Sarat Chandra IAS Academy

Important Terms in 4th August-2020 News


1. Purchasing Manager’s Index

  • PMI or a Purchasing Manager’s Index (PMI) is an indicator of business activity both in the manufacturing and services sectors.
  • It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.

2. Real lending rates and nominal lending rates

  • A real interest rate is an interest rate that has been adjusted to remove the effects of inflation to reflect the real cost of funds to the borrower and the real yield to the lender or to an investor.
  • A nominal interest rate refers to the interest rate before taking inflation into account.
  • Nominal can also refer to the advertised or stated interest rate on a loan, without taking into account any fees or compounding of interest.
  • To calculate the real interest rate, you need to subtract the actual or expected rate of inflation from the nominal interest rate.


  • The marginal cost of funds-based lending rate (MCLR) is the minimum interest rate that a bank can lend at.
  • MCLR is determined internally by the bank depending on the period left for the repayment of a loan.
  • The RBI introduced the MCLR methodology for fixing interest rates from 1 April 2016.

4. Anti-Semitism

  • hostility toward or discrimination against Jews as a religious, ethnic, or racial group

5. Gratuity pay

  • Gratuity is given by the employer to his/her employee for the services rendered by him/her during the period of employment.
  • It is usually paid at the time of retirement but can be paid earlier, provided certain conditions are met.
  • A person is eligible to receive gratuity only if he has completed minimum five years of service with an organisation.
  • However, it can be paid before the completion of five years at the death of an employee or if he has become disabled due to an accident or disease.

6. Weighted average interest rate

  • It is the aggregate rate of interest paid on all debt.
  • The calculation for this percentage is to aggregate all interest payments in the measurement period, and divide by the total amount of debt.




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