1) Commercial Banks: These are the institutions that make short term loans to business and in the process create more.
2) Credit Creation: It means the multiplication of loans and advances. Commercial banks receive deposits from the public and use these deposits to give loans.
3) Non-Bank Financial Institution (NBFI): It is a financial institution that does not have a full banking license or is not supervised by the central bank.
4) Central Bank: It is an institution that manages a state’s currency, money Banking supply, and interest rates. Central banks also usually oversee the commercial banking system.
5) Bank Rate: It is the rate at which the Central Bank of a country is prepared to re-discount the first class securities.
6) Statutory Liquidity Ratio (SLR): It is the amount which a bank has to maintain in the form of cash, gold or approved securities.
7) Cash Reserve Ratio (CRR): Banks are required to hold a certain proportion of their deposits in the form of cash with RBI. This is known as CRR.
8) Monetary Policy: It is the macro-economic policy laid down by the Central Bank towards the management of money supply and interest rate.
9) Capital Market: It is a financial market in which long-term debt or equity backed securities are bought and sold.
10) Demonetisation: It is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency.