Top 10 Banking Terms Every Fresher Must Know in 2025

Entering the banking sector as a fresher in 2025 is an exciting opportunity, with roles like Probationary Officer (PO), Sales Officer, and Relationship Manager in top banks such as ICICI, HDFC, Axis, IDFC, and Kotak Mahindra offering salaries from ₹3.5 LPA to ₹6 LPA. However, to succeed in bank exams, group discussions (GD), and interviews, freshers must master key banking terminology. Understanding these terms not only boosts your performance in selection processes but also prepares you for real-world banking operations. This blog highlights the top 10 banking terms every fresher must know, with clear explanations, examples, and preparation tips, backed by insights from Eduooze Skill Institute, a leading training provider with over 7,000 placements in top banks.

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Why Banking Terms Matter for Freshers

India’s banking sector, growing at 8–12% annually, is driven by digital transformation and financial inclusion, with over 1.5 lakh vacancies expected in 2025. Whether you’re targeting public sector exams (SBI PO, IBPS PO) or private bank programs (ICICI Manipal, HDFC Future Bankers, Axis Sales Academy), knowledge of banking terms is critical for:

• Exams: Banking awareness sections test terms like CRR, SLR, and NPAs.
• Interviews: Questions like “Explain KYC” or “What is a repo rate?” are common.
• Job Roles: Terms guide daily tasks like loan processing, KYC compliance, and client interactions.

Eduooze Skill Institute’s Post Graduate Certificate in Retail Banking (PGCRB) equips freshers with these terms through comprehensive modules and practical training, ensuring readiness for bank jobs.

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Top 10 Banking Terms Every Fresher Must Know

Below are the top 10 banking terms essential for freshers in 2025, with definitions, examples, and their relevance in banking roles, tailored for ICICI, HDFC, Axis, IDFC, and Kotak Mahindra.

1. Cash Reserve Ratio (CRR)

Definition: The percentage of a bank’s total deposits that must be held as cash with the Reserve Bank of India (RBI) to control liquidity in the economy.

• Current Rate (2025): Approximately 4.5%.
• Example: If a bank has ₹100 crore in deposits, ₹4.5 crore must be kept with RBI, limiting lending capacity.
• Relevance: Impacts money supply and loan availability. Asked in SBI PO, ICICI Manipal, and HDFC exams.
• Interview Question: “How does CRR affect a bank’s operations?”
  • Answer: “CRR, at 4.5%, ensures liquidity but reduces funds for lending. A higher CRR tightens credit, while a lower CRR boosts lending, as I learned during my internship.”
• Tip: Memorize the 2025 CRR rate using Eduooze Skill’s flashcards.

2. Statutory Liquidity Ratio (SLR)

Definition: The percentage of a bank’s net demand and time liabilities (NDTL) that must be invested in government-approved securities, like bonds, to ensure financial stability.

• Current Rate (2025): Around 18%.
• Example: For ₹100 crore in deposits, ₹18 crore must be invested in securities, balancing liquidity and investment.
• Relevance: Ensures banks have safe assets. Tested in IBPS PO and Axis Sales Academy assessments.
• Interview Question: “What’s the difference between CRR and SLR?”
  • Answer: “CRR (4.5%) is cash held with RBI to manage liquidity, while SLR (18%) is invested in securities for stability. CRR controls money supply, and SLR supports fiscal policy.”
• Tip: Study RBI’s SLR updates via Eduooze Skill’s current affairs notes.

3. Non-Performing Asset (NPA)

Definition: A loan or advance where principal or interest payments are overdue for 90 days or more, classified as substandard, doubtful, or loss assets.

• Example: A ₹5 lakh personal loan unpaid for 90 days becomes an NPA, requiring banks to set aside provisions.
• Relevance: NPAs impact profitability (India’s gross NPA ratio was 3.9% in 2024). Asked in ICICI and HDFC interviews.
• Interview Question: “How do NPAs affect banks?”
  • Answer: “NPAs reduce income and require provisions, lowering profitability. I’d manage them through credit checks and recovery mechanisms like the SARFAESI Act, as practiced in my training.”
• Tip: Learn NPA types and recovery methods with Eduooze Skill’s PGCRB modules.

4. Know Your Customer (KYC)

Definition: A mandatory process to verify customer identity and assess risk, using documents like Aadhaar, PAN, and address proof, to prevent fraud and money laundering.

• Example: A customer opening an ICICI savings account submits Aadhaar for e-KYC verification.
• Relevance: Critical for compliance with RBI’s Anti-Money Laundering (AML) guidelines. Tested in Axis and Kotak interviews.
• Interview Question: “Why is KYC important?”
  • Answer: “KYC ensures customer authenticity, preventing fraud and complying with RBI’s AML rules. I’d implement e-KYC to streamline onboarding, as I did during my internship, reducing errors by 10%.”
• Tip: Practice KYC scenarios with Eduooze Skill’s role-plays.

5. Anti-Money Laundering (AML)

Definition: A set of laws and procedures to detect and prevent illegal money transfers, often linked with KYC, enforced by RBI and global standards like FATF.

• Example: Monitoring suspicious transactions (e.g., large cash deposits) using AML software like Actimize.
• Relevance: Protects banks from financial crimes. Asked in HDFC and IDFC interviews.
• Interview Question: “How would you implement AML in a bank?”
  • Answer: “I’d use AML tools to flag unusual transactions and train staff on RBI guidelines. In my previous role, I reduced suspicious transaction reports by 15% through enhanced monitoring.”
• Tip: Study AML frameworks via Eduooze Skill’s compliance modules.

6. Repo Rate

Definition: The rate at which RBI lends short-term funds to commercial banks, influencing borrowing costs and money supply.

• Current Rate (2025): Approximately 6.75%.
• Example: A repo rate hike to 6.75% increases loan interest rates, affecting customer borrowing.
• Relevance: Impacts loan growth and profitability. Common in SBI PO and ICICI Manipal exams.
• Interview Question: “What is the impact of a repo rate hike?”
  • Answer: “A 6.75% repo rate in 2025 raises borrowing costs, reducing loan demand but controlling inflation. Banks must adjust loan pricing, as I analyzed in a college project.”
• Tip: Track RBI rate updates with Eduooze Skill’s current affairs notes.

7. Reverse Repo Rate

Definition: The rate at which RBI borrows from commercial banks to absorb excess liquidity.

• Current Rate (2025): Around 3.5%.
• Example: A 3.5% reverse repo rate encourages banks to park funds with RBI, reducing lending capacity.
• Relevance: Controls money supply. Tested in IBPS PO and Axis interviews.
• Interview Question: “How does reverse repo differ from repo rate?”
  • Answer: “Repo rate (6.75%) is for RBI lending to banks, boosting liquidity, while reverse repo (3.5%) is for borrowing, reducing liquidity. Both manage economic stability.”
• Tip: Memorize both rates using Eduooze Skill’s flashcards.

8. NEFT and RTGS

Definition:

• NEFT (National Electronic Funds Transfer): A system for transferring funds between banks in batches, available 24/7, with no minimum amount.
• RTGS (Real-Time Gross Settlement): Instant fund transfers for high-value transactions (minimum ₹2 lakh).
• Example: Transferring ₹50,000 via NEFT takes hours, while ₹5 lakh via RTGS is instant.
• Relevance: Essential for customer transactions. Asked in HDFC and Kotak interviews.
• Interview Question: “Explain NEFT vs. RTGS.”
  • Answer: “NEFT processes transfers in batches, ideal for small amounts, while RTGS is instant for ₹2 lakh+. I’d guide clients to use RTGS for urgent, high-value transfers, as practiced in my internship.”
• Tip: Learn transaction limits with Eduooze Skill’s banking modules.

9. Priority Sector Lending (PSL)

Definition: RBI-mandated lending to sectors like agriculture, MSMEs, and housing, ensuring financial inclusion.

• Example: ICICI allocates 40% of its loans to PSL, such as ₹1 lakh loans to farmers.
• Relevance: Drives social impact and compliance. Tested in SBI PO and ICICI exams.
• Interview Question: “Why is PSL important?”
  • Answer: “PSL ensures credit access for underserved sectors like agriculture, supporting financial inclusion. I’d promote PSL loans, as I did in a college project, increasing farmer outreach by 20%.”
• Tip: Study PSL categories via Eduooze Skill’s PGCRB resources.

10. Digital Banking

Definition: Banking services delivered through digital platforms like mobile apps (e.g., ICICI’s iMobile, HDFC’s PayZapp) and UPI, enhancing accessibility and efficiency.

• Example: A customer uses Axis Mobile to transfer ₹10,000 via UPI instantly.
• Relevance: Drives transaction growth (UPI: 100 billion transactions in 2024). Asked in Axis, ICICI, and HDFC interviews.
• Interview Question: “How does digital banking benefit banks?”
  • Answer: “Digital banking reduces operational costs and boosts transactions, with UPI driving 30% growth in 2024. I’d promote apps like iMobile to enhance customer engagement, as I did in my internship.”
• Tip: Explore bank apps with Eduooze Skill’s digital banking modules.

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How to Master These Banking Terms

1. Study Regularly

• Resources: RBI website, Economic Times, Eduooze Skill’s PGCRB materials.
• Method: Create flashcards for each term, including definitions and examples.
• Tip: Review 10 terms daily for 30 days.

2. Practice Application

• Scenarios: Apply terms in mock interviews (e.g., explaining KYC in a client scenario).
• Eduooze Skill: Offers role-plays to practice terms in real-world contexts.
• Tip: Simulate 5 client interactions using terms like NEFT or PSL.

3. Stay Updated

• Sources: X posts from RBI, bank websites, Eduooze Skill’s current affairs notes.
• Focus: Track 2025 rates (CRR, SLR, repo) and digital banking trends.
• Tip: Spend 30 minutes daily on updates.

4. Prepare for Exams and Interviews

• Exams: Banking awareness sections (10–20% weight) test terms like NPAs and CRR.
• Interviews: Expect questions like “Explain SLR” or “Impact of digital banking.”
• Eduooze Skill: Provides mock tests and interviews tailored for ICICI, HDFC, and Axis.
• Tip: Practice 20 questions with Eduooze Skill’s question bank.

5. Leverage Eduooze Skill Institute

• PGCRB Program: Covers all 10 terms, plus exam and interview prep.
• Mock Tests: 1,000+ questions for SBI, IBPS, and private bank exams.
• Mock Interviews: Simulates bank-specific questions with feedback.
• Job Fairs: Connects you with ICICI, HDFC, and Axis recruiters.
• Contact: 9142465110 or www.eduooze.com.

Testimonial: “Eduooze’s PGCRB helped me master banking terms like NPAs and KYC. I aced ICICI’s interview and got a PO role at ₹5 LPA!” – Rohan K., 2024.

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Why These Terms Are Critical for ICICI, HDFC, and Axis

• ICICI Bank: Emphasizes KYC, AML, and digital banking (iMobile) for compliance and innovation.
• HDFC Bank: Focuses on NPAs, PSL, and customer-centric digital platforms (PayZapp).
• Axis Bank: Tests CRR, SLR, and sales-driven digital banking knowledge for Axis Sales Academy.

Eduooze Skill Insight: “Our PGCRB program ensures freshers understand these terms in the context of each bank’s priorities,” says Meera Desai, Training Head.

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Conclusion

Mastering these top 10 banking terms—CRR, SLR, NPA, KYC, AML, repo rate, reverse repo rate, NEFT, RTGS, PSL, and digital banking—is essential for freshers aiming to build a career in banking in 2025. These terms are the foundation of exams, interviews, and daily tasks in banks like ICICI, HDFC, and Axis. Eduooze Skill Institute, with its PGCRB program, mock tests, and 7,000+ placements, provides the tools to excel. Start your preparation today to secure a rewarding banking career.

Call to Action: Master banking terms with Eduooze Skill’s PGCRB program! Call 9142465110 or visit www.eduooze.com to enroll and access mock tests, certifications, and job fairs for 2025.