Banking Fundamentals
Core banking concepts every finance fresher must know
Key Concepts
Types of Banks in India
Commercial Banks (SBI, HDFC, ICICI), Cooperative Banks, Regional Rural Banks (RRBs), Small Finance Banks (AU, Ujjivan), Payments Banks (Airtel, Paytm), Development Banks (NABARD, SIDBI), RBI (Central bank + regulator).
RBI and Monetary Policy Tools
Repo Rate: rate at which RBI lends to banks. Reverse Repo: rate at which banks park funds with RBI. CRR: % of deposits kept with RBI (no interest). SLR: % in liquid assets. Repo ↑ → EMIs ↑ → spending ↓ → inflation ↓.
NPA (Non-Performing Asset)
Loan where interest/principal is overdue 90+ days. Gross NPA: total bad loans. Net NPA: after provisions. SARFAESI Act allows recovery without court. India's NPA crisis peaked in 2018.
KYC and AML
KYC: mandatory identity verification before account opening (Aadhaar, PAN mandatory for transactions > ₹50,000). cKYC: centralised registry. AML (Anti-Money Laundering): monitoring + reporting suspicious transactions.
CIBIL Score
Credit score by TransUnion CIBIL (300–900). 750+ = good. Factors: repayment history (35%), credit utilisation (30%), credit mix, history length, new inquiries. Checked before every loan approval.