Saturday, 6 September 2014

Banking Awareness Terminology for All Bank Exams



Banking Awareness for bank exams, Banking Awareness for competitive exams, Banking Terminology, Types of banks, types of loans, types of  Bank Accounts, History of banks banking setup in India, IFSC code full form

Banking Awareness and Terminology


Bank
 Bank is an institution which attracts the deposits from the public and lends the money to the needs persons at varied interest rates 

Scheduled Banks
 The Banks are registered under to 2nd scheduled of RBI Act 1934 and having its paid up capital and reserve funds are not less than 5 lacks. Ex:- PSB, Private Schedule Bank, FB, SCB and RRB

Non Scheduled Banks
The paid capital and reserve less than 5 lacks and not included 2nd Schedule of RRB Act 1934.
Group Banking-
The bank Regulated by a Group
Branch Banking-
Banks operates through Branches to make deposits and forward loans called Branch Banks.
Unit Banks-
Individual Bank independently through offices in limited areas is call unit Banks  
Investment Banking-
The Bank assists companies raising capital by under writing and acting as the agent in the issuance of securities.
Virtual Banking-
The Bank with a very small or nonexistent Branch network. OR the banks offer Services predominately or exclusively.
Mixed Banking-
When the commercial Bank Provide Both short term and long term finance to commerce and industry is called mixed Banking.
Merchant Banking-
Merchant banking is the combination of Banking and Consultancy
Exchange Bank:
These Banks finance mostly for the foreign trade of country
Deposit bank-
 Banks accept deposits from the public and lend them to needy parties for short period only.
Co-operative Banks-
 Co-operative Bank is an institution established on the Co-operative basis and dealing in ordinary banking business.


TYPES OF BANK ACCOUNTS:

Saving Account:
It is mainly opened by individuals and salaried persons
Interest is given now on per day basis between 10th and 30th of every month
Savings account is also called common man Account
Demat Account – it is maintained by the investors for trading in the share market
NO FRILL Account- an A/C opened with Zero Balance vostro A/C
An Account maintained by the foreign Bank in India in Indian Rupees.
NOSTRO Account:
 The account is maintained for inter bank transactions and is in the currency of the foreign country.
An account one bank holds within another bank in a foreign country.
Fixed Deposit Account-
Cash is deposited in this account for a fixed period
It is also called time deposit account and the liability of the bank.
Recurring Deposit Account-
Under this account a specified amount is deposited every month for a specific period
The amount can’t be withdrawn before expired date
FCNR Account- Foreign Currency non residence Account
DORMANT A/C-
If any account is not going to be operated for more than one year. Then it is called Dormant Account.
Public Provident Fund Account- This is Central Government scheme promoting long term saving for 15 year and more
These accounts are with public sector banks onto.


TYPES OF LOANS:

Pre – Approved loan-
A pre- Approved loan is an offer generally forms a bank with which the recipient has some relationship.
The process time is less and minimum documents are required.
Personal Loans- Personal loans are given for a variety of reasons without the need to specify the purpose.
These loans are primarily used for cash needs or for urgent liquidity requirements of borrowers without any asset creation.
Since there is no security for the banks these loans remain unsecured or high risk for the banks.
TEASER LOAN- Interest collected at fewer rates at the beginning and more during the later times.
OMBUDSMAN-  It was introduced under Section 35A of the banking regulation Act 1949
Ombudsman effective from- 1995 Main objective: to clear the problems between depositors and Bankers
Bank manager should respond within 30days.
All scheduled banks scheduled primary banks, Co-operative  banks and RRBs have been covered under this scheme
What is KYC- KYC is a term used for customer identification process; KYC has two components Identity & Address
KYC main objective-
The ensure proper identification of the customer, the prevent money laundering
KYC Day- August 1st
What is core Banking and Core banking solutions-?
The branches of a bank are connected to a central host where online multiple delivery channels are under a single roof
It’s also called online banking 

History of Banks and Banking Setup in India-
v  World 1st bank- Bank of venies (1157AD)
v  India’s first bank – Bank of Hindustan (1770)
v  India’s first Indian Bank- oudh commercial bank-1881
v  1st PUReLY Indian Bank- PnB (1894)
v  Present India’s Largest Public Sector banks 1. SBI 2.BoB and 3.PnB
Information about SBI-
1806 Bank of Calcutta Started
In 1809 it was changed into bank of Bengal
1840 bank of Bombay started
1843 bank of Madras started
These three banks are called presidency Banks, in 1921 presidency banks were changed in to Imperial Bank of India.
According to “Gorvala” committee recommendations imperial bank of India changed into State Bank of India (SBI) 1955
SBI day 1st July 1955 head office – Mumbai

SBI Punch Lines or tag lines-
1.       with you all the way
2.       The banker to every Indian
3.       Pure banking and nothing else
o   Present no. of Association banks -5

LIC- Life insurance Corporation of India started on 1st Sep 1956 in Mumbai
GIC- 1972
IRDA-
IRDA Act- 1997
IRDA created- 1999, Present Head office- Hyderabad
Purpose of IRDA- It is the regulatory authority for all insurance companies in India Including LIC also

IDBI-
IDBI Started – 1964
IDBI Changed into IDBI Bank Limited in 2004
Main purpose of IDBI: the APeX Bank for Industrial loans
SIDBI-
SIDBI started 1990
Head office- Luck now {UP}
Main purpose: the APeX bank for small Scale Industries 

RRBs-
Started Oct 2nd 1975
Recommended committees:
1. Narsimhan committee
2. Sarayu committee
o   RRBs are managed by Board of Directors
o   Each RRB covers district ranging from 2 to 25
o   Present no of RRBs in India- 82 {56}
o   No new RRBs established since 1987
o   Goa, Sikkem are not having RRBs
Present RRBs owned by
1.       Central Government-50%
2.       State Government- 15%
3.       Sponsored Bank- 35% 

NABARD-
o   Recommended Committee- siva Raman {CRAFICARD}
o   Started- 12th July 1982
o   Refinance facilities provided by NABARD
o   RIDF operated by NABARD
o   the APEX bank for Agriculture & Rural development
o   NABARD provide loans indirectly
o   NABARD main role: to setup micro finance in rural areas

EXIM Bank-
o   Stated- 1st January 1982
o   the APeX bank for International trade
NHB-
Started- 1988
the APeX Bank for Housing Finance
NASSCOM-
Started- 1988
Head office – Delhi
Main objective: encourage Research & development in software services
CII- It is also called watch dog of Indian Industry
Credit Ratings-
An Assessment of the likelihood of an individual or business being able to meet its financial obligations
Credit rating are provided by credit agencies
Indian credit rating agencies approved by SEBI
Main purpose: Rating agencies to verify the financial strength of the issue for investors
CRISIL- Credit Rating Information Services of India Ltd, Mumbai
CIBIL- Credit Information Bureau India Ltd, Mumbai
CARE- Credit Analysis and Research Ltd, Mumbai
SMERA: SME Rating Agency of India Ltd , Mumbai. fitch rating India Private Ltd, Mumbai
BRICK: Rating India Pvt. Ltd,- Bangalore
ICRA: Investment Information and credit Rating Agency of India Ltd- New Delhi
America Credit Rating Agencies
1.       Standard & Poor’s – New York
2.       Moody’s- New York

BANKS NATIONALISATION
Nationalization: Complete take over the banks, firms, companies and corporations by the government of India is treated as nationalization.
Banks Nationalization-
In India Banks are Nationalization in two times. First 14 banks were nationalization on 19th July 1969 depending on the total deposits and credits to the tine Rs. crore.
Second time 6 banks were nationalization 15th April 1980 depending on the total deposits and creditd to the tune Rs. 200 crore.
Total Nationalization banks 14+6=20
1993 new bank of India merged with PNB (Punjab National Bank)
Present nationalized banks 20-1=19
Present Public sector Banks -26 (19+1SBI+5 SBI Association Banks+ 1 IDBI)
As per RBI’s data for 2012:
o   173- Commercial Banks
o   169- Scheduled Banks
o   4- Non Scheduled Banks
o   82- RRBs
o   26- Public Sector Banks
o   32- Private Sector Banks
o   47- Foreign Banks were functioning in India
Why the Banks were Nationalized-
o   to remove the regional economic imbalances
o   to implement Financial Inclusion
o   to inculcate the saving habit among the rural people
PRIVATIZATION-
Decreasing the Government of India’s share in public Sector units and nationalized organization is treated as privatization
this is popularly known as Dis - investment of Government
Dis-investment – Government withdraw its Shares or Government sale its share in Public Sector Unit is Called Dis – Investment.
What Is IFSC, IFSC Full Form?
IFSC-  Indian Financial System Code. This is an 11 digit code with the first 4 alphabetic characters representing the bank and Last 6 characters representing the Branch. the every 5th Character is 0 (Zero)

  

  

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