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Banking, Economics & Finance Awareness Notes 1 - GKmojo
Banking, Economics & Finance Awareness Notes 1 - GKmojo
Banking, Economics & Finance Awareness Notes 1 - GKmojo
GKmojo
Protected: Banking, Economics & Finance Awareness Notes 1
Banking Terminology
Demand Liabilities
They are liabilities which are payable on demand. For example: Current Deposits,
Savings bank deposits, Balances in overdue fixed deposits, Outstanding TTs, MTs, DDs,
Unclaimed deposits etc.
Time Liabilities
They are liabilities which are payable other than on demand. For example: Fixed
deposits, cash certificates, cumulative and recurring deposits, time liabilities portion of
savings bank deposits, staff security deposits etc.
Non-performing Asset
An asset, including a leased asset, becomes non performing when it ceases to generate
income for the bank. A loan on which instalment has been due for a specified period is a
non-performing asset.
Funds Transfer
There is no limit – either minimum or maximum – on the amount of funds that can be
transferred using NEFT. However, maximum amount per transaction is limited to
Rs.50,000/- for cash-based remittances and remittances to Nepal.
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12/6/2020 Banking, Economics & Finance Awareness Notes 1 - GKmojo
they are received rather than at some later time; ‘Gross Settlement’ means the
settlement of funds transfer instructions occurs individually (on an instruction
instruction basis).
The minimum amount to be remitted through RTGS is Rs. 2 lakh. There is no upper
ceiling for RTGS transactions.
A customer can instantly transfer rupee funds to anybody anywhere anytime. Per
transaction limit for IMPS using account number is 2 lakh.
Instruments
Cheque
A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be
payable otherwise than on demand. (Section 6 of Negotiable Instruments Act, 1881).
The maker of a cheque is called the ‘drawer’, and the person directed to pay is the
‘drawee’. The person named in the instrument, to whom or to whose order the money is,
the instrument directed, to be paid, is called the ‘payee’.
Ante Dated Cheque: Cheques which have been written the maker, and dated
at some point in the past.
Bounced Cheque: Check that cannot be processed because the writer has
insufficient funds.
Crossed Cheque: These cheques can only be deposited directly into a bank
account and cannot be immediately cashed a bank or any other credit institution.
Post Dated Cheque: Cheque that is written the drawer (payer) for a date in
the future.
Stale Cheque: A cheque which a bank will not accept and exchange for money
or payment because it was written more than a certain number of months ago.
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12/6/2020 Banking, Economics & Finance Awareness Notes 1 - GKmojo
Demand Draft
The Demand Draft is a pre-paid Negotiable Instrument, wherein the drawee bank
undertakes to make payment in full when the instrument is presented the payee for
payment. The demand draft is made payable on a specified branch of a bank at a
specified centre.
Bankers Cheque
It is similar to Demand Draft. The issuing bank undertakes to make the payment in full
when the instrument is presented the payee for payment. In practice it is used within
local clearing jurisdiction unlike demand draft which is issued for any place.
Plastic Money: It is a term used in reference to the hard plastic cards we use every day in
place of actual bank notes.
Example: Credit card, Debit Card
Inflation: It can be defined as a sustained increase in the general level of prices for goods
and services.
Commercial Bills: A bill of exchange issued a commercial organization to raise money for
short-term needs.
Debentures: A long-term security bearing a fixed rate of interest, issued a company and
secured against assets.
KYC Norms: The process of Banks verifying the identity of its clients.
Virtual Banking: Handling all transactions of banks via the Web, e-mail, mobile check
deposit and ATM machines.
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Wholesale Banking: Banking services between merchant banks and other financial
institutions.
NRO Accounts (For NRIs): Non Residency Ordinary Account is a bank account is
intended to manage the income earned in India from sources like pension, dividend, rent,
interest etc. NRO account is opened the citizen of India who temporarily shifted to a foreign
country.
Abbreviation list
1) Related to economy:-
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2) Related to government:-
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ATMs
The brainchild of Scottish inventor Shepherd-Barron, the first ATM (automated teller
machine) was opened on June 27, 1967 at a branch of Barclays bank in Enfield, north
London.
Types of ATMs:
White Label ATM: The ATMs that are set up Non-Banking Financial Companies and offer
services are known as White Label ATMs.
Brown Label ATM: A service provider owns the hardware and lease of the machine but a
bank manages the cash and connectivity to bank network. In this case, the ATM is termed
Brown Label.
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12/6/2020 Banking, Economics & Finance Awareness Notes 1 - GKmojo
Non-Performing Assets are loans given a Bank or financial institutions where the
borrower defaults or delays interest or principal payments.
The Act employs three significant tools for asset management of financial institutions –
asset securitization, asset reconstruction and powers for security interest enforcement. The
readers should be aware of what these terms actually mean in order to understand the
SARFAESI Act.
In February 2016, the NDA government approved the proposal for setting up BBB and it
started functioning from April 2016.
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12/6/2020 Banking, Economics & Finance Awareness Notes 1 - GKmojo
The BBB works as step towards governance reforms in Public Sector Banks (PSBs) as
recommended P.J. Nayak Committee.
Bhanu Pratap Sharma is the new Chairman of the Mumbai based Bureau.
The bureau was announced as part of the seven-point Indradhanush plan to revamp
public sector banks.
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12/6/2020 Banking, Economics & Finance Awareness Notes 1 - GKmojo
FREE GK TESTS
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Bank PO GA Test 1
TOP ARTICLES
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FREE GK CONTENT
Payment Banks
Static GK Test 1
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Geography Quiz 1
Nationalization of Banks
Business GK Quiz 1
Business GK Quiz 2
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Static GK Test 2
Geography India
Taglines of Companies
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