Definitions of Some Important Banking Terms

• ATM : An Automated Teller Machine (ATM) is a computerized telecommunications device that provides the clients with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller.

• Balance of trade: the part of a nation's balance of payments (difference between foreign entities with domestic entities) that deals with merchandise (or visible) imports or exports.

• Bancassurance : Selling of insurance products through banks. It also refers as cross selling of insurance products.

• Bank Rate : This is the rate at which the central bank (RBI) lends money to other banks or financial institutions. If the bank rate goes up, long-term interest rates also tend to move up and vice versa.

• Bounced Cheque : When the bank has not enough funds in the relevant account or the account holder requests that the cheque is bounced (under exceptional circumstances) then the bank will return the cheque to the account holder.

• Camels : It is a supervisory rating system . It refers to Capital adequacy, Assets, Management Capability, Earnings appraisal, Liquidity (also called asset liability management) and Sensitivity (sensitivity to market risk, especially interest rate risk).

• Cash Reserve Rate : Specifies the percentage of their total deposits the commercial; bank must keep with central bank or RBI. Higher the CRR lower will be the capacity of bank to create credit.

• CGT (Capital gain tax): It is a direct tax that will be levied on sales and purchases of capital assets such as Shares, stakes, even costlier items which won’t have depreciation such as monuments, paintings.

• Cheque Book : A small, bound booklet of cheques. A cheque is a piece of paper produced by your bank with your account number, sort-code and cheque number printed on it. The account number distinguishes your account from other accounts, the sort-code is your bank’s special code which distinguishes it from any other bank.

• Cheque Clearing : This is the process of getting the money from the cheque-writer’s account into the cheque receiver’s account.

• CIBIL : CIBIL refers to Credit Information Bureau India Limited was first established by SBI and HDFC. It deals with both commercial and consumer segments. It maintains the record of the borrowers by its members.

• Clearing Bank : This is a bank that can clear funds between banks. For general purposes, this is any institution which we know of as a bank or as a provider of banking services.

• Commercial Paper : Commercial Paper is an instrument in the form of a promissory note by the corporate borrowers for their short-term borrowings.

• Core Banking Solution : The branches of a bank are connected to a central host, where online multiple delivery channels like ATM, ABB, Debit Card, Mobile Banking etc under one roof.

• Credit Card : A credit card is one of the systems of payments named after the Small Plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder’s promise to pay for these goods and services.

• Credit Rating : This is the rating which an individual (or company) gets from the credit industry. This is obtained by the individual’s credit history, the details of which are available from specialist organizations like CRISIL in India.

• Credit-Worthiness : This is the judgement of an organization which is assessing whether or not to take a particular individual on as a customer. An individual might be considered credit worthy by one organization but not by another. Much depends on whether an organization is involved with high risk customers or not.

• Crop Loans : Bank provide crop loans to the farmers for their seasonal operations (Kharif, Rabi) of agriculture like to purchase seeds, fertilizers.

• Cross Selling : Cross selling refers to selling of multiple products to the existing customers such as insurance, mutual funds etc ( to the banking customers).

• Current Accounts : These accounts are maintained by the corporate clients that may be operated any number of times in a day. There is a maintenance charge for the current accounts for which the holders enjoy facilities of easy handling, overdraft facility etc.