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Banking Terms
1. International Banking:
involves more than two nations or countries. If an Indian Bank has branches in different countries like State Bank of India, it is said to do International Banking.
2. Introduction:
Banks are careful in opening any account for a customer as the prospective customer has to be introduced by an existing account holder or a staff member or by any other person known to the bank for opening of account. If bank does not take introduction, it will amount to negligence and will not get protection under law.
3. Intrinsic Value:
The difference of the exercise price over the market price of the underlying asset.
4. Investment:
A vehicle for funds expected to increase its value and/or generate positive returns.
5. Investment Adviser:
A person who carries on a business which provides investment advice with
respect to securities and is registered with the relevant regulator as an investment adviser.
6. IPO price:
The price of share set before being traded on the stock exchange. Once the company has gone Initial Public Offering, the stock price is determined by supply and demand.
involves more than two nations or countries. If an Indian Bank has branches in different countries like State Bank of India, it is said to do International Banking.
2. Introduction:
Banks are careful in opening any account for a customer as the prospective customer has to be introduced by an existing account holder or a staff member or by any other person known to the bank for opening of account. If bank does not take introduction, it will amount to negligence and will not get protection under law.
3. Intrinsic Value:
The difference of the exercise price over the market price of the underlying asset.
4. Investment:
A vehicle for funds expected to increase its value and/or generate positive returns.
5. Investment Adviser:
A person who carries on a business which provides investment advice with
respect to securities and is registered with the relevant regulator as an investment adviser.
6. IPO price:
The price of share set before being traded on the stock exchange. Once the company has gone Initial Public Offering, the stock price is determined by supply and demand.
7. JHF Account :
Joint Hindu Family Account is account of a firm whose business is carried out by Karta of the Joint family, acting for all the family members.. The family members have common ancestor and generally maintain a common residence and are subject to common social, economic and religious regulations.
8. Joint Account:
When two or more individuals jointly open an account with a bank.
9. Junk Bond:
High-risk securities that have received low ratings (i.e. Standard & Poor’s BBB rating or
below; or Moody’s BBB rating or below) and as such, produce high yields, so long as they do not go
into default.
10. Karta: Manager of a Hindu Undivided Family (HUF) who handles the family business. He is usually
the eldest male member of the undivided family.
11. Kiosk Banking:
Doing banking from a cubicle from which food, newspapers, tickets etc. are also
sold.
12. KYC Norms:
Know your customer norms are imposed by R.B.I. on banks and other financial
institutions to ensure that they know their customers and to ensure that customers deal only in
legitimate banking operations and not in money laundering or frauds.
13. Law of Limitation:
Limitation Act of 1963 fixes the limitation period of debts and obligations including banks loans and advances. If the period fixed for particular debt or loan expires, one cannot file a suit for is recovery, but the fact of the debt or loan is not denied. It is said that law of limitation bars the remedy but does not extinguish the right.
14. Lease Financing:
Financing for the business of renting houses or lands for a specified period of
time and also hiring out of an asset for the duration of its economic life. Leasing of a car or heavy
machinery for a specific period at specific price is an example.
15. Letter of Credit:
A document issued by importers bank to its branch or agent abroad authorizing the payment of a specified sum to a person named in Letter of Credit (usually exporter from abroad).
Letters of Credit are covered by rules framed under Uniform Customs and Practices of Documentary
Credits framed by International Chamber of Commerce in Paris.
16. Limited Companies Accounts:
Accounts of companies incorporated under the Companies Act, 1956 . A company may be private or public. Liability of the shareholders of a company is generally limited to the face value of shares held by them.
17. Leverage Ratio:
Financial ratios that measure the amount of debt being used to support operations and the ability of the firm to service its debt.
18. Libor:
The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the
interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale
money market (or interbank market). The LIBOR rate is published daily by the British Banker’s
Association and will be slightly higher than the London Interbank Bid Rate (LIBID), the rate at which
banks are prepared to accept deposits.
19. Limit Order:
An order to buy (sell) securities which specifies the highest (lowest) price at which the order is to be transacted.
20. Limited Company:
The passive investors in a partnership, who supply most of the capital and have
liability limited to the amount of their capital contributions.
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