Banking Terms for Bank Exams


1. Plastic Money: Plastic money is a credit card or a debit card. In a credit card, the service provider pays up the dues of a credit card holder to the commercial establishment where the card holder bought a product made or use of a particular service and collects the amount from the card holder after a period of 30 to 45 days. If the payment is delayed beyond the agreed credit period, the service provider will charge interest. In a Debit Card, the user has to have the requisite balance which will fund his purchase, A debit card is recommended for those whose spending habits encourage him to live beyond his means.

2. Pricing: It is its market value expressed in monetary terms which consumers are willing to pay. Price is influenced by capital/production cost, competition, warranty etc.

3. Product: That which can be offered to satisfy the need of the customer is called product.

4. Product Development: Product development means the range of activities required to be done by a bank to bring a new product or service to the market.

5. Product life cycle: It refers to the design/development of a product/service in four stages – introduction stage, growth stage, maturity stage and declining stage. Some of the factors that determine the life cycle of a product are competition, technology changes, introduction of substitute products, legal/regulatory system, degree of market acceptance, economic factors etc.

6. Product line: A set of related products with similar features or target markets sold by a single company. An example of a product line for a bank can be car/house/personal/scooter loan/education loan /business loans.

7. Product mix: Product mix means the diversity of products/services offered by a Company/Bank .In the banking context, it means the different kinds of FD’s / Loans offered at varying interest rates & tenures (The examples are just representative and not a comprehensive list.

8. Promotion: Promotion means all activities a bank marketeer employs to gain recognition and acceptance of his product/services in the market. The 4 elements of promotion are advertising, public relations, word of mouth and point of sale. ‘Promotion ‘is one of the 4 P’s of marketing. The others are Product, Price and Place. A Product is either a tangible commodity or an intangible service that is generally mass- produced, Price is the amount a customer has to pay for the product or service & place is where the customer can access it.

9. Proper Price: Proper price is the price at which demand equals supply. It is also called equilibrium price

10. Prospect: A prospect is a potential customer.

11. Purpose of Public relations: Public relations are required for creating a favourable image of the bank in the minds of customers, public, government, shareholders etc