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What does banking law mainly regulate?
Banking law regulates the activities of banks and financial institutions to ensure they operate legally, safely, and fairly.
What does ATM stand for?
ATM means Automated Teller Machine. It allows customers to withdraw money and check balances without going inside the bank.
What is the purpose of deposit insurance?
Deposit insurance protects customers’ money if a bank fails. It guarantees repayment up to a certain limit, helping maintain public trust.
What is a savings account used for?
A savings account is used to store money safely while earning interest over time. It helps people keep their funds secure, build savings gradually, and access their money when needed without major risk.
What does “interest rate” mean?
The interest rate is the percentage charged for borrowing money or paid for saving it. It shows the cost of a loan or the reward for saving.
What is one of the main goals of banking law?
One key goal is consumer protection — ensuring banks treat clients fairly and provide clear information about products and fees.
What does “to open a bank account” mean?
It means starting an account with a bank, allowing a person to deposit, withdraw, and manage money securely
What kind of document serves as proof of a financial transaction?
A receipt serves as proof. It shows the date, amount, and reason for payment, providing evidence of the transaction.
What happens when someone “defaults on a loan”?
It means the person fails to make required payments. This damages their credit history and can lead to penalties or legal action.
What is “identity theft”?
Identity theft is when someone illegally uses another person’s personal or financial information to commit fraud or steal money.
What is “prudential supervision”?
It is the process where regulators monitor banks’ financial health and risk management to ensure stability and prevent crises.
What does “to withdraw money” mean?
It means taking money out of a bank account, usually by visiting a teller or using an ATM.
Why are anti-money laundering (AML) laws important?
AML laws stop criminals from using banks to hide illegal money. They promote transparency and honesty in financial systems.
What does “chip and PIN” provide?
It provides security for card payments. The chip stores data, and the PIN confirms the user’s identity, preventing fraud.
What does “to make an application for something” mean?
It means to officially request something, such as a loan or account. The bank then checks if the person meets the requirements.
What does “to consolidate your debts” mean?
It means combining several loans into one, making it easier to manage payments and often lowering interest rates.
What is “market integrity”?
Market integrity means fairness and transparency in the financial system, ensuring all participants follow the same rules.
What does “to be covered by an insurance policy” mean?
It means being financially protected under an insurance contract. If something happens, the insurer pays part or all of the loss.
Why might strict banking regulation be a problem?
While regulation protects consumers, too many rules can limit competition and slow innovation in the financial sector.
What is a “loan application”?
It’s a formal request to borrow money from a bank, usually including income details, purpose of the loan, and repayment plans.
Why is international cooperation important in banking regulation?
Because banks operate globally, and coordinated rules prevent gaps or loopholes that criminals or large institutions could exploit.
What is “regulatory arbitrage”?
It occurs when banks take advantage of weaker rules in some countries to reduce costs or risks, creating unfair competition
What does “to cover your legal costs” mean?
It means paying for expenses related to legal services. Some insurance policies include coverage for these costs.
What does “subject to status” mean in banking terms?
In banking terms, “subject to status” means that approval depends on a person’s financial situation, such as income, credit history, or age. Banks use this phrase to show that not everyone automatically qualifies for a product like a loan or credit card — the customer’s financial status must first meet the bank’s requirements.
What are the main purposes of banking law?
To ensure financial stability, protect consumers, and prevent financial crimes — creating trust and balance in the banking system.