Topic - 1: Introduction

1. Bank and Its Operations

 Definition: A bank accepts public deposits and provides loans.

 Regulation: The RBI is the primary regulator in India.

2. Assets and Liabilities

 Assets: Income-generating loans (personal, corporate, mortgages).

 Liabilities: Customer deposits; banks pay interest on these.

3. Net Interest Margin (NIM)

 Definition: The difference between interest earned on loans and interest paid on deposits.
 Importance: A healthy NIM (>3%) is crucial for bank profitability.

4. Types of Accounts

 Savings Account: For individuals; interest rates 3.5%-6%; tax exemption on interest up to ₹40,000.
 Current Account: For businesses; no interest, subject to service charges.
 CASA Ratio: Should exceed 40% for banks.

5. Inactive/Dormant Accounts

 Inactive: No transactions for 12 months.

 Dormant: No transactions for 24 months; funds may go to RBI after 10 years.

6. Fixed and Recurring Deposits

 Fixed Deposit: Tenure of 7 days to 10 years; TDS applies if interest exceeds ₹40,000.
 Recurring Deposit: Monthly deposits; encourages regular saving.

7. Nomination Facility

 Purpose: Allows dues to be paid to a nominee without succession certificates.

 Applicability: Available for savings, fixed, and recurring deposits.

8. Financial Inclusion

 No-Frills Account: Zero-balance account, converted to BSBDA.

 BSBDA: Free ATM card; limited withdrawals.
 PMJDY Account: No minimum balance; includes insurance benefits.

9. Banking Ombudsman

 Role: Addresses customer complaints; operates under RBI.

 How to Complain: Approach the bank first; if unresolved in 30 days, contact the Ombudsman.

10. Types of Risks in Banking

 Financial Risk: Loss potential from transactions.

 Credit Risk: Risk of borrower default.
 Market Risk: Losses due to market price fluctuations.
 Liquidity Risk: Inability to meet obligations.
 Operational Risk: Failures in internal processes.
  Reputational Risk: Loss of public confidence.

1. KYC (Know Your Customer)

 Purpose: Customer identification to prevent money laundering.

 Documents Needed: ID and address proof (e.g., Passport, PAN, Aadhaar).
 Verification Schedule:
o Low Risk: Once every 10 years
o Medium Risk: Once every 8 years
o High Risk: Once every 2 years
 Small Account: Can open without full KYC.

2. ATM Services

 Function: Access accounts for cash and transactions without visiting banks.
 RBI Guidelines: Complaints resolved within 7 days; ₹100/day compensation for delays.

3. Types of ATMs

 Onsite: Located within bank premises.

 White Label: Operated by NBFCs; branded ATMs (e.g., Indicash).
 Brown Label: Hardware by a provider; cash managed by a sponsor bank.
 Green Label: For agricultural transactions.
 Orange Label: For share transactions.
 Yellow Label: For e-commerce.
 Pink Label: Restricted to women users.
 Biometric ATM: Uses fingerprint/iris scanning for access.

4. NRI Accounts

 Definition: Indian citizens residing outside India.

 Types of Accounts:
o NRO: Indian rupee account, tax applicable, funds repatriable up to $1 million/year.
o NRE: Indian rupee account for foreign earnings, fully repatriable, no tax in India.
o FCNR(B): Fixed deposits in foreign currencies, fully repatriable, no tax in India.

5. LIBOR/DTAA

 LIBOR: Benchmark for short-term interest rates.

 DTAA: Agreement to avoid double taxation, requires Tax Residency Certificate (TRC).

6. Other Accounts

 Nostro Account: Indian banks' accounts in foreign banks.

 Vostro Account: Foreign banks' accounts in Indian banks.
 DEMAT Account: For holding shares in electronic form.
 Dormant Account: No activity for 2 years.
 Escrow Account: Temporary account for transactions between two parties.
 GILT Account: For holding government securities in DEMAT form.

Topic - 6: Payment Types

Here are your summarized notes for quick learning:

1. Standing Instruction

 Definition: Order from a bank account holder to make regular payments (e.g., salary, bills).
2. Debit Card vs. Credit Card

Feature Debit Card Credit Card

Eligibility No criteria Criteria must be met
Limit Linked to account balance Based on credit score/history
Interest None (directly from account) Interest charged on amount utilized
Debt Instrument No Yes
Utilization Summary Monthly Bank Statement Monthly Credit Statement

3. Visa and Mastercard

 Role: Payment processing platforms facilitating electronic transactions.

 Acceptance: Widely accepted at various merchant outlets.
 RuPay: Developed by NPCI as an Indian alternative.

4. NPCI (National Payments Corporation of India)

 Established: December 2008.

 Capital: Authorized - ₹300 crores; Paid-up - ₹100 crores.
 Key Products:
o National Financial Switch (NFS)
o Automated Clearing House
o Immediate Payment Service (IMPS)
o Cheque Truncation System
o Aadhar Payment Bridge
o RuPay Card

5. Payments and Settlements System

 UPI (Unified Payment Interface):

o Instant transfers via IMPS infrastructure.
o Virtual Payment Address (VPA) used for transactions.
o Limits: ₹1 lakh per transaction; 20 transactions/day.
 BHIM (Bharat Interface for Money):
o UPI-based app for direct bank payments.
o Launch: December 30, 2016.
o Limits: Up to ₹40,000 per transaction and day.

6. IFSC Code

 Definition: Identifies bank branches for NEFT/RTGS.

 Format: 11 digits (4 characters bank code, 1 buffer, 6 branch digits).

7. NEFT (National Electronic Funds Transfer)

 Function: Facilitates one-to-one funds transfer with no minimum or maximum limit (except RTGS
for large transactions).
 Availability: 24x7 since December 2019.

8. RTGS (Real-Time Gross Settlement)

 Function: Instantaneous money transfer for large values.

 Availability: 24x7 since December 2020.
 Limits: Minimum ₹2 lakh; no maximum.

9. IMPS (Immediate Payment Service)

  Function: Instant fund transfers available 24/7, including on mobile.
 Daily Limit: Approximately ₹2 lakhs.

10. SWIFT Code - SWIFT stands for Society for Worldwide Interbank Financial Telecommunication

 Definition: Bank Identifier Code for international transfers.

 Format: 8 or 11 characters (bank code, country code, location code, branch code).

6. Currency Notes and Dimensions

Denomination Dimensions (mm) Base Colour Motif

1 Rupee 97 x 63 Pink Sagar Samrat
10 Rupee 63 x 123 Chocolate Brown Sun Temple (Odisha)
20 Rupee 63 x 147 Greenish Yellow Ellora Caves (Maharashtra)
50 Rupee 66 x 135 Fluorescent Blue Hampi with Chariot (Karnataka)
100 Rupee 66 x 142 Lavender Rani Ki Vav (Gujarat)
200 Rupee 66 x 146 Bright Yellow Sanchi Stupa (Madhya Pradesh)
500 Rupee 66 x 150 Stone Grey Red Fort (Delhi)
2000 Rupee 66 x 166 Magenta Mangalyaan

7. POS Terminal (Point of Sale Terminal)

 Definition: Device at stores for processing card payments (debit/credit/prepaid).

 Operation: Card swiped, data validated electronically.
 Function: Acts as a payment gateway for merchant acquirers.
 Revenue: Generates non-interest income for banks.

Topic 7: Negotiable Instruments

1. Negotiable Instrument Act, 1881

o Written documents transferable by delivery (bearer) or endorsement (order).
2. Bill of Exchange
o Written, signed order to pay a specified sum.
o Involves parties: payer (debtor) and payee (creditor).
3. Promissory Note
o Unconditional written commitment to pay a specified amount.
o Must be in writing.
4. Cheque
o Unconditional order for payment from an account holder to a bank.
o Involves three parties: Drawer, Drawee, Payee.
5. Types of Cheques
o Order Cheque: Payable to a specific person.
o Bearer Cheque: Payable to whoever holds it.
o Blank Cheque: No details except the signature.
o Stale Cheque: Over three months old.
o Mutilated Cheque: Torn into pieces.
o Post-dated Cheque: Date later than issue date.
o Open Cheque: Not crossed.
o Crossed Cheque: Has parallel lines across it.
6. MICR Code
o Magnetic Ink Character Recognition; 9-digit code identifying city, bank, branch.
7. Crossing of Cheque
o Prevents unauthorized payment.
o Types:
 General Crossing: Two parallel lines.
 Special Crossing: Banker's name added.
 
Restrictive Crossing: Funds must go to payee's account.

Non-Negotiable Crossing: "Not Negotiable" written.
8. Demand Draft vs. Cheque

Feature Demand Draft Cheque

Drawer Usually a bank Individual account holder
Certainty of Payment Payment is certain Payment may be stopped
Definition in NI Act Not defined Defined in NI Act, 1881

9. CTS - 2010 (Cheque Truncation System)

o Stops physical cheque flow; verifies digitally.
o Eliminates need for physical movement of cheques.

Topic - 8: Concept of Loans and Advances

1. Loans and Advances

Banks provide loans for various purposes:

 Home Loans
 Personal Loans
 Car Loans
 Loans Against Securities
 Agriculture Loans
 Corporate Loans
 Mortgage Loans

2. Index for Loans

 BPLR (2003):
o Benchmark Prime Lending Rate, not transparent, leading to inequitable interest rates.
o Reviewed by RBI, resulting in the introduction of the Base Rate.
 Base Rate (2009):
o Minimum lending rate below which banks cannot lend.
o Components: Cost of funds, operating expenses, profit, negative carry on CRR/SLR.
o Repo rate not considered; banks did not pass on rate cuts to customers.
 MCLR (2016):
o Marginal Cost of Funds based Lending Rate, introduced to enhance transparency and benefit
borrowers.
o Components: Marginal cost of funds, negative carry on CRR, operating costs, tenor premium.
 External Benchmark Rate (2019):
o Linked to external benchmarks (like Repo Rate) for new floating rate loans from October 1,
2019, to ensure effective transmission of monetary policy.

3. Exception Category

 Loans under DRI (Differential Rate of Interest):

o Launched in 1972, targeting the poorest, with a fixed interest rate of 4% per annum.
 Loans to Bank Employees:
o Includes loans to current and retired employees.
 Loans Against Deposits:
o For depositors against their own deposits.

4. DRI

 Differential Rate of Interest (DRI):

o Requires banks to lend 1% of total advances to the poorest at a 4% interest rate.
5. Other Exemptions

 Crop Loans:
o Up to ₹3 lakh with interest rates as specified by the government.
 Rupee Export Credit Advances:
o Interest rates can be below the base rate due to government subventions.

6. ALMC (Asset Liability Management Committee)

 Reviews base rate quarterly.

 Banks must communicate changes to the public and can choose fixed or floating rates.

7. Reverse Mortgage Loan

 For senior citizens (60+); the house is mortgaged, and they receive payments over time.
 Loan is repaid via property sale after the borrower’s death.

8. Secured vs. Unsecured Loans

 Secured Loan:
o Collateral is required (e.g., vehicle, home loans); lower interest rates.
 Unsecured Loan:
o No collateral; higher interest rates based on creditworthiness (e.g., personal loans).

9. Term Loan vs. Revolving Credit

 Term Loan:
o Fixed amount over a specified period.
 Revolving Credit:
o Line of credit allowing borrowing up to a limit as needed.

10. Overdraft/Cash Credit Account

 Borrowers can withdraw funds as needed up to a credit limit.

 Overdraft: Unsecured; repay as per terms.
 Cash Credit: Secured by collateral.

11. Fixed vs. Floating Interest Rates

Fixed Interest Floating Interest

Fixed for the entire loan tenure Varies based on economic conditions
Higher initial rates Usually lower than fixed initially

12. EMI (Equated Monthly Installment)

 Fixed monthly payment comprising principal and interest.

 Amortization schedule outlines payment breakdown.

13. Moratorium and Amortization

 Moratorium: Grace period where no loan repayment is required.

 Amortization: Spread of payments over time.

14. Collateral Security

 Assets pledged as security for a loan; leads to lower interest rates compared to unsecured loans.
15. Lessor and Lessee

 Lessor: Property owner; grants lease.

 Lessee: User of the property under specified terms.

16. Bailor and Bailee

 Bailment: Transfer of possession for a specific purpose.

 Bailor: Retains ownership; Bailee must safeguard the property.

Topic - 10: Priority Sector Lending

Priority Sector Lending (PSL)

1. Definition: PSL targets sectors that may not receive adequate credit without special provisions. It
includes agriculture, MSMEs, social infrastructure, renewable energy, housing for the poor,
education, and weaker sections.
2. Targets:
o Overall: Banks must allocate 40% of their lending to PSL.
o Agriculture: 18% of ANBC, with 8% specifically for small and marginal farmers.
o MSME: 7.5% of ANBC.
o Export Credit: 2% of ANBC.
o Education: Loans up to ₹10 lakh for domestic studies and ₹20 lakh for overseas studies.
o Housing: Loan limits of ₹35 lakh in metropolitan centers and ₹25 lakh elsewhere.
o Social Infrastructure: Loans up to ₹5 crore for projects like schools and health centers.
o Renewable Energy: Loans up to ₹15 crore for projects like solar and wind energy.
o Weaker Sections: Target of 10% of ANBC.
3. Priority Sector Lending Certificates (PSLCs): These certificates help banks meet PSL targets
through trading.

Non-Performing Assets (NPA)

1. Definition: An asset (usually a loan) becomes non-performing when it stops generating income for
the bank, typically after 90 days of overdue payments.
2. Categories of NPA:
o Substandard Asset: NPA for ≤12 months; indicates potential loss.
o Doubtful Asset: NPA for >12 months.
o Loss Asset: Identified loss but not written off.
3. Actions for NPA Resolution:
o Genuine Reasons: Restructuring loans, extending repayment periods, offering moratoriums,
or additional loans.
o Non-Genuine Reasons: Legal actions, including referrals to Debt Recovery Tribunals
(DRTs) or Asset Reconstruction Companies (ARCs).
4. Joint Lenders' Forum (JLF): Formed for loans ≥₹100 crore at the SMA-2 stage (61-90 days
overdue).
5. Debt Recovery Mechanisms:
o DRT: Settles issues in about six months, with a success rate of 20-30%.
o ARC: Allows banks to recover NPAs without court intervention.
6. Legal Actions: Banks can file criminal cases against willful defaulters or winding up petitions under
the Companies Act.

Topic - 12: Monetary policy and RBI regulation

1. Money Flows in Banking Systems

 The Reserve Bank of India (RBI) regulates money flow through a Monetary Policy Committee,
aimed at maintaining price stability while fostering growth.
  Money released into the economy circulates through government payments (salaries, goods,
services), part of which is deposited back into banks.
 Banks pay interest to depositors and earn income by lending out these deposits to borrowers, creating
a cycle of money movement.
 If all depositors withdraw funds simultaneously (a "run" on the bank), the bank may fail,
highlighting the RBI's role as a lender of last resort.

2. Reserve Ratios

 Cash Reserve Ratio (CRR): A mandatory percentage of a bank's Net Demand and Time Liabilities
(NDTL) must be kept in cash with the RBI. There are no floor or ceiling limits on CRR.
 Statutory Liquidity Ratio (SLR): A percentage of total deposits that banks must maintain in cash,
gold, or approved securities. The ceiling is set at 40%.

3. Policy Rates

 Repo Rate: The interest rate at which banks borrow from the RBI, functioning as a repurchase
agreement.
 Reverse Repo Rate: The interest rate paid by the RBI to banks for borrowing their funds, used to
absorb excess liquidity.
 Marginal Standing Facility (MSF): An overnight borrowing facility for scheduled banks, with a
minimum borrowing of ₹1 crore.
 Bank Rate: The long-term lending rate of the RBI to domestic banks, impacting long-term lending
activities.

4. Open Market Operations (OMO)

 The RBI conducts OMOs by buying or selling government securities to manage liquidity in the
economy.

5. Disinvestment and Privatization

 Disinvestment: The process of the government selling part of its stake (more than 51%) in a
company.
 Privatization: Transferring complete ownership of a government enterprise to private entities.

6. Fund-Based and Non-Fund Based Support

 Fund-Based Support: Includes loans like vehicle loans, agriculture loans, personal loans, overdraft
accounts, and cash credit accounts.
 Non-Fund Based Support: Includes instruments like bank guarantees and letters of credit.

7. Basel Norms

 Basel I (1988): Introduced a minimum capital requirement of 8% of risk-weighted assets (RWA).

 Basel II (2004): Built on Basel I with three pillars: Capital Adequacy, Supervisory Review, and
Market Discipline. It failed to cover systemic risks.
 Basel III (2010): Introduced after the 2008 financial crisis, with a higher Capital Adequacy Ratio
(CAR) of 9% in India, focusing on Capital Adequacy, Leverage Ratio, Net Stable Funding Ratio,
and Liquidity Coverage Ratio.

Topic 14: Types of Money

Key Concepts of Money

1. Dear Money
o Refers to a period when money is available at high interest rates, limiting company expenditures.
 o Restricted money supply leads to higher interest rates, making it difficult for companies to raise
funds.
2. Barren Money
o Money that is not earning interest or is not invested.
o Typically kept in safe deposit lockers.
3. Hot Money
o Funds actively managed by investors seeking short-term returns.
o Often invested in opportunities like certificates of deposit and can easily move in and out of markets.
4. Hard Currency
o A stable and globally traded currency that serves as a reliable store of value.
5. Fiat Money
o Currency declared legal tender by a government, not backed by a physical commodity.

Measures of Money Supply

 M0 (Reserve Money): Currency in circulation + Bankers’ deposits with RBI + Other deposits with RBI.
 M1 (Narrow Money): Currency with the public + Demand deposits with banks + Other deposits with RBI.
 M2 (Intermediate Money): M1 + Short-term time deposits of residents (up to one year).
 M3 (Broad Money): M2 + Long-term time deposits + Call/Term funding from financial institutions.

Types of Banking

1. Branch Banking
o Operates through branches, enabling better management and risk diversification.
2. Para Banking
o Financial services by banks like credit cards, mutual funds, and pension funds.
3. Universal Banking
o Combines various financial services under one roof, functioning as both commercial and investment
banks.
4. Narrow Banking
o Focuses on risk-free investments like government securities.
5. Shadow Banking
o Unregulated or loosely regulated banking services provided by non-banking financial companies
(NBFCs).
6. Unit Banking
o Operates a single branch, catering to a small community.
7. Retail Banking
o Direct transactions with customers, providing personal banking services.
8. Wholesale Banking
o Services for high-net-worth clients, such as corporations.
9. Virtual Banking
o Banking operations conducted online.
10. Chain Banking
o A system where multiple independently chartered banks are controlled by a group.
11. Offshore Banking
o Banking services provided outside an individual’s or company’s national residence.
12. Green Banking
o Promotes sustainable development and environmental responsibility.
13. Merchant Banking
o Combines banking and consultancy services.

Financial Institutions Overview

1. RBI (Reserve Bank of India)

o Central bank responsible for monetary policy and currency issuance, established in 1935.
o Functions include issuing notes, acting as banker to the government, and managing credit.
2. BRBNMPL
o Subsidiary of RBI responsible for designing and printing banknotes.
 3. DICGC
o Insures bank deposits up to ₹5,00,000 per depositor, established in 1978.
4. Regional Rural Banks (RRBs)
o Established to provide banking services in rural areas, with ownership shared between the central
government, state government, and sponsor banks.
5. NABARD
o Apex development bank established in 1982 to support rural development and agricultural credit.
6. Refinance vs. Direct Finance
o Refinance: Banks receive financing from institutions like NABARD.
o Direct Finance: Banks finance customers directly.
7. Lead Bank Scheme
o Introduced to enhance rural banking by assigning lead banks for different districts.
8. Service Area Approach
o Coordinates credit deployment and promotes branch expansion in unbanked areas.
9. Co-operative Banks
o Two segments: Urban and Rural, providing essential banking services.
10. MUDRA (Micro Units Development and Refinance Agency)
o Provides loans to microfinance institutions and NBFCs for MSMEs.

MUDRA Loan Types

 Shishu: Up to ₹50,000
 Kishor: ₹50,000 to ₹5 lakh
 Tarun: ₹5 lakh to ₹10 lakh

Topic -17: Differentiated banks

1. Non-Banking Financial Companies (NBFCs)

 Definition: NBFCs are institutions engaged in loans, advances, acquiring securities, leasing, hire
purchase, insurance, and chit business, excluding agriculture, industrial activities, and sale of
goods/services.
 Key Differences from Banks:
o Cannot accept demand deposits.
o Do not form part of the payment and settlement system (cannot issue cheques).
o Deposit insurance from DICGC is unavailable.

2. Types of Banks

 Payment Banks:
o Conceptualized by RBI to enhance financial inclusion.
o Can accept limited deposits (up to ₹1 lakh per customer).
o Initial capital requirement: ₹100 crore.
o Promoter’s stake must remain at 40% for the first five years.
o Can issue debit/ATM cards, but not credit cards.
 Small Finance Banks:
o Focused on providing banking services to underserved sectors (small businesses, farmers).
o Capital requirement: ₹200 crore.
o Must lend a minimum of 75% of ANBC to priority sector.
o Can offer all types of deposits (savings, current, fixed, recurring).

3. History of Banking in India

 Early Foundations:
o First bank: Bank of Hindustan (1770).
o Presidency Banks: Bank of Bengal (1806), Bank of Bombay (1840), Bank of Madras (1843) later
amalgamated into the Imperial Bank of India (1927), which became SBI in 1955.
 Notable Early Banks:
o Allahabad Bank (1865), Oudh Commercial Bank (1881), Punjab National Bank (1895).
  Nationalization:
o July 19, 1969: 14 major banks nationalized.
o 1980: Additional 6 banks nationalized.
 Recent Mergers:
o 27 PSBs reduced to 12, creating larger entities with significant business volumes.

4. Recent Banking Developments

 Current Large PSBs:

o SBI, PNB, Bank of Baroda, Canara Bank, Union Bank, Bank of India, Indian Bank.
 Recent Mergers:
o Notable amalgamation of PNB with Oriental Bank of Commerce and United Bank of India.

5. Prominent Small Finance and Payment Banks

 Small Finance Banks:

o Examples: AU Small Finance Bank, Equitas, Ujjivan.
 Payment Banks:
o Examples: Paytm Payments Bank, Airtel Payments Bank, India Post Payments Bank.

Topic -19: Financial Market

Definition

Financial markets are platforms that facilitate borrowing and lending among entities. They include various
products such as bonds, equities, currencies, and derivatives, and serve as intermediaries between depositors
and borrowers.

Classification

1. Money Market
o Focuses on short-term credit (1 day to 1 year).
o Participants include the RBI, commercial banks, NBFCs, and cooperative banks.
o Instruments include T-bills, commercial papers, and certificates of deposits.

Key Instruments:

o Treasury Bills (T-bills): Low-risk government-issued securities, maturing in 91, 182, or 364 days.
o Commercial Paper (CP): Short-term unsecured promissory notes issued by companies with a net
worth of at least ₹4 crore, maturing from 7 days to 1 year.
o Certificate of Deposits (CD): Issued by banks for 7 days to 1 year, with minimum denominations of
₹1 lakh.
o Cash Management Bills: Short-term instruments for government cash flow mismatches, with
maturities of less than 91 days.
2. Capital Market
o Deals with long-term credit (over 1 year).
o Comprises stock exchanges, housing finance, and insurance companies.

Key Segments:

o Primary Market: Involves new stock issuance (IPOs).

o Secondary Market: Involves trading existing securities (FPOs).

Instruments:

o Equity Shares: Ownership in a company, profit or loss shared by shareholders.

o Debentures: Debt securities with fixed interest, secured by assets.
o Preferential Shares: Fixed dividends and priority in asset recovery.
Financial Intermediaries

 RBI Regulated: Asset finance companies, loan companies, and investment firms.
 SEBI Regulated: Venture capital, angel funds, and stock broking companies.

Foreign Investment

Foreign Direct Investment (FDI)

 Direct investment in a foreign country, involving significant capital for establishing businesses.
 Common among multinationals and large institutions.

Foreign Portfolio Investment (FPI)

 Investment in foreign financial assets (stocks, bonds) without direct ownership of physical assets.
 More liquid and less stable than FDI.

Key Differences Between FDI and FPI

Parameter FDI FPI

Definition Substantial interest in a foreign enterprise. Investment in financial assets.

Investor Role Active Passive

Control High Very low

Term Long-term Short-term

Risks Stable Volatile

Banking Terminologies

 Differentiated Banks: Niche banks like payment and small finance banks.
 Bridge Loan: Short-term financing to cover gaps.
 Insolvency: Inability to pay debts.
 Bankruptcy: Legal status for individuals unable to pay debts.
 Liquidation: Dissolving a company by selling assets.
 Accounts Receivable: Money owed by customers.
 Equity: Total assets minus total liabilities.
 Liquidity: Ease of converting assets to cash.

Additional Concepts

 Market Capitalization: Company valuation based on stock price and outstanding shares.
 Mutual Funds: Pooled investments managed professionally.
 Plastic Money: Credit and debit cards.
 Yield: Annual return on investment expressed as a percentage.

Banking Abbreviations

 ACS: Automated Clearing System

 ADR: American Depository Receipt
 AEPS: Aadhar Enabled Payment System
 AFS: Annual Financial Statement
 AIF: Alternative Investment Fund
 ALCO: Asset Liability Committee
 AMFI: Association of Mutual Funds in India
 ANBC: Adjusted Net Bank Credit
  APBS: Aadhar Payment Bridge System
 ARC: Asset Reconstruction Companies
 ASBA: Application Supported by Blocked Amount
 ATM: Automated Teller Machine
 BBPS: Bharat Bill Payment System
 BCBS: Basel Committee on Banking Supervision
 BIS: Bank of International Settlements
 BOP: Balance of Payments
 BPLR: Benchmark Prime Lending Rate
 CASA: Current Account Saving Account
 CDR: Corporate Debt Restructuring
 CIBIL: Credit Information Bureau of India Ltd
 CRR: Cash Reserve Ratio
 CTS: Cheque Truncation System
 DICGC: Deposit Insurance and Credit Guarantee Corporation of India
 ECB: External Commercial Borrowings
 EMI: Equated Monthly Installment
 FDI: Foreign Direct Investment
 FPI: Foreign Portfolio Investment
 IMPS: Immediate Mobile Payment Service
 KYC: Know Your Customer
 MCLR: Marginal Cost of Lending Rate
 NPA: Non Performing Assets
 RTGS: Real Time Gross Settlement
 SIP: Systematic Investment Plans
 UPI: Unified Payments Interface

Pradhan Mantri Jan Dhan Yojana (PMJDY)

 Launched: 2014 by PM Modi

 Aim: To provide affordable access to financial services including savings, insurance, pensions,
credit, and remittances.
 Features:
o Universal access to banking facilities.
o Financial literacy and at least one basic banking account per household.
o COVID-19 support: Rs. 500 per month for women Jan Dhan account holders announced on
March 26, 2020.

Atal Pension Yojana (APY)

 Launched: May 9, 2015 by PM Modi

 Aim: To provide social and financial security in old age through regular savings.
 Eligibility:
o Indian citizens aged 18-50.
o Minimum contribution period of 20 years.
o Bank account linked to Aadhaar and a valid mobile number.
 Pension Amount: Rs. 5,000 to Rs. 10,000 per month.

Pradhan Mantri MUDRA Yojana (PMMY)

 Launched: 2015 by PM Modi

 Aim: To provide low-rate loans for income-generating activities in the non-farming sector.
 Eligibility: Indian citizens with business plans needing loans less than ₹10 lakhs.
 Types of MUDRA Loans:
o Shishu: Up to ₹50,000
o Kishor: ₹50,000 to ₹5 lakh
o Tarun: ₹5 lakh to ₹10 lakh
Kisan Credit Card (KCC)

 Launched: 1998
 Aim: To provide timely and adequate credit to farmers for crop production and ancillary activities.
 Eligibility:
o Individual/joint borrowers who are owner-cultivators.
o Tenant farmers, oral lessees, sharecroppers, and Self Help Groups (SHGs).
 Issuers: Commercial Banks, RRBs, Small Finance Banks, and Cooperatives.

Small Savings Schemes and Interest Rates

1. Public Provident Fund (PPF): 7.1%

2. National Savings Certificate (NSC): 6.8%
3. Kisan Vikas Patra (KVP): 6.9% (14 months maturity)
4. Sukanya Samriddhi Account: 7.6%
5. Senior Citizen Savings Scheme: 7.4%