Common Banking Terms – Banking Awareness

Many of you are unfamiliar with the common banking terms that are used. These terms are a must to know for regular bank transactions .Moreover, if you are an aspirant of bank exam, then these terms will help you in your bank exam preparation as well.


Here I brief about the 10 useful bank terms used regularly:

Q1. What is a Repo Rate?

Ans: Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks have any shortage of funds they can borrow it from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive.

Q2. What is Reverse Repo Rate?

Ans: This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI 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 RBI due to this attractive interest rates.

Q3. What is CRR Rate?

Ans: Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.3

Q4. What is SLR Rate?

Ans: 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.

SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently.

Q5. What is Bank Rate?

Ans: 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.

Q6. What is Inflation?

Ans: 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.

Q7. What is Deflation?

Ans: 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.

Q8. What is PLR?

Ans: 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. The rates reported below are based upon the prime rates on the first day of each respective month. Some banks use the name “Reference Rate” or “Base Lending Rate” to refer to their Prime Lending Rate.

Q9. What is Deposit Rate?

Ans: Interest Rates paid by a depository institution on the cash on deposit.

Policy Rates:

  • Bank Rate: 6.00%
  • Repo Rate: 5.25%
  • Reverse Repo Rate: 3.75%

Reserve Ratios:

  • CRR: 6.00%
  • SLR: 25.0%

Lending/Deposit Rates:

  • PLR: 11.00%-12.00%.
  • Deposit Rate: 6.00%-7.50%.

. Savings Bank rate: 3.5%.

Note: Rates as on 14-05-10.

Q10. What is FII?

Ans: 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.

SBI PO Annual Salary

Bank exam practice papers


SBI Clerk Mains Preparation Plan 2016

SBI  Clerk  Prelims has finished, but not your preparation. The  SBI Clerk Mains is on its way. You are left with nearly a month for the preparation of SBI Clerk Mains 2016.As per an estimate around 2,00,000 students are likely to clear the SBI Clerk Prelims Exam and will be appearing in the SBI Clerk Mains Exam.


Here, in this article we will discuss the strategy to crack SBI Clerk Mains Exam. You should follow this strategy if you want to clear the SBI Clerk Mains Exam.

How to Crack SBI Clerk Mains Exam :

Have faith in yourself. The SBI Clerk Mains Exam is tough to crack, but definitely worth it.

SBI Clerk Prelims Exam was only Qualifying in Nature. In simple words, it means, Only the score of your SBI Clerk Mains Exam will be considered for selection in the Final Merit List.

SBI Clerk Mains Pattern:

The Pattern of SBI Clerk Mains Exam is as follows:

Section  No. of Questions Marks Duration
General/ Financial Awareness 50 50 35 minutes
English 40 40 35 minutes
Quantitative Aptitude 50 50 45 minutes
Reasoning & Computer 50 60 45 minutes
190 200 160 minutes

SBI Clerk Mains Study Plan

You have crossed the first step. Lets check the second.

  • The SBI Clerk mains Syllabus for Reasoning , Quants and English is the same as you studied for SBI Clerk prelims Exam.
  • Financial Awareness and Computer knowledge are two new Sections in SBI Clerk mains. Your focus should be more on them now.

Week 1: SBI Clerk Mains Exam Study Plan

  • Dedicate this week towards Financial awareness and Computer Knowledge.

Week 2: SBI Clerk Mains Exam Study Plan

  • Come back to Reasoning, Quants and English.
  • Give atleast one SBI Clerk mains Mock Test each Day

Week 3: SBI Clerk Mains Exam Study Plan

  • Work on your Weak areas.
  • Make handy notes that you can revise in the last few days.
  • Give atleast one SBI Clerk Mains Mock Test each Day

Final Week : SBI Clerk Mains Exam Study Plan

  • Don’t study anything new now.
  • Revise handy notes that you made the previous week.
  • Give atleast one SBI Clerk Mains Mock Test each Day.
  • Analyse the test and try to improve your accuracy and speed.

All the best for the Mains Exam.


SBI Clerk Prelims Result and Expected Cut off

SBI Specialist Officer Recruitment 2016