List of Bank Related Terms Full Forms

Banks play a vital role in the economy by facilitating the flow of money and credit, which allows individuals and businesses to make purchases, investments, and other financial transactions. The banking industry is regulated by various government agencies to ensure that banks operate in a safe and sound manner and protect consumers’ funds.

In this article, we will explore some of the most common full-form terms used in the banking industry, helping you to decode the language of banks and navigate the financial world with ease.

List of Bank-Related Terms Full Forms

There are some common bank-related terms and their full forms:

1. ATM – ATM stands for Automated Teller Machine. It is an electronic banking outlet that allows customers to complete various banking transactions without the need for a human teller. 

2. KYC -KYC stands for Know Your Customer, which is a process that financial institutions and other regulated entities use to verify the identity and other information of their customers. The main goal of KYC is to prevent financial crimes such as money laundering, terrorist financing, and identity theft

3. EMI – EMI stands for Equated Monthly Installment, which is a fixed payment amount made by a borrower to a lender at a specified date each month for a specific period of time. EMI is commonly used to repay loans, such as home loans, car loans, or personal loans. The EMI amount includes both the principal amount borrowed and the interest charged by the lender.

4. NEFT – NEFT stands for National Electronic Funds Transfer, which is a popular electronic payment system used in India. It enables individuals, companies, and organizations to transfer funds from one bank account to another in a secure and efficient manner

5. RTGS -RTGS stands for Real Time Gross Settlement, which is a popular electronic funds transfer system used in India. It is a real-time settlement system, which means that transactions are processed immediately, as soon as they are initiated, on a gross basis, which means that each transaction is settled individually and not netted with other transactions.

6. IFSC – FSC stands for Indian Financial System Code. It is an alphanumeric code used to identify bank branches that participate in electronic funds transfer systems in India, such as NEFT, RTGS, and IMPS.

7. MICR – MICR stands for Magnetic Ink Character Recognition. It is a technology used to facilitate the processing of checks in the banking system.

MICR codes are printed on the bottom of checks using magnetic ink. They consist of a nine-digit code that includes the bank’s routing number, account number, and check number

8. SWIFT – SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It is a global messaging network used by banks and financial institutions to securely exchange information and instructions related to international financial transactions.

9. ECS – ECS stands for Electronic Clearing Service, which is an electronic payment system used in India. It is used for recurring payments such as salaries, pensions, dividends, and bills, among others.

10. NRI – Non-Resident Indian NRIs can hold various types of bank accounts in India, such as NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR (Foreign Currency Non-Resident) accounts, which are designed to meet their specific banking needs

11. FD – FD stands for Fixed Deposit. It is a type of financial instrument offered by banks and other financial institutions in which a customer deposits a sum of money for a fixed period of time, usually ranging from one month to several years, at a fixed rate of interest.

13. RD -RD stands for Recurring Deposit. It is a type of financial instrument offered by banks and other financial institutions in which a customer deposits a fixed amount of money at regular intervals, usually monthly, for a fixed period of time at a fixed rate of interest.

14. CASA – CASA stands for Current Account and Savings Account. It is a term used by banks and other financial institutions to refer to the ratio of deposits in current and savings accounts to the total deposits of a bank.

15. CIBIL – CIBIL stands for Credit Information Bureau (India) Limited. It is India’s first and largest credit information company that collects and maintains credit-related data of individuals as well as businesses.

16. IPO -IPO stands for Initial Public Offering. It is the process through which a private company offers shares of its ownership to the public for the first time, thereby becoming a publicly-traded company.

17. ECS -ECS stands for Electronic Clearing Service. It is a payment mechanism used in India that enables electronic transfer of funds from one bank account to another bank account. ECS is commonly used for transactions such as salary payments, dividend payments, and interest payments, among others.

18. NACH -NACH stands for National Automated Clearing House. It is a payment system operated by the National Payments Corporation of India (NPCI) that enables the electronic transfer of funds from one bank account to another bank account. NACH is an upgraded version of the earlier ECS system. NACH is designed to handle high-volume, low-value transactions, such as utility bill payments, loan

19. ITR -ITR stands for Income Tax Return. It is a form used by taxpayers in India to file their annual income tax returns with the Income Tax Department. The Income Tax Act, 1961, mandates that every person earning income beyond a specified threshold limit in a financial year must file an income tax return.

20. PAN – PAN stands for Permanent Account Number. It is a unique 10-character alphanumeric identifier assigned to individuals, companies, and other entities in India that are liable to pay income tax. The Income Tax Department issues PAN through the NSDL (National Securities Depository Limited) and UTI (Unit Trust of India) under the supervision of the Central Board of Direct Taxes.

21. UPI – UPI stands for Unified Payments Interface. It is a real-time payment system that facilitates instant fund transfer between two bank accounts through a mobile device. UPI is a product of the National Payments Corporation of India (NPCI) and is regulated by the Reserve Bank of India (RBI).

22. LAF– LAF stands for Liquidity Adjustment Facility. It is a monetary policy tool used by the Reserve Bank of India (RBI) to manage the liquidity in the banking system. LAF is a repo (repurchase agreement) based mechanism, where banks can borrow or lend money from or to the RBI, depending on their liquidity requirements.

23. LTV – LTV stands for Loan-to-Value ratio. It is a financial ratio used by lenders to determine the amount of loan they can provide to a borrower, based on the value of the asset offered as collateral.

25. MMID – MMID stands for Mobile Money Identifier. It is a seven-digit unique number that is issued by banks in India to their customers who have registered for mobile banking services. MMID is used to facilitate instant fund transfer between bank accounts using mobile devices.

26. NBFC – NBFC stands for Non-Banking Financial Company. It is a type of financial institution that provides financial services similar to banks, but does not hold a banking license. NBFCs are regulated by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934.

27. NPCI – NPCI stands for National Payments Corporation of India. It is a non-profit organization that operates retail payment and settlement systems in India. NPCI was set up in 2008 with the guidance and support of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) to create a robust and efficient payment infrastructure in the country.

28. OTP – OTP stands for One-Time Password. It is a security feature used to authenticate and verify the identity of users during various online transactions such as banking, e-commerce, and other services.

29. OTC –OTC stands for Over-The-Counter. It refers to the trading of financial instruments such as stocks, bonds, and derivatives that take place directly between two parties, without the involvement of a formal stock exchange.

30. PAN – PAN stands for Permanent Account Number. It is a 10-digit unique identification number assigned by the Income Tax Department of India to individuals, businesses, and other entities for the purpose of tax identification and other financial transactions.

31. PIN – PIN stands for Personal Identification Number. It is a numeric password used to authenticate and verify the identity of users during various financial transactions such as ATM withdrawals, credit/debit card transactions, and online banking.

32. PBX – PBX stands for Private Branch Exchange. It is a private telephone network used within a company or organization. PBX allows users within the organization to communicate with each other through an internal telephone system and also provides external access to the public switched telephone network (PSTN).

33. PFMS – PFMS stands for Public Financial Management System. It is a digital platform developed by the Government of India for the efficient and transparent management of public funds.

PFMS is used to manage various government schemes and programs, such as scholarships, pensions, subsidies, and grants, by providing a single-window platform for fund disbursement, monitoring, and reporting.

34. KCC –KCC stands for Kisan Credit Card. It is a credit scheme launched by the Government of India to provide affordable credit to farmers for their agricultural and allied activities.

Basic Functions of Bank

Banks offer a variety of services and features, including:

1. Deposits: Banks allow individuals and businesses to deposit funds into various types of accounts, such as checking, savings, money market, and certificates of deposit.
2. Loans: Banks offer various types of loans, such as personal loans, home loans, auto loans, and business loans.
3. Credit cards: Banks issue credit cards, which allow individuals to borrow money for purchases and pay it back over time with interest.
4. Investments: Many banks offer investment services, such as brokerage accounts, mutual funds, and retirement accounts.
5. Online banking: Banks offer online banking services, which allow customers to manage their accounts, transfer funds, pay bills, and access other features through a website or mobile app.
6. ATMs: Banks have automated teller machines (ATMs) that allow customers to withdraw cash, deposit checks, and perform other basic transactions.
7. Money transfers: Banks allow customers to transfer money domestically and internationally through various channels, such as wire transfers, online transfers, and mobile transfers.
8. Safety deposit boxes: Banks offer safety deposit boxes, which provide a secure place for individuals to store valuable items, such as jewelry, documents, and cash.
9. Financial advice: Many banks offer financial planning and advisory services, which help individuals and businesses make informed decisions about managing their finances.
10. Insurance: Some banks offer insurance products, such as life insurance, home insurance, and auto insurance, to help customers manage risk and protect their assets.

Achievements of the Banking Sector:

Banks play a critical role in the economy and contribute to the growth and development of the society in various ways. there are the achievements of banks include:

1. Providing financial intermediation: Banks collect deposits from individuals and businesses and lend these funds to borrowers, thereby creating a link between savers and borrowers. This financial intermediation helps to channel savings into productive investments, which ultimately leads to economic growth.
2. Facilitating payments: Banks provide various payment services such as cheques, debit and credit cards, online banking, and wire transfers, which make it easier and more efficient to transfer funds from one party to another.
3. Supporting economic growth: Banks provide loans and other forms of credit to businesses, entrepreneurs, and individuals, which helps to create new jobs and drive economic growth. Additionally, banks often provide advisory services to businesses, helping them to grow and expand.
4. Promoting financial inclusion: Banks provide access to financial services to underserved populations, including low-income individuals, women, and minorities. This promotes financial inclusion, which is critical to reducing poverty and promoting economic development.
5. Ensuring financial stability: Banks play a critical role in maintaining the stability of the financial system. By managing risks and ensuring the safety and soundness of the banking system, banks help to prevent financial crises and promote economic stability.

Overall banks have made significant achievements in contributing to economic growth and development, promoting financial inclusion, and ensuring financial stability.