( )

Q: What is plastic money?

A: plastic money is the Generic term for all types of bank cards, credit cards, debit
cards, smart cards, etc.
Q: What is the earning source of a Bank?
A: Fees and Commission, Interest, Consultancy, Investments and others bank related
incomes.
Q: What are the differences between debit card and credit card?
A: Debit cards allow bank customers to spend money that they have by drawing on
funds that they deposited with the card provider. Credit cards allow consumers to
borrow money from the card issuer up to a certain limit in order to purchase items or
withdraw cash.
Q: Amortization:
The process of reducing debt through regular installment payments of principal and
interest that will result in the payoff of a loan at its maturity.
Q: Annual Percentage Rate (APR):
The cost of credit on a yearly basis, expressed as a percentage. See also APR Change
in Term and Other Changes in Term.
Q: Annual Percentage Yield (APY):
A percentage rate reflecting the total amount of interest paid on a deposit account
based on the interest rate and the frequency of compounding for a 365-day year. See
also APY and APY for Index-linked CDs.
Q: Automated Clearing House (ACH):
A computerized facility used by member depository institutions to electronically
combine, sort, and distribute inter-bank credits and debits. ACHs process electronic
transfers of government securities and provided customer services, such as direct
deposit of customers' salaries and government benefit payments (i.e., social security,
welfare, and veterans' entitlements), and preauthorized transfers.
Q: Automated Teller Machine (ATM):
A machine, activated by a magnetically encoded card or other medium, that can
process a variety of banking transactions. These include accepting deposits and loan
payments, providing withdrawals, and transferring funds between accounts.

Q: Automatic Bill Payment:

A checkless system for paying recurring bills with one authorization statement to a
financial institution. For example, the customer would only have to provide one
authorization form/letter/document to pay the cable bill each month. The necessary
debits and credits are made through an Automated Clearing House (ACH).
Q: Certificate of Deposit:
A negotiable instrument issued by a bank in exchange for funds, usually bearing
interest, deposited with the bank.
Q: Certificate of Release:
A certificate signed by a lender indicating that a mortgage has been fully paid and all
debts satisfied, also known as release of lien.
Q: Demand Deposit:
A deposit of funds that can be withdrawn without any advance notice.
Q: Electronic Banking:
A service that allows an account holder to obtain account information and manage
certain banking transactions through a personal computer via the financial
institution's Web site on the Internet. (This is also known as Internet or online
banking.)
1. What is a Repo Rate?
A: Repo rate is the rate at which our banks borrow money from BB. Whenever the
banks have any shortage of funds they can borrow it from BB. A reduction in the repo
rate will help banks to get money at a cheaper rate. When the repo rate increases,
borrowing from BB becomes more expensive.
2. What is Reverse Repo Rate?
A: This is exact opposite of Repo rate. Reverse Repo rate is the rate at which
Bangladesh Bank (BB) borrows money from banks. BB uses this tool when it feels there
is too much money floating in the banking system. Banks are always happy to lend
money to BB since their money is in safe hands with a good interest. An increase in
Reverse repo rate can cause the banks to transfer more funds to BB due to this
attractive interest rates.
3. What is CRR Rate?
A: Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with
BB. If BB decides to increase the percent of this, the available amount with the banks

comes down. BB is using this method (increase of CRR rate), to drain out the
excessive money from the bank.
4. What is SLR Rate?
A: SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain
in the form of cash, or gold or govt. approved securities (Bonds) before providing
credit to its customers.
5. What is Bank Rate?
A: Bank rate, also referred to as the discount rate, is the rate of interest which a
central bank charges on the loans and advances that it extends to commercial banks
and other financial intermediaries. Changes in the bank rate are often used by central
banks to control the money supply.
6. What is Inflation?
A: Inflation is as an increase in the price of bunch of Goods and services that projects
the Indian economy. An increase in inflation figures occurs when there is an increase
in the average level of prices in Goods and services. Inflation happens when there are
fewer Goods and more buyers; this will result in increase in the price of Goods, since
there is more demand and less supply of the goods. New rate: P-P: 5.65%, M.A: 6.10%
7. What is Deflation?
A: Deflation is the continuous decrease in prices of goods and services. Deflation
occurs when the inflation rate becomes negative (below zero) and stays there for a
longer period.
8. What is PLR?
A: The Prime Interest Rate is the interest rate charged by banks to their most
creditworthy customers (usually the most prominent and stable business customers).
The rate is almost always the same amongst major banks. Adjustments to the prime
rate are made by banks at the same time; although, the prime rate does not adjust on
any regular basis. The Prime Rate is usually adjusted at the same time and in
correlation to the adjustments of the Fed Funds Rate.
9. What is Deposit Rate?
A: Interest Rates paid by a depository institution on the cash on deposit.

Policy Rates:
Bank Rate: 5.00%
Repo Rate: 7.25 %
Reverse Repo Rate: 5.25 %
Reserve Ratios:
CRR: 6.5%
SLR: 19.0%
10. What is FII?
A: FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of
an institution. An institution established outside India, which proposes to invest in
Indian market, in other words buying Indian stocks. FII's generally buy in large volumes
which has an impact on the stock markets. Institutional Investors includes pension
funds, mutual funds, Insurance Companies, Banks, etc.
11. What is FDI?
A: FDI (Foreign Direct Investment) occurs with the purchase of the physical assets or
a significant amount of ownership (stock) of a company in another country in order to
gain a measure of management control (Or) A foreign company having a stake in a
Indian Company.
12. What is IPO?
A: IPO is Initial Public Offering. This is the first offering of shares to the general public
from a company wishes to list on the stock exchanges.
13. What is Disinvestment?
A: The Selling of the government stake in public sector undertakings.
14. What is Fiscal Deficit?
A: It is the difference between the governments total receipts (excluding borrowings)
and total expenditure.
15. What is Revenue deficit?
A: It defines that, where the net amount received (by taxes & other forms) fails to
meet the predicted net amount to be received by the government

16. What is GDP?

A: The Gross Domestic Product or GDP is a measure of all of the services and goods
produced in a country over a specific period; classically a year.
17. What is GNP?
A: Gross National Product is measured as GDP plus income of residents from
investments made abroad minus income earned by foreigners in domestic market.
18. What is National Income?
A: National Income is the money value of all goods and services produced in a country
during the year.
19. What is Per Capita Income?
A: The national income of a country, or region, divided by its population. Per capita
income is often used to measure a country's standard of living. Current PCA:1466 USD
20. What is Vote on Account?
A: A vote-on account is basically a statement ,where the government presents an
estimate of a sum required to meet the expenditure that it incurs during the first
three to four months of an election financial year until a new government is in place,
to keep the machinery running.
21. Difference between Vote on Account and Interim Budget?
A: Vote-on-account deals only with the expenditure side of the government's budget,
an interim Budget is a complete set of accounts, including both expenditure and
receipts.
22. What is SDR?
A: The SDR (Special Drawing Rights) is an artificial currency created by the IMF in
1969. SDRs are allocated to member countries and can be fully converted into
international currencies so they serve as a supplement to the official foreign reserves
of member countries. Its value is based on a basket of key international currencies
(U.S. dollar, euro, yen and pound sterling).
23. What is SEZ?
A: SEZ means Special Economic Zone is the one of the part of governments policies in
India. A special Economic zone is a geographical region that economic laws which are

more liberal than the usual economic laws in the country. The basic motto behind this
is to increase foreign investment, development of infrastructure, job opportunities
and increase the income level of the people.
24. What is monetary policy?
A: A Monetary policy is the process by which the government, central bank, of a
country controls (i) the supply of money, (ii) availability of money, and (iii) cost of
money or rate of interest, in order to attain a set of objectives oriented towards the
growth and stability of the economy.
25. What is Fiscal Policy?
A: Fiscal policy is the use of government spending and revenue collection to influence
the economy. These policies affect tax rates, interest rates and government spending,
in an effort to control the economy. Fiscal policy is an additional method to
determine public revenue and public expenditure.
26. What is Core Banking Solutions?
A: Core banking is a general term used to describe the services provided by a group of
networked bank branches. Bank customers may access their funds and other simple
transactions from any of the member branch offices. It will cut down time, working
simultaneously on different issues and increasing efficiency. The platform where
communication technology and information technology are merged to suit core needs
of banking is known as Core Banking Solutions.
Debt is an amount of money borrowed by one party from another. Many
corporations/individuals use debt as a method for making large purchases that they
could not afford under normal circumstances. A debt arrangement gives the borrowing
party permission to borrow money under the condition that it is to be paid back at a
later date usually with interest.
National Debt is the amount of money borrowed at different times by the government
for the expenditure which cannot be met from budgetary revenue allocation. This
money can be used for productive purposes or unproductive purposes.
Liquidity is the ability of an asset to be converted into cash without a significant
price concession. It is known as marketability the degree to which an asset or
security can be bought or sold in the market without affecting the asset's price.
Liquidity is characterized by a high level of trading activity. Assets that can be easily
bought or sold are known as liquid assets.

Liquidity Crisis: A negative financial situation characterized by a lack of cash flow.

For a single business, a liquidity crisis occurs when the otherwise solvent business
does not have the liquid assets (cash) necessary to meet its short-term obligations,
such as repaying its loans, paying its bills & paying its employees. If the liquidity crisis
is not solved, the company must declare bankruptcy.
Liquidity Risk in foreign exchange is the risk of losses due to the inability to make
timely payment of any financial obligation to the customers or counter parties in any
currency. Liquidity Risk is the risk stemming from the lack of marketability of an
investment that cannot be bought or sold quickly enough to prevent or minimize a
loss. Liquidity risk is typically reflected in unusually wide bid-ask spreads or large
price movements (especially to the downside).
Market Risk in foreign exchange is the risk of losses in on and off balance sheet
positions arising from adverse movements in market prices.
Consumer Credit is basically the amount of credit used by consumers to purchase
non-investment goods or services that are consumed and whose value depreciates
quickly. This includes automobiles, recreational vehicles, and education, boat and
trailer loans.
Opportunity Cost is a benefit, profit, or value of something that must be given up to
acquire or achieve something else. Since every resource (land and money) can be put
to alternative uses; every action, choice, or decision has an associated opportunity
cost. Opportunity costs are fundamental costs in economics and are used in computing
cost benefit analysis of a project.
Bond refers to a certificate issued by the government or a company acknowledging
that money has been lent to it and will be paid back with interest. Bond is a debt
investment in which an investor loans money to an entity (typically corporate or
governmental) which borrows the funds for a defined period of time at a variable or
fixed interest rate. Bonds are used by companies, municipalities, states and sovereign
governments to raise money and finance a variety of projects and activities.
Treasury Bill is government promissory letter. The government receives short-term
loan through it. The written document by which the government is pledged to pay the
due loan back with interest after three months is called Treasury Bill. So, treasury bill
is a short-term debt obligation backed by the government with a maturity of less than
one year. The interest is the difference between the purchase price and the price
paid either at maturity (face value) or the price of the bill if sold prior to maturity.
Treasury Notes are bonds of 2, 5 or 10 years. They are usually issued at face value
and the client receives regular interest payments. Treasury bonds are long term bonds
(30 years) and work similarly to notes.

Treasury bills, notes and bonds are marketable securities the government sells in
order to pay off maturing debt and to raise the cash needed to run the federal
government. When a person buys one of these securities, s/he is lending his/her
money to the government of the Bangladesh. Treasury bills, notes and bonds are
securities that have a stated interest rate that is paid semiannually until maturity.
What make notes and bonds different are the terms to maturity. Notes are issued in
two-, three-, five- and 10-year terms. Conversely, bonds are long-term investments
with terms of more than 10 years.
Bill of Exchange: is a written and unconditional order issued by seller (the drawer) to
buyer (the drawee) who is bound to pay the price of products to the carrier
mentioned on the bill at a predetermined future date. The drawee accepts the bill by
signing it, thus converting it into a post-dated check and a binding contract.
Narrow Money: A category of money supply that includes all physical money like coins
and currency along with demand deposits, saving accounts and other operational
liquid assets held by the central bank.
Broad Money: In economics, broad money refers to the most inclusive definition of
the money supply. Since cash can be exchanged for many different financial
instruments and placed in various restricted accounts, it is not a simple task for
economists to define how much money is currently in the economy.
Foreign Exchange: The exchange or conversion of one currency into another
currency. It also refers to the global market where currencies are traded.
Exchange (Conversion) Rate: The value or price of a nations currency in terms of
another currency.
Floating Exchange Rate: When the exchange rate of a currency is determined by the
demand and supply of that currency then it is called floating exchange rate. Floating
Exchange Rate is a country's exchange rate regime where its currency is set by the
foreign exchange market through supply and demand for that particular currency
relative to other currencies. Thus, floating exchange rates change freely and are
determined by trading in the foreign exchange market.
Value Chain is a chain of activities that a firm operating in a specific industry
performs in order to deliver a valuable product or service for the market. It is a highlevel model of how businesses receive raw materials as input, add value to the raw
materials through various processes and sell finished products to customers.
Debit is an accounting entry that results in either an increase in assets or decrease in
liabilities on a companys balance sheet or in a persons bank account. A debit on
accounting entry will have opposite effects on the balance depending on whether it is
done to assets or liabilities, with a debit to assets indicating an increase and vice
versa for liabilities.

Credit (as accounting entry) is an accounting entry that either decreases assets or
increases liabilities and equity on the companys balance sheet. On the companys
income statement, a debit will reduce net income while a credit will increase net
income.
Credit (as a loan) is a contractual agreement in which a borrower receives something
of value now and agrees to repay the lender at some date in the future, generally
with interest. It also refers to the borrowing capacity of an individual or company.
Soft Loan: A loan with an artificially low rate of interest. Soft loans are sometimes
made to developing nations by industrialized nations for political reasons.
Bank Draft: An instrument issued by one branch of a bank on another branch of the
bank containing an order to pay a certain sum on demand to the person named on the
draft. It is issued to transfer funds and to settle outstanding balances between banks,
or to provide a customer with funds payable at a bank in a different location. Bank
drafts are valid for a certain period, generally, for six months, as indicated over the
face of draft.
Bankruptcy is a legal status of a person or business organization that cannot repay
the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court
order, often initiated by the debtor. The bankruptcy process begins with a petition
filed by the debtor (most common) or on behalf of creditors (less common).
Bank Statement is a summary of financial transactions which have occurred over a
given period on a bank account held by a person or business with a financial
institution. The opening balance from the prior month combined with the net of all
transactions during the period should result in the closing balance for the current
statement.
Weighted average cost of capital (WACC) is the average after-tax cost of a
companys various capital sources (including common stock, preferred stock, bonds
and any other long-term debt). A company has two primary sources of financing (debt
and equity) and in simple terms, WACC is the average cost of raising that money.
WACC is calculated by multiplying the cost of each capital source (debt and equity) by
its relevant weight, and then adding the products together to determine the WACC
value.
DCF (Discounted Cash Flow): A valuation method used to estimate the attractiveness
of an investment opportunity. Discounted cash flow (DCF) analysis uses future free
cash flow projections and discounts them (most often using the weighted average cost
of capital) to arrive at a present value, which is used to evaluate the potential for
investment. If the value arrived at through DCF analysis is higher than the current
cost of the investment, the opportunity may be a good one.

Nominal Interest Rate: The interest rate before taking inflation into account. The
nominal interest rate is the rate quoted in loan and deposit agreements. The equation
that links nominal and real interest rates is: (1 + nominal rate) = (1 + real interest
rate) (1 + inflation rate). It can be approximated as nominal rate = real interest rate +
inflation rate.
Nominal versus real interest rate: The real interest rate is the nominal rate of
interest minus inflation. In the case of a loan, it is this real interest that the lender
receives as income. If the lender is receiving 8% from a loan and inflation is 8%, then
the real rate of interest is zero because nominal interest and inflation are equal. A
lender would have no net benefit from such a loan because inflation fully diminishes
the value of the loan's profit. The relationship between real and nominal interest
rates can be described in the equation: (1+r) (1+i) = (1+R)
Bridge Financing: In investment banking terms, it is a method of financing used by
companies before their IPO to obtain necessary cash for the maintenance of
operations. Bridge financing is designed to cover expenses associated with the IPO and
is typically short-term in nature. Once the IPO is complete, the cash raised from the
offering will immediately payoff the loan liability.
Niche Marketing: A niche market is a small but profitable market segment on which a
specific product is focused. It defines the product features aimed at satisfying specific
market needs, as well as the price range, production quality and the demographics
that is intended to impact. Market niches do not exist by themselves, but are created
by identifying needs or wants that are not being addressed by competitors and by
offering products that satisfy them.
Merchant Bank is a bank that deals mostly in international finance and long-term
loans for companies and underwriting. Merchant banks do not provide regular banking
services to the general public.
General Banking is an operational function of the bank which consists of the
management of deposit, cash, bills, account opening, security instruments handling,
customer services, locker facilities and other essential services of the bank.
Corporate Banking refers to the aspect of banking that deals with corporate
customers. Corporate banking is banking activities done by large companies and these
activities include borrowing a loan or other large financial transaction.
Online Banking is an electronic payment system that enables customers of a financial
institution to conduct financial transactions on a website operated by the institution
such as a retail bank, virtual bank, credit union or building society. Online banking
is also referred as internet banking, e-banking, virtual banking and by other terms.
Green Banking means promoting environmental-friendly practices and reducing
carbon footprint from our banking activities. Green Banking is a device that considers

social and ecological factors to protect environment and conserve natural resources
like power and energy in order to ensure a safer world for the next generation. Green
bankers are concerned about sustainable development.
E-banking is a kind of banking system in which the bank uses electronic or satellite
based computerized devices for ensuring promptness and accuracy in banking
transactions.
E-commerce is he buying and selling of products and services by businesses and
consumers through an electronic medium without using any paper documents. Ecommerce is widely considered the buying and selling of products over the internet,
but any transaction that is completed solely through electronic measures can be
considered e-commerce.
Agent Banking is a retail or postal outlet contracted by a financial institution or a
mobile network operator to process the financial transactions of the clients.
Mobile Banking is a system that allows customers of a financial institution to conduct
a number of financial transactions through a mobile device such as a mobile phone or
tablet. It is a quite popular method of banking that fits in well with a busy,
technologically oriented lifestyle.
A set of acts, laws, regulations, and guidelines have been enacted and promulgated
time to time since BBs establishment which helped BB to perform its role as a central
bank particularly, to control and regulate countrys monetary and financial system.
Among others, important laws and acts include:
1. Bangladesh Bank Order, 1972 (P.O. No. 127 of 1972)
2. Bank Company Act, 1991
3. Bank Company (amendment) Act, 2013
4. The Negotiable Instruments Act, 1881
5. The Bankers Book Evidence Act, 1891
6. Foreign Exchange Regulations (Amendement) Act, 2015
7. Foreign Exchange Regulations Act, 1947
8. Financial Institutions Act, 1993
9. Financial Reporting Act, 2015
10. Bank Deposit Insurance Act, 2000
11. Money Loan Court Act, 2003
12. Micro Credit Regulatory Authority Act, 2006
13. Money Laundering Prevention (Amendment) Act, 2015
14. Money Laundering Prevention Act,2012 [Bangla] [English]
15. Anti Terrorism (Amendment) Act, 2013

...

. ?
: 6 ,,,,, ,,
. ?
...
.

() ?

: , ,

, ,

. ?
: ( )
. ?
:

.
:

. ?
:
.
:

. ?
:
. ?
:
.
:

. ?
:
. ?
: -
. ?
:

. () ?
: ,,
. ?
:
.

: ( )
.

:
.

.
:

. ?
:
. ?
:
. - ?
:
. ?
: ,

? :

. ? :
.
:

.
?

 :
. - ?
: -
. ?
:
. ?
:

. ?
: , , , , , ,
,
.

:
.

:
.
:

. ?
:
. ?
: , .,
.
. ?
:
. ?
:

, ,

. ( ) ?
:
.

. ?-

) ?

) -
)

) -
) -
)