Glossary · 15 terms
Banking & Finance
All banking & finance terms in the EquitiesIndia.com glossary — plain-English definitions written for Indian retail investors.
Base Rate(Bank Base Rate)
The Base Rate was the minimum lending rate set by commercial banks in India, below which they were not permitted to extend credit (with certain exceptions), introduced by the RBI in July 2010 and subsequently replaced by the MCLR system in April 2016.
Call Money Market(Call Money)
The Call Money Market is the segment of India's money market where banks and primary dealers borrow and lend unsecured funds for very short periods — overnight (call money) or up to 14 days (notice money) — to manage daily reserve requirements and short-term liquidity.
CASA Ratio(Current Account Savings Account Ratio)
The CASA Ratio is the proportion of a bank's total deposits held in current account and savings account (CASA) deposits, which are low-cost or zero-cost liabilities, serving as a key indicator of a bank's funding cost advantage and deposit franchise strength.
CRR(Cash Reserve Ratio)
The Cash Reserve Ratio (CRR) is the mandatory percentage of a commercial bank's net demand and time liabilities (NDTL) that must be maintained as cash deposits with the Reserve Bank of India, used to regulate liquidity in the banking system.
G-Sec(Government Security)
A Government Security (G-Sec) is a tradeable debt instrument issued by the central or state government of India, carrying sovereign guarantee and used to finance fiscal deficits, with maturities ranging from short-term treasury bills to long-term bonds of up to 40 years.
MCLR(Marginal Cost of Funds-based Lending Rate)
The Marginal Cost of Funds-based Lending Rate (MCLR) is the internal benchmark rate set by banks, based on their marginal cost of funds, used to price floating-rate loans, replacing the earlier base rate regime introduced by the RBI in April 2016.
NBFC(Non-Banking Financial Company)
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act that provides financial services such as loans, asset financing, and investment products, but unlike commercial banks, it cannot accept demand deposits or issue cheques drawn on itself.
NIM(Net Interest Margin)
Net Interest Margin (NIM) is the difference between the interest income a bank earns on its loans and investments and the interest it pays on deposits and borrowings, expressed as a percentage of average interest-earning assets.
NPA(Non-Performing Asset)
A Non-Performing Asset (NPA) is a loan or advance on a bank's books where the borrower has not made interest or principal repayments for 90 days or more, indicating credit stress and requiring provisioning by the lender.
RBI(Reserve Bank of India)
The Reserve Bank of India (RBI) is India's central bank and primary monetary authority, established in 1935, responsible for regulating the money supply, supervising commercial banks, and maintaining financial stability across the country.
Repo Rate(Policy Repo Rate)
The repo rate is the interest rate at which the Reserve Bank of India lends short-term funds to commercial banks against the collateral of government securities, serving as the primary instrument of monetary policy.
Reverse Repo Rate(Reverse Repurchase Rate)
The reverse repo rate is the rate at which the Reserve Bank of India borrows short-term funds from commercial banks, absorbing excess liquidity from the banking system and acting as a floor for overnight money-market rates.
SLR(Statutory Liquidity Ratio)
The Statutory Liquidity Ratio (SLR) is the minimum percentage of a bank's net demand and time liabilities that must be maintained in approved liquid assets — primarily government securities, cash, and gold — as mandated by the Reserve Bank of India.
Treasury Bill(T-Bill)
A Treasury Bill (T-Bill) is a short-term, zero-coupon government security issued by the Government of India through the RBI with maturities of 91 days, 182 days, or 364 days, sold at a discount and redeemed at face value at maturity.
UPI(Unified Payments Interface)
Unified Payments Interface (UPI) is a real-time payment system developed by the National Payments Corporation of India (NPCI) that enables instant inter-bank money transfers using a mobile device, leveraging virtual payment addresses linked to bank accounts.