WBBSE Madhyamik Banking & Financial Services (Vocational) key terms

Money held in a savings or current account that the owner can withdraw at any time without advance notice, usually through a cheque, card or electronic transfer.

A bank account meant for businesses and frequent transactions; it allows unlimited deposits and withdrawals but normally pays no interest and may require a minimum balance.

A deposit account for individuals that earns a small rate of interest and has limits on the number of withdrawals, encouraging regular saving.

A sum placed with a bank for a fixed period at an agreed interest rate; the money cannot normally be withdrawn early without a penalty.

A scheme in which the depositor pays a fixed amount every month for a set term and receives the total with interest at maturity.

The process by which a bank verifies a customer's identity and address using documents such as Aadhaar, PAN or proof of residence before opening an account.

Rules and checks that banks follow to detect and report money earned from crime being moved through accounts, so the financial system is not misused.

A written order directing a bank to pay a stated sum from the drawer's account to the named person or bearer; it must be dated and signed.

A payment instrument issued by a bank itself, payable at another branch or city, which is safer than a personal cheque because the bank guarantees payment.

The process through which banks exchange cheques and settle the amounts due among themselves, so funds reach the correct account.

National Electronic Funds Transfer: a system for sending money between bank accounts in batches at scheduled intervals, widely used for small and medium transfers.

Real Time Gross Settlement: a system that transfers large sums between banks one transaction at a time and settles each immediately, used for high-value payments.

Immediate Payment Service: a 24-hour interbank transfer facility available through mobile banking, internet banking or ATMs that credits the beneficiary at once.

Unified Payments Interface: a platform that lets a person link a bank account to a mobile app and pay or receive money instantly using a virtual address.

A prepaid digital account on a phone into which the user loads money and from which small payments can be made to merchants or other users.

A card loaded with a stored value in advance; payments are limited to the amount already loaded rather than drawn from a bank account.

A plastic card that lets the holder pay for goods or withdraw cash directly from their own bank account, with the amount deducted immediately.

A card that allows the holder to buy now and pay later up to a set limit; the full amount is due by a stated date or interest is charged.

Automated Teller Machine: a self-service machine that lets customers withdraw cash, check balances and use other services with a card and PIN.

Personal Identification Number: a secret code known only to the cardholder, used to confirm identity at an ATM or point-of-sale terminal.

A security method that requires two different proofs of identity, such as a password plus a one-time code sent to the registered mobile, before a transaction is allowed.

A fraud in which a criminal pretends to be a bank or trusted body through fake messages, calls or websites to trick a person into revealing passwords or OTPs.

One-Time Password: a code valid for a single transaction or short period, sent to the customer's registered mobile or email to authorise a payment.

The percentage a bank pays on deposits or charges on loans over a period, usually expressed per year, which decides the cost or reward of money.

Interest calculated only on the original principal for the whole period, using the formula principal × rate × time divided by one hundred.

Interest calculated on the principal plus any interest already added, so the amount grows faster than with simple interest over the same period.

How often interest is added to the balance, such as yearly, half-yearly or quarterly; more frequent compounding produces a higher effective return.

The actual yearly return on a deposit after taking compounding into account, which is higher than the stated nominal rate when interest is added more than once a year.

A sustained rise in the general price level, which reduces the purchasing power of money and lowers the real value of savings held in cash.

The quantity of goods and services that a given amount of money can buy at current prices; it falls when prices rise.

The return on an investment after subtracting inflation, showing whether the money has actually gained buying power over the period.

A plan that lists expected income and planned spending for a period, helping a person or business control expenses and set aside savings.

Money kept easily accessible to cover unexpected expenses such as illness or job loss, usually equal to a few months of essential spending.

The ease with which an asset can be converted into cash without losing value; savings accounts are highly liquid while property is not.

A pool of money collected from many investors and managed professionally in shares, bonds or other assets, with gains and losses shared among unit holders.

A method of investing a fixed sum in a mutual fund at regular intervals, which averages out purchase cost and builds discipline in saving.

The amount a policyholder pays, usually yearly or monthly, to an insurer in exchange for cover against a specified risk.

The maximum amount an insurer agrees to pay under a policy for the events and conditions listed in the agreement.

The portion of a loss that the policyholder must bear before the insurer pays anything, which keeps small claims out of the insurance system.

A book-keeping method in which every transaction is recorded in two accounts, one debit and one credit, so total debits always equal total credits.

The first record of a transaction, showing the date, the accounts affected, the amounts and a short narration of what happened.

A book or file of accounts in which journal entries are posted under each account head to show its balance and movement.

A statement listing all ledger balances at a date to check that total debits equal total credits before final accounts are prepared.

A statement of a business's assets, liabilities and capital at a particular date, showing what it owns and owes and the owner's stake.

The movement of money into and out of a business or household over a period, showing whether enough cash is available to meet obligations.

Paying full attention to a customer, noting both words and feelings, and confirming understanding by summarising before responding.

The formal process by which a bank receives a customer complaint, investigates it within a stated time and informs the customer of the outcome.

An independent official appointed to hear complaints against banks that the customer has not been able to settle directly with the bank.

How well a bank meets customer expectations in terms of speed, accuracy, courtesy and reliability of the services it provides.

A written document describing a venture's product, market, operations and finances, used to guide the owner and to seek loans or partners.

The money a business needs for day-to-day running, calculated as current assets minus current liabilities, covering stock, wages and short-term bills.

The level of sales at which total revenue equals total cost, so the business makes neither profit nor loss.

A small group of people, often women, who save regularly together and lend to members from the pooled fund, building credit habits and mutual trust.

Small loans, savings and insurance services offered to low-income households and tiny businesses that banks may not otherwise serve.

A structured written account of practical work, stating the aim, method, findings and conclusion, submitted for internal assessment.

Marks awarded by the school during the year for practical work, projects and records rather than by the external final examination.

An oral examination in which a candidate answers questions about their project or practical work before teachers or examiners.