Reserve Bank Of India A Brief Introduction

Introduction Of Reserve Bank Of India

The Reserve Bank of India is India's central bank. It is the apex monetary institution which supervises, regulates controls and develops the monetary and financial system of the country. The Reserve bank was established on April 1, 1935 under the Reserve Bank of India Act, 1934. Initially, it was constituted as a private share- holders* bank with a fully paid-up capital of Rs. 5 crore. But, it was nationalized on January 1, 1949.

Management

The management of the Reserve Bank is under the control of Central Board of Directors consisting of 20 members:

(a) the executive head of the Bank is called Governor who is assisted by four Deputy Governors. They are appointed by the Government of India for a period of five years. The head office of the Reserve Bank is at Bombay,

(b) There are four local boards at Delhi, Kolkata, Chennai and Mumbai representing four regional areas, i.e., northern, eastern, southern and western respectively. These local boards are advisory in nature and the Government of India nominates one member each from these boards to the Central Board.

(c) There are ten directors from various fields and one government official from the Ministry of Finance.

The Reserve Bank of India Act, 1934 requires that there must be at least six meetings in a year and the gap between two meetings must not exceed three months. The Governor of the Reserve Bank can call a meeting of the Central Board whenever he feels it necessary. The Governor and the Deputy Governors are full-time officials of the Reserve Bank and are paid prescribed salaries and allowances. Other directors are part-time officials and are given fare and allowance to participate in the meetings.

Organization

Organisationally, the Reserve Bank operates through various departments. They are:

1. Issue Department:

Its main function is to issue and distribute the paper currency.

2. Banking Department:

This department (a) deals with the government transactions, manages public debt and arranges for the transfer of government funds ; (b) maintains the cash reserves of the scheduled banks, provides financial accommodation to the banks and functions as a clearing house.

3. Department of Banking Development:

It aims at expanding banking facilities in unbanked and rural areas.

4. Department of Banking Operations:

Its function is to supervise, regulate and control the working of the banking institutions in the country. It grants licences for opening new banks or the new branches of the existing banks.

5. Agricultural Credit Department:

It deals with the problems of agricultural credit and provides facilities of rural credit to state governments and state cooperatives.

6. Industrial Finance Department:

Its main objective is to provide financial help to the small and medium scale industries.

7. Non-Banking Companies Department:

It supervises the activities of non-banking companies and financial institutions in the country

8. Exchange Control Department:

It conducts the business of sale and purchase of foreign exchange.

9. Legal Department:

It provides advice to various departments on legal issues. It also gives legal advice on the implementation of banking laws in the country.

10. Department of Research and Statistics:

The objective of this department is (a) to conduct research on problems relating to money, credit, finance, production, etc., (b) to collect important statistics relating to various aspects of the economy; and (c) publish these statistics.

11. Department of Planning and Reorganization:

It deals with the formulation of new plans or reorganization of existing policies for making them more effective.

12. Economic Department:

It is concerned with framing proper banking policies for better implementation of economic policies of the government.

13. Inspection Department:

It undertakes the function of inspecting various offices of the commercial banks.

14. Department of Accounts and Expenditure:

It keeps proper records of all receipts and expenditures of the Reserve Bank.

15. RBI Services Board:

It deals with the selection of new employees, for different posts in the Reserve Bank.

16. Department of Supervision:

A new department, i.e., Department of Supervision, was set up on December 22, 1993 for the supervision of commercial banks

Concept Of "AGHOR "

The word Aghor literally means, that which is not difficult or terrible. Aghor is simple and natural state of consciousness. There is no place for feelings of fear, hatred, disgust or discrimination in the eyes of an Aughar. A person who practices these virtues may be designated as an Aughar. With constant practice when the soul is established in that state, such a person becomes an Avadhuta regardless of his path.

An Aghoreshwar is an Avadhut who has gone through all the various stages of Aghor and then has returned to society for the benefit of others. Even though an Aghoreshwar remains above and beyond all social and material illusions, distinctions, and categories, he can bring many social reforms into effect. Realizing his divine nature, retaining the carefree, unattached Aghor state of being, he may have at the same time the appearance of one observing the contemporary social norm rather than a recluse.

The term Aghor goes back to the farthest reaches of time. One of the five faces of Shiva was known as Aghor. The word is as old as Shiva himself. In the SHIVA PURANA, one of India’s oldest legends, there is a hymn to the glory of Shiva by Pushpadanta, head of the Gandharvas, called the Shiva Mahimnah Stotram. One of its verses is:

Aghoranna paro mantro
Nasti tatvam Guro param.

The very name of Aghor (Shiva, or the one who has attained the state of Aghor) is a mantra that is above all other mantras. There is nothing higher to be known than the real nature of the Guru.

In the past the word Aghor implied something mysterious. Slowly, over centuries, its meaning came to include methods and practices used by sadhus to overcome their limitations. After the prehistoric association of Aghor with Lord Shiva, another legendary being was not only considered by the ancients to have realized the state of Aghor but was believed to have propounded and taught the knowledge of it to others. This was Lord Dattatreya. Many other saints and mahatmas who embodied this Aghor state arose at their destined times in history, while at other times the lineage became dormant, like embers hidden under ashes. Eventually the methods and means to achieve this Aghor state began to be communicated in guru-disciple relationships. However, the practices continued to be little known.

In the sixteenth century, a great saint called Baba Kinaram was known as Aghoreshwar.

The story of Baba Kinaram tells of his wandering for years until he attained complete knowledge by having the darshan of Bhagwan Dattatreya, who appeared to him in the Girnar Mountains, a holy place in Gujarat state. Later in his life Baba Kinaram wrote a book called Viveksar, said to be the most authentic treatise on the principles of Aghor. In his book he wrote that when he understood what Bhagwan Dattatreya was saying to him, he saw that the whole world, the whole universe, is situated in this human body, a vast world perfect in all respects, which was called Maya. Maya and its every transformation was present inside his body.

Baba Kinaram established an Ashram in Varanasi, called Krim Kund. He initiated many social reforms during the tumultuous times of the Mughul invasion when the Indian people were being persecuted.The direct lineage of the twelve Aghoreshwars that began with Baba Kinaram extends from the sixteenth century until the present. When Baba Bhagwan Ram became the 12th Aghoreshwar in this lineage, he was likened to Baba Kinaram because he had a strong sense of social responsibility, identifying himself with suffering humanity, and waiting to help the people in their struggle against social injustices. As in Baba Kinaram's time, there were social problems the people were unable to handle.

Sometimes spiritual beings are able to give the people some protection against injustice but there are other periods of time when the fires of spiritual strength burn low, embers under ashes. Recognizing the need for change Baba Bhagwan Ram renewed the socially conscious spirit of Baba Kinaram when he established a new ashram called Sri Sarveshwari Samooh and dedicated it to help the poor and the afflicted. The ashes leapt into flame again, being fed by the spiritual fuel of another great Aghoreshwar.

In order to maintain the seat of Aghor tradition as a continuum, Baba initiated his own disciple, Siddhartha Gautam Ram, as the head of Krim Kund so he could be free to follow his social callings. Krim Kund and Sri Sarveshwari Samooh are on the opposite sides of the Ganges in Varanasi with many more Ashrams in various locations in India and a number of centers and Ashrams in other countries. All of them are working in cooperation with each other to maintain the ancient tradition as well as to take a freshly motivated direction towards social services and the integration of ancient wisdom into the life of the community.

List Of Central Universities In India

1.  Rajiv Gandhi University -Arunachal Pradesh
2. Assam University -Assam 
3. Tezpur Universityn -- Assam 
4. Central University of Bihar - Bihar 
5. Nalanda University- Bihar
6. Guru Ghasidas Vishwavidyalaya- Chhattisgarh
7. Jamia Millia Islamia- Delhi
8. University of Delhi - Delhi 
9. Jawaharlal Nehru University- Delhi
10. Indira Gandhi National Open University- Delhi
11. South Asian University- Delhi
12. Central University of Gujarat- Gujarat
13. Central University of Haryana-Haryana
14. Central University of Himachal Pradesh- Himachal Pradesh
15. Central University of Kashmir-Jammu and Kashmir
16. Central University of Jammu-  Jammu and Kashmir 
17. Central University of Jharkhand -Jharkhand 
18. Central University of Karnataka -Karnataka
19. Central University of Kerala-Kerala
20. The Indira Gandhi National Tribal University- Madhya Pradesh 
21. Dr. Harisingh Gour Vishwavidyalaya - Madhya Pradesh 22.
22. Mahatma Gandhi Antarrashtriya Hindi Vishwavidyalaya - Maharashtra 
23. Manipur University- Manipur 
24. Central Agricultural University- Manipur 
25. North Eastern Hill University-Meghalaya 
26. Mizoram University- Mizoram
27. Nagaland University- Nagaland
28. Central University of Orissa- Orissa
29. Pondicherry University- Pondicherry
30. Central University of Punjab- Punjab
31. Central University of Rajasthan-Rajasthan
32. Sikkim University- Sikkim
33. Central university of Tamil Nadu-  Tamil Nadu
34. Indian Maritime University - Chennai 
35. University of Hyderabad- Telangana
36. Maulana Azad National Urdu University- Telangana
37. English & Foreign Languages University-  Telangana
38. Tripura University- Tripura 
39. Aligarh Muslim University - Uttar Pradesh 
40. Babasaheb Bhimrao Ambedkar University- Uttar Pradesh 
41. Banaras Hindu University - Uttar Pradesh 
42. University of Allahabad- Uttar Pradesh
43. Rajiv Gandhi Aviation University - Uttar Pradesh
44. Hemwati Nandan Bahuguna Garhwal University- Uttarakhand 
45. Visva Bharati- West Bengal

How will the Food Security Bill affect poor fellow citizens

India is home to over 1.2 billion people, and close to 40 percent of the population lives below the poverty line. It is more shocking to note that 68.7 percent of the population lives on less than Rs 108 (US $2) per day. To eradicate poverty in India and to uplift the status of the poor and the underprivileged, the government came up with the Food Security Bill. 

Although the aim of the Food Security Bill is to improve the welfare of the citizens, it has been met with a number of criticisms over the past few months. This is because India is facing many challenges, including high rate of inflation, slow economic growth, high unemployment rate and fiscal deficit.

Sadly, the government has not been able to solve the existing problems. And on top of that, it has added the Food Security Bill to its long list of government initiatives. Although many individuals are unaware as to how India will come up with sufficient funds to solve economic, political and social problems that exist today, people are hopeful that the Food Security Bill will help the poor citizens of India.

Through the Food Security Bill, the government will be providing food grains at extremely low prices to 67 percent of the population in both urban and rural areas.

In fact, the Food Security Bill promises to sell wheat at Rs 2 per kilogram, rice at Rs 3 per kilogram and other food grains at Rs 1 per kilogram. Every month, a family will be entitled to 35 kg of food grains at the aforementioned rates.

The government has sought the help of the Helping Hand Youth Welfare Association for the distribution of food grains among low-income families. 

According to government officials, close to 62 million tonnes of food grains will be distributed to the poor. This will definitely help the poor Indian citizens, who are living hand to mouth and finding it difficult to make ends meet amidst the rising inflation.

Currently, the market prices for one kilogram of rice and wheat stand at Rs 20 and Rs 16 respectively. So, the government is doing its citizens a huge favour by distributing food at extremely low prices.

Initially, as per the Food Security Bill, every family living below the poverty line was only entitled to 5 kg of food grains per month. This has been increased to 35 kg as per the latest amendment. If implemented successfully, the Food Security Bill will be able to change the face of India forever.

In addition, the Food Security Bill will be a game changer for the upcoming elections if majority of the population benefits from the government programme. 

Famine is a common problem in the Indian subcontinent. There is a widespread scarcity of food in the country because of crop failure, unfavourable weather conditions, and population imbalance.  With the implementation of the Food Security Bill, India will witness a significant reduction in mortality rates. A report published in Media stated that 50 percent of deaths among children are attributed to malnutrition. The Food Security Bill is indeed a ray of hope for millions of people in India.

The Indian government has been able to come up with great policies to eradicate poverty. However, the test lies in implementing these policies successfully. If the Indian government is able to implement the Food Security Bill successfully amidst the rising inflation and low economic growth, India will definitely become a role model for all developing countries in the world. In addition, the Food Security Bill will be able to restore the confidence of the Indian citizens in its government.

Buying Roles In Industrial Marketing

Buying Roles

The decision making unit of a buying organization is called its buying center – all the individuals and units that play a role in the business purchase decision making process. This group includes the actual users of the product or service , those who make the buying decision, those who influence the buying decision , those who do the actual buying and those who control buying information.

Kinds Of Buying Roles

•       Initiator

•       Users

•       Influencer

•       Deciders

•       Approvers

•       Buyers

•       Gatekeepers

Initiators – Those who request that something be purchased. They may be users or others in the organization. For example- for office equipment’s, the initiative may be taken by administrative department.

Users – Those who will use the product or services .In many cases the users initiate the buying proposal and help define the product requirements.

Influencers – People who influence the buying decision . They often help define specification and also provide information for evaluating alternatives. Technical persons are generally important influencers.

Deciders – People who decide on product requirements or on suppliers and those who have authority to select the suppliers. For major purchase , the final decision will be taken by top management.

Approvers –People who authorize the proposed action of deciders and buyers.

Buyers –People who have formal authority to select the supplier and arrange the purchase terms. Buyers paly their major role in selecting vendors and negotiating. In more complexes the buyers might include high level managers.

Gatekeepers- People who have the power to prevent sellers or information from reaching members of the buying center. For example –purchasing agents , receptionists may prevent salespersons from contacting users or deciders. 

How to Write Research Papers by Professor Shahn Majid

The style and format of research papers varies from subject to subject (and indeed journal to journal). This guide is aimed at students in the mathematical sciences.

These are some hints for starting PhD students on how to write papers. It is assumed of course that you have some results worth presenting (as no amount of good writing can cover up a lack of content).

How you write depends on the journal/type of reader you are addressing. Also, keep in mind some role models people you know or famous papers. The general aim is to be attractive to non-experts as much as can be expected, while interesting and not offensive to experts.

The Title

This should instantly convey why your work stands out from all previous ones. Should be intelligible to non-experts and down-to-earth though perhaps slightly enigmatic or 'catchy'.

The Abstract

The significance of a paper tends to be in inverse proportion to the length of the abstract. The shorter the abstract, usually the more powerful the results. So the challenge is to keep it concise while at the same time conveying the key results and ideas behind the paper. The abstract should be self-contained and intelligible before one has read the paper.

Keywords

This is for computer database searches to pick up on, along with words in the title and abstract. So think about what kind of search items you would want leading to your paper. This goes along with finding a Math Reviews code, which can be included in a foot note if you know it.

The Intro

Many readers and (sad to say) quite possibly the referee will not get past the introduction. So it should be beautifully written with much work. Up to a quarter of the manuscript might reasonably be taken up by the introduction and the preliminaries. Most people find it easier once they get onto the mathematics itself. You should try in the introduction to cover the following checklist.

i) The motivation.

This should recall to the reader why the kind of result mentioned already in the abstract would be interesting and important. It also tells the reader what you think is the motivation, so that if he or she agrees with the way you are looking at the field, there's some probability that the paper will be useful for them. Keep it as down to earth as possible.

ii) The results and strategy

The key behind the work. Don't just repeat the abstract. Don't be ashamed or too proud to admit and reference the previous work ('the shoulders of giants') which inspired and led up to your result. A good way is to tell a story, an interesting one that puts everything into perspective re the existing literature and conveys how it is you succeeded where others failed. What was the key idea which nobody else spotted? It should not reflect the actual historical progress of your research (which may have been long and winding) but rather based on how your thinking should have gone with the benefit of hindsight. This is not quite the same as the shortest logical path (which would not be understood until after the paper is read), but rather involves an historical element with reference to works and ideas that the reader might already be familiar with. Note that it's rare for a young person to do something totally out of the blue, and worrisome for a referee.

iii) Survey the field so far.

Make contacts with other aspects of the literature. Try to connect or reference all the relevant players in the field. This takes knowledge of the literature and above all a sense of historical perspective. Who did really introduce the idea X that you are using and are giving him or her proper credit? This can also be woven into the above by way of making it interesting.

iv) Outline the organisation.

This should be brief but not simply a list. State the goal and main achievement of each section. Make it into a story whereby each section is logically a precursor to the next section.

v) Preliminaries.

This should include technical remarks on notation to be used and basic references such as books for conventions. You can recall in this section for clarity things that you should be ashamed to publish in the later sections. If a lot of machinery which you did not invent is to be used, this is the place to develop it or give references. Remember, however, that you are not writing a thesis here: your goal is not to redo the work of persons A, B, C (which you may well have done in your notes while reading them, but that's tough). The goal is rather to make enough concise references or explanations so that exactly how you intend things to be defined, which conventions exactly you are using etc are all completely clear. Find ways to state cut-and-dry and precise definitions that the reader will be able to refer back to when reading the paper, without digressions or story-telling.

Anything in this section is 'safe' in the sense that the reader does not assume that this is your work. Indeed, the reader assumes it is not (and the referee can always make you delete it if it's too much). (Just the opposite is true in later sections, where you should not repeat well-known results or if forced to do so, explain that it is `for completeness ...' and give completely unambiguous references to the literature). So try to put most of what you will need here in the preliminaries.

Sections 1--n

Finally you get to explain your new results. Each section should begin with a recall of the goal and strategy of the section in case the reader forgot. Each section should have a main achievement.

Then proceed as clearly as possible in the correct logical order. Don't try to save space by building into your propositions repeats of other people's results. i.e.they should contain only results that are new, no matter how logical it would be to mention the other results not proven by you (that would be OK in a book or thesis or review article, but research papers should only contain the incremental data).

In other words, some of the stuff you want to put down is all part of the beautiful logical picture, but that's too bad. Unless you personally have something new and worthwhile to say about it, you have no business to be recalling it here (maybe in the intro with citations as motivation) and also should not be building it in mixed with your own results. As well as the logically-dictated tendency to repeat, we all have a human weakness to think that what we spent hours figuring out for ourselves is partly ours. This is a demon to be resisted. Previous work is previous work and don't be too proud to say you are using it, and whose it is you are using. You should ask yourself how would you feel if somebody developed your work and integrated it into theirs without being clear about your contribution.

Results can be organised as lemmas technical results you need later but not of self-contained interest, propositions moderately interesting new results, and theorem main new results. Each of these should be an irreducible 'gem': i.e. break up theorems etc with disjoint parts into propositions leading up to the denouement of your main theorem. You can follow these with some corollaries, which are more like tasty desserts.

The proof of a theorems or proposition should be substantial and not a cheap logical trick in which it's immediate from some other work that's a corollary or a remark. Ideally, the proof of the main theorem should use as many as possible of the lemmas and propositions already proven, to show that they were all needed and worthwhile.

Statements of theorems etc should be as self-contained as possible. Under this constraint, the shorter ones are the most powerful, i.e. pack the most punch. A `punchy' theorem can be achieved by properly setting up the relevant background in the preamble and keeping background material out of the statement itself (as much as possible that is consistent with being self-contained notationally). The statement itself should be boiled down to the part that is really new and important.

The end of the section is a good place to put any informal remarks. Anything you want to claim, assert or conjecture but which you haven't thought through formally to make a theorem, can appear here. Things are easily forgiven at the ends of sections if the section already had good results in it.

These remarks could also lead onto the next section. But don't overdo that since the beginning of the next section is going to reintroduce itself anyway. I.e., if you're setting up the next section it should be in a subtle way that doesn't overlap with the official set-up which will appear there.

General Guide to Style

Bad writing often goes hand-in-hand with murky thinking, so by writing clearly you are forced to clarify your understanding also. Thinking about layout, ordering of sentences and even simple things like punctuation are very important and can have a surprisingly good effect on your own understanding of the material.

To some extent, the best rule of good writing is to write and write. Eventually it gets better. In the meantime, some things to watch out for are as follows.

Avoid non-sequiturs.

Sentences should logically lead on from one to the next as smoothly as walking. English has a preference for short sentences with a great deal of structure connecting across sentences. Words or ideas used a few sentences back will still be in the reader's mind, so there should not be any jarring change of topic. If you want to change the topic, no problem, but warn the reader by key phrases like 'on the other hand', 'meanwhile', 'in contrast to this', 'moreover' etc.

A shift of general topic is signalled by a new paragraph. Again, previous paragraphs are still active in the readers mind so any very big shift should be excused by a suitable explanation like 'Now we come to ...' or 'To conclude this section' or other orientation signal. The signals could refer back to the introduction and outline, or might indicate a surprise for the reader.

Avoid making sandwiches.

A conceptual sandwich is where you begin with one idea, move on to another, and then move back to the first one. This can happen at all scales: within a paragraph, within a section or in the overall layout of the paper. It indicates poor organisation and should be avoided. Can you move the middle of the sandwich to the top or the bottom, thereby pooling together the two related topic? The more general topic should usually come first, with the more specific sub-topic following, unless you deliberately want to be pedagogical. The idea of avoiding a sandwich is that when you bring up a topic, say all that you will want to say about it in the near future, before moving on to further questions arising from it. Chopping and changing uses up the reader's energy.

A similar phenomenon can occur with a sentence too. A common problem is that the second half of the sentence came as an afterthought but more properly belongs as the first half of the sentence. So always ask yourself if you should reverse the order of a sentence.

Validation status of assertions.

Every assertion should have a clear validation status. By this I mean that it should be clear to the reader from context or from signals in the syntax exactly how the reader is supposed to know that the assertion is correct. Is it (i) supposed to be self-evident from what was just said (ii) supposed to follow from something said a while back (give a signal to where) (iii) a well-known fact that the reader should know anyway (iv) a fact proven elsewhere by somebody else which you had cited a while back (cite them again `on the dot' if there is any possibility of ambiguity). (v) a fact that you will be justify later (give the forward reference), etc ?

Run-on sentences.

Some languages have long sentences with lots of commas, but English does not have the grammar to support this. Rather, sentences should be short and sharp. Russians say that English people sound like barking dogs. A common fear is to avoid losing the context by finishing the sentence, leading the author to put a comma and run on with another one. There is no need to be afraid of that because words will still remain active for a short while after the period. A good rule is to look for sentences longer than one or two lines and see if ', which' or ', where' etc can be replaced by fresh sentences.

'This' and 'it'.

Beware of pronouns like 'this' and 'it'. Is it absolutely clear and unambiguous what they refer back to? You may know what you had in mind but will the reader? And don't use 'this' for 'the present'.

'Never' and 'only'.

Beware of 'never' and 'only'. These are strong assertions and unless you've really proven them it's best to water them down with 'appears to be' or 'it seems'. However, don't use 'probably'.

Commas.

Commas are especially important but hard to give rules for. Don't go by where you pause when speaking; at best commas can be used as a kind of 'conceptually pause' or to make an aside with the help of a later comma (brackets are usually better, however). Very often a fresh sentence would be better. And when writing your thesis or for camera-ready work you should be more polished about punctuation rules: consult a style manual like Fowlers.

Math symbols.

Try not to begin or end a sentence with a math symbol. More precisely, try to avoid math symbols clashing with textual punctuation. The exception to this is displayed equations, where the general rule is to put commas and if necessary a final period, so that one can read through the displayed equation like text. On the other hand, don't over do it by putting connectives like 'and' or other substantial text into the displayed equation. The displayed equation is half-way to a table so should be laid out for visual clarity and without unnecessary text.

Is it defined?

Check that all symbols and terminology are defined to some extent before they are used. This can be done in a formal definition or more informally. One technique in mathematical work is to put the term for an important concept in a different font when its usage is being specified for the first time. This is especially important in the Preliminaries section, but applies elsewhere also. On a smaller scale, make sure that any symbols are quietly specified so that it is clear what they denote. Don't assume that your notation is obvious or standard, since others could have grown up with different conventions.

Concluding Remarks

A good intro and well-written paper does not need conclusions. But this is the place for epilogical comments that can be understood only now after your new results. They are like corollaries or informal results or consequences that you haven't worked out yet in detail. You can tell your ideas about these if you want in the form of expected directions for further work.

Bibliography

Do a computer search (Bids, hepth, q-alg) to make sure you have picked up all relevant recent work. Also, did you fairly reference the originators of all the works and ideas that you used? Don't go by where you first read something (which might have been only pedagogical) but by where it was really discovered. That takes a bit of detective work but we all have to be our own policepersons.

Good Luck and don't forget to spellcheck and check punctuation if you need it! If you can, let it sit on the shelf for a week or a month before giving it a final fresh reading. There may well be typos that you did not spot first time round.

Source-  http://www.findaphd.com/advice/doing/writing-research-papers.aspx  

Some Interesting Full Forms Of Words

News paper = North East West South past and present events report.

Chess = Chariot, Horse, Elephant, Soldiers.

Cold =Chronic Obstructive Lung Disease.

Joke =Joy of Kids Entertainment.

Aim =Ambition in Mind.

Date =Day and Time Evolution.

Eat =Energy and Taste.

Tea =aste and Energy Admitted.

Pen =Power Enriched in Nib.

Smile = Sweet Memories in Lips Expression.

Bye =Be with you Every time.

Banking Terminology A to Z

The basic banking terms are frequently asked in all the Bank Interviews. These terms are useful not only for your interview but also for your general knowledge. Knowledge and Understanding of Important Banking terms play a very crucial role in the final selection. Also these banking terms are useful for Banking Aspirants, Economics & Commerce students, MBA aspirants and students preparing for other similar level Exams.Knowing basic banking terms not only gives you an edge over other candidates but also shows your interest level for the job.

  

Account Agreement: The contract governing your open-end credit account, it provides information on changes that may occur to the account.

Account History: The payment history of an account over a specific period of time, including the number of times the account was past due or over limit.

Account Holder: Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank. The signature authorizes that person to conduct business on behalf of the account.

Acquiring Bank: In a merger, the bank that absorbs the bank acquired.

Accrued interest: Interest due from issue date or from the last coupon payment date to the settlement date. Accrued interest on bonds must be added to their purchase price.

Adjustable-Rate Mortgages (ARMS): Also known as variable-rate mortgages. The initial interest rate is usually below that of conventional fixed-rate loans. The interest rate may change over the life of the loan as market conditions change.  There is typically a maximum (or ceiling) and a minimum (or floor) defined in the loan agreement. If interest rates rise, so does the loan payment. If interest rates fall, the loan payment may as well.

Arbitrage: Buying a financial instrument in one market in order to sell the same instrument at a higher price in another market.

Adverse Action: Under the Equal Credit Opportunity Act, a creditor's refusal to grant credit on the terms requested, termination of an existing account, or an unfavorable change in an existing account.

Adverse Action Notice: The notice required by the Equal Credit Opportunity Act advising a credit applicant or existing debtor of the denial of their request for credit or advising of a change in terms considered unfavorable to the account holder.

AER: Annual earnings rate on an investment.

Affidavit: A sworn statement in writing before a proper official, such as a notary public.

Alteration: Any change involving an erasure or rewriting in the date, amount, or payee of a check or other negotiable instrument.

Amortization: The process of reducing debt through regular installment payments of principal and interest that will result in the payoff of a loan at its maturity.

Anytime Banking: With introduction of ATMs, Tele-Banking and internet banking, customers can conduct their business anytime of the day and night. The 'Banking Hours' is not a constraint for transacting banking business.

Anywhere Banking : Refers to banking not only by ATMs, Tele-Banking and internet banking, but also to core banking solutions brought in by banks where customer can deposit his money, cheques and also withdraw money from any branch connected with the system. All major banks in India have brought in core banking in their operations to make banking truly anywhere banking.

Annual Percentage Rate (APR): The cost of credit on a yearly basis, expressed as a percentage.

Annual Percentage Yield (APY): A percentage rate reflecting the total amount of interest paid on a deposit account based on the interest rate and the frequency of compounding for a 365-day year.

Annuity : A life insurance product which pays income over the course of a set period. Deferred annuities allow assets to grow before the income is received and immediate annuities (usually taken from a year after purchase) allow payments to start from about a year after purchase.

APR:  The annual percentage rate of interest, usually on a loan or mortgage, usually displayed in brackets and representing the true cost of the loan or mortgage as it shows any additional payments beyond the interest rate.

Application: Under the Equal Credit Opportunity Act (ECOA), an oral or written request for an extension of credit that is made in accordance with the procedures established by a creditor for the type of credit requested.

Appraisal: The act of evaluating and setting the value of a specific piece of personal or real property.

Ask Price: The lowest price at which a dealer is willing to sell a given security.

Asset-Backed Securities (ABS): A type of security that is backed by a pool of bank loans, leases, and other assets. Most ABS are backed by auto loans and credit cards – these issues are very similar to mortgage-backed securities.

At-the-money: The exercise price of a derivative that is closest to the market price of the underlying instrument.

ATM:  ATMs are Automatic Teller Machines, which do the job of a teller in a bank through Computer Network. ATMs are located on the branch premises or off branch premises. ATMs are useful to dispense cash, receive cash, accept cheques, give balances in the accounts and also give mini-statements to the customers.

Authorization: The issuance of approval, by a credit card issuer, merchant, or other affiliate, to complete a credit card transaction.

Automated Clearing House (ACH): A computerized facility used by member depository institutions to electronically combine, sort, and distribute inter-bank credits and debits. ACHs process electronic transfers of government securities and provided customer services, such as direct deposit of customers' salaries and government benefit payments (i.e., social security, welfare, and veterans' entitlements), and preauthorized transfers.

Automated Teller Machine (ATM): A machine, activated by a magnetically encoded card or other medium that can process a variety of banking transactions. These include accepting deposits and loan payments, providing withdrawals, and transferring funds between accounts.

Automatic Bill Payment: A checkless system for paying recurring bills with one authorization statement to a financial institution. For example, the customer would only have to provide one authorization form/letter/document to pay the cable bill each month. The necessary debits and credits are made through an Automated Clearing House (ACH).

Availability Date: Bank's policy as to when funds deposited into an account will be available for withdrawal.

Availability Policy: Bank's policy as to when funds deposited into an account will be available for withdrawal.

Available Balance: The balance of an account less any hold, uncollected funds, and restrictions against the account.

Available Credit: The difference between the credit limit assigned to a cardholder account and the present balance of the account.

Banking: Accepting for the purpose of lending or investment of deposits of money from Public, Repayable on demand or otherwise and withdraw able by cheques, drafts, order, etc.

Bank Ombudsman: Bank Ombudsman is the authority to look into complaints against Banks in the main areas of collection of cheque / bills, issue of demand drafts, non-adherence to prescribed hours of working, failure to honour guarantee / letter of credit commitments, operations in deposit accounts and also in the areas of loans and advances where banks flout directions / instructions of RBI. This Scheme was announced in 1995 and is functioning with new guidelines from 2007. This scheme covers all scheduled banks, the RRBs and co-operative banks.

Bancassurance:  Bancassurance refers to the distribution of insurance products and the insurance policies of insurance companies which may be life policies or non-life policies like home insurance - car insurance, medi-policies and others, by banks as corporate agents through their branches located in different parts of the country by charging a fee.

Banker's Lien: Bankers lien is a special right of lien exercised by the bankers, who can retain goods bailed to them as a security for general balance of account. Bankers can have this right in the absence of a contract to the contrary.

Basel-II: The Committee on Banking Regulations and Supervisory Practices, popularity known as Basel Committee, submitted its revised version of norms in June, 2004. Under the revised accord the capital requirement is to be calculated for credit, market and operational risks. The minimum requirement continues to be 8% of capital fund (Tier I & II Capital) Tier II shall continue to be not more than 100% of Tier I Capital.

Brick & Mortar Banking: Brick and Mortar Banking refers to traditional system of banking done only in a fixed branch premises made of brick and mortar. Now there are banking channels like ATM, Internet Banking, tele banking etc.

Business of Banking : Accepting deposits, borrowing money, lending money, investing, dealing in bills, dealing in Foreign Exchange, Hiring Lockers, Opening Safe Custody Accounts, Issuing Letters of Credit, Travelers’ Cheques, doing Mutual Fund business, Insurance Business, acting as Trustee or doing any other business which Central Government may notify in the official Gazette.

Bouncing of a cheque: Where an account does not have sufficient balance to honour the cheque issued by the customer, the cheque is returned by the bank with the reason "funds insufficient" or "Exceeds arrangement”. This is known as 'Bouncing of a cheque’.

Basis Point: One hundredth of 1%. A measure normally used in the statement of interest rate e.g., a change from 5.75% to 5.81% is a change of 6 basis points. Bear Markets: Unfavorable markets associated with falling prices and investor pessimism.

Bid-ask Spread: The difference between a dealers’s bid and ask price.

Bid Price: The highest price offered by a dealer to purchase a given security.

Blue Chips: Blue chips are unsurpassed in quality and have a long and stable record of earnings and dividends. They are issued by large and well-established firms that have impeccable financial credentials.

Bond: Publicly traded long-term debt securities, issued by corporations and governments, whereby the issuer agrees to pay a fixed amount of interest over a specified period of time and to repay a fixed amount of principal at maturity.

Book Value: The amount of stockholders’ equity in a firm equals the amount of the firm’s assets minus the firm’s liabilities and preferred stock.

Broker: Individuals licensed by stock exchanges to enable investors to buy and sell securities.

Brokerage Fee: The commission charged by a broker.

Bull Markets: Favorable markets associated with rising prices and investor optimism.

Call Option: The right to buy the underlying securities at a specified exercise price on or before a specified expiration date.

Callable Bonds: Bonds that give the issuer the right to redeem the bonds before their stated maturity.

Capital Gain: The amount by which the proceeds from the sale of a capital asset exceed its original purchase price.

Capital Markets: The market in which long-term securities such as stocks and bonds are bought and sold.

Certificate of Deposits (CDs): Savings instrument in which funds must remain on deposit for a specified period and premature withdrawals incur interest penalties.

Certificate of Deposit:. Certificate of Deposits are negotiable receipts in bearer form which can be freely traded among investors. This is also a money market instrument,issued for a period ranging from 7 days to f one year .The minimum deposit amount is Rs. 1 lakh and they are transferable by endorsement and delivery.

Cheque: Cheque is a bill of exchange drawn on a specified banker ordering the banker to pay a certain sum of money to the drawer of cheque or another person. Money is generally withdrawn by clients by cheques. Cheque is always payable on demand.

Cheque Truncation: Cheque truncation truncates or stops the flow of cheques through the banking system. Generally truncation takes place at the collecting branch, which sends the electronic image of the cheques to the paying branch through the clearing house and stores the paper cheques with it.

Closed-end (Mutual) Fund: A fund with a fixed number of shares issued, and all trading is done between investors in the open market. The share prices are determined by market prices instead of their net asset value.

Collateral: A specific asset pledged against possible default on a bond. Mortgage bonds are backed by claims on property. Collateral trusts bonds are backed by claims on other securities. Equipment obligation bonds are backed by claims on equipment.

Commercial Paper: Short-term and unsecured promissory notes issued by corporations with very high credit standings.

Common Stock: Equity investment representing ownership in a corporation; each share represents a fractional ownership interest in the firm.

Compound Interest: Interest paid not only on the initial deposit but also on any interest accumulated from one period to the next.

Contract Note:  A note which must accompany every security transaction which contains information such as the dealer’s name (whether he is acting as principal or agent) and the date of contract.

Controlling Shareholder: Any person who is, or group of persons who together are, entitled to exercise or control the exercise of a certain amount of shares in a company at a level (which differs by jurisdiction) that triggers a mandatory general offer, or more of the voting power at general meetings of the issuer, or who is or are in a position to control the composition of a majority of the board of directors of the issuer.

Convertible Bond: A bond with an option, allowing the bondholder to exchange the bond for a specified number of shares of common stock in the firm. A conversion price is the specified value of the shares for which the bond may be exchanged. The conversion premium is the excess of the bond’s value over the conversion price.

Corporate Bond: Long-term debt issued by private corporations.

Coupon: The feature on a bond that defines the amount of annual interest income.

Coupon Frequency: The number of coupon payments per year.

Coupon Rate: The annual rate of interest on the bond’s face value that a bond’s issuer promises to pay the bondholder. It is the bond’s interest payment per dollar of par value.

Covered Warrants:  Derivative call warrants on shares which have been separately deposited by the issuer so that they are available for delivery upon exercise.

Credit Rating: An assessment of the likelihood of an individual or business being able to meet its financial obligations. Credit ratings are provided by credit agencies or rating agencies to verify the financial strength of the issuer for investors.

Collecting Banker: Also called receiving banker, who collects on instruments like a cheque, draft or bill of exchange, lodged with himself for the credit of his customer's account.

Consumer Protection Act: It is implemented from 1987 to enforce consumer rights through a simple legal procedure. Banks also are covered under the Act. A consumer can file complaint for deficiency of service with Consumer District Forum for amounts upto Rs.20 Lacs in District Court, and for amounts above Rs.20 Lacs to Rs.1 Crore in State Commission and for amounts above Rs.1 Crore in National Commission.

Co-operative Bank : An association of persons who collectively own and operate a bank for the benefit of consumers / customers, like Saraswat Co-operative Bank or Abhyudaya Co-operative Bank and other such banks.

Co-operative Society : When an association of persons collectively own and operate a unit for the benefit of those using its services like Apna Bazar Co-operative Society or Sahakar Bhandar or a Co-operative Housing Society.

Core Banking Solutions (CBS): Core Banking Solutions is a buzz word in Indian banking at present, where branches of the bank are connected to a central host and the customers of connected branches can do banking at any breach with core banking facility.

Creditworthiness: It is the capacity of a borrower to repay the loan / advance in time along with interest as per agreed terms.

Crossing of Cheques: Crossing refers to drawing two parallel lines across the face of the cheque. A crossed cheque cannot be paid in cash across the counter, and is to be paid through a bank either by transfer, collection or clearing. A general crossing means that cheque can be paid through any bank and a special crossing, where the name of a bank is indicated on the cheque, can be paid only through the named bank.

Customer: A person who maintains any type of account with a bank is a bank customer. Consumer Protection Act has a wider definition for consumer as the one who purchases any service for a fee like purchasing a demand draft or a pay order. The term customer is defined differently by Laws, softwares and countries.

Current Account: Current account with a bank can be opened generally for business purpose. There are no restrictions on withdrawals in this type of account. No interest is paid in this type of account.

Currency Board: A monetary system in which the monetary base is fully backed by foreign reserves. Any changes in the size of the monetary base have to be fully matched by corresponding changes in the foreign reserves.

Current Yield: A return measure that indicates the amount of current income a bond provides relative to its market price. It is shown as: Coupon Rate divided by Price multiplied by 100%.

Custody of Securities: Registration of securities in the name of the person to whom a bank is accountable, or in the name of the bank’s nominee; plus deposition of securities in a designated account with the bank’s bankers or with any other institution providing custodial services.

Debit Card: A plastic card issued by banks to customers to withdraw money electronically from their accounts. When you purchase things on the basis of Debit Card the amount due is debited immediately to the account. Many banks issue Debit-Cum-ATM Cards.

Debtor: A person who takes some money on loan from another person.

Demand Deposits: Deposits which are withdrawn on demand by customers. E.g.  savings bank and current account deposits.

Demat Account: Demat Account concept has revolutionized the capital market of India. When a depository company takes paper shares from an investor and converts them in electronic form through the concerned company, it is called Dematerialization of Shares. These converted Share Certificates in Electronic form are kept in a Demat Account by the Depository Company, like a bank keeps money in a deposit account. Investor can withdraw the shares or purchase more shares through this demat Account.

Derivative Call (Put) Warrants: Warrants issued by a third party which grant the holder the right to buy (sell) the shares of a listed company at a specified price.

Derivative Instrument: Financial instrument whose value depends on the value of another asset.

Discount Bond:  A bond selling below par, as interest in-lieu to the bondholders.

Dishonour of Cheque: Non-payment of a cheque by the paying banker with a return memo giving reasons for the non-payment. Default Risk: The possibility that a bond issuer will default ie, fail to repay principal and interest in a timely manner.

Diversification: The inclusion of a number of different investment vehicles in a portfolio in order to increase returns or be exposed to less risk.

Duration: A measure of bond price volatility, it captures both price and reinvestment risks to indicate how a bond will react to different interest rate environments.

Earnings: The total profits of a company after taxation and interest.

Earnings per Share (EPS): The amount of annual earnings available to common stockholders as stated on a per share basis.

Earnings Yield: The ratio of earnings to price (E/P). The reciprocal is price earnings ratio (P/E).

E-Banking : E-Banking or electronic banking is a form of banking where funds are transferred through exchange of electronic signals between banks and financial institution and customers ATMs, Credit Cards, Debit Cards, International Cards, Internet Banking and new fund transfer devices like SWIFT, RTGS belong to this category.

EFT - (Electronic Fund Transfer): EFT is a device to facilitate automatic transmission and processing of messages as well as funds from one bank branch to another bank branch and even from one branch of a bank to a branch of another bank. EFT allows transfer of funds electronically with debit and credit to relative accounts.

Either or Survivor: Refers to operation of the account opened in two names with a bank. It means that any one of the account holders have powers to withdraw money from the account, issue cheques, give stop payment instructions etc. In the event of death of one of the account holder, the surviving account holder gets all the powers of operation.

Electronic Commerce (E-Commerce): E-Commerce is the paperless commerce where the exchange of business takes place by Electronic means.

Endorsement: When a Negotiable Instrument contains, on the back of the instrument an endorsement, signed by the holder or payee of an order instrument, transferring the title to the other person, it is called endorsement.

Bouncing of a cheque: Where the name of the endorsee or transferee is not mentioned on the instrument.

Endorsement in Full: Where the name of the endorsee or transferee appears on the instrument while making endorsement.

Equity: Ownership of the company in the form of shares of common stock.

Equity Call Warrants: Warrants issued by a company which give the holder the right to acquire new shares in that company at a specified price and for a specified period of time.

Ex-dividend (XD): A security which no longer carries the right to the most recently declared dividend or the period of time between the announcement of the dividend and the payment (usually two days before the record date). For transactions during the ex-dividend period, the seller will receive the dividend, not the buyer. Ex-dividend status is usually indicated in newspapers with an (x) next to the stock’s or unit trust’s name.

Execution of Documents: Execution of documents is done by putting signature of the person, or affixing his thumb impression or putting signature with stamp or affixing common seal of the company on the documents with or without signatures of directors as per articles of association of the company.

Face Value/ Nominal Value: The value of a financial instrument as stated on the instrument. Interest is calculated on face/nominal value.

Fixed-income Securities: Investment vehicles that offer a fixed periodic return.

Fixed Rate Bonds:  Bonds bearing fixed interest payments until maturity date.

Floating Rate Bonds: Bonds bearing interest payments that are tied to current interest rates.

Factoring: Business of buying trade debts at a discount and making a profit when debt is realized and also taking over collection of trade debts at agreed prices.

Foreign Banks: Banks incorporated outside India but operating in India and regulated by the Reserve Bank of India (RBI),. e..g., Barclays Bank, HSBC, Citibank, Standard Chartered Bank, etc.

Forfeiting: In International Trade when an exporter finds it difficult to realize money from the importer, he sells the right to receive money at a discount to a forfaiter, who undertakes inherent political and commercial risks to finance the exporter, of course with assumption of a profit in the venture.

Forgery: when a material alteration is made on a document or a Negotiable Instrument like a cheque, to change the mandate of the drawer, with intention to defraud.

Fundamental Analysis: Research to predict stock value that focuses on such determinants as earnings and dividends prospects, expectations for future interest rates and risk evaluation of the firm.

Future Value: The amount to which a current deposit will grow over a period of time when it is placed in an account paying compound interest.

Future Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will grow over a period of time when it is placed in an account paying compound interest.

Futures Contract: A commitment to deliver a certain amount of some specified item at some specified date in the future.

Garnishee Order: When a Court directs a bank to attach the funds to the credit of customer's account under provisions of Section 60 of the Code of Civil Procedure, 1908.

General Lien: A right of the creditors to retain possession of all goods given in security to him by the debtor for any outstanding debt.

Guarantee: A contract between guarantor and beneficiary to ensure performance of a promise or discharge the liability of a third person. If promise is broken or not performed, the guarantor pays contracted amount to the beneficiary.

Hedge: A combination of two or more securities into a single investment position for the purpose of reducing or eliminating risk.

Holder: Holder means any person entitled in his own name to the possession of the cheque, bill of exchange or promissory note and who is entitled to receive or recover the amount due on it from the parties. For example, if I give a cheque to my friend to withdraw money from my bank,he becomes holder of that cheque. Even if he loses the cheque, he continues to be holder. Finder cannot become the holder.

Holder in due course : A person who receives a Negotiable Instrument for value, before it was due and in good faith, without notice of any defect in it, he is called holder in due course as per Negotiable Instrument Act. In the earlier example if my friend lends some money to me on the basis of the cheque, which I have given to him for encashment, he becomes holder-in-due course.

Hypothecation: Charge against property for an amount of debt where neither ownership nor possession is passed to the creditor. In pledge, possession of property is passed on to the lender but in hypothecation, the property remains with the borrower in trust for the lender.

Identification: When a person provides a document to a bank or is being identified by a person, who is known to the bank, it is called identification. Banks ask for identification before paying an order cheque or a demand draft across the counter.

Indemnifier: When a person indemnifies or guarantees to make good any loss caused to the lender from his actions or others' actions.

Indemnity: Indemnity is a bond where the indemnifier undertakes to reimburse the beneficiary from any loss arising due to his actions or third party actions.

Income: The amount of money an individual receives in a particular time period.

Index Fund:  A mutual fund that holds shares in proportion to their representation in a market index, such as the S&P 500.

Initial Public Offering (IPO): An event where a company sells its shares to the public for the first time. The company can be referred to as an IPO for a period of time after the event.

Inside Information: Non-public knowledge about a company possessed by its officers, major owners, or other individuals with privileged access to information.

Insider Trading: The illegal use of non-public information about a company to make profitable securities transactions

Insolvent: Insolvent is a person who is unable to pay his debts as they mature, as his liabilities are more than the assets . Civil Courts declare such persons insolvent. Banks do not open accounts of insolvent persons as they cannot enter into contract as per law.

Interest Warrant: When cheque is given by a company or an organization in payment of interest on deposit , it is called interest warrant. Interest warrant has all the characteristics of a cheque.

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.

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.

Intrinsic Value: The difference of the exercise price over the market price of the underlying asset.

Investment: A vehicle for funds expected to increase its value and/or generate positive returns.

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.

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.

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.

Joint Account: When two or more individuals jointly open an account with a bank.

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.

Karta: Manager of a Hindu Undivided Family (HUF) who handles the family business. He is usually the eldest male member of the undivided family.

Kiosk Banking: Doing banking from a cubicle from which food, newspapers, tickets etc. are also sold.

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.

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.

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.

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.

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.

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.

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.

Limit Order: An order to buy (sell) securities which specifies the highest (lowest) price at which the order is to be transacted.

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.

Liquidity: The ability to convert an investment into cash quickly and with little or no loss in value.

Listing: Quotation of the Initial Public Offering company’s shares on the stock exchange for public trading.

Listing Date: The date on which Initial Public Offering stocks are first traded on the stock exchange by the public

Margin Call: A notice to a client that it must provide money to satisfy a minimum margin requirement set by an Exchange or by a bank / broking firm.

Market Capitalization: The product of the number of the company’s outstanding ordinary shares and the market price of each share.

Market Maker: A dealer who maintains an inventory in one or more stocks and undertakes to make continuous two-sided quotes.

Market Order: An order to buy or an order to sell securities which is to be executed at the prevailing market price.

Money Market: Market in which short-term securities are bought and sold.

Marginal Standing Facility Rate: MSF scheme has become effective from 09th May, 2011 launched by the RBI. Under this scheme, Banks will be able to borrow upto 1% of their respective Net Demand and Time Liabilities.  The rate of interest on the amount accessed from this facility will be 100 basis points (i.e. 1%) above the repo rate. This scheme is likely to reduce volatility in the overnight rates and improve monetary transmission.

Mandate: Written authority issued by a customer to another person to act on his behalf, to sign cheques or to operate a bank account.

Material Alteration: Alteration in an instrument so as to alter the character of an instrument for example when date, amount, name of the payee are altered or making a cheque payable to bearer from an order one or opening the crossing on a cheque.

Merchant Banking : When a bank provides to a customer various types of financial services like accepting bills arising out of trade, arranging and providing underwriting, new issues, providing advice, information or assistance on starting new business, acquisitions, mergers and foreign exchange.

Micro Finance: Micro Finance aims at alleviation of poverty and empowerment of weaker sections in India. In micro finance, very small amounts are given as credit to poor in rural, semi-urban and urban areas to enable them to raise their income levels and improve living standards.

Minor Accounts: A minor is a person who has not attained legal age of 18 years. As per Contract Act a minor cannot enter into a contract but as per Negotiable Instrument Act, a minor can draw, negotiate, endorse, receive payment on a Negotiable Instrument so as to bind all the persons, except himself. In order to boost their deposits many banks open minor accounts with some restrictions.

Mobile Banking : With the help of M-Banking or mobile banking customer can check his bank balance, order a demand draft, stop payment of a cheque, request for a cheque book and have information about latest interest rates.

Money Laundering: When a customer uses banking channels to cover up his suspicious and unlawful financial activities, it is called money laundering.

Money Market: Money market is not an organized market like Bombay Stock Exchange but is an informal network of banks, financial institutions who deal in money market instruments of short term like CP, CD and Treasury bills of Government.

Moratorium: R.B.I. imposes moratorium on operations of a bank; if the affairs of the bank are not conducted as per banking norms. After moratorium R.B.I. and Government explore the options of safeguarding the interests of depositors by way of change in management, amalgamation or take over or by other means.

Mortgage: Transfer of an interest in specific immovable property for the purpose of offering a security for taking a loan or advance from another. It may be existing or future debt or performance of an agreement which may create monetary obligation for the transferor (mortgagor).

Mutual Fund: A company that invests in and professionally manages a diversified portfolio of securities and sells shares of the portfolio to investors.

NABARD: National Bank for Agriculture & Rural Development was setup in 1982 under the Act of 1981. NABARD finances and regulates rural financing and also is responsible for development agriculture and rural industries.

Negotiation: In the context of banking, negotiation means an act of transferring or assigning a money instrument from one person to another person in the course of business.

Net Asset Value: The underlying value of a share of stock in a particular mutual fund; also used with preferred stock.

Non-Fund Based Limits: Non-Fund Based Limits are those type of limits where banker does not part with the funds but may have to part with funds in case of default by the borrowers, like guarantees, letter of credit and acceptance facility.

Non-Resident: A person who is not a resident of India is a non-resident.

Non-Resident Accounts: Accounts of non-resident Indian citizens opened and maintained as per R.B.I. Rules.

Notary Public: A Lawyer who is authorized by Government to certify copies of documents .

NPA Account: If interest and instalments and other bank dues are not paid in any loan account within a specified time limit, it is being treated as non-performing assets of a bank.

Off Balance Sheet Items: Those items which affect the financial position of a business concern, but do not appear in the Balance Sheet E,g guarantees, letters of credit . The mention "off Balance Sheet items" is often found in Auditors Reports or Directors Reports.

Offer for Sale: An offer to the public by, or on behalf of, the holders of securities already in issue.

Offer for Subscription: The offer of new securities to the public by the issuer or by someone on behalf of the issuer.

Online Banking: Banking through internet site of the bank which is made interactive.

Open-end (Mutual) Fund: There is no limit to the number of shares the fund can issue. The fund issues new shares of stock and fills the purchase order with those new shares. Investors buy their shares from, and sell them back to, the mutual fund itself. The share prices are determined by their net asset value.

Open Offer: An offer to current holders of securities to subscribe for securities whether or not in proportion to their existing holdings.

Option: A security that gives the holder the right to buy or sell a certain amount of an underlying financial asset at a specified price for a specified period of time.

Oversubscribed: When an Initial Public Offering has more applications than actual shares available. Investors will often apply for more shares than required in anticipation of only receiving a fraction of the requested number. Investors and underwriters will often look to see if an IPO is oversubscribed as an indication of the public’s perception of the business potential of the IPO company.

Pass Book: A record of all debit and credit entries in a customer's account. Generally all banks issue pass books to Savings Bank/Current Account Holders.

Par Bond: A bond selling at par (i.e. at its face value).

Par Value: The face value of a security.

Perpetual Bonds: Bonds which have no maturity date.

Placing: Obtaining subscriptions for, or the sale of, primary market, where the new securities of issuing companies are initially sold.

Personal Identification Number (PIN): Personal Identification Number is a number which an ATM card holder has to key in before he is authorized to do any banking transaction in a ATM .

Plastic Money: Credit Cards, Debit Cards, ATM Cards and International Cards are considered plastic money as like money they can enable us to get goods and services.

Pledge: A bailment of goods as security for payment of a debt or performance of a promise, e.g pledge of stock by a borrower to a banker for a credit limit. Pledge can be made in movable goods only.

Post-Dated Cheque:  A Cheque which bears the date which is subsequent to the date when it is drawn. For example, a cheque drawn on 8th of February, 2007 bears the date of 12th February, 2007.

Power of Attorney: It is a document executed by one person - Donor or Principal, in favour of another person, Donee or Agent - to act on behalf of the former, strictly as per authority given in the document.

Portfolio: A collection of investment vehicles assembled to meet one or more investment goals.

Preference Shares: A corporate security that pays a fixed dividend each period. It is senior to ordinary shares but junior to bonds in its claims on corporate income and assets in case of bankruptcy.

Premium (Warrants): The difference of the market price of a warrant over its intrinsic value.

Premium Bond: Bond selling above par.

Present Value: The amount to which a future deposit will discount back to present when it is depreciated in an account paying compound interest.

Present Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will discount back to present when it is depreciated in an account paying compound interest.

Price/Earnings Ratio (P/E): The measure to determine how the market is pricing the company’s common stock. The price/earnings (P/E) ratio relates the company’s earnings per share (EPS) to the market price of its stock.

Privatization: The sale of government-owned equity in nationalized industry or other commercial enterprises to private investors.

Prospectus: A detailed report published by the Initial Public Offering company, which includes all terms and conditions, application procedures, IPO prices etc, for the IPO

Put Option: The right to sell the underlying securities at a specified exercise price on of before a specified expiration date.

Premature Withdrawals: Term deposits like Fixed Deposits, Call Deposits, Short Deposits and Recurring Deposits have to mature on a particular day. When these deposits are sought to be withdrawn before maturity , it is premature withdrawal.

Prime Lending Rate (PLR): The rate at which banks lend to their best (prime) customers.

Priority Sector Advances : consist of loans and advances to Agriculture, Small Scale Industry, Small Road and Water Transport Operators, Retail Trade, Small Business with limits on investment in equipments, professional and self employed persons, state sponsored organisations for lending to SC/ST, Educational Loans, Housing Finance up to certain limits, self-help groups and consumption loans.

Promissory Note: Promissory Note is a promise / undertaking given by one person in writing to another person, to pay to that person , a certain sum of money on demand or on a future day.

Provisioning:  Provisioning is made for the likely loss in the profit and loss account while finalizing accounts of banks. All banks are supposed to make assets classification and make appropriate provisions for likely losses in their balance sheets.

Public Sector Bank: A bank fully or partly owned by the Government.

Rate of Return: A percentage showing the amount of investment gain or loss against the initial investment.

Real Interest Rate: The net interest rate over the inflation rate. The growth rate of purchasing power derived from an investment.

Redemption Value: The value of a bond when redeemed.

Reinvestment Value: The rate at which an investor assumes interest payments made on a bond which can be reinvested over the life of that security.

Relative Strength Index (RSI): A stock’s price that changes over a period of time relative to that of a market index such as the Standard & Poor’s 500, usually measured on a scale from 1 to 100, 1 being the worst and 100 being the best.

Repurchase Agreement: An arrangement in which a security is sold and later bought back at an agreed price and time.

Resistance Level: A price at which sellers consistently outnumber buyers, preventing further price rises.

Return: Amount of investment gain or loss.

Rescheduling of Payment:  Rearranging the repayment of a debt over a longer period than originally agreed upon due to financial difficulties of the borrower.

Restrictive Endorsement: Where endorser desires that instrument is to be paid to particular person only, he restricts further negotiation or transfer by such words as "Pay to Ashok only". Now Ashok cannot negotiate the instrument further.

Right of Appropriation: As per Section 59 of the Indian Contract Act, 1972 while making the payment, a debtor has the right to direct his creditor to appropriate such amount against discharge of some particular debt. If the debtor does not do so, the banker can appropriate the payment to any debt of his customer.

Right of Set-Off : When a banker combines two accounts in the name of the same customer and adjusts the debit balance in one account with the credit balance in other account, it is called right of set-off. For example, debit balance of Rs.50,000/- in overdraft account can be set off against credit balance of Rs.75,000/- in the Savings Bank Account of the same customer, leaving a balance of Rs.25,000/- credit in the savings account.

Rights Issue: An offer by way of rights to current holders of securities that allows them to subscribe for securities in proportion to their existing holdings.

Risk-Averse, Risk-Neutral, Risk-Taking:

Risk-averse describes an investor who requires greater return in exchange for greater risk.

Risk-neutral describes an investor who does not require greater return in exchange for greater risk.

Risk-taking describes an investor who will accept a lower return in exchange for greater risk.

Safe Custody: When articles of value like jewellery, boxes, shares, debentures, Government bonds, Wills or other documents or articles are given to a bank for safe keeping in its safe vault, it is called safe custody.. Bank charges a fee from its clients for such safe custody.

Savings Bank Account: All banks in India are having the facility of opening savings bank account with a nominal balance. This account is used for personal purposes and not for business purpose and there are certain restrictions on withdrawals from this type of account. Account holder gets nominal interest in this account.

Senior Bond: A bond that has priority over other bonds in claiming assets and dividends.

Settlement: Conclusion of a securities transaction when a customer pays a broker/dealer for securities purchased or delivered, securities sold, and receive from the broker the proceeds of a sale.

Short Hedge: A transaction that protects the value of an asset held by taking a short position in a futures contract.

Short Position: Investors sell securities in the hope that they will decrease in value and can be bought at a later date for profit.

Short Selling: The sale of borrowed securities, their eventual repurchase by the short seller at a lower price and their return to the lender.

Speculation: The process of buying investment vehicles in which the future value and level of expected earnings are highly uncertain.

Stock Splits: Wholesale changes in the number of shares. For example, a two for one split doubles the number of shares but does not change the share capital.

Subordinated Bond:  An issue that ranks after secured debt, debenture, and other bonds, and after some general creditors in its claim on assets and earnings. Owners of this kind of bond stand last in line among creditors, but before equity holders, when an issuer fails financially.

Substantial Shareholder: A person acquires an interest in relevant share capital equal to, or exceeding, 10% of the share capital.

Support Level: A price at which buyers consistently outnumber sellers, preventing further price falls.

Teller : Teller is a staff member of a bank who accepts deposits, cashes cheques and performs other banking services for the public.

Technical Analysis: A method of evaluating securities by relying on the assumption that market data, such as charts of price, volume, and open interest, can help predict future (usually short-term) market trends. Contrasted with fundamental analysis which involves the study of financial accounts and other information about the company. (It is an attempt to predict movements in security prices from their trading volume history.)

Time Horizon: The duration of time an investment is intended for.

Trading Rules: Stipulation of parameters for opening and intra-day quotations, permissible spreads according to the prices of securities available for trading and board lot sizes for each security.

Trust Deed: A formal document that creates a trust. It states the purpose and terms of the name of the trustees and beneficiaries.

Underwriting : is an agreement by the underwriter to buy on a fixed date and at a fixed rate, the unsubscribed portion of shares or debentures or other issues. Underwriter gets commission for this agreement.

Underlying Security:  The security subject to being purchased or sold upon exercise of the option contract.

Universal Banking : When Banks and Financial Institutions are allowed to undertake all types of activities related to banking like acceptance of deposits, granting of advances, investment, issue of credit cards, project finance, venture capital finance, foreign exchange business, insurance etc. it is called Universal Banking.

Valuation: Process by which an investor determines the worth of a security using risk and return concept.

Virtual Banking: Virtual banking is also called internet banking, through which financial and banking services are accessed via internet's World Wide Web. It is called virtual banking because an internet bank has no boundaries of brick and mortar and it exists only on the internet.

Warrant: An option for a longer period of time giving the buyer the right to buy a number of shares of common stock in company at a specified price for a specified period of time.

Wholesale Banking: Wholesale banking is different from Retail Banking as its focus is on providing for financial needs of industry and institutional clients.

Window Dressing: Financial adjustments made solely for the purpose of accounting presentation, normally at the time of auditing of company accounts.

Yield (Internal rate of Return): The compound annual rate of return earned by an investment

Yield to Maturity: The rate of return yield by a bond held to maturity when both compound interest payments and the investor’s capital gain or loss on the security are taken into account.

Zero Coupon Bond: A bond with no coupon that is sold at a deep discount from par value.