Anytime Banking : With introduction of ATMs, Tele-Banking and internet banking, customers can conduct their business anytime

of the
day and night. The 'Banking Hours' is not a constraint for transacting banking business.
Anywhere Banking : Refers to banking not only by ATMs, Tele-Banking and internet banking, but also to core banking solutions
brought in by banks here customer can de!osit his money, che"ues and also ithdra money from any branch connected ith the
system. All ma#or banks in $ndia ha%e brought in core banking in their o!erations to make banking truly anyhere banking.
ATM : ATMs are Automatic Teller Machines, hich do the #ob of a teller in a bank through &om!uter 'etork. ATMs are located on the
branch !remises or off branch !remises. ATMs are useful to dis!ense cash, recei%e cash, acce!t che"ues, gi%e balances in the
accounts and also gi%e mini-statements to the customers.
Bank Ombudsman : Bank (mbudsman is the authority to look into com!laints against Banks in the main areas of collection of
che"ue ) bills, issue of demand drafts, non-adherence to !rescribed hours of orking, failure to honour guarantee ) letter of credit
commitments, o!erations in de!osit accounts and also in the areas of loans and ad%ances here banks flout directions ) instructions of
RB$. This *cheme as announced in +,,- and is functioning ith ne guidelines from .//0. This scheme co%ers all scheduled banks,
the RRBs and co-o!erati%e banks.
Bancassurance : Bancassurance refers to the distribution of insurance !roducts and the insurance !olicies of insurance com!anies
hich may be life !olicies or non-life !olicies like home insurance - car insurance, medi-!olicies and others, by banks as cor!orate
agents through their branches located in different !arts of the country by charging a fee.
Banker's Lien : Bankers lien is a s!ecial right of lien e1ercised by the bankers, ho can retain goods bailed to them as a security for
general balance of account. Bankers can ha%e this right in the absence of a contract to the contrary.
Banking : Acce!ting for the !ur!ose of lending or in%estment of de!osits of money from 2ublic, Re!ayable on demand or otherise
and ithdraable by che"ues, drafts, order, etc.
Basel-II : The &ommittee on Banking Regulations and *u!er%isory 2ractices, !o!ularity knon as Basel &ommittee, submitted its
re%ised %ersion of norms in 3une, .//4. 5nder the re%ised accord the ca!ital re"uirement is to be calculated for credit, market and
o!erational risks. The minimum re"uirement continues to be 67 of ca!ital fund 8Tier $ 9 $$ &a!ital: Tier $$ shall continue to be not more
than +//7 of Tier $ &a!ital.
Brick & Mortar Banking : Brick and Mortar Banking refers to traditional system of banking done only in a fi1ed branch !remises made
of brick and mortar. 'o there are banking channels like ATM, $nternet Banking,tele banking etc.
Business o Banking : Acce!ting de!osits, borroing money, lending money, in%esting, dealing in bills, dealing in ;oreign <1change,
Hiring =ockers, (!ening *afe &ustody Accounts, $ssuing =etters of &redit, Tra%eller's &he"ues, doing Mutual ;und business, $nsurance
Business, acting as Trustee or doing any other business hich &entral >o%ernment may notify in the official >a?ette.
Bouncing o a che!ue : Where an account does not ha%e sufficient balance to honour the che"ue issued by the customer , the
che"ue is returned by the bank ith the reason @funds insufficient@ or @<1ceeds arrangement@.This is knon as 'Bouncing of a che"ue' .
"ertiicate o #e$osit :% &ertificate of Ae!osits are negotiable recei!ts in bearer form hich can be freely traded among in%estors. This
is also a money market instrument,issued for a !eriod ranging from 0 days to f one year .The minimum de!osit amount is Rs. + lakh
and they are transferable by endorsement and deli%ery.
"he!ue : &he"ue is a Bill of <1change dran on a s!ecified banker ordering the banker to !ay a certain sum of money to the draer of
che"ue or another !erson. Money is generally ithdran by clients by che"ues. &he"ue is alays !ayable on demand.
"he!ue Truncation : &he"ue truncation, truncates or sto!s the flo of che"ues through the banking system. >enerally truncation
takes !lace at the collecting branch, hich sends the electronic image of the che"ues to the !aying branch through the clearing house
and stores the !a!er che"ues ith it.
"ollecting Banker : Also called recei%ing banker, ho collects on instruments like a che"ue, draft or bill of e1change, lodged ith
himself for the credit of his customer's account.
"onsumer &rotection Act : $t is im!lemented from +,60 to enforce consumer rights through a sim!le legal !rocedure. Banks also are
co%ered under the Act. A consumer can file com!laint for deficiency of ser%ice ith &onsumer Aistrict ;orum for amounts u!to Rs../
=acs in Aistrict &ourt, and for amounts abo%e Rs../ =acs to Rs.+ &rore in *tate &ommission and for amounts abo%e Rs.+ &rore in
'ational &ommission.
"o-o$erati'e Bank : An association of !ersons ho collecti%ely on and o!erate a bank for the benefit of consumers ) customers, like
*arasat &o-o!erati%e Bank or Abhyudaya &o-o!erati%e Bank and other such banks.
"o-o$erati'e (ociety : When an association of !ersons collecti%ely on and o!erate a unit for the benefit of those using its ser%ices
like A!na Ba?ar &o-o!erati%e *ociety or *ahakar Bhandar or a &o-o!erati%e Housing *ociety.
"ore Banking (olutions )"B(* : &ore Banking *olutions is a bu?? ord in $ndian banking at !resent, here branches of the bank are
connected to a central host and the customers of connected branches can do banking at any breach ith core banking facility.
"reditworthiness : $t is the ca!acity of a borroer to re!ay the loan ) ad%ance in time alongith interest as !er agreed terms.
"rossing o "he!ues : &rossing refers to draing to !arallel lines across the face of the che"ue.A crossed che"ue cannot be !aid in
cash across the counter, and is to be !aid through a bank either by transfer, collection or clearing.A general crossing means that
che"ue can be !aid through any bank and a s!ecial crossing, here the name of a bank is indicated on the che"ue, can be !aid only
through the named bank.
"urrent Account : &urrent account ith a bank can be o!ened generally for business !ur!ose. There are no restrictions on
ithdraals in this ty!e of account. 'o interest is !aid in this ty!e of account.
"ustomer : A !erson ho maintains any ty!e of account ith a bank is a bank customer. &onsumer 2rotection Act has a ider
definition for consumer as the one ho !urchases any ser%ice for a fee like !urchasing a demand draft or a !ay order. The term
customer is defined differently by =as, softares and countries.
#ebit "ard : A !lastic card issued by banks to customers to ithdra money electronically from their accounts. When you !urchase
things on the basis of Aebit &ard the amount due is debited immediately to the account . Many banks issue Aebit-&um-ATM &ards.
#ebtor : A !erson ho takes some money on loan from another !erson.
#emand #e$osits : Ae!osits hich are ithdran on demand by customers.<.g. sa%ings bank and current account de!osits.
#emat Account : Aemat Account conce!t has re%olutioni?ed the ca!ital market of $ndia. When a de!ository com!any takes !a!er
shares from an in%estor and con%erts them in electronic form through the concerned com!any, it is called Aemateriali?ation of *hares.
These con%erted *hare &ertificates in <lectronic form are ke!t in a Aemat Account by the Ae!ository &om!any, like a bank kee!s
money in a de!osit account. $n%estor can ithdra the shares or !urchase more shares through this demat Account.
#ishonour o "he!ue : 'on-!ayment of a che"ue by the !aying banker ith a return memo gi%ing reasons for the non-!ayment.
#ebit "ard : A !lastic card issued by banks to customers to ithdra money electronically from their accounts. When you !urchase
things on the basis of Aebit &ard the amount due is debited immediately to the account . Many banks issue Aebit-&um-ATM &ards.
#ebtor : A !erson ho takes some money on loan from another !erson.
#emand #e$osits : Ae!osits hich are ithdran on demand by customers.<.g. sa%ings bank and current account de!osits.
#emat Account : Aemat Account conce!t has re%olutioni?ed the ca!ital market of $ndia. When a de!ository com!any takes !a!er
shares from an in%estor and con%erts them in electronic form through the concerned com!any, it is called Aemateriali?ation of *hares.
These con%erted *hare &ertificates in <lectronic form are ke!t in a Aemat Account by the Ae!ository &om!any, like a bank kee!s
money in a de!osit account. $n%estor can ithdra the shares or !urchase more shares through this demat Account.
#ishonour o "he!ue : 'on-!ayment of a che"ue by the !aying banker ith a return memo gi%ing reasons for the non-!ayment.
+-Banking : <-Banking or electronic banking is a form of banking here funds are transferred through e1change of electronic signals
beteen banks and financial institution and customers ATMs, &redit &ards, Aebit &ards, $nternational &ards, $nternet Banking and ne
fund transfer de%ices like *W$;T, RT>* belong to this category.
+,T - )+lectronic ,und Transer* : <;T is a de%ice to facilitate automatic transmission and !rocessing of messages as ell as funds
from one bank branch to another bank branch and e%en from one branch of a bank to a branch of another bank. <;T allos transfer of
funds electronically ith debit and credit to relati%e accounts.
+ither or (ur'i'or : Refers to o!eration of the account o!ened in to names ith a bank. $t means that any one of the account holders
ha%e !oers to ithdra money from the account, issue che"ues, gi%e sto! !ayment instructions etc. $n the e%ent of death of one of
the account holder, the sur%i%ing account holder gets all the !oers of o!eration.
+lectronic "ommerce )+-"ommerce*: <-&ommerce is the !a!erless commerce here the e1change of business takes !lace by
<lectronic means.
+ndorsement : When a 'egotiable $nstrument contains, on the back of the instrument an endorsement, signed by the holder or !ayee
of an order instrument, transferring the title to the other !erson, it is called endorsement.
+ndorsement in Blank : Where the name of the endorsee or transferee is not mentioned on the instrument.
+ndorsement in ,ull : Where the name of the endorsee or transferee a!!ears on the instrument hile making endorsement.
+-ecution o #ocuments : <1ecution of documents is done by !utting signature of the !erson, or affi1ing his thumb im!ression or
!utting signature ith stam! or affi1ing common seal of the com!any on the documents ith or ithout signatures of directors as !er
articles of association of the com!any.
,actoring : Business of buying trade debts at a discount and making a !rofit hen debt is reali?ed and also taking o%er collection of
trade debts at agreed !rices.
,oreign Banks : Banks incor!orated outside $ndia but o!erating in $ndia and regulated by the Reser%e Bank of $ndia 8RB$:,. e..g.,
Barclays Bank, H*B&, &itibank, *tandard &hartered Bank, etc.
,oraiting : $n $nternational Trade hen an e1!orter finds it difficult to reali?e money from the im!orter, he sells the right to recei%e
money at a discount to a forfaiter, ho undertakes inherent !olitical and commercial risks to finance the e1!orter, of course ith
assum!tion of a !rofit in the %enture.
,orgery : hen a material alteration is made on a document or a 'egotiable $nstrument like a che"ue, to change the mandate of the
draer, ith intention to defraud.
.arnishee Order : When a &ourt directs a bank to attach the funds to the credit of customer's account under !ro%isions of *ection B/
of the &ode of &i%il 2rocedure, +,/6.
.eneral Lien : A right of the creditors to retain !ossession of all goods gi%en in security to him by the debtor for any outstanding debt.
.uarantee : A contract beteen guarantor and beneficiary to ensure !erformance of a !romise or discharge the liability of a third
!erson. $f !romise is broken or not !erformed, the guarantor !ays contracted amount to the beneficiary.
/older : Holder means any !erson entitled in his on name to the !ossession of the che"ue, bill of e1change or !romissory note and
ho is entitled to recei%e or reco%er the amount due on it from the !arties. ;or e1am!le, if $ gi%e a che"ue to my friend to ithdra
money from my bank,he becomes holder of that che"ue. <%en if he loses the che"ue, he continues to be holder. ;inder cannot become
the holder.
/older in due course : A !erson ho recei%es a 'egotiable $nstrument for %alue, before it as due and in good faith, ithout notice of
any defect in it, he is called holder in due course as !er 'egotiable $nstrument Act. $n the earlier e1am!le if my friend lends some
money to me on the basis of the che"ue, hich $ ha%e gi%en to him for encashment, he becomes holder-in-due course.
/y$othecation : &harge against !ro!erty for an amount of debt here neither onershi! nor !ossession is !assed to the creditor. $n
!ledge, !ossession of !ro!erty is !assed on to the lender but in hy!othecation, the !ro!erty remains ith the borroer in trust for the
lender.
Identiication : When a !erson !ro%ides a document to a bank or is being identified by a !erson, ho is knon to the bank, it is called
identification. Banks ask for identification before !aying an order che"ue or a demand draft across the counter.
Indemniier : When a !erson indemnifies or guarantees to make good any loss caused to the lender from his actions or others' actions.
Indemnity : $ndemnity is a bond here the indemnifier undertakes to reimburse the beneficiary from any loss arising due to his actions
or third !arty actions.
Insol'ent : $nsol%ent is a !erson ho is unable to !ay his debts as they mature, as his liabilities are more than the assets . &i%il &ourts
declare such !ersons insol%ent. Banks do not o!en accounts of insol%ent !ersons as they cannot enter into contract as !er la.
Interest 0arrant : When che"ue is gi%en by a com!any or an organi?ation in !ayment of interest on de!osit , it is called interest
arrant. $nterest arrant has all the characteristics of a che"ue.
International Banking : in%ol%es more than to nations or countries. $f an $ndian Bank has branches in different countries like *tate
Bank of $ndia, it is said to do $nternational Banking.
Introduction : Banks are careful in o!ening any account for a customer as the !ros!ecti%e customer has to be introduced by an
e1isting account holder or a staff member or by any other !erson knon to the bank for o!ening of account. $f bank does not take
introduction, it ill amount to negligence and ill not get !rotection under la.
1arta : Manager of a Hindu 5ndi%ided ;amily 8H5;: ho handles the family business. He is usually the eldest male member of the
undi%ided family.
1iosk Banking : Aoing banking from a cubicle from hich food, nes!a!ers, tickets etc. are also sold.
12" 3orms : Cno your customer norms are im!osed by R.B.$. on banks and other financial institutions to ensure that they kno their
customers and to ensure that customers deal only in legitimate banking o!erations and not in money laundering or frauds.
Law o Limitation : =imitation Act of +,BD fi1es the limitation !eriod of debts and obligations including banks loans and ad%ances. $f the
!eriod fi1ed for !articular debt or loan e1!ires, one can not file a suit for is reco%ery, but the fact of the debt or loan is not denied. $t is
said that la of limitation bars the remedy but does not e1tinguish the right.
Lease ,inancing : ;inancing for the business of renting houses or lands for a s!ecified !eriod of time and also hiring out of an asset
for the duration of its economic life. =easing of a car or hea%y machinery for a s!ecific !eriod at s!ecific !rice is an e1am!le.
Letter o "redit : A document issued by im!orters bank to its branch or agent abroad authori?ing the !ayment of a s!ecified sum to a
!erson named in =etter of &redit 8usually e1!orter from abroad:. =etters of &redit are co%ered by rules framed under 5niform &ustoms
and 2ractices of Aocumentary &redits framed by $nternational &hamber of &ommerce in 2aris.
Limited "om$anies Accounts : Accounts of com!anies incor!orated under the &om!anies Act, +,-B . A com!any may be !ri%ate or
!ublic. =iability of the shareholders of a com!any is generally limited to the face %alue of shares held by them.
Mandate : Written authority issued by a customer to another !erson to act on his behalf, to sign che"ues or to o!erate a bank account.
Material Alteration : Alteration in an instrument so as to alter the character of an instrument for e1am!le hen date, amount, name of
the !ayee are altered or making a che"ue !ayable to bearer from an order one or o!ening the crossing on a che"ue.
Merchant Banking : When a bank !ro%ides to a customer %arious ty!es of financial ser%ices like acce!ting bills arising out of trade,
arranging and !ro%iding underriting, ne issues, !ro%iding ad%ice, information or assistance on starting ne business, ac"uisitions,
mergers and foreign e1change.
Micro ,inance: Micro ;inance aims at alle%iation of !o%erty and em!oerment of eaker sections in $ndia. $n micro finance, %ery small
amounts are gi%en as credit to !oor in rural, semi-urban and urban areas to enable them to raise their income le%els and im!ro%e li%ing
standards.
Minor Accounts : A minor is a !erson ho has not attained legal age of +6 years. As !er &ontract Act a minor cannot enter into a
contract but as !er 'egotiable $nstrument Act, a minor can dra, negotiate, endorse, recei%e !ayment on a 'egotiable $nstrument so as
to bind all the !ersons, e1ce!t himself. $n order to boost their de!osits many banks o!en minor accounts ith some restrictions.
Mobile Banking : With the hel! of M-Banking or mobile banking customer can check his bank balance, order a demand draft, sto!
!ayment of a che"ue, re"uest for a che"ue book and ha%e information about latest interest rates.
Money Laundering : When a customer uses banking channels to co%er u! his sus!icious and unlaful financial acti%ities, it is called
money laundering.
Money Market : Money market is not an organi?ed market like Bombay *tock <1change but is an informal netork of banks, financial
institutions ho deal in money market instruments of short term like &2, &A and Treasury bills of >o%ernment.
Moratorium : R.B.$. im!oses moratorium on o!erations of a bankE if the affairs of the bank are not conducted as !er banking norms.
After moratorium R.B.$. and >o%ernment e1!lore the o!tions of safeguarding the interests of de!ositors by ay of change in
management, amalgamation or take o%er or by other means.
Mortgage : Transfer of an interest in s!ecific immo%able !ro!erty for the !ur!ose of offering a security for taking a loan or ad%ance
from another. $t may be e1isting or future debt or !erformance of an agreement hich may create monetary obligation for the transferor
8mortgagor:.
3ABA4# : 'ational Bank for Agriculture 9 Rural Ae%elo!ment as setu! in +,6. under the Act of +,6+. 'ABARA finances and
regulates rural financing and also is res!onsible for de%elo!ment agriculture and rural industries.
3egotiation : $n the conte1t of banking, negotiation means an act of transferring or assigning a money instrument from one !erson to
another !erson in the course of business.
3on-,und Based Limits : 'on-;und Based =imits are those ty!e of limits here banker does not !art ith the funds but may ha%e to
!art ith funds in case of default by the borroers, like guarantees, letter of credit and acce!tance facility.
3on-4esident : A !erson ho is not a resident of $ndia is a non-resident.
'on-Resident Accounts F Accounts of non-resident $ndian citi?ens o!ened and maintained as !er R.B.$. Rules.
3otary &ublic : A =ayer ho is authori?ed by >o%ernment to certify co!ies of documents .
3&A Account : $f interest and instalments and other bank dues are not !aid in any loan account ithin a s!ecified time limit, it is being
treated as non-!erforming assets of a bank.
O Balance (heet Items : Those items hich affect the financial !osition of a business concern, but do not a!!ear in the Balance
*heet <,g guarantees, letters of credit . The mention @off Balance *heet items@ is often found in Auditors Re!orts or Airectors Re!orts.
Online Banking : Banking through internet site of the bank hich is made interacti%e.
&ass Book : A record of all debit and credit entries in a customer's account. >enerally all banks issue !ass books to *a%ings
Bank)&urrent Account Holders.
&ersonal Identiication 3umber )&I3* : 2ersonal $dentification 'umber is a number hich an ATM card holder has to key in before he
is authori?ed to do any banking transaction in a ATM .
&lastic Money : &redit &ards, Aebit &ards, ATM &ards and $nternational &ards are considered !lastic money as like money they can
enable us to get goods and ser%ices.
&ledge : A bailment of goods as security for !ayment of a debt or !erformance of a !romise, e.g !ledge of stock by a borroer to a
banker for a credit limit. 2ledge can be made in mo%able goods only.
&ost-#ated "he!ue : A &he"ue hich bears the date hich is subse"uent to the date hen it is dran. ;or e1am!le, a che"ue dran
on 6th of ;ebruary, .//0 bears the date of +.th ;ebruary, .//0.
&ower o Attorney : $t is a document e1ecuted by one !erson - Aonor or 2rinci!al, in fa%our of another !erson , Aonee or Agent - to
act on behalf of the former, strictly as !er authority gi%en in the document.
&remature 0ithdrawals : Term de!osits like ;i1ed Ae!osits, &all Ae!osits, *hort Ae!osits and Recurring Ae!osits ha%e to mature on
a !articular day. When these de!osits are sought to be ithdran before maturity , it is !remature ithdraal.
&rime Lending 4ate )&L4* : The rate at hich banks lend to their best 8!rime: customers.
&riority (ector Ad'ances : consist of loans and ad%ances to Agriculture, *mall *cale $ndustry, *mall Road and Water Trans!ort
(!erators, Retail Trade, *mall Business ith limits on in%estment in e"ui!ments, !rofessional and self em!loyed !ersons, state
s!onsored organisations for lending to *&)*T, <ducational =oans, Housing ;inance u! to certain limits, self-hel! grou!s and
consum!tion loans.
&romissory 3ote : 2romissory 'ote is a !romise ) undertaking gi%en by one !erson in riting to another !erson, to !ay to that !erson ,
a certain sum of money on demand or on a future day.
&ro'isioning : 2ro%isioning is made for the likely loss in the !rofit and loss account hile finali?ing accounts of banks. All banks are
su!!osed to make assets classification . and make a!!ro!riate !ro%isions for likely losses in their balance sheets.
&ublic (ector Bank : A bank fully or !artly oned by the >o%ernment.
4escheduling o &ayment : Rearranging the re!ayment of a debt o%er a longer !eriod than originally agreed u!on due to financial
difficulties of the borroer.
4estricti'e +ndorsement : Where endorser desires that instrument is to be !aid to !articular !erson only, he restricts further
negotiation or transfer by such ords as @2ay to Ashok only@. 'o Ashok cannot negotiate the instrument further.
4ight o A$$ro$riation : As !er *ection -, of the $ndian &ontract Act, +,0. hile making the !ayment, a debtor has the right to direct
his creditor to a!!ro!riate such amount against discharge of some !articular debt. $f the debtor does not do so, the banker can
a!!ro!riate the !ayment to any debt of his customer.
4ight o (et-O : When a banker combines to accounts in the name of the same customer and ad#usts the debit balance in one
account ith the credit balance in other account, it is called right of set-off. ;or e1am!le, debit balance of Rs.-/,///)- in o%erdraft
account can be set off against credit balance of Rs.0-,///)- in the *a%ings Bank Account of the same customer, lea%ing a balance of
Rs..-,///)- credit in the sa%ings account.
(ae "ustody : When articles of %alue like #eellery, bo1es, shares, debentures, >o%ernment bonds, Wills or other documents or
articles are gi%en to a bank for safe kee!ing in its safe %ault,it is called safe custody.. Bank charges a fee from its clients for such safe
custody.
(a'ings Bank Account : All banks in $ndia are ha%ing the facility of o!ening sa%ings bank account ith a nominal balance. This
account is used for !ersonal !ur!oses and not for business !ur!ose and there are certain restrictions on ithdraals from this ty!e of
account. Account holder gets nominal interest in this account.
Teller : Teller is a staff member of a bank ho acce!ts de!osits, cashes che"ues and !erforms other banking ser%ices for the !ublic.
5nderwriting : is an agreement by the underriter to buy on a fi1ed date and at a fi1ed rate, the unsubscribed !ortion of shares or
debentures or other issues. 5nderriter gets commission for this agreement.
5ni'ersal Banking : When Banks and ;inancial $nstitutions are alloed to undertake all ty!es of acti%ities related to banking like
acce!tance of de!osits, granting of ad%ances, in%estment, issue of credit cards, !ro#ect finance, %enture ca!ital finance, foreign
e1change business, insurance etc. it is called 5ni%ersal Banking.
6irtual Banking : Girtual banking is also called internet banking, through hich financial and banking ser%ices are accessed %ia
internet's orld ide eb. $t is called %irtual banking because an internet bank has no boundaries of brick and mortar and it e1ists only
on the internet.
0holesale Banking : Wholesale banking is different from Retail Banking as its focus is on !ro%iding for financial needs of industry and
institutional clients.