ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ

ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ

Table of Contents

ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ

পরিশিষ্ট-২ [ ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ ]

1. Accelerated depreciation:

A method of computing depreciation deductions for income taxes that permits deductions in early years greater than those under straight line depreciation.

2.Account activity:

Transactions associated with a deposit account, including home debits, transit checks, deposit, and account maintenance.

3. Account analysis:

An analytical procedure for determining whether a customer’s deposit account or entire credit-deposit relationship with a bank is profitable. The procedure compares revenues from the account with the cost of providing services.

4. Account maintenance:

The overhead cost associated with collecting information and mailing periodic statements to depositors.

5. Accrual:

The accumulation of income. eamed or expenses incurred, regardless of when the underlying cash flow is actually received or paid.

6. Accrued interest:

Interest income that is eamed but not yet received.

7. Acid-test ratio:

A measure of liquidity from reported balance sheet figures with a targeted minimum value of

1. Calculated as the sum of cash and marketable, securities divided by current liabilities.

8. Activity charge:

A service charge based on the number of checks written by a depositor

9. Add-on rate:

A method of calculating Interest charges by applying the quoted rate to the entire amount advanced to a borrower times that of financing periods. An 8 percent add-on rate indicates $1,000 for 1 year. $160 for 2 years, and so forth. The effective interest rate is higher than the add-on rate is because the borrower makes installment payments and cannot use the entire loan proceeds for the full maturity.

10. Adjustable rate mortgage

A mortgage with an interest rate that can be adjusted with changes in a base rate or reference index. The index generally varies with market interest rates

11. Affiliated

Any organization owned or controlled by a bank or bank holding company, the stockholders, or executive officers.

12. Agency

A trust account in which te to property remains in the owner’s name.1 13. Agency securities: Fixed income securities Issued by agencies owned or sponsored by the federal govemment. The most common securities are issued by the Federal government. The most common securities are issued by the Federal Home Loan Bank Federal National Mortgage Association, Government National Mortgage Association, and Farm Credit System.

14. Aging accounts receivable

A procedure for analyzing a firm’s accounts receivable by dividing them into groups according to whether they are current or 30, 60, or over 90 days past due.

পরিশিষ্ট-২ [ ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ ]

15. Automated Clearing House:

A clearing house where the information enters the system in an electronically readable form, such as magnetic tape.

16. Amortize

A process where the level of debt is gradually reduced by making equal periodic payments that cover interest and principal owed.

17. Anticipated Income Theory:

The theory that loans should have appropriate repayment schedules based on the expected cash flow.

18. Appraisal Fee:

The charge for estimating the value of property offered as security.

19. Appreciation

An increase in the market value of an asset.

20. Arbitrage:

The simultaneous trading (purchase and sale) of assets to take advantage of price differentials.

21. ARM Adjustable Rate Mortgage

A mortgage in which the contractual interest rate is tied to some index of interest rates and changes when supply and demand conditions change the underlying index.

22. Ask price

The price at which an asset is offered for sale.

23. Asset-liability management

The management of a bank’s entire balance sheet achieve desired risk-return objectives and to maximize the market value of stockholder’s equity.

24. Asset utilization:

Ratio of total operating Income to total assets; a measure of the gross yield eamed on assets.

25 Assignment:

The transfer for the legal right or Interest on an asset on another party.

26. Automatic teller machine

A machine that serves as a computer terminal and allows a customer to access account balances and Information on a bank

27. Average Loan Balance:

The sum of the average of all outstanding loans of the customer and affiliated accounts for the analysis period.

28. Bank Acceptance:

A draft drawn on and accepted by a bank, making it a negotiable Instrument.

29. Lending Limit:

The maximum amount that can be loaned to a single borrower.

30. Bank Soundness:

The strength of the bank as reflected by its level of capital, assets and liabilities

31. Bankwire:

An electronic communication network owned by an association of banks and used to transfer messages between subscribing banks.

[message not payments]

32. Bad debts:

Loans that are due but are uncollectable.

33. Balance Sheet:

A financial statement that Indicates the type and amount of assets, liabilities, and not worth of a firm or individual at a point in time.

34. Ballon loan:

A loan that requires small payments that are insufficient to pay off the entire loan so that a large final payment is necessary at termination.

35. Bank holding company:

A firm that owns or controls at least one commercial bank.

36. Banker’s bank:

A firm that provides correspondent banking services to commercial banks and not to commercial or retail deposit and loan customers.

37 Bankrupt:

The situation in which a borrower la unable to pay obligated debts.

38. Base rate:

An interest rate used as an index to price loans; typically associated with a bank’s weighted marginal cost of funds.

39. Basic banking

Low-cost deposits and other services that are designed to meet the banking needs of customers of limited means. It is also known as life line banking.

39. Basis

With financial futures contracts, t futures rate minus the cash rate. 40. Basis point: 1/100 of 1 percent, or 100 basis points equals 1 percent

41. Basis risk:

The uncertainty that the future rate minus the cash rate will vary from the expected.

42. Beneficiary:

The recipient of the balanca a trust account upon termination of the th

43. Bid price:

The price at which someone offered to buy an assot.

44. BIF

Bank Insurance Fund which inte deposits at commercial banks

45. Board of Directors:

Individual elected by stockholders to manage and oversee a f operations.

পরিশিষ্ট-২ [ ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ ]

46. Bond:

An interest-bearing security representing a debt obligation of the issuer

47. Bond rating:

The subjective assessment d the likelihood that a borrower will make tney interest and principal payment as scheduled Lotters are assigned to a security by rating agencies to reflect estima creditworthiness.

48. Book value:

Accounting value typicaly measured depreciation. as historical cost minus depreciation.

49. Branch Banking:

An organizational struct in which a bank maintains facilities that a part of the bank in offices different from b home office. Some states allow banks to s up branches through the state, county a city. Others prohibit branches.

50. Call loan:

A loan that is callable on 24 hours’ notice.

51. Call option:

An agreement in which t buyer has the right to buy a fixed amount of the underlying asset at a set price for a specified period of time.

52. Call provision:

A provision in a bond r allows the issuer to redeem the bond typically at a maturity. premium over par pr

53. Cap

Use of options to place a ceiling on firm’s borrowing costs.

54. Capital

Funds subscribed and paid stockholders representing ownership bank. Regulatory capital also includes d components and loss reserves.

55. Capital gain (loss)

Prolit (loss) resulting from the sale of an asset for more (less) than its purchase.

56. Card bank

Bank that administers its own credit card plan or serves as a primary regional agont of a national credit card operation.

57. Cash budget

A comparison of cash receipts and cash expenditure over a period of time.

58. Cash Letter:

Transit letter on tape that lists items submitted between banks for collection

59. Cash Management Services

A bank agrees to handle cash collections and disbursements for a business firm and to invest any temporary cash surpluses In Interest-bearing securities until those funds are needed for spending.

60. Cash market:

The spot market for the Immediate exchange of goods and services for immediate payment.

61. Cash-to-cash asset cycle:

The time it takes to accumulate cash, purchase inventory. produce a finished good, sell it, and collect on the sale.

62. Consumer Bank:

A bank that does not make commercial loans.

63. Conventional Mortgage

A mortgage or liquidating [to meet liquidity needs of the deed of trust that is not obtained under a govemment-insured program.

64. Core Capital

Tier 1 capital consisting primarily

66. Core deposits:

A base level of deposits a bank expects to remain on deposit, regardless of the economic environment.

67. Credit bureau:

An association that collects and provides Information on credit(payment) histories of borrower.

68. Camel Rating:

An Uniform Interagency Bank Rating System.

69. Cap:

Use of options to place a ceiling on a firm’s borrowings costs

70. Capital Adequacy:

A level of capital that will allow bank to absorb (loan)losses and still have adequate funds to maintain and operate the bank as a going concem.

71. Capital Market:

The market for long term (usually more than one year) debt or equity issues.

72. Card Bank:

Bank that administers its own credit card plan or services as a primary regional agent of a national credit card operation

73. Cash Letter

Transit letter on tape that Ests Items submitted between banks for collection.

74. Cash Market:

The spot market for the Immediate exchange of goods and services for immediate payment.

75. Cash-to-cash asset cycle:

The Sme it takos to accumulate cash, purchase Inventories produce a finished good, sell it and collect on the sale.

76. Cash-to- cash liability cycle:

The length of time to obtain interest -free financing from suppliers in the form accounts payable and accrued expenses.

77 Cash-to-working capital:

The timing difference between the cash-to- cash asset cycle and the cash-to-cash liability cycle.

78. Charge- off

The act of writing off a loan to its present value in recognition that the asset has decreased in value.

79. Charter

A document that authorizes a bank to conduct business.

80. Certificate of Deposit [CD]:

A time deposit with a specific maturity evidenced by a certificate that can be either negotiable or nonnegotiable.

81. CD Yield Rate:

The interest paid on a CD expressed as a percentage of market value.

82. Collateral:

Security pledged to assure repayment of a loan.

83. Collaterised Loan:

A loan for which security or collateral is provided to assure repayment 84. Commercial Loan Theory: Loans should be for business purposes, short-termed self- bank

85. Concentration of Loans:

The extent to which a portion of the loan portfolio is invested in a geographic area, industry, or type of loan.

86. Contemporaneous Reserve Accounting [CRR]:

A process for calculating reserve requirements on the basis of deposits held during the same period.

87 Correspondent bank:

A bank that accepts the deposits and performs other financial services for respondent.

88. Correspondent services:

Services provided a bank for another bank. Typical services are check clearing, loan participation, and computer assistance.

পরিশিষ্ট-২ [ ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ ]

89. Credit Card

Cards utilized to purchase goods and/or services on credit, in contrast to debit cards which are used to withdraw cash from ATMs. Technological changes are rapidly changing the capability and use of the credit card.

90. Credit file:

A paper or electronic file containing loan, memoranda and other Information related to the borrower and the relationship to the bank. denominated in US dollars at barks a other financial institutions out side t United States.

91. Credit or default risk

The probability of being unable to meet the terms of a credit contract

92. Credit scoring system:

A statistical model used to rate the creditworthiness of a loan applicant.

93. Creditworthiness:

The willingness and ability of an individual or business to repay debts.

94. Customer needs:

Recognition of the customer preferences must be addressed in  planning fund sources and uses.

95. Daylight overdrafts:

Bank payments from deposits held at a Federal Reserve bank or correspondent bank in excess of actual collected balances during a day.

96. Debit Card:

A plastic card that, when used, Immediately reduces the balances in a customers transactions deposit.

97. Default risk or credit risk:

Failure to meet the terms of a credit or loan contract.

98. Demand Deposit:

that are payable on demand.

99. Deposit Liquidity:

The cash or working reserves provided to a bank by the inflow of Deposits.

100. Discount Window:

The process of Federal Reserve banks lending to member institutions.

101. Dividend Policy:

The determination of the level of eamings to be paid out as common stock holder dividends.

102. Draft:

A signed written order directed by one person drawer] to another person [drawee] ordering the latter to pay a

specified amount of money to the order of a third person.

103. Dual Banking System:

A banking system in which commercial banks are chartered and regulated by two different govemmental units.

104. Effective Yield:

The calculated yield that reflects the results of compounding as opposed to a quotation of an annual rate of Interest.

105. EFTS:

Acronym for electronic funds transfer system.

106. Earning Risk

The risk to a bank’s net Income after taxes (its bottom line), which normally flows to its stockholders.

107. Eurodollars:

Deposit balances denominated in U.S dollars at banks and other financial institutions out side the United Stsates.

108. Exchange Rate:

The exchange relatione [ratio] between specific currencies.

109. Facility Fee:

Fee imposed for a making a line of credit available.

110. Financial Innovations:

Changes or new ways to do business-new product services-that are implemented to overcome limitations [frequently regulatory constraints].

111. Financial Risk:

The risk of being unable meet debt service obligations.

112. Foreign Branches:

An organizatora structure of foreign banks that empowered to engage in a full range d

banking activities.

113. Fraud Risk:

The risk of loss due dishonesty, deceit, or misconduct on the part of bank of officers, employees or customers.

114. Funding Risk:

Sometimes called volaty risk, the probability that funds will be withdrawn from the bank within a stor period of time.

115. Funding Gap:

The difference between current and projected and deposit flows t creates a need for raising additional bark reserves or for profitably investing any excess reserve that may arise.

116. Garnishment:

A court directive authorizing a bank to withhold funds from a borrower.

117, Global Bank:

A bank that is pursuing a strategy where one is servicing the worlds centers of economic activities with a full range of financial services -retail banking mortgage, corporate, and in some cases Investment banking services.

পরিশিষ্ট-২ [ ব্যাংক ব্যবসায়ে ব্যবহৃত নির্বাচিত টার্মসমূহ ]

118. Home debit:

A check drawn on a bank th is presented to the same bank for deposit or payment.

 119. Home equity loan:

Loan secured by individual’s equity in a home.

120. Home Banking:

The use of computer terminals in the hore to access bank accounts and execute transactions.

121. Independent bank:

A bank operating in one locality that is not part of a large multi bank holding company or group of banks.

122. Installment Loan

A loan that is payable in periodic, partial installments.

123. Inter-locking directors:

Directors serving on the boards of more than one institution

124. Investment Banking

Activity involving securities underwriting, making a market in securities, and arranging mergers and acquisitions.

125. Judgment Credit Analysis

Subjective assessment of a borrower’s ability and willingness to repay debts.

126. Kite

Writing checks against uncollected deposits in the process of clearing through the banking system.

127. Legal Reserves

Assets that by law must be held behind a bank’s deposits these assets consists of vault cash and deposits at the central bank.

128. Letter of Credit

A bank’s guarantee of payment, indicated by a document that describes the handling of a specific transaction.

129. Lien

Legal right granted by the court to attach property until a legal claim is paid.

130. Liquidity

Access to sufficient immediately spendable funds at reasonable cost exactly when those funds are needed.

131. Liquidity Gap

Whenever sources and uses of liquidity for a bank do not match, measured by the size of the total money difference between sources and uses of liquid funds.

132. Liquidity Indicators:

Certain bell whether financial ratios are employed in order to estimate a bank’s liquidity needs and to monitor changes in its liquidity position.

133. Liquidity risk:

The variation in net income and market value of bank equity caused by a bank’s difficulty in obtaining immediately available funds, either by borrowing or selling assets.

134. Line of Credit:

Informal arrangements, either verbal or written. ir.dicating that a certain amount of credit will be available for a specified time period. A formal agreement of a similar nature is called a loan commitment.

135.Liquidity Management:

The estimation of the demand for funds and the provision of adequate reserves to meet those needs.

136. Loan audit:

A periodic review of the loan portfolio by an Individual other than the originating loan officer

137. Loan commitment

Formal agreement between a bank and borrower to provide a fixed amount of credit for a specified period.

138. Loan participation:

Credit extended to a borrower in which members of a group of lenders each provide a fraction of the total nfinancing typically arises because individual banks are limited in the amount of credit they can extend to a single customer.

139. Loan-to-value ration

The loan amount divided by the appraised value of the underlying collateral.

140. Loan handling costs:

The expenses incurred in lending operations, such as loan department overhead salaries for loan analyst, legal fees, and credit reports.

141 Loan Participation

Agreement under which a bank will sale a portion of large loan for a period equal to the loan’s time to maturity so that the sale ends when the loan matures.

142.Loan Options:

A device to lock in the amount and cost of borrowing for designated time period by allowing a customer to borrow at a guaranteed interest rate regardless of how market interest rates change subsequently until the option expires.

143. Loan Policy:

A set of rules and procedures to guide lending officers through the credit decision process.

144. Loan Portfollo:

All of the bank’s loan at a specific point in time.

145. Loan Sales

A form of investment banking in which the banker trades on his or her superior ability to evaluate the credit worthiness of borrowers and sells some of the loans the bank has made to other investors who value the bank’s expertise in assessing credit quality.

146. Loan strips

The sale of a portion of a large loan for a short period of time, usually for a period less than the loan’s remaining time to maturity.

147 Member Bank:

A bank that is a member of the Federal Reserve System.

148. Merchant Bank:

A bank that arranges loans and underwriter the sale of loans and securities that are funded by others.

149. Margin

Deposit with a broker that protects the broker from losses arising from customer transactions.

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150. Maturity:

The date at which the principal of a note, draft, or bond becomes due and payable.

151. Mortgage:

A contract whereby a borrower provides a lender with a lien on real property as security against a loan.

152. Off-balance sheet activities:

Commitments, such as loan guarantees, that do not appear on bank’s balance sheet but represent actual contractual obligations.

153. Overdraft

Depositor writing power to withdraw from his account.

154. Nondeposit Borrowing:

Funds obtained from the sale of large CDs, federal funds, repurchase agreements, Eurodollar borrowing, discounts and advances from the FRB, and commercial paper

155. Nonperforming Loans:

A loan on which the interest payments is past due.

156. Nonprice Competition:

Competition for deposits that does not result in the financial institution paying higher rates of interest, but rather in the use of premiums, longer office hours, and other free services or customer benefits

157 Off-balance sheet liabilities:

Liabilities not reflected on the balance sheet, such as a backup line of credit or other contingent liability.

158. Overnight Loans:

A loan that is made on a given date and reversed the next day. The common example is the sale of federal funds.

159. Overdraft:

Depositor writing a cheque for an amount greater than the balance lying in the account.

160. Point of Sale:

Electronic terminals that accounts.

161. Permissible nonbank activities:

A enable customers to directly access deposit financial activity deemed closely related to and a proper incident of commercial banking under Section 4[c] 8 of the Bank Holding Company Act.

162. Personal Banker:

Individual assigned to a bank customer to handle a broad range of financial services

163. PEST The four types of external influences on a financial institution:

1 Political change 2 Economic change 3. Sociological change; and 4. Technological change.

164. Prime rate:

Historically the interest rate charged by banks to their most creditworthy customers.

165. Problem Loans:

Loans that are in default or are expected to become delinquent in the near future.

166. Project Loans

Credit designed to finance the construction of fixed assets associated with a particular investment project that is expected to generate a flow of revenue in the future period sufficient to repay the loan and tum a profit.

167 Rebate:

The return of a portion of unearned Interest to a borrower

168. Repurchase Agreement [RP]:

Short-term loans secured by govemment securities and settled immediately available funds.

169. Repos:

A security transaction in which a holder of the securities sells them to another party with an agreement to repurchase them at a fixed price on a given date.

170. Reserve for Bank debts:

Amount appearing on a bank’s balance sheet that represents the estimated value of uncollected loans.

171. Reserve

Qualifying assets to meet reserve requirements including vault cash and deposit balances held at the central bank.

172. Reserve Repurchase Agreement:

Securities purchased under an agreement to resell at a later date.

173. Retail Bank’s

Small consumer-oriented banks that sale the majority of their services to households and smaller businesses.

174. Retail Risk

Smaller-denomination loans extended to individuals and families as well as to smaller business.

175. Revolving Credit:

An arrangement by which the borrower may borrow and repay as needed during a specified time period, subject to a maximum borrowing level.

178. Risk Assets

Total assets minus cash and due from balances minus Govt. securities.

179. Run on a Bank:

Situation in which a large number of depositors lose confidence in the safety of their deposits and attempt to withdraw their funds.

180. Safe deposit box:

Privacy boxes for storage located in a bank vault under lock and key life preferred

181. Secondary Capital:

Limited stock, subordinated, and mandatory securities not included as primary capital.

182. Security:

Collateral that/which the borrower pledges against a loan or secondary source of repayment in case of default.

183. Service Charge:

Fees imposed for bank services

184. Simple Interest:

Interest applied against principal only.

185. Solvency Risk

The probability that a bankwill fail

186. Subordinate debt:

Capital notes and debentures that are subordinate to the claims of depositors.

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187. Syndicate:

Group banks that jointly negotiate a contract to sell securities or make loans.

188. Takedowns:

Actual borrowings against a line of credit or loan commitments.

189. Tax Credit:

Direct reduction in tax liability arising from qualifying expenditures.

190. Time Certificate of deposit:

Deposits with specific maturity dates. Evidenced by negotiable or nonnegotiable certificates.

191. Time deposit open account:

Deposits other than time certificate for which written notice of withdrawal must be given in advance.

192. Transaction Account:

Deposit Account on which a customer can write cheques

193. Transit item:

Cheques drawn on banks located out-side the community of the bank in which they are deposited.

194. Trust:

A property interest held by one party for the benefit of another.

195. Trustee:

Individual or firm charged with managing trust assets.

196. Undesirable Loans:

Loans that have speculative characteristics, are outside the bank’s trade area or area of expertise, or loans for speculative purposes.

 197. Underwrite:

Purchase securities from the initial issuer and distribute them to investors.

198. Unsecured Loans:

Loans without collateral or security based on the good name of the borrower

199. Valuation Reserve:

Loan loss reserve reported on the Balance Sheet, losses can be charged only against this reserve.

200. Volatile Deposits:

Those deposits that are Eikely to leave the bank during the planning period.

201. Volatility Risk:

The probability that funds will be withdrawn from the bank in the near future [see funding risk) 202. Warehouse Receipt: A receipt issued by a warehouseman engaged in the business of storing goods for hire.

203. Wholesale Banks

Large metropolitan bank’s offering large-denominations loans, mainly to corporations

204. Will:

A formal written instrument by which a person gives explicit instructions regarding the disposition to be made of his property after his death

205. Wire Fate:

An instruction accompanying an item sent to an out- of- town bank requesting that the sending bank be notified by wire whether or not the item is paid

206. Wire Transfer

A transaction activated by telephone, telegram, or cable instructions between banks to pay or credit a sum of money to a designated payee,

207. Writ Attachment

A document issued by direction of a court of law which may be served on banks or anyone in possession of assets of the debtor.

208. Write-out

To completely write in figures and words the amount of Cheque along with other needed things including signature of the payee.

209.Withdraw:

To take out money from the Account of a Deposit holder through cheque of otherwise.

210. Work-space

The space available on a computer for temporary work.

211. Zero Out Proof

A method of proof whereby a control figure is first entered into a machine or system from which all posted items are then successfully .subtracted. When the posting run is completed a zero balance indicates that all items included in the control total have been correctly entered.

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