Banking System

Basel Accords – Things You Should Know

Basel Committee was developed by BIS (Bank for International Settlements), Switzerland to prescribe the guidelines and general norms to all the International Banks. It is the first organized committee by BIS in 1960’s in order to handle financial imbalances in the banking sector. Basel Committee formulated accords for best practice of banking sector. History of Basel Committee: The name Basel was given to the committee on behalf of the place where BIS is located in Switzerland i.e., Basel. Basel...
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What is Mobile Money?

Mobile payment is completely a different domain and generally refers to payment of services operated under financial regulation and performed from or via a mobile device. It is also referred to as mobile money, mobile banking, mobile money transfer and mobile wallet. Mobile payment is an alternative payment method. Instead of paying with cash, check, or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods such...
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Understanding Priority Sector Lending – Classification and Targets

It is important to understand about the priority sector for all bank aspirants as you can always expect some questions in the exams and interview. Here is a small FAQ on lending in priority sector. 1. What is meant by Priority Sector? Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities,...
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What are Mutual Funds & Fixed Deposits?

A MUTUAL FUND is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets whereas a FIXED DEPOSIT (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account. It is known as a term deposit or time...
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What are Asset Reconstruction Companies?

Introduction Asset reconstruction is the handling of distressed assets to attempt to recover their value and clear them from the books. The problem of non performing loan/assets is a global one and has been receiving attention of banks, economist, regulators and public, alike. Internationally Asset Reconstruction Companies (ARCs) have been created to bring about a system for cleaning up Non Performing Assets (NPAs) from the books of secured lenders and bring the locked assets in circulation into the economy. The word asset...
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Inflation Indexed Bonds – What and Why?

Reserve Bank of India recently launched Inflation Index Bond also known as Inflation-linked bonds or Inflation Indexed National Savings Securities. These bonds are launched in the backdrop of announcement made in the Union Budget 2013-14 to introduce instruments that will protect savings from inflation and also with increasing preference of investors for diversified instruments and to further improve the depth and width of G-Sec Market, it has been felt that Inflation Indexed bonds could be issued at the current juncture....
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BCSBI – Banking Codes And Standards Board Of India

What is BCSBI ? It is an independent and autonomous watch dog to monitor and ensure that the Banking Codes and Standards adopted by the banks are adhered to in true spirit while delivering their services. Definition:-  In these Rules, unless the context requires otherwise: “Act” means the Societies Registration Act, 1860  in its application to the State of Maharashtra. “Chairman” means the Chairman of the Governing Council referred to in Rule 6 or 7. “Chief Executive Officer” means...
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What Is Core Banking System ?

The word Core Banking is used to describe the various services being offered by the banking system to its customers and this is done by the whole banking core branches. This facility makes it possible for the banks to get transfer their funds and other transactions to other core branch offices in a very easy and quick manner. Now, there is no need to get deposit and withdrawal of your cash in the same branch. You can deposit from...
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IFSC Codes

IFSC means Indian Financial System Code. The Indian online payment systems like NEFT and RTGS requires IFSC code to locate the branch in which transaction is to be done. These code are directly used by RBI (Reserve Bank of India) to facilitate various interbank transactions. A IFSC Code contains 11 characters – for example – ICIC0001245 Explanation of various elements of IFSC Code The first 4 characters represent the bank or entity (ICIC0001245) – In this case it is...
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Bank Related Rates

Bank Related Rates Type Name Rate Policy Rate Bank Rate 6% Repo Rate 8.50% Reverse Repo Rate 7.50% Marginal Standing Facility Rate 9.50% Reserve Ratios CRR 6% SLR 24% Lending Deposit Rates Base Rate 9.50% – 10.75% Savings Bank Rate 4% Deposit Rate 8.50% – 9.50%   Explanation of Bank Related Rates 1) What is Bank Rate? Bank rate is the rate of interest which RBI charges on the loans and advances that it extends to banks and other...
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CBS – Core Banking Solution

What is Core Banking Solution (CBS) ? Core Banking Solution (CBS) is networking of branches, which enables Customers to operate their accounts, and avail banking services from any branch of the Bank on CBS network, regardless of where he maintains his account. The customer is no more the customer of a Branch. He becomes the Bank’s Customer. Thus CBS is a step towards enhancing customer convenience through Anywhere and Anytime Banking. How shall CBS help Customers? All CBS branches...
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NEFT UTR Number

The term UTR No. means Unique Trasaction Reference Number and it is generally used in association with NEFT transactions done through bank.  For every successful NEFT transaction, your Bank will provide a UTR number (Unique Transaction Reference No.). For example, if you do the a NEFT transaction with a branch of Union Bank of India, the Union Bank of India will provide the UTR No. to you which can be used to track the transaction later. So, UTR number...
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Certificate of Deposit in India

CDs are negotiable money market instrument issued in demat form or as a Usance Promissory Notes. CDs issued by banks should not have the maturity less than seven days and not more than one year. Financial Institutions are allowed to issue CDs for a period between 1 year and up to 3 years. CDs are like bank term deposits but unlike traditional time deposits these are freely negotiable and are often referred to as Negotiable Certificates of Deposit. CDs...
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