IMPORTANT BANKING CONCEPTS

1) What is Asset Management Companies?

A company that invests its clients' pooled fund into securities that match its declared financial objectives. Asset management companies provide investors with more diversification and investing options than they would have by themselves. Mutual

funds, hedge funds and pension plans are all run by asset management companies. These companies earn income by

charging service fees to their clients.

2) What is Liquidity Adjustment Facility(LAF)?

A tool used in monetary policy that allows banks to borrow money through repurchase agreements. This arrangement allows banks to respond to liquidity pressures and is used by governments to assure basic stability in the financial markets.

3) What is Bancassurance?

It is the term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell

insurance products.

4) What is Balance of Trade?

The value of a country’s exports minus the value of its imports. Unless specified as the balance of merchandise trade, it normally incorporates trade in services, including earnings (interest,dividends, etc.) on financial assets.

5) What is Balance of Payments?

A list of all of a country’s international transactions for a given time period, usually one year. Payments into the country (receipts) are entered as positive numbers, called credits;

Payments out of the country (payments) are entered as negative numbers called debits. A single numbers summarize all of a country’s international transactions: the balance of payments

surplus.

6) What is NOSTRO Account?

A Nostro account is maintained by an Indian Bank in the foreign countries.

7) What is VOSTRO Account?

A Vostro account is maintained by a foreign bank in India with their corresponding bank.

8) What is IMPS?

Immediate Payment Service. It is an instant interbank electronic fund transfer service through mobile phones. Both the customers must have MMID (Mobile Money Identifier Number). For this service, we don’t need any GPS-enabled cell phones.

9) What is BCBS?

Basel Committee on Banking Supervision is an institution created by the Central Bank governors of the Group of Ten nations.

10) What is LIBOR?

London InterBank Offered Rate. An interest rate at which banks can borrow funds, in marketable size, from other banks in the

London interbank market.