| Banking Term | Explanation |
| Repo Rate | The rate at which RBI lends money to commercial banks to control inflation and manage liquidity. |
| Reverse Repo Rate | The rate at which RBI borrows money from banks, helping absorb excess liquidity from the system. |
| Bank Rate | The long-term interest rate at which RBI lends funds to banks; used to regulate credit and inflation. |
| CASA Ratio | The percentage of a bank’s total deposits that must be kept with RBI in cash form. |
| SLR | The share of deposits banks must maintain in liquid assets like cash, gold, or government securities. |
| Base Rate | The minimum lending rate below which banks cannot give loans (now replaced by MCLR). |
| Marginal Standing Facility (MSF) | A special window for banks to borrow overnight from RBI during urgent liquidity shortages. |
| Monetary Policy | RBI’s policy to control money supply, interest rates, and inflation in the economy. |
| Capital Adequacy Ratio (CAR) | Shows whether a bank has enough capital to cover risks and absorb losses. |
| Non-Performing Asset (NPA) | A loan where interest or principal has not been paid for 90+ days. |
| Securitization | Converting loans (like home loans) into tradable securities and selling them to investors. |
| Letter of Credit | A bank guarantee assuring a seller that the buyer will make payment on time. |
| Payments Bank | A bank that can accept deposits (up to ₹1 lakh) but cannot give loans or credit cards. |
| Soft Loan | A loan with very low interest rates or easy repayment terms, usually for development projects. |
| No-Frills Account | A basic savings account with no or very low minimum balance requirements. |
| Plastic Money | Debit cards, credit cards, and prepaid cards used instead of cash. |
| Special Drawing Rights (SDR) | International reserve assets created by the IMF to support member countries’ forex reserves. |
| RTGS (Real-Time Gross Settlement) | A system for transferring large-value funds instantly between banks. |
| Nostro Account | An account a bank holds in another country in that country’s currency. |
| Vostro Account | An account a foreign bank holds in India on behalf of an Indian bank. |
| Balloon Mortgage | A loan with small payments initially but a large lump-sum payment at the end. |
| Call Money | Borrowing or lending of funds for one day. |
| Notice Money | Funds borrowed or lent for 2–14 days. |
| Term Money | Interbank lending or borrowing for more than 14 days. |
| MIBOR (Mumbai Interbank Offer Rate) | The rate at which banks lend to each other in the Indian money market. |
| LIBOR (London Interbank Offer Rate) | A benchmark interest rate for global interbank borrowing. |
| Bank Ombudsman | An authority appointed by RBI to handle customer complaints against banks. |
| On-Lending | When banks lend money to intermediaries, who then give loans to priority-sector borrowers. |
| Currency Deposit Ratio | The proportion of currency held by the public versus deposits held in banks. |
| Returned Item Fee | The charge applied when a cheque bounces or fails to clear. |
| Government Securities (G-Secs) | Bonds issued by the government to borrow money; considered safe investments. |
| Prime Lending Rate (PLR) | The interest rate banks charge their most creditworthy customers. |
| Current Account | A deposit account mainly used by businesses for frequent transactions, with no interest. |
| Savings Account | A basic account for individuals to save money and earn interest. |
| Open Market Operations (OMO) | RBI buying or selling government securities to control liquidity. |
| Priority Sector Lending (PSL) | Loans that banks must give to important sectors like agriculture, MSMEs, housing, and education. |
| Basel Norms | International banking rules to strengthen banks’ capital structure and reduce risk. |
| Treasury Bills | Short-term government securities with maturities up to 1 year. |
| KYC (Know Your Customer) | Process used by banks to verify customer identity to prevent fraud and money laundering. |
| AML (Anti-Money Laundering) | Rules to prevent illegal money from entering the banking system. |
| Financial Inclusion | Providing affordable and accessible financial services to all sections of society. |
| Balance of Payments (BoP) | A statement showing all financial transactions between a country and the rest of the world. |
| Foreign Exchange Reserves | Assets held by RBI in foreign currencies, gold, and SDRs to stabilize the currency. |
