Banking sector jobs offer many perks like work-life balance, growth opportunities, and good pay. However, candidates who are unfamiliar with banking terms struggle with interviews.
Keep reading to learn the most important banking terms that every candidate should be familiar with before the interview, like reverse repo rate, retail banking, and more.
Importance of learning banking terms before interview
Knowing banking terms before the interview is of the essence. It helps you strengthen your industry knowledge and awareness. It also gives you a clear idea of real-time banking practices.
Reverse Repo Rate
Reverse Repo Rate refers to the interest rate at which the Reserve Bank of India (RBI) borrows funds from commercial banks. It is used when there is too much liquidity in the market.
Statutory Liquid Ratio [SLR]
Statutory Liquid Ratio or SLR, is the minimum amount that banks must keep as liquid assets. SLR is set by RBI and helps to ensure that the banks remain financially healthy.
Call Money & Notice Money
Call Money, is a short-term loan that banks lend to other banks or financial institutions. The loan tenure is typically 1 day. While Notice Money is money that’s borrowed or lent for more than one day and up to 14 days.
Retail Banking
In retail banking, the banks deal with individual customers, instead of businesses. It is also called Consumer Banking and Personal Banking in some places.
Cash Reserve Ratio
Cash Reserve Ratio refers to the share of a bank’s deposits that must be kept with RBI as reserves. The current CRR of India is 4.5%.
Green Banking
Under Green Banking, banks follow sustainable or eco-friendly business practices. State Bank of India, also known as SBI, was the original pioneer of green banking in India, with initiatives like paperless banking and the SBI Green Fund.
Minimum Reserve System
The minimum reserve system is used by RBI to issue currency. It states that all banks must maintain minimum reserves of 200 crore. The reserves include gold coin, gold bullion, and foreign currencies.
Clean Note Policy
The aim of the clean note policy is to ensure that the general public receives clean, durable, and high-quality currency notes. It was introduced in 1999 by RBI.