NHB Assistant Manager key terms

Cash Reserve Ratio: the share of net demand and time liabilities that a scheduled commercial bank must hold as cash with the RBI. It earns no interest and is used to drain or inject liquidity.

Statutory Liquidity Ratio: the minimum share of net demand and time liabilities a bank must hold in liquid assets such as government securities, cash or gold, maintained in addition to CRR.

The base used for computing reserve requirements: liabilities to the public other than inter-bank items, split into demand deposits and time deposits, with prescribed adjustments for inter-bank and other specified liabilities.

The rate at which the RBI lends short-term funds to banks against government securities in the liquidity adjustment window. Raising it generally makes credit costlier and moderates demand.

The rate at which the RBI absorbs surplus liquidity from banks by borrowing against securities. It usually sits below the repo rate and forms the floor of the policy corridor.

A window allowing banks to borrow overnight from the RBI against approved government securities, up to a limit of their net demand and time liabilities, at a rate above the repo rate.

A six-member statutory body chaired by the RBI Governor that meets at least four times a year to set the policy repo rate and maintain inflation within the mandated target band.

A framework in which the central bank commits to a numeric inflation goal, currently four per cent consumer price inflation with a tolerance band, and answers publicly for deviations.

A retail price index tracking the cost of a representative basket of goods and services. The combined CPI is the headline measure used as the nominal anchor for monetary policy in India.

The minimum lending rate a bank is not allowed to lend below, computed from cost of funds, operating expenses and a minimum margin. It replaced the benchmark prime lending rate for new loans.

A benchmark lending rate derived from marginal cost of funds, negative carry on statutory reserves, operating cost and a tenor premium. It replaced the base rate as the floor for most floating-rate retail loans.

The margin a lender adds over its benchmark rate to price a loan, reflecting borrower risk, tenor and profitability. It is the difference between the interest earned and the cost of funds.

A loan or advance where interest or principal has remained overdue for more than ninety days, or where the account is otherwise classified as substandard, doubtful or loss by the lender.

An account showing early signs of stress but not yet an NPA, classified as SMA-0, SMA-1 or SMA-2 according to how long the overdue has persisted, and used to trigger corrective action.

The process of sorting loan accounts into standard, substandard, doubtful and loss categories based on overdue duration and security cover, which in turn determines the provisioning required.

The amount a lender sets aside from profits against expected losses on bad or doubtful loans, computed at prescribed percentages of the outstanding balance under the applicable classification.

A measure of a bank's capital relative to its risk-weighted assets, expressed as a percentage. It must exceed the regulatory minimum plus buffers to absorb unexpected credit and market losses.

The core capital of a bank, chiefly paid-up equity, share premium and disclosed reserves less specified deductions. It absorbs losses on a going-concern basis and supports the larger part of capital adequacy.

Total exposures of a bank multiplied by risk weights prescribed for each asset class, so that safer assets such as government securities attract lower weights than unsecured credit.

A short-term stress measure requiring a bank to hold high-quality liquid assets sufficient to cover net cash outflows for thirty days under a prescribed stressed scenario.

The mandatory process of identifying a customer, verifying identity and address through accepted documentary or digital means, and understanding the purpose of the relationship before providing services.

Laws, rules and internal controls aimed at preventing the movement of criminal proceeds through the financial system, including reporting suspicious transactions to the financial intelligence unit.

Ongoing verification and monitoring of a customer's identity, activity and risk profile, conducted at onboarding and periodically thereafter, with enhanced measures for higher-risk customers.

A mandated share of bank credit that must be directed to specified sectors such as agriculture, micro enterprises, education and weaker sections, with shortfalls deposited in a designated fund.

A concessional lending rate offered to the poorest and most deserving borrowers under schemes framed against the priority sector obligation, set below the normal lending rate.

The loan amount expressed as a percentage of the appraised value of the property mortgaged. Higher ratios increase lender risk and attract caps and higher risk weights.

A transfer of interest in immovable property as security for a loan, where the lender may enforce the security on default. In housing loans it is usually an English mortgage or equitable mortgage.

A security created by depositing title deeds of immovable property with the lender with intent to create a mortgage, without a registered instrument, in notified towns.

The statutory filing of particulars of a security interest created by a company with the Registrar of Companies within the prescribed period, so the charge is publicly recorded.

The gradual repayment of loan principal through periodic instalments. In a housing loan the equated monthly instalment covers both interest and principal over the agreed tenor.

A fixed payment made by a borrower each month, comprising interest on the outstanding balance and a portion of principal, so the loan is fully repaid at the end of the tenor.

Interest calculated on the initial principal plus interest already accrued, so the amount grows faster than under simple interest. It is applied to deposits and to overdue loan amounts.

Interest computed only on the original principal for the whole period, without adding accrued interest to the base. Formula: principal multiplied by rate multiplied by time, divided by one hundred.

A reasoning problem presenting two or more premises and asking which conclusions necessarily follow. Validity depends on logical form, not on whether the statements are factually true.

A reasoning item where a short passage is given and candidate conclusions are tested for whether they follow beyond reasonable doubt from the stated information alone.

A puzzle describing family ties through coded or indirect statements, requiring the candidate to map relationships and answer who is related to whom and how.

A puzzle in which people or objects are placed in a row or around a table subject to clues about relative positions, requiring a consistent arrangement to answer the questions.

A fixed expression whose meaning cannot be derived from its individual words, such as 'to bite the bullet'. Idiom questions test recognition of the intended figurative sense.

A verb combined with a preposition or adverb that together carry a distinct meaning, for example 'put off' or 'carry out'. The particle changes the sense of the base verb.

A passage with certain words removed, where the candidate selects the option that best restores meaning and grammatical fit in each blank, judged from context and collocation.