Best Small Business Ideas Under ₹2 Lakh (Low Investment, High Potential)

 Starting a business does not always require a huge investment. In India, especially in rural and semi-urban areas, many profitable businesses can be started with a budget of less than ₹2 lakh. With the right planning and dedication, these small ventures can generate steady monthly income and even grow into bigger enterprises.

If you are looking for small business ideas under ₹2 lakh, this guide will help you choose the right opportunity.

Why Small Investment Businesses Are a Smart Choice

Small businesses are ideal because:

Low financial risk

Easy to manage

Can be started from home or small shop

Suitable for self-employment

Government loan schemes support them

These businesses are perfect for youth, women, and rural entrepreneurs.

1. Cyber Café / Digital Service Center

A cyber café is still in demand in small towns and villages.

Services You Can Offer

Online form filling

Government services

Printouts and scanning

Ticket booking

Investment Needed

₹1–2 lakh for computers, printer, furniture, and internet.

Income Potential

₹15,000–₹40,000 per month depending on location.

2. Mobile Repairing Shop

Smartphone use is increasing everywhere, and repair services are always needed.

Requirements

Basic training in mobile repair

Tools and spare parts

Investment

₹1–1.5 lakh.

Income

Good technicians can earn ₹20,000+ monthly.

3. Dairy Farming (Small Scale)

Milk demand is constant in every village.

Start With

2–3 cows or buffaloes.

Investment

Around ₹1.5–2 lakh.

Income

Regular daily income from milk sales.

4. Flour Mill (Atta Chakki)

People prefer fresh flour, making this a reliable business.

Investment

₹1–1.5 lakh for machine and setup.

Benefits

Steady local demand.

5. Photocopy and Stationery Shop

Essential near schools, colleges, and offices.

Investment

₹1–1.5 lakh.

Products

Notebooks, pens, printing, photocopying.

6. Poultry Farming

Egg and chicken demand remains high.

Start Small

500–1000 birds.

Investment

₹1.5–2 lakh.

Income

Profitable if managed properly.

7. CSC Center / Online Services

Becoming a digital service provider helps people access government and financial services.

Services

Banking, insurance, bill payments, schemes.

Investment

₹1–1.5 lakh.

8. Vegetable or Fruit Shop

Daily consumption ensures steady sales.

Investment

₹50,000–₹1 lakh.

Tip

Choose busy market areas.

9. Tailoring Shop

Clothing needs never end.

Investment

₹50,000–₹1 lakh.

Special Demand

School uniforms, women’s garments.

10. Tea and Snacks Stall

A simple but profitable idea.

Investment

₹40,000–₹80,000.

Income

High profit margins.

How to Choose the Right Business

Consider:

✔ Local demand

✔ Your interest and skills

✔ Available space

✔ Investment capacity

✔ Competition

Choose a business you can manage confidently.

Government Support for Small Businesses

You can apply for loans under:

Mudra Loan

PMEGP

State self-employment schemes

These help with funding and subsidy.

Tips for Success

✔ Start small and grow slowly

✔ Maintain quality service

✔ Build customer trust

✔ Keep expenses under control

✔ Use digital payments

Consistency leads to long-term growth.

Conclusion

Starting a small business under ₹2 lakh is possible and practical in India. With proper planning, dedication, and use of government support schemes, you can build a stable source of income and achieve financial independence.

Small beginnings often lead to big success. The key is to take the first step and stay committed.

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Digital Payment Safety Tips for Beginners (Complete Guide to Stay Secure Online)

 Digital payments have become a part of daily life in India. From sending money to paying electricity bills, mobile recharge, shopping, and booking tickets — everything can now be done online. While digital payments are fast and convenient, they also come with risks like fraud and scams.

If you are new to online transactions, this guide explains digital payment safety tips for beginners in simple language to help you stay secure.

What Are Digital Payments?

Digital payments are transactions made through electronic methods instead of cash. Common examples include:

UPI apps

Mobile wallets

Debit/credit cards

Internet banking

QR code payments

These methods are easy but require awareness to avoid fraud.

Why Digital Payment Safety Is Important

Online fraud cases are increasing. Scammers try to steal:

OTP codes

Bank details

Card numbers

Passwords

If safety measures are not followed, people may lose money.

Top Digital Payment Safety Tips

1. Never Share OTP

OTP (One Time Password) is secret. No bank, company, or official will ever ask for OTP. Sharing OTP means giving access to your money.

2. Do Not Share PIN or Password

Keep your ATM PIN, UPI PIN, and banking passwords confidential. Do not write them where others can see.

3. Use Official Apps Only

Download apps only from official app stores. Fake apps may look real but can steal data.

4. Check Website Address

Before entering bank details, check if the website address starts with https and shows a lock symbol.

5. Avoid Public Wi-Fi for Banking

Public Wi-Fi is not secure. Use your mobile data or home Wi-Fi for transactions.

6. Verify Before Sending Money

Always double-check the mobile number or UPI ID before sending money. Once sent, recovery is difficult.

7. Enable SMS Alerts

Keep SMS alerts active for bank transactions. Immediate notification helps detect fraud quickly.

8. Log Out After Use

Always log out from banking apps or websites after use, especially on shared devices.

9. Do Not Click Unknown Links

Fraudsters send links through SMS, WhatsApp, or email. Clicking may install harmful software.

10. Update Your Apps Regularly

App updates include security improvements. Using outdated apps increases risk.

Common Types of Digital Payment Frauds

1. OTP Fraud

Scammers call pretending to be bank officials and ask for OTP.

2. UPI Collect Request Fraud

Fraudsters send payment requests. Accepting means you send money to them.

3. Fake Customer Care Numbers

Searching online may show fake helpline numbers.

4. Screen Sharing Apps

Fraudsters ask you to install apps that give them access to your phone.

What To Do If Money Is Lost

If fraud happens:

Call your bank immediately

Block card or UPI

Report on cybercrime portal

Inform local police

Quick action may help recover money.

Safe Digital Payment Habits

✔ Use strong passwords

✔ Use fingerprint or face lock

✔ Check bank statements regularly

✔ Keep mobile number updated with bank

Good habits reduce risk.

Benefits of Using Digital Payments Safely

Saves time

Easy record of transactions

Safe if used correctly

No need to carry cash

Digital payments are helpful when used wisely.

Conclusion

Digital payments are the future, but safety should be the priority. By following simple precautions like not sharing OTP, using secure apps, and avoiding suspicious links, beginners can protect themselves from fraud.

Being alert and informed is the best way to enjoy the convenience of online payments without fear. Stay safe, stay smart, and use digital services responsibly.

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Difference Between Term Loan and Working Capital (Simple Guide for Small Business Owners)

When starting or running a business, financial support is often necessary. Banks offer different types of loans, but two of the most common are Term Loans and Working Capital Loans. Many small business owners and rural entrepreneurs get confused between these two.

Understanding the difference between term loan and working capital is important so you can choose the right type of finance for your business needs.

What Is a Term Loan?

A term loan is a loan taken for a fixed period to purchase assets or make long-term investments in a business. It is usually repaid in regular monthly installments (EMIs).

Purpose of Term Loan

Term loans are mainly used for:

Buying machinery

Purchasing equipment

Constructing a shop or factory

Buying vehicles for business

Expanding infrastructure

These are long-term investments that help grow the business.

Features of Term Loan

Fixed repayment schedule (EMIs)

Longer repayment period (1–10 years or more)

Used for asset creation

May require collateral

Interest calculated on full loan amount

Term loans are ideal when you want to build something permanent for your business.

What Is Working Capital Loan?

A working capital loan is used to manage daily business expenses. It helps maintain smooth operations when cash flow is low.

Purpose of Working Capital

Working capital is used for:

Buying raw materials

Paying salaries

Paying electricity bills

Stock purchase

Managing short-term expenses

It keeps the business running day to day.

Features of Working Capital Loan

Short-term in nature

Flexible repayment

Often given as cash credit or overdraft

Interest charged only on used amount

Helps manage cash flow

It is not used to buy assets but to handle operational costs.

Key Differences Between Term Loan and Working Capital

Basis

Term Loan

Working Capital Loan

Purpose

Asset purchase

Daily expenses

Duration

Long-term

Short-term

Repayment

Fixed EMIs

Flexible

Interest

On total loan

On used amount

Example

Buying machine

Buying raw material

Both serve different needs and are equally important.

When Should You Take a Term Loan?

You should choose a term loan when:

Starting a new business

Expanding your factory or shop

Purchasing costly equipment

Investing in infrastructure

Term loans help increase production capacity.

When Should You Take Working Capital?

Working capital is best when:

Business faces seasonal demand

Cash is blocked in stock

Customers delay payments

Immediate expenses arise

It ensures your business does not stop due to cash shortage.

Examples for Better Understanding

Example 1

A person opens a flour mill.

Machine purchase → Term Loan

Wheat stock purchase → Working Capital

Example 2

A shop owner expands his store.

Shop renovation → Term Loan

Monthly salary payment → Working Capital

Can a Business Take Both?

Yes, many businesses take both:

Term loan for infrastructure

Working capital for operations

Banks often combine both in business finance packages.

Advantages of Term Loan

✔ Helps in long-term growth

✔ Structured repayment

✔ Builds business assets

✔ Improves production capacity

Advantages of Working Capital Loan

✔ Maintains smooth operations

✔ Flexible usage

✔ Prevents business interruption

✔ Useful during low sales periods

Common Mistakes to Avoid

Using working capital to buy fixed assets

Taking term loan for daily expenses

Overborrowing

Ignoring repayment schedule

Wrong usage can lead to financial stress.

Which Loan Is Better?

Neither is better — both serve different purposes. The right choice depends on your need:

For growth → Term Loan

For running business → Working Capital

Understanding this difference helps in better financial planning.

Conclusion

Term loans and working capital loans are essential tools for business success. A term loan builds your business foundation, while working capital keeps it running smoothly. Smart entrepreneurs know when to use each type of loan.

Before applying, assess your business requirement and consult your bank. Choosing the right loan at the right time can help your business grow steadily and avoid financial difficulties.

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Banking Awareness Part 2 ( Types Of Banking)

Types of Banks

Types of Scheduled Bank

1. PUBLIC SECTOR - Born under Government of India
2. NATIONALIZED - 19 banks ( 1st Phase & 2nd Phase) Discussed in previous blog.
3. CO-OPERATIVE BANK - For helping public.
4. COMMERCIAL BANK - It can be PUBLIC SECTOR BANK , PRIVATE SECTOR BANK, FOREIGN BANK,SMALL FINANCE BANK, PAYMENT BANK. As from the name "Commerce" this bank is usually for business purposes.

Non Scheduled Bank - All Local Area Bank which doesn't comes under RBI Act.

Types of Development Bank

1. SIDBI- "SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA" which Promote industrialization.
2. EXIM - "EXPORT IMPORT BANK" which promote Export Import business.
3. NABARD - "NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT" which promotes the development of Rural and Agriculture Sector.
4. NHB- "NATIONAL HOUSING BANKING" which promote Housing Facility

To be continued.........................

Guys if you want more these type of notes then share it to your friends and do your best in your exam..

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Banking Awareness for Upcoming Bankers (Introduction)

Hey Guys!

Now it's a time of competition and there is no sites or any book which provides the BANKING AWARENESS notes in one platform.



Here we discuss only those which is essential for banking exam.

Let's start our first session if you like it then share it & continues follow it.

चलिए शुरू करते है ।

What is BANK?

It is the financial institution which deposits & grant loans under Banking Regulation Act 1949.

Note- Second and Fourth Saturday Holidays of bank was declared under Negotiable Instrument Act 1881.

History

First Established Bank- BANK OF HINDUSTAN by East India Company.
First Commercial Bank- ALLAHABAD BANK (1865).

Before Independence Bank was divided into 2 categories

• Swadeshi Bank- Established by Indian which gives loans to only rich peoples in urban areas for doing export in USA.
• Firangi Bank- Established by Foreigners which invest their money on Stock Market.

These two banks focused on Rich Peoples and Profit of their own. But there was no rules and regulation regarding Rate Of Interest etc. Anybody can open their bank in India cause there was no rules and regulation.

Now there was a entry of HILTON YOUNG COMMISSION (1926) also known as Royal Commission. They noticed that these banks work for their own benefits but not for the country and there is no guidance or rules regulation. They advised that to form such a committee which gives instruction to these banks.

But this advice was neglected which results into USA DEPRESSION 1929-30 by collapsing of banking.

After that Government realized that HILTON YOUNG COMMISSION was right.

Now they were willing to established RBI.

RESERVE BANK OF INDIA

• 1934 - Starting Phase of RBI or RBI ACT passed
• 1 APRIL 1935- Establishment of RBI in Calcutta
• 1937- Head Office Shifted to Bombay

Initial Phase RBI started with 5 Crore Rupees only.

• Still ownership was under Privatization which results into personal profit.
• Government had decided to transfer the ownership of RBI..
• 1 January 1948 was the starting phase of Nationalization of RBI.
• 1949 - RBI was Nationalized with 100% Government Share.

Nationalization- Firstly Act was passed then maximum share owned by government. After Nationalization whole share was owned by Government.

Banks was under regulation which aimed to the growth of Economy.

There was a requirement of  Nationalization of Banks.

At initial phase there was a total 20 Nationalized banks, one bank i.e. New Bank Of India Merge with Punjab National Bank so total 19 Banks was nationalized.

Reason for Nationalization

1. Regional Disparity Removal- Openings of banks in urban as well as rural areas.
2. Enhancement of Agriculture- Focus on Agriculture.

So more banks more burden more activities.

Now some banks are specialized in agriculture and some are in business so to regulate these banks RBI categorized the bank according to their specialization.

1. Development Bank - Focus only on development such as NABARD, NHB, EXIM, SIDBI.
   Development bank don't deals with public it only deals with bank which deals with public.
2. Commercial Bank -  It deals with public for business purpose.
3. Co-Operative Bank - For helping peoples.
4. Foreign Bank - Bank which is operated from out of India but branches are presented in India like Citibank, HSBC Bank etc.

To be continued.........................

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Stand-Up India Scheme Features

• हिन्दी

Title of the Scheme

Stand-Up India Scheme for financing SC/ST and/or Women Entrepreneurs.

Objective

The objective of the Stand-Up India scheme is to facilitate bank loans between  10 lakh and  1 Crore 

to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman 

borrower per bank branch for setting up a greenfield enterprise. This enterprise may be in 

manufacturing, services or the trading sector. In case of non-individual enterprises at least 51% 

of the shareholding and controlling stake should be held by either an SC/ST or Woman entrepreneur.

Eligibility

1. SC/ST and/or woman entrepreneurs, above 18 years of age.

2. Loans under the scheme is available for only green field project. Green field signifies, in this context, 

 the first time venture of the beneficiary in the manufacturing or services or trading sector.

3. In case of non-individual enterprises, 51% of the shareholding and controlling stake should be held

 by either SC/ST and/or Women Entrepreneur.

4. Borrower should not be in default to any bank/financial institution.

Nature of Loan

Composite loan (inclusive of term loan and working capital) between  10 lakh and upto  100 lakh.

Purpose of Loan

For setting up a new enterprise in manufacturing, trading or services sector by SC/ST/Women 

entrepreneur.

Size of Loan

Composite loan of 75% of the project cost inclusive of term loan and working capital. The stipulation

 of the loan being expected to cover 75% of the project cost would not apply if the borrower’s 

contribution along with convergence support from any other schemes exceeds 25% of the project cost.

Interest Rate

The rate of interest would be lowest applicable rate of the bank for that category (rating category) not 

 to exceed (base rate (MCLR) + 3%+ tenor premium).

Security

Besides primary security, the loan may be secured by collateral security or guarantee of Credit  

Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as decided by the banks.

Repayment

The loan is repayable in 7 years with a maximum moratorium period of 18 months.

Working Capital

For drawal of Working capital upto  10 lakh, the same may be sanctioned by way of overdraft.  

Rupay debit card to be issued for convenience of the borrower.

Working capital limit above  10 lakh to be sanctioned by way of Cash Credit limit.

Margin Money

The Scheme envisages 25% margin money which can be provided in convergence with eligible  

Central / State schemes. While such schemes can be drawn upon for availing admissible subsidies

 or for meeting margin money requirements, in all cases, the borrower shall be required to bring in 

minimum of 10% of the project cost as own contribution.

STAND-UP INDIA SCHEME WOULD BE OPERATED BY ALL THE BRANCHES OF SCHEDULED 

COMMERCIAL BANKS IN INDIA..

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SBI PO 2017 : Socio - Economic Daily Current Affairs Update

• Dr. Shawna Pandya, has selected for a space mission with this, she would be the third Indian-origin woman to go to space.
• National Stock Exchange (NSE) has appointed IDFC chief Vikram Limaye as its new managing director and chief executive officer.
• Surgeon P Raghu Ram has been awarded with the prestigious Dr BC Roy national award 2016 outstanding service in the field of socio medical relief.
• India has been ranked 43th in the list of 45 global economies in the intellectual property index.
• The prime minister of Somalia, Mohamed Abdullahi Farmajo, sworn in as the new president of the country.
• India and Senegal has sign in an aggrement  in the field of health and medicine which includes coorpation in AIDS control,integrated diesease survillance and emergency relief.
• Jeff Sessions has been confirmed to be the new attorny general of USA.
• Ola cab aggregation service provider, has appointed Badri raghavan as its chief Data scientist.
• Anish Kapoor, indian origin british sculptor has been selected for Israel's prestigious genesis prize for commitment to jewish values.
• Lata Mangeskar will be conferred with D. Litt by the YCMOU (Yashwantrao Chavan Maharastra Open University) for her contribution in the field of music.

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Pratiyogita Darpan March 2015

Pratiyogita Darpan March 2015

Pratiyogita Darpan is one of the most liked monthly magazines in India that provides the complete knowledge of national and international current affairs and other information that helps youngsters in cracking the various competitive exams.

PD Size : 51.27 MB

Language : English

Highlights :

• US President Barack Obama’s Visit to India
• Change of Power in Sri Lanka
• 13th Pravasi Bhartiya Divas
• Niti Ayog
• Padma Awards 2015

Solved Papers:

• UPPSC (Main) Exam 2014
• UPPSC Review Officer (Main) Exam 2013
• NVS PGT Exam 2014
• KVS PGT Exam 2014
• SSC CGL Exam 2014
• MAT 2014

Solved Model Paper:

• IBPS Bank PO

Click Here To Download

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IBPS IT Specialist Officer Study Material

Pattern of Question papers for IBPS SO examination :

Total number of questions – 200
Total marks – 200
Time for completing the examination – 2 hours

For IT Officer (Scale 1 )

Reasoning – 50 Questions 50 Marks
English Language – 50 Questions 25 Marks
Quantitative Aptitude – 50 Questions 50 Marks
Professional Knowledge – 50 Questions 75 Marks

Negative Marking Scheme for IBPS SO Examination
For each question for which a wrong answer has been given by the candidate one fourth or 0.25 of the marks assigned to that question will be deducted as a negative mark. If a question is left blank, there will be no penalty for that question.

Click On the links to Download :

Mahendras Booster Part 1

Mahendras Booster Part 2

One Liners

MCQs on OS,C,C++,DS

MCQs in Computer Science

The Complete Reference – Databases SQL

The Complete Reference – HTML & CSS

The Complete Reference – Information Security

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Interview questions for IBPS PO/Clerk 2015

1. Why do you want to join banking sector?
Banking is one of the fastest growing sectors in India with more stable and high
growth and more over providing wide range of career opportunities for graduates.
So I want to take an opportunity to join in a bank.

2. What is the difference between Cheque and Demand Draft?
Cheque: Cheuqe is a negotiable instrument instructing a bank to pay a specific amount from a specific account held in the maker/depositor name with that Bank.

Demand Draft: A demand draft is an instrument used for effecting transfer of money. It is a negotiable instrument.

3. What is a Non-Banking Financial Company (NBFC)?
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

4. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?
NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

• NBFC cannot accept demand deposits;
• NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
• deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

5 . What is Private Banking?
Banking services offered to high net-worth individuals. Private banking institution
assists the high net-worth individual in investing his/her money in exchange for
commissions and fees. The term "private" refers to the customer service being
rendered on a more personal basis.

6. What is BSBDA?
Under the guidelines issued on August 10, 2012 by RBI: Any individual, includingpoor or those from weaker section of the society, can open zero balance account in any bank. BSBDA guidelines are applicable to "all scheduled commercial banks in India, including foreign banks having branches in India".
All the accounts opened earlier as 'no-frills' account should be renamed as BSBDA. Banks are required to convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.

The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all customers, through branches .

The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives.

7. What is BPS (Basis Points)?
BPS (Basis point) : - BPS is an acronym for basic points  is used to indicate changes in rate of interest and other financial instrument.
1 BASIC POINT IS EQUAL TO 0.01%
So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%

8. What is KYC?
      The Reserve Bank of India (RBI) has advised banks to follow ‘KYC guidelines’, wherein certain personal information of the account-opening prospect or the customer is obtained. The objective of doing so is to enable the Bank to have positive identification of its customers.  This is also in the interest of customers to safeguard their hard earned money.
      The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are-

• Photograph                    
• Proof of identity             
• Proof of address

9. What is Sub-prime crisis?
The current Subprime crisis is due to sub-prime lending. These are the loans given
to the people having low credit rating.

10. What is Base Rate?
        It is the minimum rate of interest that a bank is allowed to charge from its customers. Unless mandated by the government, RBI rule stipulates that no bank can offer loans at a rate lower than BR to any of its customers.
      It is effective from, July 1, 2010. However, all existing loans, including home loans and car loans, will continue to be at the current rate. Only the new loans taken on or after July 1 and old loans being renewed after this date will be linked to BR.

11. What is SWIFT?

SWIFT  :- Society for worldwide Interbank financial tele- communication.

•  India was 74th Nation to join SWIFT Network.

•  SWIFT Code is a standard format of bank Identifier code. This code is used particularly in International transfer of money between banks.

• A majority of FOREX related message are sent to correspondent banks abroad through SWIFT.

• SWIFT Code consist 8 or 11 character when code is 8 digit, It is referred to primary office 4 – bank code

2 – country code
2 – location code
3 – branch code (optional).

12. What  is Swabhimaan Yojana?
Swabhimaan is a financial inclusion plan of bank to take banking to the door steps of the remote village where banking facility are not available.

13. What is NOSTRO and VOSTRO account?
NOSTRO Account: A NOSTRO account is maintained by an Indian bank in the foreign countries.

VOSTRO Account: a vostro a/c is maintained by a foreign bank in India with their corresponding bank.

14. What is a DeMat Account?
DeMat is nothing but a dematerialized account. If one has to save money or make cheque payments, then he/she needs to open a bank account. Similarly, one needs to open a DeMat account if he/she wants to buy or sell stocks. Thus, DeMat account is similar to a bank account wherein the actual money is being replaced by shares. In order to open a DeMat account, one needs to approach the Depository Participants [DPs].
In India, a DeMat account is a type of banking account that dematerializes paper-based physical stock shares. The DeMat account is used to avoid holding of physical shares: the shares are bought as well as sold through a stock broker. In this case, the advantage is that one does not need any physical evidence for possessing these shares. All the things are taken care of by the DPs.
This account is very popular in India. Physically only 500 shares can be traded as per the provision given by SEBI. From April 2006, it has become mandatory for any person holding a DeMat account to possess a Permanent Account Number (PAN).

15. What is RuPay Card?

RuPay is the Indian domestic card payment network set up by National Payments Corporation of India (NPCI) at the behest of banks in India. The RuPay project had been conceived by Indian Banks Association (IBA) and had the approval of Reserve Bank of India (RBI).

RuPay LogoNational Payments Corporation of India (NPCI) has a plan to provide a full range of card payment services including the RuPay ATM, RuPay MicroATM, Debit, Prepaid and Credit Cards which will be accepted in India and abroad, across various channels like POS, Internet, IVR and mobile etc.

The initial focus of NPCI would be to approach those banks who have not been issuing any payment card at all more specifically – Regional Rural Banks (RRBs) and urban co-operative banks.

All Public Sector Undertakings (PSU) banks set to join RuPay system by the end of year 2012. RuPay-based debit cards can be used by the consumers on the Internet from September, 2012.

The government of India had launched India’s first domestic payment card network, RuPay, to compete with Visa Inc and Mastercard Inc.


16. What is foreign exchange reservers?
Foreign exchange reserves (also called Forex reserves) in a strict sense are only
the foreign currency deposits and bonds held by central banks and monetary
authorities.However, the term in popular usage commonly includes foreign
exchange and gold,SDRs and IMF reserve positions.

17. What is Bancassurance ?
Bancassurance stands for distribution of financial products particularly the
insurance policies (both the life and non-life), also called referral business, by
banks as corporate agents, through their branches located in different parts of the
country.

18. What is Money Laundering ?
Money laundering is the processes of concealing the source of obtain money. Money or funds obtained through illegal activities are presented as legitimate.

19. What is the difference between Nationalized bank and Private Bank ?
A Nationalized bank is one that is owned by the government of the country. Since
the people decide who the government is, they are also referred to as public sector
banks. The government is responsible for the money deposited into the accounts of
these banks. Where as a private sector bank is one that is owned by an independent
individual or a company that is controlled by a few individuals. In short, the bank
is owned by someone else and they run the bank. The person owning/running the
bank is responsible for the money deposited into the accounts of these banks.

20. What are non-perfoming assets?

A classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset.
Also known as "non-performing loan".

21. What is the Functions of RBI?
The Reserve Bank of India is the central bank of India, was established on April 1,
1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Reserve Bank of India was set up on the recommendations of the Hilton
Young Commission. The commission submitted its report in the year 1926, though
the bank was not set up for nine years.To regulate the issue of Bank Notes and
keeping of reserves with a view to securing monetary stability in India and
generally to operate the currency and credit system of the country to its
advantage." Banker to the Government: performs merchant banking function for
the central and the state governments; also acts as their banker.Banker to banks:
maintains banking accounts of all scheduled banks. 29 What is monetary policy?
A Monetary policy is the process by which the government, central bank, of a
country controls
(i) the supply of money,
(ii) availability of money, and
(iii) cost of money or rate of interest, in order to attain a set of objectives
oriented towards the growth and stability of the economy.

22. What is SEZ?
SEZ means Special Economic Zone is the one of the part of government’s policies
in India. A special Economic zone is a geographical region that economic laws
which are more liberal than the usual economic laws in the country. The basic
motto behind this is to increase foreign investment, development of infrastructure,
job opportunities and increase the income level of the people.

23. What is SIDBI?
The Small Industries Development Bank of India is a state-run bank aimed to aid
the growth and development of micro, small and medium scale industries in India.
Set up in 1990 through an act of parliament, it was incorporated initially as a
wholly owned subsidiary of Industrial Development Bank of India.

24. What is TREASURY BILLS (TB)?
Treasury bills (T-Bills) are the short term liabilities of the central government .theoretically government of India issued three types of T-bills through auctions, namely 91 days, 182days,and 364 days. There are no treasury bills issued by state government. Minimum amount of T –Bills is Rs. 2500and in multiple of RS. 2500.T-bills are issued at a discount and are redeemed at par from 1st April 1997 treasury bills have been replaced by WAYS AND MEANS ADVANCES .

25. What is COMMERCIAL PAPER (CP)?
commercial paper was introduced by RBI in 1991. It is a short term money market instrument issued in the form of promissory note .Corporate; primary dealers and the all India financial institution are eligible to issue CP. The maturity period of each commercial paper is 7days to 1year from the date of issue .CP can be issued denominations of Rs. 5lakh or multiples thereof. Only a schedule bank can act as an issuing and paying agent (IPA) for issuance of CP.

26. What is CRM?
Customer Relationship Management (CRM) refers to the ability to understand,
anticipate and manage the needs of the customer, interaction and relationship
resulting in increased profitability through revenue and margin growth and
operational efficiencies.

27. What is Right to information Act?
The Right to Information act is a law enacted by the Parliament of India giving
citizens of India access to records of the Central Government and State
overnments.The Act applies to all States and Union Territories of India, except the
State of Jammu and Kashmir - which is covered under a State-level law. This law
was passed by Parliament on 15 June 2005 and came fully into force on 13
October 2005.

28.  What is Recession?
A true economic recession can only be confirmed if GDP (Gross Domestic
Product)growth is negative for a period of two or more consecutive quarters.

29. What is dematerialisation ?
Dematerialisation is a process by which the paper certificates of an investor are
taken back by the company/registrar and actually destroyed and an equivalent
number of securities are credited in electronic holdings of that investor.

30. What is Defivative ?
A derivative is a financial contract that derives its value from another financial
product/commodity (say spot rate) called underlying (that may be a stock, stock
index, a foreign currency, a commodity). Forward contract in foreign exchange
transaction, is a simple form of a derivative.

31. What is LAF ?
Liquidity Adjustment Facility (LAF) was introduced by RBI during June, 2000 in
phases, to ensure smooth transition and keeping pace with technological
upgradation.

32.  What is a Repo Rate?
Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the
banks have any shortage of funds they can borrow it from RBI. A reduction in the
repo rate will help banks to get money at a cheaper rate. When the repo rate
increases, borrowing from RBI becomes more expensive

33. What is Reverse Repo Rate?
This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve
Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels
there is too much money floating in the banking system. Banks are always happy
to lend money to RBI since their money is in safe hands with a good interest. An
increase in Reverse repo rate can cause the banks to transfer more funds to RBI
due to this attractive interest rates.

34. What is CRR Rate?
Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with
RBI. If RBI decides to increase the percent of this, the available amount with the
banks comes down. RBI is using this method (increase of CRR rate), to drain out
the excessive money from the banks.

35. What is Bank Rate?
Bank rate, also referred to as the discount rate, is the rate of interest which a
central bank charges on the loans and advances that it extends to commercial
banks and other financial intermediaries. Changes in the bank rate are often used
by central banks to control the money supply.

36. What is PLR?
The Prime Interest Rate is the interest rate charged by banks to their most
creditworthy customers (usually the most prominent and stable business
customers). The rate is almost always the same amongst major banks. Adjustments
to the prime rate are made by banks at the same time; although, the prime rate
does not adjust on any regular basis. The Prime Rate is usually adjusted at the
same time and in correlation to the adjustments of the Fed Funds Rate. The rates
reported below are based upon the prime rates on the first day of each respective
month. Some banks use the name "Reference Rate" or "Base Lending Rate" to
refer to their Prime Lending Rate.


37. what is Bitcoin?
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

38.  What is SLR Rate?
SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth.
Through SLR rate tuning the money supply in the system can be controlled efficiently.

39. What is Deposit Rate?
Interest Rates paid by a depository institution on the cash on deposit.

40. What is Fiscal Policy?
Fiscal policy is the use of government spending and revenue collection to
influence the economy. These policies affect tax rates, interest rates and
government spending, in an effort to control the economy. Fiscal policy is an
additional method to determine public revenue and public expenditure.

41. What is the Banking Ombudsman Scheme? 
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

42. Which are the banks covered under the Banking Ombudsman Scheme, 2006? 
All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.

43.  What is Inflation?
Inflation is as an increase in the price of bunch of Goods and services that projects
the Indian economy. An increase in inflation figures occurs when there is an
increase in the average level of prices in Goods and services. Inflation happens
when there are fewer Goods and more buyers; this will result in increase in the
price of Goods, since there is more demand and less supply of the goods.


44. What is Deflation?
Deflation is the continuous decrease in prices of goods and services. Deflation
occurs when the inflation rate becomes negative (below zero) and stays there for a
longer period.

45. What is FII?
FII (Foreign Institutional Investor) used to denote an investor, mostly in the form
of an institution. An institution established outside India, which proposes to invest
in Indian market, in other words buying Indian stocks. FII's generally buy in large
volumes which has an impact on the stock markets. Institutional Investors includes
pension funds, mutual funds, Insurance Companies, Banks, etc.

46. What is FDI?
FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets
or a significant amount of ownership (stock) of a company in another country in
order to gain a measure of management control” (Or) A foreign company having a
stake in a Indian Company.

47.  What is IPO?
IPO is Initial Public Offering. This is the first offering of shares to the general
public from a company wishes to list on the stock exchanges.

48. What is GDP?
The Gross Domestic Product or GDP is a measure of all of the services and goods
produced in a country over a specific period; classically a year.

49. What is GNP?
Gross National Product is measured as GDP plus income of residents from
investments made abroad minus income earned by foreigners in domestic market.

50. What is Revenue deficit?
It defines that, where the net amount received (by taxes & other forms) fails to
meet the predicted net amount to be received by the government.

51. What is Disinvestment?
The Selling of the government stake in public sector undertakings.

52. What is Fiscal Deficit?
It is the difference between the government’s total receipts (excluding borrowings)
and total expenditure.

53. What is National Income?
National Income is the money value of all goods and services produced in a
Country during the year.

54.  What is bank and its features and types?
A bank is a financial organization where people deposit their money to keep it
safe.Banks play an important role in the financial system and the economy. As a
key component of the financial system, banks allocate funds from savers to
borrowers in an efficient manner.

55. What are Mutual funds?
Mutual funds are investment companies that pool money from investors at large
and offer to sell and buy back its shares on a continuous basis and use the capital
thus raised to invest in securities of different companies. The mutual fund will
have a fund manager that trades the pooled money on a regular basis. The net
proceeds or losses are then typically distributed to the investors annually. A
company that invests its clients' pooled fund into securities that match its declared
financial objectives. 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.

56. What is Cheque?
Cheque is a negotiable instrument instructing a Bank to pay a specific amount
from a specified account held in the maker/depositor's name with that Bank.A bill
of exchange drawn on a specified banker and payable on demand.“Written order
directing a bank to pay money”.

57. What is demand Draft?
A demand draft is an instrument used for effecting transfer of money. It is a
Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of
money. You can 100% trust a DD. It is a banker's check. A check may be
dishonored for lack of funds a DD can not. Cheque is written by an individual and
Demand draft is issued by a bank. People believe banks more than individuals.

58. What is NABARD?
NABARD was established by an act of Parliament on 12 July 1982 to implement
the National Bank for Agriculture and Rural Development Act 1981. It replaced

the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell
(RPCC) of Reserve Bank of India, and Agricultural Refinance and Development
Corporation (ARDC). It is one of the premiere agency to provide credit in rural
areas. NABARD is set up as an apex Development Bank with a mandate for
facilitating credit flow for promotion and development of agriculture, small-scale
industries, cottage and village industries, handicrafts and other rural crafts.

59.  What is SENSEX and NIFTY?
SENSEX is the short term for the words "Sensitive Index" and is associated with
the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed on
1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE.
Where as NSE has 50 most traded stocks of NSE.SENSEX IS THE INDEX OF
BSE. AND NIFTY IS THE INDEX OF NSE.BOTH WILL SHOW DAILY
TRADING MARKS. Sensex and Nifty both are an "index”. An index is basically
an indicator it indicates whether most of the stocks have gone up or most of the
stocks have gone down.

60. What is SEBI?
SEBI is the regulator for the Securities Market in India. Originally set up by the
Government of India in 1988, it acquired statutory form in 1992 with SEBI Act
1992 being passed by the Indian Parliament. Chaired by C B Bhave.1. Why do you want to join banking sector?
Banking is one of the fastest growing sectors in India with more stable and high
growth and more over providing wide range of career opportunities for graduates.
So I want to take an opportunity to join in a bank.

2. What is the difference between Cheque and Demand Draft?
Cheque: Cheuqe is a negotiable instrument instructing a bank to pay a specific amount from a specific account held in the maker/depositor name with that Bank.

Demand Draft: A demand draft is an instrument used for effecting transfer of money. It is a negotiable instrument.

3. What is a Non-Banking Financial Company (NBFC)?
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

4. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?
NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

• NBFC cannot accept demand deposits;
• NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
• deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

5 . What is Private Banking?
Banking services offered to high net-worth individuals. Private banking institution
assists the high net-worth individual in investing his/her money in exchange for
commissions and fees. The term "private" refers to the customer service being
rendered on a more personal basis.

6. What is BSBDA?
Under the guidelines issued on August 10, 2012 by RBI: Any individual, includingpoor or those from weaker section of the society, can open zero balance account in any bank. BSBDA guidelines are applicable to "all scheduled commercial banks in India, including foreign banks having branches in India".
All the accounts opened earlier as 'no-frills' account should be renamed as BSBDA. Banks are required to convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.

The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all customers, through branches .

The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives.

7. What is BPS (Basis Points)?
BPS (Basis point) : - BPS is an acronym for basic points  is used to indicate changes in rate of interest and other financial instrument.
1 BASIC POINT IS EQUAL TO 0.01%
So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%

8. What is KYC?
      The Reserve Bank of India (RBI) has advised banks to follow ‘KYC guidelines’, wherein certain personal information of the account-opening prospect or the customer is obtained. The objective of doing so is to enable the Bank to have positive identification of its customers.  This is also in the interest of customers to safeguard their hard earned money.
      The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are-

• Photograph                    
• Proof of identity             
• Proof of address

9. What is Sub-prime crisis?
The current Subprime crisis is due to sub-prime lending. These are the loans given
to the people having low credit rating.

10. What is Base Rate?
        It is the minimum rate of interest that a bank is allowed to charge from its customers. Unless mandated by the government, RBI rule stipulates that no bank can offer loans at a rate lower than BR to any of its customers.
      It is effective from, July 1, 2010. However, all existing loans, including home loans and car loans, will continue to be at the current rate. Only the new loans taken on or after July 1 and old loans being renewed after this date will be linked to BR.

11. What is SWIFT?

SWIFT  :- Society for worldwide Interbank financial tele- communication.

•  India was 74th Nation to join SWIFT Network.

•  SWIFT Code is a standard format of bank Identifier code. This code is used particularly in International transfer of money between banks.

• A majority of FOREX related message are sent to correspondent banks abroad through SWIFT.

• SWIFT Code consist 8 or 11 character when code is 8 digit, It is referred to primary office 4 – bank code

2 – country code
2 – location code
3 – branch code (optional).

12. What  is Swabhimaan Yojana?
Swabhimaan is a financial inclusion plan of bank to take banking to the door steps of the remote village where banking facility are not available.

13. What is NOSTRO and VOSTRO account?
NOSTRO Account: A NOSTRO account is maintained by an Indian bank in the foreign countries.

VOSTRO Account: a vostro a/c is maintained by a foreign bank in India with their corresponding bank.

14. What is a DeMat Account?
DeMat is nothing but a dematerialized account. If one has to save money or make cheque payments, then he/she needs to open a bank account. Similarly, one needs to open a DeMat account if he/she wants to buy or sell stocks. Thus, DeMat account is similar to a bank account wherein the actual money is being replaced by shares. In order to open a DeMat account, one needs to approach the Depository Participants [DPs].
In India, a DeMat account is a type of banking account that dematerializes paper-based physical stock shares. The DeMat account is used to avoid holding of physical shares: the shares are bought as well as sold through a stock broker. In this case, the advantage is that one does not need any physical evidence for possessing these shares. All the things are taken care of by the DPs.
This account is very popular in India. Physically only 500 shares can be traded as per the provision given by SEBI. From April 2006, it has become mandatory for any person holding a DeMat account to possess a Permanent Account Number (PAN).

15. What is RuPay Card?

RuPay is the Indian domestic card payment network set up by National Payments Corporation of India (NPCI) at the behest of banks in India. The RuPay project had been conceived by Indian Banks Association (IBA) and had the approval of Reserve Bank of India (RBI).

RuPay LogoNational Payments Corporation of India (NPCI) has a plan to provide a full range of card payment services including the RuPay ATM, RuPay MicroATM, Debit, Prepaid and Credit Cards which will be accepted in India and abroad, across various channels like POS, Internet, IVR and mobile etc.

The initial focus of NPCI would be to approach those banks who have not been issuing any payment card at all more specifically – Regional Rural Banks (RRBs) and urban co-operative banks.

All Public Sector Undertakings (PSU) banks set to join RuPay system by the end of year 2012. RuPay-based debit cards can be used by the consumers on the Internet from September, 2012.

The government of India had launched India’s first domestic payment card network, RuPay, to compete with Visa Inc and Mastercard Inc.


16. What is foreign exchange reservers?
Foreign exchange reserves (also called Forex reserves) in a strict sense are only
the foreign currency deposits and bonds held by central banks and monetary
authorities.However, the term in popular usage commonly includes foreign
exchange and gold,SDRs and IMF reserve positions.

17. What is Bancassurance ?
Bancassurance stands for distribution of financial products particularly the
insurance policies (both the life and non-life), also called referral business, by
banks as corporate agents, through their branches located in different parts of the
country.

18. What is Money Laundering ?
Money laundering is the processes of concealing the source of obtain money. Money or funds obtained through illegal activities are presented as legitimate.

19. What is the difference between Nationalized bank and Private Bank ?
A Nationalized bank is one that is owned by the government of the country. Since
the people decide who the government is, they are also referred to as public sector
banks. The government is responsible for the money deposited into the accounts of
these banks. Where as a private sector bank is one that is owned by an independent
individual or a company that is controlled by a few individuals. In short, the bank
is owned by someone else and they run the bank. The person owning/running the
bank is responsible for the money deposited into the accounts of these banks.

20. What are non-perfoming assets?

A classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset.
Also known as "non-performing loan".

21. What is the Functions of RBI?
The Reserve Bank of India is the central bank of India, was established on April 1,
1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Reserve Bank of India was set up on the recommendations of the Hilton
Young Commission. The commission submitted its report in the year 1926, though
the bank was not set up for nine years.To regulate the issue of Bank Notes and
keeping of reserves with a view to securing monetary stability in India and
generally to operate the currency and credit system of the country to its
advantage." Banker to the Government: performs merchant banking function for
the central and the state governments; also acts as their banker.Banker to banks:
maintains banking accounts of all scheduled banks. 29 What is monetary policy?
A Monetary policy is the process by which the government, central bank, of a
country controls
(i) the supply of money,
(ii) availability of money, and
(iii) cost of money or rate of interest, in order to attain a set of objectives
oriented towards the growth and stability of the economy.

22. What is SEZ?
SEZ means Special Economic Zone is the one of the part of government’s policies
in India. A special Economic zone is a geographical region that economic laws
which are more liberal than the usual economic laws in the country. The basic
motto behind this is to increase foreign investment, development of infrastructure,
job opportunities and increase the income level of the people.

23. What is SIDBI?
The Small Industries Development Bank of India is a state-run bank aimed to aid
the growth and development of micro, small and medium scale industries in India.
Set up in 1990 through an act of parliament, it was incorporated initially as a
wholly owned subsidiary of Industrial Development Bank of India.

24. What is TREASURY BILLS (TB)?
Treasury bills (T-Bills) are the short term liabilities of the central government .theoretically government of India issued three types of T-bills through auctions, namely 91 days, 182days,and 364 days. There are no treasury bills issued by state government. Minimum amount of T –Bills is Rs. 2500and in multiple of RS. 2500.T-bills are issued at a discount and are redeemed at par from 1st April 1997 treasury bills have been replaced by WAYS AND MEANS ADVANCES .

25. What is COMMERCIAL PAPER (CP)?
commercial paper was introduced by RBI in 1991. It is a short term money market instrument issued in the form of promissory note .Corporate; primary dealers and the all India financial institution are eligible to issue CP. The maturity period of each commercial paper is 7days to 1year from the date of issue .CP can be issued denominations of Rs. 5lakh or multiples thereof. Only a schedule bank can act as an issuing and paying agent (IPA) for issuance of CP.

26. What is CRM?
Customer Relationship Management (CRM) refers to the ability to understand,
anticipate and manage the needs of the customer, interaction and relationship
resulting in increased profitability through revenue and margin growth and
operational efficiencies.

27. What is Right to information Act?
The Right to Information act is a law enacted by the Parliament of India giving
citizens of India access to records of the Central Government and State
overnments.The Act applies to all States and Union Territories of India, except the
State of Jammu and Kashmir - which is covered under a State-level law. This law
was passed by Parliament on 15 June 2005 and came fully into force on 13
October 2005.

28.  What is Recession?
A true economic recession can only be confirmed if GDP (Gross Domestic
Product)growth is negative for a period of two or more consecutive quarters.

29. What is dematerialisation ?
Dematerialisation is a process by which the paper certificates of an investor are
taken back by the company/registrar and actually destroyed and an equivalent
number of securities are credited in electronic holdings of that investor.

30. What is Defivative ?
A derivative is a financial contract that derives its value from another financial
product/commodity (say spot rate) called underlying (that may be a stock, stock
index, a foreign currency, a commodity). Forward contract in foreign exchange
transaction, is a simple form of a derivative.

31. What is LAF ?
Liquidity Adjustment Facility (LAF) was introduced by RBI during June, 2000 in
phases, to ensure smooth transition and keeping pace with technological
upgradation.

32.  What is a Repo Rate?
Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the
banks have any shortage of funds they can borrow it from RBI. A reduction in the
repo rate will help banks to get money at a cheaper rate. When the repo rate
increases, borrowing from RBI becomes more expensive

33. What is Reverse Repo Rate?
This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve
Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels
there is too much money floating in the banking system. Banks are always happy
to lend money to RBI since their money is in safe hands with a good interest. An
increase in Reverse repo rate can cause the banks to transfer more funds to RBI
due to this attractive interest rates.

34. What is CRR Rate?
Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with
RBI. If RBI decides to increase the percent of this, the available amount with the
banks comes down. RBI is using this method (increase of CRR rate), to drain out
the excessive money from the banks.

35. What is Bank Rate?
Bank rate, also referred to as the discount rate, is the rate of interest which a
central bank charges on the loans and advances that it extends to commercial
banks and other financial intermediaries. Changes in the bank rate are often used
by central banks to control the money supply.

36. What is PLR?
The Prime Interest Rate is the interest rate charged by banks to their most
creditworthy customers (usually the most prominent and stable business
customers). The rate is almost always the same amongst major banks. Adjustments
to the prime rate are made by banks at the same time; although, the prime rate
does not adjust on any regular basis. The Prime Rate is usually adjusted at the
same time and in correlation to the adjustments of the Fed Funds Rate. The rates
reported below are based upon the prime rates on the first day of each respective
month. Some banks use the name "Reference Rate" or "Base Lending Rate" to
refer to their Prime Lending Rate.


37. what is Bitcoin?
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

38.  What is SLR Rate?
SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth.
Through SLR rate tuning the money supply in the system can be controlled efficiently.

39. What is Deposit Rate?
Interest Rates paid by a depository institution on the cash on deposit.

40. What is Fiscal Policy?
Fiscal policy is the use of government spending and revenue collection to
influence the economy. These policies affect tax rates, interest rates and
government spending, in an effort to control the economy. Fiscal policy is an
additional method to determine public revenue and public expenditure.

41. What is the Banking Ombudsman Scheme? 
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

42. Which are the banks covered under the Banking Ombudsman Scheme, 2006? 
All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.

43.  What is Inflation?
Inflation is as an increase in the price of bunch of Goods and services that projects
the Indian economy. An increase in inflation figures occurs when there is an
increase in the average level of prices in Goods and services. Inflation happens
when there are fewer Goods and more buyers; this will result in increase in the
price of Goods, since there is more demand and less supply of the goods.


44. What is Deflation?
Deflation is the continuous decrease in prices of goods and services. Deflation
occurs when the inflation rate becomes negative (below zero) and stays there for a
longer period.

45. What is FII?
FII (Foreign Institutional Investor) used to denote an investor, mostly in the form
of an institution. An institution established outside India, which proposes to invest
in Indian market, in other words buying Indian stocks. FII's generally buy in large
volumes which has an impact on the stock markets. Institutional Investors includes
pension funds, mutual funds, Insurance Companies, Banks, etc.

46. What is FDI?
FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets
or a significant amount of ownership (stock) of a company in another country in
order to gain a measure of management control” (Or) A foreign company having a
stake in a Indian Company.

47.  What is IPO?
IPO is Initial Public Offering. This is the first offering of shares to the general
public from a company wishes to list on the stock exchanges.

48. What is GDP?
The Gross Domestic Product or GDP is a measure of all of the services and goods
produced in a country over a specific period; classically a year.

49. What is GNP?
Gross National Product is measured as GDP plus income of residents from
investments made abroad minus income earned by foreigners in domestic market.

50. What is Revenue deficit?
It defines that, where the net amount received (by taxes & other forms) fails to
meet the predicted net amount to be received by the government.

51. What is Disinvestment?
The Selling of the government stake in public sector undertakings.

52. What is Fiscal Deficit?
It is the difference between the government’s total receipts (excluding borrowings)
and total expenditure.

53. What is National Income?
National Income is the money value of all goods and services produced in a
Country during the year.

54.  What is bank and its features and types?
A bank is a financial organization where people deposit their money to keep it
safe.Banks play an important role in the financial system and the economy. As a
key component of the financial system, banks allocate funds from savers to
borrowers in an efficient manner.

55. What are Mutual funds?
Mutual funds are investment companies that pool money from investors at large
and offer to sell and buy back its shares on a continuous basis and use the capital
thus raised to invest in securities of different companies. The mutual fund will
have a fund manager that trades the pooled money on a regular basis. The net
proceeds or losses are then typically distributed to the investors annually. A
company that invests its clients' pooled fund into securities that match its declared
financial objectives. 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.

56. What is Cheque?
Cheque is a negotiable instrument instructing a Bank to pay a specific amount
from a specified account held in the maker/depositor's name with that Bank.A bill
of exchange drawn on a specified banker and payable on demand.“Written order
directing a bank to pay money”.

57. What is demand Draft?
A demand draft is an instrument used for effecting transfer of money. It is a
Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of
money. You can 100% trust a DD. It is a banker's check. A check may be
dishonored for lack of funds a DD can not. Cheque is written by an individual and
Demand draft is issued by a bank. People believe banks more than individuals.

58. What is NABARD?
NABARD was established by an act of Parliament on 12 July 1982 to implement
the National Bank for Agriculture and Rural Development Act 1981. It replaced

the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell
(RPCC) of Reserve Bank of India, and Agricultural Refinance and Development
Corporation (ARDC). It is one of the premiere agency to provide credit in rural
areas. NABARD is set up as an apex Development Bank with a mandate for
facilitating credit flow for promotion and development of agriculture, small-scale
industries, cottage and village industries, handicrafts and other rural crafts.

59.  What is SENSEX and NIFTY?
SENSEX is the short term for the words "Sensitive Index" and is associated with
the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed on
1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE.
Where as NSE has 50 most traded stocks of NSE.SENSEX IS THE INDEX OF
BSE. AND NIFTY IS THE INDEX OF NSE.BOTH WILL SHOW DAILY
TRADING MARKS. Sensex and Nifty both are an "index”. An index is basically
an indicator it indicates whether most of the stocks have gone up or most of the
stocks have gone down.

60. What is SEBI?
SEBI is the regulator for the Securities Market in India. Originally set up by the
Government of India in 1988, it acquired statutory form in 1992 with SEBI Act
1992 being passed by the Indian Parliament. Chaired by C B Bhave.

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