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Complete List of Banking Terms with Definitions For Bank Exams Powered by medical-site.info your A to Z competitive exam guide ww w. Gr 8A mb iti on. Jul 3, Banking terms and concepts are many and can sometimes be difficult to figure out, even for the industry professionals. However, since banking. Certificate of Deposit (CD) – a type of investment that requires you to invest your money for a certain length of time and guarantees the same rate of return.

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Banking Terms Pdf

Glossary of Banking Terms and Definitions: Banking Terms that Begin With A. Banking Terms. Banking Definitions. AAA. AAA is a term or a grade that is used to . Definitions of key terms and phrases used in commercial, retail and investment banking and bank regulation. Feb 18, To help you better understand the terms used in the financial services Automated Clearing House (ACH) – Used by member banks to.

See account reconciliation services Arrears Unpaid dividends or bond interest that a corporation owes its stockholders or bond holders after the payable or due date on which the dividends or interest should have been paid. See Uniform Commercial Code. Article 8 Portion of the UCC covering collateral interests in both physical certificated and book-entry uncertificated securities. Article 9 Portion of the UCC covering security interest in most personal property other than securities. Article of agreement Contractual arrangement used in some states under which a buyer purchases real estate from a seller over a period of time, usually by making periodic installment payments. Title is not conveyed to the buyer until the final payment is made. Also called land contract. Asian option An option whose payoff is based upon the average value of an underlying over a specified period of time. See underlying.

Banks normally specify certain minimum Z.

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Common practices which can damage your credit rating include late or missed payments, exceeding the limit on cards, defaulting on loans or declaring bankruptcy. Transfers are limited to the mb available credit on the receiving card. It is used to transfer funds and to settle outstanding balances between banks, or to provide a 8A customer with funds payable at a bank in a different location.

Bank drafts are valid for certain period, generally, for 6 months, as indicated over face of draft. Banker's cheque are valid for a certain period as indicated on the face of the cheque.

The collateral w. Base Rate New reference rate used by banks for loan pricing w. Banks are not allowed to lend base rate except for certain specified category or borrowers. This is used to measure changes in interest rates, stock-market indices or yield on fixed income securities.

The Bank then presents the co Bill to the borrower's customer on the due date of the Bill and collect the total amount. If the bill is delayed, the borrower or his customer pay the Bank a pre-determined interest depending upon the terms of transaction.

In addition you can elect to receive e-Bills - electronic versions of your paper bills - from your bank credit on card and a variety of companies currently offering e-Bills.

Most service providers follow a monthly mb billing cycle. Your budget also includes savings and how much you pay to your creditors.

Business credit card builds credit history for the associated business. They are a good way to separate business expenses from personal ones. The Card member Agreement is between the customer iti and the card issuing company and is a legal document.

When you sign up for a credit card understand the terms and Conditions. In simple terms it is the area usable as floor level inside a room.

Dictionary of Banking Terms and Phrases

The Credit Card advance may be through a cash withdrawal at an automated teller 8A machine, bank teller or by use of a convenience check. This cash is an instant loan from your credit card account. The credit card company will apply finance charges from the day you take the advance until the day you pay it off. A transaction fee may also be charged based on the amount of your withdrawal. Gr 48 Cash Advance A one-time fee for cash advances in addition to normal finance Fee charges.

This fee is usually a percentage of the advance amount. Credit Card Whenever you use your cash back credit card to make downloads, a percentage of it is returned back to you. The cash back rewards can be redeemed as gift vouchers, or hard cash. It is always fixed as a percentage of total demand and time liabilites.

CDs Deposit CD generally pay a fixed interest rate and generally offer a different co interest rate than other types of deposit accounts. If an early withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. CD is sold at discount value and being a money market instrument, can be transferred to other person through negotiaion. Banks in India do not generally, certify cheques. Usually done by the credit card holder in response to faulty products, credit card fraud, a dispute or non- compliance with the rules and regulations, charge back restores the 55 Charge back iti funds back with the credit card.

It is the time period from a particular credit card transaction within mb Period which, the credit card holder must initiate a charge back. It is not a line of credit and no interest is charged. Usually, both fee the collecting bank and paying bank leavy cheque eturn charges on their customers. Co-branded credit card carries special deals and savings from the participating merchants. Collateral could include savings, bonds, insurance policies, jewelry, property Z. Collateral is not required for unsecured credit card accounts.

See also Glossary term, "account balance. Can be used to meet the balance required to waive the monthly fee on some accounts. This area is generally divided proportionately in relation to the size of property and charged accordingly. The more frequently Gr interest is compounded, the higher the effective rate. In India interest on loans and advances is compounded on monthly basis as per RBI order.

Basic Financial and Banking Terms - Download PDF

Loan payments and balances into a single account with one creditor. This can be done in several ways. For example, you can transfer several high interest credit card balances onto one card with a lower rate. If you own a home, you can consolidate your debt with ww a low-interest home equity loan.

Or, you can get a loan specifically designed for this purpose.

FREE Banking Awareness Ebook : Top 50 Important Banking Terms - Oliveboard

CPV is an important parameter in banks and a negative verification can lead to decline of the banking facilities sought. This helps establish the risks involved in the proposal and debt servicing capacity of the borrower. A wide range of iti criteria viz. Credit History of the person is an important criteria for sanction of mb credit.

Your credit available is your outstanding balance subtracted from your total credit line. For example, if your credit line is Rs 50, and you have an outstanding balance of Rs 40,, your credit available is 8A Rs 10,, which means that you have Rs 10, of credit left that you can use to make downloads with your credit card. Many banks and credit issuers Gr Information regularly update the credit bureaus about your payment habits and Company how much money you owe.

Potential creditors may check your credit report when you apply for a loan or a credit card. Reporting to at least one Credit Bureau is mandatory in India. They may include the following: Borrowing or drawing limit fixed by a bank for a customer depending on his co credit history, repaying capacity and relationship with bank.

A good credit management will ensure optimum utilization of borrowed funds and meet repyment obligations on Z. It is the official record of how you pay the money you owe to your creditors. The information on your report can either qualify or disqualify you from obtaining credit cards, mortgages, loans etc. An individual can obtain credit 84 Credit-worthy iti report on himself from the credit bureau on payment of a fee. You are judged to be qualified to have credit. It attracts no rate of interest and is generally charged by the bank with maintenance charges.

There is no limit to the number of transactions in this type of account. The factor is computed by dividing the yearly rate by Gr days. Debit Card denotes immediate debit to the customer's account.

More specifically, it is the amount of money that you have borrowed. It is the ww Burden percentage of your income that goes to paying your debts every month. Debt ratio usually gives a clear picture of your overall financial well-being. To calculate your debt ratio, first add up all your monthly income including take-home pay after taxes. Then add up all your monthly payments for interest bearing loans and accounts, such as mortgages, student loans, credit cards and car loans.

Finally, divide your monthly payments by your m income. This Scheme was announced in and is functioning with new guidelines from This scheme covers all scheduled banks, the RRBs and co-operative banks.

Banker's Lien: Bankers lien is a special right of lien exercised by the bankers, who can retain goods bailed to them as a security for general balance of account. Bankers can have this right in the absence of a contract to the contrary. Under the revised accord the capital requirement is to be calculated for credit, market and operational risks. A measure normally used in the statement of interest rate e. Bear Markets: Unfavorable markets associated with falling prices and investor pessimism.

Bid Price: The highest price offered by a dealer to purchase a given security. Blue Chips: Blue chips are unsurpassed in quality and have a long and stable record of earnings and dividends.

They are issued by large and well-established firms that have impeccable financial credentials. Bond: Publicly traded long-term debt securities, issued by corporations and governments, whereby the issuer agrees to pay a fixed amount of interest over a specified period of time and to repay a fixed amount of principal at maturity.

Broker: Individuals licensed by stock exchanges to enable investors to buy and sell securities. Brokerage Fee: The commission charged by a broker. Bull Markets: Favorable markets associated with rising prices and investor optimism. Call Option: The right to buy the underlying securities at a specified exercise price on or before a specified expiration date.

Callable Bonds: Bonds that give the issuer the right to redeem the bonds before their stated maturity. Capital Gain: The amount by which the proceeds from the sale of a capital asset exceed its original purchase price. Capital Markets: The market in which long-term securities such as stocks and bonds are bought and sold.

Certificate of Deposits CDs : Savings instrument in which funds must remain on deposit for a specified period and premature withdrawals incur interest penalties. Certificate of Deposit:.

Certificate of Deposits are negotiable receipts in bearer form which can be freely traded among investors. This is also a money market instrument,issued for a period ranging from 7 days to f one year. The minimum deposit amount is Rs.

Cheque: Cheque is a bill of exchange drawn on a specified banker ordering the banker to pay a certain sum of money to the drawer of cheque or another person. Money is generally withdrawn by clients by cheques. Cheque is always payable on demand. Cheque Truncation: Cheque truncation truncates or stops the flow of cheques through the banking system.

Generally truncation takes place at the collecting branch, which sends the electronic image of the cheques to the paying branch through the clearing house and stores the paper cheques with it. Closed-end Mutual Fund: A fund with a fixed number of shares issued, and all trading is done between investors in the open market.

The share prices are determined by market prices instead of their net asset value. Collateral: A specific asset pledged against possible default on a bond.

Mortgage bonds are backed by claims on property. Collateral trusts bonds are backed by claims on other securities. Equipment obligation bonds are backed by claims on equipment.

Commercial Paper: Short-term and unsecured promissory notes issued by corporations with very high credit standings. Common Stock: Equity investment representing ownership in a corporation; each share represents a fractional ownership interest in the firm.

Compound Interest: Interest paid not only on the initial deposit but also on any interest accumulated from one period to the next. Controlling Shareholder: Any person who is, or group of persons who together are, entitled to exercise or control the exercise of a certain amount of shares in a company at a level which differs by jurisdiction that triggers a mandatory general offer, or more of the voting power at general meetings of the issuer, or who is or are in a position to control the composition of a majority of the board of directors of the issuer.

Convertible Bond: A bond with an option, allowing the bondholder to exchange the bond for a specified number of shares of common stock in the firm.

A conversion price is the specified value of the shares for which the bond may be exchanged. Corporate Bond: Long-term debt issued by private corporations. Coupon: The feature on a bond that defines the amount of annual interest income. Coupon Frequency: The number of coupon payments per year. Credit Rating: An assessment of the likelihood of an individual or business being able to meet its financial obligations. Credit ratings are provided by credit agencies or rating agencies to verify the financial strength of the issuer for investors.

Collecting Banker: Also called receiving banker, who collects on instruments like a cheque, draft or bill of exchange, lodged with himself for the credit of his customer's account. Consumer Protection Act: It is implemented from to enforce consumer rights through a simple legal procedure. Banks also are covered under the Act. A consumer can file complaint for deficiency of service with Consumer District Forum for amounts upto Rs.

Co-operative Society : When an association of persons collectively own and operate a unit for the benefit of those using its services like Apna Bazar Co-operative Society or Sahakar Bhandar or a Co-operative Housing Society.

Core Banking Solutions CBS : Core Banking Solutions is a buzz word in Indian banking at present, where branches of the bank are connected to a central host and the customers of connected branches can do banking at any breach with core banking facility. Crossing of Cheques: Crossing refers to drawing two parallel lines across the face of the cheque. A crossed cheque cannot be paid in cash across the counter, and is to be paid through a bank either by transfer, collection or clearing.

A general crossing means that cheque can be paid through any bank and a special crossing, where the name of a bank is indicated on the cheque, can be paid only through the named bank. Customer: A person who maintains any type of account with a bank is a bank customer. Consumer Protection Act has a wider definition for consumer as the one who purchases any service for a fee like purchasing a demand draft or a pay order. The term customer is defined differently by Laws, softwares and countries.

Current Account: Current account with a bank can be opened generally for business purpose. There are no restrictions on withdrawals in this type of account. No interest is paid in this type of account. Currency Board: A monetary system in which the monetary base is fully backed by foreign reserves.

Any changes in the size of the monetary base have to be fully matched by corresponding changes in the foreign reserves. Current Yield: A return measure that indicates the amount of current income a bond provides relative to its market price.

Debit Card: A plastic card issued by banks to customers to withdraw money electronically from their accounts. When you purchase things on the basis of Debit Card the amount due is debited immediately to the account. Debtor: A person who takes some money on loan from another person. Demand Deposits: Deposits which are withdrawn on demand by customers. Demat Account: Demat Account concept has revolutionized the capital market of India.

When a depository company takes paper shares from an investor and converts them in electronic form through the concerned company, it is called Dematerialization of Shares. These converted Share Certificates in Electronic form are kept in a Demat Account by the Depository Company, like a bank keeps money in a deposit account.

Investor can withdraw the shares or purchase more shares through this demat Account. Derivative Call Put Warrants: Warrants issued by a third party which grant the holder the right to buy sell the shares of a listed company at a specified price.

Derivative Instrument: Financial instrument whose value depends on the value of another asset. Dishonour of Cheque: Non-payment of a cheque by the paying banker with a return memo giving reasons for the non-payment. Default Risk: The possibility that a bond issuer will default ie, fail to repay principal and interest in a timely manner.

Diversification: The inclusion of a number of different investment vehicles in a portfolio in order to increase returns or be exposed to less risk.

Duration: A measure of bond price volatility, it captures both price and reinvestment risks to indicate how a bond will react to different interest rate environments. Earnings: The total profits of a company after taxation and interest. Earnings per Share EPS : The amount of annual earnings available to common stockholders as stated on a per share basis.

EFT - Electronic Fund Transfer : EFT is a device to facilitate automatic transmission and processing of messages as well as funds from one bank branch to another bank branch and even from one branch of a bank to a branch of another bank. EFT allows transfer of funds electronically with debit and credit to relative accounts.

Either or Survivor: Refers to operation of the account opened in two names with a bank. It means that any one of the account holders have powers to withdraw money from the account, issue cheques, give stop payment instructions etc. In the event of death of one of the account holder, the surviving account holder gets all the powers of operation. Electronic Commerce E-Commerce : E-Commerce is the paperless commerce where the exchange of business takes place by Electronic means.

Endorsement: When a Negotiable Instrument contains, on the back of the instrument an endorsement, signed by the holder or payee of an order instrument, transferring the title to the other person, it is called endorsement. Bouncing of a cheque: Where the name of the endorsee or transferee is not mentioned on the instrument. Endorsement in Full: Where the name of the endorsee or transferee appears on the instrument while making endorsement.

Equity: Ownership of the company in the form of shares of common stock. If the borrower defaults, the assignment of lease and rentals gives the lender the right to receive rents from the tenants and to transfer the leases to a subsequent purchaser of the property. Assignment of seller's interest in land contract A document used in real estate loans when the mortgaged property is subject to a land contract or article of agreement under which it is being sold over time to a third party.

If the borrower defaults, the assignment of the land contract gives the lender the right to receive payments from the buyer and to transfer the land contract to another buyer. Association of Financial Professionals A national organization for finance professionals that provides educational, and certifications programs, research programs, standards development, and government relations activities. Assumable As applied to mortgage loans, assumable means that a borrower who sells his or her home may transfer the outstanding mortgage loan secured by that dwelling to the new buyers.

The new buyers are said to assume the loan. Assumed name Name used by a proprietorship, partnership, or corporation to conduct business that is different from the legal name of the proprietorship, partnership or corporation.

Asymmetric behavior Unbalanced behavior exhibited by financial instruments, the rates or values of which do not change in proportion to changes in market rates.

For example, increases in the prime rate quickly reflect most or all of increases in prevailing interest rates, while decreases in the prime rate are slow to reflect decreases in prevailing interest rates.

At the money The situation in which the current market price, the spot price, of an underlying instrument is equal to the strike or exercise price of an option to buy or sell that instrument.

Creditors must comply with this procedure in order to obtain a security interest in property owned by a debtor. Alternatively or in addition, the process may be used to give the creditor a security interest in property owned by a guarantor or by another third party. Often, attachment alone is not sufficient to establish the priority of the creditor's interest relative to the interests of other creditors. See financing statements and perfection.

Attorney's certificate of title See title opinion. Attrition analysis Evaluation of the reduction in the amount of an asset or liability held. For example, an analysis of the reduction in savings account balances caused by withdrawals over time. Audited statements The most reliable type of financial statements.

The audit is based on information submitted by the client, and the CPA does not verify all of the information.

Limits on the scope of the audit and on the CPA's responsibility are described in the opinion letter that accompanies the audited statements. However, the value of an audited statement is that the independent CPA is responsible for testing and verifying any numbers that seem questionable or unusual as well as the most material financial information. For example, if a firm has a material amount of accounts receivable, the auditor will typically confirm at least a sample of those accounts. If a firm has a material amount of inventory, the auditor will typically perform a physical verification of that inventory.

Authenticated security agreement A electronic security agreement between the debtor and the bank that is accepted by the borrower either by downloading the agreement into a personal database or by printing a copy. As an alternative to a security agreement physically signed by the debtor, the amendments to the UCC provide for an authenticated security agreement.

Authority A government or public agency created to perform a single function or a restricted group of related activities. Usually, such units are financed from service charges, fees, and tolls, but in some instances they also have taxing powers.

An authority may be completely independent of or partially dependent upon other governments for its financing or the exercise of certain powers. Automated clearinghouse ACH The ACH network is a nationwide electronic funds transfer system for participating depository financial institutions. The ACH network serves 20, financial institutions, 3 million businesses, and million individuals. The ACH Network is commonly used for direct deposit of payroll and government benefits such as Social Security, direct payment of consumer bills, business-to-business payments, federal tax payments, and, increasingly, e-commerce payments.

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