Banking and Finance Terms Part 2

What is FDI?

A: FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets  or a significant amount of ownership (stock) of a company in another country in  order to gain a measure of management control” (Or) A foreign company having a stake in a Indian Company.

 What is IPO?

A: IPO is Initial Public Offering. This is the first offering of shares to the general public from a company wishes to list on the stock exchanges.

 What is Disinvestment?

A: The Selling of the government stake in public sector undertakings.

 What is Fiscal Deficit?

A: It is the difference between the government’s total receipts (excluding borrowings) and total expenditure. 

What is Revenue deficit?

A: It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government. 

 What is GDP?

A: The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period; classically a year. 

What is GNP?

A: Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market.

 What is National Income?

A: National Income is the money value of all goods and services produced in a country during the year.

What is Per Capita Income?

A: The national income of a country, or region, divided by its population. Per capita income is often used to measure a country's standard of living.

What is Vote on Account?

A: A vote-on account is basically a statement ,where the government presents an estimate of a sum required to meet the expenditure that it incurs during the first three to four months of an election financial year until a new government is in place, to keep the machinery running.

Difference between Vote on Account and Interim Budget?

A: Vote-on-account deals only with the expenditure side of the government's budget, an interim Budget is a complete set of accounts, including both expenditure and receipts.

 What is SDR?

A: The SDR (Special Drawing Rights) is an artificial currency created by the IMF in 1969. SDRs are allocated to member countries and can be fully converted into international currencies so they serve as a supplement to the official foreign reserves of member countries. Its value is based on a basket of key international currencies (U.S. dollar, euro, yen and pound sterling).

What is SEZ?

A: SEZ means Special Economic Zone is the one of the part of government’s policies in India. A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. The basic motto behind this is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people.