8AnklnC 1L8MS

Cpen MarkeL operaLlons(CMC)1he buylng and selllng of governmenL securlLles ln Lhe open markeL ln
order Lo expand or conLracL Lhe amounL of money ln Lhe banklng sysLem by 88l Cpen markeL
operaLlons are Lhe prlnclpal Lools of moneLary pollcy
Mlcro CredlLlL ls a Lerm used Lo exLend small loans Lo very poor people for selfemploymenL pro[ecLs
LhaL generaLe lncome allowlng Lhem Lo care for Lhemselves and Lhelr famllles
81CS1he acronym '81CS' sLands for 8eal 1lme Cross SeLLlemenL 81CS sysLem ls a funds Lransfer
mechanlsm where Lransfer of money Lakes place from one bank Lo anoLher on a 'real Llme' and on'gross'
basls 1hls ls Lhe fasLesL posslble money Lransfer sysLem Lhrough Lhe banklng channelSeLLlemenL ln 'real
Llme' means paymenL LransacLlon ls noL sub[ecLed Lo any walLlng perlod1he LransacLlons are seLLled as
soon as Lhey are processed 'Cross seLLlemenL' means Lhe LransacLlon ls seLLled on one Lo one basls
wlLhouL bunchlng wlLh any oLher LransacLlon
8ancassurancelL ls Lhe Lerm used Lo descrlbe Lhe parLnershlp or relaLlonshlp beLween a bank and an
lnsurance company whereby Lhe lnsurance company uses Lhe bank sales channel ln order Lo sell
lnsurance producLs
Wholesale rlce lndex(Wl)1he Wholesale rlce lndex (Wl) ls Lhe lndex used Lo measure Lhe changes
ln Lhe average prlce level of goods Lraded ln wholesale markeL A LoLal of 433 commodlLy prlces make up
Lhe lndex lL ls avallable on a weekly basls lL ls generally Laken as an lndlcaLor of Lhe lnflaLlon raLe ln Lhe
lndlan economy 1he lndlan Wholesale rlce lndex (Wl) was flrsL publlshed ln 1902 and was used by
pollcy makers unLll lL was replaced by Lhe roducer rlce lndex (l) ln 1978
Consumer prlce lndex(Cl)lL ls a measure esLlmaLlng Lhe average prlce of consumer goods and servlces
purchased by households
venLure CaplLalvenLure caplLal ls money provlded by an ouLslde lnvesLor Lo flnance a new growlng or
Lroubled buslness 1he venLure caplLallsL provldes Lhe fundlng knowlng LhaL Lhere's a slgnlflcanL rlsk
assoclaLed wlLh Lhe company's fuLure proflLs and cash flow CaplLal ls lnvesLed ln exchange for an equlLy
sLake ln Lhe buslness raLher Lhan glven as a loan and Lhe lnvesLor hopes Lhe lnvesLmenL wlll yleld a
beLLerLhanaverage reLurn
1reasury 8llls1reasury 8llls (18llls) are shorL Lerm 8upee denomlnaLed obllgaLlons lssued by Lhe
8eserve 8ank of lndla (88l) on behalf of Lhe CovernmenL of lndla 1hey are Lhus useful ln managlng
shorLLerm llquldlLy AL presenL Lhe CovernmenL of lndla lssues Lhree Lypes of Lreasury bllls Lhrough
aucLlons namely 91day 182day and 364day 1here are no Lreasury bllls lssued by SLaLe
CovernmenLs
8anklng Cmbudsmen Scheme1he 8anklng Cmbudsman Scheme enables an expedlLlous and
lnexpenslve forum Lo bank cusLomers for resoluLlon of complalnLs relaLlng Lo cerLaln servlces rendered
by banks 1he 8anklng Cmbudsman ls a senlor offlclal appolnLed by Lhe 8eserve 8ank of lndla Lo redress
cusLomer complalnLs agalnsL deflclency ln cerLaln banklng servlces 1he 8anklng Cmbudsman Scheme
was flrsL lnLroduced ln lndla ln 1993 and was revlsed ln 2002 1he currenL scheme became operaLlve
from Lhe 1 !anuary 2006 and replaced and superseded Lhe banklng Cmbudsman Scheme 2002
SubsldyA subsldy ls a form of flnanclal asslsLance pald Lo a buslness or economlc secLor MosL subsldles
are made by Lhe governmenL Lo producers or dlsLrlbuLors ln an lndusLry Lo prevenL Lhe decllne of LhaL
lndusLry or an lncrease ln Lhe prlces of lLs producLs or Lo encourage lL Lo hlre more labor
uebenLure A debenLure ls baslcally an unsecured loan Lo a corporaLlon A Lype of debL lnsLrumenL LhaL
ls noL secured by physlcal asseL uebenLures are backed only by Lhe general credlLworLhlness and
repuLaLlon of Lhe lssuer
l)ConverLlble uebenLures Any Lype of debenLure LhaL can be converLed lnLo some oLher securlLy or lL
can be converLed lnLo sLock
ll)nonConverLlblllLy uebenLures(nC8) non ConverLlble uebenLures are Lhose LhaL cannoL be converLed
lnLo equlLy shares of Lhe lssulng company as opposed Lo ConverLlble debenLures nonconverLlble
debenLures normally earn a hlgher lnLeresL raLe Lhan converLlble debenLures do
Pedge fundPedge means Lo reduce flnanclal rlsk A hedge fund ls an lnvesLmenL fund open Lo a llmlLed
range of lnvesLors and requlres a very large lnlLlal mlnlmum lnvesLmenL lL ls lmporLanL Lo noLe LhaL
hedglng ls acLually Lhe pracLlce of aLLempLlng Lo reduce rlsk buL Lhe goal of mosL hedge funds ls Lo
maxlmlze reLurn on lnvesLmenL
lCC8A lorelgn Currency ConverLlble 8ond (lCC8) ls a Lype of converLlble bond lssued ln a currency
dlfferenL Lhan Lhe lssuer's domesLlc currency ln oLher words Lhe money belng ralsed by Lhe lssulng
company ls ln Lhe form of a forelgn currency A company may lssue an lCC8 lf lL lnLends Lo make a large
lnvesLmenL ln a counLry uslng LhaL forelgn currency
CaplLal AccounL ConverLlblllLy(CAC) lL ls Lhe freedom Lo converL local flnanclal asseLs lnLo forelgn
flnanclal asseLs and vlce versa aL markeL deLermlned raLes of exchange 1hls means LhaL caplLal accounL
converLlblllLy allows anyone Lo freely move from local currency lnLo forelgn currency and back 1he
8eserve 8ank of lndla has appolnLed a commlLLee Lo seL ouL Lhe framework for fuller CaplLal AccounL
ConverLlblllLy CaplLal accounL converLlblllLy ls consldered Lo be one of Lhe ma[or feaLures of a
developed economy lL helps aLLracL forelgn lnvesLmenL caplLal accounL converLlblllLy makes lL easler for
domesLlc companles Lo Lap forelgn markeLs
CurrenL AccounL ConverLlblllLylL deflnes aL one can lmporL and exporL goods or recelve or make
paymenLs for servlces rendered Powever lnvesLmenLs and borrowlngs are resLrlcLed
ArblLrage1he opporLunlLy Lo buy an asseL aL a low prlce Lhen lmmedlaLely selllng lL on a dlfferenL
markeL for a hlgher prlce
CaplLallsmCaplLallsm as an economy ls based on a democraLlc pollLlcal ldeology and produces a free
markeL economy where buslnesses are prlvaLely owned and operaLed for proflL ln caplLallsm all of Lhe
caplLal lnvesLmenLs and declslons abouL producLlon dlsLrlbuLlon and Lhe prlces of goods servlces and
labor are deLermlned ln Lhe free markeL and affecLed by Lhe forces of supply and demand
SoclallsmSoclallsm as an economy ls based on a collecLlvlsL Lype of pollLlcal ldeology and lnvolves Lhe
runnlng of buslnesses Lo beneflL Lhe common good of a vasL ma[orlLy of people raLher Lhan of a small
upper class segmenL of socleLy
CorporaLe governance 1he way ln whlch a company ls governed and how lL deals wlLh Lhe varlous
lnLeresLs of lLs cusLomers shareholders employees and socleLy aL large CorporaLe governance ls Lhe seL
of processes cusLoms pollcles laws and lnsLlLuLlons affecLlng Lhe way a corporaLlon (or company) ls
dlrecLed admlnlsLered or conLrolledls deflned as Lhe general seL of cusLoms regulaLlons hablLs and
laws LhaL deLermlne Lo whaL end a flrm should be run
luncLlons of 88l
1he 8eserve 8ank of lndla ls Lhe cenLral bank of lndla was esLabllshed on Aprll 1 1933 ln
accordance wlLh Lhe provlslons of Lhe 8eserve 8ank of lndla AcL 1934 1he 8eserve 8ank of lndla was
seL up on Lhe recommendaLlons of Lhe PllLon ?oung Commlsslon 1he commlsslon submlLLed lLs reporL
ln Lhe year 1926 Lhough Lhe bank was noL seL up for nlne years1o regulaLe Lhe lssue of 8ank noLes and
keeplng of reserves wlLh a vlew Lo securlng moneLary sLablllLy ln lndla and generally Lo operaLe Lhe
currency and credlL sysLem of Lhe counLry Lo lLs advanLage 8anker Lo Lhe CovernmenL performs
merchanL banklng funcLlon for Lhe cenLral and Lhe sLaLe governmenLs also acLs as Lhelr banker8anker
Lo banks malnLalns banklng accounLs of all scheduled banks
MoneLary pollcyA MoneLary pollcy ls Lhe process by whlch Lhe governmenL cenLral bank of a counLry
conLrols (l) Lhe supply of money (ll) avallablllLy of money and (lll) cosL of money or raLe of lnLeresL ln
order Lo aLLaln a seL of ob[ecLlves orlenLed Lowards Lhe growLh and sLablllLy of Lhe economy
llscal ollcyllscal pollcy ls Lhe use of governmenL spendlng and revenue collecLlon Lo lnfluence Lhe
economy 1hese pollcles affecL Lax raLes lnLeresL raLes and governmenL spendlng ln an efforL Lo conLrol
Lhe economy llscal pollcy ls an addlLlonal meLhod Lo deLermlne publlc revenue and publlc expendlLure
Core 8anklng SoluLlonsCore banklng ls a general Lerm used Lo descrlbe Lhe servlces provlded by a group
of neLworked bank branches 8ank cusLomers may access Lhelr funds and oLher slmple LransacLlons
from any of Lhe member branch offlces lL wlll cuL down Llme worklng slmulLaneously on dlfferenL
lssues and lncreaslng efflclency 1he plaLform where communlcaLlon Lechnology and lnformaLlon
Lechnology are merged Lo sulL core needs of banklng ls known as Core 8anklng SoluLlons
LCovernance LCovernance ls Lhe publlc secLor's use of lnformaLlon and communlcaLlon Lechnologles
wlLh Lhe alm of lmprovlng lnformaLlon and servlce dellvery encouraglng clLlzen parLlclpaLlon ln Lhe
declslonmaklng process and maklng governmenL more accounLableLransparenL and effecLlve
8lghL Lo lnformaLlon AcL 1he 8lghL Lo lnformaLlon acL ls a law enacLed by Lhe arllamenL of lndla glvlng
clLlzens of lndla access Lo records of Lhe CenLral CovernmenL and SLaLe overnmenLs1he AcL applles Lo
all SLaLes and unlon 1errlLorles of lndla excepL Lhe SLaLe of !ammu and kashmlr whlch ls covered
under a SLaLelevel law 1hls law was passed by arllamenL on 13 !une 2003 and came fully lnLo force on
13 CcLober 2003
CredlL 8aLlng Agencles1he credlL raLlng agencles ln lndla malnly lnclude lC8A and C8lSlL lC8A
wasformerly referred Lo Lhe lnvesLmenL lnformaLlon and CredlL 8aLlng Agency of lndla LlmlLed 1helr
maln funcLlon ls Lo grade Lhe dlfferenL secLor and companles ln Lerms of performance and offer
soluLlons for up gradaLlon 1he credlL raLlng agencles ln lndla malnly lnclude lC8A and C8lSlL(CredlL
8aLlng lnformaLlon Servlces of lndla LlmlLed)
ChequeCheque ls a negoLlable lnsLrumenL lnsLrucLlng a 8ank Lo pay a speclflc amounL from a speclfled
accounL held ln Lhe maker/deposlLor's name wlLh LhaL 8ankA blll of exchange drawn on a speclfled
banker and payable on demandWrlLLen order dlrecLlng a bank Lo pay money"
uemand urafLA demand drafL ls an lnsLrumenL used for effecLlng Lransfer of money lL ls a negoLlable
lnsLrumenL Cheque and uemandurafL boLh are used for 1ransfer of money ?ou can 100 LrusL a uu lL
ls a banker's check A check may be dlshonored for lack of funds a uu can noL Cheque ls wrlLLen by an
lndlvldual and uemand drafL ls lssued by a bank eople belleve banks more Lhan lndlvlduals
n8lC A nonbanklng flnanclal company (n8lC) ls a company reglsLered under Lhe
Companles AcL 1936 and ls engaged ln Lhe buslness of loans and advances acqulslLlon of
shares/sLock/bonds/debenLures/securlLles lssued by governmenL buL does noL lnclude any lnsLlLuLlon
whose prlnclpal buslness ls LhaL of agrlculLure acLlvlLy lndusLrlal acLlvlLy
sale/purchase/consLrucLlon of lmmovable properLy
n8lCs are dolng funcLlons akln Lo LhaL of banks however Lhere are a few dlfferences
(l)A n8lC cannoL accepL demand deposlLs (demand deposlLs are funds deposlLed aL a deposlLory
lnsLlLuLlon LhaL are payable on demand lmmedlaLely or wlLhln a very shorL perlod llke your currenL
or savlngs accounLs)
(ll) lL ls noL a parL of Lhe paymenL and seLLlemenL sysLem and as such cannoL lssue cheques Lo lLs
cusLomers and
(lll) ueposlL lnsurance faclllLy of ulCCC ls noL avallable for n8lC deposlLors unllke ln case of banks
nASSCCM1he naLlonal AssoclaLlon of SofLware and Servlces Companles (nASSCCM) Lhe lndlan
chamber of commerce ls a consorLlum LhaL serves as an lnLerface Lo Lhe lndlan sofLware lndusLry and
lndlan 8C lndusLry MalnLalnlng close lnLeracLlon wlLh Lhe CovernmenL of lndla ln formulaLlng naLlonal
l1 pollcles wlLh speclflc focus on l1 sofLware and servlces malnLalnlng a sLaLe of Lhe arL lnformaLlon
daLabase of l1 sofLware and servlces relaLed acLlvlLles for use of boLh Lhe sofLware developers as well as
lnLeresLed companles overseas
Slu8l 1he Small lndusLrles uevelopmenL 8ank of lndla ls a sLaLerun bank almed Lo ald Lhe growLh and
developmenL of mlcro small and medlum scale lndusLrles ln lndla SeL up ln 1990 Lhrough an acL of
parllamenL lL was lncorporaLed lnlLlally as a wholly owned subsldlary of lndusLrlal uevelopmenL 8ank of
lndla
SLnSLx and nll1?SLnSLx ls Lhe shorL Lerm for Lhe words SenslLlve lndex" and ls assoclaLed wlLh Lhe
8ombay (Mumbal) SLock Lxchange (8SL) 1he SLnSLx was flrsL formed on 111986 and used Lhe markeL
caplLallzaLlon of Lhe 30 mosL Lraded sLocks of 8SL Where as nSL has 30 mosL Lraded sLocks of
nSLSLnSLx lS 1PL lnuLx Cl 8SL Anu nll1? lS 1PL lnuLx Cl nSL8C1P WlLL SPCW uAlL? 18AulnC
MA8kS Sensex and nlfLy boLh are an lndex" An lndex ls baslcally an lndlcaLor lL lndlcaLes wheLher
mosL of Lhe sLocks have gone up or mosL of Lhe sLocks have gone down
SL8l SL8l ls Lhe regulaLor for Lhe SecurlLles MarkeL ln lndla Crlglnally seL up by Lhe CovernmenL of lndla
ln 1988 lL acqulred sLaLuLory form ln 1992 wlLh SL8l AcL 1992 belng
passed by Lhe lndlan arllamenL Chalred by C 8 8have
ASSCCPAM 1he AssoclaLed Chambers of Commerce and lndusLry of lndla (ASSCCPAM) lndla's premler
apex chamber covers a membershlp of over 2 lakh companles and professlonals across Lhe counLry lL
was esLabllshed ln 1920 by promoLer chambers represenLlng all reglons of lndla As an apex lndusLry
body ASSCCPAM represenLs Lhe lnLeresLs of lndusLry and Lrade lnLerfaces wlLh CovernmenL on pollcy
lssues and lnLeracLs wlLh counLerparL lnLernaLlonal organlzaLlons Lo promoLe bllaLeral economlc lssues
resldenLSwaLl lramal
nA8A8unA8A8u was esLabllshed by an acL of arllamenL on 12 !uly 1982 Lo lmplemenL Lhe naLlonal
8ank for AgrlculLure and 8ural uevelopmenL AcL 1981 lL replaced Lhe AgrlculLural CredlL ueparLmenL
(ACu) and 8ural lannlng and CredlL Cell (8CC) of 8eserve 8ank of lndla and AgrlculLural 8eflnance and
uevelopmenL CorporaLlon (A8uC) lL ls one of Lhe premlere agency Lo provlde credlL ln rural areas
nA8A8u ls seL up as an apex uevelopmenL 8ank wlLh a mandaLe for faclllLaLlng credlL flow for
promoLlon and developmenL of agrlculLure smallscale lndusLrles coLLage and vlllage lndusLrles
handlcrafLs and oLher rural crafLs
MuLual funds MuLual funds are lnvesLmenL companles LhaL pool money from lnvesLors aL large and
offer Lo sell and buy back lLs shares on a conLlnuous basls and use Lhe caplLal Lhus ralsed Lo lnvesL ln
securlLles of dlfferenL companles 1he muLual fund wlll have a fund manager LhaL Lrades Lhe pooled
money on a regular basls 1he neL proceeds or losses are Lhen Lyplcally dlsLrlbuLed Lo Lhe lnvesLors
annually
AsseL ManagemenL Companles A company LhaL lnvesLs lLs cllenLs' pooled fund lnLo securlLles LhaL
maLch lLs declared flnanclal ob[ecLlves AsseL managemenL companles provlde lnvesLors wlLh more
dlverslflcaLlon and lnvesLlng opLlons Lhan Lhey would have by Lhemselves MuLual funds hedge funds
and penslon plans are all run by asseL managemenL companles 1hese companles earn lncome by
charglng servlce fees Lo Lhelr cllenLs
nonperfomlng asseLsnonperformlng asseLs also called nonperformlng loans are loansmade by a
bank or flnance company on whlch repaymenLs or lnLeresL paymenLs are noL belng made on Llme A
debL obllgaLlon where Lhe borrower has noL pald any prevlously agreed upon lnLeresL and prlnclpal
repaymenLs Lo Lhe deslgnaLed lender for an exLended perlod of Llme 1he nonperformlng asseL ls
Lherefore noL yleldlng any lncome Lo Lhe lender ln Lhe form of prlnclpal and lnLeresL paymenLs