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Banking Terminology

GATE ACADEMY
THALAYOLAPARAMBU

Customer
A customer is the
important visitor on
our premises. He is
not dependent on us,
we are dependent on
him. He is not an
interruption to our
works, he is the
purpose of it. He is
not an outsider in our
business, he is a part
of it. We are not
doing him a favour by
serving him, he is
doing us a favour by
giving us an
opportunity to do so.

Important Banking and Financial


Terms

Land: Natural resources or gifts of nature


that are used to produce goods and
services.
Law of demand: The principle that price
and quantity demanded are inversely
related.
Law of supply: The principle that price and
quantity supplied are directly related.
Loss: Business situation in which total
cost of production exceeds total revenue.
It is also termed as negative profit.
Market: A setting where buyers and
sellers establish prices for identical or

Important Banking and Financial Terms


Market economy: An economic system where most goods
and services are exchanged through transactions by
private households and businesses. Prices are determined
by buyers and sellers making exchanges in private
markets.
Medium of exchange: One of the functions of money
whereby people exchange goods and services for money
and in turn use money to obtain other goods and services.
Mixed economy: It is a dominant form of economic
organisation in non-communist countries. Mixed
economies rely primarily on the price system for their
economic organisation but use a variety of government
interventions (such as taxes, spending and regulation) to
handle macroeconomic instability and market failures.
Monetary policy: The objectives of the Central bank in
exercising its control over money, interest rates, and credit
conditions. The instruments of monetary policy are
primarily open-market operations, reserve requirements,
and the discount rate.

Important Banking and Financial Terms


Money: It is an officially-issued legal tender generally consisting
of currency and coins. Money is the circulating medium of
exchange as defined by a government. It is often synonymous
with cash, including negotiable instruments such as cheques.
Each country has its own money, or currency, that is used as a
medium of exchange within that country (Some countries share
a type of currency, such as the Euro used by the European
Union.) The currency of one country can be exchanged for the
currency of another via a currency exchange.
Money market: A term denoting the set of institutions that
handle the purchase or sale of short-term credit instruments like
Treasury bills and commercial paper.
National debt: The net accumulation of central governments
budget deficits.
National income: The amount of aggregate income earned by
suppliers of resources employed to produce GNP; net national
product plus government subsidies minus indirect business
taxes.
Natural resources: Gifts of nature that are used to produce
goods and services. They include land, trees, fish, petroleum
and mineral deposits, the fertility of soil, climatic conditions for

Important Banking and Financial Terms


Non-durables: Consumer goods expected to last less than
three years.
Opportunity cost: The next best alternative that must be
given up when a choice is made.
Physical capital: Manufactured items used to produce
goods and services.
Price: The money value of a unit of goods., services or
resources.
Private goods: A commodity that benefits the individual.
For example bread, which, if consumed by one person,
cannot be consumed by another person.
Producers: People who use resources to make goods and
services, (also called workers).
Production: The making of goods available for use; total
output, especially of a commodity or industry.
Productive resources: All natural resources (land), human
resources (labour), and man-made resources (capital) used
in the production of goods and services.

Important Banking and Financial Terms


Productivity: The ratio of output (goods and services) produced
per unit of input (productive resources) over some period of
time.
Profit: The difference between total revenues and the full costs
involved in producing or selling goods or services. It is a return
for risk taking.
Property tax: Taxes paid by households and businesses on land
and buildings.
Public goods: A commodity whose benefits are indivisibly
spread among the entire community, whether or not particular
individuals desire to consume the public goods. For example, a
public-health measure that eradicates small pox protects all, not
just those paying for the vaccinations. These goods are often
provided by the government.
Quota: A legal limit on the quantity of a particular product that
can be imported or exported.
Quality: in manufacturing, a measure of excellence or a state of
being free from defects, deficiencies and significant variations. It
is brought about by strict and consistent commitment to certain
standards that achieve uniformity of a product in order to satisfy
specific customer or user requirements.

BROAD MONEY

Ineconomics,broadmoneyisameasureofthemoney
supplythatincludesmorethanjustphysicalmoneysuchas
currencyandcoins(alsotermednarrowmoney).
Itgenerallyincludesdemanddepositsatcommercialbanks,
andanymoniesheldineasilyaccessibleaccounts.
Componentsofbroadmoneyarestillveryliquid,andnon-cash
componentscanusuallybeconvertedintocashveryeasily.

COMPONENTS:

CURRENCY WITH PUBLIC.


DEMAND DEPOSITS WITH BANKS.
TIME DEPOSITS WITH BANK.
OTHER DEPOSITS WITH RBI.

MICR Code
Magnetic Ink Character Recognition
First 3 digits: Postal Code Eg. 682
Second 3 digits: Bank Code Eg. 002
Third set of 3 digits: Branch Eg. 005
10- SB. Interest type
Hard Currency is the currency of a country in
relation to which we have an adverse balance of
payment, i.e., which is hard to be obtained.
Hot Money is money which moves from one place
to another to seek profit or higher rate of
interest.
Index Number is a statistical method of indicating
approximately the variations in the prices of
essential commodities over certain periods of
time.

FOR EFFECTIVE COACHING


CONTACT

GATE ACADEMY
(Guidance And Training for Employment)
BANK / PSC EXAMS COACHING CENTRE
RUN BY RETIRED BANK OFFICIALS
K.R.AUDITORIUM, I Floor,
THALAYOLAPARAMBU 686 606
PH:04829 238005/ 9446424407 / 9447059090
WEB SITE:www.gateacademi.in.net
Blog:gateacademi.blog.com
e-mail id: gateacademi@gmail.com

GATE ACADEMY

(Estd. 2011)

BANK / PSC EXAMS COACHING CENTRE


K.R.AUDITORIUM, I Floor, THALAYOLAPARAMBU 686 606
PH:04829 238005/ 9446424407 / 9447059090
PRINCIPAL
Sri. M.G.RAGHAVAN. B.Sc.(Ag), M.A. BGL, CAIIB
COURSE DIRECTORS
SRI.K.SANKARAN. M.A. B.Ed. HDC
Sri. Pailo Varghese. M.A (Lit) M.A.(Eco.) LLB
DIRECTORS
SRI.T.M.MARANGOLI.
SRI. P.P.PHILIP. M.A. B.Ed, M.Sc.(Pshyco.) LLB
SRI. A.J.KURIEN
ADV. P.V.KRISHNAKUMAR