Important General Awareness 8

• Nguyen Tan Dung : Vietnamese prime Minister Mr. Nguyen Tan Dung was elected for a second term.
• Hina Rabbani Khar : Mrs Hina Rabbani Khan became Pakistan's first woman foreign Minister on July 19, 2011. The 34 year old belongs to Pakistan's People's Party
• Nirupama Rao : India's Foreign Secretary Mrs. Nirupama Rao was appointed as India's ambassador to the United States on July 16, 2011.
• Sushil Kumar Modi : Bihar Deputy Chief Minister Mr. Sushil Kumar Modi was elected as the new Chairman of the Empowered Committee of State Finance Ministers of GST ( Goods and Service Tax )on July 18, 2011.
• Pradeep Kumar : Defence Secretary Mr. Pradeep kumar was sowrn in as the new Central Vigilance Commissioner (CVC) of India on July 14, 2011. He is 1972 IAS batch officer of Haryana cadre replacing Mr. P J Thomas.
• Mahendra Singh Dhoni : Has been declared man of the series in the home one day international series against England in which Indian Team beat England 5 games to Nil.
• Bangladesh's Highest honour for Indira Gandhi : Bangladesh's highest award- the Bangladesh Swadhinata Sammanona ( Bangladesh Freedom Honour )- conferred on the late Indira Gandhi for her outstanding contribution to the Bangladesh Liberation war.
• Magaysay Awards for 2011 : The Ramon magsasay Awards for 2011 were announced in Manila, the Philippines on July 27, 2011. Two Indians- Dr. Harish Hande and Ms. Nileema Mishra - were among the winners.
• Prahaar missile successfully test-fired : A new surface to surface missile named : Prahaar " was successfully test fired on July 21, 2011 for the first time from the integrated test Range at Chandipur, Orissa.
• New Defence Secretary : Mr. Sashikant Sharma, a 1976 batch IAS officer of Bihar Cadre  was appointed as new defence secretary.
• Sanskrit Day : September 5
• World Tourism Day : September 27

Important General Awareness VII

1. Income tax in India was introduced by ?

a) William Jones b) James Wilson c) Lord Macaulay d) Sir Charles Wood

2. Which of the following country is not a member of SAARC ?

a)Nepal b)Pakistan c) India d) Myanmar

3. The Indian Rupee symbol was designed by ?

a) D Udai Kumar b) Udai Chopra c) Rakesh Mohan d) D raju Reddy

4. Which of the following bank is limited to the needs of agriculture and rural finance ?

a) RBI b) NHB c) SBI d) NABARD

5. The food for work programme was renamed as

a) RLEGP b) IRDP c) NREP d) NREGA

6. Which of the following is the credit rating agency in India ?

a) CRISIL b) FITCH c) CARE d) ICRA e) All of these

7. Infrastructure financing committee is which of these ?

a) T Vikas Mohan b) V Kurien c) Deepak Parikh d) K V Kamat

8. Present SLR rate is ?

a) 26% b) 24% c) 6% d) 7%

9. SFIO stands for ?

a) Serious Fraud Investing Office
b) Super Financial Investment Office
c) Serious Financial Investing Office
d) None

10. Chinese largest which recently set up its operation in India ?

a) China Commerical Bank
b) Industrial and Commercial Bank of China
c) Shanghai commercial Bank
d) Honkong and Shanghai bank

11. Who among the following has been elected as first ever woman Prime Minister of Denmark ?

a) Jytte Anderson
b) Angella Merkel
c) Helle Thorning-Schmidt
d) KimY Clisters

12. Which is the biggest bank of France ?

a) BNP Pribas
b) HSBC bank
c) Barclays Bank
d) Rabobank

13. 44th Jnanpith Award has been awarded to which of the following ?

a) Akhlaq Shahryar b) Javed Hussian c) Anupam Kher d) Kirron Kher

14. First Ever formula one rance in India will be held where ?

a) Bangalore
c) Navi Mumbai
d) Noida
d) Chennai

15. Which of the following European Country has banned Muslims Friday prayers on streets ?

a) England
b) France
c) Poland
d) Germany

KEYS......

1.(a) 2. (d) 3. (a) 4 (d) 5. (c) 6. (e) 7. (c) 8. (a) 9. (a) 10. (b) 11. (c) 12. (a) 13. (a) 14. (d) 15. (b)

If your score is...

>12.... excellent
8-12...Needs further polishing
<8.. Need high improvement

Banking Glossary (D)

Daily Periodic Rate
    The interest rate factor used to calculate the interest charges on a daily basis. The factor is computed by dividing the yearly rate by 365 days.

Debit Card
    A plastic card issued by a Bank for cash withdrawal from a/c(s) through ATMs and payments at point of sale for purchases made. Debit Card denotes immediate debit to the customer's account.

Debt

An amount of money you owe to banks or credit issuers. More specifically, it is the amount of money that you have borrowed.

Debt Ratio / Debt Burden
  An amount of money you owe to banks or credit issuers. It is the percentage of your income that goes to paying your debts every month. Debt ratio usually gives a clear picture of your overall financial well-being. To calculate your debt ratio, first add up all your monthly income including take-home pay (after taxes). Then add up all your monthly payments for interest bearing loans and accounts, such as mortgages, student loans, credit cards and car loans. If you rent your home, include that amount, but do not include utilities and telephone charges because they can vary on a monthly basis. Finally, divide your monthly payments by your income. Multiply the result by 100 and that number is your debt ratio percentage.

*A low ratio is under 20%, which means that you are in good financial health and are doing a good job of managing your money.

*A moderate ratio is between 21% and 40%. This means that you should look carefully at your monthly payments and start decreasing your overall level of debt, including credit cards.

A high debt burden is over 40%. You should immediately stop accumulating debt and start looking for ways to decrease your debt or increase your income.


Default
    Failure to repay a loan according to the agreed upon terms.

Deferred Payment
    Payments put off to a future date or extended over a period of time. Interest will usually still accumulate during deferment.

Deferred Tax Assets

   Unabsorbed depreciation and carry forward of losses which can be set-off against future taxable income which is considered as timing differences result in deferred tax assets. The deferred Tax Assets are accounted as per the Accounting Standard 22.

Deferred Tax Liabilities
   Deferred tax liabilities have an effect of increasing future year's income tax payments, which indicates that they are accrued income taxes and meet definition of liabilities.

Delinquency
    When loan payments are not paid according to the terms of the agreement / promissory note. Late fees are often levied on delinquent accounts.

Deposit
    Money placed in a customer's account at a Bank / Financial Institution.

Deposit at Call
   Receipts issued to customers for amount deposited and repayable on demand. A facility normally extended for payment of earnest money deposits in tenders.

Depreciation
    Depreciation means a decline in the value of capital asset. It represents a cost of ownership and the consumption of an asset over time.

Derivative
    A derivative instrument derives its value from an underlying product. There are basically three derivatives :

a) Forward Contract : A forward contract is an agreement between two parties to buy or sell an agreed amount of a commodity or financial instrument at an agreed price, for delivery on an agreed future date. Future Contract - Is a standardized exchange tradable forward contract executed at an exchange. In contrast to a futures contract, a forward contract is not transferable or exchange tradable, its terms are not standardized and no margin is exchanged. The buyer of the forward contract is said to be long on the contract and the seller is said to be short on the contract.


b) Options : An option is a contract which grants the buyer the right, but not the obligation, to buy (call option) or sell (put option) an asset, commodity, currency or financial instrument at an agreed rate (exercise price) on or before an agreed date (expiry or settlement date). The buyer pays the seller an amount called the premium in exchange for this right. This premium is the price of the option.

c) Swaps : Is an agreement to exchange future cash flow at pre-specified Intervals. Typically one cash flow is based on a variable price and other on affixed one.

Detailed Statement
      The detailed statement of account depicts the details of the transactions in the account (ie. Loan disbursal, EMI credit, interest debit, unpaid return of EMI, penal interest debit, if any, etc.).

Disclosure
    Information pertaining to the account services, fees and regulatory requirements.

Disclosure Statement
    A disclosure statement details the actual cost of a loan, including all estimated interest costs and loan fees. For credit card accounts, this information may be found in the Card member Agreement.

Disposable Income
   Disposable income is the amount of income left after deductions such as income tax, pension contributions and personal insurance. It is often known as 'take home pay' - the actual pay a worker receives.

Documentation
   The legal or other papers to be signed and presented during the loan process. It is also called the loan papers.

Dormant Account (In operative account)
    A bank account in which there have not been any transactions for two years.

Doubtful Asset
  An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months. A loan classified as doubtful has all the weaknesses inherent in assets that were classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, - on the basis of currently known facts, conditions and values - highly questionable and improbable.

Down Payment
   The amount, which has to be paid by the borrower upfront while taking a loan. This amount is generally 10%-15% of the total fund required. It is also called the margin amount or margin money.

Draft
 A written, signed and dated order from one Branch of a Bank to another , to pay a sum of money to a specific party.

Drawee
  The person or entity on whom a draft / bill is drawn by the drawer.

Drawer
    The party who draws or issues the draft / bill. In a Letter of Credit it is the Beneficiary. The person who makes or draws a bill of exchange or cheque is called drawer.

Due Date
  The day a payment is due to a payee / creditor. After that date, a late fee can be charged, the payment can be recorded as late, and the account considered overdue / delinquent.

Important General Awareness VI

1. The country which achieved number one position in terms of medals tally in the 19th Commonwealth Games in New Delhi is

a) England  b) Australia  c) Germany  d) Malaysia

2. Bharti Airtel which is India largest telecom service provider has recently bought Zain. Zain is the biggest phone company of

a) Kuwait b) UAE c) Egypt d) Sudan

3. The chief election commissioner of India is

a) S Y Qureshi b) Navin Chawala c) N Gopalaswami d) Hamid Ansari

4. Naoto Kan is the Prime minister of which country

a) Iran b) Japan c) Argentina d) Brazil

5. International Youth day is observed on

a) August 9 b) 15 c) August 21 d) August 12

6. Lawn Tennis player Kim Clisters belongs to which country

a) Belgium b) Russia c) Yugoslavia d) Spain

7. Rangaswamy Cup is associated with

a) Hockey b) Chess c) Polo d) Squash

8. Kiran Kumar Reddy is the Chief Minister of which state in India

a) Karnataka b) Kerala c) Andhra Pradesh d) Orrisa

9. Highest sports award in India is

a) Arjuna Award b) Dronacharya Award c) Rajiv Gandhi Khel Ratna d) Bharata Ratna

10. Moin-ud-Dawala cup is associated with which sports

a) Cricket b) Football c) Tennis d) Golf

..........................
Keys :

1. B
2. A
3. A
4. B
5. D
6. A
7. A
8. C
9. C
10. A

Banking Glossary (C)

Canceled Cheque
	A cheque that has been not paid and cancelled by the drawer - Account holder.
Capital Adequacy Ratio
	Capital Adequacy Ratio is the capital to assets ratio which banks are required to maintain against risks. It is also known as Capital to Risk (Weighted) Assets Ratio (CRAR).
Capital Funds
	Equity contribution of owners. The basic approach of capital adequacy framework is that a bank should have sufficient capital to provide a stable resource to absorb any losses arising from the risks in its business. Capital is divided into different tiers according to the characteristics / qualities of each qualifying instrument. For supervisory purposes capital is split into two categories : Tier I and Tier II.
	Tier I Capital
	>	A term used to refer to one of the components of regulatory capital. It consists mainly of share capital and disclosed reserves (minus goodwill, if any). Tier I items are deemed to be of the highest quality because they are fully available to cover losses Hence it is also termed as core capital.
	Tier II Capital
	>	Refers to one of the components of regulatory capital. Also known as supplementary capital, it consists of certain reserves and certain types of subordinated debt. Tier II items qualify as regulatory capital to the extent that they can be used to absorb losses arising from a bank's activities. Tier II's capital loss absorption capacity is lower than that of Tier I capital.
Capital Reserves
	That portion of a company's profits not paid out as dividends to shareholders. They are also known as undistributable reserves and are ploughed back into the business.
Card Holder
	Cardholder is a person who owns a debit or credit card issued by a credit card company, financial institution or bank.
Card Issuer
	A bank, financial institution, credit union, or agency that issues a credit card to public or its members is called a card issuer.
Card member Agreement
	The issuer's  terms and conditions relating to your credit card account. The Card member Agreement is between the customer and the card issuing company and is a legal document. (When you sign up for a credit card understand the terms and Conditions).
Carpet Area
	The area inside the walls of a room, measured from wall to wall including the door jams. In simple terms it is the area usable as floor level inside a room.
CASA Deposit
	Deposit in bank in current and Savings account.
Cash Advance (Credit Card)
	Applies to an advance taken against a credit card account. The advance may be through a cash withdrawal at an automated teller machine, bank teller or by use of a convenience check. This cash is an instant loan from your credit card account. The credit card company will apply finance charges from the day you take the advance until the day you pay it off. A transaction fee may also be charged based on the amount of your withdrawal.
Cash Advance Fee
	A one-time fee for cash advances in addition to normal finance charges. This fee is usually a percentage of the advance amount.
Cash Back Credit Card
	It is a special type of reward credit card, which pays back in cash. Whenever you use your cash back credit card to make purchases, a percentage of it is returned back to you. The cash back rewards can be redeemed as gift vouchers, or hard cash.
Cash Reserve Ratio (CRR)
	Cash Reserve Ratio is the amount of mandatory funds that commercial banks have to keep with RBI. It is always fixed as a percentage of total demand and time liabilites.
Certificate of Title (Title Deed)
	An official document, showing the ownership or title of the property in question is called the certificate of title / title deeds. It describes various details about the property such as the area, location, registered owner and other factors and charges related to the property.
Certificate of Deposit (CD)
	A time deposit that is payable at the end of a specified term. CDs generally pay a fixed interest rate and generally offer a different interest rate than other types of deposit accounts. If an early withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. CD is sold at discount value and being a money market instrument, can be transferred to other person through negotiaion.
Certified Cheque
	A cheque for which the bank guarantees payment. Banks in India do not generally, certify cheques.
Charge Back
	A credit card transaction, which is returned or not honored, is called a charge back. Usually done by the credit card holder in response to faulty products, credit card fraud, a dispute or non-compliance with the rules and regulations, charge back restores the funds back with the credit card.
Charge back Period
	It is the time period from a particular credit card transaction within which, the credit card holder must initiate a charge back.
Charge Card
	A card that requires full payment of the balance before the end of the billing period. It is not a line of credit and no interest is charged.
Cheque for Collection
	An instrument drawn on another Bank or Branch tendered by a customer of a Bank or by his representative, at the branch or in the drop box provided for the purpose for collecting the amount of the cheque.
Cheque Purchase
	Bank may, at its sole discretion, purchase local / outstation cheque tendered for collection at the specific request of the customer or as per prior arrangement subject to levy of service charges.
Cheque Return fee / EMI return fee
	This is a 'service charge' that would be levied in the account due to return of cheque sent for collection / EMI cheque. Usually, both the collecting bank and paying bank leavy cheque return charges on their customers.
Clear Title
	When the property in question is free from any doubt, is not disputed and is not having any encumbrances it is said to have a clear title.
Co-borrower
	A person who applies for any loan with the primary borrower and takes on the responsibility for repayment of the debt. This is done to improve the eligibility for loan and simultaneously mitigating the risk of banks who can exercise the option of recovery from both parties- jointly as well as severally.
Co-Branded Card
	It is a special type of credit card which is sponsored by both the credit card issuing company and the participating retail company or vendor. Co-branded credit card carries special deals and savings from the participating merchants.
Collateral
	An asset pledged to a lender to guarantee repayment. Collateral could include savings, bonds, insurance policies, jewelry, property or other items that are pledged to pay off a loan if payments are not made according to the contract. Collateral is not required for unsecured credit card accounts.
Collected Balance
	The balance in a deposit account, not including deposited items that have not yet been paid, or collected. See also Glossary term, "account balance." It is also known as cleared balance.
Combined Balance
	Any combination of balances from linked accounts, such as savings, current and CDs. Can be used to meet the balance required to waive the monthly fee on some accounts.
Commercial Real Estate
	Commercial real estate is defined as "fund based and non-fund based exposures secured by mortgages on commercial real estates (office buildings, retail space, multi-purpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction etc.)"
Commitment Fee
	It is an interest, which is charged on a loan applicant if he doesn't withdraw the sanctioned loan within a stipulated time period.
Common Areas
	Areas such as staircase, lifts, sanitation ducts, electricity ducts, air-conditioning ducts etc. kept aside for common use by the property owners. This area is generally divided proportionately in relation to the size of property and charged accordingly.
Compound Interest
	Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. The more frequently interest is compounded, the higher the effective rate. In India interest on loans and advances is compounded on monthly basis as per RBI order.
Consolidation Loan
	If you owe money to several creditors, you can combine your payments and balances into a single account with one creditor. This can be done in several ways. For example, you can transfer several high interest credit card balances onto one card with a lower rate. If you own a home, you can consolidate your debt with a low-interest home equity loan. Or, you can get a loan specifically designed for this purpose.
Contact Point Verification
	This refers to contact by bank staff on the phone numbers / address provided by the customer to establish correctness of the contact points. CPV is an important parameter in banks and a negative verification can lead to decline of the banking facilities sought.
Contract
	A written, oral, partly written partly oral or behavioral agreement between two or more parties or people, which is legally binding, can be termed as a contract.
Convexity
	This represents the rate of change of duration. It is the difference between actual price of a bond and the price estimated by modified duration.
Conveyance
	It is the process of legally transferring the ownership of interest in land.
Co-sign
	To sign a credit agreement with someone and agree to share the debt with that person or assume the debt if the other person defaults and doesn't pay.
Co-signer (Co-obligant)
	A co-signer is a person who signs a loan or credit card with the primary applicant, pledging to be responsible for repaying the loan or debt in the event the applicant is unable.
Cost Income Ratio (Efficiency Ratio)
	The cost income ratio reflects the extent to which non-interest expenses of a bank make a charge on the net total income (total income - interest expense). The lower the ratio, the more efficient is the bank. (Formula : Non interest expenditure / Net Total Income x 100)
Coverage Ratio
	Equity minus net NPA divided by total assets minus intangible assets.
CRAR (Capital to Risk Weighted Assets Ratio)
	Capital to risk weighted assets ratio is arrived at by dividing the capital of the bank with aggregated risk weighted assets for credit risk, market risk and operational risk. The higher the CRAR of a bank the better capitalized it is.
Credit Appraisal
	This is the process for evaluating credit worthiness of any loan proposal. This helps establish the risks involved in the proposal and debt servicing capacity of the borrower. A wide range of criteria viz. age of borrower, credit score, existing loan obligations, nature / sources / stability of income etc. are taken into account. Credit History of the person is an important criteria for sanction of credit.
Credit Available
	The amount of unused credit that is available. Your credit available is your outstanding balance subtracted from your total credit line. For example, if your credit line is  Rs.50,000  and you have an outstanding balance of Rs.40,000, your credit available is Rs.10,000, which means that you have Rs.10,000 of credit left that you can use to make purchases with your credit card.
Credit Bureau (Credit Information Company)
	A credit bureau is a company that collects and shares information about how you manage your credit. Many banks and credit issuers regularly update the credit bureaus about your payment habits and how much money you owe. Potential creditors may check your credit report when you apply for a loan or a credit card. Reporting to at least one Credit Bureau is mandatory in India.
Credit Card Debt
	The total unpaid balances on all of your credit cards (not to be confused with the minimum amount you owe each month).
Credit Criteria
	Factors used by lenders to rate the credit worthiness or ability to repay debt. They may include the following : income, amount of personal debt carried, number of accounts from other credit sources and credit history. A lender is free to use any credit-related information in approving or denying a credit application
Credit Enhancement
	These are the facilities offered to an SPV to cover the probable losses from the pool of securitized assets. It is a credit risk cover given by the originator or a third party and meant for the investors in any securitization process.
Credit History
	A financial profile of any person created by credit rating agencies based on how he repays his bills, clears his debt and the amount a person owes to various credit card companies and other lenders.
Credit Limit
	It is the maximum amount of money one can draw on his account based on prior sanction or approval from the bank. Borrowing or drawing limit fixed by a bank for a customer depending on his credit history, repaying capacity and relationship with bank.
Credit Management
	The way you handle the money you borrow from banks or credit issuers. A good credit management will ensure optimum utilization of borrowed funds and meet repayment obligations on time.
Credit Report
	A credit report is a record of all of the information that credit bureau have collected about the way you've managed your finances over the last 5 years. It is the official record of how you pay the money you owe to your creditors.  The information on your report can either qualify or disqualify you from obtaining credit cards, mortgages, loans etc. An individual can obtain credit report on himself from the credit bureau on payment of a fee.
Credit Risk
	The risk that a party to a contractual agreement or transaction will be unable to meet its obligations or will default on commitments. Credit risk can be associated with almost any financial transaction. BASEL-II provides two options for measurement of capital charge for credit risk :
	1.	Standardised Approach (SA) : Under the SA, the banks use a risk-weighting schedule for measuring the credit risk of its assets by assigning risk weights based on the rating assigned by the external credit rating agencies.
	2.	Internal rating based approach (IRB) : The IRB approach, on the other hand, allows banks to use their own internal ratings of counterparties and exposures, which permit a finer differentiation of risk for various exposures and hence delivers capital requirements that are better aligned to the degree of risks. The IRB approaches are of two types :
		a)	Foundation IRB (FIRB) : The bank estimates the Probability of Default (PD) associated with each borrower, and the supervisor supplies other inputs such as Loss Given Default (LGD) and Exposure At Default (EAD).
		b)	Advanced IRB (AIRB) : In addition to Probability of Default (PD), the bank estimates other inputs such as EAD and LGD. The requirements for this approach are more exacting. The adoption of advanced approaches would require the banks to meet minimum requirements relating to internal ratings at the outset and on an ongoing basis such as those relating to the design of the rating system, operations, controls, corporate governance, and estimation and validation of credit risk components, viz., PD for both FIRB and AIRB and LGD and EAD for AIRB. The banks should have, at the minimum, PD data for five years and LGD and EAD data for seven years. In India, banks have been advised to compute capital requirements for credit risk adopting the SA.
Credit Risk Mitigation
	Techniques used to mitigate the credit risks through exposure being collateralised in whole or in part with cash or securities or guaranteed by a third party.
CRR
	Cash reserve ratio is the cash parked by the banks in their specified current account maintained with RBI.
Credit-worthy
	You are judged to be qualified to have credit.
Current Account
	An account used for commercial purpose. It attracts no rate of interest and is generally charged by the bank with maintenance charges. There is no limit to the number of transactions in this type of account.
Current Exposure Method
	The credit equivalent amount of a market related off-balance sheet transaction is calculated using the current exposure method by adding the current credit exposure to the potential future credit exposure of these contracts. Current credit exposure is defined as the sum of the positive mark to market value of a contract. The Current Exposure Method requires periodical calculation of the current credit exposure by marking the contracts to market, thus capturing the current credit exposure. Potential future credit exposure is determined by multiplying the notional principal amount of each of these contracts irrespective of whether the contract has a zero, positive or negative mark-to-market value by the relevant add-on factor prescribed by RBI, according to the nature and residual maturity of the instrument.
Custodian
	An entity, usually a bank that actually holds the receivables as agent and bailee of the trustee.
Custodial Account
	An account created for the benefit of a minor with an adult as the custodian.

Banking Glossary (B)

Balance Transfer
	Transferring balances from one credit card to another, usually to take advantage of a lower interest rate. Transfers are limited to the available credit on the receiving card.
Banking Book
	The banking book comprises assests and liabilities, which are contracted basically on account of relationship or for steady income and statutory obligations and are generally held till maturity.
Bank Draft
	An instrument issued by one branch of a bank on another branch of the bank containing an order to pay a certain sum on demand to the person named on the draft. It is used to transfer funds and to settle outstanding balances between banks, or to provide a customer with funds payable at a bank in a different location. Bank drafts are valid for certain period, generally, for 6 months, as indicated over face of draft.
Banker's Cheque
	A cheque issued by a branch of a bank against consideration received. Banker's cheque are valid for a certain period as indicated on the face of the cheque. (also called Pay Order).
Bankruptcy
	A legal action, in which a person who is not able to repay his loans satisfactorily, is declared bankrupt by a court order. The collateral or security in this case becomes liable to be attached by administration to satisfy creditors.
Bankruptcy Remote
	The legal position with reference to the creation of the SPV should be such that the SPV and its assets would not be touched in case the originator of the securitization goes bankrupt and its assets are liquidated.
Base Rate
	New reference rate used by banks for loan pricing w.e.f July 2010. Base rate captures cost of deposits, cost of capitals and unallocable (common) overheads. Banks are not allowed to lend base rate except for certain specified category or borrowers.
BASEL Committee on Banking Supervision
	The BASEL Committee is a committee of bank supervisors consisting of members from each of the G10 countries. The Committee is a forum for discussion on the handling of specific supervisory problems. It coordinates the sharing of supervisory responsibilities among national authorities in respect of banks' foreign establishments with the aim of ensuring effective supervision of banks' activities worldwide.
BASEL Capital Accord
	The BASEL Capital Accord is an Agreement concluded among country representatives in 1988 to develop standardised risk-based capital requirements for banks across countries. The Accord was replaced with a new capital adequacy framework (BASEL II), published in June 2004. BASEL II is based on three mutually reinforcing pillars hat allow banks and supervisors to evaluate properly the various risks that banks face. These three pillars are :
	>	Minimum capital requirements, which seek to refine the present measurement framework
	>	supervisory review of an institution's capital adequacy and internal assessment process;
	>	market discipline through effective disclosure to encourage safe and sound banking practices
Basis Point
	A unit of measurement which is equal to 1/100th of 1%. This is used to measure changes in interest rates, stock-market indices or yield on fixed income securities. For example, if an interest rate is reduced by 50 basis points it means an effective reduction of 0.5%.
Bill Discounting
	Under this type of lending, Bank takes the bill drawn by borrower on his (borrower's) customer and pay him immediately deducting some amount as discount / commission. The Bank then presents the Bill to the borrower's customer on the due date of the Bill and collect the total amount. If the bill is delayed, the borrower or his customer pay the Bank a pre-determined interest depending upon the terms of transaction.
Bill Pay Service
	Bill Pay is a service of Online Banking from bank that allows you to pay your bills online. In addition you can elect to receive e-Bills - electronic versions of your paper bills - from your bank credit card and a variety of companies currently offering e-Bills.
Biller
	A service provider who bills his / her services at specified intervals and has facilitated receipt of payment from his customers through online banking.
Billing Cycle
	The number of days between your last statement date and your current statement date. Most service providers follow a monthly billing cycle.
Billing Statement
	A monthly bill from your credit card issuer which describes and summarizes the activity on your account including the outstanding balance, purchases, payments, credits, finance charges and other transactions for the month.
Borrower
	The person / legal entity who is taking the loan with the promise to repay it back with interest under the credit or loan agreement.
Bounced cheque
	A cheque, which a bank returns unpaid because there is not enough available balance in the account or for other reasons.
Broker
	Broker is an individual who, for a commission or a fee, brings two parties together and assists in negotiating contracts between them.
Budget
	The financial record you use to keep track of the money you earn, how much you spend and what you spend it on. Your budget also includes savings and how much you pay to your creditors.

Banking Glossary (A)

Acceptance Letter
	Acceptance letter is the letter that a borrower or applicant gives to the lender after reading the terms of the loan. This letter denotes the borrower's willingness to accept the loan offer within a particular time frame.
Account Balance
	Opening Account Balance / Beginning of the Day (BOD) Balance : The balance in an account at the beginning of each business day; includes all deposits and withdrawals that were posted from the previous night, whether or not funds have been collected.
	Closing Account Balance / End of the Day (EOD) Balance : The account balance computed at the end of the business day, and is the adjusted balance of the credits and debits during the business day in the account of the customer.
Account Statement
	Periodic statement of all the debit and credit transactions on an account for a given statement cycle.
Acquirer
	Acquirers are banks and financial institutions that collaborate with businesses to accept credit / debit card payments.
Active Account
	A bank account in which there are regular transactions. A bank account that is not dormant or inoperative or under an attachment order of the court or enforcement authorities.
Additional Cardholder
	Another member added to an existing card thus extending its usage is called an additional cardholder. Thus by adding an additional cardholder the existing cardholder allows him / her to make purchases and use the credit card. However, the responsibility to repay the monthly outstanding balance rests with the original (principal) cardholder.
Administrative Fee
	A one time non-refundable levy to bank's customers for meeting expenses related to appraisal of loan proposals.
Advance EMI
	Number of equated monthly installments, paid in advance at the time of disbursal of loan.
Affinity Card
	Credit cards linked to special organizations like sports clubs, exclusive clubs and charities. Affinity credit cards can also help raise funds, when a part of income from every transaction goes toward the benefit of relevant organization.
ALCO
	Asset-Liability Management Committee (ALCO) is a strategic decision making body, formulating and overseeing the function of asset liability management (ALM) of a bank.
ALM
	Asset Liability Management (ALM) is concerned with strategic balance sheet management involving all market risks. It also deals with liquidity management, funds management, trading and capital planning.
Amortization
	Amortization is the repayment of Principal and Interest components of a Loan, over a period of time. Certain category of expenses or charges are also amortized over a period of time.
Annual Fee
	An annual amount charged by the credit card companies to maintain the credit card.
Annual percentage yield (APY)
	A percentage rate reflecting the total amount of interest paid on a deposit account (savings, CDs etc.), based on the interest rate and the effect of interest compounding for one year.
Anywhere Banking
	Customer can deposit / withdraw cash at any branch other than the branch in which he holds the account. Anywhere banking frees the customer from geographical boundaries and limitations and gives the flexibility to the customer to use his account across the board.
Application Form
	A form to be filled in and signed as per the Bank's requirements to avail Banking facilities. Requirement of details to be filled in will vary for each facility. Applications may also require certain specified documents also to be attached.
Arrears Outstanding
	The arrears outstanding comprises of the unpaid EMI's and other charges, if any, levied in the account.
Asset
	Cash or anything you own that can be turned into cash. This includes property, goods, savings or investments.
	These are things that people own such as buildings, vehicles, shares and money in the bank. The opposite is liabilities. For a bank, its assets are mainly the loans it makes
ATM
	Acronym for automated teller machine, a machine at a bank branch or other location, which enables a customer to perform basic banking activities (checking one's balance, withdrawing or transferring funds) even when the bank is closed.
Attestation
	Authentication of signatures of a customer of the branch required by the customer for any legal purposes.
Automatic Funds Transfer
	An arrangement that moves funds from one account to another automatically on a pre-arranged schedule; for example, every payday or once a month.
Automatic Payment
	An arrangement that authorizes payments to be deducted automatically from a bank account (usually a savings / current account) to pay bills (such as insurance payments, rent, mortgage or loan payments). Payments are usually scheduled to be made on a certain day of the month.
Available Balance
	The available balance is the account balance in the account that is available for immediate use at any given point of time
Available Credit
	Available credit is your credit limit minus your current balance. It is the unused portion of your credit line.
Available for Sale (AFS)
	The securities available for sale are those securities where the intention of the bank is neither to trade nor to hold till maturity. These securities are valued at the fair value which is determined by reference to the best available source of current market quotations or other data relative to current value.
Average Cost
	(Interest expended on deposits and borrowings / Average interest bearing liabilities) x 100
Average daily Balance
	The average balance in a deposit account, equals the sum of the daily account balances during an accounting period, usually a monthly or a quarterly cycle, divided by the number of days in the accounting period. Banks normally specify certain minimum average daily balance to be maintained in current and savings accounts.
Average Yield
	(Interest and discount earned / average interest earning assets) x 100

Important Banking Terms for IBPS Exam II

BASEL Committee on Banking Supervision
	The BASEL Committee is a committee of bank supervisors consisting of members from each of the G10 countries. The Committee is a forum for discussion on the handling of specific supervisory problems. It coordinates the sharing of supervisory responsibilities among national authorities in respect of banks' foreign establishments with the aim of ensuring effective supervision of banks' activities worldwide.
BASEL Capital accord
	The BASEL Capital Accord is an Agreement concluded among country representatives in 1988 to develop standardised risk-based capital requirements for banks across countries. The Accord was replaced with a new capital adequacy framework (BASEL II), published in June 2004. BASEL II is based on three mutually reinforcing pillars hat allow banks and supervisors to evaluate properly the various risks that banks face. These three pillars are: Minimum capital requirements, which seek to refine the present measurement framework supervisory review of an institution's capital adequacy and internal assessment process; market discipline through effective disclosure to encourage safe and sound banking practices
Risk Weighted Asset
	The notional amount of the asset is multiplied by the risk weight assigned to the asset to arrive at the risk weighted asset number. Risk weight for different assets vary e.g. 0% on a Government Dated Security and 20% on a AAA rated foreign bank etc.
CRAR(Capital to Risk Weighted Assets Ratio)
	Capital to risk weighted assets ratio is arrived at by dividing the capital of the bank with aggregated risk weighted assets for credit risk, market risk and operational risk. The higher the CRAR of a bank the better capitalized it is.
Credit Risk
	The risk that a party to a contractual agreement or transaction will be unable to meet its obligations or will default on commitments. Credit risk can be associated with almost any financial transaction. BASEL-II provides two options for measurement of capital charge for credit risk 1.standardised approach (SA) - Under the SA, the banks use a risk-weighting schedule for measuring the credit risk of its assets by assigning risk weights based on the rating assigned by the external credit rating agencies. 2. Internal rating based approach (IRB) - The IRB approach, on the other hand, allows banks to use their own internal ratings of counterparties and exposures, which permit a finer differentiation of risk for various exposures and hence delivers capital requirements that are better aligned to the degree of risks. The IRB approaches are of two types: a) Foundation IRB (FIRB): The bank estimates the Probability of Default (PD) associated with each borrower, and the supervisor supplies other inputs such as Loss Given Default (LGD) and Exposure At Default (EAD). b) Advanced IRB (AIRB): In addition to Probability of Default (PD), the bank estimates other inputs such as EAD and LGD. The requirements for this approach are more exacting. The adoption of advanced approaches would require the banks to meet minimum requirements relating to internal ratings at the outset and on an ongoing basis such as those relating to the design of the rating system, operations, controls, corporate governance, and estimation and validation of credit risk components, viz., PD for both FIRB and AIRB and LGD and EAD for AIRB. The banks should have, at the minimum, PD data for five years and LGD and EAD data for seven years. In India, banks have been advised to compute capital requirements for credit risk adopting the SA.
Market risk
	Market risk is defined as the risk of loss arising from movements in market prices or rates away from the rates or prices set out in a transaction or agreement. The capital charge for market risk was introduced by the BASEL Committee on Banking Supervision through the Market Risk Amendment of January 1996 to the capital accord of 1988 (BASEL I Framework). There are two methodologies available to estimate the capital requirement to cover market risks: 1) The Standardised Measurement Method: This method, currently implemented by the Reserve Bank, adopts a ‘building block’ approach for interest-rate related and equity instruments which differentiate capital requirements for ‘specific risk’ from those of ‘general market risk’. The ‘specific risk charge’ is designed to protect against an adverse movement in the price of an individual security due to factors related to the individual issuer. The ‘general market risk charge’ is designed to protect against the interest rate risk in the portfolio. 2) The Internal Models Approach (IMA): This method enables banks to use their proprietary in-house method which must meet the qualitative and quantitative criteria set out by the BCBS and is subject to the explicit approval of the supervisory authority.
Operational Risk
	The revised BASEL II framework offers the following three approaches for estimating capital charges for operational risk: 1) The Basic Indicator Approach (BIA): This approach sets a charge for operational risk as a fixed percentage ("alpha factor") of a single indicator, which serves as a proxy for the bank’s risk exposure. 2) The Standardised Approach (SA): This approach requires that the institution separate its operations into eight standard business lines, and the capital charge for each business line is calculated by multiplying gross income of that business line by a factor (denoted beta) assigned to that business line. 3) Advanced Measurement Approach (AMA): Under this approach, the regulatory capital requirement will equal the risk measure generated by the banks’ internal operational risk measurement system. In India, the banks have been advised to adopt the BIA to estimate the capital charge for operational risk and 15% of average gross income of last three years is taken for calculating capital charge for operational risk.
Internal Capital Adequacy Assessment Process (ICAAP)
	In terms of the guidelines on BASEL II, the banks are required to have a board-approved policy on internal capital adequacy assessment process (ICAAP) to assess the capital requirement as per ICAAP at the solo as well as consolidated level. The ICAAP is required to form an integral part of the management and decision-making culture of a bank. ICAAP document is required to clearly demarcate the quantifiable and qualitatively assessed risks. The ICAAP is also required to include stress tests and scenario analyses, to be conducted periodically, particularly in respect of the bank’s material risk exposures, in order to evaluate the potential vulnerability of the bank to some unlikely but plausible events or movements in the market conditions that could have an adverse impact on the bank’s capital.
Supervisory Review Process (SRP)
	Supervisory review process envisages the establishment of suitable risk management systems in banks and their review by the supervisory authority. The objective of the SRP is to ensure that the banks have adequate capital to support all the risks in their business as also to encourage them to develop and use better risk management techniques for monitoring and managing their risks.
Market Discipline
	Market Discipline seeks to achieve increased transparency through expanded disclosure requirements for banks.
Credit risk mitigation
	Techniques used to mitigate the credit risks through exposure being collateralised in whole or in part with cash or securities or guaranteed by a third party.
Mortgage Back Security
	A bond-type security in which the collateral is provided by a pool of mortgages. Income from the underlying mortgages is used to meet interest and principal repayments.

Important Banking Terms for IBPS Exam I

Capital Funds
	Equity contribution of owners. The basic approach of capital adequacy framework is that a bank should have sufficient capital to provide a stable resource to absorb any losses arising from the risks in its business. Capital is divided into different tiers according to the characteristics / qualities of each qualifying instrument. For supervisory purposes capital is split into two categories: Tier I and Tier II.
Tier I Capital
	A term used to refer to one of the components of regulatory capital. It consists mainly of share capital and disclosed reserves (minus goodwill, if any). Tier I items are deemed to be of the highest quality because they are fully available to cover losses Hence it is also termed as core capital.
Tier II Capital
	Refers to one of the components of regulatory capital. Also known as supplementary capital, it consists of certain reserves and certain types of subordinated debt. Tier II items qualify as regulatory capital to the extent that they can be used to absorb losses arising from a bank's activities. Tier II's capital loss absorption capacity is lower than that of Tier I capital.
Revaluation reserves
	Revaluation reserves are a part of Tier-II capital. These reserves arise from revaluation of assets that are undervalued on the bank's books, typically bank premises and marketable securities. The extent to which the revaluation reserves can be relied upon as a cushion for unexpected losses depends mainly upon the level of certainty that can be placed on estimates of the market values of the relevant assets and the subsequent deterioration in values under difficult market conditions or in a forced sale.
Leverage
	Ratio of assets to capital.
Capital reserves
	That portion of a company's profits not paid out as dividends to shareholders. They are also known as undistributable reserves and are ploughed back into the business.
Deferred Tax Assets
	Unabsorbed depreciation and carry forward of losses which can be set-off against future taxable income which is considered as timing differences result in deferred tax assets. The deferred Tax Assets are accounted as per the Accounting Standard 22.
Deferred Tax Liabilities
	Deferred tax liabilities have an effect of increasing future year's income tax payments, which indicates that they are accrued income taxes and meet definition of liabilities.
Subordinated debt
	Refers to the status of the debt. In the event of the bankruptcy or liquidation of the debtor, subordinated debt only has a secondary claim on repayments, after other debt has been repaid.
Hybrid debt capital instruments
	In this category, fall a number of capital instruments, which combine certain characteristics of equity and certain characteristics of debt. Each has a particular feature, which can be considered to affect its quality as capital. Where these instruments have close similarities to equity, in particular when they are able to support losses on an ongoing basis without triggering liquidation, they may be included in Tier II capital.

IBPS Supplementry exam 2011

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Computer Knowledge I

1. Which of the following groups consists of only output devices ?

1. Scanner, Printer, Monitor
2. Keyboard, Printer, Monitor
3. Mouse, Printer, Monitor
4. None of these

    2. An error is also known as

1. Bug
2. Debug
3. Cursor
4. Icon

    3.Full form of URL is

1. Uniformal recource line
2. Uni real location
3. Uniform resource Locator
4. None of these

   4. A printer is what kind of device

1. Input
2. Processing
3. Word processing
4. Output

     5.---------- is the process of carrying out commands

1. Fetching
2. Sorting
3. Executing
4. Decoding

   6. Computer's Brain is called

1. Monitor
2. Hardware
3. Software
4. CPU

   7. Attachment in email is .........

1. Attaching e mail to desktop
2. Dropping e mail in letter box
3. Attaching a file or document along with e mail
4. None of these

  8.  What is the full form of CBS in banking parlance

1. Core Business Solutions
2. Carrying business simultaneously
3. Coded banking Solution
4. Core Banking Solution

9. Full form of LAN is ....

1. Localised area network
2. Line are network
3. Local area network
4. Local access Network

   10. Which of these are banking software ?

1. Finnacle
2. Flexcube
3. Banks 24
4. All of above

( Answers : 1. A, 2. A, 3. C, 4. D, 5. C, 6. D, 7. C, 8. D, 9. C, 10. D )