Every IBPS PO aspirant should have a strong understanding of important banking terms for the IBPS PO Interview 2026. These concepts help candidates demonstrate their knowledge of RBI policies, banking operations, financial markets, and economic fundamentals. The interview panel may ask questions about these terms to assess your banking awareness and ability to explain financial concepts clearly.
Along with theoretical knowledge, candidates should understand how these concepts are applied in everyday banking. Revising important definitions, recent RBI policy developments, and practical examples can help you answer interview questions with greater confidence.
Important Banking Terms for IBPS PO Interview 2026
The following table covers essential banking terms that candidates should revise before appearing for the IBPS PO Interview 2026. Focus on understanding the meaning of each term, its purpose, and its relevance to the Indian banking system.
| Banking Term | Explanation |
|---|---|
| Repo Rate | The rate at which the RBI lends short-term funds to banks against eligible securities under the repo framework. |
| Reverse Repo Rate | The rate associated with the RBI borrowing funds from banks under the reverse repo mechanism. |
| Bank Rate | The rate at which the RBI is prepared to buy or rediscount eligible bills of exchange or other commercial paper under the applicable framework; it is also linked to certain penal rates. |
| CRR (Cash Reserve Ratio) | The percentage of a bank’s net demand and time liabilities (NDTL) that must be maintained as cash balance with the RBI. |
| SLR (Statutory Liquidity Ratio) | The prescribed percentage of NDTL that banks must maintain in eligible liquid assets, such as cash, gold, and unencumbered approved securities. |
| MCLR (Marginal Cost of Funds Based Lending Rate) | An internal benchmark lending rate introduced by the RBI to help determine lending rates for eligible loans. |
| Marginal Standing Facility (MSF) | A facility through which scheduled commercial banks can borrow overnight funds from the RBI against eligible securities, subject to applicable conditions. |
| Monetary Policy | The RBI’s framework for influencing interest rates and liquidity to achieve its policy objectives, including price stability while supporting growth. |
| Capital Adequacy Ratio (CAR) | A measure of a bank’s eligible regulatory capital in relation to its risk-weighted assets. |
| Non-Performing Asset (NPA) | Generally, a loan or advance becomes an NPA when interest or principal remains overdue for more than 90 days, subject to applicable RBI norms and exceptions. |
| Securitisation | The process of pooling financial assets, such as loans, and converting them into marketable securities. |
| Letter of Credit (LC) | A document issued by a bank undertaking to make payment to a beneficiary when the specified terms and documentary conditions are met. |
| Payments Bank | A specialised bank that accepts permitted deposits and provides payment and remittance services but cannot undertake lending activities. The applicable deposit limit should be checked against the latest RBI directions. |
| Small Finance Bank | A bank established to promote financial inclusion by providing savings and credit facilities to underserved individuals and businesses, including small farmers and micro, small, and medium enterprises. |
| Basic Savings Bank Deposit Account (BSBDA) | A basic savings bank account designed to provide essential banking facilities without a minimum balance requirement, subject to applicable conditions. |
| Plastic Money | A common term for payment instruments such as debit cards and credit cards. |
| Special Drawing Rights (SDR) | An international reserve asset created by the International Monetary Fund (IMF) to supplement the official reserves of its member countries. |
| RTGS (Real-Time Gross Settlement) | An electronic funds transfer system in which transactions are settled individually in real time. |
| NEFT (National Electronic Funds Transfer) | A nationwide electronic funds transfer system that operates round the clock. |
| IMPS (Immediate Payment Service) | An instant electronic funds transfer service that enables interbank transfers through participating channels. |
| Nostro Account | An account maintained by a domestic bank with a foreign bank, generally in the foreign currency of the account-holding bank’s jurisdiction. |
| Vostro Account | An account maintained by a foreign bank with a domestic bank, generally in the domestic bank’s currency. |
| Call Money | Funds borrowed or lent in the interbank market for one day. |
| Notice Money | Funds borrowed or lent in the money market for a period of more than one day and up to 14 days. |
| Term Money | Money market borrowing or lending for periods exceeding 14 days. |
| MIBOR (Mumbai Interbank Offered Rate) | A benchmark reference rate associated with the Indian interbank market. |
| SOFR (Secured Overnight Financing Rate) | A US dollar benchmark interest rate based on transactions in the US Treasury repurchase agreement market. It is used as a replacement for LIBOR in many contracts. |
| RBI Integrated Ombudsman Scheme | An RBI grievance-redressal framework for eligible complaints against regulated entities when the prescribed conditions are met. |
| Government Securities (G-Secs) | Debt instruments issued by the Central or State Governments to raise funds. |
| Treasury Bills (T-Bills) | Short-term Government of India securities with original maturities of 91, 182, or 364 days. |
| Current Account | A deposit account generally used by businesses and other entities requiring frequent transactions; interest is generally not paid on ordinary current account balances. |
| Savings Account | A deposit account designed primarily for saving money while earning interest according to the bank’s applicable terms. |
| Open Market Operations (OMO) | The RBI’s purchase or sale of government securities to manage liquidity in the banking system. |
| Priority Sector Lending (PSL) | Lending to designated sectors, including agriculture, MSMEs, and other eligible categories, under RBI-prescribed targets and guidelines. |
| Basel Norms | International banking standards designed to strengthen capital adequacy, risk management, and the resilience of banks. |
| KYC (Know Your Customer) | The process through which regulated entities verify customer identity and obtain prescribed information under applicable rules. |
| AML (Anti-Money Laundering) | Laws, regulations, and controls intended to prevent and detect money laundering and related financial crimes. |
| Financial Inclusion | Ensuring access to appropriate and affordable financial services for individuals and businesses, particularly underserved sections of society. |
| Balance of Payments (BoP) | A systematic record of economic transactions between residents of a country and the rest of the world during a specified period. |
| Foreign Exchange Reserves | External reserve assets held by the RBI, including foreign currency assets, gold, SDR holdings, and the reserve position in the IMF. |
| Digital Banking | The delivery of banking products and services through digital channels, including internet banking and mobile banking. |
| UPI (Unified Payments Interface) | An instant payment system developed by NPCI that facilitates transfers between bank accounts through participating applications and payment providers. |
Important Banking Terms, FREE PDF (2026 Updated)
Candidates preparing for the IBPS PO Interview 2026 can use a consolidated list of banking terms for quick revision. A structured PDF makes it easier to revisit definitions, strengthen conceptual understanding, and prepare for questions related to banking awareness.
Use the resource to:
- Revise important banking definitions in one place.
- Strengthen your understanding of RBI policies and banking operations.
- Prepare for questions on financial awareness and banking terminology.
- Build confidence while explaining banking concepts during the interview.
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Hi, I’m Tripti, a senior content writer at Oliveboard, where I manage blog content along with community engagement across platforms like Telegram and WhatsApp. With 3+ years of experience in content and SEO optimization related to banking exams, I have led content for popular exams like SSC, banking, railway, and state exams.