Banking Important Terms Part 9 WWW - Anujjindal.In Successrbi@Anujjindal - in

Table of Contents
CAPITAL AND CURRENT ACCOUNT TRANSACTIONS ........................................................... 3

NEGOTIABLE INSTRUMENTS ............................................................................................. 3
PROMISSORY NOTE .......................................................................................................... 3
GDR (GLOBAL DEPOSITORY RECEIPT) ................................................................................ 3
ADR (AMERICAN DEPOSITORY RECEIPT) ............................................................................ 3
IDR (INDIAN DEPOSITORY RECEIPT)................................................................................... 4
FCCB (FOREIGN CURRENCY CONVERTIBLE BOND) .............................................................. 4
BILL OF EXCHANGE ........................................................................................................... 4
LIEN.................................................................................................................................. 4
ECB (EUROPEAN CENTRAL BANK) ...................................................................................... 4
KYC (KNOW YOUR CUSTOMER/CLIENT) ............................................................................. 5
PAN (PERMANENT ACCOUNT NUMBER) ............................................................................ 5
CBS (CORE BANKING SOLUTION) ....................................................................................... 5
PREPAID PAYMENT INSTRUMENTS ................................................................................... 5
SWIFT ............................................................................................................................... 6
DEFERRED PAYMENT GUARANTEE (DPG) .......................................................................... 6
BID AND OFFER ................................................................................................................ 6
BULLION ........................................................................................................................... 6
BOLT ................................................................................................................................ 7
.................................................................................................. 7
BANKING IMPORTANT TERMS PART 9 WWW.ANUJJINDAL.IN [email protected]

CAPITAL AND CURRENT ACCOUNT TRANSACTIONS
The balance of payment comprises of two accounts: Current account and Capital
account.
The current account transactions consists of visible trade (export and import of
goods), invisible trade (export and import of services), unilateral transfers, and
investment income (income from factors such as land or foreign shares).
Capital account transactions include foreign investments, loans, commercial
borrowings, banking and other forms of capital, etc. This account directly affects a
NEGOTIABLE INSTRUMENTS
Negotiable Instruments are written contracts whose benefit could be passed on
from its original holder to a new holder.
These instruments are transferable signed documents which promises to pay the
bearer/holder the sum of money when demanded or at any time in the future.
Negotiable instruments in India are governed by Negotiable Instruments Act 1881.
PROMISSORY NOTE
It is a signed document containing a written promise to pay a stated sum to a specified
person or the bearer at a specified date or on demand.
GDR (GLOBAL DEPOSITORY RECEIPT)

A global depository receipt is a general name for a depository receipt where a certificate
issued by a depository bank, which purchases shares of foreign companies, creates a
security on a local exchange backed by those shares.
ADR (AMERICAN DEPOSITORY RECEIPT)

It is a certified negotiable instrument issued by an American bank representing a
number of shares of a foreign company which can be traded on an American stock
exchange.
They are US equivalent of a GDR.

IDR (INDIAN DEPOSITORY RECEIPT)
It is a depository receipt created by domestic depository in India against the
underlying equity shares of a company outside India.
It is an instrument used by foreign companies to raise capital in India.
They were introduced in the year 2004.
FCCB (FOREIGN CURRENCY CONVERTIBLE BOND)

FCCBs are convertible bonds that are issued in currencies different from the issuing
company's domestic currency in the overseas market.
Starting out as bonds, FCCBs usually carry clauses which allow the issuer or
bondholder the option to convert the bonds into shares mid-way during its term, at
a pre-agreed price.
BILL OF EXCHANGE
A bill of exchange is a binding agreement by one party to pay a fixed amount of
cash to another party as of a predetermined date or on demand.
They are primarily used in international trade.
There are three parties in a bill of exchange: drawer, drawee and payee.
LIEN
It is a claim that someone or something has on property that you possess or use.
The individual or entity that has the claim (e.g. lender) can repossess or foreclose on
the property if you don't make payments on an associated loan or perform other
agreed-upon terms.
Example: payment agreement for a car loan
ECB (EUROPEAN CENTRAL BANK)

Established in 1998, it is the central bank of 19 European Union countries (Eurozone)
which have adopted the euro as their currency.
The main task of ECB is to maintain price stability in the eurozone and preserve
purchasing power of the euro.
ECB is one of the seven institutions of the European Union (EU).

KYC (KNOW YOUR CUSTOMER/CLIENT)
It is a process by which banks obtain information about the identity and address of
the customers.
The KYC procedure is to be completed by the banks while opening accounts and also
periodically update the same.
To open a bank account, one needs to submit a Aadhaar/enrolment number and
.
PAN (PERMANENT ACCOUNT NUMBER)
It is a means of identifying various taxpayers in the country.

It is a 10-digit unique alpha-numeric number.
PAN number is required to file income tax returns.
All tax-related information for a person is recorded against a single PAN number
which acts as the primary key for storage of information.
CBS (CORE BANKING SOLUTION)

CBS is networking of branches of a bank which allows customers to operate their
accounts and avail banking services from any branch of their bank on CBS network,
regardless of the branch where that customer maintains account.
CORE in CBS is an acronym for tralized Online Real-time Exchange ch means
that bank branches can access applications from centralized data centres.
PREPAID PAYMENT INSTRUMENTS

They are payment instruments which come with a pre-loaded value and some of these
instruments can be used only for a defined purpose (e.g. metro cards).
They facilitate the purchase of goods and services as well as inter-personal remittance
transactions such as sending money to a friend or a family member.

SWIFT
SWIFT stands for Society for Worldwide Interbank Financial Telecommunication
It provides a network that enables financial institutions worldwide to send and
receive information about financial transactions in a secure, standardized and
reliable environment.
A SWIFT code, or Bank Identifier Code (BIC), is used to identify a particular branch of
a bank.
SWIFT does not facilitate funds transfer. It only sends payment orders, which must
be settled by correspondent accounts that the institutions have with each other.
DEFERRED PAYMENT GUARANTEE (DPG)

It refers to a guarantee for a payment which has been deferred or postponed.
The payment is usually on instalments.
DPGs are issued by banks in cases of purchase of capital goods or machine where the
seller offers credit to the buyer and buyer
the seller.
BID AND OFFER

Bid and offer (or bid and ask) refers to a two-way price quotation that indicates the
best potential price at which a security can be bought or sold at a given point in
time.
Bid rate is the maximum price which the buyers of stock are willing to pay in order to
purchase any security.
Offer or ask rate is the minimum price at which sellers are willing to sell any security
which they are currently holding.
The difference between bid and offer prices is called the spread which is an
important indicator of the liquidity of that asset or security. The smaller the spread,
the better is the liquidity.
BULLION
Bullions refers to thick blocks (in the form of bars, ingots or specialized coins) of rare
metals such as gold, silver, etc.
They are bought and sold in large quantities as a commodity or investment.
The value of bullion is typically determined by the value of its precious metals
content, which is defined by its purity and mass.
It is often kept as a reserve asset by governments and central banks.

BOLT
It is an automated system launched by Bombay Stock Exchange (BSE) which allows traders
all over the world to place trades in Bombay Stock Exchange.
RULE IN CLAYTON S CASE

This rule was laid down in the famous case Devayanas Vs. Noble by an English Court
in 1816.
It states the rule of appropriation in running accounts like cash credit and overdraft
accounts.
As per this rule, each withdrawal in a cash credit account is considered as a new loan
and each deposit as a repayment of the loan in the order in which it is made. The
first debit in the account is considered to have been discharged or reduced by the
first item in credit side and accordingly other entries follow suit in chronological
order.

Banking Important Terms Part 9 WWW - Anujjindal.In Successrbi@Anujjindal - in

Uploaded by

Copyright:

Available Formats

Banking Important Terms Part 9 WWW - Anujjindal.In Successrbi@Anujjindal - in

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Banking Important Terms Part 9 WWW - Anujjindal.In Successrbi@Anujjindal - in

Uploaded by

Copyright:

Available Formats

Table of Contents

CAPITAL AND CURRENT ACCOUNT TRANSACTIONS ........................................................... 3

BANKING IMPORTANT TERMS PART 9 WWW.ANUJJINDAL.IN [email protected]

GDR (GLOBAL DEPOSITORY RECEIPT)

ADR (AMERICAN DEPOSITORY RECEIPT)

BANKING IMPORTANT TERMS PART 9 WWW.ANUJJINDAL.IN [email protected]

FCCB (FOREIGN CURRENCY CONVERTIBLE BOND)

ECB (EUROPEAN CENTRAL BANK)

BANKING IMPORTANT TERMS PART 9 WWW.ANUJJINDAL.IN [email protected]

PAN (PERMANENT ACCOUNT NUMBER)

It is a means of identifying various taxpayers in the country.

CBS (CORE BANKING SOLUTION)

PREPAID PAYMENT INSTRUMENTS

BANKING IMPORTANT TERMS PART 9 WWW.ANUJJINDAL.IN [email protected]

DEFERRED PAYMENT GUARANTEE (DPG)

BID AND OFFER

BANKING IMPORTANT TERMS PART 9 WWW.ANUJJINDAL.IN [email protected]

RULE IN CLAYTON S CASE

BANKING IMPORTANT TERMS PART 9 WWW.ANUJJINDAL.IN [email protected]

You might also like