Banking Awareness Flashcards
RBI, monetary policy, banking terms and bank mergers.
- When was RBI established?
- 1 April 1935 under the RBI Act, 1934.
Nationalised on 1 January 1949. - RBI headquarters
- Mumbai (moved from Calcutta in 1937).
- Repo Rate
- Rate at which RBI lends short-term funds to banks against government securities.
- Reverse Repo Rate
- Rate at which RBI borrows funds from banks.
- CRR (Cash Reserve Ratio)
- Share of a bank's NDTL kept as cash with RBI; earns no interest.
- SLR (Statutory Liquidity Ratio)
- Share of NDTL a bank must keep in liquid assets – cash, gold, approved securities.
- MSF (Marginal Standing Facility)
- Overnight borrowing by banks from RBI above the repo rate by dipping into SLR.
- SDF (Standing Deposit Facility)
- Introduced April 2022; floor of the liquidity corridor; RBI absorbs liquidity without collateral.
- Bank Rate
- Rate at which RBI lends long-term to banks without collateral; used for penal rates.
- Monetary Policy Committee (MPC)
- 6 members – 3 from RBI (Governor has casting vote) and 3 nominated by the Government.
- Inflation target of RBI
- 4% CPI inflation with a band of ±2%.
- Open Market Operations (OMO)
- RBI buys or sells government securities to manage liquidity.
- NEFT
- National Electronic Funds Transfer.
- RTGS
- Real Time Gross Settlement – minimum ₹2 lakh.
- IMPS
- Immediate Payment Service.
- UPI
- Unified Payments Interface – launched in 2016 by NPCI.
- NPCI
- National Payments Corporation of India (2008).
- KYC
- Know Your Customer.
- NPA
- Non-Performing Asset – loan overdue for more than 90 days.
- CASA
- Current Account Savings Account.
- IFSC
- Indian Financial System Code – 11 characters.
- MICR
- Magnetic Ink Character Recognition – 9-digit code.
- SWIFT
- Society for Worldwide Interbank Financial Telecommunication.
- DICGC
- Deposit Insurance and Credit Guarantee Corporation – insures deposits up to ₹5 lakh per depositor per bank.
- CIBIL
- Credit Information Bureau (India) Limited.
- Bank nationalisation
- 14 banks on 19 July 1969; 6 more in 1980.
- SBI merger (2017)
- 5 associate banks and Bharatiya Mahila Bank merged into SBI.
HQ: Mumbai. - Bank of Baroda merger (2019)
- Vijaya Bank and Dena Bank merged into Bank of Baroda.
HQ: Vadodara. - Punjab National Bank merger (2020)
- Oriental Bank of Commerce and United Bank of India merged into PNB.
HQ: New Delhi. - Canara Bank merger (2020)
- Syndicate Bank merged into Canara Bank.
HQ: Bengaluru. - Union Bank of India merger (2020)
- Andhra Bank and Corporation Bank merged into Union Bank.
HQ: Mumbai. - Indian Bank merger (2020)
- Allahabad Bank merged into Indian Bank.
HQ: Chennai. - Number of public sector banks after 2020 mergers
- 12.
- HDFC merger (2023)
- HDFC Ltd merged into HDFC Bank on 1 July 2023.
- First bank started entirely with Indian capital
- Punjab National Bank (founded 1894, Lahore).