BITCOIN

Bitcoin is a form of virtual currency. If you have bitcoins, you do not physically purchase goods by handling notes or tokens to the seller.

Bitcoins are used for electronic purchases and transfer. Every single purchase is immediately logged digitally on a transaction log that tracks the time of purchase and who owns how many bitcoins.

How are Bitcoins priced?

Bitcoins are like ay other currency, they fluctuate in value relative to other currencies.

The difference between bitcoins and other currencies is that there is no centralized bank that prints the currency and sets relative values. The value of bitcoins fluctuates through supply and demand. 

Bitcoins in India?

RBI has issued an advisory cautioning general public against use of bitcoins and other virtual currencies due to potential money laundering and cyber security risks.

Many bitcoins operators in India, like buysellbitco.in and INRBTC.com have suspended their services indefinitely.

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FIAT MONEY

Currency that a government has declared to be legal tender, but is not backed by a physical commodity.

The value of fiat money is derived from the relationship between supply and demand rather than the value of material that the money is made of.

Traditionally, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith.

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SWIFT- Society for Worldwide Interbank Financial Telecommunication

It is a financial messaging network which exchanges messages between banks and other financial institution. Majority of international interbank messages uses SWIFT.

http://www.swift.com/products_services/by_customer/banks/swift_for_banks?rdct=t

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MONEY

Money is a record that is usually accepted as payment for goods and services as well as for payment of debt.

• CU= Currency Notes + Coins held by the public.
• DD= Net Demand Deposits held by commercial banks.
• M1 Money= CU + DD.
• M2 Money= M1 + Savings deposits of Commercial Banks.
• M3 Money= M3+Total deposits with post office savings excluding National Savings Certificate.
• M4 Money= M3+ Total Deposits with post office savings excluding National Savings Certificate.
• M1, M2- Narrow Money.
• M3, M4- Broad money.

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IFSC- Indian Financial System Code

• 11 digit alphanumeric code to identify a bank branch for NEFT/RTGS transactions.
• 1st 4 characters represent- Bank.
• '0' represent- a control number.
• Last six characters represent- Bank Branch.

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MICR CODE- Magnetic Ink Character Recognition

• 9 digit code in cheque books to identify the bank branch.
• 1st 3 digits represent- City.
• Next 3 digits represent- Bank.
• Last 3 digits represent- Branch.

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BASE RATE

The Base Rate is the minimum interest rate of a bank below which it cannot lend, except in cases allowed by RBI.

The Base Rate system has replaced the BPLR system with effect from July 1, 2010.

As per RBI guidelines, the following categories of loans could be priced without reference to Base Rate:

1. DRI Advances (Differential Rate of Interest Scheme)

2. Loans to banks own employees including retired employees.

3. Loans to banks depositors against their own deposits.

Base Rate is reviewed by the respective banks at least on quarterly basis and the same is to be disclosed publicly.

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