Banking Awareness

11) What is STRIPS?

Separate Trading for Registered Interest & Principal Securities.

12) What is KYC?

KYC is an acronym for “Know your Customer”, a term used for customer identification process. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, source of funds, the nature of customer’s business, reasonableness of operations in the account in relation to the customer’s business, etc which in turn helps the banks to manage their risks prudently. The objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by

criminal elements for money laundering.

KYC has two components - Identity and Address. While identity remains the same, the address may change and hence the banks are required to periodically update their records.

13) What do you mean by term “CASA” related to bank?

CASA stands for Current Account Savings Account. The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit. A higher CASA ratio means better operating efficiency of the bank because on current account there is no interest payable whereas on savings

account a tiny 3.5% interest is payable by the bank. CASA ratio shows how much of the deposit of the bank comes from the current and savings deposit.

14) We hear regularly that all bank branches are turning CBS. What is CBS?

CBS stands for CORE banking solutions under which the branches of the banks are interconnected with each other through intra net with a central database server. The CORE word in CBS stands for Centralized Online Realtime Exchange.

Q15) What is Inflation?

 The rise in the prices of goods or service in an economy over a certain period of time is known as inflation.