BANKING AWARENESS

1. Purchasing power parity: Using market exchange values to equalize their purchasing power.
2. Repo rate: The rates at which banks borrow money from RBI.
3. Securities: It is an instrument that has a financial value. It can be classified as debt securites{Bank notes(currency), bonds} and equity securities{Stocks}.
4. Reverse repo rate: The rates at which RBI borrows money from the Banks.
5. Aggregate Demand: It is the total of all the demand in a country. It can also be expressed as
6. Total Exports of a country – Total imports of the country.
7. Parallel economy: Alternative term for black economy, shadow economy and underground economy.
8. Aggregate Supply: Total value of good and services produced in an economy + {Imports-Exports}
9. Net Domestic Product: NDP= GDP-depreciation of capital goods in that country.
10. Asset: Any item of monetary value like bank accounts, real estate property, stocks,..etc
11. Bretton-Woods: It is a monetary system that existed from the year 1946-1973. In this monetary system the value of dollar was calculated using gold reserves and every other country held it’s currency at an exchange rate with US dollars.
12. Monetary Policy: The policy through which the RBI controls the supply, availability and cost of money {Interset rate} in order to attain economic goals.
13. Budget Deficit: Budget Deficit = Goverment Expenditure- Goverment Revenues.
14. Microcredit: It is the provision of credit, parsimony, and other financial services and products of very small amount to the poor in semi-urban, rural and urban areas. It is to enable them to raise their income levels and improve their living standards
15. Call Money Market: It is the market in which the Dealers and brokers locate and borrow money to satisfy their investment needs.
16. International  Monetary Fund: It is an organization of 186 countries that aims at stabilizing foreign exchange rates and assisting the reconstruction of the international payment system. It was established in 1944.
17. Stop Payment: An order not to pay a check that has been issued but not yet cashed. If requested soon enough, the check will not be debitd from the payer’s account.
18. Capital Gains Tax: Tax paid for the profit made through the sale of an asset.
19. Maturity: The date on which the principal balance of a loan becomes due and payment.
20. International Labour Organization{ILO}: Was established in 1919 and is a specialized UN agency that deals with labour issues.
21. Cash Reserve Ratio{CRR}: It is determined by the RBI and is the minimum reserves each bank must hold to customer deposits and notes.Both CRR and Statutory Liquidity Ratio{SLR} are used to combat inflation. Higher CRR and SLR decrease the money supply thereby combating inflation.
22. Guarantor:  A party who agrees to be responsible for the payment of another party’s debts should that party default.
23. Centrally planned economy: An economic system where the production & pricing of goods and services are determined by the goverment
24. Deed: The legal document that conveys or transfers title of property.
25. Classical Economics: The theory emphasizes the fact that free market can regulate themselves. This theory was framed by Adam Smith, David Ricardo, Thomas Malthus and John Stuart Mill
26. Default: Failure to make loan payments on a timely basis or to comply with other terms / requirements as stipulated in the loan agreement.
27. Closed economy: The economy is closed and doesnt have any contact with the rest of the world
28. Deed of trust: The legal document (in some states) that conveys title of real property to a trustee on behalf of the owner.
29. Consumer Price Index: It is the measure of the average price of consumer goods and services purchased by households. It is measured with 1982 as its base year.
30. Bond: A band is a debt security, in which the authorized issuers owes the holders a debt and and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity. 
31. Currency Appreciation: Increase in the value of a currency over the other. It takes place when the market exchange rates change.
32. Convertibility Clause: A provision in some loans that allows the borrower to change the interest rate from fixed to variable or vice-versa.
33. Debentures: A debenture is a long term debt instrument used by governments and large companies to obtain funds. It is similar to a bond except the securitization conditions are different.
34. Current Account Deficit: Current account deficit= Export-Import
35. Basis Point: A basis point is 1/100^th of a percentage point. For example, 50 basis points of a $10,000 loan would be 0.50% X 10,000 or $50.00.
36. Current GDP: Current GDP is GDP expressed in the current prices of the period being measured
37. Deferred: An action that has been postponed until a future date.
38. Customs Duty: Duty levied on imports.
39. Mortgage: A mortgage is a method of using Property (real or personal) as security for the performance of an obligation, usually the payment of a debt.
40. Deflation: An economy is said to be in deflation when there is a fall in the prices of the commodities.
41. Reverse Mortgage: Reverse Mortgage are powerful tools that help eligible homeowners obtain a tax free cash flow.
42. Direct Tax: These are the taxes that are levied on us directly. Taxes on Corporate Income, Capital Gains tax, Personal Income tax and Fringe benefit tax fall under this category.
43. Dividends: It is the portion of the profits made by a company that is paid to the share holders.
44. Exchange rate: Also called as Foreign Exchange Rates or FOREX of a country specifies how much the country’s currency is worth in terms of the other currency.
45. Fiscal Deficit: Fiscal Deficit= Goverment Expenditure in the current fiscal year- Goverment Revenues in the fiscal year.
46. Fiscal Policy: It is the use of goverment revenue to influence the country’s economic situation.
47. Foreign Direct Investment: It is the investment made by a company in one country on building a factory in another country.
48. SWIFT: The Society of World Wide Interbank Financial Telecommunication operates a world wide financial messaging network which exchanges messages between banks and other financial institutions.
49. Foreign Institutional Investor: Investor from a foreign country.
50. Free Trade: In this type of trade there is no tariffs to the imported or exported goods between two countries.
51. GATT: The General Agreement on Tariffs and Trade{GATT} was created in 1947 as a replacement to International Trade Organization (ITO). GATT was replaced by World Trade Organization in the year 1995.
52. World Bank: It is an international financial institution that was established in the year 1945. It provides loans to poor countries in order to reduce poverty.
53. Financial Inclusion: Financial Inclusion is delivery of banking services at an affordable cost (no frills account) to the vast sections of disadvantaged and low income group.
54. No-Frills Account: RBI exhorted banks, with a view to achieve greater financial inclusion, to make available a basic banking ‘no frills’ account either with ‘NIL’ or very minimum balance as well as charges that would make such accounts accessible to vast sections of population.
55. Wholesale price Index: Wholesale price Index is used to measure the inflation in our country and is the price of a basket of wholesale goods with its base year as 1993-94.
56. SHG (Self Help Group): SHG is a small voluntary association of poor people, preferably from the same socio economic background. They come together for the purpose of solving their common problems through self help and mutual help.
57. Treasury Bills: These are short term borrowing instruments that are issued by RBI. They are issued at discount to face value and on attaining maturity the maturity value is paid to the holder. The minimum amount in treasury bills is 25,000 Rs and thereafter they are available in multiples of 25,000.
58. Subsidy: It is the payment given to the producers and distributors in a particular sector to prevent the downfall of that sector. For example goverment providers subsidies to small scale industry owners in order to prevent the downfall of small scale industries in the country.