RBSE SS Voc Banking flashcards

33 cards. Read the term and the definition here. The deck at the top of this page is optional.

Scheduled bank

A bank included in the Second Schedule of the RBI Act, 1934, satisfying capital and reserve conditions and entitled to RBI facilities like refinance and clearing membership.

CRR

Cash Reserve Ratio is the percentage of net demand and time liabilities that a bank must keep as cash with the RBI; it earns no interest.

SLR

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

BSBDA

Basic Savings Bank Deposit Account offers no-frills banking with no minimum balance requirement and a limited number of free withdrawals each month.

Dormant account

A savings or current account with no customer-induced transaction for two years is treated as inoperative; reactivation requires fresh KYC verification by the bank.

Nomination

A facility under Section 45ZA of the Banking Regulation Act allowing a depositor to name a person to receive the deposit on death; the nominee acts as trustee.

Holder in due course

A person who obtains a negotiable instrument for value, in good faith, before maturity, and without notice of any defect in the transferor's title.

Crossing of cheque

Two parallel lines on the face of a cheque mean it must be paid through a bank account; special crossing names a particular bank for collection.

Section 138 NI Act

Provision making dishonour of a cheque for insufficient funds a criminal offence, requiring a demand notice within 30 days and a complaint within one month thereafter.

RTGS

Real Time Gross Settlement transfers funds individually and instantly through RBI; the minimum transaction value is two lakh rupees and there is no upper limit.

Integrated Ombudsman Scheme

RBI's 2021 scheme providing one portal and one address for complaints against banks after the bank fails to respond within thirty days.

DICGC cover

Deposit Insurance and Credit Guarantee Corporation insures each depositor's deposits in a bank up to five lakh rupees, covering principal and interest.

Fair Practices Code

RBI-mandated code requiring banks to disclose charges, give reasons for loan rejection, and treat customers transparently and without hidden fees.

Five Cs of credit

Character, capacity, capital, collateral, and conditions; the standard framework used to assess a borrower's creditworthiness before sanctioning a loan.

Hypothecation

A charge created over movable assets where the borrower retains possession but the lender has a right to seize the goods on default.

Pledge

A bailment of goods as security for a debt where the lender takes actual or constructive possession and may sell on default after notice.

Priority Sector Lending

RBI requirement that commercial banks lend at least forty percent of adjusted net bank credit to agriculture, micro enterprises, weaker sections, and similar sectors.

SARFAESI Act

Law allowing secured creditors to enforce security interests without court intervention after a sixty-day notice, mainly for non-performing secured loans.

Double-entry system

Book-keeping method where every transaction is recorded with equal debit and credit entries, keeping the accounting equation in balance.

Trial balance

A statement listing ledger account balances to verify that total debits equal total credits; it detects arithmetic errors but not all errors.

Bank reconciliation

Statement reconciling the bank column of the cash book with the passbook, adjusting for cheques issued or deposited but not yet cleared, and bank charges.

Gross NPA ratio

A measure of asset quality calculated as gross non-performing assets divided by gross advances, expressed as a percentage of the loan portfolio.

UPI

Unified Payments Interface, operated by NPCI, enables instant mobile payments between bank accounts using a virtual payment address around the clock.

Account aggregator

RBI-regulated entity that enables consent-based sharing of a customer's financial data across institutions; the customer controls the consent artefact.

Tokenisation

Process of replacing a card number with a unique token for transactions, reducing the risk of card data theft during digital payments.

AePS

Aadhaar Enabled Payment System lets customers withdraw cash and check balances at micro-ATMs using Aadhaar authentication and a business correspondent.

PMJDY

Pradhan Mantri Jan Dhan Yojana, launched in 2014, provides basic savings accounts with RuPay cards and overdraft facilities to unbanked households.

Mudra loans

Loans under the Pradhan Mantri Mudra Yojana for micro and small enterprises, categorised as Shishu, Kishore, and Tarun by loan size.

Business correspondent

An agent appointed by a bank to provide basic banking services such as deposits, withdrawals, and balance enquiries in unbanked areas.

Basel III

International regulatory framework setting capital adequacy, leverage, and liquidity standards to strengthen bank resilience against financial shocks.

STR

Suspicious Transaction Report is filed by a bank with FIU-IND when a transaction appears linked to money laundering or terrorist financing, regardless of amount.

Maker-checker control

Segregation of duties where one employee initiates a transaction and another independently verifies and authorises it, reducing fraud risk in banking operations.

Cheque truncation system

Image-based clearing where the physical cheque is scanned at the presenting bank and the electronic image is used for clearing instead of the paper instrument.