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BankersAdda:BANKINGTERMS

BANKING

DAILYQUIZ

ENGLISH

FRESHVACANCY

GKUPDATES

IBPSEXAM

INTERVIEWPREP

QUANT

REASONING

RESULTS

SSC

STUDYNOTES

BANKINGTERMS
ThebasicbankingtermsarefrequentlyaskedinalltheBankInterviews.
Thesetermsareusefulnotonlyforyourinterviewbutalsoforyourgeneral
knowledge.KnowledgeandUnderstandingofImportantBankingtermsplaya
verycrucialroleinthefinalselection.Alsothesebankingtermsareusefulfor
BankingAspirants,Economics&Commercestudents,MBAaspirantsand
studentspreparingforothersimilarlevelExams.
Knowingbasicbankingtermsnotonlygivesyouanedgeoverother
candidatesbutalsoshowsyourinterestlevelforthejob.

AccountAgreement:Thecontractgoverningyouropenendcreditaccount,
itprovidesinformationonchangesthatmayoccurtotheaccount.
AccountHistory:Thepaymenthistoryofanaccountoveraspecificperiod
oftime,includingthenumberoftimestheaccountwaspastdueoroverlimit.
AccountHolder:Anyandallpersonsdesignatedandauthorizedtotransact
businessonbehalfofanaccount.Eachaccountholder'ssignatureneedsto
beonfilewiththebank.Thesignatureauthorizesthatpersontoconduct
businessonbehalfoftheaccount.
AcquiringBank:Inamerger,thebankthatabsorbsthebankacquired.
Accruedinterest:Interestduefromissuedateorfromthelastcoupon
paymentdatetothesettlementdate.Accruedinterestonbondsmustbe
addedtotheirpurchaseprice.
AdjustableRateMortgages(ARMS):Alsoknownasvariablerate
mortgages.Theinitialinterestrateisusuallybelowthatofconventionalfixed
rateloans.Theinterestratemaychangeoverthelifeoftheloanasmarket
conditionschange.Thereistypicallyamaximum(orceiling)andaminimum
(orfloor)definedintheloanagreement.Ifinterestratesrise,sodoestheloan
payment.Ifinterestratesfall,theloanpaymentmayaswell.
Arbitrage:Buyingafinancialinstrumentinonemarketinordertosellthe
sameinstrumentatahigherpriceinanothermarket.
AdverseAction:UndertheEqualCreditOpportunityAct,acreditor'srefusal
tograntcreditonthetermsrequested,terminationofanexistingaccount,or
anunfavorablechangeinanexistingaccount.
AdverseActionNotice:ThenoticerequiredbytheEqualCreditOpportunity
Actadvisingacreditapplicantorexistingdebtorofthedenialoftheirrequest
forcreditoradvisingofachangeintermsconsideredunfavorabletothe
accountholder.
AER:Annualearningsrateonaninvestment.
Affidavit:Aswornstatementinwritingbeforeaproperofficial,suchasa
notarypublic.
Alteration:Anychangeinvolvinganerasureorrewritinginthedate,amount,
orpayeeofacheckorothernegotiableinstrument.
Amortization:Theprocessofreducingdebtthroughregularinstallment
paymentsofprincipalandinterestthatwillresultinthepayoffofaloanatits
maturity.
AnytimeBanking:WithintroductionofATMs,TeleBankingandinternet
banking,customerscanconducttheirbusinessanytimeofthedayandnight.
The'BankingHours'isnotaconstraintfortransactingbankingbusiness.
AnywhereBanking:ReferstobankingnotonlybyATMs,TeleBankingand
internetbanking,butalsotocorebankingsolutionsbroughtinbybanks
wherecustomercandeposithismoney,chequesandalsowithdrawmoney
fromanybranchconnectedwiththesystem.AllmajorbanksinIndiahave
broughtincorebankingintheiroperationstomakebankingtrulyanywhere
banking.
AnnualPercentageRate(APR):Thecostofcreditonayearlybasis,
expressedasapercentage.
AnnualPercentageYield(APY):Apercentageratereflectingthetotal
amountofinterestpaidonadepositaccountbasedontheinterestrateand
thefrequencyofcompoundingfora365dayyear.
Annuity:Alifeinsuranceproductwhichpaysincomeoverthecourseofa
setperiod.Deferredannuitiesallowassetstogrowbeforetheincomeis
receivedandimmediateannuities(usuallytakenfromayearafterpurchase)
allowpaymentstostartfromaboutayearafterpurchase.
APR:Theannualpercentagerateofinterest,usuallyonaloanormortgage,
usuallydisplayedinbracketsandrepresentingthetruecostoftheloanor
mortgageasitshowsanyadditionalpaymentsbeyondtheinterestrate.
Application:UndertheEqualCreditOpportunityAct(ECOA),anoralor
writtenrequestforanextensionofcreditthatismadeinaccordancewiththe
proceduresestablishedbyacreditorforthetypeofcreditrequested.
Appraisal:Theactofevaluatingandsettingthevalueofaspecificpieceof
personalorrealproperty.
AskPrice:Thelowestpriceatwhichadealeriswillingtosellagiven
security.
AssetBackedSecurities(ABS):Atypeofsecuritythatisbackedbyapool
ofbankloans,leases,andotherassets.MostABSarebackedbyautoloans
andcreditcardstheseissuesareverysimilartomortgagebacked
securities.

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securities.
Atthemoney:Theexercisepriceofaderivativethatisclosesttothe
marketpriceoftheunderlyinginstrument.
ATM:ATMsareAutomaticTellerMachines,whichdothejobofatellerina
bankthroughComputerNetwork.ATMsarelocatedonthebranchpremises
oroffbranchpremises.ATMsareusefultodispensecash,receivecash,
acceptcheques,givebalancesintheaccountsandalsogivemini
statementstothecustomers.
Authorization:Theissuanceofapproval,byacreditcardissuer,merchant,
orotheraffiliate,tocompleteacreditcardtransaction.
AutomatedClearingHouse(ACH):Acomputerizedfacilityusedby
memberdepositoryinstitutionstoelectronicallycombine,sort,anddistribute
interbankcreditsanddebits.ACHsprocesselectronictransfersof
governmentsecuritiesandprovidedcustomerservices,suchasdirect
depositofcustomers'salariesandgovernmentbenefitpayments(i.e.,social
security,welfare,andveterans'entitlements),andpreauthorizedtransfers.
AutomatedTellerMachine(ATM):Amachine,activatedbyamagnetically
encodedcardorothermediumthatcanprocessavarietyofbanking
transactions.Theseincludeacceptingdepositsandloanpayments,providing
withdrawals,andtransferringfundsbetweenaccounts.
AutomaticBillPayment:Achecklesssystemforpayingrecurringbillswith
oneauthorizationstatementtoafinancialinstitution.Forexample,the
customerwouldonlyhavetoprovideoneauthorizationform/letter/document
topaythecablebilleachmonth.Thenecessarydebitsandcreditsaremade
throughanAutomatedClearingHouse(ACH).
AvailabilityDate:Bank'spolicyastowhenfundsdepositedintoanaccount
willbeavailableforwithdrawal.
AvailabilityPolicy:Bank'spolicyastowhenfundsdepositedintoan
accountwillbeavailableforwithdrawal.
AvailableBalance:Thebalanceofanaccountlessanyhold,uncollected
funds,andrestrictionsagainsttheaccount.
AvailableCredit:Thedifferencebetweenthecreditlimitassignedtoa
cardholderaccountandthepresentbalanceoftheaccount.
Banking:Acceptingforthepurposeoflendingorinvestmentofdepositsof
moneyfromPublic,Repayableondemandorotherwiseandwithdrawableby
cheques,drafts,order,etc.
BankOmbudsman:BankOmbudsmanistheauthoritytolookinto
complaintsagainstBanksinthemainareasofcollectionofcheque/bills,
issueofdemanddrafts,nonadherencetoprescribedhoursofworking,failure
tohonourguarantee/letterofcreditcommitments,operationsindeposit
accountsandalsointheareasofloansandadvanceswherebanksflout
directions/instructionsofRBI.ThisSchemewasannouncedin1995andis
functioningwithnewguidelinesfrom2007.Thisschemecoversallscheduled
banks,theRRBsandcooperativebanks.
Bancassurance:Bancassurancereferstothedistributionofinsurance
productsandtheinsurancepoliciesofinsurancecompanieswhichmaybe
lifepoliciesornonlifepolicieslikehomeinsurancecarinsurance,medi
policiesandothers,bybanksascorporateagentsthroughtheirbranches
locatedindifferentpartsofthecountrybychargingafee.
Banker'sLien:Bankerslienisaspecialrightoflienexercisedbythe
bankers,whocanretaingoodsbailedtothemasasecurityforgeneral
balanceofaccount.Bankerscanhavethisrightintheabsenceofacontract
tothecontrary.
BaselII:TheCommitteeonBankingRegulationsandSupervisoryPractices,
popularityknownasBaselCommittee,submitteditsrevisedversionof
normsinJune,2004.Undertherevisedaccordthecapitalrequirementisto
becalculatedforcredit,marketandoperationalrisks.Theminimum
requirementcontinuestobe8%ofcapitalfund(TierI&IICapital)TierII
shallcontinuetobenotmorethan100%ofTierICapital.
Brick&MortarBanking:BrickandMortarBankingreferstotraditional
systemofbankingdoneonlyinafixedbranchpremisesmadeofbrickand
mortar.NowtherearebankingchannelslikeATM,InternetBanking,tele
bankingetc.
BusinessofBanking:Acceptingdeposits,borrowingmoney,lending
money,investing,dealinginbills,dealinginForeignExchange,Hiring
Lockers,OpeningSafeCustodyAccounts,IssuingLettersofCredit,
TravelersCheques,doingMutualFundbusiness,InsuranceBusiness,acting
asTrusteeordoinganyotherbusinesswhichCentralGovernmentmaynotify
intheofficialGazette.
Bouncingofacheque:Whereanaccountdoesnothavesufficientbalance
tohonourthechequeissuedbythecustomer,thechequeisreturnedbythe
bankwiththereason"fundsinsufficient"or"Exceedsarrangement.Thisis
knownas'Bouncingofacheque.
BasisPoint:Onehundredthof1%.Ameasurenormallyusedinthe
statementofinterestratee.g.,achangefrom5.75%to5.81%isachangeof
6basispoints.BearMarkets:Unfavorablemarketsassociatedwithfalling
pricesandinvestorpessimism.
BidaskSpread:Thedifferencebetweenadealerssbidandaskprice.
BidPrice:Thehighestpriceofferedbyadealertopurchaseagivensecurity.
BlueChips:Bluechipsareunsurpassedinqualityandhavealongand
stablerecordofearningsanddividends.Theyareissuedbylargeandwell
establishedfirmsthathaveimpeccablefinancialcredentials.
Bond:Publiclytradedlongtermdebtsecurities,issuedbycorporationsand
governments,wherebytheissueragreestopayafixedamountofinterest
overaspecifiedperiodoftimeandtorepayafixedamountofprincipalat
maturity.
BookValue:Theamountofstockholdersequityinafirmequalstheamount

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BookValue:Theamountofstockholdersequityinafirmequalstheamount
ofthefirmsassetsminusthefirmsliabilitiesandpreferredstock.
Broker:Individualslicensedbystockexchangestoenableinvestorstobuy
andsellsecurities.
BrokerageFee:Thecommissionchargedbyabroker.
BullMarkets:Favorablemarketsassociatedwithrisingpricesandinvestor
optimism.
CallOption:Therighttobuytheunderlyingsecuritiesataspecifiedexercise
priceonorbeforeaspecifiedexpirationdate.
CallableBonds:Bondsthatgivetheissuertherighttoredeemthebonds
beforetheirstatedmaturity.
CapitalGain:Theamountbywhichtheproceedsfromthesaleofacapital
assetexceeditsoriginalpurchaseprice.
CapitalMarkets:Themarketinwhichlongtermsecuritiessuchasstocks
andbondsareboughtandsold.
CertificateofDeposits(CDs):Savingsinstrumentinwhichfundsmust
remainondepositforaspecifiedperiodandprematurewithdrawalsincur
interestpenalties.
CertificateofDeposit:.CertificateofDepositsarenegotiablereceiptsin
bearerformwhichcanbefreelytradedamonginvestors.Thisisalsoa
moneymarketinstrument,issuedforaperiodrangingfrom7daystofone
year.TheminimumdepositamountisRs.1lakhandtheyaretransferableby
endorsementanddelivery.
Cheque:Chequeisabillofexchangedrawnonaspecifiedbankerordering
thebankertopayacertainsumofmoneytothedrawerofchequeoranother
person.Moneyisgenerallywithdrawnbyclientsbycheques.Chequeis
alwayspayableondemand.
ChequeTruncation:Chequetruncationtruncatesorstopstheflowof
chequesthroughthebankingsystem.Generallytruncationtakesplaceatthe
collectingbranch,whichsendstheelectronicimageofthechequestothe
payingbranchthroughtheclearinghouseandstoresthepaperchequeswith
it.
Closedend(Mutual)Fund:Afundwithafixednumberofsharesissued,
andalltradingisdonebetweeninvestorsintheopenmarket.Theshare
pricesaredeterminedbymarketpricesinsteadoftheirnetassetvalue.
Collateral:Aspecificassetpledgedagainstpossibledefaultonabond.
Mortgagebondsarebackedbyclaimsonproperty.Collateraltrustsbonds
arebackedbyclaimsonothersecurities.Equipmentobligationbondsare
backedbyclaimsonequipment.
CommercialPaper:Shorttermandunsecuredpromissorynotesissuedby
corporationswithveryhighcreditstandings.
CommonStock:Equityinvestmentrepresentingownershipinacorporation
eachsharerepresentsafractionalownershipinterestinthefirm.
CompoundInterest:Interestpaidnotonlyontheinitialdepositbutalsoon
anyinterestaccumulatedfromoneperiodtothenext.
ContractNote:Anotewhichmustaccompanyeverysecuritytransaction
whichcontainsinformationsuchasthedealersname(whetherheisacting
asprincipaloragent)andthedateofcontract.
ControllingShareholder:Anypersonwhois,orgroupofpersonswho
togetherare,entitledtoexerciseorcontroltheexerciseofacertainamount
ofsharesinacompanyatalevel(whichdiffersbyjurisdiction)thattriggersa
mandatorygeneraloffer,ormoreofthevotingpoweratgeneralmeetingsof
theissuer,orwhoisorareinapositiontocontrolthecompositionofa
majorityoftheboardofdirectorsoftheissuer.
ConvertibleBond:Abondwithanoption,allowingthebondholderto
exchangethebondforaspecifiednumberofsharesofcommonstockinthe
firm.Aconversionpriceisthespecifiedvalueofthesharesforwhichthe
bondmaybeexchanged.Theconversionpremiumistheexcessofthe
bondsvalueovertheconversionprice.
CorporateBond:Longtermdebtissuedbyprivatecorporations.
Coupon:Thefeatureonabondthatdefinestheamountofannualinterest
income.
CouponFrequency:Thenumberofcouponpaymentsperyear.
CouponRate:Theannualrateofinterestonthebondsfacevaluethata
bondsissuerpromisestopaythebondholder.Itisthebondsinterest
paymentperdollarofparvalue.
CoveredWarrants:Derivativecallwarrantsonshareswhichhavebeen
separatelydepositedbytheissuersothattheyareavailablefordeliveryupon
exercise.
CreditRating:Anassessmentofthelikelihoodofanindividualorbusiness
beingabletomeetitsfinancialobligations.Creditratingsareprovidedby
creditagenciesorratingagenciestoverifythefinancialstrengthoftheissuer
forinvestors.
CollectingBanker:Alsocalledreceivingbanker,whocollectson
instrumentslikeacheque,draftorbillofexchange,lodgedwithhimselffor
thecreditofhiscustomer'saccount.
ConsumerProtectionAct:Itisimplementedfrom1987toenforce
consumerrightsthroughasimplelegalprocedure.Banksalsoarecovered
undertheAct.Aconsumercanfilecomplaintfordeficiencyofservicewith
ConsumerDistrictForumforamountsuptoRs.20LacsinDistrictCourt,and
foramountsaboveRs.20LacstoRs.1CroreinStateCommissionandfor
amountsaboveRs.1CroreinNationalCommission.
CooperativeBank:Anassociationofpersonswhocollectivelyownand
operateabankforthebenefitofconsumers/customers,likeSaraswatCo
operativeBankorAbhyudayaCooperativeBankandothersuchbanks.
CooperativeSociety:Whenanassociationofpersonscollectivelyownand
operateaunitforthebenefitofthoseusingitsserviceslikeApnaBazarCo

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operateaunitforthebenefitofthoseusingitsserviceslikeApnaBazarCo
operativeSocietyorSahakarBhandaroraCooperativeHousingSociety.
CoreBankingSolutions(CBS):CoreBankingSolutionsisabuzzwordin
Indianbankingatpresent,wherebranchesofthebankareconnectedtoa
centralhostandthecustomersofconnectedbranchescandobankingatany
breachwithcorebankingfacility.
Creditworthiness:Itisthecapacityofaborrowertorepaytheloan/
advanceintimealongwithinterestasperagreedterms.
CrossingofCheques:Crossingreferstodrawingtwoparallellinesacross
thefaceofthecheque.Acrossedchequecannotbepaidincashacrossthe
counter,andistobepaidthroughabankeitherbytransfer,collectionor
clearing.Ageneralcrossingmeansthatchequecanbepaidthroughany
bankandaspecialcrossing,wherethenameofabankisindicatedonthe
cheque,canbepaidonlythroughthenamedbank.
Customer:Apersonwhomaintainsanytypeofaccountwithabankisa
bankcustomer.ConsumerProtectionActhasawiderdefinitionforconsumer
astheonewhopurchasesanyserviceforafeelikepurchasingademand
draftorapayorder.ThetermcustomerisdefineddifferentlybyLaws,
softwaresandcountries.
CurrentAccount:Currentaccountwithabankcanbeopenedgenerallyfor
businesspurpose.Therearenorestrictionsonwithdrawalsinthistypeof
account.Nointerestispaidinthistypeofaccount.
CurrencyBoard:Amonetarysysteminwhichthemonetarybaseisfully
backedbyforeignreserves.Anychangesinthesizeofthemonetarybase
havetobefullymatchedbycorrespondingchangesintheforeignreserves.
CurrentYield:Areturnmeasurethatindicatestheamountofcurrentincome
abondprovidesrelativetoitsmarketprice.Itisshownas:CouponRate
dividedbyPricemultipliedby100%.
CustodyofSecurities:Registrationofsecuritiesinthenameoftheperson
towhomabankisaccountable,orinthenameofthebanksnomineeplus
depositionofsecuritiesinadesignatedaccountwiththebanksbankersor
withanyotherinstitutionprovidingcustodialservices.
DebitCard:Aplasticcardissuedbybankstocustomerstowithdrawmoney
electronicallyfromtheiraccounts.Whenyoupurchasethingsonthebasisof
DebitCardtheamountdueisdebitedimmediatelytotheaccount.Many
banksissueDebitCumATMCards.
Debtor:Apersonwhotakessomemoneyonloanfromanotherperson.
DemandDeposits:Depositswhicharewithdrawnondemandbycustomers.
E.g.savingsbankandcurrentaccountdeposits.
DematAccount:DematAccountconcepthasrevolutionizedthecapital
marketofIndia.Whenadepositorycompanytakespapersharesfroman
investorandconvertstheminelectronicformthroughtheconcerned
company,itiscalledDematerializationofShares.TheseconvertedShare
CertificatesinElectronicformarekeptinaDematAccountbythe
DepositoryCompany,likeabankkeepsmoneyinadepositaccount.
Investorcanwithdrawthesharesorpurchasemoresharesthroughthis
dematAccount.
DerivativeCall(Put)Warrants:Warrantsissuedbyathirdpartywhichgrant
theholdertherighttobuy(sell)thesharesofalistedcompanyataspecified
price.
DerivativeInstrument:Financialinstrumentwhosevaluedependsonthe
valueofanotherasset.
DiscountBond:Abondsellingbelowpar,asinterestinlieutothe
bondholders.
DishonourofCheque:Nonpaymentofachequebythepayingbankerwith
areturnmemogivingreasonsforthenonpayment.DefaultRisk:The
possibilitythatabondissuerwilldefaultie,failtorepayprincipalandinterest
inatimelymanner.
Diversification:Theinclusionofanumberofdifferentinvestmentvehiclesin
aportfolioinordertoincreasereturnsorbeexposedtolessrisk.
Duration:Ameasureofbondpricevolatility,itcapturesbothpriceand
reinvestmentriskstoindicatehowabondwillreacttodifferentinterestrate
environments.
Earnings:Thetotalprofitsofacompanyaftertaxationandinterest.
EarningsperShare(EPS):Theamountofannualearningsavailableto
commonstockholdersasstatedonapersharebasis.
EarningsYield:Theratioofearningstoprice(E/P).Thereciprocalisprice
earningsratio(P/E).
EBanking:EBankingorelectronicbankingisaformofbankingwhere
fundsaretransferredthroughexchangeofelectronicsignalsbetweenbanks
andfinancialinstitutionandcustomersATMs,CreditCards,DebitCards,
InternationalCards,InternetBankingandnewfundtransferdeviceslike
SWIFT,RTGSbelongtothiscategory.
EFT(ElectronicFundTransfer):EFTisadevicetofacilitateautomatic
transmissionandprocessingofmessagesaswellasfundsfromonebank
branchtoanotherbankbranchandevenfromonebranchofabanktoa
branchofanotherbank.EFTallowstransferoffundselectronicallywithdebit
andcredittorelativeaccounts.
EitherorSurvivor:Referstooperationoftheaccountopenedintwonames
withabank.Itmeansthatanyoneoftheaccountholdershavepowersto
withdrawmoneyfromtheaccount,issuecheques,givestoppayment
instructionsetc.Intheeventofdeathofoneoftheaccountholder,the
survivingaccountholdergetsallthepowersofoperation.
ElectronicCommerce(ECommerce):ECommerceisthepaperless
commercewheretheexchangeofbusinesstakesplacebyElectronic
means.

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means.
Endorsement:WhenaNegotiableInstrumentcontains,onthebackofthe
instrumentanendorsement,signedbytheholderorpayeeofanorder
instrument,transferringthetitletotheotherperson,itiscalledendorsement.
Bouncingofacheque:Wherethenameoftheendorseeortransfereeisnot
mentionedontheinstrument.
EndorsementinFull:Wherethenameoftheendorseeortransferee
appearsontheinstrumentwhilemakingendorsement.
Equity:Ownershipofthecompanyintheformofsharesofcommonstock.
EquityCallWarrants:Warrantsissuedbyacompanywhichgivetheholder
therighttoacquirenewsharesinthatcompanyataspecifiedpriceandfora
specifiedperiodoftime.
Exdividend(XD):Asecuritywhichnolongercarriestherighttothemost
recentlydeclareddividendortheperiodoftimebetweentheannouncementof
thedividendandthepayment(usuallytwodaysbeforetherecorddate).For
transactionsduringtheexdividendperiod,thesellerwillreceivethedividend,
notthebuyer.Exdividendstatusisusuallyindicatedinnewspaperswithan
(x)nexttothestocksorunittrustsname.
ExecutionofDocuments:Executionofdocumentsisdonebyputting
signatureoftheperson,oraffixinghisthumbimpressionorputtingsignature
withstamporaffixingcommonsealofthecompanyonthedocumentswith
orwithoutsignaturesofdirectorsasperarticlesofassociationofthe
company.
FaceValue/NominalValue:Thevalueofafinancialinstrumentasstated
ontheinstrument.Interestiscalculatedonface/nominalvalue.
FixedincomeSecurities:Investmentvehiclesthatofferafixedperiodic
return.
FixedRateBonds:Bondsbearingfixedinterestpaymentsuntilmaturity
date.
FloatingRateBonds:Bondsbearinginterestpaymentsthataretiedto
currentinterestrates.
Factoring:Businessofbuyingtradedebtsatadiscountandmakingaprofit
whendebtisrealizedandalsotakingovercollectionoftradedebtsatagreed
prices.
ForeignBanks:BanksincorporatedoutsideIndiabutoperatinginIndiaand
regulatedbytheReserveBankofIndia(RBI),.e..g.,BarclaysBank,HSBC,
Citibank,StandardCharteredBank,etc.
Forfeiting:InInternationalTradewhenanexporterfindsitdifficulttorealize
moneyfromtheimporter,hesellstherighttoreceivemoneyatadiscountto
aforfaiter,whoundertakesinherentpoliticalandcommercialriskstofinance
theexporter,ofcoursewithassumptionofaprofitintheventure.
Forgery:whenamaterialalterationismadeonadocumentoraNegotiable
Instrumentlikeacheque,tochangethemandateofthedrawer,withintention
todefraud.
FundamentalAnalysis:Researchtopredictstockvaluethatfocuseson
suchdeterminantsasearningsanddividendsprospects,expectationsfor
futureinterestratesandriskevaluationofthefirm.
FutureValue:Theamounttowhichacurrentdepositwillgrowoveraperiod
oftimewhenitisplacedinanaccountpayingcompoundinterest.
FutureValueofanAnnuity:Theamounttowhichastreamofequalcash
flowsthatoccurinequalintervalswillgrowoveraperiodoftimewhenitis
placedinanaccountpayingcompoundinterest.
FuturesContract:Acommitmenttodeliveracertainamountofsome
specifieditematsomespecifieddateinthefuture.
GarnisheeOrder:WhenaCourtdirectsabanktoattachthefundstothe
creditofcustomer'saccountunderprovisionsofSection60oftheCodeof
CivilProcedure,1908.
GeneralLien:Arightofthecreditorstoretainpossessionofallgoodsgiven
insecuritytohimbythedebtorforanyoutstandingdebt.
Guarantee:Acontractbetweenguarantorandbeneficiarytoensure
performanceofapromiseordischargetheliabilityofathirdperson.If
promiseisbrokenornotperformed,theguarantorpayscontractedamountto
thebeneficiary.
Hedge:Acombinationoftwoormoresecuritiesintoasingleinvestment
positionforthepurposeofreducingoreliminatingrisk.
Holder:Holdermeansanypersonentitledinhisownnametothe
possessionofthecheque,billofexchangeorpromissorynoteandwhois
entitledtoreceiveorrecovertheamountdueonitfromtheparties.For
example,ifIgiveachequetomyfriendtowithdrawmoneyfrommybank,he
becomesholderofthatcheque.Evenifhelosesthecheque,hecontinuesto
beholder.Findercannotbecometheholder.
Holderinduecourse:ApersonwhoreceivesaNegotiableInstrumentfor
value,beforeitwasdueandingoodfaith,withoutnoticeofanydefectinit,
heiscalledholderinduecourseasperNegotiableInstrumentAct.Inthe
earlierexampleifmyfriendlendssomemoneytomeonthebasisofthe
cheque,whichIhavegiventohimforencashment,hebecomesholderindue
course.
Hypothecation:Chargeagainstpropertyforanamountofdebtwhereneither
ownershipnorpossessionispassedtothecreditor.Inpledge,possessionof
propertyispassedontothelenderbutinhypothecation,thepropertyremains
withtheborrowerintrustforthelender.
Identification:Whenapersonprovidesadocumenttoabankorisbeing
identifiedbyaperson,whoisknowntothebank,itiscalledidentification.
Banksaskforidentificationbeforepayinganorderchequeorademanddraft

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Banksaskforidentificationbeforepayinganorderchequeorademanddraft
acrossthecounter.
Indemnifier:Whenapersonindemnifiesorguaranteestomakegoodany
losscausedtothelenderfromhisactionsorothers'actions.
Indemnity:Indemnityisabondwheretheindemnifierundertakesto
reimbursethebeneficiaryfromanylossarisingduetohisactionsorthird
partyactions.
Income:Theamountofmoneyanindividualreceivesinaparticulartime
period.
IndexFund:Amutualfundthatholdssharesinproportiontotheir
representationinamarketindex,suchastheS&P500.
InitialPublicOffering(IPO):Aneventwhereacompanysellsitssharesto
thepublicforthefirsttime.ThecompanycanbereferredtoasanIPOfora
periodoftimeaftertheevent.
InsideInformation:Nonpublicknowledgeaboutacompanypossessedby
itsofficers,majorowners,orotherindividualswithprivilegedaccessto
information.
InsiderTrading:Theillegaluseofnonpublicinformationaboutacompany
tomakeprofitablesecuritiestransactions
Insolvent:Insolventisapersonwhoisunabletopayhisdebtsasthey
mature,ashisliabilitiesaremorethantheassets.CivilCourtsdeclaresuch
personsinsolvent.Banksdonotopenaccountsofinsolventpersonsasthey
cannotenterintocontractasperlaw.
InterestWarrant:Whenchequeisgivenbyacompanyoranorganizationin
paymentofinterestondeposit,itiscalledinterestwarrant.Interestwarrant
hasallthecharacteristicsofacheque.
InternationalBanking:involvesmorethantwonationsorcountries.Ifan
IndianBankhasbranchesindifferentcountrieslikeStateBankofIndia,itis
saidtodoInternationalBanking.
Introduction:Banksarecarefulinopeninganyaccountforacustomeras
theprospectivecustomerhastobeintroducedbyanexistingaccountholder
orastaffmemberorbyanyotherpersonknowntothebankforopeningof
account.Ifbankdoesnottakeintroduction,itwillamounttonegligenceand
willnotgetprotectionunderlaw.
IntrinsicValue:Thedifferenceoftheexercisepriceoverthemarketpriceof
theunderlyingasset.
Investment:Avehicleforfundsexpectedtoincreaseitsvalueand/or
generatepositivereturns.
InvestmentAdviser:Apersonwhocarriesonabusinesswhichprovides
investmentadvicewithrespecttosecuritiesandisregisteredwiththe
relevantregulatorasaninvestmentadviser.
IPOprice:Thepriceofsharesetbeforebeingtradedonthestockexchange.
OncethecompanyhasgoneInitialPublicOffering,thestockpriceis
determinedbysupplyanddemand.
JHFAccount:JointHinduFamilyAccountisaccountofafirmwhose
businessiscarriedoutbyKartaoftheJointfamily,actingforallthefamily
members..Thefamilymembershavecommonancestorandgenerally
maintainacommonresidenceandaresubjecttocommonsocial,economic
andreligiousregulations.
JointAccount:Whentwoormoreindividualsjointlyopenanaccountwitha
bank.
JunkBond:Highrisksecuritiesthathavereceivedlowratings(i.e.Standard
&PoorsBBBratingorbeloworMoodysBBBratingorbelow)andassuch,
producehighyields,solongastheydonotgointodefault.
Karta:ManagerofaHinduUndividedFamily(HUF)whohandlesthefamily
business.Heisusuallytheeldestmalememberoftheundividedfamily.
KioskBanking:Doingbankingfromacubiclefromwhichfood,newspapers,
ticketsetc.arealsosold.
KYCNorms:KnowyourcustomernormsareimposedbyR.B.I.onbanks
andotherfinancialinstitutionstoensurethattheyknowtheircustomersand
toensurethatcustomersdealonlyinlegitimatebankingoperationsandnotin
moneylaunderingorfrauds.
LawofLimitation:LimitationActof1963fixesthelimitationperiodofdebts
andobligationsincludingbanksloansandadvances.Iftheperiodfixedfor
particulardebtorloanexpires,onecannotfileasuitforisrecovery,butthe
factofthedebtorloanisnotdenied.Itissaidthatlawoflimitationbarsthe
remedybutdoesnotextinguishtheright.
LeaseFinancing:Financingforthebusinessofrentinghousesorlandsfora
specifiedperiodoftimeandalsohiringoutofanassetforthedurationofits
economiclife.Leasingofacarorheavymachineryforaspecificperiodat
specificpriceisanexample.
LetterofCredit:Adocumentissuedbyimportersbanktoitsbranchoragent
abroadauthorizingthepaymentofaspecifiedsumtoapersonnamedin
LetterofCredit(usuallyexporterfromabroad).LettersofCreditarecovered
byrulesframedunderUniformCustomsandPracticesofDocumentary
CreditsframedbyInternationalChamberofCommerceinParis.
LimitedCompaniesAccounts:Accountsofcompaniesincorporatedunder
theCompaniesAct,1956.Acompanymaybeprivateorpublic.Liabilityof
theshareholdersofacompanyisgenerallylimitedtothefacevalueofshares
heldbythem.
LeverageRatio:Financialratiosthatmeasuretheamountofdebtbeingused
tosupportoperationsandtheabilityofthefirmtoserviceitsdebt.
Libor:TheLondonInterbankOfferedRate(orLIBOR)isadailyreference
ratebasedontheinterestratesatwhichbanksoffertolendunsecuredfunds
tootherbanksintheLondonwholesalemoneymarket(orinterbankmarket).

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tootherbanksintheLondonwholesalemoneymarket(orinterbankmarket).
TheLIBORrateispublisheddailybytheBritishBankersAssociationand
willbeslightlyhigherthantheLondonInterbankBidRate(LIBID),therateat
whichbanksarepreparedtoacceptdeposits.
LimitOrder:Anordertobuy(sell)securitieswhichspecifiesthehighest
(lowest)priceatwhichtheorderistobetransacted.
LimitedCompany:Thepassiveinvestorsinapartnership,whosupplymost
ofthecapitalandhaveliabilitylimitedtotheamountoftheircapital
contributions.
Liquidity:Theabilitytoconvertaninvestmentintocashquicklyandwith
littleornolossinvalue.
Listing:QuotationoftheInitialPublicOfferingcompanyssharesonthe
stockexchangeforpublictrading.
ListingDate:ThedateonwhichInitialPublicOfferingstocksarefirsttraded
onthestockexchangebythepublic
MarginCall:Anoticetoaclientthatitmustprovidemoneytosatisfya
minimummarginrequirementsetbyanExchangeorbyabank/brokingfirm.
MarketCapitalization:Theproductofthenumberofthecompanys
outstandingordinarysharesandthemarketpriceofeachshare.
MarketMaker:Adealerwhomaintainsaninventoryinoneormorestocks
andundertakestomakecontinuoustwosidedquotes.
MarketOrder:Anordertobuyoranordertosellsecuritieswhichistobe
executedattheprevailingmarketprice.
MoneyMarket:Marketinwhichshorttermsecuritiesareboughtandsold.
MarginalStandingFacilityRate:MSFschemehasbecomeeffectivefrom
09thMay,2011launchedbytheRBI.Underthisscheme,Bankswillbeable
toborrowupto1%oftheirrespectiveNetDemandandTimeLiabilities.The
rateofinterestontheamountaccessedfromthisfacilitywillbe100basis
points(i.e.1%)abovethereporate.Thisschemeislikelytoreducevolatility
intheovernightratesandimprovemonetarytransmission.
Mandate:Writtenauthorityissuedbyacustomertoanotherpersontoacton
hisbehalf,tosignchequesortooperateabankaccount.
MaterialAlteration:Alterationinaninstrumentsoastoalterthecharacterof
aninstrumentforexamplewhendate,amount,nameofthepayeearealtered
ormakingachequepayabletobearerfromanorderoneoropeningthe
crossingonacheque.
MerchantBanking:Whenabankprovidestoacustomervarioustypesof
financialserviceslikeacceptingbillsarisingoutoftrade,arrangingand
providingunderwriting,newissues,providingadvice,informationor
assistanceonstartingnewbusiness,acquisitions,mergersandforeign
exchange.
MicroFinance:MicroFinanceaimsatalleviationofpovertyand
empowermentofweakersectionsinIndia.Inmicrofinance,verysmall
amountsaregivenascredittopoorinrural,semiurbanandurbanareasto
enablethemtoraisetheirincomelevelsandimprovelivingstandards.
MinorAccounts:Aminorisapersonwhohasnotattainedlegalageof18
years.AsperContractActaminorcannotenterintoacontractbutasper
NegotiableInstrumentAct,aminorcandraw,negotiate,endorse,receive
paymentonaNegotiableInstrumentsoastobindallthepersons,except
himself.Inordertoboosttheirdepositsmanybanksopenminoraccounts
withsomerestrictions.
MobileBanking:WiththehelpofMBankingormobilebankingcustomer
cancheckhisbankbalance,orderademanddraft,stoppaymentofa
cheque,requestforachequebookandhaveinformationaboutlatestinterest
rates.
MoneyLaundering:Whenacustomerusesbankingchannelstocoverup
hissuspiciousandunlawfulfinancialactivities,itiscalledmoneylaundering.
MoneyMarket:MoneymarketisnotanorganizedmarketlikeBombayStock
Exchangebutisaninformalnetworkofbanks,financialinstitutionswhodeal
inmoneymarketinstrumentsofshorttermlikeCP,CDandTreasurybillsof
Government.
Moratorium:R.B.I.imposesmoratoriumonoperationsofabankifthe
affairsofthebankarenotconductedasperbankingnorms.Aftermoratorium
R.B.I.andGovernmentexploretheoptionsofsafeguardingtheinterestsof
depositorsbywayofchangeinmanagement,amalgamationortakeoveror
byothermeans.
Mortgage:Transferofaninterestinspecificimmovablepropertyforthe
purposeofofferingasecurityfortakingaloanoradvancefromanother.It
maybeexistingorfuturedebtorperformanceofanagreementwhichmay
createmonetaryobligationforthetransferor(mortgagor).
MutualFund:Acompanythatinvestsinandprofessionallymanagesa
diversifiedportfolioofsecuritiesandsellssharesoftheportfoliotoinvestors.
NABARD:NationalBankforAgriculture&RuralDevelopmentwassetupin
1982undertheActof1981.NABARDfinancesandregulatesruralfinancing
andalsoisresponsiblefordevelopmentagricultureandruralindustries.
Negotiation:Inthecontextofbanking,negotiationmeansanactof
transferringorassigningamoneyinstrumentfromonepersontoanother
personinthecourseofbusiness.
NetAssetValue:Theunderlyingvalueofashareofstockinaparticular
mutualfundalsousedwithpreferredstock.
NonFundBasedLimits:NonFundBasedLimitsarethosetypeoflimits
wherebankerdoesnotpartwiththefundsbutmayhavetopartwithfundsin
caseofdefaultbytheborrowers,likeguarantees,letterofcreditand
acceptancefacility.
NonResident:ApersonwhoisnotaresidentofIndiaisanonresident.
NonResidentAccounts:AccountsofnonresidentIndiancitizensopened

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NonResidentAccounts:AccountsofnonresidentIndiancitizensopened
andmaintainedasperR.B.I.Rules.
NotaryPublic:ALawyerwhoisauthorizedbyGovernmenttocertifycopies
ofdocuments.
NPAAccount:Ifinterestandinstalmentsandotherbankduesarenotpaid
inanyloanaccountwithinaspecifiedtimelimit,itisbeingtreatedasnon
performingassetsofabank.
OffBalanceSheetItems:Thoseitemswhichaffectthefinancialpositionof
abusinessconcern,butdonotappearintheBalanceSheetE,gguarantees,
lettersofcredit.Themention"offBalanceSheetitems"isoftenfoundin
AuditorsReportsorDirectorsReports.
OfferforSale:Anoffertothepublicby,oronbehalfof,theholdersof
securitiesalreadyinissue.
OfferforSubscription:Theofferofnewsecuritiestothepublicbythe
issuerorbysomeoneonbehalfoftheissuer.
OnlineBanking:Bankingthroughinternetsiteofthebankwhichismade
interactive.
Openend(Mutual)Fund:Thereisnolimittothenumberofsharesthefund
canissue.Thefundissuesnewsharesofstockandfillsthepurchaseorder
withthosenewshares.Investorsbuytheirsharesfrom,andsellthemback
to,themutualfunditself.Thesharepricesaredeterminedbytheirnetasset
value.
OpenOffer:Anoffertocurrentholdersofsecuritiestosubscribefor
securitieswhetherornotinproportiontotheirexistingholdings.
Option:Asecuritythatgivestheholdertherighttobuyorsellacertain
amountofanunderlyingfinancialassetataspecifiedpriceforaspecified
periodoftime.
Oversubscribed:WhenanInitialPublicOfferinghasmoreapplicationsthan
actualsharesavailable.Investorswilloftenapplyformoresharesthan
requiredinanticipationofonlyreceivingafractionoftherequestednumber.
InvestorsandunderwriterswilloftenlooktoseeifanIPOisoversubscribed
asanindicationofthepublicsperceptionofthebusinesspotentialoftheIPO
company.
PassBook:Arecordofalldebitandcreditentriesinacustomer'saccount.
GenerallyallbanksissuepassbookstoSavingsBank/CurrentAccount
Holders.
ParBond:Abondsellingatpar(i.e.atitsfacevalue).
ParValue:Thefacevalueofasecurity.
PerpetualBonds:Bondswhichhavenomaturitydate.
Placing:Obtainingsubscriptionsfor,orthesaleof,primarymarket,where
thenewsecuritiesofissuingcompaniesareinitiallysold.
PersonalIdentificationNumber(PIN):PersonalIdentificationNumberisa
numberwhichanATMcardholderhastokeyinbeforeheisauthorizedtodo
anybankingtransactioninaATM.
PlasticMoney:CreditCards,DebitCards,ATMCardsandInternational
Cardsareconsideredplasticmoneyaslikemoneytheycanenableustoget
goodsandservices.
Pledge:Abailmentofgoodsassecurityforpaymentofadebtor
performanceofapromise,e.gpledgeofstockbyaborrowertoabankerfora
creditlimit.Pledgecanbemadeinmovablegoodsonly.
PostDatedCheque:AChequewhichbearsthedatewhichissubsequent
tothedatewhenitisdrawn.Forexample,achequedrawnon8thof
February,2007bearsthedateof12thFebruary,2007.
PowerofAttorney:ItisadocumentexecutedbyonepersonDonoror
Principal,infavourofanotherperson,DoneeorAgenttoactonbehalfof
theformer,strictlyasperauthoritygiveninthedocument.
Portfolio:Acollectionofinvestmentvehiclesassembledtomeetoneor
moreinvestmentgoals.
PreferenceShares:Acorporatesecuritythatpaysafixeddividendeach
period.Itisseniortoordinarysharesbutjuniortobondsinitsclaimson
corporateincomeandassetsincaseofbankruptcy.
Premium(Warrants):Thedifferenceofthemarketpriceofawarrantoverits
intrinsicvalue.
PremiumBond:Bondsellingabovepar.
PresentValue:Theamounttowhichafuturedepositwilldiscountbackto
presentwhenitisdepreciatedinanaccountpayingcompoundinterest.
PresentValueofanAnnuity:Theamounttowhichastreamofequalcash
flowsthatoccurinequalintervalswilldiscountbacktopresentwhenitis
depreciatedinanaccountpayingcompoundinterest.
Price/EarningsRatio(P/E):Themeasuretodeterminehowthemarketis
pricingthecompanyscommonstock.Theprice/earnings(P/E)ratiorelates
thecompanysearningspershare(EPS)tothemarketpriceofitsstock.
Privatization:Thesaleofgovernmentownedequityinnationalizedindustry
orothercommercialenterprisestoprivateinvestors.
Prospectus:AdetailedreportpublishedbytheInitialPublicOffering
company,whichincludesalltermsandconditions,applicationprocedures,
IPOpricesetc,fortheIPO
PutOption:Therighttoselltheunderlyingsecuritiesataspecifiedexercise
priceonofbeforeaspecifiedexpirationdate.
PrematureWithdrawals:TermdepositslikeFixedDeposits,CallDeposits,
ShortDepositsandRecurringDepositshavetomatureonaparticularday.
Whenthesedepositsaresoughttobewithdrawnbeforematurity,itis
prematurewithdrawal.
PrimeLendingRate(PLR):Therateatwhichbankslendtotheirbest
(prime)customers.
PrioritySectorAdvances:consistofloansandadvancestoAgriculture,

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PrioritySectorAdvances:consistofloansandadvancestoAgriculture,
SmallScaleIndustry,SmallRoadandWaterTransportOperators,Retail
Trade,SmallBusinesswithlimitsoninvestmentinequipments,professional
andselfemployedpersons,statesponsoredorganisationsforlendingto
SC/ST,EducationalLoans,HousingFinanceuptocertainlimits,selfhelp
groupsandconsumptionloans.
PromissoryNote:PromissoryNoteisapromise/undertakinggivenbyone
personinwritingtoanotherperson,topaytothatperson,acertainsumof
moneyondemandoronafutureday.
Provisioning:Provisioningismadeforthelikelylossintheprofitandloss
accountwhilefinalizingaccountsofbanks.Allbanksaresupposedtomake
assetsclassificationandmakeappropriateprovisionsforlikelylossesintheir
balancesheets.
PublicSectorBank:AbankfullyorpartlyownedbytheGovernment.
RateofReturn:Apercentageshowingtheamountofinvestmentgainorloss
againsttheinitialinvestment.
RealInterestRate:Thenetinterestrateovertheinflationrate.Thegrowth
rateofpurchasingpowerderivedfromaninvestment.
RedemptionValue:Thevalueofabondwhenredeemed.
ReinvestmentValue:Therateatwhichaninvestorassumesinterest
paymentsmadeonabondwhichcanbereinvestedoverthelifeofthat
security.
RelativeStrengthIndex(RSI):Astockspricethatchangesoveraperiodof
timerelativetothatofamarketindexsuchastheStandard&Poors500,
usuallymeasuredonascalefrom1to100,1beingtheworstand100being
thebest.
RepurchaseAgreement:Anarrangementinwhichasecurityissoldand
laterboughtbackatanagreedpriceandtime.
ResistanceLevel:Apriceatwhichsellersconsistentlyoutnumberbuyers,
preventingfurtherpricerises.
Return:Amountofinvestmentgainorloss.
ReschedulingofPayment:Rearrangingtherepaymentofadebtovera
longerperiodthanoriginallyagreeduponduetofinancialdifficultiesofthe
borrower.
RestrictiveEndorsement:Whereendorserdesiresthatinstrumentistobe
paidtoparticularpersononly,herestrictsfurthernegotiationortransferby
suchwordsas"PaytoAshokonly".NowAshokcannotnegotiatethe
instrumentfurther.
RightofAppropriation:AsperSection59oftheIndianContractAct,1972
whilemakingthepayment,adebtorhastherighttodirecthiscreditorto
appropriatesuchamountagainstdischargeofsomeparticulardebt.Ifthe
debtordoesnotdoso,thebankercanappropriatethepaymenttoanydebtof
hiscustomer.
RightofSetOff:Whenabankercombinestwoaccountsinthenameofthe
samecustomerandadjuststhedebitbalanceinoneaccountwiththecredit
balanceinotheraccount,itiscalledrightofsetoff.Forexample,debit
balanceofRs.50,000/inoverdraftaccountcanbesetoffagainstcredit
balanceofRs.75,000/intheSavingsBankAccountofthesamecustomer,
leavingabalanceofRs.25,000/creditinthesavingsaccount.
RightsIssue:Anofferbywayofrightstocurrentholdersofsecuritiesthat
allowsthemtosubscribeforsecuritiesinproportiontotheirexistingholdings.
RiskAverse,RiskNeutral,RiskTaking:
Riskaversedescribesaninvestorwhorequiresgreaterreturninexchangefor
greaterrisk.
Riskneutraldescribesaninvestorwhodoesnotrequiregreaterreturnin
exchangeforgreaterrisk.
Risktakingdescribesaninvestorwhowillacceptalowerreturninexchange
forgreaterrisk.
SafeCustody:Whenarticlesofvaluelikejewellery,boxes,shares,
debentures,Governmentbonds,Willsorotherdocumentsorarticlesare
giventoabankforsafekeepinginitssafevault,itiscalledsafecustody..
Bankchargesafeefromitsclientsforsuchsafecustody.
SavingsBankAccount:AllbanksinIndiaarehavingthefacilityofopening
savingsbankaccountwithanominalbalance.Thisaccountisusedfor
personalpurposesandnotforbusinesspurposeandtherearecertain
restrictionsonwithdrawalsfromthistypeofaccount.Accountholdergets
nominalinterestinthisaccount.
SeniorBond:Abondthathaspriorityoverotherbondsinclaimingassets
anddividends.
Settlement:Conclusionofasecuritiestransactionwhenacustomerpaysa
broker/dealerforsecuritiespurchasedordelivered,securitiessold,and
receivefromthebrokertheproceedsofasale.
ShortHedge:Atransactionthatprotectsthevalueofanassetheldby
takingashortpositioninafuturescontract.
ShortPosition:Investorssellsecuritiesinthehopethattheywilldecrease
invalueandcanbeboughtatalaterdateforprofit.
ShortSelling:Thesaleofborrowedsecurities,theireventualrepurchaseby
theshortselleratalowerpriceandtheirreturntothelender.
Speculation:Theprocessofbuyinginvestmentvehiclesinwhichthefuture
valueandlevelofexpectedearningsarehighlyuncertain.
StockSplits:Wholesalechangesinthenumberofshares.Forexample,a
twoforonesplitdoublesthenumberofsharesbutdoesnotchangetheshare
capital.
SubordinatedBond:Anissuethatranksaftersecureddebt,debenture,and
otherbonds,andaftersomegeneralcreditorsinitsclaimonassetsand
earnings.Ownersofthiskindofbondstandlastinlineamongcreditors,but

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earnings.Ownersofthiskindofbondstandlastinlineamongcreditors,but
beforeequityholders,whenanissuerfailsfinancially.
SubstantialShareholder:Apersonacquiresaninterestinrelevantshare
capitalequalto,orexceeding,10%ofthesharecapital.
SupportLevel:Apriceatwhichbuyersconsistentlyoutnumbersellers,
preventingfurtherpricefalls.
Teller:Tellerisastaffmemberofabankwhoacceptsdeposits,cashes
chequesandperformsotherbankingservicesforthepublic.
TechnicalAnalysis:Amethodofevaluatingsecuritiesbyrelyingonthe
assumptionthatmarketdata,suchaschartsofprice,volume,andopen
interest,canhelppredictfuture(usuallyshortterm)markettrends.
Contrastedwithfundamentalanalysiswhichinvolvesthestudyoffinancial
accountsandotherinformationaboutthecompany.(Itisanattemptto
predictmovementsinsecuritypricesfromtheirtradingvolumehistory.)
TimeHorizon:Thedurationoftimeaninvestmentisintendedfor.
TradingRules:Stipulationofparametersforopeningandintraday
quotations,permissiblespreadsaccordingtothepricesofsecuritiesavailable
fortradingandboardlotsizesforeachsecurity.
TrustDeed:Aformaldocumentthatcreatesatrust.Itstatesthepurpose
andtermsofthenameofthetrusteesandbeneficiaries.
Underwriting:isanagreementbytheunderwritertobuyonafixeddateand
atafixedrate,theunsubscribedportionofsharesordebenturesorother
issues.Underwritergetscommissionforthisagreement.
UnderlyingSecurity:Thesecuritysubjecttobeingpurchasedorsoldupon
exerciseoftheoptioncontract.
UniversalBanking:WhenBanksandFinancialInstitutionsareallowedto
undertakealltypesofactivitiesrelatedtobankinglikeacceptanceof
deposits,grantingofadvances,investment,issueofcreditcards,project
finance,venturecapitalfinance,foreignexchangebusiness,insuranceetc.it
iscalledUniversalBanking.
Valuation:Processbywhichaninvestordeterminestheworthofasecurity
usingriskandreturnconcept.
VirtualBanking:Virtualbankingisalsocalledinternetbanking,through
whichfinancialandbankingservicesareaccessedviainternet'sWorldWide
Web.Itiscalledvirtualbankingbecauseaninternetbankhasnoboundaries
ofbrickandmortaranditexistsonlyontheinternet.
Warrant:Anoptionforalongerperiodoftimegivingthebuyertherighttobuy
anumberofsharesofcommonstockincompanyataspecifiedpricefora
specifiedperiodoftime.
WholesaleBanking:WholesalebankingisdifferentfromRetailBankingas
itsfocusisonprovidingforfinancialneedsofindustryandinstitutional
clients.
WindowDressing:Financialadjustmentsmadesolelyforthepurposeof
accountingpresentation,normallyatthetimeofauditingofcompany
accounts.
Yield(InternalrateofReturn):Thecompoundannualrateofreturnearned
byaninvestment
YieldtoMaturity:Therateofreturnyieldbyabondheldtomaturitywhen
bothcompoundinterestpaymentsandtheinvestorscapitalgainorlosson
thesecurityaretakenintoaccount.
ZeroCouponBond:Abondwithnocouponthatissoldatadeepdiscount
fromparvalue.
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Jointhediscussion
RAJ(thefavourite) amonthago

whenwetalkaboutparty...wealwaysusegoingon...not
onlygoing..
7

Reply Share

Jyotika>RAJ(thefavourite) amonthago

yes
1

Reply Share

richa>RAJ(thefavourite) amonthago

hmm
1

Reply Share

RAJ(thefavourite) amonthago

KabTakYeUpvotesBachoge...
AurInheKahaLekrjaoge.........
Kanjusequestionskesaathsaathekupvotetodediya
karo..hehhe:P
6

Reply Share

Alina>RAJ(thefavourite) amonthago

ifamrytthnmujebhiupvtkarna:p

Reply Share

RAJ(thefavourite)>Alina amonthago

krrhahu....neechedekhoto
1

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Alina>RAJ(thefavourite)
amonthago

kkk

Reply Share

amitkumarsrivastava>Alina
11daysago

WhatisICSID?

Reply Share

RAJ(thefavourite) amonthago

Lastqustionhas2errors
Ans___a.Addonaftergoingand'b'Fell
6

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RAJ(thefavourite) amonthago

Ans___c.Replaceonbyfor
5

Reply Share

@k$>RAJ(thefavourite) amonthago

Yesnowright

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RAJ(thefavourite) amonthago

Ctobolrhehosablog..andkuchlogFrombolrhe
hai..but
Ans___c.Replacesinceby
for
5

Reply Share

Alina>RAJ(thefavourite) amonthago

thnkgod,,thyraskingtofinderroe,agarwtiserror
puchliyathosabwrng
2

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garima>Alina 20daysago

urritedear
2

Reply Share

>Alina amonthago

weshouldknowtheerror..Onlyitwillhelp
clearourvocab
1

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6/29/2015

BankersAdda:BANKINGTERMS

garima> 20daysago

ys
1

Reply Share

Alina> amonthago

haurryt,butsmtimeswrnghojatana
1

Reply Share

>Alina amonthago

Hamesahotahai..butinexamwedo
guesswork..andareunsure..Sowe
canavoidthat
2

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garima> 20daysago

true
1

Reply Share

Jyotika> amonthago

yehihotahai..yaharight..examme
wrongkrkeatehai:P

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garima>Jyotika 20daysago

hm
1

Reply Share

RAJ(thefavourite)>Alina amonthago

hahaha
1

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p!n!<....:))>RAJ(thefavourite) amonthago

tqRAJforquiz:)ihavtogo...byee:)
1

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RAJ(thefavourite)>p!n!<....:))
amonthago

okdear..bye..takcare:)
1

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p!n!<....:))>RAJ(thefavourite)
amonthago

tcu2:)

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>RAJ(thefavourite) amonthago

youareright:)

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lucky(2015PO)>RAJ(thefavourite) amonthago

Ynotsince?

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simple>RAJ(thefavourite) amonthago

ya...itsknowntoall:))

Reply Share

@k$>RAJ(thefavourite) amonthago

Boleto

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RAJ(thefavourite) amonthago

tostartmustreplace'starting'
4

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RAJ(thefavourite) amonthago

hadisused
4

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$$KUNMUN$$>RAJ(thefavourite) amonthago

yeeee..opt44:))
2

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RAJ(thefavourite) amonthago

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RAJ(thefavourite) amonthago

Thiskindofbehavior(a)/hasnotbeenseenhere(b)/
since
thelastfiveyears.(c)/Noerror(d)
4

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RAJ(thefavourite)>RAJ(thefavourite)
amonthago

cccccc
3

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10dulkar.....Mylegend...>RAJ(thefavourite)
amonthago

cccc
2

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$hIv@>RAJ(thefavourite) amonthago

cc.for
1

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RAJ(thefavourite)>$hIv@
amonthago

rytsweetu..:))

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~U$#@~>RAJ(thefavourite) amonthago

ccfor
1

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p!n!<....:))>RAJ(thefavourite) amonthago

cc
1

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Jyotika>RAJ(thefavourite) amonthago

cc
1

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@k$>RAJ(thefavourite) amonthago

Cccfor
1

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simple>RAJ(thefavourite) amonthago

cccc
1

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richa>RAJ(thefavourite) amonthago

3?
1

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>RAJ(thefavourite) amonthago

fromcccccc
1

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Vidanshi>RAJ(thefavourite) amonthago

33
1

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Unnamed>RAJ(thefavourite) amonthago

c..
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