BANKING TERMS GLOSSARY

Compiled by S.Shantharam,Faculty, IMA-B

Act of God : Force Majeure , Any event or a natural calamity which might lead to nonfulfilment or non-performance of any obligation under a contract. Inclusion of this clause in a contract will protect the parties concerned from such non-performance. Accounting : A System of maintaining record of financial transactions. Account Payee: When a cheque is crossed (two parallel lines drawn across the left top corner) with these terms, it means that the banker who is collecting proceeds of the cheque is obliged to ensure collection only to the payees account. Acceleration clause : A provision in a loan agreement which enables a lender to recall the entire amount of loan in case there is a default in even a single instalment payment by the borrower. Accrued interest / income : Income / interest earned but yet to be received / accounted. Acceptance : An unqualified consent to honor or pay a bill of exchange by signing under the word accepted. Accommodation bill: A Bill of exchange endorsed or guaranteed by a third party which can be discounted by banks (A bill usually drawn without an underlying actual trade or transaction) Accounts payable: Money due to be paid to suppliers / services (classified as short term liabilities in a balance sheet) Accounts receivable: Moneys due to be received for sales made or services rendered (classified as short term assets in a balance sheet) Acid test ratio : Measure of a firm/companys liquidity. Ratio of highly liquid assets to its current liabilities. Used by banks for financing short term loans. Accumulation : Building up of reserves from profits earned Acquisition: Acquiring / Taking control of a company by purchasing 51% of its shares ACU: Asian Currency Unit ::Foreign Currency Deposits (in a bank) in an Asian Country. Advance(s) : Cash loans or loans generally for short term Advised credit : A letter of credit issued by a buyer (importer)s bank may be advised to the exporter by another bank (in the seller exporters country). Advising bank: A bank, (A correspondent bank in the exporters country) on behalf of another bank (in the importers country) informs (advises) the exporter that an LC has been opened by the importer favoring the exporter.

Ad Valorem: Tax, duty or levy charged according to the value of goods. Adjusting entries: Accounting entries posted on the balance sheet date to appropriate expenses incurred (but not paid) and income due (but not received) for that period. Adjusted book-value : Valuation of a running business by adjusting all its assets & liabilities to fair market value. Administrator : An individual appointed by a Court to wind up the estate of a deceased person where there is no Will, or no executor named in the Will or if the named executor is unable or unwilling to act. Adventure Capitalist : An Investor who dares to finance a highly risky business and who also actively participates in management of such a business. Affidavit :Declaration of facts made under oath before a court or a notary. Affiliate : A company / business which has the power to control another. After sight : Term to indicate a specified period (number of days) after which a bill becomes payable. At sight : Term to indicate that a bill is payable immediately (at sight) on presentation Agency : Fiduciary relationship between two parties in which one (agent) is under the control of another (principal). Agreement : A record of a negotiated settlement. Airway bill : A bill or a receipt acknowledging receipt of goods(for transportation)by an Airline. Alienation: Voluntary transfer of a property or an asset from one party to another. Amalgamation: Merging of two or more business units into single entity. Amendment: Valid change,addition, deletion, alteration made in a document by common consent of all parties concerned. American option: An option that can be exercised any time before or on expiry date. Amortization: Spreading over or gradual reduction of a liability. Annuity : Amounts periodically paid for an agreed length of time or for life of an individual (depending on the investment contract) which includes both principal & interest. Similar to pension. Appraisal: A professional method of assessment of a business or value of an asset. Appropriation : Funds set aside for specific purpose. For example, debenture redemption reserve is created for which funds are periodically set aside to facilitate repayment of the debenture at a pre-determined date.

APR

:Annual Percentage Rate. The yearly cost of a loan, including interest, insurance, etc,

expressed as a percentage. Articles of Association: A document containing the rights & obligations of the Directors and shareholders among themselves and also the bye-laws, internal rules etc. of a company. Arbitration: Settlement of a trade dispute by a neutral third party (Arbitrator). Asset: Any item of economic value. Can be tangible like cash, real estate, gold or shares etc., or intangible like, Trademarks, copyright, Goodwill,etc., Asset liability Management: Management of Banks Deposits and advances to maximize profits and minimize risks and evolving optimum rates of interest for both. At par :Anything sold at Market rate / face value ATM : Acronym for automated teller machine, a machine at a bank branch or other location

which enables a customer to perform basic banking activities (checking one's balance, withdrawing or transferring funds) even when the bank is closed. Auction : Type of sale where the price is decided by competitive bidding. Authentication : Verification that a legal document is genuine or valid, such as through a seal from an authorized public official. Authorised Share Capital : Capital that can be raised by a Company authorized in its Memorandum of Association approved by shareholders Autonomy: High level of freedom or discretionary powers. Audit: A System of checking/verifying books of accounts and records in conformity with any given standards / norms.

Bank: An institution / organization licensed to accept deposits for lending. Bailment :Transfer of possession (not ownership) of any movable property for a specific purpose. (as security for a loan or for safe keeping). One who is the real owner is bailor and one who has such possession is bailee. Back to back :A pair of linked transaction or agreement mutually dependent. Barter: A form of trading or exchanging goods for goods or services. Backup credit: Arrangement of a Standby line of credit in case the first line fails Backward Integration: A manufacturing unit, may like to have its own set up for supply of raw materials & so might acquire an existing unit or start a new one. Back-end load : A sales charge or commission paid when an individual sells an investment, such as a mutual fund. It is Intended to discourage selling. Bad-debt : A loan with limited or no chance of recovery. Balance sheet: A statement of the financial position of a business enterprise as on a particular date. Balanced fund: A Mutual fund which, by investing in both Stocks & Bonds, may provide regular income as well as capital appreciation. Balloon payment :A large, lump-sum payment scheduled at the end of a series of considerably

smaller periodic payments. A balloon payment may be included in the payment schedule for a loan, lease, or other stream of payments. Bankers lien: A special right enjoyed by Bankers to possess, appropriate the proceeds by sale, the property that come to him in the normal course of business. Bancassurance :Sale of Insurance products through Banks. Bank Guarantee: Guarantee issued by a bank to pay the liabilities of a debtor in case of his default Bank rate :the rate at which RBI lends to member banks. BCSBI :Banking Codes & Standards Board of India :Set up jointly by RBI and members of IBA(Indian Banks Association) in 2006 to set standards of fair banking practices for financial institutions BIS (Bank for International Settlements, Hqrs:BASEL,Switzerland, Estt.:1930) A representative body of Central Banks of member countries. Lays down guidelines for effective management & supervision of International financial System. Basel I accord laid down (in 1988) certain standards & regulations for banks including a minimum capital base of 8% of a banks risk-weighted assets. Basel II document of 2004 made more detailed recommendations on risks, market discipline & supervision for banks.

Bar-code: Computer generated symbols used to identify / track anything. Below par: Any Security, share or bond if sold at a discount or below its face value, is known to be sold below par. Bid: The max. price a prospective buyer would be willing to pay. Bill : a. An Invoice or a receipt b. c. A Negotiable Instrument creating a loan obligation. A Treasury bill is an instrument (a Promisory Note) issued by the Central Govt. to raise

short term loans; Also used for controlling / regulating money supply. Bill of exchange: An unconditional written order issued by the maker / drawer directing the drawee to pay a certain sum of money to a third party on a future date. Bill of lading: A receipt for cargo received on board (of a ship) for transportation, issued by the Master of the ship. Blue chip Company: Any enterprise with solid record of performance & earnings, dividend payments and stable with long term growth potential. Blank endorsement : An endorsement consisting only of a signature on the back of a cheque or a bill of exchange. This endorsement enables subsequent holder of the cheque/bill of exchange to be the bonafide holder. BOLERO : (Bill of Lading Electronic Registry Organisation) : A voluntary body created by some of the leading banks, Trading houses and Shipping Companies to encourage paperless transactions in international trade. Bottom line: Profits of any organization after tax. Bourse: Other word for Stock exchange (French) Bond :A long-term debt instrument usually issued by Govt./ Quasi Govt. bodies. Bona fide : Sincere, authentic, genuine. Bonus: A gift or an extra-compensation given as reward for any achievement. Book-building :A book that contains the indicated prices offered by investors for a Initial Public Offer. The issue price will be finalized after an anlysis of these offers. Book value : Present Value of an asset after deducting depreciation book profit :Profit which has been made but not yet realized through a transaction. For instance equity which has risen in value but is still being held. Also called unrealized gain or unrealized profit or paper gain or paper profit. Break-even :A position of no loss or gain Breakup value :Valuation of assets on forced sale on liquidation of a business

Bridge-loan :Bridge financing

:Finance extended to a person, company, or other entity, using

existing assets as collateral in order to acquire new assets. Bridge financing is usually short-term and interim loan extended during the period leading upto the disbursement of the sanctioned loan. Broker : A licensed professional dealing in shares & securities Bullion : Precious metals in the form of Ingots or Bars.

Credit: a.Borrowing capacity of an individual or an enterprise. b.An agreement in which a borrower receives a value now and repay later Creditor: A person to whom you owe. A person who has extended credit to you. Credit card: A Plastic card issued by Banks with a limited provision to borrow or to make credit purchases. Credit rating: Evaluation of credit worthiness or timely repayment capacity of a company based on its past record, present financials and future potential. Credit(rating)agency : Is a company which collects information about the creditworthiness of individuals and corporations and provides it for a fee to interested parties. Credit risk : Risk arising out of possibility of a borrowers default. Also known as default risk 4 C's of credit :The four key elements a borrower should have to obtain credit: character

(integrity), capacity (sufficient cash flow to service the obligation), capital (net worth or owned funds), & collateral (assets to secure the debt). Confirmed credit :A confirmed letter of credit . Confirmation is made by another bank nominated as confirming bank. Coupon rate : Interest rate quoted / offered on a fixed income security Correspondent bank : A bank acting as an agent of another bank in another city or country. Call money market returnable on call. CAMELS : It is an assessment of member banks by RBI to ascertain the capital adequacy, asset quality, management, earnings appraisal, liquidity, systems and controls. It is an assessment of the intrinsic strength of banks. Capital expenditure : Business Expenses towards acquiring long term assets like land & building, Plant & machinery etc.,(capital goods) : Market in which banks and dealers borrow money to satisfy their credit

needs or their short term needs of liquidity to cover their reserve ratio requirements. The money is

Capital Market : Market exclusively for sale & purchase of Shares & securities. Capital gain: Profits made by disposal of any capital asset. Capital adequacy: A measure of a banks financial strength & stability indicated by percentage ratio of capital to its assets. (Note: Assets for banks, are their loans & investments) Capitalisation: Conversion of accumulated profits (reserves) of an enterprise into capital through fresh issue of shares. Cash credit : A kind of loan granted for day to day activities of an enterprise against a floating charge on movable assets. Cash flow statement :A summary of a company's cash flow over a given period of time. It gives the net position of inflows and outflows of funds during the course of business. Cash reserves :Cash, money market instruments, and Treasury Bills. Central bank :The generic name given to a country's primary monetary authority, such as the RESERVE BANK OF INDIA . Usually has responsibility for issuing currency, administering monetary policy, holding member banks' deposits, and facilitating the nation's banking industry. Certificate of deposit : It is an usance promissory note issued by bank enabling the investor to negotiate it. It is short term surplus kept with the bank . It can be negotiated 30 days after issue. Certificate of incorporation : Certificate issued by R O C that brings a company into existence. Claytons rule : The first item on debit side is discharged by first item on credit side and so on chronologically. This arises in case of default in payment or business. The rule is based upon the simple notion of first-in, first-out to determine the effect of payments from an account, and will normally apply in the absence of evidence of any other intention. For the banker it is important to reconstitute the defaulter to avoid complete loss because the liability is thus crystallized and future credits are not adjusted against old liabilities/dues. Clearing house : cheques drawn on all banks are collected here, their respective balances

debited/credited, and returned to the banks on whom they are drawn. Closed-end fund : A fund with a fixed number of shares outstanding, and one which does not redeem shares the way a typical mutual fund does. Closed-end funds behave more like equity than open-end funds: Cheque :An instrument in writing, containing an unconditional order, directing the bank on whom it is drawn, to pay on demand, a certain sum of money to or to the order of a certain person. Collateral :Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default. Also called security. Collecting bank : The bank which collects the proceeds of cheques, bills and such other instruments of value, to the customers accpounts. Clean bill : A bill of exchange not supported by document of title to goods.

Commercial Paper ::An unsecured obligation issued by a corporation or bank to finance its shortterm credit needs, such as accounts receivable and inventory. Commercial paper is usually issued by companies with high credit ratings, meaning that the investment is almost always relatively low risk. These papers are bought by organizations or even high networth individuals on short term basis to provide liquidity to otherwise sound companies. Commission :A fee charged by a broker or agent for his/her service in facilitating a transaction, such as the buying or selling of securities or real estate. In the case of securities trading, brokers can be split into two broad categories depending on the commissions they charge. Some brokers charge higher commissions, but provide research and investment advisory services. Commitment fee / charges :A charge by a lender for holding credit available for a borrower. Simply put , the penalty charged for not availing credit sanctioned. Compound interest :Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. Compound interest differs from simple interest in that simple interest is calculated solely as a percentage of the principal sum. Consideration :Something of value, such as money or personal services, given by one party to

another in exchange for an act or promise. Conversion : If there is a happening, that is inconsistent with owners right of possession, which may be unlawful then conversion is said to take place. An example is of a third party cheque by fraudulent endorsement transferred into the customers account. For this a banker needs protection u/s 131 as provided by a formal introduction, of the customer, to the bank. Consumer loan: loans to individuals to acquire household goods or for personal consumption. Contingent liability: An obligation that might arise on occurrence of an event or a possible default. Contra account : An account that is offset by a matching associated account. Control account: A General ledger account which represents the total balances of related subsidiary ledger accounts, serving as a crosscheck of the arithmetical accuracy of records. Convertible currency: Any currency that is freely accepted / exchanged in any other country. Convertible loan : A debt / loan raised by issuing an interest bearing security with a promise of conversion of that loan as equity or capital after a given term. Core activity :Basic / fundamental activities of an organisation that define its purpose.(For ex., core activity of a bank is to borrow from savers and lend to users.) Corporate banking: Also known as Wholesale banking : Banking services tailor-made to large corporates / business units.

Corporate Governance: Set of rules & practices of any Corporate body ensuring fairness and transperancy in their relationship with all its stakeholders. Cost-benefit analysis: Quantifying the costs & benefits of any proposed / existing activity to arrive at a decision as to continuation / discontinue the practice. CIF (Cost, Insurance, Freight): Term of sale indicating that the price quoted includes Insurance & carriage charges paid upto destination. Covenant: A Written and binding agreement. Crossing : Two parallel lines drawn diagonally on the top left corner of a cheque or a similar instrument which indicates to the paying bank that such an instrument is not to be paid across the counter. Cumulative : successive periodical additions to the principal. Current ratio: A ratio of current assets (immediately convertible to cash)to current liabilities (immediately payable) indicative of a companys capacity to meet its short term obligations. Currency risk : Uncertainty or risk inherent in dealing with other (foreign)currencies that have no fixed exchange rate with our currency. Customs duty : Tax levied mostly on imports (and sometimes on exports) generally as a protection to domestic industries. Custodian : An individual or an organization, which holds in custody and safekeeping the

securities and other assets of another organization or individual.

DA bills : are bills which have a usance period and require acceptance by the drawee. DP bills : are bills where delivery of goods is against payment by the drawee. Debenture: An instrument to raise debt by a company offering regular predetermined rate of interest. Debt : amount of money borrowed usually for a longer term. Debt instrument : A document evidencing a debt. Debt restructuring : Re-scheduling or converting repayment obligations under a debt to borrowers who are in financial trouble. Debt service : Capacity to repay principal and interest due on a debt. Debt instrument :A written promise to repay a debt. Examples include bills, bonds, notes, CDs,

commercial paper, and banker's acceptances/ L/Cs. Debt market :The market for trading debt instruments. Debt equity ratio: Ratio of Total loans to own capital indicating the leveraging capacity of a companys capital. Debit: An accounting entry which could result in increase in assets or decrease in liabilities. Debit card :A card which allows customers to access their funds immediately, electronically. Unlike a credit card, a debit card does not have any float. Debtor: An individual who owes you or whom you have lent. Deed: A document in writing, signed in presence of witnesses, and delivered to the beneficiary. Usually made for transfer of title or ownership. Day-loan : A Bank loan (repayable at the end of day)to a stock-broker for purchase of securities pending delivery Dealer: Bankers or Professionals who(are authorized to) deal in foreign exchange. Deep discount bond: A loan instrument or a bond trading at a discounting of more than 20% of its par value. De facto: A condition or situation treated as fact or official. Default risk: Risk of non-payment by a borrower. Also known as credit risk. Deferred credit: Advance or payment received before delivery of goods or services. Deflation: A slow-down in economic cycle indicated by decreasing employment & wages, high interest rates and falling prices. Also known as Depression.

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Del Credere agent:An agent who guarantees creditworthiness of a buyer and undertakes to compensate the seller in case of default. Delinquency ratio : A tool employed by banks in sanctioning / pricing retail loans. Ratio of overdue loans to current loans indicating the quality of loans. Demand draft: An instrument (like a cheque) drawn by a bank, made payable on demand at another branch of its own to the payee beneficiary named therein. Demand deposit :An account balance which can be drawn upon on demand, i.e. without prior notice. Savings deposit is an example. Demand loan : A loan that is repayable on demand. Dematerialisation or DEMAT: Conversion of Shares / Securities from physical form to Electronic form Demurrage : Penal charges for delay in taking delivery of goods that have arrived and stored in a Transporters warehouse. Deposit account : A Bank account which limits withdrawals to the amount existing in the account. Usually interest earning accounts. Depository : An institution established for safe-keeping of securities (in electronic form). Depreciation : Accounting the cost of natural wear & tear of a tangible asset for the purposes of charging it to P & L account as an expenditure. Replacement cost of an asset over its normal life. Derivatives: Financial Instruments involving future transactions related to Securities and whose characteristics & value depend upon the underlying security. Devaluation : A deliberate and planned reduction in exchange value of a countrys currency. Development Bank or DFI : Financial institutions dedicated to finance specific & long-term needs like infrastructure development or core industries. Discharge : To satisfy or dismiss the obligation of a debt. Simply put, it is the full repayment of a

debt or an obligation. Disclosure : The release of relevant information. Dishonor :To not pay, such as for a bounced cheque. It is also failure to meet/pay legitimate demand raised by a bill of exchange made in normal trade Dividend:Share of profit of a Public company distributed pro rata among its shareholders Divestiture : Reduction of debt burden, by a company, by disposing off some of its assets Dissolution: End of an enterprise (by creditors or Govt., or Sharfeholders)

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Dormant account: A bank account, generally a savings account, not operated by the holder for a long time. Doubtful account: A loan account whose recovery appears doubtful Domestic bond: A loan instrument issued in the currency of the country Domestic credit: loans involving goods that are neither exported nor imported. Domiciled credit :A letter of credit containing a stipulation that payment will be made by a designated bank in the country of the exporter. Drawer :Maker or Writer of a cheque or such an instrument who directs the bank (drawee) to pay the amount of the instrument as stated therein. Drawee : The bank or the institution on whom an instrument is drawn with instructions to honour as stated therein. Dun & Bradstreet: A US based firm which collates & publishes financial data /business information of MNCs for a fee. Due date :Date on which an obligation must be paid. DBOM Contract (Design,Build,Operate & Maintain) contracts offered to Private Sector participation for development of Public utility services and infrastructure like Airports, Highways, etc.,

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E-commerce: Commercial transactions on electronic media. Earnest money: A token money usually paid by a contractor to an organization to bind them to a contract. Earned income: Income earned from labour, sale, or services and not interest or dividend EPS : Earning per share: ( Total revenue Total expenses ) divided by No. of outstanding shares. EDI : Electronic Data Interchange :A Computer Network System like Internet used by European banks which facilitates computer to computer exchange of electronic documents. EFT : Electronic Funds Transfer :Transfer of funds between accounts of the same bank or different banks without use of paper documents (electronically) EMI :Equated Monthly Instalments :Monthly instalment -obligation of repayment of loan including part of principal & interest ERM Exchange Rate Mechanism: or the currency grid, is a system that limits currency fluctuations to a range of 15 percent in either direction. ERP : Enterprise Resource Planning :A multi-module integrated software system for planning the resource need of an enterprise. ESOP (Employee Stock Ownership Plan) : An incentive offered by Blue chip companies to existing as well as potential employees by enabling them to purchase shares funded by a loan or at its face value or below its market value. Effective rate of interest: Actual interest paid on a loan or on a deposit depending on periodicity of compounding. Elasticity of demand: The tendency of demand going up or coming down depending on the price of an item. Empirical knowledge : Knowledge derived after thorough observation, experimentation and experience Encumbered asset : An asset or property on which there could be legal claims. Endorsement :Signature in a legal capacity on a legal document. The endorser guarantees that he is the lawful owner of the instrument and is legally capable of transferring the title to another person. (endorsee) Entity : A business unit which has a legal existence. Equitable mortgage : A mortgage created by mere deposit of title deeds and related documents with the bank and recording a recital of such deposit.

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Equity : : Ownership interest in a corporation in the form of equity capital, say. It also refers to total assets minus total liabilities, in which case it is also referred to as shareholder's equity or net worth or book value. Simply put it is the money brought in by the owners/shareholders and over time could also include accumulated profits. Escrow account :A trust account held in the borrower's name to repay obligations such as

borrowing. Credits to the account are first appropriated to discharge the borrowers liability Exchange :Any organization, association or group which provides or maintains a marketplace

where securities, options, futures, or commodities can be traded. Executor :An individual or institution nominated in a will and appointed by a court to settle the estate of a deceased. Export-import Bank :An independent bank, which encourages exports by providing credit and

insurance. Also called Eximbank. External Financing :Financing projects through new issues of securities; debt and/or equity. European Option :A type of option that may be exercised only on its expiry date.

Face value :The nominal amount assigned to a security by the issuer. For an equity security, face value is usually a very small amount that bears no relationship to its market price. For a debt

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security, face value is the amount repaid to the investor when the bond matures . In the secondary market, a bond's price fluctuates with interest rates. If interest rates are higher than the coupon rate on a bond, the bond will be sold below face value (at a "discount"). If interest rates have fallen, the price will be sold above face value. Factor : A firm engaged in the business of financing accounts receivable, an activity known as

factoring. The firm so buying the receivables become the creditors to the receivables. This helps the liquidity of the selling entity. Factoring : The selling of a company's accounts receivable, at a discount, to a factor, who then

assumes the credit risk of the account debtors and receives cash as the debtors settle their accounts. Also called accounts receivable financing. FEMA:Foreign Exchange Management Act 1999 (Earlier FERA) Laws relating to Foreign exchange to facilitate external trade. FEDAI :Foreign Exchange Dealers Association of India set up in 1958 with an objective to frame rules governing conduct of inter-bank forex business & liaison with RBI Financial Intermediaries :Financial institutions that assist the transfer of savings from economic agents with excess savings to those that need capital for investments. Financial Investment :Investment in financial assets. Financial Engineering :The design of financial portfolios to achieve specified goals. Firm : A business organization run either as a proprietary or as a partnership Fixed assets: Land,building, Plant & machinery, etc., of an organization Floating charge : A charge on current or floating assets like cash,Accounts

receivable,inventory,etc., Forex reserves : Valuable foreign currency reserves maintained by a country. Full value: Value of exports declared to the customs dept., without discount or commission. Financial institution :Institution which collects funds from the public and places them in financial assets, such as deposits, loans, and bonds, rather than tangible property. Floating rate :Any interest rate that changes on a periodic basis. The change is usually tied to movement of an outside
indicator, such as the prime interest rate. Movement above or below certain levels is often prevented by a predetermined floor and ceiling for a given rate. For an individual taking out a loan when rates are low, a fixed rate loan would allow him or her to "lock in" the low rates and not be concerned with fluctuations. On the other hand, if interest rates were historically high at the time of the loan, he or she would benefit from a floating rate loan, because as the prime rate falls to historically normal levels, the rate on the loan would decrease.

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Floating charge: Charge or right on goods & movables which undergo change , like from raw materials to semis-finished & finished goods. Forfeiture : A loss of money, property, or privileges due to a breach of legal obligation, which

serves as compensation for resulting losses. An example is of equity shares issued on part payment basis. When calls for payment of the balance is not heeded then the amount initially paid is forfeited or lost by the prospective investor and the shares are said to be forfeited. Futures :An agreement to execute a transaction at some time in the future. Futures contract : This is an agreement that allows an investor to buy or sell a commodity, like gold or wheat, or a financial instrument, like a currency, at some time in future. A future is part of a class of securities called derivatives, so named because such securities derive their value from the worth of an underlying asset. These contracts trade on organized futures exchanges. Futures Exchange:Traded contracts specifying a future date of delivery or receipt of a specific product or asset. The assets include agricultural products like, pork bellies and oranges; metal; and financial instruments and indices. They are used by firms to hedge against potentially unfavorable price changes, and by speculators who hope to benefit from betting on the direction or magnitude of change. Futures Market:Where futures contracts are traded.

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Garnishee order

: Monetary judgement by the court against defendant by ordering 3rd

party(garnishee) to pay, money owed to the defendant(judgement debtor), to the plaintiff(judgement creditor). This is so when there is default in debt repayment. General lien :A lien applied to all goods, not just the goods giving rise to the debt, owned by the lienee. Goodwill : Brand value :Advantage of market reputation a company or a product has which can be valued in terms of money. Golden Parachute. :A plan devised by existing management stipulating that an acquiring company has to pay executives of the acquired company a substantial sum of money in the event of removing the former. Green clause : A clause in an LC (letter of credit) which permits the exporter to avail preshipment advance as well as storage facility for the goods to be exported. Gross profit: Total value of goods sold Total cost of production government securities :Securities issued by a government to raise the funds necessary to pay for meet expenses/investments. Guarantee : To accept responsibility for an obligation if the entity with primary responsibility for

the obligation does not meet it. That is the guarantor pays when the debtor fails to do so. Guarantor : One who guarantees an obligation and has a legal duty to fulfill it.

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Hedging : Protecting assets from currency fluctuations. This can be done by taking positions or doing things which will offset the adverse effects on the original investment. For instance a weak rupee leads to purchase of shares of export oriented companies, who will benefit from falling rupee. This will provide a hedge against fall in value of other assets, if at all. Hire purchase: A purchase contract under which payment for the goods is made in instalments after completing which the ownership passes on to the buyer. Holder in due course : Is a person who is in possession of an instrument for which consideration has been paid and who believes that there is no defect in the title.. Hundi: An indigenous Bill of exchange, a negotiable instrument, usually governed by local customs and drawn in local language. Hybrid instrument / debt : Instruments which are similar to equity , which absorb losses without forcing/causing liquidation. Hypothecation :The mode of creating a charge on securities or other assets as collateral to secure a loan. This is without transfer of possession or ownership of goods or assets hypothecated. Horizontal merger: Merger between two companies that produce similar products. Also referred to as horizontal integration. Hostile take-over :A merger or acquisition in which management resists the group initiating the transaction. Hurdle rate:The minimum required return on a project.

Inactive account: A bank account in which there have been no transactions for an extended period of time. Inalienable : A right that is not assignable, not transferable.

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Incentive : A reward designed to encourage a productive activity Indemnity :Expressed or implied contract to compensate for loss or damange. Ex., Insurance Indenture:The legal agreement between the firm issuing the bond and the bondholders, providing the specific terms of the loan agreement. Index :A yardstick to measure change from a base year. Index Funds: Mutual funds whose objective is to replicate the performance of an index. The most popular equity index is the BSE Sensex. Inflation :A general increase in prices of goods and services. Injunction: An order of a Court of law, directing a person/company to refrain from doing or continuing to do any act complained of. Inside market:The highest bid and the lowest offer prices among all competing dealers in a Nasdaq security, i.e., the best bid and offer prices. Insiders :These are directors and senior officers of a corporation -- in effect those who have access to inside information about a company. An insider also is a shareholer who owns more than 10 percent of the voting shares of a company. Interest rate cap :A derivative instrument which is linked to interest rates. Interest rate floor :A derivative instrument which is linked to interest rates. Interest rate parity:A relationship which must hold between the interest rates of two countries. Internal financing :Financing projects through retained earnings. International banking: Extending banking services globally, including dealing in forex, managing overseas branches,financing foreign trade & projects,overseas loan syndication In-the-money option :An option that would be worth exercising if it expired immediately. Also see out-of-the-money options. Intrinsic value::A component of the market value of an option. Inverse floater : A type of fixed income instrument. Investment banks : are firms that assist companies in initial sale of securities in primary market. Investment company:A company that uses its capital to invest in other companies.

IMF ; International Monetary Fund : A Global organization (Hqrs.: USA) providing financial assistance to its member countries to finance their deficits,maintain external value of their currency,etc., IPO: Initial Public Offer :Securities are offered for the first time to the public.

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Inactive account :A bank account in which there have not been any transactions for an extended period of time. Accounts are often charged a fee if there is not enough activity. Initial public offering : IPO. The first sale of shares by a company to the public. Insolvent :Unable to meet debt obligations. Opposite of solvent. Interest cover : A company's pretax operating income (or occasionally, cash flow) divided by its interest obligations, for a given period. Mathematically it is the ratio of earnings before interest, tax, and depreciation divided by the amount of interest payable. A ratio of 1.5 to 2% is considered ideal by lending institutions. Interest rate :A rate which is charged or paid for the use of money. An interest rate is expressed as an annual percentage of the principal. Internal Rate of Return :IRR. The rate of return that would make the present value of future cash flows of an investment or business opportunity plus the terminal value of the business equal the current market price of the investment or opportunity. Simply put, it is the discount rate which makes the current investment in a business equal to the present value of, future cash flows arising out of the business plus the terminal value of the business. i.e. the NPV of the business equals zero. Introduction : Introduction of a potential customer to a bank by an account holder, employee, or a

well known person. It is necessary for a bank seeking protection under sec. 131 of the N.I. act. This formality is necessary for opening of accounts. Irrevocable adhered to. : Not able to be undone. There are certain terms in a negotiable instrument or a legal

document or a document whose tenor cannot be overlooked/avoided/bypassed and have to be

Joint account :Any account owned by two or more people. Joint and several liability :An obligation for which multiple individuals are liable for payment as in case of obligations of a partnership concern. Judgement creditor : Under garnishee order the creditor or person to receive its benefit is called so.

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Judgement debtor : Under garnishee order the debtor or the person liable to the creditor is called so. Junk bond: A bond which pays a high yield due to significant credit risk.

Kai Zen : Japanese concept of maintenance / improvement of work place using simple techniques Key factor :A risk factor which is used in estimating value at risk. Knock-In Option :A type of path-dependent option. KnockOut Option :A type of path-dependent option.

Law of limitation : Law that sets out a period after which a legal document cannot be enforced unless revalidated before the said date. Lease : A contractual arrangement whereby the lessor grants the lessee the right to use his asset

for a fixed period in return for periodic (lease) rentals.

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Ledger accounts.

: A book/folder/file of accounting entries where transactions are listed in separate

Legal risk:Risk relating to legal uncertainties Lender of last resort :A function of a central bank, such as the Reserve bank, in which it lends money to a bank which is facing unusually heavy withdrawals. Lessee : A person who obtains a property on lease from its owner. Lessor : An owner of property who rents it to another party. :L/C. A binding document that a buyer can request from his bank in order to

Letter of credit

guarantee that the payment for goods will be tranferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary documents . Leverage : Is the amount of long term debt relative to equity with a higher ratio meaning a greater amount of leverage. A business entitys funding pattern generally is a judicious mix of equity and debt. Loosely speaking, it represents the influence one financial variable has over some other related financial variable. Liability short term. LIBOR : It is the London inter bank offered rate. It is the standard for international transactions : It is a claim on the assets of a business. It is the amount owed by the business to the

shareholders, both preferential and equity, creditors both long term(banks and institutions), and

by Indian entities. Lien :A legal claim against an asset which is used to secure a loan and which must be paid when the asset is sold. Liens can be structured in many different ways. In some cases, the creditor will have legal claim against an asset, while not actually hold it in possession, and in other cases the creditor will actually hold on to the asset until the debt is paid of. Lien, bankers : bankers lien gives it a right of sale on possession of goods in the event of failure of the debtor to meet the obligation. Lien, negative : In which borrowers assets are free from any charge and no charge will be created without bankers prior consent. The first right of charge lies with bank. Liquidate : To convert an asset to cash. obligation. Liquidity ratio :Total value of cash and marketable assets(receivables easily realizable) divided by current liabilities. For a bank this is the cash held by the bank as a proportion of deposits in the bank. The liquidity ratio measures the extent to which a corporation or other entity can quickly liquidate assets and cover short-term liabilities, and therefore is of interest/concern to short-term creditors. Or : to sell off an entity to meet legal

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Listing :When a company's stock trades on an official exchange. Long-term debt : Loans and obligations with a maturity of longer than one year; accompanied by interest payments. Long-term Gain :A gain on the sale of a capital asset where the holding period was six months or more and the profit was subject to the long-term capital gains tax.

Mandate

Power given to a person or group of persons for carrying out certain

jobs/activities/obligations. Margin : Margin refers to an amount required to be brought in by a borrower, as specified by the lender, as his own contribution(equity) to the business. Market value : A security's last reported sale price on an exchange. OR : The market price of an entire company, calculated by multiplying the number

of shares outstanding by the price per share. Here also called market cap or market capitalization.

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Marketable security :Security that probably could be converted into cash quickly and easily. Marked-to-Market :An arrangement whereby the profits or losses on a futures contract are settled up each day. Material alteration : Any alteration that changes the tenor of an instrument . To validate a material alteration the drawer must authenticate . Maturity date :The date on which a debt becomes due for payment. Memorandum of association : Document which governs the association of a company with the outside world ; gives details of the type of company, objects of the company(activities the company may carry out), capital structure, etc. Moratorium : A period of time during which a certain activity is not allowed or required. For instance when repayment on a loan starts only after a lapse of a certain period after its disbursement, then that period is called the moratorium on the loan. Mortgage : A loan to finance the purchase of real estate, or plant and machinery, usually with

specified payment periods and interest rates. The borrower (mortgagor) gives the lender (mortgagee) a lien on the property as collateral for the loan. Mortgage Backed Security :A security interest in a pool of mortgages.

NAV : Net Asset Value. The rupee value of a single mutual fund share, based on the value of the underlying assets of the fund minus its liabilities/expenses, divided by the number of shares outstanding. Calculated at the end of each business day. Negligence : Failure to act during the normal course of business in an usually accepted manner.

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Negotiable instrument : A transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. Examples include cheques, bills of exchange, and promissory notes. Net present value ; NPV: A method of evaluating investment proposals. It is present value of future cash flows less the sunk costs(initial investment). When evaluating 2 proposals it is assumed that the one with higher NPV is the better of the two. Sometimes comparative ratios of the NPVs to the initial investment is also used for the purpose. Net worth : For a company, it is total assets minus total outside liabilities. Net worth is an

important determinant of the value of a company, considering it is composed primarily of all the money that has been invested since its inception, as well as the retained earnings for the duration of its operation. Net worth can be used to determine creditworthiness because it gives a snapshot of the company's investment history. Also called owner's equity, shareholders' equity, or net assets. Non-performing asset :A loan that is not meeting its stated principal and interest payments. More generally, an asset which is not producing income. Non-recourse debt :Debt for which the borrower is not personally liable. Nostro account : A banking term to describe an account one bank holds with a bank in a foreign country, usually in the currency of that foreign country. Notary public : A person authorized by the state to notarize certain documents.

Online banking :A system allowing individuals to perform banking activities at home, via the internet Operating cycle : The average time between purchasing or acquiring inventory and receiving cash proceeds from its sale in finished goods form. Also called working capital cycle in which the period covers the time from purchase of raw materials , its conversion to final goods, subsequent sale and realization of the proceeds. Opportunity cost : It is the rate of return that can be earned on the best alternative investment.

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Open-End Fund : A mutual fund that stands ready to redeem stocks and issue new stock. Also see closed-end funds. Option : A type of derivative instrument. Option :The choice to take a specific action in the future. The action considered in finance are the purchase (call option) or sale (put option) of an asset. Order nisi : To freeze all transactions in debtors account and use the amount to pay off the judgement debit. Overdraft :The amount by which withdrawals exceed deposits, or the extension of credit by a

lending institution to allow for such a situation.

Passbook :Book issued by a bank to record deposits, withdrawals, and interest earned in a deposit account. Payee : One who receives a payment, such as through cash, cheque, money order, bill of

exchange etc. Paying banker collection. : Bank on whom the negotiable instrument is drawn and which is sent for

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Payout Ratio :Percent of earnings that is paid out as dividends. Pension Fund :Assets held in trust to cover the costs of pension benefits to participants. Personal guarantee :Promise made by an entrepreneur which obligates him/her to personally repay debts his/her corporation defaults on. Personal identification number :PIN. Code used by an individual so that he/she can access his/her bank account at an ATM machine, but others can't. Pledging :Offering assets to a lender as collateral for a loan. Though the asset will be pledged and may be in the custody of the lender, it is still owned by the borrower unless he/she defaults on the loan. Post-date :To put a future date on a document or cheque, postponing the effective or negotiable date. Power of Attorney :A legal document that enables an individual to designate another person,

called the attorney, in fact, to act on his/her behalf as long as the individual does not become disabled or incapacitated. Preamble : It is an introductory statement, a preliminary explanation. It tells about the rules

governing a body which form the basis for their existence and future action. Preferential shares : shares on which a specific dividend is paid before any dividends are paid

to equity shareholders, and which takes precedence over equity in the event of a liquidation. Preferential shareholders do not enjoy any of the voting rights of equity shareholders. Primary Market is where firms sell new financial assets typically with the assistance of an investment banker. Prime rate :The interest rate that commercial banks charge their most creditworthy borrowers,

such as large corporations. The prime rate is a lagging indicator. Also called prime. Probate : The review or testing of a will before a court of law to ensure that the will is authentic.

Profit and loss statement

: An official quarterly or annual financial document published by a

public company, showing earnings, expenses, and net profit. Net income is determined from this financial report by subtracting total expenses from total revenue. The profit and loss statement and the balance sheet are the two major financial reports that every company publishes. The difference between this statement and the balance sheet deals with the periods of time that each one represents. The profit and loss statement shows transactions over a given period of time (usually quarterly or annually), whereas the balance sheet gives holdings on a specific date.

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Promissory note date to the drawee.

: a promise by the drawer of the note to pay a certain sum of money on certain

Prospectus : Description of a company, raising funds from the capital market , to the prospective investors. Prudential limits : limits of sector wise credit exposure set by RBI on commercial banks. These limits helps control among other things too much exposure to a particular sector vis--vis others as also the effects of artificial prices, demand-supply mismatches, default situations and so on. P/E Ratio :Price to earnings ratio. The price of a share of stock divided by earnings per share of stock for a twelve-month period.

Quote : The highest bid to buy and the lowest offer to sell a security at a given time

Real Assets :Tangible assets include: plant and equipment; intangible include: technical expertise, trademarks & patents. Reconciliation :Adjusting one's cheque/cash book balance to match a bank statement. Red Herring :A preliminary prospectus. Redemption : The return of an investor's principal amount in a security, such as a bond, debenture or mutual fund shares, at or prior to maturity.

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Remit

:To make a payment by transfer. Examples of remittance include cash, cheque/draft and

electronic transfer. Repo (Repurchase Agreement) :Purchase of Treasury securities from a securities dealer with an agreement that the dealer will repurchase them at a specified price. Reverse Repo : An agreement to purchase and resell an asset. Reserve ratio :Amount of money and liquid assets that the Reserve Banks member banks must hold in gilt securities or cash with the RBI, usually a specified percentage of their demand deposits and time deposits. Also called reserve requirement. Resolution :An official document representing an action on the part of the board of directors of a corporation. For instance a board may resolve to borrow funds from or place deposits in a bank and may appoint certain directors or officials to operate the bank account. Retail banking : Banking services for individual customers. Retained earnings : Earnings not paid out as dividends but instead reinvested in the core business

or used to pay off debt. Revaluation reserves : reserves that are created after revaluation of assets that are under valued in the books of accounts. An example is of an asset which commands a market price well above the book value(after depreciation) such as land, and therefore the company decides to increase its value in the books and create a reserve(notional). Revolving line of credit : An agreement by a bank to lend a specific amount to a borrower, and to

allow that amount to be borrowed again once it has been repaid. Also called revolving credit. Right of recourse :The right to recover a bad debt. Round Lot :The purchase or sale of a quantity of stocks that is in multiples of 100, such as 200, 1,000, etc.

Sans recourse : without liability to the endorser. The liability is solely that of the drawee/acceptor. Savings deposits :Accounts that pay interest and can be withdrawn on upon demand. Offered by banks. Secondary market : A market in which an investor purchases a security from another investor

rather than the issuer, subsequent to the original issuance in the primary market. It is a place where buyers and sellers of a security meet to deal/operate. Secured debt : Backed by a pledge of collateral/assets. Opposite of unsecured. Secured loan :A loan which is backed by assets belonging to the borrower in order to decrease the risk assumed by the lender. The assets may be forfeited to the lender if the borrower fails to make the necessary payments.

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Securitization : The process of aggregating similar instruments, such as loans or mortgages, into a negotiable/tradable security. Set off : adjusting debit in one account of a borrower with credit in another. Short Sale Sale of an asset that the investor does not own or any sale that is completed by the delivery of a security borrowed by the seller. Short selling is a legitimate trading strategy. Short sellers assume the risk that they will be able to buy the stock at a more favorable price than the price at which they sold short. Simple interest :The interest calculated on a principal sum, not compounded on earned interest. Sinking fund :A fund into which a company sets aside money over time, in order to retire its

preferential shares, bonds or debentures. Spin-Off :A newly created company that used to be part of a parent company. Parent company shareholders receive a pro rata ownership in the new company. Spot :For immediate delivery. Statutory : Something which is enacted by legislation. As law perhaps.

Stop payment : An order to a bank not to honor the payment of a cheque after it has been delivered but before it has been cashed. Subordinated debt : Debt that is either unsecured or has a lower priority than that of another debt claim on the same asset or property. Also called junior debt. Surety company. Swap : An exchange of streams of payments over time according to specified terms. Also : A pledge, guarantee or bond, usually to back the performance of an individual or

exchange of loan portfolio by banks Systemic Risk :Risk which threatens an entire financial system.

Tangible asset intangible asset. Tenor

: Assets having a physical existence, such as cash, equipment, and real estate;

accounts receivable are also usually considered tangible assets for accounting purposes. Opposite of

: instructions appearing on the face of a negotiable instrument such as date, amount , name

of payee and so on. Terminal value : it is the value of an asset at some point in time in future. It is a notional value assigned while estimating the future cash flows of a business but is essential nevertheless. Third party : Someone other than the principals directly involved in a transaction or agreement

Time deposit : money kept as deposit in a financial institution, usually a bank, for a fixed term or with the understanding that the customer can withdraw only by giving advanced notice.

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Transfer :A movement of funds from one account to another Traveller's cheque : cheque issued by a financial institution which functions as cash but is

protected against loss or theft. Traveller's checks are useful when traveling, especially in case of overseas travel when not all credit and debit cards carried by a person will be accepted. A charge or commission is usually incurred when a person exchanges cash for traveller's checks, though some issuers provide them free of charge. Treasury Bill :A negotiable debt obligation issued by the government and backed by its full faith and credit, having a short maturity. Also called T-Bill . These instruments, liquid in nature, are a source for meeting the Central Banks(RBI) reserve ratios. Trust : A legal arrangement in which an individual gives fiduciary control of property to a person or institution (the trustee) for the benefit of beneficiaries. Tangible asset intangible asset. Tenor : instructions appearing on the face of a negotiable instrument such as date, amount , name : Assets having a physical existence, such as cash, equipment, and real estate;

accounts receivable are also usually considered tangible assets for accounting purposes. Opposite of

of payee and so on. Terminal value : it is the value of an asset at some point in time in future. It is a notional value assigned while estimating the future cash flows of a business but is essential nevertheless. Third party : Someone other than the principals directly involved in a transaction or agreement.

Time deposit : money kept as deposit in a financial institution, usually a bank, for a fixed term or with the understanding that the customer can withdraw only by giving advanced notice. Transfer :A movement of funds from one account to another

Underwrite :To assume risk, as when offering an policy or bringing a corporation's new securities issue to the public; in the latter case, the term originally applied only to firm commitment offerings, but is now used for all offerings. To put it simply if the IPO is undersubscribed the underwriter subscribes to the extent of his commitment for a fee/commission which is payable in all situations. Usance : the length of time allowed on the payment of a bill of exchange

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Variable rate :Any interest rate or dividend that changes on a periodic basis. Variable rates are often used for convertibles, mortgages, and certain other kinds of loans. The change is usually tied to movement of an outside indicator, such as the prime interest rate. Movement above or below certain levels is often prevented by a predetermined floor and ceiling for a given rate. Also called adjustable rate.. Venture Capital :Capital supplied to particularly high-risk projects, such as start-ups or to companies denied conventional financing. Vertical Integration :Merger between a supplier and its customers. An example would be when an oil-refining firm acquires a firm that owns oil fields. Vicarious liability : Liability that arises out of the responsibility of a superior for the acts of his subordinate. As in case of a bank which is liable to the acts of its employees in the natural discharge of duties.

Waiver

: The act of voluntarily giving up a right or covenant. Convenants are certain clauses in an

agreement. Warrant :A certificate, usually issued by a corporation along with a bond or debenture, entitling the holder to buy a specific amount of securities of that corporation at a specific price, usually above the prevailing market price at the time of issuance. In case the price of the security rises to above that of the warrant's exercise(entitled) price, then the investor can buy the security at the warrant's exercise price and resell it for a profit. Otherwise, the warrant may simply expire or remain unused. White Knight: A firm that comes to the rescue of a corporation that is being taken over. Wholesale banking : Banking services for institutions.

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Wire transfer :An electronic transfer of funds. Withdrawal : A removal of funds from an account. : Is current assets minus current liabilities . Working capital measures how much

Working capital

liquid assets a company has available, to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. Working capital loan :A short-term loan which provides money to buy earning assets. Write-off : To charge an asset amount to expense or loss, in order to reduce the value of that asset

and one's earnings. An example, is of receivables not recoverable being charged to the profit and loss account in order to offset the income that has already accrued to the account. Written down value method : It is a method of calculation by which depreciation is charged as a

percentage of the net asset value(written down value) in the books year after year.

Yield :A measure of a bond's potential return. Yield to Maturity (YTM): The rate of return the investor will earn if the bond is held to maturity.

Zero Coupon Bond :A bond that has no coupon payments. It pays only a single cash flow at maturity.

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Glossary Of Information Technology Terms

Algorithm - : A step-by-step method of accomplishing a task. A series of mathematical commands that cipher and de-cipher. Batch : A group of commands that are executed one at a time. : A file in a DOS/Windows environment with the .bat extension. This file type is

Batch File -

executable in DOS or at a Windows command prompt. Batch programs are written in a batch programming language that utilizes a superset of standard DOS commands. Buffer : A temporary location to store or group information in hardware or software. Buffers are

used whenever data is received in sizes that may be different than the ideal size for the hardware or software that uses the buffer.

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Buffered memory - : Memory modules that have extra chips on them to support Error Checking and Correcting (ECC) functionality. Bug software. Bus Topology : This network topology has computers connected to a strand of network cabling : This is commonly an error in design or programming in a hardware device or piece of

that is connected to network repeaters at one end and terminated at the other. Cable Modem : The device that you attach a coaxial cable from your cable company directly

into that can provide you with high speed Internet access. Channel : It consists of controller card , interface cable & power supply. : It stops the flow of cheques thru the banking system & converts into

Cheque truncation

electronic processing system. Coaxial cable -. high speeds. Data - Information. : Any series of bits, characters, or objects that has meaning. Data is stored and : It consists of a single copper wire, surrounded by a copper braid or foil that acts

as a ground. The entire wire is then coated with an insulation. The cable carries digital signals at

transmitted by computers. Data Compression : Takes something large and makes it smaller. : An encryption method developed by IBM in 1977. It uses a

Data Encryption Standard (DES) -

private 56-bit key that is applied to each 64- bit block of data. Data Mining : The act of analyzing a database or data warehouse and searching for new facts

based on the data.

Database -

: An ordered set of data. : Takes something large and makes it smaller.

Data Compression (Compression) Digital signature -

: A form of electronic signature that works with a public and private key

encryption system and a certificate authority. Disk Mirroring -. : Disk mirroring involves two hard drives that are on the same drive controller.

The same data is written to both drives over same channel. Disk Duplexing . controller. Dumb Terminal : These are hooked up to mainframes, and are little more than a monitor : Disk duplexing is much like disk mirroring, but each drive is on a separate

attached to a keyboard. All they are good for is running programs using the mainframe's hard drive and memory, thus the "dumb" in the name.

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Dynamic signature verification : it finds out whether a signature is genuine or not. E-mail : This stands for electronic mail. It is a service provided over the Internet that allows you

to send information to another person or list of people. Electronic purse : the space in a card is used to store different types of accounts of a user. : Any form of electronic identifier, including a digital signature.

Electronic signature -

Encryption - : The act of altering data to make it unreadable unless you know how to decrypt it. Ethernet : A network topology that is able to send data at 10 Mbits/second. Workstations can

exist on the same cable, but only one can communicate at a time. To get by these limitations, switched Ethernet and Fast Ethernet were invented, and were also combined. Nowadays, most networking devices you would purchase are switched fast Ethernet. FTP (File Transfer Protocol) - : A common method of moving files from system to system using TCP/IP. To work properly, it requires an FTP client to contact an FTP server in order to transmit data back and forth. Fault Tolerant Computer system failure in one or more components. Full Duplex : Originally this referred to a communication between a modem and a remote : . The ability of a system to continue operations following

system, where characters were sent both ways over the phone line so that they could be accurately displayed on a terminal. Gopher : This is often said to be the first incarnation of the World Wide Web. It is an

information source based on textual links, now outdated and superceded by the Web.

Graphical User Interface (GUI) -

: Any system that uses graphics to represent the functions of a

program. All Windows operating systems are GUIs. Host : A generic term used to describe a computer or program that makes a resource available,

usually over a network. Half Duplex : Originally a modem communications term, half duplex now mainly refers to

network communications that transmit in one direction at a time. Also see duplex and full duplex. Internet : global network of networks. It is system that allows user computers to exchange data,

messages etc. LAN : A small isolated network at one office or physical location. Most office computers are

connected to a LAN, but may also be connected to the Internet or a WAN.

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Management Information Systems/Services (MIS) provides real- time information to the management. MODEM (Modulator/Demodulator) -

: The department at most companies that

: A device that serves as a bridge between your digital

computer and some form of analog line used to transmit data, such as a phone line (standard modem) or analog cable connection (cable modem). Multiplexer (Mux) channel. Node nodes. Online - This term refers to anything that's on the Internet and electronically transmitted. Optical fibre Packet : provides high quality transmission at very high speeds. : One computer/machine or address on a network. If you managed a network with 10 : A logic circuit that sends one of several inputs out over a single output

printers, 50 servers, and 150 client machines, you could say you managed a network with 210

: A collection of information. This term is most often used to refer to the chunks of

information sent over computer networks. Peripheral : Any device that is not part of the motherboard, aside from memory and the CPU.

For example, video cards, sound cards, modems, and hard drives are peripherals. Point to Point Protocol (PPP) - : The mode of transport used to connect a computer to the Internet via a dial-up adapter (a modem). Protocol one another. : A general behavior that computers and network devices must follow to understand

Real-time -

: Tasks that are time-critical and must happen in our time (as opposed to the much

faster computer). The user interface should always be real-time. If you move the mouse, your pointer should move on screen immediately. Unfortunately, Windows can bog down enough so that this doesn't happen Ring topology - : A network that is connected on both ends to one source, with client machines hanging off of the ring. If you break the ring, all computers in the ring lose connectivity RTGS : Real time gross settlement system. Instant credit thru the RBI clearing system. : An operating mode used in Microsoft operating systems. It was first introduced in

Safe Mode -

Windows 95 and was loaded automatically if Windows 95 crashed during boot up. You can access Safe Mode if you press the "F8" key when new Windows operating systems are booting--this will

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bring you to a menu that allows you to boot into safe mode. Safe Mode boots the operating system with minimal driver support. The purpose of it is to help resolve boot problems. Server data. Simplex transmission : it transmits data in one direction only. Smart card Standalone Star topology : A plastic card with an Integrated chip installed. : A hardware device or piece of software that works with nothing else required. : A network topology that has network hubs at the center, with all connected : A machine whose sole purpose is to supply data so that other machines can use that

computers linked back to the hub by a single cable. Thus, if one cable goes down, the rest of the computers can still communicate. SWIFT : Society for worldwide inter-bank financial telecommunication, is an instant transfer

of messages internationally. Token Ring : A network topology pioneered by IBM and eventually made into the IEEE 802.5

standard.. Token ring networks are wired in a ring topology, and nodes on the network pass a token around. Whichever node has the token is allowed to use the network. Usenet Newsgroups : Also referred to simply as "newsgroups," Usenet newsgroups are a huge

bunch of Internet discussion groups that replicate across the Internet every so often. Vein recognition Visual recognition identification. Voice recognition system VSAT - . : it compares voicres with original recorded. : uses unique vein structure of the human body to to identify individuals. : digitizing a picture of a person ,storing in a smart card then using it for

: an outdoor small dish antenna interfacing with a satellite.

WAN (Wide Area Network) -

: Any network that spans more than one location. Typically at least

one of the locations is fairly remote.. WAP (Wireless Application Protocol) : A proposed standard that allows for transfer of data

securely between wireless devices, such as PDAs, cellphones, pagers, or other combinations of those devices. WAP supports many different wireless networks. World Wide Web (WWW or Web) : This is basically a means of communicating text, graphics,

and other multimedia objects over the Internet.

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