Maharashtra HSC Bifocal Banking key terms

A financial institution licensed to accept deposits from the public, repayable on demand or otherwise, and to use those funds for lending and investment, thereby creating credit in the economy.

The process by which banks multiply the money supply by lending out a portion of the deposits they receive, keeping only a fraction as reserves for withdrawals.

A bank included in the Second Schedule of the Reserve Bank of India Act, 1934, having paid-up capital and reserves of at least the prescribed minimum and satisfying the RBI's conditions.

The percentage of a bank's net demand and time liabilities that must be held as cash balances with the Reserve Bank of India, earning no interest.

The minimum proportion of net demand and time liabilities that a bank must maintain in approved liquid assets such as cash, gold, or specified government securities.

The interest rate at which the Reserve Bank of India lends short-term funds to banks against the security of government bonds, used as a key tool of monetary policy.

The rate at which the Reserve Bank of India absorbs surplus liquidity from banks by borrowing their funds against government securities, usually lower than the repo rate.

The actions of a central bank to regulate money supply, credit availability, and interest rates in order to achieve price stability and support economic growth.

India's central bank, established in 1935, which issues currency, acts as banker to government and banks, manages foreign exchange, and regulates the banking system.

The central bank's role of providing emergency liquidity to solvent banks facing temporary cash shortages, thereby protecting the banking system from collapse.

A bank that accepts demand and time deposits from the public and provides short- and medium-term loans and advances with the objective of earning profit.

A bank organised on cooperative principles, owned and controlled by its members, serving agriculture, small industry, and local communities, regulated under cooperative societies law and RBI rules.

A bank set up under the Regional Rural Banks Act, 1976, jointly owned by the central government, state government, and a sponsor bank, to serve rural and semi-urban areas.

An institution established to provide long-term finance for industry, agriculture, or infrastructure, such as the erstwhile IFCI or IDBI, distinct from short-term commercial banking.

A company registered under the Companies Act that conducts financial activities such as lending, investment, or insurance, but does not accept demand deposits and is not a full bank.

The legal relationship between a bank and its customer, primarily that of debtor and creditor for deposits, along with obligations of secrecy, honouring cheques, and acting on instructions.

The right of a bank to retain possession of goods or securities belonging to a customer until a debt owed to the bank in respect of those items is repaid.

A bank's right to combine two or more accounts of the same customer and adjust a debit balance in one against a credit balance in another, subject to conditions.

Money placed with a bank by a customer for safekeeping and growth, repayable on demand or after an agreed period, and recorded as a liability of the bank.

A deposit account meant for individuals to save surplus funds, offering modest interest, limited withdrawal facilities, and usually a minimum balance requirement.

A deposit account used mainly by businesses, offering unlimited withdrawals and cheque facilities without interest, usually requiring a higher minimum balance.

A term deposit placed for a specified period at a fixed rate of interest, where premature withdrawal is permitted usually with a penalty and reduced interest.

A term deposit scheme in which a customer deposits a fixed amount every month for an agreed period and receives the accumulated amount with interest at maturity.

A deposit account with no customer-initiated transaction for a prolonged period, after which the bank restricts operations until the customer reactivates it through re-verification.

A written document that entitles the holder to a sum of money and can be transferred by delivery or endorsement, giving the transferee a good title free of defects.

A bill of exchange drawn on a specified banker, payable on demand, containing an unconditional order to pay a certain sum to a named person or bearer.

A written instrument containing an unconditional order, signed by the maker, directing a person to pay a certain sum to a specified person or bearer.

A written instrument containing an unconditional promise, signed by the maker, to pay a certain sum of money to a specified person or bearer on demand or at a fixed time.

The practice of drawing two parallel lines across a cheque, directing the paying bank to credit the amount only to a bank account rather than paying cash over the counter.

The refusal of a bank to pay a cheque, for reasons such as insufficient funds, irregular signature, or stale date, which may attract legal consequences under the Negotiable Instruments Act.

The rules banks follow when granting credit, including safety of funds, liquidity, profitability, purpose, and the borrower's capacity and character.

A sum of money lent by a bank to a borrower for a specified purpose and period, usually repaid in instalments with interest, and often secured by assets.

An asset or guarantee offered by a borrower to a bank in addition to the primary security, to secure repayment of a loan in case of default.

The RBI requirement that banks direct a minimum share of their lending to specified sectors such as agriculture, small enterprises, education, housing, and weaker sections.

The charge paid by a borrower to a lender for the use of money, usually expressed as a percentage of the principal amount over a period of time.

Interest calculated only on the original principal amount for the entire period, without adding accrued interest to the principal base.

Interest calculated on the principal plus any interest already accrued, so that the amount grows at a faster rate over successive periods.

Any transfer of money made electronically through channels such as mobile banking, internet banking, cards, or unified payment interfaces, without using physical cash.

A real-time payment system developed by the National Payments Corporation of India that allows instant fund transfers between bank accounts using a virtual payment address.

A service that lets customers conduct banking transactions such as balance enquiries, transfers, and bill payments through a mobile application or SMS on their phone.

The process of ensuring that individuals and businesses, especially low-income and rural groups, have access to affordable and appropriate financial products and services.

A national financial inclusion programme launched in 2014 to provide every household with a basic savings bank account, RuPay card, insurance cover, and overdraft facility.

An individual or entity engaged by a bank to provide banking services at the customer's doorstep in areas where a full branch is not viable.

An independent authority appointed by the Reserve Bank of India to receive and resolve complaints of deficiency in banking services by banks free of charge to customers.

The set of rules, codes, and grievance redress mechanisms that safeguard bank customers against unfair practices, hidden charges, and deficient service.