Welcome to our Banking Glossary, your one-stop destination to understand complex banking terms in simple language. Whether you’re a student, a working professional, or someone managing daily finances, this glossary is designed to help you make sense of the jargon used by banks and financial institutions in India.
✅ Why This Banking Glossary is Useful:
- 💡 Simple Explanations – No more confusion over technical terms.
- 📚 Financial Literacy – Improve your understanding of how the banking system works.
- 🔍 Quick Reference – Perfect for anyone dealing with banks, loans, savings, UPI, and digital banking.
- 📱 Mobile Friendly – Read and understand terms on the go!
🔤 A–Z List of Common Banking Terms:
Here are some commonly used banking terms and their simplified meanings:
🅰️ A
Account Number – A unique number assigned by a bank to identify your account.
ATM (Automated Teller Machine) – A machine that allows you to withdraw cash, check balance, and more without visiting the bank.
Auto Debit: A service that automatically deducts bills or EMIs from your account on a set date.
🅱️ B
Balance – The amount of money currently available in your bank account.
Bank Charges: Fees charged by banks for various services like ATM use, minimum balance penalty, etc.
Bank Statement – A record of all transactions in your bank account over a specific period.
Beneficiary: The person who receives money in a bank transfer.
🅲 C
Cheque – A written order to a bank to pay a specific amount from your account to another person or organization.
Cheque Bounce: When a cheque is returned due to insufficient balance or other reasons.
Credit – Money added to your account.
Credit Score – A 3-digit number that shows how likely you are to repay loans on time.
Current Account: A type of bank account used by businesses with no limits on transactions.
🅳 D
Debit – Money withdrawn from your bank account.
Debit Card: A card used to withdraw money from your account or pay at shops.
Demand Draft (DD) – A pre-paid financial instrument used to transfer money securely.
Dormant Account: An account that hasn’t had any activity for a long time.
🅴 E
EMI (Equated Monthly Installment) – A fixed payment amount made by a borrower to a lender every month for a loan.
ECS (Electronic Clearing Service) – A method for automatic debit or credit from a bank account on a fixed date.
e-KYC (Electronic Know Your Customer): A digital way to verify your identity with Aadhaar and OTP.
🅵 F
Fixed Deposit (FD) – A deposit in a bank for a fixed period that earns a higher rate of interest than a savings account.
Floating Interest Rate – An interest rate that changes as per market conditions.
Fund Transfer: The process of sending money from one account to another.
🅶 G
Gross Salary – The total salary before deductions like tax, PF, etc.
GSTIN: A tax identification number for businesses, sometimes linked with bank accounts.
Guarantor – A person who promises to repay a loan if the borrower fails to do so.
🅷 H
Home Loan – A loan taken from a bank or financial institution to purchase or construct a house.
Hypothecation – Offering a movable asset (like a vehicle) as collateral to get a loan, while retaining ownership and usage.
Hotlisting: Blocking a lost or stolen debit/credit card to prevent misuse.
🅸 I
IFSC Code (Indian Financial System Code) – A unique 11-digit code used to identify a bank branch during online money transfers like NEFT, RTGS, and IMPS.
Interest Rate – The percentage charged by a lender on the borrowed amount or paid on savings deposits.
IMPS (Immediate Payment Service) – A real-time interbank fund transfer system available 24×7 using mobile or internet banking.
🅹 J
Joint Account – A bank account operated by two or more individuals jointly, with shared rights to withdraw and deposit money.
Jan Dhan Yojana – A government financial inclusion program to ensure access to banking services for every Indian citizen.
🅺 K
KYC (Know Your Customer) – A process used by banks to verify the identity of their customers using documents like Aadhaar, PAN, etc.
🅻 L
Loan – A sum of money borrowed from a bank, which must be paid back with interest over time.
Locker – A secured storage facility provided by banks to customers for storing valuables.
🅼 M
Minimum Balance – The minimum amount a customer needs to maintain in their bank account to avoid penalty.
Mobile Banking – A banking service that lets you perform transactions using a mobile phone app or SMS.
MICR Code: A 9-digit code used for cheque processing.
🅽 N
NEFT (National Electronic Funds Transfer) – A fund transfer system where transactions are processed in batches and settled during bank hours.
NPA (Non-Performing Asset) – A loan or advance on which the borrower has stopped making interest or principal repayments.
Nominee: A person designated to receive the money in your bank account if something happens to you.
Net Banking: Performing banking transactions online via a website.
🅾️ O
Overdraft – A credit facility that allows a customer to withdraw more money than what is available in their account.
Online Banking – Also known as internet banking; allows users to manage accounts and perform transactions online.
One-Time Password (OTP): A unique code sent to your phone to authenticate a transaction.
🅿️ P
PAN (Permanent Account Number) – A 10-digit alphanumeric number issued by the Income Tax Department, essential for financial transactions.
Passbook – A small book provided by banks that contains a printed record of all transactions in your savings account.
POS (Point of Sale): The place where card payments are made during shopping.
🆀 Q
Quick Response (QR) Code – A barcode used to quickly scan and initiate digital payments via mobile apps like Paytm, Google Pay, etc.
🆁 R
Recurring Deposit (RD) – A deposit scheme that allows you to save a fixed amount monthly and earn interest over a period.
RTGS (Real Time Gross Settlement) – A fund transfer system that allows large-value transactions in real-time.
🆂 S
Savings Account – A basic deposit account that earns interest and is used for daily financial transactions.
SWIFT Code – A unique code used for international wire transfers between banks.
Standing Instruction: An auto-payment setup for recurring payments like SIPs or EMIs.
🆃 T
TDS (Tax Deducted at Source) – A tax collected by banks or employers before crediting income like interest or salary.
Transaction History: A list of all activities in your account
Term Loan – A loan provided for a specific period, usually with regular repayment schedules.
🆄 U
UPI (Unified Payments Interface) – A real-time payment system that enables money transfers between banks using a mobile phone.
Unclaimed Deposit: Funds that have remained untouched in an account for over 10 years– One of the major government-owned banks in India, often referenced in banking-related queries.
🆅 V
Virtual Payment Address (VPA) – A unique ID used in UPI to send and receive money without sharing bank details.
Virtual Account Number: A temporary account number used for tracking payments.
Verification – The process of confirming a user’s identity for security and compliance.
🆆 W
Wallet (Digital Wallet) – An app-based service that allows users to store money digitally and make payments online or offline.
Withholding Tax – A government-required deduction of tax at source before income is paid.
🆇 X
Xpress Credit – A type of quick personal loan offered by some banks with minimal paperwork and instant approval.
🆈 Y
Yield – The earnings generated and realized on an investment over a particular period, often expressed as a percentage.
🆉 Z
Zero Balance Account – A savings account that doesn’t require a minimum balance, popular under schemes like Jan Dhan Yojana.
Zone Clearing – A method used by banks to settle inter-bank cheques within a defined geographical area or “zone.”
📘 Keep Learning with Our Banking Glossary
We update this glossary regularly to include the most current and relevant banking terms. It’s perfect for students, small business owners, job seekers, and anyone looking to improve their banking knowledge in India.
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