Banking Awareness: 20 Terminologies You Should Never Forget

Dear Reader, being a bank job aspirant, you should have a good knowledge about basic banking terminologies. These banking terminologies are frequently asked in bank exams. Knowing these terms will not only help you during the examination but will also boost up your knowledge in banking sector and thus help you in performing transaction or doing some other bank related work. Though you have to know a lot of terms related to banking, it’s difficult to remember all. So here we have listed the 20 most important banking terms for bank exams or interview.

1. Account Holder: The individual person or organization, which is authorized to perform transactions on behalf of an account. It’s simply known as the owner of the bank account.
2. Cheque: A cheque is a written order issued by an account holder to transfer certain sum of money from their account to an individual or company’s account and also used for cash withdrawals from the bank. In other words, the cheque is an important document to transfer money through the bank.
3. Bouncing of Cheque: If an account has insufficient funds, the cheque is not payable and is returned back to the corresponding bank with a reason as “funds insufficient” or “Exceeds arrangement”.
4. Debit Card: Debit card is also called as plastic card.It is issued by the bank to customers to withdraw money from their account.
5. Pass Book: A record of all debit and credit transactions of the customer’s account. They are mainly issued to current or saving account holders.
6. Bank Ombudsman: Bank Ombudsman is the authority who looks into complaints against banks in main areas like collection of cheque, areas of loans and advances, issue of demand drafts, etc.
7. Cash Reserve Ratio (CRR): Cash Reserve Ratio (CRR) is the amount of funds that the banks have to keep with Reserve Bank of India (RBI).
8. ATM: ATM stands for Automatic Teller Machines. It is electronic machine which allows the customer to do transactions without the help of teller in a bank. ATMs are used to withdraw cash, accept cheques, give balance in the accounts and also give mini statements to the customers.
9. Bank Rate: Bank Rate is also referred to as the discount rate. It is the rate of interest which a central bank charges on loans and advances to a commercial bank.
10. E-Banking: E-Banking is called as electronic banking. It is the type of banking where funds are transferred electronically between banks and financial institution. ATM, Credit cards, Debit cards, RTGS, etc come under this category.
11. Electronic Fund Transfer (EFT): Electronic Fund Transfer (EFT) is a system used to transfer funds between different account in different bank or same bank.
12. Teller: Teller is one of the staff members of a bank, who performs banking services for the public. This includes accepting cash deposits, cheque deposits etc.
13. Marginal Standing Facility (MSF): The rate at which commercial banks could borrow funds overnight from RBI against Government securities during emergency period is called Marginal Standing Facility (MSF).
14. Savings Bank Account: This account is used for personal purpose and has some restrictions on withdrawals. In this account, Account holder gets nominal interest.
15. Current Account: Generally this account is opened for business purpose. It does not have any restriction on withdrawals and no interest is paid.
16. Core Banking Solutions (CBS): All the branches of the corresponding banks are connected together, so that the customer can do transactions from any other branch.
17. Foreign Banks: Banks which are incorporated outside India but operating in India and regulated by the RBI. Ex: HSBC, Citibank, etc.
18. Joint Account: Joint account is an account held by two or more individuals in a bank.
19. Universal Banking: When financial institutions and banks undertake activities related to banking like acceptance of deposits, investments, issue of debit and credit card etc, then it is known as universal banking.
20. Virtual Banking: Virtual banking is sometimes known as Internet banking. Here the banking and related services are done online without physically going to bank.

If you want clarification for any doubts, please use the comments section below. Also please let us know if you have suggestions or corrections.