Banking Terms for IBPS Exam

NEAR MONEY: It is highly liquid asset that can easily be converted into cash. Example: Savings account, Bank time deposits, bonds nearing redemption date etc.

DEAR MONEY: A situation in which money or loans become difficult to obtain in a given country.

CREDIT RATIONING: It refers to the situation where lenders limit the supply of additional credit to borrowers who demand funds, even if the latter are willing to pay higher interest rates. Example: Market
imperfection and Market failure

DEFICIT FINANCING: It is the amount by which a government, private company, or individual's spending exceeds income over a particular period of time, also called deficit, or budget deficit.

CREDIT CONTRACTION: Credit contractions are attempts to minimize or limit the amount of credit that is currently available to consumers.The use of a credit contraction is normally associated with the desire to slow the rate of inflation in the general economy. By creating a state of recession, credit contractions help to slow or even possibly stop any growth of inflation for a period of time.

OPEN MARKET OPERATION: It is the buying and selling of government bonds on the open market by a central bank. It is the primary means of implementing monetary policy by a central bank.


  1. not bad...thanx for helping me to know all these terms cz it was unknown to me