IBPS booster 1- Banking Terms
1. What is Credit Counselling?
Ans : Credit counselling is a consultancy session where the credit counsellor suggests debt relief solutions and debt management solutions to the clients.
2. Define Dividend.
Ans: A dividend is a part of the profit that is earned by a corporation or joint stock companies, and is distributed amongst the shareholders
3. Explain the Debt Recovery process.
Ans: Debt recovery is the process that is initiated by the banks and lending institutions, by various procedures like debt settlement or selling of collaterals.
4. How E-Cash works?
Ans: It is known as electronic cash and digital cash, e-cash is a technology where the banking organizations resort to the use of electronics, computers and other networks to execute transactions and transfer funds.
5. What is Government Bonds?
Ans: A government bond, which is also known as a government security, is basically any security that is held with the government and has the highest possible rate of interest.
6. Write the abbreviations for NEFT and RTGS.
Ans: NEFT stands for National Electronic Fund Transfer and RTGS stands for Real time gross settlement .
Descriptive Answers
1.What is the difference between Cheque and Demand Draft?
Ans: Lets discuss it with some points:
(a) A cheque is drawn by an account holder of a bank, whereas a draft
is drawn by one branch of a bank on another branch of the same bank.
(b) A cheque can be made payable either to a bearer or order. But a demand draft is always payable to order of a certain person .
(c) In a cheque, the drawer and the drawee are different persons. But in a draft both the drawer and the drawee are the same bank.
(d) A cheque is issued by an individual whereas a demand draft is issued by a bank.
(e) A Cheque can be dishonored for want of sufficient balance in the account. Whereas a draft cannot be dishonoured.Hence there is certainty of the payment in the case of a demand draft.
2.What is Priority Sector? What are the categories in Priority Sector?
Ans: Priority sector are those sectors of the economy which may not get timely and adequate credit in the absence of the special dispensation.
Categories in Priority Sector:
- Export Credit
- Housing
- Micro and Small enterprises
- Education
- Agriculture
- Others.
3.Explain Cash Reserve Ratio.
Ans: The amount of the funds that the banks have to keep with RBI.If RBI increases CRR, the available amount with the banks comes down. RBI is using this method (increase of CRR), to drain out the excessive money from the banks.
4. What is Bank Rate?
Ans: The interest rate at which at central bank lends money to commercial banks. Often these loans are very short in duration. Managing the bank rate is a preferred method by which central banks can regulate the level of economic activity. Lower bank rates can help to expand the economy, when unemployment is high, by lowering the cost of funds for borrowers. Conversely, higher bank rates help to reign in the economy, when inflation is higher than desire.
