Reading Material Relating to Banking Industry RTGS: Real Time Gross Settlement System is a centralized payment system in which

inter-bank payment instruction are processed and settled, transaction by transaction and continuously on line throughout the day. Universal Banking: Refer to providing complete financial services under one roof. Corporate Governance: Refers to conducting the affairs of an organization in a manner that gives fair deal to all the stake holders. The Board of Directors and the Management are to ensure that the organization is accountable to shareholders, give equitable treatment to all its owners and acts transparently. HRM: is important to-day because growing importance given to human and intellectual capital to-day. Superior business performance requires a firm to hone its human resource capital. Superior performance in the current scenario is based on flexibility, innovation and speed. VAT: Value added taxto remove multiple taxation barriers and ensure a free flow of goods across states. HDI(Human Development Index):is an index which focuses on three measurable dimensions of human development i.e.living a long and healthy life, being educated, having a decent standard of living. India ranking is 127 out of 177 countries. MICR: Magnetic Ink Character Recognition. This number is printed on every cheque. Rangarajan Committee: set up by R.B.I in 1983 to study the problems facing banking industry in computerization. Capital Adequacy Ratio: the amount of capital a bank has at its disposal in relation to the amount of credit and investment(weighted for risk). Commercial Paper: is a negotiable short term unsecured promissory note with fixed maturities issued by reputed companies. Leadership: can be best defined as the ability of a person to motivate a group of people to try and achieve as a team all that is beyond the realm of individual accomplishment. The most important part of any business is its customers. Leaders relentlessly focuss on their customers, listen to them effectively. Mortgage: Immovable properties such as land, building and fixed machinery are obtained as securities in the form of mortgage. In this case,

there is a transfer by the borrower to the bank of his interest in specific immovable property. When a borrower deposit with the bank title deeds with intention of creating security , it is known as equitable mortgage. Pledge: is the delivery of goods by one person to another with the intention of creating a security for payment of a debt. Under Hypothecation, both possession and ownership of goods continue to be with the borrower. Venture Capital: is a source of fund used to finance new proposals\ideas involving new technology or product which are risky but with a potential of high returns. Merchant Banking; stands for providing various services relating to capital markets and finance to corporate sector.It provides consultancy to the corporate sector on issues like finance, capital structure and investment, merger, take over and amalgamation. Dematerialisation: is the process by which shares in the physical paper form are cancelled and credit in the form of electronic balances which are maintained in a highly secure system in the depository. Guarantee: is defined as a contract to perform the promise or discharge the liability of a third person in case of his default. Balance of Payment: is the summary of economic transactions of residents of a country with the non- resident outside India. Exchange Rate: is the rate at which one currency is converted into another currency. Capital Account Convertibility: mean the freedom to convert local financial assets into foreign financial assets and vice-versa. Financial Direct Investment(FDI): mean long term investment brought into the country from abroad through subscribing to the stocks and debentures of companies India. Globalization: means adoption of a global outlook for the business and business strategy aimed at enhancing global competitiveness. A truly global corporate view the entire world as a single market. Balance Sheet: Financial position of a business concern on a given date Say March 31--Assets: are the tools with the help of which income in a business is earned.

Contingent Liabilities:((off-balance sheet items) These liabilities are not shown in the body of balance sheet but are recorded as a foot note .Their possibility of becoming a funded liability or not depends upon the fulfillment or non- fulfilment of certain conditions like pending law suits, taxes and duties under dispute with govt. Intangible Assets: certain assets in business donot have any physical presence or in other words these are just book entries created with certain specific objectives,e.g Good will, patents, copy right. Non-Performing Assets(NPA): are those advances which have ceased to earn income by way of interest and other charges. Derivatives: Financial instruments or contracts based on an underlying cash instruments. Banking Status: A sound and fundamentally strong financial system is a pre-requisite for the growth process of the economy. Financial sector reform aims toward building a strong, efficient, stable and competitive financial system. Bancassurance: Distribution of the insurers product on as is where basis enabling the bank to earn a fee. Consolidation: only 20 banks of India are listed in the top 1000 world banks. Bigger size would enable the banks to undertake investment of bigger size which would have larger returns. It would give the banks greater strength to compete in the market place. Big banks would be able to meet the varied nature of customer needs. HRM: The core function of HRM in banking is to improve employee performance and productivity measured not only in terms of operational and financial parameters but also on the quality of financial services provided through its impact on customer satisfaction. Empowerment: provides the environment where employee want to be more responsible and free to take action that they deem fit. Retail Banking: means providing services to individual focusing on individual needs for different kinds of financial services. Relationship is the heart of retail banking. Lien: is the right of a person to retain property belonging to another until a certain debt due from the owner of the property to the possessor of the property is paid.

Cash Reserve Ratio(CRR): under RBI Act, 1934 all scheduled commercial banks are required to keep certain minimum cash reserve with RBI. Statutory Liquidity Ratio(SLR): Under Banking Regulation Act,1949 every banking company requires to maintain in India equivalent to an amount which shall not be less than 25% of the total of its demand and time liabilities. Letter of Credit: It is an instrument by which a bank undertake to make payment to a seller on production of documents stipulated in the credit. Microfinance; refers to small savings, credit and other financial services and products extended to socially and economically disadvantaged segments of society for enabling them to improve their income level and their standard of living. Banking for the poor, not poor banking. Globally over a billion poor people are still without access to formal financial services and some 200 million of them live in India. Know Your Customer(KYC): is the procedure for identification of an individual or corporate while opening an account in the bank. Money Laundering: laundering means cleaning. It therefore means cleaning of dirty money i.e. money from illegal activities e.g. drug trafficking, tax evasion, corruption, fraud. It is a process to make illegitimate money appear legitimate without disclosing their true source and making them legally usuable.