Banking Awareness: Monetary Standards and Important Bank Terms for coming IBPS Exams and Interviews

Monetary Standards and Important Bank Terms

Monetary Standards:

It refers to the commodity that fixes the value of the standard money used in a country. Monetary standard, on the other hand, relates to the commodity by which the standard money unit is determined.

A sound monetary standard aims at the following.

• Stability in the internal value of the currency through internal price stability.
• Stability of the external value of the currency through exchange rate stability.

Monetary Standards in India

These are classified in to two parts

i) Gold Exchange Standards:

I year 1898, Fowler Committee 1898 was appointed and on their recommendations, gold standard was established in India. At that time, 15 Indian rupee were rural to 1 British sovereign. Gold standard was there till 1914-15, as after First World War was ended.

ii) Paper Currency in India:

Reserve Bank of India was established in 1935 as Central Bank of India and controller of credit. British Government had given right of issuing of currency notes to Bank of Bengal, but from 1st April, 1935, the only right of issue currency was given to India.

Frequently Asking  Bank Terms in Interviews

Important Bank Terms
1) Money Market:	It refers to the market for short-term requirements and deployment of funds.
2) Call Money:	Money lent for 1 day
3) Notice Money:	Money sent for a period exceeding 1 day
4) Term Money:	Money lent for 15 days or more in inter-bank market.
5) Held Till Maturity:	Securities, which are not meant for sale and shall be kept till mature.
6) Yield to Maturity:	Expected rate of return on an existing security purchased from the market.
7) Coupon Rate:	Specified interest rate on a fixed maturity, security fixed at the time of issue.
8) Treasury Operations	Trading in government securities in the market. An investor bank can purchase these securities in the primary market. Tracking takes place in the secondary market.