Every IBPS PO aspirant must have a clear understanding of core banking terms used across the financial system. These concepts are frequently asked in interviews to test your awareness of RBI policies, banking operations, and economic fundamentals. Strong clarity here helps you answer confidently and accurately before the panel.
Important Banking Terms for IBPS PO Interview 2026
Below is a refined list of key banking terms every candidate should revise thoroughly before the interview. These concepts strengthen your fundamentals and improve your chances of final selection.
| Banking Term | Explanation |
| Repo Rate | Rate at which RBI lends short-term funds to banks to manage liquidity and inflation. |
| Reverse Repo Rate | Rate at which RBI absorbs liquidity by borrowing from banks. |
| Bank Rate | Long-term rate at which RBI lends to banks without collateral. |
| CRR (Cash Reserve Ratio) | Portion of deposits banks must keep with RBI as cash. |
| SLR (Statutory Liquidity Ratio) | Portion of deposits to be maintained in liquid assets like G-Secs, gold, or cash. |
| MCLR (Marginal Cost of Funds Based Lending Rate) | Internal benchmark rate below which banks generally cannot lend. |
| Marginal Standing Facility (MSF) | Emergency borrowing window for banks from RBI overnight. |
| Monetary Policy | RBI’s framework to control money supply, inflation, and interest rates. |
| Capital Adequacy Ratio (CAR) | Measure of a bank’s capital to absorb risks and losses. |
| Non-Performing Asset (NPA) | Loan where interest/principal is overdue for more than 90 days. |
| Securitization | Conversion of loans into marketable securities. |
| Letter of Credit (LC) | Bank guarantee ensuring payment to the seller. |
| Payments Bank | Bank allowed to accept deposits (up to ₹2 lakh as per latest norms) but cannot lend. |
| Small Finance Bank | Bank focused on financial inclusion with lending to MSMEs, small farmers, etc. |
| No-Frills Account | Basic savings account with zero/minimum balance requirement. |
| Plastic Money | Digital payment tools like debit/credit cards. |
| Special Drawing Rights (SDR) | Reserve asset created by IMF to support global liquidity. |
| RTGS | Real-time fund transfer system for large-value transactions. |
| NEFT | Nationwide electronic fund transfer system (available 24×7). |
| IMPS | Instant mobile-based fund transfer system. |
| Nostro Account | Account held by an Indian bank in a foreign bank in foreign currency. |
| Vostro Account | Account held by a foreign bank in India with an Indian bank. |
| Call Money | Interbank lending for 1 day. |
| Notice Money | Lending for 2–14 days. |
| Term Money | Lending for more than 14 days. |
| MIBOR | Benchmark rate for interbank lending in India. |
| SOFR | Global benchmark replacing LIBOR in many markets. |
| Bank Ombudsman | RBI-appointed authority to resolve customer complaints. |
| Government Securities (G-Secs) | Safe investment instruments issued by the government. |
| Treasury Bills (T-Bills) | Short-term G-Secs with maturity up to 1 year. |
| Current Account | Business account with high transactions and no interest. |
| Savings Account | Deposit account for individuals earning interest. |
| Open Market Operations (OMO) | RBI buying/selling G-Secs to control liquidity. |
| Priority Sector Lending (PSL) | Mandatory lending to sectors like agriculture, MSMEs, education, housing. |
| Basel Norms | Global standards for bank capital and risk management. |
| KYC (Know Your Customer) | Identity verification process to prevent fraud. |
| AML (Anti-Money Laundering) | Regulations to curb illegal financial activities. |
| Financial Inclusion | Providing banking services to underserved sections. |
| Balance of Payments (BoP) | Record of a country’s transactions with the world. |
| Foreign Exchange Reserves | RBI-held assets in foreign currencies, gold, SDRs. |
| Digital Banking | Banking services delivered through online/mobile platforms. |
| UPI | Instant real-time payment system developed in India. |
Important Banking Terms, FREE PDF (2026 Updated)
Understanding these banking terms is essential for cracking the IBPS PO interview 2026, as questions are often based on RBI policies, financial awareness, and real-world banking scenarios. To make your preparation easier, we’ve compiled all key concepts into a well-structured FREE PDF with crisp explanations for quick revision.
Download the PDF to:
- Improve confidence for interview questions
- Revise all important terms in one place
- Strengthen conceptual clarity
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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.