Acceptance For Settlement
The Stage In The Processing Of A Payment At Which It Has Passed All Risk Management And Other Tests And Can Be Settled Under The System’S Rules And Procedures.
Aaa
Aaa Is A Term Or A Grade That Is Used To Rate A Particular Bond. It Is The Highest Rated Bond That Gives Maximum Returns At The Time Of Maturity. Usually The Grade Aaa Is Given To The Best Debt Obligation Or A Security, By A Credit Rating Agency.
Abo
Abo Is An Abbreviation For The Term ‘Accumulated Benefit Obligation’. It Is Basically The Measure Of The Liability Of The Pension Plan Of An Organization And Is Calculated When The Pension Plan Is To Be Terminated.
Absorption
Absorption Is A Term Related To Real Estate, Banking And Finance Fields. The Word ‘Absorption’ Means The Process Of Renting A Real Estate Property That Is Newly Built Or Is Recently Renovated.
Absorption Time
The Term ‘Absorption Time’ Is Used To Define The Time Period
That Is Required To Complete The Process Of Absorption.
Abstract Of Title
The ‘Abstract Of Title’ Is A Written Report That
Defines, Records And Identifies The HIstory And Ownerships Of
A Particular Asset, Usually A Real Estate.
Accelerated Depreciation
A Method Of Depreciation Of Fixed Assets, Where The Early Deductions Are Greater In Monetary Terms And Later Ones Are Smaller.
Acceleration
Acceleration Is The Process, Where The Lender Demands A Full And Final Payment Of The Debt Or Loan, Before The Allotted Time Period For Repayment. A Clause In The Document Of The Debt Usually Empowers The Lender To Accelerate The Time Period.
Acceleration Clause
A Clause In The Debt Document That Empowers The Lender To Accelerate The Payment, (I.E. Or That Is) The Lender Can Demand The Full Amount Of Loan Before The Date Of Maturity.
Acceptance
Acceptance Which Is Also Known As The Banker’S Acceptance Is
A Signed Instrument Of Acknowledgment That Indicates The Approval And Acceptance Of All Terms And Conditions Of Any Agreement On Behalf Of The Banker. It Is A Very Wide Term That Is Used In Context With Financial Agreements.
Accepting House
An Accepting House Is A Banking Or Finance Organization That Specializes In The Service Of Acceptance And Guarantee Of Bills Of Exchange. This Organization Specializes In Two Prominent Functions, That Is Facilitating The Different Negotiable Instruments And Merchant Banking.
Accepting Party
The Party (Either An Individual Or A Group Of Individuals Or Organizations) That Accepts The Terms And Conditions Of A Proposed Agreement Or Contract Put Forth By Another Party.
Acceptor
Any Trading Or Service Establishment That Accepts, On Its Own Behalf Or On Behalf Of Its Network, The Payment Of Goods Or Services Via An Electronic Money Instrument.
Access
The Right Of Or Opportunity For An Institution To Use The Services Of A Particular Payment System To Settle Payments On Its Own Account Or For Customers. See Also Direct Participant, Direct Participant/Member, Indirect Participant/Member, Participant/ Member.
Access
Products
Payment Instruments That Allow Customers To Access Their Deposit Accounts And To Transfer The Deposits Therein. Examples Include Electronic Funds Transfers At The Point Of Sale And Home Banking Facilities.
Accessions
The New Physical Goods That Are Physically United To Older Goods, In The Manner Where Identity, Of Both The Goods Remains The Same, Are Known As Accessions. For Example, A New Upgrade Or Addition On An Already Existing Piece Of Machinery.
Accommodation Maker
A Person Who Signs The Note Of Application And Renders His Credit History During The Process Of Application Of A Loan Is Called Accommodation
Maker. The Accommodation Maker, Usually Receives No Direct Financial Benefit From The Loan. The Term Is Also Used In The Concept Of ‘Accommodation Bills’, When Two Or More People Help Each Other By Rendering Liquidity Of A Negotiable Instrument.
Account
An Account Is A Record Of All Financial Transactions That Are Related To An Asset, Individual, Transaction Or Any Organization. It Is A Major Term In The Field Of Accountancy And Is Conventionally Denoted By A/C. It Can Also Be Defined As A Transaction Between A Buyer And A Seller About Payments And Dues Which Develop Creditor-Debtor Relations.
Account Aggregation
An Online Facility That Is Made Available By Some Banks Or Financial Organizations, In Which All The Transactions Related To The Bank Account, Credit Facilities, Debts And Investments Can Be Handled And Operated With The Help Of A Single Interface Or Account. Account Aggregation Is A Form Of Internet Banking, Provided For Ease Of Transaction.
Account Agreement
The Contract Governing A Customers Open-End Credit Account, It Provides Information On Changes That May Occur To The Account.
Account Analysis
The Term ‘Account Analysis’ Is Used In Basically Two Contexts. First, It Is Used To Define The Study And Conclusion Of A Single Account. Second, It Is Also A Procedure, Where The Profitability Of A Single Demand Account Or Many Demand Accounts Is Projected And Analyzed.
Account Balance
The Total Amount Of Money In A Particular Bank Account, Along With The Debit And Credit Amounts, The Net Amount Is Also Termed As The Account Balance.
Account Control Agreement
An Account Control Agreement Is An Agreement That Perfects
The Interests Of The Creditor In A Securities Account.
Account Debtor
An Account Debtor Is A Person Or An Organization That Is In Debt And Is Obliged To Pay Either On An Account Or Chattel Paper Or Contract Right. Account Debtors Are, Sometimes, Simply Referred To As Debtors.
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.
Account Reconciliation
Account Reconciliation Is A Process With The Help Of Which The Account Balance Can Be Easily Verified. Account Reconciliation Is Usually Done At The End Of A Week, Month, Financial Year Or At The End Of Any Financial Period. It Is Usually Done With The Help Of Receipts, Atm Notes, Bank Statements Etc.
Account Reconciliation
Services
Account Reconciliation Services Are Basically Services That Specialize In The Compilation Of Reconciliation Documents And Statements. Reconciliation Services Cater To The Demands Of Individuals And Huge Organizations That Have A Large Number Of Transactions Taking Place Everyday.
Account Statement
A Financial Record That Indicates The Transaction And Its Effect On An Account (Usually Bank Account), In Terms Of Debit And Credit. Sometimes, An Account Statement Also Carries Some Precise Details, Like The Date Of Transaction, Code Of Transaction, Mode Of Transaction, Sales, Purchases, Etc.
Account Value
An Account Value Is The Total Value Of Any Account, Applicable When A Person Has Many Accounts And Transactions In The Same Bank Or Financial Institution. The Account Value Is A Total Value That Is Expressed In Monetary Terms.
Accountability
Record-Keeping Of Electronic Money Transactions.
Accounts Payable
Accounts Payable Is A List Of Liabilities Of An Organization Or An Individual That Are Due But Not Paid To Creditors. Account Payable, In Some Cases Also Appears As A Current Liability In The Balance Sheet. One Must Note That Loans And Liabilities To The Bank Which Have Not Maturated, Are Not A Part Of Account Payable.
Accreting Swap
Accreting Swap Is A Swap Of Interest Which Has An Increasing
Notional Amount.
Accretion
Accretion, Is A Process, Where Increments And Periodic Increases Are Made In The Book Value Or The Balance Sheet Value Of An Asset. In The Field Of Banking And Finance, Accretion Is The Process Where The Price Of A Bond That Has Been Bought At A Discount Is Changed To The Par Value Of The Bond. It Is Also Defined As A Change In The Price Of A Bond That Has Been Bought At A Discount To The Par Value Of The Bond.
Accretion Bond
An Accretion Bond Is Basically A Bond That Has Been Purchased At A Discount And Whose Book Value Is Incremented To The Par Value Or The Face Value.
Accrual Basis
Accrual Is The Process Of Accumulation Of Interest Or Money. Accrual Basis, Which Is Also Known As Accrual Convention, Is The Method By Which, Investors, Economists And Businessmen Count The Number Of Days In A Month Or A Year(S). Of The Most Common Examples Of Accrual Basis Is The 30/360
Convention, Wherein The Accrual Basis Is Calculated By
| Assuming That Every Month Has 30 Days. Accrual Basis Is Often |
And Returns.
Accrual Bond
An Accrual Bond Is Also Known As Range Bond. An Accrual Bond Is A Bond That Has A Tendency To Pay The Investors, An Above The Market Rate. Sometimes, An Accrual Rate Is Also Defined As A Security That Does Not Have A Period Payment For The Rate Of Interest.The Interest Is Accrued And Then Added Later On At The Time Of Maturity.
Accrual Convention
It Is The Method Of Calculating The Time Period On A Specific Investment By The Investors. Accrual Convention Is At Times Calculated With The Help Of Different Interest Calculation Mechanisms. Accrual Convention Is Also Known As Accrual Basis.
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.
Accumulated Depreciation
Accumulated Depreciation Is The Total All The Periodic Reductions From The Book Value Of Fixed Assets. It Is Also Termed As An Allowance For Depreciation.
Accumulator
Accumulator Is Also Known As Capital Appreciation Bond. The Accumulator Is A Type Of Security That Is Related To Capital And Is Issued On Face Value, But The Interest Is Not Paid To The Investor On The Basis Of The Time Period. Instead, The Total Amount Of Accrued Interest Is Paid Along With The Face Value Upon The Maturity Of The Security.
Ach
See Automated Clearing House.
Acknowledge
Indicates The Acceptance Of A Document, Agreement, Proposal Or A Negotiable Instrument By Authenticating It With The Help Of A Seal Or A Signature. Acknowledgment Signifies That The Terms And Conditions Of The Contract Have Been Accepted And The Agreement Authenticated.
Acquirer
The Entity Or Entities That Hold(S) Deposit Accounts For CardAcceptors (Merchants) And To Which The Card Acceptor TransmitsThe Data Relating To The Transaction. The Acquirer Is Responsible ForThe Collection Of Transaction Information And Settlement With TheAcceptors.
Acquiring Bank
In A Merger, The Bank That Absorbs The Bank Acquired.
Acquiring Technical Operator
The Party Providing The Technical Facilities For Each Acquiring
Entity To Accept The Data Relating To Each Transaction.
Active Tranche
Active Tranche Basically Stands For Remic Or Real Estate Mortgage Investment Conduit. The Remic Tranche Is Basically A Bond That Is Backed Up By A Large Set Of Mortgages. The Principal And Interest That Are Paid By The Borrowers, Are Transferred To The People Who Hold Tranche (Tranche Refers To A Portion Or Money) In Remic.
Actual Delay Days
Actual Delay Days Are Also Simply Known As ‘Delay Days’. The Actual Delay Days Are The Actual Days Of The Lag Times. The Lag Time Is The Time Period That Starts After The Expiry Of The Last Date Of Repayment.
Adjustable Rate Mortgage
(Arm)
Adjustable Rate Mortgage Or Arm Is Basically A Type Of Loan, Where The Rate Of Interest Is Calculated On The Basis Of The Previously Selected Index Rate. Due To This, The Rate Of Interest That Is Charged Differs Periodically, Usually In Every Month. Hence, The Rate Of Interest And The Total Interest Remain Variable Throughout The Term/Time Period
Adjusted Trading
Adjusted Trading Is A Mercantile Understanding Between An Investor And The Broker Or Dealer. In This Understanding, The Investor Overpays The Broker) For A Recently Purchased Security. As A Return Favor, The Broker Overpays The Investor For The Security Or The Investment That He Wants To Get Rid Of.
Administered Rates
Administered Rates Are The Rates Of Interest Which Can Be Changed Contractually By Lender. In Some Cases, These Rates Can Also Be Changed By The Depositor And Also The Payee. The Laws And Provisions That Monitor The Concept Of Administered Rates Differ In Each Jurisdiction.
Administrative Float
Administrative Float Is The Frame Of Elapsed Time That Is Required In Order To Complete The Paperwork, In Order To Administratively Sort The Checks, Or For That Matter, Any Type Of Currency And Negotiable Instruments In The Bank Itself Or In The Clearing House.
Administrative Review
An Administrative Review Is Usually Used In Context To The Appraisal Of The Book Value Of A Real Estate And Basically, Deals In The Underwriting Issues. The Administrative Review Is Usually Written From The Point Of View Of Loan Underwriting During An Estate Appraisal.
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.
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.
Advisory Netting
See Position Netting.
Aer
Annual Earnings Rate On An Investment.
Affidavit
A Sworn Statement In Writing Before A Proper Official, Such As
A Notary Public.
AgencyRelationship
A Contractual Relationship In Which One Party, The Agent, Acts OnBehalf Of Another Party, The Principal. The Agent May ExecuteTrades For The Principal But Is Not Responsible For Performance ByThe Principal.
Agent
An Entity, Such As A Fund Manager Or A Custodian, That Undertakes A Securities Loan And Negotiates The Terms With The Borrower On Behalf Of A Customer-Owner.
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.
(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.
Annuities
Annuities Are Contracts That Guarantee Income Or Return, In Exchange Of A Huge Sum Of Money That Is Deposited, Either At The Same Time Or Is Paid With The Help Of Periodic Payments. Some Of The Common Types Of Annuities Include The Deferred, Fixed, Immediate Or Variable Variants.
Annuity
A Life Insurance Contract Sold By Insurance Companies, Brokers, And Other Financial Institutions. It Is Usually Sold As A Retirement Investment. An Annuity Is A Long-Term Investment And Can Have Steep Surrender Charges And Penalties For Withdrawal Before The Annuity’S Maturity Date. (Annuities Are Not Fdic Insured.)
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.
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
An Appraisal Is Basically A Statement, Document Or An Estimated Rise Or Drastic Climb In The Price Of A Particular Real Estate. The Term ‘Appraisal’ Is Also Used In Connection To Raising The Book Value Of A Real Estate.
Appraisal Surplus
An Appraisal Surplus Is The Difference Between The Historical
Cost And The Appraised Cost Of The Real Estate.
Appraisal
The Act Of Evaluating And Setting The Value Of A Specific
Piece Of Personal Or Real Property.
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.
Aps
See Assured Payment System.
Arbitrage
Profiting From A Difference In Price When The Same Security, Currency Or Commodity Is Traded On Two Or More Markets.
Arbitrage Free
Arbitrage Free Is A Type Of Financial Model That Generates Market Structures That Exclude Scenarios Generated By The Arbitrage Transactions And Dealings.
Arbitrageur
An Arbitrageur Is An Independent And Individual Broker Who
Deals In Arbitrage.
Article Of Agreement
Article Of Agreement Is A Contractual Provision, With The Help Of Which A Buyer Purchases Real Estate From The Seller Over A Period Of Time, And Pays The Consideration In Installments. This Type Of Agreement Or Contract Is Also Known As A Land Contract.
Ascending Rate Bond
Security With Which Has A Coupon Rate That Increases In Previously Defined Increments At Scheduled Intervals, Is Termed As An Ascending Rate Bond.
As-Extracted Collateral
As Extracted Collateral Are Extracted Or Non-Extracted Minerals Created By A Debtor Having An Interest In Minerals, And Are Subject To Security Interest, Either Before Or After Extraction. In Short, Mined Or Non-Mined Minerals Can Also Be Used As Collaterals.
Ask Price
The Lowest Price At Which A Dealer Is Willing To Sell A Given
Security.
Asset And Liability
Management
Asset And Liability Management Is The Coordinated Management Of All The Financial Risks Inherent In The Business Conducted By Financial Institutions. In Real Practice, Asset And Liability Management Aims At Minimization Of Loss And Maximization Of Profit.
Asset Sensitive
Asset Sensitive Is A Sort Of A Position, Wherein An Increase In The Rate Of Interest Will Help The Investor And The Decline In The Rate Will Not Be Helpful At All.
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.
Assets Repriced Before
Liabilities
‘Assets Repriced Before Liabilities’ Is A Term That Is Used To Define A Gap Between The Repricing Of The Assets And Liabilities In A Given Period Of Time.
Assignee
Assignee Is An Individual Or An Organization Or Party To Whom
An Assignment Is Given And Commitment Taken.
Assumable
Assumable Is A Very Different Type Of Mortgage Loan Application, Where The New Buyers Of A Real Estate That Has Already Been Pledged As Collateral, Assumes The Liability Of A Loan And Also The Ownership Of The Real Estate
Assumed Name
An Assumed Name Is A Name Which Is Assumed By An Individual, Organization Or Corporation In Order To Conduct Business. It Must Be Noted That The Assumed Name Is Always Different From The Original Name Of The Corporation.
Assured Payment System
An Arrangement In An Exchange-For-Value System Under Which Completion Of Timely Settlement Of A Payment Instruction Is Supported By An Irrevocable And Unconditional Commitment From A Third Party (Typically A Bank, Syndicate Of Banks Or Clearing House).See Also Exchange-For-Value Settlement System.
Asymmetric Behavior
Asymmetric Behavior Is The Unbalanced Behavior Displayed By The Financial Instruments. It Is Said To Be Observed When The Rates And Value Of Instruments Change In Different Proportions, In Comparison To The Market Rates.
Asymmetric
Cryptography
A Set Of Cryptographic Techniques In Which Two Different Keys (Private And Public Keys) Are Used For Encrypting And Decrypting Data. The Private Key Is Kept Secret By Its Holder While The Public Key Is Made Available To Communicating Entities. Also Called Public Key Cryptography.
Atm
Automated Teller Machine.
At-The-Money
The Exercise Price Of A Derivative That Is Closest To The
Market Price Of The Underlying Instrument.
Attorney’S Certificate Of
Title
The Attorney’S Certificate Of Title, Is Also Known As The Title Option. This Certificate Is Basically Prepared By The Attorney, In Order To State The Ownership And The Lien Priority Of An Asset, Particularly A Real Estate.
Attrition Analysis
Attrition Analysis Is Basically Carried Out For The Purpose Of
Reformation Of The Assets And Liabilities In A Balance Sheet.
Audit Trail
A Sequential Record Of Events Having Occurred In A System.
Auditability
Understood To Mean That It Is Possible To Establish Whether ASystem Is Functioning Properly And, Thereafter, That It Has Worked Properly. One Aspect Of Auditability Is To Provide Sufficient Knowledge About The System And Its Structure, Functions, Controls,Etc By Means Of Appropriate Documentation. Another Important Aspect Of Auditability Is To Make Visible All Integrity-Related Modifications To The System And Its Data. Logging Data Should Make It Possible To Answer The Questions “Who?”, “What?” And “When?”.
Audited Statements
Audited Statements Are Supposed To Be The Most Reliable Statements. The Audited Statements Are Basically Financial Statements Whose Reliability And Second Effect (According To The Double Entry System) Have Been Verified, Cross Checked And Confirmed. The Word ‘Audited’ (Audit), Signifies The Process Of Verification.
Authenticated Security
Agreement
The Agreement Of Security Between Debtor And Banker Is Known As The Authenticated Security Agreement And Is Accepted By The Borrower The Acceptance Process Is Done, Online And Then The Agreement Is Down Loaded And Printed.
Authentication
The Methods Used To Verify The Origin Of A Message Or To Verify The Identity Of A Participant Connected To A System And To Confirm That A Message Has Not Been Modified Or Replaced In Transit.
Authority
In The Terms Of Banking, An Authority Is Basically A Governmental Department Or Agency That Is Empowered By The Judicial System Of A Nation To Authenticate, Legalize, Conduct And Monitor The Functions That Are Related To Banking, Finance, Economics and Transactions.
Authorization
The Issuance Of Approval, By A Credit Card Issuer, Merchant, Or
Other Affiliate, To Complete A Credit Card Transaction.
Automated Clearing House
(Ach)
An Automatic Clearing House Is A Nationwide Electronic Clearing House That Monitors And Administers The Process Of Check And Fund Clearance Between Banks. The Ach Is An Electronic System And Thus Minimizes The Human Work In The Process Of Clearance. It Distributes Credit And Debit Balances Automatically.
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.
Automated Teller Machines
Automated Teller Machines Are Basically Used To Conduct Transactions With The Bank, Electronically. The Automated Teller Machine Is An Excellent Example Of Integration Of Computers And Electronics Into The Field Of Banking.
Automated TellerMachine
An Electromechanical Device That Permits Authorised Users, Typically Using Machine-Readable Plastic Cards, To Withdraw CashFrom Their Accounts And/Or Access Other Services, Such As BalanceEnquiries, Transfer Of Funds Or Acceptance Of Deposits. Atms MayBe Operated Either Online With Real-Time Access To An AuthorisationDatabase Or Offline.
Automated
Clearing House
An Electronic Clearing System In Which Payment Orders Are Exchanged Among Financial Institutions, Primarily Via Magnetic Media Or Telecommunications Networks, And Handled By A Data Processing Centre. See Also Clearing/Clearance.
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).
Automatic Stay
The Automatic Stay Is An Injunction That Automatically Becomes Effective, After Any Person Or Organization Files For Bankruptcy. The Automatic Stay Basically Precludes The Creditors From Taking The Debtor Or The Property Of The Debtor.
Automatically Protected
As Of May 1, 2011, Up To Two Months Of Federal Benefits Such As Social Security Benefits, Supplemental Security Income Benefits, Veteran’S Benefits, Railroad Retirement Benefits, And Benefits From The Office Of Personnel Management That Are Direct Deposited To An Account May Be Protected From Garnishment. The Amount Automatically Protected Will Depend Upon The Balance Of The Account On The Day Of Review.
Availability
The Ability Of Services And Information To Be Accessed By
Users When Requested.
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.
Back Office
The Part Of A Firm That Is Responsible For Post-Trade Activities. Depending Upon The Organisational Structure Of The Firm, The Back Office Can Be A Single Department Or Multiple Units (Such As Documentation, Risk Management, Accounting Or Settlements).Some Firms Have Combined A Portion Of These Responsibilities Usually Found In The Back Office, Particularly Those Related To Risk Management, Into What They Term A Middle Office Function. See Also Front Office.
Back-To-Back
Trades
A Pair Of Transactions That Requires A Counterparty To Receive And Redeliver The Same Securities On The Same Day. The Transactions Involved May Be Outright Purchases And Sales Or Collateral Transactions (Repurchase Agreements Or Securities Loans). For Example, A Securities Dealer Might Buy And Sell The Same Securities For The Same Settlement Date In The Course Of Making Markets For Customers Or It Might Buy Securities For Inventory AndFinance The Position Through A Repurchase Agreement.
Back-To-BackTransactions
A Chain Of Securities Transactions Among Three Or MoreCounterparties Involving The Purchase And Sale Of A SingleSecurity, For Settlement On A Single Date. The Most SimpleBack-To-Back Trade Is A Pair Of Transactions In Which One PartyAgrees To Purchase Securities From A Second Party And ThenAgrees To Sell Them To A Third Party.
Balance
The Balance Is The Actual Amount Of Money That Is Left In The Account. Sometimes, The Term Balance Also Refers To Amount Of The Debt That Is Owed.
Balance Transfer
A Balance Transfer Is The Repayment Of A Credit Debt With The Help Of Another Source Of Credit. In Some Cases, Balance Transfer Also Refers To Transfer Of Funds From One Account To Another.
Balance Transfer Fee
The Balance Transfer Fee Is Charged By The Bank For The Transfer Of Balances From One Source Of Credit To Another. It Also Refers To The Transfer Of Fees From One Bank Account To Another.
Balance-Based
System
An Electronic Money System In Which The Electronic Funds Are Stored On A Device As A Numeric Ledger, With Transactions Performed As Debits Or Credits To A Balance.
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.
Bank
A Bank Is An Establishment That Helps Individuals And Organizations, In The Issuing, Lending, Borrowing And Safeguarding Functions Of Money.
Bank Account
A Bank Account Is An Account Held By A Person With A Bank, With The Help Of Which The Account Holder Can Deposit, Safeguard His Money, Earn Interest And Also Make Check Payments.
Bank Custodian
A Bank Custodian Is Responsible For Maintaining The Safety Of Clients’ Assets Held At One Of The Custodian’S Premises, A Sub- Custodian Facility Or An Outside Depository.
Bank Debt
A Bank Debt Is Basically Any Debt That Is Owed To A Bank, By Any Kind Of Consumer, Organization Or Corporation. The Debt May Be Anything From A Bank Loan To A Credit Card Debt Or An Overdraft That Has Been Used.
Bank Draft
In Europe, The Term Generally Refers To A Draft Drawn By A Bank On Itself. The Draft Is Purchased By The Payer And Sent To The Payee, Who Presents It To His Bank For Payment. That Bank Presents It To The Payer’S Bank For Reimbursement. In The United States, The Term Generally Refers To A Draft Or Cheque Drawn By A Bank On Itself Or On Funds Deposited With Another Bank. In The Case Of A Cashier’S Cheque, The Bank Is Both The Drawer And Drawee. In The Case Of A Teller’S Cheque, One Bank Is The Drawer And A Second Bank Is The Drawee. Bank Drafts May Be Written By A Bank For Its Own Purposes Or May Be Purchased By A Customer And Sent To A Payee To Discharge An Obligation. See Also Draft.
Bank Examination
Examination Of A Bank’S Assets, Income, And Expenses-As Well As Operations By Representatives Of Federal And State Bank Supervisory Authority-To Ensure That The Bank Is Solvent And Is Operating In Conformity With Banking Laws And Sound Banking Principles.
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.
Bank Reserves
Deposits Held By Banks With The Central Bank.
Bank Statement
Periodically The Bank Provides A Statement Of A Customer’S Deposit Account. It Shows All Deposits Made, All Checks Paid, And Other Debits Posted During The Period (Usually One Month), As Well As The Current Balance.
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.
Banking Day
A Business Day During Which An Office Of A Bank Is Open To
The Public For Substantially All Of Its Banking Functions.
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.
Bankrupt
A Bankrupt Person, Firm, Or Corporation Has Insufficient Assets To Cover Their Debts. The Debtor Seeks Relief Through A Court Proceeding To Work Out A Payment Schedule Or Erase Debts. In Some Cases, The Debtor Must Surrender Control Of All Assets To A Court-Appointed Trustee.
Bankruptcy
A Bankruptcy Refers To Economic Insolvency, Wherein The Person’S Assets Are Liquidated, To Pay Off All Liabilities With The Help Of A Bankruptcy Trustee Or A Court Of Law.
Bankruptcy Advice
Bankruptcy Advice Is Given By A Bankruptcy Lawyer Or A Bankruptcy Counseling Service, So That A Person Can Overcome Financial And Economic Difficulties After Bankruptcy.
Bankruptcy Trustee
A Bankruptcy Trustee Is An Individual Or A Corporation Or Any Organization That Is Appointed, In Case Of Bankruptcy, In Order To Represent The Interests Of The Bankruptcy Estate And The Insolvent Debtor According To Chapter 7, Chapter 11 And Chapter 13.
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.
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.
Basis Risk
The Risk Of Changes In The Basis, That Is, The Difference Between The Price Of A Futures Or Forward Contract And The Price Of The Underlying Asset.
Batch
The Transmission Or Processing Of A Group Of Payment Orders
And/Or Securities Transfer Instructions As A Set At Discrete
Intervals
Of Time.
BeneficialOwnership/Interest
The Entitlement To Receive Some Or All Of The Benefits Of OwnershipOf A Security Or Other Financial Instrument (Eg Income, VotingRights, Power To Transfer). Beneficial Ownership Is UsuallyDistinguished From “Legal Ownership” Of A Security Or FinancialInstrument. See Also Legal Ownership.
Beneficiary
A Person Who Is Entitled To Receive The Benefits Or Proceeds Of A Will, Trust, Insurance Policy, Retirement Plan, Annuity, Or Other Contract.
Bid Price
The Highest Price Offered By A Dealer To Purchase A Given
Security.
Bid-Ask Spread
The Difference Between A Dealers’S Bid And Ask Price.
Bilateral Credit
Limit
See Credit Limit.
Bilateral Net Settlement System
A Settlement System In Which Participants’ Bilateral Net Settlement Positions Are Settled Between Every Bilateral Combination Of Participants. See Also Net Credit (Or Debit) Position.
Bilateral Netting
An Arrangement Between Two Parties To Net Their Bilateral Obligations. The Obligations Covered By The Arrangement May Arise From Financial Contracts, Transfers Or Both. See Also Multilateral Netting, Netting, Net Settlement.
Bilateral
Exposure
One Party’S Exposure To Another Party.
Bill Of Exchange
A Written Order From One Party (The Drawer) To Another (The Drawee) To Pay A Specified Sum On Demand Or On A Specified Date To The Drawer Or To A Third Party Specified By The Drawer. Widely Used To Finance Trade And, When Discounted With A Financial Institution, To Obtain Credit. See Also Draft.
Billing Cycle
A Billing Cycle Is A Time Period That Covers The Credit
Statement, That Usually Lasts For 25 Days.
Billing Date
The Month, Date, And Year When A Periodic Or Monthly
Statement Is Generated. Calculations Have Been Performed For
| Appropriate Finance Charges, Minimum Payment Due, And New Balance. |
Billing Error
A Charge That Appears On A Periodic Statement Associated With An Extension Of Credit (E.G., Credit Card) That • Was Not Authorized By The Cardholder Or The Cardholders’ • Is Not Properly Identified, Anddesignee,• Was Not Accepted By The Cardholder Or The Cardholder’S Designee.A Billing Error Can Also Be Caused By A Creditor’S Failure To Credit A Payment Or Other Credit To An Account As Well As Accounting And Clerical Errors.
Billing Statement
A Billing Statement Is A Summary Of All Transactions, Payments, Purchases, Finance Charges And Fees, That Take Place Through A Credit Account During A Billing Cycle.
Biometric
Refers To A Method Of Identifying The Holder Of A Device By Measuring A Unique Physical Characteristic Of The Holder, Eg By Fingerprint Matching, Voice Recognition Or Retinal Scan.
Bit
The Basic Data Element A Binary Digit, Either 0 Or 1.
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
A Bond Is A Certificate That Represents An Interest Bearing Debt, Where The Issuer Is Required To Pay A Sum Of Money Periodically Till The Maturity, And Then Receive Back The Accumulated Amount.
Bond, U.S. Savings
Savings Bonds Are Issued In Face Value Denominations By The
U.S. Government In Denominations Ranging From $50 To
$10,000. They Are Typically Long-Term, Low-Risk Investment
Tools.
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.
Book-Entry
System
An Accounting System That Permits The Transfer Of Claims (Eg Electronic Transfer Of Securities) Without The PhysicalMovement Of Paper Documents Or Certificates. See Also Dematerialisation, Immobilisation.
Borrower
A Borrower Is The Party That Uses Any Kind Of Credit Facility And Thus, Becomes Obliged To Repay The Principal Amount And Interest On The Borrowed Amount.
Bounced Check
A Bounced Check Is Nothing But An Ordinary Bank Check That Any Bank Can Refuse To Encash Or Pay Because Of The Fact That There Are No Sufficient Finances In The Bank Account Of The Originator Or Drawer Of The Check.
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’.
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.
Bridge
The “Bridge” Is The Name Commonly Used For The Link Between Euroclear And Clearstream That Permits Cross-System Settlement Of A Trade Between A Participant In One Icsd (International Central Securities Depository) And A Participant In The Other Icsd.
Bridge Financing
Also Known As Gap Financing, Bridge Financing Is A Loan Where The Time And Cash Flow Between A Short Term Loan And A Long Term Loan Is Filled Up. Bridge Financing Begins At The End Of The Time Period Of The First Loan And Ends With The Start Of The Time Period Of The Second Loan, Thereby Bridging The Gap Between Two Loans. It Is Also Known As Gap Financing.
Bridge Loan
The Bridge Loan Also Known As A Swing Loan, Is Basically A Real Estate Loan Or A Home Loan, Where The Current Residence/Real Estate Is Pledged By The Borrower As A Collateral In Order To Purchase A New Residence.Read More On, What Is A Bridge Loan.
Broker
A Firm That Communicates Bid And Ask Levels To Potential PrincipalsAnd Otherwise Arranges Transactions As Agent For A Fee, Without Acting As Counterparty In The Transactions.
Brokerage Fee
The Commission Charged By A Broker.
Broker-Dealer
A Person Or Firm Sometimes Acting As Broker And Sometimes As Principal Intermediary In Securities Transactions. A Broker Is A Firm That Communicates Bid And Ask Levels To Potential Principals And Otherwise Arranges Transactions As Agent For A Fee, Without Acting As Counterparty In The Transactions.
Brute ForceAttack
A Method Of Cryptanalysis In Which Every Possible
CryptographicKey Is Tried.
Bulk Funds
Transfer System
A Method Of Cryptanalysis In Which Every Possible
Cryptographic Key Is Tried.
Bull Markets
Favorable Markets Associated With Rising Prices And Investor
Optimism.
Business Day
Any Day On Which Offices Of A Bank Are Open To The Public
For Carrying On Substantially All Of The Bank’S Business.
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.
Business
Continuity
A Payment System’S Arrangements Which Aim To Ensure That It Meets Agreed Service Levels Even If One Or More Components Of The System Fail Or If It Is Affected By An Abnormal External Event. Include Both Preventative Measures And Arrangements To Deal With Contingencies.
Buy-In
A Purchase Of Securities In The Open Market By The Lender, Where The Borrower Is Not Able To Deliver The Securities To The Lender In Accordance With The Terms Of The Transaction (Eg On The Settlement Date). All Costs Are Borne By The Borrower In This Case.
A Series Of Eight Bits.
Call Money
A Loan Contract Which Is Automatically Renewed Every Day Unless The Lender Or The Borrower Indicates That It Wishes The Funds To Be Returned Within A Short Period Of Time.
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.
Canceled Check
A Check That A Bank Has Paid, Charged To The Account Holder’S Account, And Then Endorsed. Once Canceled, A Check Is No Longer Negotiable.
Cap
A Cap Is A Limit That Regulates The Increase Or Decrease In The Rate Of Interest And Installments Of An Adjustable Rate Mortgage.
Capital
The Term ‘Capital’ Means The Total Net Worth Of Any Business Establishment, Organization Or Corporation Or The Total Amount Invested For Financial Returns. Reference To Know More On Capital You May Also Refer To Venture Capital
Capital Gain
The Amount By Which The Proceeds From The Sale Of A Capital
Asset Exceed Its Original Purchase Price.
Capital Improvement
Capital Improvement Is The Addition In The Property Of An
Organization That Adds To Its Additional Value.
Capital Markets
The Market In Which Long-Term Securities Such As Stocks And
Bonds Are Bought And Sold.
Capital Risk
See Principal Risk.
Caps
Quantitative Limits On The Funds Transfer Activity Of IndividualParticipants In A System; Limits May Be Set By Each IndividualParticipant Or May Be Imposed By The Body Managing The System;Limits Can Be Placed On The Net Debit Position Or Net Credit PositionOf Participants In The System.
Card
See Cash Card, Cheque Guarantee Card, Chip Card, Credit Card,Debit Card, Delayed Debit Card, Prepaid Card, Retailer Card, Travel And Entertainment Card.
Card Holders Agreement
The Card Holder’S Agreement Is A Written Statement That Depicts All The Terms And Conditions Of A Credit Card Agreement. The Cardholders Agreement Constitutes Many Elements, Such As Rate Of Service Charges, Billing Dispute Remedies And Communications With The Credit Card Companies Or Service Providers.
Card-Based
Products
Electronic Money Products Which Provide The Customer With A Portable, Specialized Computer Device, Typically An Ic Card Containing A Microprocessor Chip.
Case Law
Precedents Established In Previously Decided Court Cases That May Influence Future Interpretations Of Law Or The Disposition Of Future Court Cases.
Cash
Bills And Coins, Checks And Other Negotiable Instruments, That Are Acceptable At Banks And Are Considered To Be Liquid Assets Are Collectively Known As Cash.
Cash Advance Fee
Cash Advance Fee Is Basically Charged When A Person Uses A Credit Card To Obtain Cash. In Most Cases, It Is Charged As A Percentage To The Cash Advance.
Cash Card
Card For Use Only In Atms Or Cash Dispensers (Other Cards OftenHave A Cash Function That Permits The Holder To Withdraw Cash).
Cash Clearing
A Method For Clearing Futures Contracts In Which Positions Are Periodically Marked To Market And Resulting Obligations Are Satisfied By Cash Payments, Known As Variation Margin. See Also Non-Cash Clearing And Variation Margin.
Cash Deposit
Risk
The Credit Risk Associated With The Holding Of Cash Balances With An Intermediary For The Purpose Of Settling Securities Transactions.
Cash Dispenser
Electromechanical Device That Permits Consumers, Typically Using Machine-Readable Plastic Cards, To Withdraw Banknotes (Currency) And, In Some Cases, Coins. See Also Automated Teller Machine.
Cash Flow
The Cash Flow Is Often Defined As The Liquid Balance Of Cash As Well As The Bank Balance That Is Available With An Organization Or A Corporation. In Some Cases, The Cash Flow Is Also Defined As The Net Amount Of Cash That Is Generated By The Net Income That Has Been Generated By An Organization Or Corporation In A Particular Time Period.
Cash Reserve
The Cash Reserve Is The Total Amount Of Cash That Is Present In
The Bank Account And Can Also Be Withdrawn Immediately.
Cash Settlement
Agent
The Entity Whose Assets Are Used To Settle The Ultimate Payment Obligations Arising From Securities Transfers Within The Csd. Accounts With The Cash Settlement Agent Are Held By Settlement Banks Which Act On Their Own Behalf And May Also Offer Payment Services To Participants That Do Not Have Accounts With The Settlement Agent. See Also Settlement Agent.
CashCorrespondents
Banks (Or Similar Institutions) Used By The Sss To Make Or
ReceivePayments.
Cash Memorandum Accounts
Records Kept By The Sss Of The Funds Due To Be Paid To Or Received By Participants In Conjunction With Their Securities Settlements; The Records Are For Information Purposes Only And Do Not Represent Legal Claims Or Liabilities Between The Sss And Its Participants.
Cash-Driven Securities Lending Transactions
Transactions Motivated By The Wish To Borrow/Invest A Cash
Amount Through A Repo (Or Loan) Of Securities.
Cashier’S Cheque
See Bank Draft.
Cashier’S Check
The Cashier’S Check Is Drawn By A Bank On Its Own Name To May Payments Other Organizations, Banks, Corporations Or Even Individuals.
Cease And Desist Letter
A Letter Requesting That A Company Stops The Activity
Mentioned In The Letter.
Central Bank
A Central Bank Is The Governing Authority Of All The Other
Banks In A Country.
Central Bank
Bills
Short-Term Securities Issued By The Central Bank Which Could
Be Marketable Or Tradable
| Central Bank Credit (Liquidity) Facility |
A Standing Credit Facility That Can Be Drawn Upon By Certain Designated Account Holders (Eg Banks) At The Central Bank. In Some Cases, The Facility Can Be Used Automatically At The Initiative Of The Account Holder, While In Other Cases The Central Bank May Retain Some Degree Of Discretion. The Loans Typically Take The Form Either Of Advances Or Overdrafts On An Account Holder’S Current Account Which May Be Secured By A Pledge Of Securities (Also Known As Lombard Loans In Some European Countries), Or Of Traditional Rediscounting Of Bills.
Central
Counterparty
An Entity That Is The Buyer To Every Seller And Seller To Every Buyer Of A Specified Set Of Contracts, Eg Those Executed On A Particular Exchange Or Exchanges.
Central
Processing Unit
Area Of A Computer System (And Of An Ic Card) That Performs
Computations.
Central Securities Depository
A Facility (Or An Institution) For Holding Securities, Which Enables Securities Transactions To Be Processed By Book Entry. Physical Securities May Be Immobilised By The Depository Or Securities May Be Dematerialised (Ie So That They Exist Only As Electronic Records).In Addition To Safekeeping, A Central Securities Depository May Incorporate
Comparison, Clearing And Settlement Functions.
Certificate
Physical Document Which Evidences An Ownership Claim In,Indebtedness Of, Or Other Outstanding Financial Obligations Of The Issuer.
Certificate Of Deposit
A Negotiable Instrument Issued By A Bank In Exchange For
Funds, Usually Bearing Interest, Deposited With The Bank.
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 Release
A Certificate Signed By A Lender Indicating That A Mortgage
Has Been Fully Paid And All Debts Satisfied.
Certification
Authority
An Entity Entrusted With Creating And Assigning Public Key
Certificates.
| Certified Check |
A Personal Check Drawn By An Individual That Is Certified (Guaranteed) To Be Good. The Face Of The Check Bears The Words “Certified” Or “Accepted,” And Is Signed By An Official Of The Bank Or Thrift Institution Issuing The Check. The Signature Signifies That • The Signature Of The Drawer Is Genuine, And • Sufficient Funds Are On Deposit And Earmarked For Payment Of The Check.
Cfd
See Contract For Difference.
Chaining
A Method Used In Certain Transfer Systems (Mostly For Securities) For Processing Instructions. It Involves The Manipulation Of The Sequence In Which Transfer Instructions Are Processed To Increase The Number Or Value Of Transfers That May Be Settled With Available Funds And/Or Securities Balances (Or Available Credit Or Securities Lending Lines).
Challenge-response
A Means Of Authentication In Which One Device Replies In A Predetermined Way To A Challenge From Another Device, Thus Proving Its Authenticity.
Charge Card
See Travel And Entertainment Card.
Charge-Off
The Balance On A Credit Obligation That A Lender No Longer
Expects To Be Repaid And Writes Off As A Bad Debt.
Check
A Check Is A Negotiable Instrument That Instructs The Bank To Pay A Particular Amount Of Money From The Writer’S Bank, To The Receiver Of The Check.
Check 21 Act
Check 21 Is A Federal Law That Is Designed To Enable Banks To Handle More Checks Electronically, Which Is Intended To Make Check Processing Faster And More Efficient. Check 21 Is The Short Name For The Check Clearing For The 21St Century Act, Which Went Into Effect On October 28, 2004.
Check Truncation
The Conversion Of Data On A Check Into An Electronic Image After A Check Enters The Processing System. Check Truncation Eliminates The Need To Return Canceled Checks To Customers.
Checking Account
A Demand Deposit Account Subject To Withdrawal Of Funds By
Check.
Cheque
A Written Order From One Party (The Drawer) To Another (The Drawee, Normally A Bank) Requiring The Drawee To Pay A Specified Sum On Demand To The Drawer Or To A Third Party Specified By The Drawer. Cheques May Be Used For Settling Debts And Withdrawing Money From Banks. See Also Bill Of Exchange.
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.
Cheque
Guarantee Card
A Card Issued As Part Of A Cheque Guarantee System. This Function May Be Combined With Other Functions In The Same Card, Eg Those Of A Cash Card Or Debit Card. See Also Cheque Guarantee System.
Cheque Guarantee System
A System To Guarantee Cheques, Typically Up To A Specified Amount, That Have Been Validated By The Merchant Either On The Basis Of A Card Issued To The Cheque Writer Or Through A Central Database Accessible To Merchants. Validated Cheques Are
Guaranteed By The Issuer Of The Guarantee Card, The Drawee
Bank Or The System Operator.
Chexsystems
The Chexsystems, Inc. Network Is Comprised Of Member Financial Institutions That Regularly Contribute Information On Mishandled Checking And Savings Accounts To A Central Location. Chexsystems Shares This Information Among Member Institutions To Help Them Assess The Risk Of Opening New Accounts
Chip Card
Also Known As An Ic (Integrated Circuit) Card. A Card Containing One Or More Computer Chips Or Integrated Circuits For Identification, Data Storage Or Special Purpose Processing Used To Validate Personal Identification Numbers (Pins), Authorise Purchases, Verify Account Balances And Store Personal Records. In Some Cases, The Memory In The Card Is Updated Every Time The Card Is Used (Eg An Account Balance Is Updated).
Choice Of Law
A Contractual Provision By Which Parties Choose The Law That Will Govern Their Contract Or Relationship. Choice Of Law May Also Refer To The Question Of What Law Should Govern In The Case Of A Conflict Of Laws. See Also Conflict Of Laws.
The Encrypted Form Of Data.
Clearance
The Term “Clearance” Has Two Meanings In The Securities Markets. It May Mean The Process Of Calculating The Mutual Obligations Of Market Participants, Usually On A Net Basis, For The Exchange Of Securities And Money. It May Also Signify The Process Of Transferring Securities On The Settlement Date, And In This Sense The Term “Clearing System” Is Sometimes Used To Refer To Securities Settlement Systems.
Clearing
Clearing Of A Check Is Basically A Function That Is Executed At The Clearing House, When All Amount Of The Check Is Subtracted From The Payer’S Account And Then Added To The Payee’S Account.
Clearing And Settling Institution
An Institution Which Transmits Information And Funds Through APayment System Network. It May Operate As An Agent Or APrincipal.
Clearing House
A Central Location Or Central Processing Mechanism Through Which Financial Institutions Agree To Exchange Payment Instructions Or Other Financial Obligations (Eg Securities). The Institutions Settle For Items Exchanged At A Designated Time Based On The Rules And Procedures Of The Clearing House. In Some Cases, The Clearing House May Assume Significant Counterparty, Financial Or Risk Management Responsibilities For The Clearing System. See Also Clearing/Clearance, Clearing System.
Clearing House
Funds
Term Most Commonly Used In Certain Us Markets To Refer To Funds That Typically Are Provisional On The Day Of Receipt And Final On The Following Day. More Specifically, The Term Is Used To Refer To Monetary Claims With Next Day Finality That Are Exchanged By Participants In Certain Clearing House Arrangements In Settlement Of Obligations Arising From The Clearing Process. Such Claims Are Typically Transferred Via Cheques, Drafts Or Other Similar Payment.
Clearing Link
An Arrangement In Which The Same Contract Is Traded OnExchanges Affiliated With Two Clearing Houses But All Positions AreTransferred Daily To A Single Clearing House Where They Are CarriedUntil Expiration Or Offset. See Also Mutual Offset System.
Clearing System
A Set Of Procedures Whereby Financial Institutions Present And Exchange Data And/Or Documents Relating To Funds Or Securities Transfers To Other Financial Institutions At A Single Location (Clearing House). The Procedures Often Also Include A Mechanism For The Calculation Of Participants’ Bilateral And/Or Multilateral Net Positions With A View To Facilitating The Settlement Of Their Obligations On ANet Or Net Net Basis. See Also Netting.
Clearing
Member
A Member Of A Clearing House. All Trades Must Be Settled Through A Clearing Member. A Direct Clearing Member Is Able To Settle Only Its Own Obligations. A General Clearing Member Is Able To Settle Its Own Obligations As Well As Those Of Clients. Variations Of These Two Types Of Clearing Member May Also Exist.
Clearing/ Clearance
The Process Of Transmitting, Reconciling And, In Some Cases,Confirming Payment Orders Or Security Transfer Instructions Prior To Settlement, Possibly Including The Netting Of Instructions And The Establishment Of Final Positions For Settlement. Sometimes The Term Is Used (Imprecisely) To Include Settlement.
Client
A Party That Is Not A Member Of The Clearing House And Must
Settle Through A Clearing Member. Also Known As Customer.
Closed Network
Telecommunications Network Used For A Specific Purpose, Such
As A Payment System, And To Which Access Is Restricted.
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.
Closed-End Credit
Generally, Any Credit Sale Agreement In Which The Amount Advanced, Plus Any Finance Charges, Is Expected To Be Repaid In Full By A Specified Date. Most Real Estate And Automobile Loans Are Closed-End Agreements.
Closed-End Loan
Generally, Any Loan In Which The Amount Advanced, Plus Any Finance Charges, Is Expected To Be Repaid In Full By A Specified Date. Most Real Estate And Automobile Loans Are Closed-End Agreements.
Closeout
The Process Of Offsetting Existing Contracts. Closeout May Be Used By The Clearing House To Prevent Further Losses From Positions Carried By An Entity That Has Defaulted.
Closeout Netting
A Special Form Of Netting Which Occurs Following Some Predefined Events Such As Default. Closeout Netting Is Intended To Reduce Exposures On Open Contracts If One Party Meets Certain Conditions Specified By The Contract (Eg Becomes Subject To Insolvency Procedures) Before The Settlement Date (Also Referred To As Default Netting, Open Contract Netting Or Replacement Contract Netting).
Closing
Closing Of An Account Is The Final Stage Of Any Transaction Where Both The Parties Receive Almost Equal Consideration From Each Other. The Term ‘Closing’ From Ledger Books Where The Two Accounts Are ‘Closed Down’ I.E. Both Debit And Credit Sides Become Equal.
Closing (OrBack) Leg
Second Leg Of A Pair Of Transactions In The Same Securities, Ie A Securities Lending Transaction – One For A Near Value Date, TheOther For A Value Date Further Into The Future. See Also Opening (Or Front) Leg.
Closing A Mortgage Loan
The Consummation Of A Contractual Real Estate Transaction In Which All Appropriate Documents Are Signed And The Proceeds Of The Mortgage Loan Are Then Disbursed By The Lender.
Closing Costs
The Expenses Incurred By Sellers And Buyers In Transferring Ownership In Real Property. The Costs Of Closing May Include The Origination Fee, Discount Points, Attorneys’ Fees, Loan Fees, Title Search And Insurance, Survey Charge, Recordation Fees, And The Credit Report Charge.
Co-Borrower
The Co-Borrower Is A Person Who Signs A Promissory Note As A Guarantee That The Loan Would Be Repaid. Thus The Co- Borrower Plays The Role Of A Guarantor And Is Equally Responsible For The Loan.
Collateral
An Asset Or Third-Party Commitment That Is Accepted By The Collateral Taker To Secure An Obligation Of The Collateral Provider Vis-À-Vis The Collateral Taker.
Collateral Pool
Assets Owned By Members Of A Payment System That Are Collectively Available To The System As Collateral To Enable It To Obtain Funds In Circumstances Specified In Its Rules.
Collateral Management Service
A Centralised Service That May Handle Any Of A Variety Of Collateral-Related Functions For A Client Firm, Including Valuation Of Collateral, Confirmation Of Valuations With Counterparties, Optimisation Of Collateral Usage And Transfer Of Collateral.
Collateral
Assets That Are Offered To Secure A Loan Or Other Credit. For Example, If You Get A Real Estate Mortgage, The Bank’S Collateral Is Typically Your House. Collateral Becomes Subject To Seizure On Default.
Collected Funds
Cash Deposits Or Checks That Have Been Presented For Payment
And For Which Payment Has Been Received.
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.
Collection Agency
A Company Hired By A Creditor To Collect A Debt That Is Owed. Creditors Typically Hire A Collection Agency Only After They Have Made Efforts To Collect The Debt Themselves, Usually Through Letters And Telephone Calls.
Collection Items
Items-Such As Drafts, Notes, And Acceptances-Received For Collection And Credited To A Depositor’S Account After Payment Has Been Received. Collection Items Are Usually Subject To Special Instructions And May Involve Additional Fees. Most Banks Impose A Special Fee, Called A Collection Charge, For Handling Collection Items.
Collective Investment Funds
(Cifs)
A Collective Investment Fund (Cif) Is A Trust Created And Administered By A Bank Or Trust Company That Commingles Assets From Multiple Clients. The Federal Securities Laws Generally Require Entities That Pool Securities To Register Those Pooled Vehicles (Such As Mutual Funds) With The Sec. However, Congress Created Exemptions From These Registration Requirements For Cifs So Long As The Entity Offering These Funds Is A Bank Or Other Authorized Entity And So Long As Participation In The Fund Is Restricted To Only Those Customers Covered By The Exemption. If These Limitations Are Met, Cifs Are Exempt From Sec Registration And Reporting Requirements.
Co-Maker
A Person Who Signs A Note To Guarantee A Loan Made To Another Person And Is Jointly Liable With The Maker For Repayment Of The Loan. (Also Known As A Co-Signer)
Combination Of An Outright Sale With Put And Call Option
A Derivative Financial Arrangement That Has A Similar Economic Effect To A Securities Lending Transaction. In This Arrangement, A Dealer Simultaneously (1) Sells Shares Outright To A Cash Investor, Receiving Market Value, (2) Purchases Otc At-The-Money Call Options From The Cash Investor Giving The Dealer The Right To Buy The Shares At A Specified Date At The Original Price, And (3) Sells To The Cash Investor Otc At-The-Money Put Options That Give The Cash Investor The Right To Sell The Shares At The Original Price. This Results In The Dealer Having A Synthetic Long Position Of The Shares, Retaining Any Positive Or Negative Return On The Shares, While The Cash Investor Is Hedged Against A Loss On The Value Of The Shares, But Must Also Pay Away Any Gain To The Dealer. The Options Are Cash-Settled At Expiration. An Option Pricing Model Will Produce Premiums For The Put And The Call Which Net Out To A Predetermined Financing Cost.
Commercial Paper
Short-Term And Unsecured Promissory Notes Issued By
Corporations With Very High Credit Standings.
Committed
Facilities
Facilities (For Example, Lines Of Credit Or Repo Facilities) Under Which The Provider Is Contractually Committed To Advance Funds In Defined Circumstances. See Also Repurchase Agreement.
Common Stock
Equity Investment Representing Ownership In A Corporation; Each Share Represents A Fractional Ownership Interest In The Firm.
Community Reinvestment Act
The Act Is Intended To Encourage Depository Institutions To Help Meet The Credit Needs Of The Communities In Which They Operate, Including Low- And Moderate-Income Neighborhoods. It Was Enacted By The Congress In 1977.
Comparison
See Matching.
Compound Interest
Interest Paid Not Only On The Initial Deposit But Also On Any
Interest Accumulated From One Period To The Next.
Confidentiality
The Quality Of Being Protected Against Unauthorised Disclosure.
Confirmation
A Particular Connotation Of This Widely Used Term Is The Process Whereby A Market Participant Notifies Its Counterparties Or Customers Of The Details Of A Trade And, Typically, Allows Them Time To Affirm Or To Question The Trade.
Confirmation
Process
The Procedure For Verifying Trade Details With A Counterparty. This Is Generally Done By Exchanging Via Fax Or Mail A Document (Ie A Confirmation) Identifying The Trade Details And Any Governing Legal Documentation And Verifying The Accuracy Of The Information Provided By The Counterparty (Ie Matching).
Conflict Of Laws
An Inconsistency Or Difference In The Laws Of Jurisdictions That Have A Potential Interest In A Transaction. Each Jurisdiction’S Conflict Of Laws Rules Specify The Criteria That Determine The Law Applicable In Such A Case.
Consumer Credit
Consumer Credit Is The Credit And Loan Facility That Is Provided To The Consumer For The Purchase Of Goods, Services And Real Estate Property. Most Consumer Credit Is Unsecured With The Help Of A Collateral .
Consumer Credit Counseling
Service
A Service Which Specializes In Working With Consumers Who Are Overextended With Debts And Need To Make Arrangements With Creditors.
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.
Consumer Reporting Agency
An Agency That Regularly Collects Or Evaluates Individual Consumer Credit Information Or Other Information About Consumers And Sells Consumer Reports For A Fee To Creditors Or Others. Typical Clients Include Banks, Mortgage Lenders, Credit Card Companies, And Other Financing Companies.
Contact Cards
Cards That Require Physical Contact Through An Electronic Connection Surface Between The Card And The Card Reader Or Terminal Device.
Contactless
Cards
Cards That Do Not Require Physical Contact Between The Card
and The Card Reader Or Terminal
Contract For
Difference
A Financial Contract In Which The Difference Between The Agreed Fixed Price Of An Asset And Its Prevailing Market Price Is Periodically Credited To The Counterparty In The Money. Since There Is No Transfer Of Principal, A Cfd Covers Hedging Or Speculative Needs.
Contract Law
Body Of Law Concerned With Making And Enforcing
Arrangements.
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.
Contractual Income Collection
A Contractual Commitment By A Custodian To Credit A Customer’S Cash Account With Interest, Dividend Or Tax Refund Payments On The Date On Which The Payments Are Scheduled, Regardless Of Whether The Custodian Has Actually Received The Payment. Usually Such Credits Are Provisional And Are Reversed If The Custodian Does Not Receive The Payment Within An Interval Established By The Custodian.
Contractual Settlement Date Accounting
A Contractual Commitment By A Custodian To Credit And Debit A Customer’S Cash And Securities Accounts, As Appropriate, On The Date On Which The Customer’S Contract With Its Counterparty Provides For Settlement (The Contractual Settlement Date),
Regardless Of Whether Settlement Has Actually Occurred. Usually These Credits And Debits Are Provisional And Are Reversed If Settlement Does Not Occur Within An Interval Established By The Custodian.
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.
Conventional Fixed Rate
Mortgage
A Fixed-Rate Mortgage Offers You A Set Interest Rate And Payments That Do Not Change Throughout The Life, Or “Term,” Of The Loan.A Conventional Fixed-Rate Loan Is Fully Paid Off Over A Given Number Of Years-Usually 15, 20, Or 30. A Portion Of Each Monthly Payment Goes Towards Paying Back The Money Borrowed, The “Principal”; The Rest Is “Interest.”
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.
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.
Corporate Bond
Long-Term Debt Issued By Private Corporations.
Correspondent
Banking
An Arrangement Under Which One Bank (Correspondent) Holds Deposits Owned By Other Banks (Respondents) And Provides Payment And Other Services To Those Respondent Banks. Such Arrangements May Also Be Known As Agency Relationships In Some Domestic Contexts. In International Banking, Balances Held For A Foreign Respondent Bank May Be Used To Settle Foreign Exchange Transactions. Reciprocal Correspondent Banking Relationships May Involve The Use Of So-Called Nostro And Vostro Accounts To Settle Foreign Exchange Transactions.
Co-Signer
An Individual Who Signs The Note Of Another Person As Support For The Credit Of The Primary Signer And Who Becomes Responsible For The Obligation. (Also Known As A Co-Maker.)
Counterparty
The Opposite Party To A Financial Transaction Such As A SecuritiesTrade Or Swap Agreement.
Counterparty
Credit Limits
Limits Set By A Trading Party To Restrict The Largest Amount
Of Its Credit Exposures To Different Counterparties.
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.
Coupon
The Feature On A Bond That Defines The Amount Of Annual
Interest Income.
Covered Warrants
Derivative Call Warrants On Shares Which Have Been Separately Deposited By The Issuer So That They Are Available For Delivery Upon Exercise.
Cpu
See Central Processing Unit.
Credit Application
A Form To Be Completed By An Applicant For A Credit Account, Giving Sufficient Details (Residence, Employment, Income, And Existing Debt) To Allow The Seller To Establish The Applicant’S Creditworthiness. Sometimes, An Application Fee Is Charged To Cover The Cost Of Loan Processing.
Credit Bureau
An Agency That Collects Individual Credit Information And Sells It For A Fee To Creditors So They Can Make A Decision On Granting Loans. Typical Clients Include Banks, Mortgage Lenders, Credit Card Companies, And Other Financing Companies. Also Commonly Referred To As A Consumer Reporting Agency Or A Credit Reporting Agency.
Credit Caps
See Caps.
Credit Card
A Card Indicating That The Holder Has Been Granted A Line Of Credit. It Enables The Holder To Make Purchases And/Or Withdraw Cash Up To A Prearranged Ceiling; The Credit Granted Can Be Settled In Full By The End Of A Specified Period Or Can Be Settled In Part, With The Balance Taken As Extended Credit. Interest Is Charged On The Amount Of Any Extended Credit And The Holder Is Sometimes Charged An Annual Fee.
Credit Card Account
Agreement
A Written Agreement That Explains The• Terms And Conditions Of The Account,• Credit Usage And Payment By The Cardholder, And• Duties And Responsibilities Of The Card Issuer.
Credit Card Debt
Consolidation Loan
Credit Card Debt Consolidation Loan Is Availed From A Bank In
Order To Pay Off All Credit Card Debts.
Credit Card Issuer
Any Financial Institution That Issues Bank Cards To Those Who
Apply For Them.
Credit Card
Company
A Company Which Owns The Trademark Of A Particular Credit Card,And May Also Provide A Number Of Marketing, Processing Or Other Services To Its Members Using The Card Services.
Credit Counseling
Credit Counseling Is A Consultancy Session Where The Credit Counselor Suggests Debt Relief Solutions And Debt Management Solutions To The Clients.
Credit Disability Insurance
A Type Of Insurance, Also Known As Accident And Health Insurance, That Makes Payments On The Loan If You Become Ill Or Injured And Cannot Work.
Credit Life Insurance
A Type Of Life Insurance That Helps Repay A Loan If You Should Die Before The Loan Is Fully Repaid. This Is Optional Coverage.
Credit Limit
Limit On The Credit Exposure A Payment System Participant Incurs Vis-À-Vis Another Participant (Bilateral Credit Limit) Or Vis-À-Vis All Other Participants (Multilateral Credit Limit) As A Result Of Receiving Payments That Have Not Yet Been Settled.
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.
Credit Repair Organization
A Person Or Organization That Sells, Provides, Performs, Or Assists In Improving A Consumer’S Credit Record, Credit History Or Credit Rating (Or Says That That They Will Do So) In Exchange For A Fee Or Other Payment. It Also Includes A Person Or Organization That Provides Advice Or Assistance About How To Improve A Consumer’S Credit Record, Credit History Or Credit Rating. There Are Some Important Exceptions To This Definition, Including Many Non-Profit Organizations And The Creditor That Is Owed The Debt.
Credit Report
A Detailed Report Of An Individual’S Credit History Prepared By A Credit Bureau And Used By A Lender In Determining A Loan Applicant’S Creditworthiness.
Credit Score
A Number, Roughly Between 300 And 800, That Measures An Individual’S Credit Worthiness. The Most Well-Known Type Of Credit Score Is The Fico® Score. This Score Represents The Answer From A Mathematical Formula That Assigns Numerical Values To Various Pieces Of Information In Your Credit Report.
Credit Transfer
A Payment Order Or Possibly A Sequence Of Payment Orders Made For The Purpose Of Placing Funds At The Disposal Of The Beneficiary. Both The Payment Instructions And The Funds Described Therein Move From The Bank Of The Payer/Originator To The Bank Of TheBeneficiary, Possibly Via Several Other Banks As Intermediaries And/Or More Than One Credit Transfer System.
Credit Transfer
System
A Funds Transfer System Through Which Payment Orders Move From (The Bank Of) The Originator Of The Transfer Message Or Payer To (The Bank Of) The Receiver Of The Message Or Beneficiary.
Credit
Institution
The Definition Given To A “Bank” In The European Union. The First Ec Banking Directive Defines It As An Undertaking Whose Business Is To Receive Deposits Or Other Repayable Funds From The Public And To Grant Credits For Its Own Account.
Credit
Risk/Exposure
The Risk That A Counterpart Will Not Settle An Obligation For Full Value, Either When Due Or At Any Time Thereafter. In Exchange-For value Systems, The Risk Is Generally Defined To Include Replacement Cost Risk And Principal Risk.
Creditworthiness
It Is The Capacity Of A Borrower To Repay The Loan / Advance
In Time Along With Interest As Per Agreed Terms.
Cross-Border
Netting Scheme
An Arrangement To Net Positions Or Obligations Between Or Among Parties In More Than One Country Or Jurisdiction. See Also Netting.
Cross-Border
Settlement
An Arrangement To Net Positions Or Obligations Between Or Among Parties In More Than One Country Or Jurisdiction. See Also Netting.
Cross-Border
Trade
A Settlement That Takes Place In A Country Other Than The
Country In Which One Trade Counterparty Or Both Are Located.
| Cross-Currency Settlement Risk | A Trade Between Counterparties Located In Different Countries. |
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.
Crossmargining
Agreement
A Trade That Requires Cross-Border Settlement.
Cross-System
Settlement
A Settlement Of A Trade That Is Effected Through A Link
Between Two Separate Securities Transfer Systems.
Crypt analysis
Area Of Cryptography Dedicated To Studying And Developing Methods By Which, Without Prior Knowledge Of The Cryptographic Key, Plain text May Be Deduced From Cipher text.
Cryptographic
Algorithm
A Mathematical Function Used In Combination With A Key That Is Applied To Data To Ensure Confidentiality, Data Integrity And/Or Authentication. Also Called Cipher.
Cryptography
The Application Of Mathematical Theory To Develop Techniques AndAlgorithms That Can Be Applied To Data To Ensure Goals Such AsConfidentiality, Data Integrity And/Or Authentication.
Csd
See Central Securities Depository.
Csda
See Contractual Settlement Date Accounting.
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 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.
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%.
Current
Exposure
The Loss That Would Be Incurred Today On A Contract Or Set Of Contracts If A Counterparty Failed To Perform On Its Obligations. Also Known As Replacement Cost, Current Exposure Is What It Would Cost To Replace A Given Contract If The Counterparty Defaulted Now. See Also Potential Future Exposure.
Custodian
An Entity, Often A Bank, That Safekeeps And Administers Securities For Its Customers And That May Provide Various Other Services, Including Clearance And Settlement, Cash Management, Foreign
Exchange And Securities Lending.
Custody
The Safekeeping And Administration Of Securities And Financial
Instruments On Behalf Of Others.
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.
Custody Risk
The Risk Of Loss Of Securities Held In Custody Occasioned By The Insolvency, Negligence Or Fraudulent Action Of The Custodian Or Of A Subcustodian.
Custody-Only
Link
A Link Between Two Securities Settlement Systems (sss) Which Enables Transactions In Securities Held In Sss1 To Be Settled Using Sss2 (Rather Than Sss1) When The Buyer And Seller Are Both Participants In Sss2. Custody-Only Links Do Not Provide For The Transfer Of Funds Between Sss1 And Sss2 And Cannot Be Used ToSettle Transactions Between A Participant In Sss1 And AParticipant In Sss2.
Customer
A Buyer, Seller Or Holder Of Securities And Financial Instruments That Does Not Participate Directly In A System. A Participant’S Holdings In A System Often Include Securities And Financial Instruments Of Which The Participant’S Customers Are The Beneficial Owners.
Customer-Tocustomer
Transfer
See Transferability.
Cut-Off Time
A Time Of Day Established By A Bank For Receipt Of Deposits. After The Cut-Off Time, Deposits Are Considered Received On The Next Banking Day.
To Be Continued->>>>>>
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