Banking Terms in JAIIB PPB
JAIIB, one of the flagship courses is conducted by the Indian Institute of Banking and Finance(IIBF). JAIIB Exam is conducted for 4 papers, IE & IFS(Indian Economy & Indian Financial System), PPB(Principles and Practices of Banking), AFM(Accounting & Financial Management for Bankers), RBWM(Retail Banking & Wealth Management). PPB is the second paper in which the basic principles and practices of banking are dealt with. To qualify for the PPB Paper aspirants must have a crystal clear knowledge of all the topics. In this article, we have discussed the banking terms that will be beneficial to the candidates in their preparation.
JAIIB PPB Banking Terms
The candidates preparing for the JAIIB PPB Exam must keep the banking terms at their tips. When the terms of banking are clear they will get command over the topics of PPB. Some of the banking terms that will be beneficial for a candidate is mentioned below:
- Account: An account refers to an arrangement by which an organization such as a bank accepts the financial assets of a customer and holds them on the wish of the customers.
- Automated Clearing House(ACH): Automated Clearing House is also known as Direct Payments because money is transferred from one bank account to another without the use of cheques, cash, etc. ACH is used for electronic payments and money transfer between banks, businesses and individual customers.
- Automated Teller Machine(ATM): A computerized electronic machine through which the funds of a bank account holder can be managed efficiently. A person can perform several functions through ATM such as deposit or withdraw money, check the balance of their account, etc.
- Base Rate: A minimum rate of interest set by the central bank of the country that is used by all the other banks to provide loan to its customers is called base rate.
- National Electronic Funds Transfer(NEFT): An electronic fund transfer system between banks that is secured, economical, efficient, and reliable. The Reserve Bank of India(RBI) maintains the National Electronic Fund Transfer system. The money through NEFT is transferred from one bank to another or within the same branch.
- Collateral: Property or something valuable given to the bank in exchange of a loan is called collateral.
- Asset: Any resource or valuable item that is owned and controlled by a business is called asset.
- MICR Code: The full form of MICR is Magnetic Ink Character Recognition and a unique MICR Code is assigned by the RBI to every branch of the bank. It is a nine-digit code that is used for identifying a bank and branch participating in the ECS Credit scheme.
- KYC: The full form of KYC is Know Your Customer. To know the correct identity of a customer KYC is undergone by all the banks. The process of KYC makes sure that no fraudulent activities are taking place in the bank.
- Capital Budgeting: Capital Budgeting is the process through which a business decides to purchase any fixed asset or invest in a particular project.
- Plastic Money: Mostly the credit cards and debit cards are referred as plastic money. The money that is used by people not in the form of hard cash is calleed plastic money.
- Mobile Banking: The banking services that are operated by people with the help of a mobile phone is called Mobile Banking.
- Bank Rate: The rate at which the banks borrow money from the RBI is called bank rate.
- Monetary Policies: To establish a standard banking procedures in the country the Reserve Bank of India assigns certain rules and regulations which are known as Monetary Policies.
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