In IBPS, SBI, and RBI exams, the Banking Awareness section (15–20 questions) can be a game-changer. While current affairs change monthly, these 15 core banking terms appear **year after year** — often with the same definitions.
Master these to secure **15+ free marks** in General/Banking Awareness.
1 Repo Rate
The rate at which RBI lends money to commercial banks for short-term needs.
As of Dec 2025, RBI’s repo rate is 6.25%. A cut boosts liquidity; a hike controls inflation.
2 Reverse Repo Rate
The rate at which RBI borrows money from commercial banks.
Usually 0.25–0.50% lower than repo rate. Banks park excess funds here for safe returns.
3 CRR (Cash Reserve Ratio)
Percentage of total deposits banks must keep as cash with RBI (non-interest bearing).
Current CRR: 4.5%. A hike reduces money supply; a cut increases it.
4 SLR (Statutory Liquidity Ratio)
Percentage of deposits banks must maintain in form of gold, govt. securities, or cash.
Current SLR: 18%. Ensures bank solvency and controls credit expansion.
5 Bank Rate
Rate at which RBI lends to banks for long-term (vs. short-term repo rate).
Used for re-discounting bills of exchange. Less frequently changed than repo rate.
6 NPA (Non-Performing Asset)
Loan or advance where interest/principal remains unpaid for 90+ days.
Gross NPA ratio of Indian banks was 3.9% in Q2 FY26 (RBI, Dec 2025).
7 Priority Sector Lending (PSL)
Mandatory lending by banks to sectors like agriculture, MSMEs, education, housing.
PSL target: 40% of Adjusted Net Bank Credit (ANBC) for domestic banks.
8 BASEL III Norms
Global regulatory framework for bank capital adequacy, stress testing, and liquidity.
Requires banks to maintain a minimum Capital Adequacy Ratio (CAR) of 11.5% (9% + 2.5% buffer).
9 MCLR (Marginal Cost of Funds based Lending Rate)
Minimum interest rate below which banks cannot lend (except govt.-approved schemes).
Replaced Base Rate in 2016. Resets monthly based on repo rate and deposit costs.
10 Payment Bank
Bank that offers payments, remittances, and deposits (up to ₹2 lakh) but no loans.
Examples: Airtel Payments Bank, India Post Payments Bank, Fino Payments Bank.
11 Small Finance Bank (SFB)
Bank that provides basic banking to unserved/underserved sections (MSMEs, farmers, etc.).
Examples: AU Small Finance Bank, Equitas SFB, Ujjivan SFB.
12 DICGC (Deposit Insurance and Credit Guarantee Corporation)
RBI subsidiary that insures bank deposits up to ₹5 lakh per depositor per bank.
Covers all commercial banks, RRBs, and cooperative banks. Premium paid by banks.
13 NEFT (National Electronic Funds Transfer)
Electronic system for transferring funds between banks across India (24x7).
No minimum/maximum limit. Settled in 48 half-hourly batches (as of 2025).
14 RTGS (Real Time Gross Settlement)
Real-time interbank fund transfer system for high-value transactions (min ₹2 lakh).
Available 24x7. Funds credited instantly. Used for property, stock, or business deals.
15 UPI (Unified Payments Interface)
Real-time payment system that allows instant money transfer between bank accounts via mobile apps.
Handles 11+ billion transactions/month (Nov 2025). Apps: Google Pay, PhonePe, BHIM.
🎯 How to Prepare Banking Terms
- ✅ Create flashcards with term on front, definition + example on back.
- ✅ Link to current affairs: e.g., “RBI’s Dec 2025 policy kept repo rate at 6.25%”.
- ✅ Practice MCQs weekly — 80% of terms appear in direct definition-based questions.
Test your banking awareness with daily MCQs — updated with latest RBI policies!
→ Practice Banking MCQsNote: All rates and examples are based on RBI data as of December 2025.