Banking Terminologies For UPSC Exam Check List of Bank Terms

Banking Terminologies: Banking terminologies encompass a wide range of terms and concepts that are utilized by banks across India. These terminologies can sometimes be perplexing and challenging even for finance and banking professionals. Nevertheless, as banking has become an integral part of both personal and business life, familiarizing oneself with these terminologies can prove immensely beneficial.

Banking terminologies refer to the specific terms and phrases employed within the banking industry, crucial for comprehending the functioning of banks and effectively managing personal finances. Some commonly encountered banking terminologies include APR, APY, ACH, ATM, bank run, basis point, checking account, certificate of deposit, and credit union.

List of Banking Terminologies

Banking Terminologies: Here is a list of commonly used banking terminologies mentioned below. Check the following list of banking terminologies.

• APR (Annual Percentage Rate): It represents the annual interest rate charged on loans or credit cards, including additional fees and charges.
• APY (Annual Percentage Yield): APY is the effective annual rate of return on an investment or deposit, taking into account compounding interest.
• ACH (Automated Clearing House): ACH is an electronic network used for processing financial transactions, such as direct deposits and bill payments.
• ATM (Automated Teller Machine): An ATM is a self-service machine that allows individuals to perform various banking transactions, such as cash withdrawals and balance inquiries.
• Bank Run: A bank run occurs when a large number of depositors withdraw their funds from a bank due to concerns about its financial stability.
• Basis Point: A basis point is a unit of measurement used to express changes in interest rates or yields. One basis point is equivalent to 0.01%.
• Checking Account: Also known as a current account, it is a bank account that enables frequent deposits, withdrawals, and payments through methods like checks and debit cards.
• Certificate of Deposit (CD): A CD is a time deposit offered by banks with a fixed term and fixed interest rate. The funds are inaccessible until the maturity date.
• Credit Union: A credit union is a cooperative financial institution owned and operated by its members, providing banking services like savings accounts and loans.
• EFT (Electronic Funds Transfer): EFT is the electronic transfer of funds between different accounts or financial institutions, facilitating payments and money transfers.
• FDIC (Federal Deposit Insurance Corporation): The FDIC is a government agency that provides deposit insurance to protect depositors’ funds in case of bank failures.
• KYC (Know Your Customer): KYC refers to the process through which banks verify and authenticate the identity of their customers to prevent fraud and money laundering.
• NEFT (National Electronic Funds Transfer): NEFT is an electronic payment system in India that enables individuals and businesses to transfer funds between banks.
• RTGS (Real-Time Gross Settlement): RTGS is a real-time funds transfer system that allows large-value transactions between banks on a one-to-one basis.
• NPA (Non-Performing Asset): NPA refers to a loan or advance that has stopped generating interest income for the bank due to non-payment by the borrower.

These are just a few examples of banking terminologies, and the banking industry has many more specialized terms and concepts.

Meaning of Banking Terminologies

Check the following Bank Terminologies with their meanings from A to Z in the table mentioned below: