RBSE Sec Voc Banking, Financial Services and Insurance key terms

India's central bank. It issues currency, sets monetary policy, supervises banks and non-bank lenders, manages foreign exchange reserves, and operates payment systems and the customer grievance-redressal scheme.

A bank listed in the Second Schedule of the RBI Act, 1934, meaning it satisfies capital and conduct conditions and can access RBI refinance and clearing facilities. Most Indian retail and corporate banks fall in this category.

The share of a bank's net demand and time liabilities that must be held as cash with the RBI. It earns no interest and is used by the central bank to drain or inject liquidity.

The minimum share of net demand and time liabilities that a bank must hold in approved liquid assets such as government securities, cash or gold, maintained by the bank itself rather than with the RBI.

The interest rate at which the RBI lends short-term funds to banks against government securities. Movements in it influence deposit and loan rates across the economy and signal the monetary policy stance.

Efforts to bring unserved and underserved people into the formal financial system through affordable accounts, credit, insurance, pensions and digital payments, supported by simplified KYC and delivery channels such as business correspondents.

A licensed bank that must direct at least 75% of its lending to priority sectors, with a large portion going to micro and small borrowers. It accepts deposits and typically serves low-income and unbanked customers.

An individual or entity, such as a shop or self-help group, appointed by a bank to deliver basic services like account opening, deposits and withdrawals in places without a branch, using devices linked to the bank's system.

A deposit account for individuals that pays interest, allows withdrawals on demand, and usually carries conditions on minimum balance and the number of free transactions each month.

A deposit account used mainly by businesses that pays no interest but permits unlimited deposits and withdrawals, and is designed for frequent trade and payment transactions.

A sum placed with a bank for an agreed period at an agreed interest rate. The money is locked in, generally with a penalty for early withdrawal, and interest is paid periodically or at maturity.

The proportion of a bank's total deposits held in current and savings accounts. These deposits cost the bank very little, so a higher CASA ratio lowers the cost of funds and supports lending margins.

Centralised banking software that links all branches to one shared ledger, so a customer can operate the same account from any branch, ATM or digital channel and see transactions posted in real time.

A payment instrument issued by a bank on behalf of a customer, drawn on one of its branches or another bank, instructing payment of a stated sum to a named payee on demand. Used where a personal cheque is not accepted.

A real-time mobile payment system run by NPCI that lets a user link bank accounts, create a virtual payment address, and pay or collect money through any participating app.

A 24x7 interbank electronic funds transfer service operated by NPCI and available through mobile banking, internet banking and ATMs, with per-transaction limits decided by each bank.

An RBI-operated retail funds transfer system in which transactions are settled in batches at half-hourly intervals around the clock, with no RBI-set minimum and no upper limit.

An RBI system for large-value payments in which each transaction is settled individually and immediately rather than in batches. The minimum amount for a customer transaction is two lakh rupees.

An NPCI service that lets a customer transact at a business correspondent's point using an Aadhaar number and fingerprint authentication, for cash withdrawal, deposit, balance enquiry or receiving government payments.

A firm that lets merchants accept online payments across many instruments, collects the funds into an escrow account and settles them to the merchant, under RBI authorisation and prescribed rules.

Digital money issued by a central bank as its own direct liability, in India the Digital Rupee. It works like electronic cash for retail and wholesale payments and is not a commercial bank deposit.

A company registered with the RBI that lends, invests or provides finance, but cannot accept demand deposits and does not participate in the payment and settlement system like a bank.

A pooled investment vehicle that gathers money from many investors and invests it in a portfolio of stocks, bonds or other assets, managed professionally and divided into units held by investors.

The value of one unit of a mutual fund scheme, calculated as the scheme's total assets minus its liabilities, divided by the number of units outstanding, and normally published every business day.

A way of investing a fixed sum in a mutual fund at regular intervals instead of a single lump sum. It suits salaried savers and averages out the purchase cost across market levels.

An account with a depository participant that holds shares and other securities in electronic form. Buying or selling moves holdings in or out of it, and holdings can be pledged or transferred without paper certificates.

The statutory regulator of India's securities markets. It registers intermediaries, sets listing and disclosure norms, supervises stock exchanges, and protects investors in shares, mutual funds and related products.

The financial stake a person has in the subject of insurance, so that loss or damage would cause them monetary harm. It must exist when the policy is bought, and for general insurance also when the loss occurs.

The amount a policyholder pays, usually yearly, half-yearly or monthly, to keep an insurance policy in force. It is priced on the risk, the cover chosen and the insurer's expenses and expected claims.

The amount stated in the policy that the insurer will pay when the insured event occurs, such as death or maturity. It is fixed at purchase and is a key input in calculating the premium.

The part of a loss that the policyholder must bear before the insurer pays anything. Choosing a higher deductible usually reduces the premium but raises the customer's own share of each claim.

Insurance that an insurer buys from another insurer to spread the risk of very large or unusually numerous claims. The original policyholder stays with the first insurer and is not a party to the reinsurance contract.

A licensed entity that processes health insurance claims for an insurer, handling cashless hospitalisation authorisation, document checking, claim adjudication support and settlement communication with the policyholder and hospital.

The process by which a bank or financial institution identifies a customer and verifies identity and address, using documents or digital checks, before opening an account or allowing specified transactions.

Laws, systems and procedures that financial institutions use to detect, report and prevent the movement of money earned from crime, including customer due diligence, transaction monitoring and suspicious transaction reporting.

India's core anti-money-laundering law, enacted in 2002. It defines predicate offences and obliges reporting entities to verify customers, retain records and report suspicious or prescribed transactions.

A government agency that receives cash, suspicious and other prescribed transaction reports from banks and other reporting entities, analyses the information and shares intelligence with investigating and enforcement agencies.

An RBI-run dispute resolution scheme for complaints against regulated entities. A customer must first complain to the bank and, if it is not resolved within the prescribed period, may approach the ombudsman free of charge.

A sales approach that first identifies the customer's actual financial requirement and then recommends a fitting product, disclosing costs, risks and alternatives rather than pushing whatever earns the highest commission.

The process a financial institution uses to receive, record, investigate and settle customer complaints within stated timelines, with escalation to an internal committee and then to the regulator's ombudsman.