Financial Glossary

The total market value of all financial assets managed by a fund house or investment manager on behalf of investors at a given point in time.

The hypothetical constant annual rate at which an investment would have grown from its beginning value to its ending value over a given period.

The ratio of a bank's capital to its risk-weighted assets, used by regulators to assess financial strength and loss-absorption capacity.

The percentage of a bank's total deposits that must be maintained as cash reserves with the RBI, used as a monetary policy tool.

A three-digit number from 300 to 900 calculated by TransUnion CIBIL that measures an individual's creditworthiness based on credit history.

A category of open-ended equity mutual funds with a mandatory three-year lock-in that qualifies for tax deductions under Section 80C.

A mandatory retirement savings scheme for salaried employees where employer and employee each contribute 12% of basic salary, managed by EPFO.

A fee previously charged by mutual funds at purchase, expressed as a percentage of the investment amount, abolished by SEBI in August 2009.

A fixed monthly payment by a borrower comprising both principal repayment and interest, calculated to fully amortise the loan over its tenure.

A pooled investment vehicle that tracks an underlying index or asset, listed and traded on a stock exchange like equity shares.

A fee charged by a mutual fund when an investor redeems units before a specified holding period, expressed as a percentage of the redemption amount.

The annual fee a mutual fund charges investors, expressed as a percentage of the fund's average Assets Under Management.

A salary component for rental expenses, partially or fully exempt from income tax under Section 10(13A) of the Income Tax Act.

A mandatory identity and address verification process required by Indian regulators for opening financial accounts, using Aadhaar, PAN, and supporting documents.

A minimum period during which an investor cannot redeem, withdraw, or transfer their investment without penalties or legal restriction.

An internal benchmark lending rate mandated by the RBI since April 2016, calculated based on a bank's marginal cost of funds.

A voluntary, government-regulated retirement savings scheme offering tax deductions under Sections 80CCD(1), 80CCD(1B), and 80CCD(2).

The per-unit market value of a mutual fund scheme, calculated daily as total assets minus liabilities divided by total outstanding units.

The initial subscription period during which units of a newly launched mutual fund scheme are offered at a fixed price, typically ₹10 per unit.

A loan or advance where principal or interest payment is overdue for more than 90 days, classified by RBI as a key indicator of bank asset quality.

A government-backed long-term savings scheme with a 15-year lock-in period, offering tax benefits under Section 80C of the Income Tax Act.

The rate at which the RBI lends short-term funds to commercial banks against government securities, serving as the primary monetary policy instrument.

A provision under the Income Tax Act allowing deductions up to ₹1.5 lakh per year for specified investments and expenses, under the old tax regime.

A provision under the Income Tax Act allowing deductions for health insurance premiums paid for self, family, and parents, with enhanced senior citizen limits.

Government securities issued by the RBI denominated in grams of gold, carrying a fixed interest rate of 2.5% per annum with an 8-year maturity.

An investment mode allowing individuals to invest a fixed amount in a mutual fund at regular intervals, enabling disciplined periodic investment.

The minimum percentage of a bank's deposits that must be maintained in liquid assets such as cash, gold, or approved government securities.

A facility enabling automatic transfer of a fixed amount from one mutual fund scheme to another within the same AMC at regular intervals.

A facility enabling investors to withdraw a fixed amount from a mutual fund at regular intervals, with units redeemed at the prevailing NAV.

A function that calculates the annualised return on investments involving multiple cash flows at irregular intervals, commonly used for SIP returns.