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IBPS PO 2017 Banking Awareness Notes : Important Financial Terms

In this post we bring to you the most important financial terms which are asked in the general awareness section of various banking exams such as those conducted by the IBPS.

1) Standard Assets

Standard assets are those which do not disclose any problems and which do not carry more than normal risk attached to the business.

2) Sub-standard Assets

An asset classified as an NPA ( non-performing asset ) for less than a period of 12 months is known as a sub-standard asset.


3) Doubtful Assets

The assets that have been classified as NPAs for a period of more than 12 months are referred to as doubtful assets.

4) Loss Assets

An asset which is considered uncollectible and loss has been identified by the bank or internal or external auditors or the RBI inspection and the loss has not been written off is regarded as loss asset. 

5) Core Banking Solutions (CBS)

Core banking is a banking service provided by a group of networked bank branches where customers may access their bank account and perform basic transactions from any of the member branch offices.

Core banking is often associated with retail banking and many banks treat the retail customers as their core banking customers. Businesses are usually managed via the corporate banking division of the institution. Core banking covers basic depositing and lending of money.

6) Prime Lending Rate

A prime rate or prime lending rate is an interest rate used by banks, usually the interest rate at which banks lend to favored customers — i.e., those with good credit. Some variable interest rates may be expressed as a percentage above or below prime rate.

7) Special Drawing Rights (SDRs)

Special Drawing Rights are supplementary foreign-exchange reserve assets defined and maintained by the International Monetary Fund (IMF). The SDR is the unit of account for the IMF, and is not a currency per se. It represents a claim to currency held by IMF member countries for which they may be exchanged. SDRs are allocated to countries by the IMF.

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8) Negotiated Dealing System

The Negotiated Dealing System (NDS) facilitates the members to submit bids or applications for primary issuance of Government Securities when auctions are conducted, electronically. NDS also provides an interface to the Securities Settlement System (SSS) of the Public Debt Office and RBI, thus facilitating settlement of transactions in government securities conducted in the secondary market.


9) Asset Management Companies

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.

10) NDS OM : Negotiated Dealing System Order Matching

It is an online anonymous bond trading platform of the central bank ( RBI ). This is an order driven electronic system, where the participants can trade anonymously by placing their orders on the system or accepting the orders already placed by other participants. NDS-OM is operated by the Clearing Corporation of India Ltd. (CCIL) on behalf of the RBI.

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Hope this helps.

All the best!

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