PD for Banking-01

8/17/2019 PD for Banking-01

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ABOUT BANKING INDUSTRY

Reserve Bank of India (RBI)

RBI, India's /Central Bank/ came into existence on 1stApril 193 as a private

s!are !olders "ank# $%ote &$ 1st Central Bank in t!e orld &

Rick's Bank eden in 1# B*t in t!e li+!t of *nctions, Bank of -n+land is t!e1st Central Bank 19.#

$*nctions of RBI & $

$ 0onopol of %ote iss*e

$ Banker, Adviser and A+ent to t!e 2ovt# of India

$ Banker to Banks

$ C*stodian of orei+n exc!an+e and +old#

$ Redisco*nts "ills of exc!an+e and !*ndis#

$ 4ender of last Resort

$ 0aintains sta"ilit of forei+n val*e of R*pee#

$ Acts as clearin+ !o*se

$ Credit control

5ere are some important points to remem"er a"o*t RBI &

$ RBI's central o6ce is in 0*m"ai#

$ RBI !as 77 re+ional o6ces#

$ It as nationali8ed on 1st an*ar 19.9#

$ It prints C*rrenc in 1 4an+*a+es#

$ Its predecessor as Imperial Bank of India (1971)#

$ RBI came into existence on t!e recommendation of 5ilton :o*n+ (Roal)commission as per RBI act 193.#

$ It is t!e mem"er "ank of Asian Clearin+ ;nion (AC;) and I0 (International0onetar *nd)#

$ RBI !as Board of


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C*rrent R#B#I rates

Bank Rate

9.00% (w.e.f.

07/10/2013)

Decreased from

9.50% which was

continin! since

20/09/2013

[Remember Bank Rate is not the same thing as Deposit Rates offered by banks for fixed

deposits and recurring deposits. If you are a non banker and have landed on this page

while looking at Deposit Rates

"ash

Reser#e

Ratio

("RR)

$.00% (wef

09/02/2013)

annonced on

29/01/2013

Decreased from

$.25%which was

continin! since

30/10/2012

&tattor'

iidit'

Ratio

(&R)

23%(w.e.f.

11/0*/2012)

(annonce

d on

31/07/2012)

Decreased from

2$% which was

continin! since

1*/12/2010


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Re+o Rate

nder ,-

7.50%

(w.e.f.

20/09/2013

)

ncreased from

7.25% which was

continin! since03/05/2013

Re#erse

Re+o Rate

nder ,-

.50%

(w.e.f.

20/09/2013

)

ncreased from

.25% which was

continin! since

03/05/2013

*Reverse Report rate was an independent rate till 03/05/2011. However, in the

monetary policy announced on 03/05/2011, RB has decided that now onwards the

Reverse Repo Rate will not !e announced separately, !ut will !e lin"ed to Repo rate and

it will always !e 100 !ps !elow the Repo rate #till RB decides to delin" the same$

•

ar!ina

9.00%

(w.e.f.07/10/2013 Decreased from


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&tandin!

-aciit' (&-)

)9.50% which

was continin!

since 20/09/2013

** he concept of !arginal "tanding #acility was announced by RBI wef $%&$'&($))

+owever implemented wef $,&$'&($))-. t that time it was decided that !arginal

"tanding #acility i.e. !"# rate will be linked to Repo rate and will be )$$ bps above the

Repo Rate till RBI decides to change the same-. /0# )'&$1&($)%2 RBI has announced

that from now onwards the !"# Rate will be %$$ basis points above the Repo Rate.

3nce again !"# rates were revised wef ($&$,&($)% to ,.'$42 which is ($$ bps above the

Repo Rate2

$-xplanations & $

$Bank Rate$

Bank rate, also referred to as t!e disco*nt rate, is t!e rate of interest !ic! acentral "ank c!ar+es on t!e loans and advances t!at it extends to commercial"anks and ot!er ?nancial intermediaries# C!an+es in t!e "ank rate are often*sed " central "anks to control t!e mone s*ppl#

Repo Rate

Repo rate is t!e rate at !ic! o*r "anks "orro r*pees from RBI# @!enever t!e"anks !ave an s!orta+e of f*nds t!e can "orro it from RBI# A red*ction in t!erepo rate ill !elp "anks to +et mone at a c!eaper rate# @!en t!e repo rateincreases, "orroin+ from RBI "ecomes more expensive#

Reverse Repo Rate

=!is is exact opposite of Repo rate# Reverse Repo rate is t!e rate at !ic!Reserve Bank of India (RBI) "orros mone from "anks# RBI *ses t!is tool !en itfeels t!ere is too m*c! mone oatin+ in t!e "ankin+ sstem# Banks are alas


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!app to lend mone to RBI since t!eir mone is in safe !ands it! a +oodinterest# An increase in Reverse repo rate can ca*se t!e "anks to transfer moref*nds to RBI d*e to t!is attractive interest rates#

CRR

Cas! reserve Ratio (CRR) is t!e amo*nt of f*nds t!at t!e "anks !ave to keepit! RBI# If RBI decides to increase t!e percent of t!is, t!e availa"le amo*nt it!t!e "anks comes don# RBI is *sin+ t!is met!od (increase of CRR rate), to draino*t t!e excessive mone from t!e "anks#

4R

4R (tat*tor 4i*idit Ratio) is t!e amo*nt a commercial "ank needs tomaintain in t!e form of cas!, or +old or +ovt# approved sec*rities (Bonds) "eforeprovidin+ credit to its c*stomers# 4R rate is determined and maintained " t!e

RBI (Reserve Bank of India) in order to control t!e expansion of "ank credit# 4Ris determined as t!e percenta+e of total demand and percenta+e of timelia"ilities# =ime 4ia"ilities are t!e lia"ilities a commercial "ank lia"le to pa to t!ec*stomers on t!eir antime demand# 4R is *sed to control ination and propel+rot!# =!ro*+! 4R rate t*nin+ t!e mone s*ppl in t!e sstem can "econtrolled e6cientl#

0ar+inal tandin+ acilit (0)

0ar+inal tandin+ acilit (0) is t!e rate at !ic! sc!ed*led "anks co*ld"orro f*nds overni+!t from t!e Reserve Bank of India (RBI) a+ainst approved

+overnment sec*rities# =!e "asic dierence "eteen Repo and 0 sc!eme ist!at in 0 "anks can *se t!e sec*rities *nder 4R to +et loans from RBI and!ence 0 rate is 1D more t!an repo rate#

a*+*st nes

0eetin+ for next +overnor of R#B#I

0eet t!e %ext 2overnor of RBI Ra+!*ram Ra>an

As t!e present +overnor of RBI 0r# an is presentlorkin+ as t!e C!ief -conomic Advisor to t!e 0inistr of inance, 2overnment ofIndia (from 1Et! A*+*st 7EE1)# 5e ill "e servin+ as t!e +overnor of CentralBank for 3 ears# 0r Ra>an ill "e t!e $73rd 2overnor of RBI$#

Revie of monetar polic

5i+!li+!ts of irst F*arter Revie of RBI 0onetar Golic 7E131. dated 3Et!

*l 7E13 In a meetin+ it! t!e c!ief exec*tives of ma>or sc!ed*led commercial"anks on =*esda 3Et! *l 7E13 at t!e Central H6ce, Reserve Bank of India,


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0*m"ai, t!e 2overnor of RBI


7/44

(Centrali8ed Bankin+ ol*tions)$

$ $C


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Bank of India$

$ $C%R$ $ orei+n C*rrenc %onResident

Acco*nt$

$ $-0A$ $ orei+n -xc!an+e 0ana+ement Act$

$ $2CC$ $ 2eneral Credit Card$

$ $2


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3# tore of Nal*e

.# tandard of


10/44

Gersistent rise in t!e +eneral price level or Ofall in t!e val*e of moneO is calledination# 5ave a look at some important points a"o*t Ination#

o!%"ete 2ist of In'ian Banks an' t$eir 3ea's & 0Ds & 4Os

riends, In t!is presents t!e $Complete 4ist of t!e 5eads

of t!e Banks in India$#

=!is list as made it! t!e details availa"le as of $.t! Hcto"er 7E17$# @e ill*pdate !enever t!ere are c!an+es in t!e list# If o* came to kno a"o*t anc!an+es t!en please *se t!e comment section "elo to comment, so t!at e illc!an+e immediatel# 2ood


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S $Corporation Bank$ A>ai M*mar,C0<

S $

S $ederal Bank$ !am rinivasan,0< T C-H

S $5


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S $Motak 0a!indra Bank$ ;da Motak , 0<

S $4aks!mi Nilas Bank$ G#R# omas*ndaram, 0<

S $%ainital Bank$ a, 0< T C-H

S $o*t! Indian Bank$


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$ ;nion 2overnment Rs# 71,,1 Crores (9#7D)

$ tates Rs# 1.,JJ,1. Crores (.E#JD)

$ Approac! paper to 11t! Glan approved " t!e Glannin+ Commission on 1J1E7EE#

$ 7nd %ational


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$cope of A40$

=!e A40 f*nctions extend to li*idl risk mana+ement, mana+ement of marketrisk, tradin+ risk mana+ement, f*ndin+ and capital plannin+ and pro?t plannin+and +rot! pro>ection#

$Resid*al mat*rit$

Resid*al mat*rit is t!e time period !ic! a partic*lar asset or lia"ilit ill stilltake to mat*re i#e# "ecome d*e for pament (once at a time, sa in case of aterm deposit or in instalments, sa in case of term loan)#

$0at*rit B*ckets $

0at*rit "*ckets are dierent time intervals (J for t!e time "ein+, namel 11.das, 17J, 799E, 911JE, 1J13 das, 13 ears, 3 and a"ove ears), in!ic! t!e val*e of a partic*lar asset or lia"ilit is placed dependin+ *pon itsresid*al mat*rit#

$0ismatc! position$

@!en in a partic*lar mat*rit "*cket, t!e amo*nt of mat*rin+ lia"ilities or assetsdoes not matc!, s*c! position is called a mismatc! position, !ic! createsli*idit s*rpl*s or li*idit cr*nc! position and dependin+ *pon t!e interest rate

movement, s*c! sit*ation ma t*rno*t to "e risk for t!e "ank# =!e mismatc!esfor cas! os for 11. das and 17J das "*ckets are to "e kept to t!eminim*m (not to exceed 7ED eac! of cas! o*tos for t!ose "*ckets)#

$Role of A4CH$

Asset4ia"ilit Committee is t!e top most committee to oversee implementationof A40 sstem, to "e !eaded " C0< or -


15/44


16/44

*Banking Ter!s* AND *Banking De:nitions*

$AAA$ AAA is a term or a +rade t!at is *sed to rate a partic*lar "ond# It is t!e!i+!est rated "ond t!at +ives maxim*m ret*rns at t!e time of mat*rit# ;s*allt!e +rade AAA is +iven to t!e "est de"t o"li+ation or a sec*rit, " a credit ratin+

a+enc#

$ABA =ransit %*m"er$ =!e ABA transit n*m"er is assi+ned " t!e AmericanBankers Association# It is a n*meric codin+ t!at indicates and facilitates t!eamo*nt of c!eck paments, "alances and d*es t!at are to "e cleared amon+dierent "anks at t!e clearin+ !o*se#

$ABH$ ABH is an a""reviation for t!e term 'Acc*m*lated Bene?t H"li+ation'# It is"asicall t!e meas*re of t!e lia"ilit of t!e pension plan of an or+ani8ation and iscalc*lated !en t!e pension plan is to "e terminated#

$A"sorption$ A"sorption is a term related to real estate, "ankin+ and ?nance?elds# =!e ord 'a"sorption' means t!e process of rentin+ a real estate propertt!at is nel "*ilt or is recentl renovated#

$A"sorption =ime$ =!e term 'a"sorption time' is *sed to de?ne t!e time periodt!at is re*ired to complete t!e process of a"sorption#

$A"stract of title$ =!e 'a"stract of title' is a ritten report t!at de?nes, recordsand identi?es t!e !istor and oners!ips of a partic*lar asset, *s*all a realestate#

$Acceleration$ Acceleration is t!e process, !ere t!e lender demands a f*ll and?nal pament of t!e de"t or loan, "efore t!e allotted time period for repament#A cla*se in t!e doc*ment of t!e de"t *s*all empoers t!e lender to acceleratet!e time period#

$Acceleration Cla*se$ A cla*se in t!e de"t doc*ment t!at empoers t!e lenderto accelerate t!e pament, (i#e# or t!at is) t!e lender can demand t!e f*llamo*nt of loan "efore t!e date of mat*rit#

$Accelerated


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$Acceptin+ Gart$ =!e part (eit!er an individ*al or a +ro*p of individ*als oror+ani8ations) t!at accepts t!e terms and conditions of a proposed a+reement orcontract p*t fort! " anot!er part#

$Acco*nt$ An acco*nt is a record of all ?nancial transactions t!at are related to

an asset, individ*al, transaction or an or+ani8ation# It is a ma>or term in t!e ?eldof acco*ntanc and is conventionall denoted " A/c# It can also "e de?ned as atransaction "eteen a "*er and a seller a"o*t paments and d*es !ic!develop creditorde"tor relations# $Acco*nt A++re+ation$ An Hnline facilit t!atis made availa"le " some "anks or ?nancial or+ani8ations, in !ic! all t!etransactions related to t!e "ank acco*nt, credit facilities, de"ts and investmentscan "e !andled and operated it! t!e !elp of a sin+le interface or acco*nt#Acco*nt a++re+ation is a form of Internet "ankin+, provided for ease oftransaction#

$Acco*nt Balance$ =!e total amo*nt of mone in a partic*lar "ank acco*nt,alon+ it! t!e de"it and credit amo*nts, t!e net amo*nt is also termed as t!eacco*nt "alance#

$Acco*nt Reconciliation$Acco*nt reconciliation is a process it! t!e !elp of !ic!t!e acco*nt "alance can "e easil veri?ed# Acco*nt reconciliation is *s*all doneat t!e end of a eek, mont!, ?nancial ear or at t!e end of an ?nancial period#It is *s*all done it! t!e !elp of receipts, A=0 notes, "ank statements etc#

$Acco*nt tatement$ A ?nancial record t!at indicates t!e transaction and itseect on an acco*nt (*s*all "ank acco*nt), in terms of de"it and credit#

ometimes, an acco*nt statement also carries some precise details, like t!e dateof transaction, code of transaction, mode of transaction, sales, p*rc!ases, etc#

$Acco*nt Nal*e$ An acco*nt val*e is t!e total val*e of an acco*nt, applica"le!en a person !as man acco*nts and transactions in t!e same "ank or ?nancialinstit*tion# =!e acco*nt val*e is a total val*e t!at is expressed in monetarterms#

$Acknoled+e$ Indicates t!e acceptance of a doc*ment, a+reement, proposalor a ne+otia"le instr*ment " a*t!enticatin+ it it! t!e !elp of a seal or asi+nat*re# Acknoled+ment si+ni?es t!at t!e terms and

conditions of t!e contract !ave "een accepted and t!e a+reement

a*t!enticated#

$Accessions$ =!e ne p!sical +oods t!at are p!sicall *nited to older +oods, int!e manner !ere identit, of "ot! t!e +oods remains t!e same, are knon asaccessions# or example, a ne *p+rade or addition on an alread existin+ pieceof mac!iner#

$Accommodation 0aker$ A person !o si+ns t!e note of application and renders

!is credit !istor d*rin+ t!e process of application of a loan is calledaccommodation maker# =!e accommodation maker, *s*all receives no direct


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?nancial "ene?t from t!e loan# =!e term is also *sed in t!e concept of'accommodation "ills', !en to or more people !elp eac! ot!er " renderin+li*idit of a ne+otia"le instr*ment#

$Acco*nt Analsis$ =!e term 'acco*nt analsis' is *sed in "asicall to contexts#

irst, it is *sed to de?ne t!e st*d and concl*sion of a sin+le acco*nt# econd, itis also a proced*re, !ere t!e pro?ta"ilit of a sin+le demand acco*nt or mandemand acco*nts is pro>ected and anal8ed#

$Acco*nt Control A+reement$ An acco*nt control a+reement is an a+reementt!at perfects t!e interests of t!e creditor in a sec*rities acco*nt#

$Acco*nt


19/44

$Accr*al Bond$ An accr*al "ond is also knon as ran+e "ond# An accr*al "ond isa "ond t!at !as a tendenc to pa t!e investors, an a"ove t!e market rate#ometimes, an accr*al rate is also de?ned as a sec*rit t!at does not !ave aperiod pament for t!e rate of interest# =!e interest is accr*ed and t!en addedlater on at t!e time of mat*rit#

$Accr*al Convention$ It is t!e met!od of calc*latin+ t!e time period on a speci?cinvestment " t!e investors# Accr*al convention is at times calc*lated it! t!e!elp of dierent interest calc*lation mec!anisms# Accr*al convention is alsoknon as accr*al "asis#

$Accr*ed Interest$ Accr*ed Interest is t!e interest, acc*m*lated on aninvestment "*t is not et paid# Hften, accr*ed interest is also termed as interestreceiva"le# ome "ankin+ "ooks prefer to call it as t!e interest t!at is earned,"*t not et paid#

$Acc*m*lated *sta"le rate mort+a+e or AR0 is "asicalla tpe of loan, !ere t!e rate of interest is calc*lated on t!e "asis of t!eprevio*sl selected index rate#


20/44

overpas t!e investor for t!e sec*rit or t!e investment t!at !e ants to +et ridof#

$Administered Rates$ Administered rates are t!e rates of interest !ic! can"e c!an+ed contract*all " lender# In some cases, t!ese rates can also "e

c!an+ed " t!e depositor and also t!e paee# =!e las and provisions t!atmonitor t!e concept of administered rates dier in eac! >*risdiction#

$Administrative loat$ Administrative oat is t!e frame of elapsed time t!at isre*ired in order to complete t!e paperork, in order to administrativel sort t!ec!ecks, or for t!at matter, an tpe of c*rrenc and ne+otia"le instr*ments int!e "ank itself or in t!e clearin+ !o*se#

$Administrative Revie$ An administrative revie is *s*all *sed in context tot!e appraisal of t!e "ook val*e of a real estate and "asicall, deals in t!e*nderritin+ iss*es# =!e administrative revie is *s*all ritten from t!e point

of vie of loan *nderritin+ d*rin+ an estate appraisal#

$American


21/44

individ*als and or+ani8ations t!at mis*se and take advanta+e of tax "ene?tsc!emes t!at are in monetar terms exor"itant, if rationall compared to t!eirann*al incomes#

$Analtical ol*tion$ Analtical sol*tions, also knon as closed form sol*tions,

are simple mat!ematical tec!ni*es and models, *sed to calc*late pro>ectionsand interest rates " t!e lendin+, "ankin+ and ?nance or+ani8ations# ome oft!e analtical sol*tions are so simple and eective t!at t!e calc*lations can also"e cond*cted orall, it!o*t ritin+ it don on a paper or *sin+ a calc*lator#

$Analtical NAR$ An analtical NAR is also knon as t!e correlation# NAR# Ananaltical NAR is "asicall t!e meas*rement of a ?nancial instr*ment, portfolio of t!e ?nancial instr*ments or an entit's expos*re to t!e red*ctions in its val*eres*ltin+ from c!an+es in t!e prevailin+ interest rates#

$Ann*al Gercenta+e Rate (AGR)$=!e ann*al percenta+e rate is calc*lated "

dividin+ t!e total ?nancin+ costs associated it! a loan divided " t!e principalamo*nt of t!e loan#

$Ann*al Gercenta+e :ield (AG:)$ =!e ann*al percenta+e ield or AG: is "asicall aver acc*rate and calc*lated meas*re of ield t!at is paid on a standard "ankdeposit acco*nt#

$Ann*ities$ Ann*ities are contracts t!at +*arantee income or ret*rn, in exc!an+eof a !*+e s*m of mone t!at is deposited, eit!er at t!e same time or is paid it!t!e !elp of periodic paments# ome of t!e common tpes of ann*ities incl*det!e deferred, ?xed, immediate or varia"le variants#

Anticipated Income


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$Ar"itra+e*r$ An ar"itra+e*r is an independent and individ*al "roker !o dealsin ar"itra+e#

$Article of A+reement$Article of a+reement is a contract*al provision, it! t!e!elp of !ic! a "*er p*rc!ases real estate from t!e seller over a period of time,

and pas t!e consideration in installments# =!is tpe of a+reement or contract isalso knon as a land contract#

$Asextracted Collateral$ As extracted collateral are extracted or nonextractedminerals created " a de"tor !avin+ an interest in minerals, and are s*">ect tosec*rit interest, eit!er "efore or after extraction# In s!ort, mined or nonminedminerals can also "e *sed as collaterals#

$Ascendin+ Rate Bond$ ec*rit it! !ic! !as a co*pon rate t!at increases inprevio*sl de?ned increments at sc!ed*led intervals, is termed as an ascendin+rate "ond#

$Asset Backed ec*rit (AB)$ A sec*rit t!at is "acked it! t!e !elp of somekind of val*a"le assets, is knon as an asset "acked sec*rit# ometimes, AB isalso referred to as t!e mont!l rate of repament of a sec*red loan#

$Asset ensitive$ Asset sensitive is a sort of a position, !erein an increase int!e rate of interest ill !elp t!e investor and t!e decline in t!e rate ill not "e!elpf*l at all#

$Asset and 4ia"ilit 0ana+ement$ Asset and lia"ilit mana+ement is t!ecoordinated mana+ement of all t!e ?nancial risks in!erent in t!e "*siness

cond*cted " ?nancial instit*tions# In real practice, asset and lia"ilitmana+ement aims at minimi8ation of loss and maximi8ation of pro?t#

$Assets Repriced Before 4ia"ilities$ 'Assets repriced "efore lia"ilities' is a termt!at is *sed to de?ne a +ap "eteen t!e repricin+ of t!e assets and lia"ilities in a+iven period of time#

$Assi+nee$Assi+nee is an individ*al or an or+ani8ation or part to !om anassi+nment is +iven and commitment taken#

$Assi+nment$In t!e ?eld of "ankin+ and ?nance, an assi+nment is t!e transfer of

an contract*al a+reement "eteen to or more parties# =!e part t!at assi+nst!e contract is t!e assi+nor and t!e part !o receives t!e assi+nment is t!eassi+nee#

$Ass*ma"le$Ass*ma"le is a ver dierent tpe of mort+a+e loan application,!ere t!e ne "*ers of a real estate t!at !as alread "een pled+ed ascollateral, ass*mes t!e lia"ilit of a loan and also t!e oners!ip of t!e realestate#

$Ass*med name$ An ass*med name is a name !ic! is ass*med " anindivid*al, or+ani8ation or corporation in order to cond*ct "*siness# It m*st "e

noted t!at t!e ass*med name is alas dierent from t!e ori+inal name of t!ecorporation#


23/44

$Asmmetric Be!avior$ Asmmetric "e!avior is t!e *n"alanced "e!avio*rdisplaed " t!e ?nancial instr*ments# It is said to "e o"served !en t!e ratesand val*e of instr*ments c!an+e in dierent proportions, in comparison to t!emarket rates#

$Attorne's Certi?cate of =itle$=!e attorne's certi?cate of title, is also knon ast!e title option# =!is certi?cate is "asicall prepared " t!e attorne, in order tostate t!e oners!ip and t!e lien priorit of an asset, partic*larl a real estate#

$Attrition Analsis$Attrition analsis is "asicall carried o*t for t!e p*rpose ofreformation of t!e assets and lia"ilities in a "alance s!eet#

$A*dited tatements$ A*dited statements are s*pposed to "e t!e most relia"lestatements# =!e a*dited statements are "asicall ?nancial statements !oserelia"ilit and second eect (accordin+ to t!e do*"le entr sstem) !ave "eenveri?ed, cross c!ecked and con?rmed# =!e ord 'a*dited' (a*dit), si+ni?es t!e

process of veri?cation#

$A*t!enticated ec*rit A+reement$ =!e a+reement of sec*rit "eteen de"torand "anker is knon as t!e a*t!enticated sec*rit a+reement and is accepted "t!e "orroer =!e acceptance process is done, online and t!en t!e a+reement isdon loaded and printed#

$A*t!orit$In t!e terms of "ankin+, an a*t!orit is "asicall a +overnmentaldepartment or a+enc t!at is empoered " t!e >*dicial sstem of a nation toa*t!enticate, le+ali8e, cond*ct and monitor t!e f*nctions t!at are related to"ankin+, ?nance, economics and transactions#

$A*tomated Clearin+ 5o*se (AC5)$ An a*tomatic clearin+ !o*se is a nationideelectronic clearin+ !o*se t!at monitors and administers t!e process of c!eck andf*nd clearance "eteen "anks# =!e AC5 is an electronic sstem and t!*sminimi8es t!e !*man ork in t!e process of clearance# It distri"*tes credit andde"it "alances a*tomaticall#

$A*tomated =eller 0ac!ines$ A*tomated teller mac!ines are "asicall *sed tocond*ct transactions it! t!e "ank, electronicall# =!e a*tomated teller mac!ineis an excellent example of inte+ration of comp*ters and electronics into t!e ?eld

of "ankin+#$A*tomatic ta$ =!e a*tomatic sta is an in>*nction t!at a*tomaticall "ecomeseective, after an person or or+ani8ation ?les for "ankr*ptc# =!e a*tomaticsta "asicall precl*des t!e creditors from takin+ t!e de"tor or t!e propert oft!e de"tor#

$Bankin+ =erms t!at Be+in @it! B$

$Balance$ =!e "alance is t!e act*al amo*nt of mone t!at is left in t!e acco*nt#

ometimes, t!e term "alance also refers to amo*nt of t!e de"t t!at is oed#


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$Balance =ransfer$ A "alance transfer is t!e repament of a credit de"t it! t!e!elp of anot!er so*rce of credit# In some cases, "alance transfer also refers totransfer of f*nds from one acco*nt to anot!er#

$Balance =ransfer ee$ =!e "alance transfer fee is c!ar+ed " t!e "ank for t!e

transfer of "alances from one so*rce of credit to anot!er# It also refers to t!etransfer of fees from one "ank acco*nt to anot!er#

$Bank$ A "ank is an esta"lis!ment t!at !elps individ*als and or+ani8ations,in t!e iss*in+, lendin+, "orroin+ and safe+*ardin+ f*nctions of mone#

$Bank Acco*nt$ A "ank acco*nt is an acco*nt !eld " a person it! a "ank, it!t!e !elp of !ic! t!e acco*nt !older can deposit, safe+*ard !is mone, earninterest and also make c!eck paments#

$Bank


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ends it! t!e start of t!e time period of t!e second loan, t!ere" "rid+in+ t!e+ap "eteen to loans# It is also knon as +ap ?nancin+#

$Brid+e 4oan$ =!e "rid+e loan also knon as a sin+ loan, is "asicall a realestate loan or a !ome loan, !ere t!e c*rrent residence/real estate is pled+ed "

t!e "orroer as a collateral in order to p*rc!ase a ne residence#

$Bo*nced C!eck$ A "o*nced c!eck is not!in+ "*t an ordinar "ank c!eck t!atan "ank can ref*se to encas! or pa "eca*se of t!e fact t!at t!ere are nos*6cient ?nances in t!e "ank acco*nt of t!e ori+inator or draer of t!e c!eck#

$Bankin+ =erms t!at Be+in @it! C$

$Cap$ A cap is a limit t!at re+*lates t!e increase or decrease in t!e rate ofinterest and installments of an ad>*sta"le rate mort+a+e# $Capital$ =!e term'capital' means t!e total net ort! of an "*siness esta"lis!ment, or+ani8ationor corporation or t!e total amo*nt invested for ?nancial ret*rns#

$Capital Improvement$ Capital improvement is t!e addition in t!e propert ofan or+ani8ation t!at adds to its additional val*e#

$Card 5olders A+reement$ =!e card !older's a+reement is a ritten statementt!at depicts all t!e terms and conditions of a credit card a+reement# =!ecard!olders a+reement constit*tes man elements, s*c! as rate of servicec!ar+es, "illin+ disp*te remedies and comm*nications it! t!e credit card

companies or service providers#$Cas!$ Bills and coins, c!ecks and ot!er ne+otia"le instr*ments, t!at areaccepta"le at "anks and are considered to "e li*id assets are collectivel knonas cas!#

$Cas! Advance ee$ Cas! advance fee is "asicall c!ar+ed !en a person *ses acredit card to o"tain cas!# In most cases, it is c!ar+ed as a percenta+e to t!ecas! advance#

$Cas! lo$ =!e cas! o is often de?ned as t!e li*id "alance of cas! as ell

as t!e "ank "alance t!at is availa"le it! an or+ani8ation or a corporation# Insome cases, t!e cas! o is also de?ned as t!e net amo*nt of cas! t!at is+enerated " t!e net income t!at !as "een +enerated " an or+ani8ation orcorporation in a partic*lar time period#

$Cas!ier's C!eck$ =!e cas!ier's c!eck is dran " a "ank on its on name toma paments ot!er or+ani8ations, "anks, corporations or even individ*als#

$Cas! Reserve$ =!e cas! reserve is t!e total amo*nt of cas! t!at is present int!e "ank acco*nt and can also "e it!dran immediatel#


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$Certi?cate of


27/44

!as "een ded*cted from an acco*nt# =!e ori+in of t!e term is from t!e conceptof de"it side of a led+er acco*nt#

$oint stock companies, and is distri"*ted amon+st t!e s!are!olders#

$


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$


29/44

$-xpiration orit of co*ntries, ed*cational loans tend to !ave a lo rate of interest# =!eperiod of repament also starts after t!e completion period of t!e loan#

$-xc!an+e Rate$ An exc!an+e rate is a "asicall a rate, it! t!e !elp of !ic!one co*ntr's c*rrenc can "e exc!an+ed it! t!e c*rrenc of anot!er co*ntr#

$-ndorsement$ -ndorsement is "asicall t!e !andin+ over of ri+!ts of a?nancial/le+al doc*ment or a ne+otia"le instr*ment to anot!er person#=!eperson !o !ands over !is/!er ri+!ts is knon as t!e endorser, and t!e personto !om t!e ri+!ts !ave "een transferred is knon as t!e endorsee#

$Bankin+ =erms t!at Be+in @it! $

$ace Nal*e$ ace val*e is t!e ori+inal val*e of an sec*rit or ne+otia"leinstr*ment#

$ield A*dits$ ield a*dits are "asicall t!e a*dits t!at are cond*cted " "anko6cials, on t!e site itself, in order to assess t!e stat*s and condition of t!ecollateral# At times, ?eld a*dits are also cond*cted in order to assess t!e?nancial sit*ation of de"tors, especiall corporations, !o !ave availed !*+e

loans#$inal 0at*rit$ A ?nal mat*rit is t!e date of mat*rit !en a last, sin+le loanmat*res from a pool of loans# =!e ?nal mat*rit indicates t!e total and ?nalpament of t!e pool of mort+a+e loans#

$inancial Instr*ment$A ?nancial instr*ment is ant!in+ t!at ran+es from cas!,deed, ne+otia"le instr*ment, or for t!at matter an ritten and a*t!enticatedevidence, t!at s!os t!e existence of a transaction or a+reement#

$inancial Intermediar$ A ?nancial intermediar is "asicall a part or person

!o acts as a link "eteen a provider !o provides sec*rities and t!e *ser, !op*rc!ases t!e sec*rities# !are "roker, and almost all t!e "anks, are t!e "estexamples of ?nancial intermediaries#

$inancial tatement$ A ?nancial statement is a record of !istorical ?nancial?+*res, reports and a record of assets, lia"ilities, capital, income andexpendit*re#

$ixt*res$ =!e term '?xt*re' is *sed in t!e context of a real estate propert, !enassets, like f*rnit*re, are attac!ed to t!e real estate and are also incl*ded in its"ook val*e# Banks, in man a cases, are knon to incl*de ?xt*res in t!e val*e, if

t!e real estate propert !as "een pled+ed as a collateral#


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$or"earance A+reement$ A for"earance a+reement is an a*t!enticateda+reement "eteen a de"tor and a creditor, and is *tili8ed " t!e creditor, !ent!e de"tor initiates a de"t settlement or t!e loan is defa*lted, or t!e former"ecomes "ankr*pt#

$oreclos*re$ A foreclos*re is a standardi8ed proced*re !ere creditors like"anks, are a*t!ori8ed to o"tain t!e title of t!e real estate propert t!at !as "eenpled+ed as a collateral#

$ree Cas! lo$ A free cas! o is "asicall is a total of ?nanciall li*id assetst!at does not incl*de capital expendit*res and dividends#

$ixed Rate 0ort+a+e$ A ?xed rate mort+a+e is a !ome loan, for !ic! t!einterest rate remains constant and ?xed t!ro*+!o*t t!e lifetime of loan#

$orei+n C*rrenc *rc!ar+e$ =!e forei+n c*rrenc s*rc!ar+e is levied " some

"anks and credit card companies, !en a credit card or an A=0 is *sed in aforei+n co*ntr#

$Bankin+ =erms t!at Be+in @it! 2$

$2overnment Bonds$ A +overnment "ond, !ic! is also knon as a +overnmentsec*rit, is "asicall an sec*rit t!at is !eld it! t!e +overnment and !as t!e!i+!est possi"le rate of interest#

$2ross


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$5o*se!old Income$ 5o*se!old income is t!e income of all t!e mem"ers of one!o*se!old p*t to+et!er# Hne m*st note t!at t!e income earned t!ro*+! t!efamil "*siness, is also co*nted in t!e !o*se!old income#

$5oldin+ Geriod$ =!e !oldin+ period is t!e time d*ration d*rin+ !ic! a capitalasset is !eld/oned " an individ*al or corporation# =!e !oldin+ period is takeninto consideration, !ile pled+in+ t!e asset as a collateral#

$5ome -*it


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$oint and everal 4ia"ilit$ =!is is a le+al term *tili8ed to point t!at to or moreentities are individ*all entirel responsi"le, instead of "ein+ collectivelresponsi"le#

$*d+ment Cla*se$ =!is relates to a provision re+ardin+ "ank notes of !and or+*arantees, and incl*des t!e a*t!ori8ation of t!e "orroers or s*reties +iven tot!e "ank, to create a >*d+ment lien, at an time after t!e completion of t!e le+alinstr*ments#

$*dicial 4ien$ It pertains to an interest in t!e !oldin+s ,!ic! are +ained from >*dicial or co*rt orders#

$*mp Y=ranc!e$ A Ytranc!e is a real estate mort+a+e investment cond*it(R-0IC), !ic! is co*ntenanced to o"tain principal s*ms, "efore prior tranc!esare no lon+er active#

$*nior


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paments to t!e seller, in order to "* a real estate# B*t, t!e title to t!e propertis not transferred to t!e "*er, *ntil !e makes t!e ?nal pament#

$4and lip$ A collo*ial expression *sed to denote a real estate fra*d, !ereint!e prices of *ndeveloped propert is arti?ciall increased to !i+! amo*nts,

!ic! are a"ove t!e fair market val*e# =!is is often accomplis!ed " a +ro*p ofcoll*din+ "*ers, !o p*rc!ase and resell t!e same propert, amon+ itsmem"ers, several times, eac! time increasin+ t!e price# @!en t!e price"ecomes *nrealisticall !i+!, t!e sell t!e propert or raise a loan for itsdevelopment#

$4ease$ A contract, t!ro*+! !ic!, t!e oner (lessor) of a certain propert,allos anot!er (lessee) to *se t!e same for a speci?ed period, in exc!an+e for aval*e called t!e rent#

$4etter of Credit$ A doc*ment iss*ed " a "ank (on "e!alf of t!e "*er or t!e

importer), statin+ its commitment to pa a t!ird part (seller or t!e exporter), aspeci?c amo*nt, for t!e p*rc!ase of +oods " its c*stomer, !o is t!e "*er# =!eseller !as to meet t!e conditions +iven in t!e doc*ment and s*"mit t!e relevantdoc*ments, in order to receive t!e pament# 4etters of credit are mainl *sed ininternational trade transactions of !*+e amo*nts, !erein t!e c*stomer and t!es*pplier live in dierent co*ntries#

$4ife Cap$ =!e *pper and loer limit for c!an+es in t!e "orroer's interest rateover t!e term of !is/!er loan#

$4ifeline Acco*nt$ A "ank acco*nt meant for c*stomers it! lo incomes# =!eseacco*nts are c!aracteri8ed " little or no mont!l fees and t!ere is no strict r*lere+ardin+ t!e minim*m "alance#

$4i*idated


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$0ort+a+e$ A mort+a+e is a le+al a+reement "eteen t!e lender and "orroer!ere real estate propert is *sed as a collateral for t!e loan, in order to sec*ret!e pament of t!e de"t# Accordin+ to t!e mort+a+e a+reement, t!e lender oft!e loan is a*t!ori8ed to con?scate t!e propert, t!e moment t!e "orroer stopspain+ t!e installments#

$0at*rit$ =!e term mat*rit is *sed to indicate t!e end of investment period ofan ?xed investment or sec*rit# After mat*rit, t!e investor is repaid t!einvested amo*nt alon+ it! t!e interest t!at !as "een acc*m*lated# orexample, on t!e mat*rit of a one ear ?xed deposit, t!e invested s*m alon+it! t!e acc*m*lated interest, is transferred " t!e "ank to t!e acco*nt of t!einvestor#

$0at*rit


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$%et Hperatin+ 4oss$ A total loss t!at is calc*lated for a tax ear and isattri"*ted to "*siness or cas*alt losses#

$%et Income$ =!e amo*nt t!at is left after pain+ t!e taxes is called t!e netincome#

$%e+ative Amorti8ation$ @!en t!e mont!l pament is *na"le to cover t!eprincipal and t!e interest d*e, t!ere is a slo increase in t!e mort+a+e de"t# =!issit*ation is termed as ne+ative amorti8ation#

$%on4i*id Asset$ A possession or asset !ic! cannot "e c!an+ed into cas!ver easil is called non li*id asset#

$%on Reco*rse 4oan$ A loan !ic! is sec*red " collateral and for !ic! t!e"orroer is not personall lia"le, is called a non reco*rse loan#

$Bankin+ =erms t!at Be+in @it! H$

$Hri+inal Grincipal Balance$ =!e amo*nt "orroed " an "orroer is called t!eori+inal principal "alance#

$Hner inancin+$ @!en t!e seller loans t!e !ole s*m or a part of it to a "*er,it is called oner ?nancin+#

$Hnline Bankin+$ =!e accessin+ of "ank information, acco*nts and transactionsit! t!e !elp of a comp*ter t!ro*+! t!e ?nancial instit*tion's e"site on t!e

Internet, is called online "ankin+# It is also called Internet "ankin+ or e"ankin+

$Hverdraft$ As t!e name s*++ests, it is a c!eck or rat!er an amo*nt of c!eck,!ic! is a"ove t!e "alance availa"le in t!e acco*nt of t!e paer#

$Hverdraft Grotection$ A service !ic! permits a veri?cation acco*nt to "econnected to ot!er savin+s or line of credit for facilitation of protection a+ainstoverdraft is called overdraft protection#

$Hri+ination ee$ =!e c!ar+es a lender or creditor levies for processin+ a loan# Itincl*des cost of loan doc*ment preparation, veri?cation of t!e credit !istor of

t!e "orroer and cond*ctin+ an overall appraisal#

$Hrdinar


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$Hpen -nd Credit$ Hpen end credit means a line of credit t!at can "e *sed an*m"er of times, *p to a certain limit# Anot!er name for t!is tpe of credit isc!ar+e acco*nt or revolvin+ credit#

$Bankin+ =erms t!at Be+in @it! G$

$Gaee$Gaee is t!e person to !om t!e mone is to "e paid " t!e paer#

$Gaer$ Gaer is t!e person !o pas t!e mone to t!e paee#

$Genalt Rate$ -xtra pament made to orkers for orkin+ more t!annormal orkin+ !o*rs is knon as penalt rate#

$Gersonal Identi?cation %*m"er (GI%)$ Gersonal identi?cation n*m"er or GI% is asecret code of n*m"ers and alp!a"ets +iven to c*stomers to perform

transactions t!ro*+! an a*tomatic teller mac!ine or an A=0#

$Goint of ale (GH)$ Goint of sale a terminal is !ere cas! re+isters are replaced" comp*teri8ed sstems#

$Gostin+ o"#

$Grevio*s Balance$ Grevio*s "alance is an o*tstandin+ amo*nt !ic! appears ont!e credit card statement on date !en it is +enerated#

$Grincipal$ Grincipal is "asic amo*nt !ic! is invested to ield ret*rns over acertain period of time at a +iven rate of interest#

$Bankin+ =erms t!at Be+in @it! F$

$F*ali?ed Hpinion$ An a*ditor's opinion mentioned in !is report !ic! !oldssome reservations re+ardin+ t!e process of a*dit is knon as a *ali?ed opinion#

$F*alit pread$ =!e dierence "eteen t!e ields of =reas*r sec*rities andnon=reas*r sec*rities, as a res*lt of dierent ratin+s or *alit, is termed as*alit spread#

$F*ick Ratio$ F*ick ratio is also knon as t!e acidtest ratio# It meas*res t!ecompan's lia"ilities and determines its position to pa o its o"li+ations#

$Bankin+ =erms t!at Be+in @it! R$


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$Ran+e Bonds$ Bonds !ic! cease t!e paments "eca*se t!e reference rateof t!e "ond increases or decreases, as compared to predetermined rate on a+iven index#

$Rate$ A rate is a meas*re !ic! forms t!e "asis of an ?nancial

transaction#

$Rate Covenant$ Rate covenant in a m*nicipal "ond determines t!e rates to "ec!ar+ed to "*ers#

$Re?nance$ Re?nance means clearin+ t!e c*rrent loan it! t!e proceeds of ane one and *sin+ t!e same propert for collateral#

$Revolvin+ 4ine of Credit$ Revolvin+ line of credit is a r*le folloed " t!e lender,!ic! "inds !im to allo a certain credit to t!e "orroer#

$Rate Risk$ Rate risk is t!e rate of ret*rn determined to attract capital on a +iveninvestment#

$Rate ensitive$ Rate sensitive pertains to deposit acco*nt or sec*ritinvestment# If an c!an+es are made to t!e related interest rate t!at ca*sesvariations in its demand and s*ppl#

$Real -state$ A piece of land developed or *ndeveloped !ic! comes for a price#

$Real Gropert$ Real propert refers to ant!in+ t!at is "*ilt on land#

$Record


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$Repossession$ =akin+ "ack of propert " a seller or a lender from t!e "*er ort!e "orroer d*e to defa*lt of pament#

$Repricin+$ Repricin+ means a c!an+e in t!e rate of interest#

$Reserve Acco*nt$ An acco*nt !ic! is maintained " depositin+ *ndistri"*tedparts of pro?t for f*t*re needs is knon as a reserve acco*nt#

$Reserve Re*irements$ Cas! mone or li*idit t!at mem"er "anks need to!old it! t!e ederal Reserve stem#

$Resid*al Nal*e$ =!e anticipated val*e t!at a compan calc*lates, to sell itsasset at t!e end of its f*ll life#

$Ret*rn on Capital$ A meas*re !ic! determines !o a compan ill optimi8e itsf*nds#

$Ret*rns$ =!e ield or earnin+ at t!e end of a +iven period at a +iven rate ofinterest#

$Risk$ =!e pro"a"ilit of t!reat, dan+er, dama+e, lia"ilit or loss is knon as risk#


$afekeepin+$ An arran+ement for !oldin+ and protectin+ a c*stomer'sassets, like val*a"les, doc*ments, etc# *c! arran+ements are commonl

provided " "anks and some ?nancial instit*tions, *s*all for a fee# =!ec*stomer is iss*ed a safekeepin+ receipt, !ic! indicates t!at t!e assets do not"elon+ to t!e "ank and t!e !ave to "e ret*rned to t!e c*stomer, *pon !isre*est#

$ame ect to t!e net settlement ofacco*nts "eteen t!e "ank, t!ro*+! !ic! t!e mone is sent and t!e receivin+"ank# =!is term is also *sed to refer to t!e transfer of federal f*nds from one"ank to anot!er over edire and t!e transfers t!ro*+! t!e Clearin+ 5o*seInter"ank Gaments stem (C5IG) in %e :ork#

$ale Contract$ A sale contract refers to a ritten a+reement "eteen t!e "*erand t!e seller of an asset (*s*all real estate), it! details re+ardin+ t!e termsand conditions of t!e sale#

$ale 4ease"ack$ A sale of propert, !erein t!e title is transferred to t!e "*er,on condition t!at t!e propert ill "e leased to t!e seller on a lon+term "asis,after t!e sale#

$econd 0ort+a+e$ Ht!erise knon as 'second tr*st', a second mort+a+e is amort+a+e !ic! is taken o*t on propert, !ic! !as "een pled+ed as sec*rit to


39/44

ens*re pament (collateral) of an ori+inal or ?rst mort+a+e# A ?rst mort+a+e !aspriorit in settlement of claims, "efore all ot!er s*"se*ent mort+a+es# ;nlike a?rst mort+a+e, a second mort+a+e !as a s!orter repament term, it! !i+!erinterest rates#

$ec*red 4oan$ A loan !ic! is "acked " a pled+in+ of real or personalpropert (collateral) " t!e "orroer to t!e lender# ;nlike *nsec*red loans, !ic!is "acked " a mere promise " t!e "orroer t!at !e ill repa t!e loan, in caseof a sec*red loan, t!e lender can initiate le+al action a+ainst t!e "orroer toreclaim and sell t!e collateral (pled+ed propert)#

$ec*rit$ Gropert or assets, !ic! are pled+ed to t!e lender " t!e "orroer,as a +*arantee to t!e repament of a loan#

$eller Broker$ A person !o ?nds a "*er for t!e seller of a propert andaids t!e latter in ne+otiation, in lie* of a commission#

$eller Carr"ack$ A form of ?nancin+, !erein t!e seller of a propert ?nancest!e "*er, !o ?nds it di6c*lt to proc*re a loan or falls s!ort of t!e amo*ntneeded to "* t!e propert# In s!ort, it is a part of t!e p*rc!ase amo*nt, !ic!t!e seller oers to ?nance# =!is term is also knon as carr"ack loan or seller'ssecond#

$eller's 0arket$ A market, !ic! !as more "*ers, as compared to t!e n*m"erof sellers# =!is condition leads to a rise in t!e prices, !ic! is favora"le forsellers#

$ort Code$ A sort code is a speci?c n*m"er, !ic! is assi+ned to a partic*lar"ranc! of a "ank for internal p*rposes# -ac! "ranc! is assi+ned it! a sort code,!ic! makes it easier to desi+nate t!at partic*lar "ranc! of "ank, t!an ritin+don t!e !ole address#

$tandard Gament Calc*lation$ A met!od *sed to calc*late t!e mont!lpament re*ired to repa a loan, "ased on t!e loan "alance, term of t!e loanand t!e c*rrent interest rate#

$tarter 5ome$ A term *sed to denote a small !o*se, !ic! is inexpensive, andis often meant for ?rst time !ome "*ers#

$mart Cards$ ;nlike de"it and credit cards (it! ma+netic stripes), smart cardspossess a comp*ter c!ip, !ic! is *sed for data stora+e, processin+ andidenti?cation#

$ndicated 4oan$ A ver lar+e loan extended " a +ro*p of small "anks to asin+le "orroer, especiall corporate "orroers# In most cases of sndicatedloans, t!ere ill "e a lead "ank, !ic! provides a part of t!e loan and sndicatest!e "alance amo*nt to ot!er "anks#

$Bankin+ =erms t!at Be+in @it! =$


40/44

$=akedon Geriod$ =!e time (period) !en a "orroer receives ?nances from alender *nder a line of credit or loan commitment#

$=akeo*t Commitments$ =!is term relates to a ritten promise " a loaner tomake a lon+term ?nancial arran+ement to s*"stit*te or replace a s!ortr*n loan#

$=erm Ins*rance$ It is t!e ins*rance for a certain time period !ic! provides forno defraal to t!e ins*red individ*al, excl*din+ losses d*rin+ t!e period, and t!at"ecomes n*ll *pon its expiration#

$=erm %ote$ A le+al notice oered " a partic*lar or+ani8ation to investorst!ro*+! a dealer#

$=erm tr*ct*re of Interest Rates$ =!is p!rase relates to t!e relations!ip "eteeninterest rates on "onds of dierent d*e dates, +enerall descri"ed in t!e form ofa c!art, often knon as a 'ield c*rve'#

$=ime


41/44

$=rade Credit$It is t!e credit !ic! a compan +ives to anot!er or+ani8ation fort!e p*rpose of "*in+ prod*cts or services#

$=otal RiskBased Capital$ =!e ?nances t!at are provided for start*p companiesand small "*sinesses it! prodi+io*s +rot! a"ilities#

$=rade


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$;s*r 4as$ =!e state and federal >*rispr*dence settin+ *p *ttermostpermissi"le rates of interest t!at can "e c!ar+ed on certain tpes of creditextensions to partic*lar kinds of "orroers#

$Bankin+ =erms t!at Be+in @it! N$

$ $Nal*e At Risk (NAR)$ =!e s*m or portion of t!e val*e t!at is at stake of s*">ectto loss from a variation in prevalent interest rates#

$Nal*e Based 0ana+ement (NB0)$ It is a str*ct*red approac! to eval*ate t!eperformance of t!e compan's *nit mana+ers or +oods and services, in terms oft!e a++re+ate +ains t!e render to stock!olders#

$Naria"le 4ife Ins*rance$ =!is tpe of ins*rance is ver similar to !ole lifeins*rance, !erein t!e cas! ort! is invested in e*it or de"t s*reties#

$Naria"le Rate 0ort+a+e$ =!is is >*st anot!er term *sed for Ad>*sta"le Rate0ort+a+e (AR0)#

$Nariance$ =!is is a statsrelated ord !ic! meas*res t!e distri"*tion ofinformation, like rates or costs aro*nd t!e mean#

$Nector Gat!$ A series of t!e rate of pain+ ?nances in advance, in s*ccessiont!at is c!osen to contemplate an ass*med rate of interest scenario#

$Nariance ap$ =!is relates to a H=C ?scal derivative !ic! ena"les a person to

spec*late on or !ed+in+ >eopardi8es connected it! *npredicta"ilit of some*nderlin+ prod*ct, s*c! as an exc!an+e rate, interest rate or stock index#

$Nested Acc*m*lated Bene?t H"li+ation$ =!e part of t!e con+lomerated "ene?to"li+ation *nder a speci?ed "ene?t plan to !ic! t!e orkers possess a le+alri+!t, even if t!eir emploment is terminated "efore retirement#

$Bankin+ =erms t!at Be+in @it! @$

$@aiver$ In "ankin+ terms, a aiver is relin*is!in+ t!e ri+!ts# ometimes alsoconsidered to "e t!e exemption or settlement of a part of de"t#

$@are!o*se 4ines of Credit$ @are!o*se line of credit is a facilit provided to t!e"orroer to +et a are!o*se mort+a+e portfolio for f*t*re sec*rit#

$@are!o*se Receipt$ A doc*ment or a statement !ic! states t!e *antit and*alit of t!e items at t!e are!o*se for safekeepin+#

$@arrant


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$@!enIss*ed (@I)$ '@!en iss*ed' or @I is a conditional transaction made d*e toits a*t!ori8ed sec*rit or de"t o"li+ation#

$@!ole 4ife Ins*rance$ A !ole life ins*rance is a contract "eteen t!eins*rer and t!e polic oner, t!at t!e ins*rer ill pa t!e s*m of mone on t!e

occ*rrence of t!e event mentioned in t!e polic to t!e ins*red# It's a concept!erein t!e ins*rer miti+ates t!e loss ca*sed to t!e ins*red on t!e "asis ofcertain principles#

$@!olesale Bankin+$@!olesale "ankin+ is a term *sed for "anks !ic! oerservices to ot!er corporate entities, lar+e instit*tions and ot!er ?nancialinstit*tions#

$@ire =ransfers$ @ire transfers is an -lectronic medi*m *sed !ile transferrin+ of f*nds#

$@it! Reco*rse$ A term *sed to si+nif t!at a seller or a draer ill "e lia"le incase of nonperformance of asset or nonpament of an instr*ment#

$@it!draals$Removin+ of f*nds from a "ank acco*nt is knon as makin+ ait!draal#

$@it!o*t Reco*rse$A term !ic! si+ni?es t!at t!e "*er is responsi"le for nonperformance of an asset or nonpament of an instr*ment, instead of t!e seller#

$@orkin+ Capital$ In "ankin+ terms, orkin+ capital is de?ned as t!e dierence"eteen c*rrent assets and c*rrent lia"ilities#

$@raparo*nd 0ort+a+e$ An arran+ement, !erein existin+ mort+a+e isre?nanced it! more mone, it! a rate of interest ran+in+ "eteen t!e oldrates and c*rrent market rates#

$@riter$ A riter is an entit or a ?nancial instit*tion !ic! promises to sell acertain n*m"er of s!ares or stocks at a price "efore a certain date#

$Bankin+ =erms t!at Be+in @it! :$

:ield C*rve$ :ield c*rve is a +rap! or a c*rve t!at s!os t!e relations!ip"eteen mat*rit dates and ield#

$:ield$ =!e ret*rns earned on a stock or "onds, as per t!e eective rate ofinterest on t!e eective date, is knon as a ield in t!e "ankin+ terms#

$:ield C*rve Risk$ :ield c*rve risk is t!e !*+e risk involved in a ?xed incomeinstr*ment, d*e to ma>or *ct*ations in t!e market rates of interest#

$:ield to Call (:=C)$ =!e ield on a "ond calc*lated on t!e s*pposition t!at t!eiss*er ill redeem t!e amo*nt at t!e ?rst call as stated on t!e "ond's prospect*s

is knon as ield to call#


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$:ieldto0at*rit (:=0)$ =!e avera+e ann*al ield t!at an investor receives"eca*se !e !olds it for life or till t!e mat*rit date is knon as t!e ield tomat*rit#

$Bankin+ =erms t!at Be+in @it! Y$

$Y score$ Y score is a meas*re, *sed in t!e "ankin+ ?eld, to determine t!edierence "eteen a sin+le data point and a normal data point#

$Yero Balance Acco*nt$ A "ank acco*nt !ic! does not re*ire an minim*m"alance is termed as a 8ero "alance acco*nt#

$Yero Cost Collar$ A tpe of arran+ement, !erein, t!e "orroer "*s a cap fromt!e "ank and sells t!e oor# In t!is arran+ement, t!e cost of t!e cap is recovered" sale proceeds of t!e oor or vice versa#

$Yero Co*pon :ield C*rve$ Yero co*pon ield c*rve is also knon as spot ieldc*rve, and is *sed to determine disco*nt factors#

$Yonin+$ A +overnment controlled area !ere onl certain *ses of t!e land arepermitted is called 8onin+#

$Yonin+ Nariance$ An exception made in t!e 8onin+ r*le " t!e local+overnment is 8onin+ variance#

$Yero4ot 4ine$ tr*ct*re of a !o*sin+ area s*c! t!at ever !o*se !as a

desi+nated plot# =!e ma or ma not !ave same alls#

$Yero

PD for Banking-01

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