Abbrevations Banking

Banking Abbreviations and Terms Bank
A financial institution that accepts deposits and channels the money into lending activities. An organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositors checks; and issues drafts and cashiers checks. A business establishment in which money is kept for saving or commercial purposes or is invested, supplied for loans, or exchanged.
Banking Terms
Banking Terms Banking Definitions AAA is a term or a grade that is used to rate a particular bond. It is the highest rated bond that gives maximum returns at the time of maturity. Usually the grade AAA is given to the best debt obligation or a security, by a credit rating agency.
AAA
The ABA transit number is assigned by the American Bankers Association. It is a numeric coding that indicates and facilitates the amount of check ABA Transit Number payments, balances and dues that are to be cleared among different banks at the clearing house. ABO ABO is an abbreviation for the term Accumulated Benefit Obligation. It is basically the measure of the liability of the pension plan of an organization and is calculated when the pension plan is to be terminated. Absorption is a term related to real estate, banking and finance fields. The word absorption means the process of renting a real estate property that is newly built or is recently renovated. The term absorption time is used to define the time period that is required to complete the process of absorption. The abstract of title is a written report that defines records and identifies the history and ownerships of a particular asset, usually a real estate. Acceleration is the process, where the lender demands a full and final payment of the debt or loan, before the allotted time period for repayment. A clause in the document of the debt usually empowers the lender to accelerate the time period. A clause in the debt document that empowers the lender to accelerate the payment, (i.e. or that is) the lender can demand the full amount of loan before the date of maturity. A method of depreciation of fixed assets, where the early deductions are greater in monetary terms and later ones are smaller. Acceptance which is also known as the bankers acceptance is a signed instrument of acknowledgment that indicates the approval and acceptance of all terms and conditions of any agreement on behalf of the banker. It is a very wide term that is used in context with financial agreements and contracts. An accepting house is a banking or finance organization that specializes in the
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Absorption Absorption Time Abstract of title
Acceleration
Acceleration Clause Accelerated Depreciation Acceptance Accepting House
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Banking Abbreviations and Terms

service of acceptance and guarantee of bills of exchange. This organization specializes in two prominent functions that are facilitating the different negotiable instruments and merchant banking. Accepting Party The party (either an individual or a group of individuals or organizations) that accept the terms and conditions of a proposed agreement or contract put forth by another party. An account is a record of all financial transactions that are related to an asset, individual, transaction or any organization. It is a major term in the field of accountancy and is conventionally denoted by the A/c. It can also be defined as a transaction between a buyer and a seller about payments and dues which develop creditor-debtor relations.
Account
An online facility that is made available by some banks or financial organizations, in which all the transactions related to the bank account, credit Account Aggregation facilities, debts and investments can be handled and operated with the help of a single interface or account. Account aggregation is a form of Internet banking, provided for ease of transaction. Account Balance Account Reconciliation The total amount of money in a particular bank account, along with the debit and credit amounts, the net amount is also termed as the account balance. Account reconciliation is a process with the help of which the account balance can be easily verified. Account reconciliation is usually done at the end of a week, month, and financial year or at the end of any financial period. It is usually done with the help of receipts, ATM notes, bank statements etc. A financial record that indicates the transaction and its effect on an account (usually bank account), in terms of debit and credit. Sometimes, an account statement also carries some precise details, like the date of transaction, code of transaction, mode of transaction, sales, purchases, etc. An account value is the total value of any account, applicable when a person has many accounts and transactions in the same bank or financial institution. The account value is a total value that is expressed in monetary terms. Indicates the acceptance of a document, agreement, proposal or a negotiable instrument by authenticating it with the help of a seal or a signature. Acknowledgment signifies that the terms and conditions of the contract have been accepted and the agreement authenticated. The new physical goods that are physically united to older goods, in the manner where identity, of both the goods remains the same, are known as accessions. For example, a new upgrade or addition on an already existing piece of machinery. A person who signs the note of application and renders his credit history during the process of application of a loan is called accommodation maker. The accommodation maker usually receives no direct financial benefit from the loan. The term is also used in the concept of accommodation bills, when two or more people help each other by rendering liquidity of a negotiable instrument. The term account analysis is used in basically two contexts. First, it is used to
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Account Statement
Account Value
Acknowledge
Accessions
Accommodation Maker
Account Analysis

define the study and conclusion of a single account. Second, it is also a procedure, where the profitability of a single demand account or many demand accounts is projected and analyzed. Account Control Agreement Account Debtor Account Reconciliation Services An account control agreement is an agreement that perfects the interests of the creditor in a securities account. An account debtor is a person or an organization that is in debt and is obliged to pay either on an account or chattel paper or contract right. Account debtors are, sometimes, simply referred to as debtors. Account reconciliation services are basically services that specialize in the compilation of reconciliation documents and statements. Reconciliation services cater to the demands of individuals and huge organizations that have a large number of transactions taking place every day. Accounts payable is a list of liabilities of an organization or an individual that are due but not paid to creditors. Account payable, many a times, also appears as a current liability in the balance sheet. One must note that loans and liabilities to the bank which have not maturated are not a part of account payable. Accretion is a process, where increments and periodic increases are made in the book value or the balance sheet value of an asset. In the field of banking and finance, accretion is the process where the price of a bond that has been bought at a discount is changed to the par value of the bond. It is also defined as a change in the price of a bond that has been bought at a discount to the par value of the bond. An accretion bond is basically a bond that has been purchased at a discount and whose book value is incremented to the par value or the face value. Accreting swap is a swap of interest which has an increasing notional amount. Accrual is the process of accumulation of interest or money. Accrual basis, which is also known as accrual convention, is the method by which, investors, economists and businessmen count the number of days in a month or a year(s). Of the most common examples of accrual basis is the 30/360 convention, wherein the accrual basis is calculated by assuming that every month has 30 days. Accrual basis is often used as the common parameter for the calculation of interests and returns. An accrual bond is also known as range bond. An accrual bond is a bond that has a tendency to pay the investors, an above the market rate. Sometimes, an accrual rate is also defined as a security that does not have a period payment for the rate of interest. The interest is accrued and then added later on at the time of maturity. It is the method of calculating the time period on a specific investment by the investors. Accrual convention is many a time calculated with the help of different interest calculation mechanisms. Accrual convention is also known as accrual basis. Accrued Interest is the interest, accumulated on an investment but is not yet paid. Often, accrued interest is also termed as interest receivable. Some
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Accounts Payable
Accretion
Accretion Bond Accreting Swap
Accrual Basis
Accrual Bond
Accrual Convention
Accrued Interest

banking books prefer to call it as the interest that is earned, but not yet paid. Accumulated Depreciation Accumulated depreciation is the total all the periodic reductions from the book value of fixed assets. It is also termed as an allowance for depreciation. Accumulator is also known as capital appreciation bond. The accumulator is a type of security that is related to capital and is issued on face value, but the interest is not paid to the investor on the basis of the time period. Instead, the total amount of accrued interest is paid along with the face value upon the maturity of the security. ACH is the abbreviation of the banking term automated clearing house. The automated clearing house operates on a national level and helps banks and financial institutions in the clearance of balances and negotiable instruments that are used at a personalized as well as a mercantile mode of transactions. Active tranche basically stands for REMIC or Real Estate Mortgage Investment Conduit. The REMIC tranche is basically a bond that is backed up by a large set of mortgages. The principal and interest that are paid by the borrowers, are transferred to the people who hold tranche (tranche refers to a portion or money) in REMIC. Actual delay days are also simply known as delay days. The actual delay days are the actual days of the lag times. The lag time is the time period that starts after the expiry of the last date of repayment. Adjustable rate mortgage or ARM is basically a type of loan, where the rate of interest is calculated on the basis of the previously selected index rate. Due to this, the rate of interest that is charged differs periodically, usually in every month. Hence, the rate of interest and the total interest remain variable throughout the term/time period Adjusted trading is a mercantile understanding between an investor and the broker or dealer. In this understanding, the investor overpays the broker) for a recently purchased security. As a return favor, the broker overpays the investor for the security or the investment that he wants to get rid of. Administered rates are the rates of interest which can be changed contractually by lender. In some cases, these rates can also be changed by the depositor and also the payee. The laws and provisions that monitor the concept of administered rates differ in each jurisdiction.
Accumulator
ACH
Active Tranche
Actual Delay Days
Adjustable Rate Mortgage (ARM)
Adjusted Trading
Administered Rates
Administrative float is the frame of elapsed time that is required in order to complete the paper work, in order to administratively sort the checks, or for Administrative Float that matter, any type of currency and negotiable instruments in the bank itself or in the clearing house. Administrative Review American Depository Receipt (ADR) An administrative review is usually used in context to the appraisal of the book value of a real estate and basically, deals in the underwriting issues. The administrative review is usually written from the point of view of loan underwriting during an estate appraisal. American depository receipts, also known as ADRs, are depository receipts which are equal to a specific number of shares of a corporate stock that has been issued in a foreign country. American depository receipts are traded
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only the United States of America. The American Institute of Certified Public Accountants (AICPA) is a national American Institute accountants institute of the United States of America, which represents the of Certified Public certified public accountants, who conduct accounting operations in the Accountants(AICPA) spheres of business and industry, public practice, government, education and even NGOs. One should not confuse between amortization as an accounting concept and amortization of loans. Amortization of loans is nothing but the process of liquidation of loans or securities with the help of periodic reductions. The principal amount of the loan is amortized periodically by the method of payments in installments. The techniques that are used for the amortization of a loan differ from case to case.
Amortization of Loans
Amortization period is the time period that is considered from the inception of the credit, investment or negotiable instrument and ends upon the maturity or expiry of the instrument. The amortization period is basically Amortization Period considered in order to calculate the rate of interest, time line of installments and also the appropriate amount of all the installments. The term amortization period is also used in the field of accountancy; however, in a different context. Amortizing Swap Amortizing swap is a swap in the rate of interest that has a declining notional principal. Alternative minimum tax, also known as the AMT, is a type of tax that is levied by the United States government and is a type of Federal income tax. The alternative minimum tax (AMT) is basically levied on the individuals and organizations that misuse and take advantage of tax benefit schemes that are in monetary terms exorbitant, if rationally compared to their annual incomes. Analytical solutions, also known as closed form solutions, are simple mathematical techniques and models, used to calculate projections and interest rates by the lending, banking and finance organizations. Some of the analytical solutions are so simple and effective that the calculations can also be conducted orally, without writing it down on a paper or using a calculator. An analytical VAR is also known as the correlation VAR. An analytical VAR is basically the measurement of a financial instrument, portfolio of the financial instruments or an entitys exposure to the reductions in its value resulting from changes in the prevailing interest rates. The annual percentage rate is calculated by dividing the total financing costs associated with a loan divided by the principal amount of the loan. The annual percentage yield or APY is basically a very accurate and calculated measure of yield that is paid on a standard bank deposit account. Annuities are contracts that guarantee income or return, in exchange of a huge sum of money that is deposited, either at the same time or is paid with the help of periodic payments. Some of the common types of annuities include the deferred, fixed, immediate or variable variants. The anticipated income doctrine of liquidity is basically an explanation of
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Alternative Minimum Tax
Analytical Solution
Analytical VAR Annual Percentage Rate (APR) Annual Percentage Yield (APY) Annuities Anticipated Income

Doctrine of Liquidity bank liquidity development in which the net cash flow of the borrowers is considered as the source of loan repayment instead of usual subsequent new borrowings. Appraisal Appraisal Surplus An appraisal is basically a statement, document or an estimated rise or drastic climb in the price of a particular real estate. The term appraisal is also used in connection to raising the book value of a real estate. An appraisal surplus is the difference between the historical cost and the appraised cost of the real estate. Arbitrage is the simultaneous purchase and sale of two identical commodities or instruments. This simultaneous sale and purchase is done in order to take advantage of the price variations in two different markets. For example, purchase of gold in one nation and the simultaneous sale in another nation, (international markets) to achieve profit. Arbitrage free is a type of financial model that generates market structures that exclude scenarios generated by the arbitrage transactions and dealings. An arbitrageur is an independent and individual broker who deals in arbitrage.
Arbitrage
Arbitrage Free Arbitrageur
Article of agreement is a contractual provision, with the help of which a buyer purchases real estate from the seller over a period of time, and pays the Article of Agreement consideration in installments. This type of agreement or contract is also known as a land contract. As-extracted Collateral Ascending Rate Bond Asset Backed Security (ABS) Asset Sensitive As extracted collateral are extracted or non-extracted minerals created by a debtor having an interest in minerals, and are subject to security interest, either before or after extraction. In short, mined or non-mined minerals can also be used as collaterals. Security with which has a coupon rate that increases in previously defined increments at scheduled intervals, is termed as an ascending rate bond. A security that is backed with the help of some kind of valuable assets is known as an asset backed security. Sometimes, ABS is also referred to as the monthly rate of repayment of a secured loan. Asset sensitive is a sort of a position, wherein an increase in the rate of interest will help the investor and the decline in the rate will not be helpful at all. Asset and liability management is the coordinated management of all the financial risks inherent in the business conducted by financial institutions. In real practice, asset and liability management aims at minimization of loss and maximization of profit. Assets reprised before liabilities is a term that is used to define a gap between the reprising of the assets and liabilities in a given period of time. Assignee is an individual or an organization or party to whom an assignment is made and commitment taken. In the field of banking and finance, an assignment is the transfer of any contractual agreement between two or more parties. The party that assigns
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Asset and Liability Management Assets Reprised Before Liabilities Assignee Assignment

the contract is the assignor and the party who receives the assignment is the assignee. Assumable Assumable is a very different type of mortgage loan application, where the new buyers of a real estate that has already been pledged as collateral, assumes the liability of a loan and also the ownership of the real estate. An assumed name is a name which is assumed by an individual, organization or corporation in order to conduct business. It must be noted that the assumed name is always different from the original name of the corporation. Asymmetric behavior is the unbalanced behavior displayed by the financial instruments. It is said to be observed when the rates and value of instruments change in different proportions, in comparison to the market rates. The attorneys certificate of title is also known as the title option. This certificate is basically prepared by the attorney, in order to state the ownership and the lien priority of an asset, particularly a real estate. Attrition analysis is basically carried out for the purpose of reformation of the assets and liabilities in a balance sheet. Audited statements are supposed to be the most reliable statements. The audited statements are basically financial statements whose reliability and second effect (according to the double entry system) have been verified, cross checked and confirmed. The word audited (audit), signifies the process of verification. The agreement of security between debtor and banker is known as the authenticated security agreement and is accepted by the borrower The acceptance process is done, online and then the agreement is down loaded and printed. In the terms of banking, an authority is basically a governmental department or agency that is empowered by the judicial system of a nation to authenticate, legalize, conduct and monitor the functions that are related to banking, finance, economics and transactions.
Assumed name Asymmetric Behavior Attorneys Certificate of Title Attrition Analysis
Audited Statements
Authenticated Security Agreement
Authority
An automatic clearing house is nationwide electronic clearing houses that monitors and administers the process of check and fund clearance between Automated Clearing banks. The ACH is an electronic system and thus minimizes the human work House(ACH) in the process of clearance. It distributes credit and debit balances automatically. Automated Teller Machines Automatic Stay Automated teller machines are basically used to conduct transactions with the bank, electronically. The automated teller machine is an excellent example of integration of computers and electronics into the field of banking. The automatic stay is an injunction that automatically becomes effective, after any person or organization files for bankruptcy. The automatic stay basically precludes the creditors from taking the debtor or the property of the debtor. Banking Definitions The balance is the actual amount of money that is left in the account. Sometimes, the term balance also refers to amount of the debt that is owed.
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Banking Terms Balance

A balance transfer is the repayment of a credit debt with the help of another source of credit. In some cases, balance transfer also refers to transfer of funds from one account to another. The balance transfer fee is charged by the bank for the transfer of balances Balance Transfer Fee from one source of credit to another. It also refers to the transfer of fees from one bank account to another. A bank is an establishment that helps individuals and organizations, in the Bank issuing, lending, borrowing and safeguarding functions of money. A bank account is an account held by a person with a bank, with the help of Bank Account which the account holder can deposit, safeguard his money, earn interest and also make check payments. A bank debt is basically any debt that is owed to a bank, by any kind of Bank Debt consumer, organization or corporation. The debt may be anything from a bank loan to a credit card debt or an overdraft that has been used. A bankruptcy refers to economic insolvency, wherein the persons assets are Bankruptcy liquidated, to pay off all liabilities with the help of a bankruptcy trustee or a court of law. A billing cycle is a time period that covers the credit statement that usually Billing Cycle lasts for 25 days. A bankruptcy trustee is an individual or a corporation or any organization that is appointed, in case of bankruptcy, in order to represent the interests of Bankruptcy Trustee the bankruptcy estate and the insolvent debtor according to Chapter 7, Chapter 11 and Chapter 13. Bankruptcy advice is given by a bankruptcy lawyer or a bankruptcy Bankruptcy Advice counseling service, so that a person can overcome financial and economic difficulties after bankruptcy. A billing statement is a summary of all transactions, payments, purchases, Billing Statement finance charges and fees, that take place through a credit account during a billing cycle. A bond is a certificate that represents an interest bearing debt, where the Bond issuer is required to pay a sum of money periodically till the maturity, and then receive back the accumulated amount. A borrower is the party that uses any kind of credit facility and thus, becomes Borrower obliged to repay the principal amount and interest on the borrowed amount. Also know as gap financing, bridge financing is a loan where the time and cash flow between a short term loan and a long term loan is filled up. Bridge Bridge Financing financing begins at the end of the time period of the first loan and ends with the start of the time period of the second loan, thereby bridging the gap between two loans. It is also known as gap financing. The bridge loan also known as a swing loan is basically a real estate loan or a Bridge Loan home loan, where the current residence/real estate is pledged by the borrower as collateral in order to purchase a new residence. A bounced check is nothing but an ordinary bank check that any bank can Bounced Check refuse to encash or pay because of the fact that there are no sufficient finances in the bank account of the originator or drawer of the check. Balance Transfer
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Banking Terms Banking Definitions A cap is a limit that regulates the increase or decrease in the rate of interest Cap and installments of an adjustable rate mortgage. The term capital means the total net worth of any business establishment, Capital organization or corporation or the total amount invested for financial returns. Capital improvement is the addition in the property of an organization that Capital Improvement adds to its additional value. The cardholders agreement is a written statement that depicts all the terms and conditions of a credit card agreement. The cardholders agreement Cardholder constitutes many elements, such as rate of service charges, billing dispute Agreement remedies and communications with the credit card companies or service providers. Bills and coins, checks and other negotiable instruments, which are acceptable Cash at banks and are considered to be liquid assets, are collectively known as cash. Cash advance fee is basically charged when a person uses a credit card to Cash Advance Fee obtain cash. In most cases, it is charged as a percentage to the cash advance. The cash flow is often defined as the liquid balance of cash as well as the bank balance that is available with an organization or a corporation. In some cases, Cash Flow the cash flow is also defined as the net amount of cash that is generated by the net income that has been generated by an organization or corporation in a particular time period. The cashiers check is drawn by a bank on its own name to may payments Cashiers Check other organizations, banks, corporations or even individuals. The cash reserve is the total amount of cash that is present in the bank Cash Reserve account and can also be withdrawn immediately. The certificate of deposit is a certificate of savings deposit that promises the Certificate of Deposit depositor the sum back along with appropriate interest. A check is a negotiable instrument that instructs the bank to pay a particular Check amount of money from the writers bank, to the receiver of the check. Clearing of a check is basically a function that is executed at the clearing Clearing house, when all amount of the check is subtracted from the payers account and then added to the payees account. The clearing house is a place where the representatives of the different banks meet for confirming and clearing all the checks and balances with each other. Clearing House The clearing house, in most countries across the world, is managed by the central bank. Central Bank A central bank is the governing authority of all the other banks in a country. Closing of an account is the final stage of any transaction where both the parties receive almost equal consideration from each other. The term closing Closing from ledger books where the two accounts are closed down i.e. both debit and credit sides become equal. The co-borrower is a person who signs a promissory note as a guarantee that Co-borrower the loan would be repaid. Thus the co-borrower plays the role of a guarantor and is equally responsible for the loan. Consumer credit is the credit and loan facility that is provided to the consumer Consumer Credit for the purchase of goods, services and real estate property. Most consumer credit is unsecured with the help of a collateral
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Compound interest is the interest that is compounded on a sum of money that is deposited for a long time. The compound interest, unlike simple interest, is calculated by taking into consideration, the principal amount and the accumulated interest. Credit card debt consolidation loan is availed from a bank in order to pay off all credit card debts. Credit counseling is a consultancy session where the credit counselor suggests debt relief solutions and debt management solutions to the clients. Banking Definitions Debit is a banking term that indicates the amount of money that is owed by a borrower. It also indicates the amount that is payable, or the amount that has been deducted from an account. The origin of the term is from the concept of debit side of a ledger account. A debt is any amount that is owed by an individual, organization or corporation to a bank. A debit card is an instrument that was developed with digital cash technology, and is used when a consumer makes that payment first to the credit card company and then swipes the card. The debit card operates in the exact opposite manner of the credit card. A deed is a very important document that indicates the ownership of an asset, especially a real estate. The deed is also used to convey the property from the seller to the buyer. A default is a scenario where the debtors of a bank are unable to repay the debt or the loan. A demand deposit is an account that is used as a checking account. A deposit slip is a bill of itemized nature and depicts the amount of paper money, coins and the check numbers that are being deposited into a bank account. The person who deposits money into a bank account is called a depositor. The degradation in the book and monetary value of a fixed asset as a result of wear and tear in the course of time. Debentures are long term corporate bonds that are unsecured in nature. It must be noted that debenture holders are not protected by any collateral and tend to be treated like ordinary creditors In the terms of banking, in the term discount is used when any negotiable instrument is converted into cash. For example, a person can exchange a bearer check for cash with the amount being little less than the face value of the check. This method is used by merchants who are in a dire need for liquid finances. Tins definition is written from the banking point of view but has a variable meanings. A dividend is a part of the profit that is earned by a corporation or joint stock companies, and is distributed amongst the shareholders. Debt management is a process of managing debts and repaying creditors. Debt management is a very broad concept covering almost anything related to debts and their repayment. A debt consolidation loan is a type of loan, where the bank or the lending
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Compound Interest Credit Card Debt Consolidation Loan Credit Counseling Banking Terms Debit Debt Debit Card
Deed Default Demand Deposit Deposit Slip Depositor Depreciation Debentures
Discount
Dividend Debt Management Debt Consolidation

Loan Debt Settlement Debt Repayment Debt Recovery institution provides the borrower with a loan that helps the borrower to pay off all his previous debts. Debt settlement is a procedure wherein a person in debt negotiates the price with the lender of a loan, in order to reduce the installments and the rate of repayment, and ensure a fast and guaranteed repayment. Debt repayment is the total process repayment of a debt along with the interest. Sometimes, the consolidation that is provided is also included in debt repayment. Debt recovery is the process that is initiated by the banks and lending institutions, by various procedures like debt settlement or selling of collaterals. Banking Definitions Also known as electronic cash and digital cash, e-cash is a technology where the banking organizations resort to the use of electronics, computers and other networks to execute transactions and transfer funds. An early withdrawal penalty is basically a penalty that is levied by a bank because of an early withdrawal of a fixed investment by any investor. There can be several types of early withdrawal penalties, like forfeiting the promised interest. Earning assets generate returns, either in the form of returns or in the form of interest or cash. One must note that in the case of earning assets, the owner does not have to take any daily efforts to achieve returns. Encryption is a process that is used to ensure the privacy and security of a persons confidential financial information. The actual process involves scrambling of the data of the person, in such a manner, so that only the person himself can see the data. An exchange is a trade of property, assets, goods or services for consideration of any kind. Electronic filing is the method of filing of tax returns and tax forms on the Internet. An earnest money deposit is made by the buyer to the potential seller of a real estate, in the initial stages of negotiation of purchase. Equity is the remainder balance between market value of a given property and the outstanding real estate debt that is to yet be paid. The equity is a risk that is basically borne by the lender. This term indicates the invalidity of a financial document or instrument, after a specified period of time. An education loan, also known as students loan, is specifically meant to provide for the borrowers expenditure towards education. In the majority of countries, educational loans tend to have a low rate of interest. The period of repayment also starts after the completion period of the loan. An exchange rate is a basically a rate, with the help of which one countrys currency can be exchanged with the currency of another country. Endorsement is basically the handing over of rights of a financial/legal document or a negotiable instrument to another person. The person who hands over his/her rights is known as the endorser, and the person to whom
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Banking Terms E-Cash Early Withdrawal Penalty Earning Assets
Encryption Exchange Electronic Filing Earnest Money Deposit Equity Expiration Date Education Loan Exchange Rate Endorsement

the rights have been transferred is known as the endorsee. Banking Terms Face Value Banking Definitions Face value is the original value of any security or negotiable instrument. Field audits are basically the audits that are conducted by bank officials, on the site itself, in order to assess the status and condition of the collateral. Many a Field Audits times, field audits are also conducted in order to assess the financial situation of debtors, especially corporations, who have availed huge loans. A final maturity is the date of maturity when a last, single loan matures from a Final Maturity pool of loans. The final maturity indicates the total and final payment of the pool of mortgage loans. A financial instrument is anything that ranges from cash, deed, negotiable Financial Instrument instrument, or for that matter any written and authenticated evidence, which shows the existence of a transaction or agreement. A financial intermediary is basically a party or person who acts as a link Financial between a provider who provides securities and the user, who purchases the Intermediary securities. Share brokers, and almost all the banks, are the best examples of financial intermediaries. A financial statement is a record of historical financial figures, reports and a Financial Statement record of assets, liabilities, capital, income and expenditure. The term fixture is used in the context of a real estate property, when assets like furniture are attached to the real estate and are also included in its book Fixtures value. Banks, in many a cases, are known to include fixtures in the value, if the real estate property has been pledged as a collateral. A forbearance agreement is an authenticated agreement between a debtor and Forbearance a creditor, and is utilized by the creditor, when the debtor initiates a debt Agreement settlement or the loan is defaulted, or the former becomes bankrupt. A foreclosure is a standardized procedure where creditors like banks, are Foreclosure authorized to obtain the title of the real estate property that has been pledged as collateral. A free cash flow is basically is a total of financially liquid assets that does not Free Cash Flow include capital expenditures and dividends. A fixed rate mortgage is a home loan, for which the interest rate remains Fixed Rate Mortgage constant and fixed throughout the lifetime of loan. Foreign Currency The foreign currency surcharge is levied by some banks and credit card Surcharge companies, when a credit card or an ATM is used in a foreign country. Banking Terms Government Bonds Gross Dividends Gross Income Test Grace Period Banking Definitions A government bond, which is also known as a government security, is basically any security that is held with the government and has the highest possible rate of interest. Gross dividends are basically the total amount of dividends that are earned by an individual, or corporation in a single accounting and tax year. It must be noted that capital gains are also included in gross dividends. A gross income test, is a kind of test, where one can prove to any government authority that a person is ones dependent. A grace period is an interest-free period that is to be given by a creditor to a
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debtor after the period of the loan gets over, before initiating the process of loss recovery. The grace period depends on the amount of the loan and also the credit score of the borrower. Gross income is the total income of a person, organization or corporation in one financial year, before making any deductions. Ground rent is the amount of rent that a leaseholder pays periodically to the owner for using a piece of land. A grant is any type of financial aid that is given by the government. A guarantor is a creator of trust who takes the responsibility of the repayment of a loan, and is also, in some cases, liable and equally responsible for the repayment of the loan. Banking Definitions Household income is the income of all the members of one household put together. One must note that the income earned through the family business, is also counted in the household income. The holding period is the time duration during which a capital asset is held/ owned by an individual or corporation. The holding period is taken into consideration, while pledging the asset as collateral. A home equity debt is a debt, where the borrowers house is pledged as collateral. Hedge is a strategy that is used to minimize the risk of a particular investment and maximize the returns of an investment. A hedge strategy is, most of the times, implemented with the help of a hedge fund. These terms has been written from the bankers point of view and may be interpreted differently in the field of finance.
Gross Income Ground Rent Grant Guarantor
Banking Terms Household Income Holding Period Home Equity Debt
Hedge
Banking Terms
Banking Definitions An installment contract is a contract where the borrower, who is also the Installment Contract purchaser, pays a series of installments that includes the interest of the principal amount. Interest is a charge that is paid by any borrower or debtor for the use of money, which is calculated on the basis of the rate of interest, time period of Interest the debt and the principal amount that was borrowed. Interest is, sometimes, also titled as the cost of credit. The interest accrual rate is a percentage of interest that is calculated on the Interest Accrual Rate basis of the rate of interest and is expressed in terms of annual percentage rate or APR. An investment property is a real estate property that generates income for the Investment Property owner, in terms of rent and lease. Interest rate is the percentage of principal amount that is paid as an interest Interest Rate for the use of money. Usually, the interest rate is decided by a countrys central bank, on the basis of the economic conditions. Internet banking is a system wherein customers can conduct their Internet Banking transactions through the Internet. This kind of banking is also known as ebanking or online banking. Installment Credit Installment credit is a debt or loan that is to be returned to the lender in a set

of periodic installments. Auto loans, home loans and other types of loans are included in installment credit. Banking Terms Joint and Several Liability Judgment Clause Judicial Lien Jump Z-Tranche Junior Debt Junior Creditor Junk Bonds Banking Terms Kappa Key Rate Duration Knot Points Banking Terms Land Contract Banking Definitions This is a legal term utilized to point that two or more entities are individually entirely responsible, instead of being collectively responsible. This relates to a provision regarding bank notes of hand or guarantees, and includes the authorization of the borrowers or sureties given to the bank, to create a judgment lien, at any time after the completion of the legal instruments. It pertains to an interest in the holdings, which are gained from judicial or court orders. A Z-tranche is a real estate mortgage investment conduit (REMIC), which is countenanced to obtain principal sums, before prior tranches are no longer active. The responsibilities of an issuing entity, for which quittance has contractually been considered, as a priority of miscellaneous liabilities of the same debtor. A creditor who possesses junior debt. This is a recognized term for high-yield sureties with quality standings below investment grade. Banking Definitions This is a Greek term utilized in the banking sector that relates to the sensitiveness of an options rate to alterations in the unpredictability cost. This pertains to a measure of duration, which computes efficient or empirical duration by altering the market price for a particular maturity date on the yield curve, while keeping all other variables constant. It relates to the points that are on the yield curve for which there are discernible rates for traded instruments. Banking Definitions Otherwise known as an article of agreement, a land contract denotes a form of contract, wherein the buyer makes periodic installment payments to the seller, in order to buy a real estate. But, the title to the property is not transferred to the buyer, until he makes the final payment. A colloquial expression used to denote a real estate fraud, wherein the prices of undeveloped property are artificially increased to high amounts, which are above the fair market value. This is often accomplished by a group of colluding buyers, who purchase and resell the same property, among its members, several times, each time increasing the price. When the price becomes unrealistically high, they sell the property or raise a loan for its development. A contract, through which, the owner (lessor) of a certain property, allows another (lessee) to use the same for a specified period, in exchange for a value called the rent. A document issued by a bank (on behalf of the buyer or the importer), stating its commitment to pay a third party (seller or the exporter), a specific amount, for the purchase of goods by its customer, who is the buyer. The seller has to
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Land Flip
Lease Letter of Credit

meet the conditions given in the document and submit the relevant documents, in order to receive the payment. Letters of credit are mainly used in international trade transactions of huge amounts, wherein the customer and the supplier live in different countries. The upper and lower limit for changes in the borrowers interest rate over the Life Cap term of his/her loan. A bank account meant for customers with low incomes. These accounts are Lifeline Account characterized by little or no monthly fees and there is no strict rule regarding the minimum balance. A clause, which is commonly found in contracts, wherein the parties agree to pay a fixed amount, in case of any breach of the contractual provisions. The Liquidated Damages party, who violates the provisions, has to pay the amount to the aggrieved party. A guarantee given by the lender that there will be no change in the quoted Lock-in Period mortgage rates for a specified period of time, which is called the lock-in period. An amount owed for a period exceeding one year, from the date of last balance sheet/accounting year. Otherwise known as funded debts, long term debts Long Term Debt refers to those loans, which become due, after one year from the last balance sheet/accounting year. Such debts can be a bank loan, bonds, mortgage, debenture, or other obligations. A term used to denote the actual loss incurred by a bank, in case of default by Loss Given Default a debtor to pay off the loan. If there is any collateral pledged by the debtor, the (LGD) value of such assets will be reduced from the loan amount. Banking Terms Banking Definitions A mortgage is a legal agreement between the lender and borrower where real estate property is used as collateral for the loan, in order to secure the Mortgage payment of the debt. According to the mortgage agreement, the lender of the loan is authorized to confiscate the property, the moment the borrower stops paying the installments. The term maturity is used to indicate the end of investment period of any fixed investment or security. After maturity, the investor is repaid the invested Maturity amount along with the interest that has been accumulated. For example, on the maturity of a one year fixed deposit, the invested sum along with the accumulated interest, is transferred by the bank to the account of the investor. Maturity Date Maturity date is the date on which the investment or security attains maturity. A mortgage refinance involves the replacement of current debt with another Mortgage Refinance debt with more convenient terms and conditions. Market value is the value at which the demand of consumers and the supply of the manufacturers decide the price of a commodity or service. The market value is the equilibrium point on the supply and demand graph, where the Market Value demand and supply curves meet. Thus, market value is decided on the basis of the number people who demand a commodity and the number of commodities that the sellers are capable of selling. Banking Terms No Cash Out Banking Definitions A home loan, which is at a lower interest, an amount which does not go over
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Refinance No Documentation Loan Non-Recurring Closing Costs National Bank Net Operating Loss Net Income Negative Amortization Non-Liquid Asset Non-Recourse Loan Banking Terms Original Principal Balance the closing costs and the outstanding principal of the original mortgage. When the applicant furnishes minimum information, giving, only name, address, contact information for the employer and social security number, for the application of the loan, it is called a no-documentation loan. A lump sum fees paid at a real estate set up, which includes appraisal, origination, title insurance, credit report and points, is referred to as nonrecurring closing costs. A bank which is chartered by the federal government and is a member of the Federal Reserve System by default is called a national bank. A total loss that is calculated for a tax year and is attributed to business or casualty losses. The amount that is left after paying the taxes is called the net income. When the monthly payment is unable to cover the principal and the interest due, there is a slow increase in the mortgage debt. This situation is termed as negative amortization. A possession or asset which cannot be changed into cash very easily is called non liquid asset. A loan which is secured by collateral and for which the borrower is not personally liable, is called a non recourse loan.
Banking Definitions The amount borrowed by any borrower is called the original principal balance. When the seller loans the whole sum or a part of it to a buyer, it is called Owner Financing owner financing. The accessing of bank information, accounts and transactions with the help of Online Banking a computer through the financial institutions website on the Internet is called online banking. It is also called Internet banking or e-banking As the name suggests, it is a check or rather an amount of check, which is Overdraft above the balance available in the account of the payer. A service which permits a verification account to be connected to other Overdraft Protection savings or line of credit for facilitation of protection against overdrafts is called overdraft protection. The charges a lender or creditor levies for processing a loan. It includes cost of Origination Fee loan document preparation, verification of the credit history of the borrower and conducting an overall appraisal. Dividends, which are a distribution of the profits of a company, are called Ordinary Dividends ordinary dividends. Ordinary Income Income, not qualifying as a capital gain, is called ordinary income. This refers to a card which is issued by a bank and has a VISA or MasterCard Offline Debit Card logo on it. It can be issued, either instead of or along with a ATM card. Open end credit means a line of credit that can be used a number of times, up Open End Credit to a certain limit. Another name for this type of credit is charge account or revolving credit. Banking Terms Payee Banking Definitions Payee is the person to whom the money is to be paid by the payer.
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Payer Penalty Rate Personal Identification Number (PIN) Point of Sale (POS) Posting Date Pre-Qualification Previous Balance Principal Banking Terms Qualified Opinion Quality Spread Quick Ratio Banking Terms Range Bonds Rate Rate Covenant Refinance Revolving Line of Credit Rate Risk Rate Sensitive Real Estate Real Property Record Date Reconveyance Payer is the person who pays the money to the payee. Extra payment made to workers for working more than normal working hours is called as penalty rate. Personal identification number or PIN is a secret code of numbers and alphabets given to customers to perform transactions through an automatic teller machine or an ATM. Point of sale a terminal is where cash registers are replaced by computerized systems. Posting date is the date on which outdoor advertisements hit the markets. Usually these dates are in multiples of five. A preliminary stage prior to bidding process, where the applicant is verified of whether he has the resources and the ability to do a given job. Previous balance is an outstanding amount which appears on the credit card statement on date when it is generated. Principal is basic amount which is invested to yield returns over a certain period of time at a given rate of interest. Banking Definitions An auditors opinion mentioned in his report which holds some reservations regarding the process of audit is called as a qualified opinion. The difference between the yields of Treasury securities and non-Treasury securities, as a result of different ratings or quality, is termed as quality spread. Quick ratio is also called as the acid-test ratio. It measures the companys liabilities and determines its position to pay off its obligations. Banking Definitions Bonds which cease the payments because the reference rate of the bond increases or decreases, as compared to predetermined rate on a given index. A rate is a measure which forms the basis of any financial transaction. Rate covenant in a municipal bond determines the rates to be charged to buyers. Refinance means clearing the current loan with the proceeds of a new one and using the same property for collateral. Revolving line of credit is a rule followed by the lender, which binds him to allow a certain credit to the borrower. Rate risk is the rate of return determined to attract capital on a given investment. Rate sensitive pertains to deposit account or security investment. If any changes are made to the related interest rate that causes variations in its demand and supply. A piece of land developed or undeveloped which comes for a price. Real property refers to anything that is built on land. A date set by the issuer, on which an individual must own the shares, so as to be eligible to receive the dividend. In Banking Terms, reconveyance is transfer of property to its real owner, once the loan or the mortgage is paid off.
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Redemption Fee Reference Asset Reference Rate Refunding Reinvestment Risk Relative Value Repossession Repricing Reserve Account Reserve Requirements Residual Value Return on Capital Returns Risk Banking Terms Safekeeping A commission or fee paid, when an agent or an individual sells an investment, such as mutual funds or annuity. An asset such as debt instrument which has a credit derivative is called as a reference asset. The basis of floating rate security is called as the reference rate. The act of paying back the amount or returning the funds is called as refunding. The risk that arises from the fact that dividends or any yields may not be eligible for investment to earn the rate of interest is called as the reinvestment risk. The liquidity, risk and return of one instrument in relation to another financial instrument is the relative value. Taking back of property by a seller or a lender from the buyer or the borrower due to default of payment. Repricing means a change in the rate of interest. An account which is maintained by depositing undistributed parts of profit for future needs is called as a reserve account. Cash money or liquidity that member banks need to hold with the Federal Reserve System. The anticipated value that a company calculates, to sell its asset at the end of its full life. A measure which determines how a company will optimize its funds. The yield on earning at the end of a given period at a given rate of interest. The probability of threat, danger, damage, liability or loss is called as risk. Banking Definitions An arrangement for holding and protecting a customers assets, like valuables, documents, etc. Such arrangements are commonly provided by banks and some financial institutions, usually for a fee. The customer is issued a safekeeping receipt, which indicates that the assets do not belong to the bank and they have to be returned to the customer, upon his request. This banking term refers to the funds or money balances, which can be transferred or withdrawn on the same day of presenting and collection. In short, a transfer of money, which can be used by the recipient on the same day of transfer and this provision is subject to the net settlement of accounts between the bank, through which the money is sent and the receiving bank. This term is also used to refer to the transfer of federal funds from one bank to another over Fed wire and the transfers through the Clearing House Interbank Payments System (CHIPS) in New York. A sale contract refers to a written agreement between the buyer and the seller of an asset (usually real estate), with details regarding the terms and conditions of the sale. A sale of property, wherein the title is transferred to the buyer, on condition that the property will be leased to the seller on a long-term basis, after the sale. Otherwise known as second trust, a second mortgage is a mortgage which is taken out on property, which has been pledged as security to ensure payment
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Same Day Funds
Sale Contract Sale Leaseback Second Mortgage

(collateral) of an original or first mortgage. A first mortgage has priority in settlement of claims, before all other subsequent mortgages. Unlike a first mortgage, a second mortgage has a shorter repayment term, with higher interest rates. A loan which is backed by a pledging of real or personal property (collateral) by the borrower to the lender. Unlike unsecured loans, which is backed by a mere promise by the borrower that he will repay the loan, in case of a secured loan, the lender can initiate legal action against the borrower to reclaim and sell the collateral (pledged property). Property or assets, which are pledged to the lender by the borrower, as a guarantee to the repayment of a loan. A person who finds a buyer for the seller of a property and aids the latter in negotiation, in lieu of a commission. A form of financing, wherein the seller of a property finances the buyer, who finds it difficult to procure a loan or falls short of the amount needed to buy the property. In short, it is a part of the purchase amount, which the seller offers to finance. This term is also known as carry back loan or sellers second. A market, which has more buyers, as compared to the number of sellers. This condition leads to a rise in the prices, which is favorable for sellers. A sort code is a specific number, which is assigned to a particular branch of a bank for internal purposes. Each branch is assigned with a sort code, which makes it easier to designate that particular branch of bank, than writing down the whole address. A method used to calculate the monthly payment required to repay a loan, based on the loan balance, term of the loan and the current interest rate. A term used to denote a small house, which is inexpensive, and is often meant for first time home buyers. Unlike debit and credit cards (with magnetic stripes), smart cards possess a computer chip, which is used for data storage, processing and identification. A very large loan extended by a group of small banks to a single borrower, especially corporate borrowers. In most cases of syndicated loans, there will be a lead bank, which provides a part of the loan and syndicates the balance amount to other banks. Banking Definitions The time (period) when a borrower receives finances from a lender under a line of credit or loan commitment. This term relates to a written promise by a loaner to make a long-term financial arrangement to substitute or replace a short-run loan. It is the insurance for a certain time period which provides for no defrayal to the insured individual, excluding losses during the period, and that becomes null upon its expiration. A legal notice offered by a particular organization to investors through a dealer. This phrase relates to the relationship between interest rates on bonds of different due dates, generally described in the form of a chart, often known as a yield curve.
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Secured Loan
Security Seller Broker Seller Carry back Sellers Market Sort Code Standard Payment Calculation Starter Home Smart Cards Syndicated Loan
Banking Terms Takedown Period Takeout Commitments Term Insurance Term Note Term Structure of Interest Rates

A kind of bank deposit which the investor is not able to withdraw, before a time fixed when making the deposit. Time Draft This term relates to a draft that is collectible at a particular future date. A time note is a financial instrument, like a note of hand, which stipulates Time Note dates or a date of defrayal. This is the sum of money that an options premium surpasses its intrinsic Time Value worth, and is also called as time premium. Times Interest It pertains to a measure of the financial trustworthiness of an organization, Earned which is equal to Earning divided by interest. It is the insurance for the purpose of protecting a loaner or owner against loss, Title Insurance if there is any kind of a property ownership conflict. This term is concerned with the commitment which is brought out by a title Title Insurance insurance firm, and comprises the stipulations under which a title insurance Commitment policy will be made out. It pertains to a legal instrument confirming that a property title is clear and Title Opinion can be offered for sale in the market. This refers to the procedure of analyzing all applicable records to affirm that Title Search the vendor is the legal possessor of the property and that there are no liens or other claims undercharged. This term relates to the analysis of the real rate of return that is earned over a Total Return Analysis certain evaluation time period. It is a kind of switch wherein an entity pays another entity according to the Total Return Swap fixed rate in return for defrayals based on the return of a given asset. It is the credit which a company gives to another organization for the purpose Trade Credit of buying products or services. Total Risk-Based The finances that are provided for startup companies and small businesses Capital with prodigious growth abilities. The day on which the actual transaction takes place; one to five days before Trade Date the settlement period, according to the kind of transaction. The incorporated legal name under which an organization carries out all its Trade Name operations, functions, and dealings. This refers to a legal document that a customer asks for from his bank for the Trade Letter of Credit purpose of assuring that the defrayal for products would be transferred to the vendor. Time Deposit Banking Terms Unadvised Line Uncertificated Uncovered Underwriter Undivided Profits Unexpected Loss or Banking Definitions A line of credit which is sanctioned by the bank but not revealed to the borrower till the time of some particular occasion. This is a legal word that is utilized as an adjective to depict stocks, bonds, miscellaneous investments and deposit certificates, which are held in immaterial form as electronic computer records. It is the condition of an option bearer who doesnt even possess an offsetting position in the underlying instrument. Any investment or commercial financial firm or a securities house that works with an issuing entity for the purpose of selling a new issue. This is a banking work for retained earnings. The element or part of risk or loss which surpasses the anticipated amount.
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Unexpected Risk Universal Life Insurance
A type of life insurance which blends term insurance protection with a savings element. A guarantee understanding which doesnt consist of any provisos limiting the Unlimited Guaranty amount of debt guaranteed. A word used to depict a suggestion letter concomitant with scrutinized Unqualified Opinion financial statements. A word that is utilized to give a description of a guarantee of a loan to a Upstream Guaranty borrowing entity, when the borrowing party is an owning company or shareholder of the surety. The state and federal jurisprudences setting up uttermost permissible rates of Usury Laws interest that can be charged on certain types of credit extensions to particular kinds of borrowers. Banking Terms Banking Definitions The sum or portion of the value that is at stake of subject to loss from a Value At Risk (VAR) variation in prevalent interest rates. It is a structured approach to evaluate the performance of the companys unit Value Based managers or goods and services, in terms of the aggregate gains they render to Management (VBM) stockholders. Variable Life This type of insurance is very similar to whole life insurance, wherein the cash Insurance worth is invested in equity or debt sureties. Variable Rate This is just another term used for Adjustable Rate Mortgage (ARM). Mortgage This is a stats-related word which measures the distribution of information, Variance like rates or costs around the mean. A series of the rate of paying finances in advance, in succession that is chosen Vector Path to contemplate an assumed rate of interest scenario. This relates to an OTC fiscal derivative which enables a person to speculate on Variance Swap or hedging jeopardizes connected with unpredictability of some underlying product, such as an exchange rate, interest rate or stock index. The part of the conglomerated benefit obligation under a specified benefit Vested Accumulated plan to which the workers possess a legal right, even if their employment is Benefit Obligation terminated before retirement. Banking Terms Waiver Warehouse Lines of Credit Warehouse Receipt Warranty Deed When-Issued (WI) Banking Definitions In Banking Terms, a waiver is relinquishing the rights. Sometimes also considered to be the exemption or settlement of a part of debt. Warehouse line of credit is a facility provided to the borrower to get a warehouse mortgage portfolio for future security. A document or a statement which states the quantity and quality of the items at the warehouse for safekeeping. A deed which states that the seller holds the clear title of the goods or real estate to be sold. This gives him or her right to sell the title to a prospective buyer. When issued or WI is a conditional transaction made due to its authorized security or debt obligation.
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A whole life insurance is a contract between the insurer and the policy owner, which the insurer will pay the sum of money on the occurrence of the event Whole Life Insurance mentioned in the policy to the insured. Its a concept wherein the insurer mitigates the loss caused to the insured on the basis of certain principles. Wholesale banking is a term used for banks which offer services to other Wholesale Banking corporate entities, large institutions and other financial institutions. Wire Transfers Wire transfers are an Electronic medium used while transferring of funds. A term used to signify that a seller or a drawer will be liable in case of nonWith Recourse performance of asset or non-payment of an instrument. Withdrawals Removing of funds from a bank account is called as making a withdrawal. A term which signifies that the buyer is responsible for non-performance of an Without Recourse asset or non-payment of an instrument, instead of the seller. In Banking Terms, working capital is defined as the difference between Working Capital current assets and current liabilities. Wraparound An arrangement, wherein existing mortgage is refinanced with more money, Mortgage with a rate of interest ranging between the old rates and current market rates. A writer is an entity or a financial institution which promises to sell a certain Writer number of shares or stocks at a price before a certain date. Banking Terms Yield Curve Yield Yield Curve Risk Yield to Call (YTC) Yield-to-Maturity (YTM) Banking Terms Banking Definitions Yield curve is a graph or a curve that shows the relationship between maturity dates and yield. The returns earned on a stock or bonds, as per the effective rate of interest on the effective date, are called as a yield in the Banking Terms. Yield curve risk is the huge risk involved in a fixed income instrument, due to major fluctuations in the market rates of interest. The yield on a bond calculated on the supposition that the issuer will redeem the amount at the first call as stated on the bonds prospectus is called as yield to call. The average annual yield that an investor receives because he holds it for life or till the maturity date is called as the yield to maturity.
Banking Definitions Z score is a measure, used in the banking field, to determine the difference Z score between a single data point and a normal data point. A bank account which does not require any minimum balance is termed as a Zero Balance Account zero balance account. A type of arrangement, wherein, the borrower buys a cap from the bank and Zero Cost Collar sells the floor. In this arrangement, the cost of the cap is recovered by sale proceeds of the floor or vice versa. Zero Coupon Yield Zero coupon yield curve is also called as spot yield curve, and is used to Curve determine discount factors. A government controlled area where only certain uses of the land are Zoning permitted is called zoning. An exception made in the zoning rule by the local government is zoning Zoning Variance variance. Zero-Lot Line Structure of a housing area such that every house has a designated plot. They

may or may not have same walls. Zero-down-payment mortgage is a type of mortgage given to a buyer who Zero-Down-Payment does not make any down payments while borrowing. The mortgage buyer Mortgage borrows the amount at the entire purchase price.
A quick look on basic Banking terms...

1. RBI The Reserve Bank of India is the apex bank of the country, which was constituted under the RBI Act, 1934 to regulate the other banks, issue of bank notes and maintenance of reserves with a view to securing the monetary stability in India. 2. Demand Deposit A Demand deposit is the one which can be withdrawn at any time, without any notice or penalty; e.g. money deposited in a checking account or savings account in a bank. 3. Time Deposit Time deposit is a money deposit at a banking institution that cannot be withdrawn for a certain "term" or period of time. When the term is over it can be withdrawn or it can be held for another term. 4. Fixed Deposits FDs are the deposits that are repayable on fixed maturity date along with the principal and agreed interest rate for the period. Banks pay higher interest rates on FDs than the savings bank account. 5. Recurring Deposits These are also called cumulative deposits and in recurring deposit accounts, a certain amounts of savings are required to be compulsorily deposited at specific intervals for a specified period. 6. Savings Account Savings account is an account generally maintained by retail customers that deposit money (i.e. their savings) and can withdraw them whenever they need. Funds in these accounts are subjected to low rates of interest. 7. Current Accounts These accounts are maintained by the corporate clients that may be operated any number of times in a day. There is a maintenance charge for the current accounts for which the holders enjoy facilities of easy handling, overdraft facility etc. 8. FCNR Accounts Foreign Currency Non-Resident accounts are the ones that are maintained by the NRIs in foreign currencies like USD, DM, and GBP etc. The account is a term deposit with interest rates linked to the international rates of interest of the respective currencies. 9. NRE Accounts Non-Resident External accounts are the ones in which NRIs remit money in any permitted foreign currency and the remittance is converted to Indian rupees for credit to NRE accounts. The accounts can be in the form of current, saving, FDs, recurring deposits. The interest rates and other terms of these accounts are as per the RBI directives. 10. Cheque Book - A small, bound booklet of cheques. A cheque is a piece of paper produced by your bank with your account number, sort-code and cheque number printed on it. The account number distinguishes your account from other accounts; the sort-code is your bank's special code which distinguishes it from any other bank. 11. Cheque Clearing - This is the process of getting the money from the cheque-writer's account into the cheque receiver's account.

12. Clearing Bank - This is a bank that can clear funds between banks. For general purposes, this is any institution which we know of as a bank or as a provider of banking services. 13. Bounced Cheque - when the bank has not enough funds in the relevant account or the account holder requests that the cheque is bounced (under exceptional circumstances) then the bank will return the cheque to the account holder. The beneficiary of the cheque will have not been paid. This normally incurs a fee from the bank. 14. Credit Rating - This is the rating which an individual (or company) gets from the credit industry. This is obtained by the individual's credit history, the details of which are available from specialist organizations like CRISIL in India. 15. Credit-Worthiness - This is the judgment of an organization which is assessing whether or not to take a particular individual on as a customer. An individual might be considered creditworthy by one organization but not by another. Much depends on whether an organization is involved with high risk customers or not. 16. Interest - The amount paid or charged on money over time. If you borrow money interest will be charged on the loan. If you invest money, interest will be paid (where appropriate to the investment). 17. Overdraft - This is when a person has a minus figure in their account. It can be authorized (agreed to in advance or retrospect) or unauthorized (where the bank has not agreed to the overdraft either because the account holder represents too great a risk to lend to in this way or because the account holder has not asked for an overdraft facility). 18. Payee - The person who receives a payment. This often applies to cheques. If you receive a cheque you are the payee and the person or company who wrote the cheque is the payer. 19. Payer - The person who makes a payment. This often applies to cheques. If you write a cheque you are the payer and the recipient of the cheque is the payee. 20. Security for Loans - Where large loans are required the lending institution often needs to have a guarantee that the loan will be paid back. This takes the form of a large item of capital outlay (typically a house) which is owned or partly owned and the amount owned is at least equivalent to the loan required. 21. Internet Banking - Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by the bank. 22. Credit Card - A credit card is one of the systems of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. 23. Debit Card Debit card allows for direct withdrawal of funds from customers bank accounts. The spending limit is determined by the available balance in the account. 24. Loan - A loan is a type of debt. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal

amount of money to the lender at a later time. There are different kinds of loan such as the house loan, auto loan etc. 25. Bank Rate - This is the rate at which central bank (RBI) lends money to other banks or financial institutions. If the bank rate goes up, long-term interest rates also tend to move up, and vice-versa. 26. CRR - CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash with Reserve Bank of India (RBI). This minimum ratio is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Thus, when a banks deposits increase by Rs100, and if the cash reserve ratio is 9%, the banks will have to hold additional Rs 9 with RBI and Bank will be able to use only Rs 91 for investments and lending / credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount that banks will be able to use for lending and investment. This power of RBI to reduce the lendable amount by increasing the CRR makes it an instrument in the hands of a central bank through which it can control the amount that banks lend. Thus, it is a tool used by RBI to control liquidity in the banking system. 27. SLR - SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities. Thus, we can say that it is ratio of cash and some other approved to liabilities (deposits). It regulates the credit growth in India. 28. ATM - An automated teller machine (ATM) is a computerized telecommunications device that provides the clients with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVV. Authentication is provided by the customer entering a personal identification number (PIN)
A quick look on basic Finance Terms

29. Compound interest Compound Interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also it earns interest. This addition of interest to the principal is called compounding (i.e. the interest is compounded). 30. Time value of money The time value of money is the value of money figuring in a given amount of interest earned over a given amount of time. For example, 100 dollars of today's money invested for one year and earning 5 percent interest will be worth 105 dollars after one year. Therefore, 100 dollars paid now or 105 dollars paid exactly one year from now both have the same value to the recipient who assumes 5 percent interest; using time value of money. 31. Present Value The current worth of a future sum of money or stream of cash flows given a specified rate of return is the present value of that sum. 32. Nominal interest rate Nominal rate of interest refers to the rate of interest before adjustment for inflation (in contrast with the real interest rate); or, for interest rates "as stated" without adjustment for the full effect of compounding.
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33. Effective interest rate Effective Annual interest rate, Annual Equivalent Rate (AER) or simply effective rate is the interest rate on a loan or financial product restated from the nominal interest rate as an interest rate with annual compound interest payable in arrears. 34. Bond A bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals 35. Equity/ Stock The stock or capital stock of a business entity represents the original capital paid or invested into the business by its founders. 36. Cost of Capital The cost of capital is the cost of a company's funds (both debt and equity), or, from an investor's point of view "the expected return on a portfolio of all the company's existing securities." It is used to evaluate new projects of a company as it is the minimum return that investors expect for providing capital to the company, thus setting a benchmark that a new project has to meet. 37. CAGR Compound Annual Growth Rate is a business and investing specific term for the smoothed annualized gain of an investment over a given time period. CAGR dampens the effect of volatility of periodic returns that can render arithmetic means irrelevant. CAGR is often used to describe the growth over a period of time of some element of the business, for example revenue, units delivered, registered users, etc. 38. Leverage Leverage (also known as gearing or levering) refers to the use of debt to supplement investment. Companies usually leverage to increase returns to stock, as this practice can maximize gains (and losses). 39. DCF Discounted Cash Flow analysis is a method of valuing a project, company, or asset using the concepts of the time value of money. All future cash flows are estimated and discounted to give their present values (PVs). 40. NPV The Net Present Value or net present worth of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows. In case when all future cash flows are incoming (such as coupons and principal of a bond) and the only outflow of cash is the purchase price, the NPV is simply the NPV of future cash flows minus the purchase price (which is its own PV). 41. NBFC Non-Banking Financial Company is a company registered under the Companies Act, 1956 of India and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government or local authority or other securities of like marketable nature, insurance business. 42. Mutual Fund A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually.
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43. Insurance Insurance is a form of risk management primarily used to hedge against the risk of a loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. 44. Pension fund A pension fund is a pool of assets forming an independent legal entity that are bought with the contributions to a pension plan for the exclusive purpose of financing pension plan benefits. Pension funds are important shareholders of listed and private companies 45. Dividends Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. 46. Exchange rate The exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how much one currency is worth in terms of the other. It is the value of a foreign nations currency in terms of the home nations currency. For example an exchange rate of 91 Japanese yen (JPY, ) to the United States dollar (USD, $) means that JPY 91 is worth the same as USD 1. 47. Derivatives Derivatives is the collective name used for a broad class of financial instruments that derive their value from other financial instruments (known as the underlying), events or conditions. 48. Futures A futures contract is a standardized contract to buy or sell a specified commodity of standardized quality at a certain date in the future and at a market-determined price (the futures price). The contracts are traded on a futures exchange. They are a type of derivative contract. 49. Options In finance, an option is a contract between a buyer and a seller that gives the buyer of the option the right, but not the obligation, to buy or to sell a specified asset (underlying) on or before the options expiration time, at an agreed price, the strike price. 50. SEBI Securities Exchange Board of India is the regulator for the Securities Market in India. It was formed officially by the Government of India in 1988 with SEBI Act 1992 being passed by the Indian Parliament. 51. CRISIL Credit Rating and Information Services of India Ltd. is India's leading Ratings, Research, Risk and Policy Advisory Company. CRISILs majority shareholder is Standard & Poor's, world's foremost provider of financial market intelligence. CRISIL offers domestic and international customers with independent information, opinions and solutions related to credit ratings and risk assessment; energy, infrastructure and corporate advisory; research on India's economy, industries and companies; global equity research; fund services; and risk management. 52. Capital Structure Capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed.
Banking Abbreviations and Terms Banking Terms

1. What is a Repo Rate? Ans: Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks have any shortage of funds they can borrow it from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive. 2. What is Reverse Repo Rate? Ans: This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to these attractive interest rates. 3. What is CRR Rate? Ans: Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks. 4. What is SLR Rate? Ans: SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently. 5. What is Bank Rate? Ans: Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the money supply. 6. What is Inflation? Ans: Inflation is as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are fewer Goods and more buyers; this will result in increase in the price of Goods, since there is more demand and less supply of the goods. 7. What is Deflation? Ans: Deflation is the continuous decrease in prices of goods and services. Deflation occurs when the inflation rate becomes negative (below zero) and stays there for a longer period. 8. What is PLR? Ans: The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers). The rate is almost

always the same amongst major banks. Adjustments to the prime rate are made by banks at the same time; although, the prime rate does not adjust on any regular basis. The Prime Rate is usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate. The rates reported below are based upon the prime rates on the first day of each respective month. Some banks use the name "Reference Rate" or "Base Lending Rate" to refer to their Prime Lending Rate. 9. What is Deposit Rate? Ans: Interest Rates paid by a depository institution on the cash on deposit. 10. What is FII? Ans: FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks. FII's generally buy in large volumes which has an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc. 11. What is FDI? Ans: FDI (Foreign Direct Investment) occurs with the purchase of the physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control (Or) A foreign company having a stake in a Indian Company. 12. What is IPO? Ans: IPO is Initial Public Offering. This is the first offering of shares to the general public from a company wishes to list on the stock exchanges. 13. What is Disinvestment? Ans: The Selling of the government stake in public sector undertakings. 14. What is Fiscal Deficit? Ans: It is the difference between the governments total receipts (excluding borrowings) and total expenditure. Fiscal deficit in 2009-10 is proposed at 6.8% of GDP. 15. What is Revenue deficit? Ans: It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government. Revenue deficit in 2009-10 is proposed at 4.8% of GDP. 16. What is GDP? Ans: The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period; classically a year. GDP during 2008-09 is 6.7%. 17. What is GNP? Ans: Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market. 18. What is National Income? Ans: National Income is the money value of all goods and services produced in a country during the year.

19. What is Per Capita Income? Ans: The national income of a country, or region, divided by its population. Per capita income is often used to measure a country's standard of living Per capita income during 2008-09 estimated by CSO: Rs.25, 494. 20. What is Vote on Account? Ans: A vote-on account is basically a statement, where the government presents an estimate of a sum required to meet the expenditure that it incurs during the first three to four months of an election financial year until a new government is in place, to keep the machinery running. 21. Difference between Vote on Account and Interim Budget? Ans: Vote-on-account deals only with the expenditure side of the government's budget, an interim Budget is a complete set of accounts, including both expenditure and receipts. 22. What is SDR? Ans: The SDR (Special Drawing Rights) is an artificial currency created by the IMF in 1969. SDRs are allocated to member countries and can be fully converted into international currencies so they serve as a supplement to the official foreign reserves of member countries. Its value is based on a basket of key international currencies (U.S. dollar, euro, yen and pound sterling). 23. What is SEZ? Ans: SEZ means Special Economic Zone is the one of the part of governments policies in India. A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. The basic motto behind this is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people.
OTHER IMPORTANT TERMS

1. What is corporate governance? Ans: The way in which a company is governed and how it deals with the various interests of its customers, shareholders, employees and society at large. Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled is defined as the general set of customs, regulations, habits, and laws that determine to what end a firm should be run. 2. What are functions of RBI? Ans: The Reserve Bank of India is the central bank of India, was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their bankers Banker to banks: maintains banking accounts of all scheduled banks. 3. What is monetary policy?

Ans: A Monetary policy is the process by which the government, central bank, of a country controls the supply of money, availability of money, and cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy. 4. What is Fiscal Policy? Ans: Fiscal policy is the use of government spending and revenue collection to influence the economy. These policies affect tax rates, interest rates and government spending, in an effort to control the economy. Fiscal policy is an additional method to determine public revenue and public expenditure. 5. What is Core Banking Solutions? Ans: Core banking is a general term used to describe the services provided by a group of networked bank branches. Bank customers may access their funds and other simple transactions from any of the member branch offices. It will cut down time, working simultaneously on different issues and increasing efficiency. The platform where communication technology and information technology are merged to suit core needs of banking is known as Core Banking Solutions. 6. What are bank and its features and types? Ans: A bank is financial organizations where people deposit their money to keep it safe. Banks play an important role in the financial system and the economy. As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner. Regional Rural Banks were established with an objective to ensure sufficient institutional credit for agriculture and other rural sectors. The RRBs mobilize financial resources from rural/semi-urban areas and grant loans and advances mostly to small and marginal farmers, agricultural laborers and rural artisans. The area of operation of RRBs is limited to the area as notified by GoI covering one or more districts in the State. Banking services for individual customers is known as retail banking. A bank that deals mostly in but international finance, long-term loans for companies and underwriting. Merchant banks do not provide regular banking services to the general public Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank. Mobile Banking is a service that allows you to do banking transactions on your mobile phone without making a call, using the SMS facility. Is a term used for performing balance checks, account transactions, payments etc. via a mobile device such as a mobile phone. Traditional banking is the normal bank accounts we have. Like, put your money in the bank and they act as a security and you will get only the normal interests (decided by RBI in our case, FED bank in US). Investment banking is entirely different. Here, people who are having so much money (money in excess which will yield only less interest if in Banks) will invest their money and get higher returns. For example, If I have more money instead of taking the pain of investing in share market, buying properties etc. I will give to investment banks and they will do the money management and give me higher returns when compared to traditional banks. 7. What is E-Governance?

Ans: E-Governance is the public sectors use of information and communication technologies with the aim of improving information and service delivery, encouraging citizen participation in the decision-making process and making government more accountable, transparent and effective. 8. What is Right to information Act? Ans: The Right to Information act is a law enacted by the Parliament of India giving citizens of India access to records of the Central Government and State governments. The Act applies to all States and Union Territories of India, except the State of Jammu and Kashmir - which is covered under a State-level law. This law was passed by Parliament on 15 June 2005 and came fully into force on 13 October 2005. 9. What is Credit Rating Agencies in India? Ans: The credit rating agencies in India mainly include ICRA and CRISIL. ICRA was formerly referred to the Investment Information and Credit Rating Agency of India Limited. Their main function is to grade the different sector and companies in terms of performance and offer solutions for up gradation. The credit rating agencies in India mainly include ICRA and CRISIL (Credit Rating Information Services of India Limited) 10. What is Cheque? Ans: Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified account held in the maker/depositor's name with that Bank. A bill of exchange drawn on a specified banker and payable on demand.Written order directing a bank to pay money. 11. What is demand Draft? Ans: A demand draft is an instrument used for effecting transfer of money. It is a Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of money. You can 100% trust a DD. It is a banker's check. A check may be dishonored for lack of funds a DD cannot. Cheque is written by an individual and Demand draft is issued by a bank. People believe banks more than individuals. 12. What is a NBFC? Ans: Non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances; acquisition of shares/stock/bonds/debentures/securities issued by government, but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property. NBFCs are doing functions akin to that of banks; however there are a few differences: (i) A NBFC cannot accept demand deposits (demand deposits are funds deposited at a depository institution that are payable on demand -- immediately or within a very short period like your current or savings accounts.) (ii) It is not a part of the payment and settlement system and as such cannot issue cheques to its customers; and (iii) Deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of banks. 13. What is Difference between banking & Finance? Ans: Finance is generally related to all types of financial, this could be accounting, insurances and policies whereas banking is everything that happens in a bank only. The term Banking and

Finance are two very different terms but are often associated together. These two terms are often used to denote services that a bank and other financial institutions provide to its customers. 14. What is NASSCOM? Ans: The National Association of Software and Services Companies (NASSCOM), the Indian chamber of commerce is a consortium that serves as an interface to the Indian software industry and Indian BPO industry. Maintaining close interaction with the Government of India in formulating National IT policies with specific focus on IT software and services maintaining a state of the art information database of IT software and services related activities for use of both the software developers as well as interested companies overseas. 15. What is ASSOCHAM? Ans: The Associated Chambers of Commerce and Industry of India (ASSOCHAM), India's premier apex chamber covers a membership of over 2 lakh companies and professionals across the country. It was established in 1920 by promoter chambers, representing all regions of India. As an apex industry body, ASSOCHAM represents the interests of industry and trade, interfaces with Government on policy issues and interacts with counterpart international organizations to promote bilateral economic issues. 16. What is NABARD? Ans: NABARD was established by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premiere agencies to provide credit in rural areas. NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts. 17. What is SIDBI? Ans: The Small Industries Development Bank of India is a state-run bank aimed to aid the growth and development of micro, small and medium scale industries in India. Set up in 1990 through an act of parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India. 18. What is SENSEX and NIFTY? Ans: SENSEX is the short term for the words "Sensitive Index" and is associated with the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed on 1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE. Whereas NSE has 50 most traded stocks of NSE.SENSEX IS THE INDEX OF BSE. AND NIFTY IS THE INDEX OF NSE.BOTH WILL SHOW DAILY TRADING MARKS. SENSEX and Nifty both are an "index. An index is basically an indicator it indicates whether most of the stocks have gone up or most of the stocks have gone down. 19. What is SEBI? Ans: SEBI is the regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament.
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20. What are Mutual funds? Ans: Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually. 21. What is Asset Management Companies? Ans: A company that invests its clients' pooled fund into securities that match its declared financial objectives. Asset management companies provide investors with more diversification and investing options than they would have by themselves. Mutual funds, hedge funds and pension plans are all run by asset management companies. These companies earn income by charging service fees to their clients. 22. What are non-performing assets? Ans: Non-performing assets, also called non-performing loans, are loans, made by a bank or finance company, on which repayments or interest payments are not being made on time. A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments. 23. What is Recession? Ans: A true economic recession can only be confirmed if GDP (Gross Domestic Product) growth is negative for a period of two or more consecutive quarters. 24. What are foreign exchange reserves? Ans: Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions. 25. What is Open Market Operations (OMO)? Ans: The buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system by RBI. Open market operations are the principal tools of monetary policy. 26. What is Micro Credit? Ans: It is a term used to extend small loans to very poor people for self-employment projects that generate income, allowing them to care for themselves and their families. 27. What is Liquidity Adjustment Facility (LAF)? Ans: A tool used in monetary policy that allows banks to borrow money through repurchase agreements. This arrangement allows banks to respond to liquidity pressures and is used by governments to assure basic stability in the financial markets. 28. What is RTGS System? Ans: The acronym 'RTGS' stands for Real Time Gross Settlement. RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a 'real

time' and on 'gross' basis. This is the fastest possible money transfer system through the banking channel. Settlement in 'real time' means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. 'Gross settlement' means the transaction is settled on one to one basis without bunching with any other transaction. 29. What is Bancassurance? Ans:It is the term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products. 30. What is Wholesale Price Index (WPI)? Ans:The Wholesale Price Index (WPI) is the index used to measure the changes in the average price level of goods traded in wholesale market. A total of 435 commodity prices make up the index. It is available on a weekly basis. It is generally taken as an indicator of the inflation rate in the Indian economy. The Indian Wholesale Price Index (WPI) was first published in 1902, and was used by policy makers until it was replaced by the Producer Price Index (PPI) in 1978. 31. What is Consumer price Index (CPI)? Ans: It is a measure estimating the average price of consumer goods and services purchased by households. 32. What is Venture Capital? Ans:Venture capital is money provided by an outside investor to finance a new, growing, or troubled business. The venture capitalist provides the funding knowing that theres a significant risk associated with the companys future profits and cash flow. Capital is invested in exchange for an equity stake in the business rather than given as a loan, and the investor hopes the investment will yield a better-than-average return. 33. What is a Treasury Bills? Ans:Treasury Bills (T-Bills) are short term, Rupee denominated obligations issued by the Reserve Bank of India (RBI) on behalf of the Government of India. They are thus useful in managing short-term liquidity. At present, the Government of India issues three types of treasury bills through auctions, namely, 91-day, 182-day and 364-day. There are no treasury bills issued by State Governments. 34. What is Banking Ombudsmen Scheme? Ans: The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services. The Banking Ombudsman Scheme was first introduced in India in 1995, and was revised in 2002. The current scheme became operative from the 1 January 2006, and replaced and superseded the banking Ombudsman Scheme 2002. 35. What is Subsidy? Ans: A subsidy is a form of financial assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent

the decline of that industry or an increase in the prices of its products or to encourage it to hire more labor. 36. What is a Debenture? How many types of debentures are there? What are they? Ans: A debenture is basically an unsecured loan to a corporation. A type of debt instrument that is not secured by physical asset. Debentures are backed only by the general creditworthiness and reputation of the issuer. Convertible Debentures: Any type of debenture that can be converted into some other security or it can be converted into stock.. Non-Convertibility Debentures (NCB): Non Convertible Debentures are those that cannot be converted into equity shares of the issuing company, as opposed to Convertible debentures. Non-convertible debentures normally earn a higher interest rate than convertible debentures due. 37. What is a hedge fund? Ans: Hedge means to reduce financial risk. A hedge fund is an investment fund open to a limited range of investors and requires a very large initial minimum investment. It is important to note that hedging is actually the practice of attempting to reduce risk, but the goal of most hedge funds is to maximize return on investment. 38. What is FCCB? Ans: A Foreign Currency Convertible Bond (FCCB) is a type of convertible bond issued in a currency different than the issuers domestic currency. In other words, the money being raised by the issuing company is in the form of a foreign currency. A company may issue an FCCB if it intends to make a large investment in a country using that foreign currency. 39. What is Capital Account Convertibility (CAC)? Ans: It is the freedom to convert local financial assets into foreign financial assets and vice versa at market determined rates of exchange. This means that capital account convertibility allows anyone to freely move from local currency into foreign currency and back. The Reserve Bank of India has appointed a committee to set out the framework for fuller Capital Account Convertibility. Capital account convertibility is considered to be one of the major features of a developed economy. It helps attract foreign investment. Capital account convertibility makes it easier for domestic companies to tap foreign markets. 40. What is Current Account Convertibility? Ans: It defines at one can import and export goods or receive or make payments for services rendered. However, investments and borrowings are restricted. 41. What is Arbitrage? Ans: The opportunity to buy an asset at a low price then immediately selling it on a different market for a higher price. 42. What is Capitalism? Ans: Capitalism as an economy is based on a democratic political ideology and produces a free market economy, where businesses are privately owned and operated for profit; in capitalism, all of the capital investments and decisions about production, distribution, and the prices of goods, services, and labor, are determined in the free market and affected by the forces of supply and demand.

Abbrevations Banking

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Banking Abbreviations and Terms Bank

Absorption Absorption Time Abstract of title

Acceleration Clause Accelerated Depreciation Acceptance Accepting House

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Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Accretion Bond Accreting Swap

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Banking Abbreviations and Terms

Actual Delay Days

Adjustable Rate Mortgage (ARM)

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Banking Abbreviations and Terms

Alternative Minimum Tax

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Banking Abbreviations and Terms

Arbitrage Free Arbitrageur

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Banking Abbreviations and Terms

Assumed name Asymmetric Behavior Attorneys Certificate of Title Attrition Analysis

Authenticated Security Agreement

Banking Terms Balance

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Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Banking Abbreviations and Terms

Deed Default Demand Deposit Deposit Slip Depositor Depreciation Debentures

Dividend Debt Management Debt Consolidation

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Banking Abbreviations and Terms

Banking Terms E-Cash Early Withdrawal Penalty Earning Assets

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Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Gross Income Ground Rent Grant Guarantor

Banking Terms Household Income Holding Period Home Equity Debt

Banking Abbreviations and Terms

Lease Letter of Credit

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Banking Abbreviations and Terms

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Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Same Day Funds

Sale Contract Sale Leaseback Second Mortgage

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Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Compiled By: Zenith Career Academy (Mob. No: 8872147797)

Banking Abbreviations and Terms

Banking Abbreviations and Terms

A quick look on basic Banking terms...

Banking Abbreviations and Terms

Banking Abbreviations and Terms