JAIIB RBWM key terms

Banking services provided directly to individual consumers rather than to companies or other banks, covering savings, current accounts, personal loans, cards, and wealth products delivered through branches or digital channels.

Current Account and Savings Account balances held with a bank. These are low-cost or no-cost funds for the bank, so a high CASA ratio lowers the overall cost of funds and supports net interest margin.

The difference between interest income earned on loans and investments and interest paid on deposits, expressed as a percentage of earning assets. It is a core measure of a retail bank's lending profitability.

The minimum interest rate a bank is permitted to charge on loans, calculated from cost of funds, operating expenses, and a minimum margin. No lending rate may be set below it.

An internal reference rate computed from the marginal cost of funds, negative carry on cash reserve and statutory liquidity balances, operating costs, and a tenor premium. Banks price floating-rate retail loans as a spread over it.

A loan whose interest rate resets periodically in line with movements in a reference benchmark plus a fixed spread, so the borrower's instalment or tenor changes when the benchmark moves.

The fixed amount a borrower repays each month on an amortising loan. It combines interest on the outstanding balance and principal repayment so the loan is fully repaid by the agreed end date.

The gradual reduction of a loan's principal through scheduled repayments over its tenor. In the early years interest dominates each instalment; principal repayment grows over time as the balance falls.

The contractual period over which a loan must be repaid. A longer tenor reduces the monthly instalment but raises total interest cost and lengthens the bank's exposure to default risk.

The loan amount expressed as a percentage of the appraised value of the asset being financed, usually property. Regulators cap it to limit borrower leverage and protect the lender against price falls.

An asset pledged or mortgaged to a lender so it can be sold to recover dues if the borrower defaults. It reduces credit risk and may lower the interest rate charged.

A charge created over movable assets such as vehicle stock or machinery, where the borrower retains possession and use but the lender may seize and sell the assets on default.

A lender's legal right to retain possession of a borrower's asset or funds until a debt is settled. Banks commonly exercise a right of set-off or general lien over deposits held with them.

The bank's contractual and legal power to combine a defaulting borrower's deposit accounts with the overdue loan account and adjust the balance against the dues owed.

A licensed repository that collects repayment history and enquiry data from lenders and issues credit reports and scores on borrowers. Lenders use these reports in underwriting and monitoring decisions.

A numerical summary, typically from 300 to 900, derived from repayment history, credit utilisation, credit age, enquiry frequency, and product mix. Higher scores generally indicate lower default probability.

A borrower-level document from a credit bureau listing open and closed loan accounts, sanctioned limits, outstanding balances, repayment status, and recent enquiries made by lenders.

The mandatory process of identifying a customer and verifying identity and address using officially valid documents before opening an account or establishing a business relationship.

Ongoing risk-based assessment of a customer's identity, business profile, source of funds, and transaction behaviour. The intensity of checks rises with the assessed money-laundering and terrorist-financing risk.

Additional scrutiny applied to high-risk customers such as politically exposed persons, non-resident clients, and cash-intensive businesses. It includes deeper source-of-funds checks and senior-management approval.

An individual entrusted with a prominent public function, and their family members and close associates. Such customers require enhanced due diligence and senior approval before a relationship is established.

The legal and procedural framework banks follow to detect and report attempts to disguise the proceeds of crime, including customer screening, transaction monitoring, record-keeping, and suspicious-transaction reporting.

A confidential report filed with the financial intelligence unit when a bank suspects that a transaction involves proceeds of crime or terrorist financing, regardless of the amount involved.

A report a bank must file with the financial intelligence unit for cash transactions above a prescribed threshold, either in a single transaction or in an aggregated series of connected transactions.

A loan or advance where interest or principal has remained overdue for more than ninety days. It must be classified as substandard, doubtful, or loss and requires provisioning from bank capital.

An account showing early signs of stress, such as overdue payments for up to ninety days, which is not yet a non-performing asset but is monitored closely for slippage.

The amount a bank sets aside from profits to absorb expected losses on loans, based on the asset classification and the security held. Higher provisioning directly reduces reported profit and capital.

A bank's capital expressed as a percentage of its risk-weighted assets. It shows the cushion available to absorb unexpected losses and must stay above the regulator's prescribed minimum.

A bank's exposures weighted by credit, market, and operational risk factors. Safer assets such as government securities carry low weights, while unsecured retail loans and off-balance-sheet items carry higher ones.

A transferable document that promises or orders payment of a sum of money, such as a cheque, bill of exchange, or promissory note. Rights in it pass by delivery or endorsement and delivery.

The signature and instructions written on the back of a negotiable instrument that transfer the right to receive payment to another party, often with a mandate such as 'account payee only'.

An image-based clearing system in which a bank captures an electronic image of a cheque and transmits it for clearing, so the physical cheque no longer moves between branches.

A central institution or process through which participating banks exchange and settle cheques and electronic payment instructions, computing each member's net payable or receivable position.

The final transfer of funds between banks to discharge payment obligations arising from clearing. Once settled, the payment is irrevocable and the receiving bank can credit the beneficiary.

A payment system that processes and settles each fund transfer individually and in real time through central bank accounts, typically used for high-value and time-critical interbank payments.

A mobile-based instant payment system that allows customers to transfer funds between bank accounts using a virtual payment address, without entering account numbers or bank details.

A unique identifier, such as a name followed by a bank handle, that maps to a customer's bank account and lets them send or receive funds without disclosing account and branch details.

A security control requiring two independent proofs of identity, such as a password plus a one-time code sent to a registered mobile number, before a digital transaction is authorised.

A social-engineering fraud in which criminals impersonate a bank or trusted service through email, messages, or calls to trick customers into revealing passwords, card details, or one-time codes.

A service model where a dedicated officer manages a customer's full portfolio of accounts and products, using knowledge of the customer's needs to cross-sell and retain the relationship.