Terms used in banking business such as Capital Adequacy Ratio,Capital Funds,Cash Reserve Ratio ,Census,Certificate of Deposit etc

 

 

The terms used in banking business such as Capital Adequacy Ratio,Capital Funds,Cash Reserve Ratio ,Census,Certificate of Deposit etc.

 

 

This post explains about terms used in banking such as Capital Adequacy Ratio,Capital Funds,Capital Gain and Loss,Capital investments,Capital Structure,Capitalism,Capital-labour Ratio,cardholder agreement,Cash advance,Cash Credit,Cash Letter,Cash Reserve Ratio ,Census,Certificate of Deposit etc.These terms used in international business are arranged in alphabetical order and you may add more information about terms used in export business at the end of this article, if you wish.

 

The terms used in banking business

 

Capital Adequacy Ratio (CAR): A ratio of total capital divided by risk-weighted assets and risk-weighted off-balance sheet items. A bank is expected to meet a minimum capital ratio specifically prescribed by the Regulator.

 

Capital budget: The list of planned capital expenditures prepared usually annually

 

Capital Budgeting: Capital budgeting represents the process of preparing budget for a period of a year or even for several years allocating capital outlays for the various investment projects. In other words, it is the process of budgeting capital expenditure by means of an annual or longer period capital budget.

 

Capital Funds: Equity contribution of owners. The basic approach of capital adequacy framework is that a bank should have sufficient capital to provide a stable resource to absorb any losses arising from the risks in its business. Capital is divided into different tiers according to the characteristics / qualities of each qualifying instrument. For supervisory purposes capital is split into two categories: Tier I and Tier II. Tier I Capital:A term used to refer to one of the components of regulatory capital. It consists mainly of share capital and disclosed reserves (minus goodwill, if any). Tier I items are deemed to be of the highest quality because they are fully available to cover losses Hence it is also termed as core capital. Tier II Capital:Refers to one of the components of regulatory capital. Also known as supplementary capital, it consists of certain reserves and certain types of subordinated debt. Tier II items qualify as regulatory capital to the extent that they can be used to absorb losses arising from a bank's activities. Tier II's capital loss absorption capacity is lower than that of Tier I capital.

 

The terms used in banking business such as Capital Adequacy Ratio,Capital Funds,Cash Reserve Ratio ,Census,Certificate of Deposit etcCapital Gain and Loss:The difference between the price that is originally paid for a security and cash proceeds at the time of maturity (face value of bond) or at the time of sale (selling price of a bond or stock). When the difference is positive, it is a gain, but when it is negative, it is a loss.

 

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

 

Capital investments: Money used to purchase permanent fixed assets for a business, such as machinery, land or buildings as opposed to day-to-day operating expenses.

 

Capital Market: Capital market is the market which gives medium term and long term loans. It is different from money market which deals only in short term loans.

 

Capital reserves:That portion of a company's profits not paid out as dividends to shareholders. They are also known as undistributable reserves and are ploughed back into the business.

 

Capital Structure: The composition of a firm’s long-term financing consisting of equity, preference shares, and long-term debt.

 

Capital: Funds invested in a firm by the owners for use in conducting the business.

 

Capitalism : Capitalism is an economic system in which all means of production are owned by private individuals Selfprofit motive is the guiding feature for all the economic activates under capitalism. Under pure capitalism system economic conditions are regulated solely by free market forces. This system is based on ‘Laissez-faire system’ i.e., no state intervention. Sovereignty of consumer prevails in this system. Consumer behaves like a king under capitalism.

 

Capital-labour Ratio: Latest models of machinery and equipment raise the labour efficiency and the output is maximized. Capitallabour ratio is the amount of capital against the given labours that a firm employs. Capital-labour ratio is the ratio of capital to labour.

 

Capture:Reading and storing data from the check MICR line to enable the funds represented by the check to move between banks and their customers.

 

cardholder agreement -- The written statement that defines and explains all legal terms for a credit card agreement. It includes payment terms, billing dispute procedures and communications guidelines, among other items.

 

Carry: The cost incurred in interest charges for financing and holding a securities inventory. See Positive Carry; Negative Carry.

 

CASA Deposit:Deposit in bank in current and Savings account.

 

cash advance fee-- A fee assessed when a card holder uses a credit card to obtain cash. These fees are often charged as a percentage of the cash obtained.

 

Cash advance: Credit card holders get one of these when they receive cash directly from the account, often through an ATM or by using a check issued by the card provider. While an advance can deliver fast cash, it typically comes with a fee of 3% to 5% of the amount, which may be capped at several hundred dollars. The interest rate the card issuer charges on this sort of borrowing can be significantly higher than the rate on purchases or balance transfers. It’s best to reserve cash advances for emergencies.

 

Cash cows: Business segments, having a high market share in low growth product markets, which generate more cash flow than needed for reinvestment.

 

Cash Credit (CC): An arrangement whereby the bank gives a short-term loan against the self-liquidating security.

 

Cash Discount: A discount given to buyers for cash rather than credit purchase.

 

Cash flow forecast:An estimate of when and how much money will be received and paid out of a business. It usually records cash flow on a month-by-month basis.

 

Cash Letter: A group of checks packaged and sent by a Bank to another Bank, clearinghouse, or a Federal Reserve office. A cash letter is accompanied by a list containing the dollar amount of each check, the total amount of the checks and the number of checks in the cash letter.

cash-- Money in the form of paper and coins (e.g., U.S. dollars and cents). In banking, this is the act of paying a check.

 

Cash Reserve Ratio (CRR): The commercial banks are required to keep a certain amount of cash reserves at the central bank. This percentage amount is called CRR. It influences the commercial bank’s volume of credit because variation in CRR affects the liquidity position of the banks and hence their ability to lend.

 

Cash Sale: A transaction calling for the delivery and payment of the securities on the same day that the transaction takes place.

 

Cashier’s check:A check issued by a bank and paid from its funds. A cashier's check will not usually bounce because the amount it is written for is paid to the bank when it is issued, and the bank then assumes the obligation.

 

cashier's check-- A check issued by a bank, drawn on its own funds rather than on one of its depositor's funds.

 

Casino banking/finance: a colloquial term used to describe an investment approach in which investors at commercial banks employ risky financial strategies to earn large rewards.

 

Census: Census gives us estimates of population. Census is of great economic importance for the country. It tells us the rate at which the total population is increasing among different age groups. In India census is done after every 10 years. The latest census in India has been done in 2001.

 

Central Bank: Central Bank may be defined as the apex barking and monetary institution whose main function is to control, regulate and stabilize the banking and the monetary system of the country in the national interest.

 

certificate of deposit -- A savings account in which an individual promises to deposit the money for a set period of time, for which the bank pays higher interest than a regular savings account.

 

Certificate of Deposit (CD):A time deposit that is payable at the end of a specified amount of time or "term." CDs generally pay a fixed rate of interest and, depending on the market rate environment, can offer a higher interest rate than other types of deposit accounts. Terms can range from 7 days to 10 years. CDs are insured by the FDIC up to applicable limits. If early withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. See "Federal Deposit Insurance Corporation."

 

Certified check:A check for which the bank guarantees payment.

 

The above details describes about terms called in banking such as Capital Adequacy Ratio,Capital Funds,Capital Gain and Loss,Capital investments,Capital Structure, Capitalism,Capital-labour Ratio,cardholder agreement,Cash advance,Cash Credit,Cash Letter,Cash Reserve Ratio ,Census,Certificate of Deposit etc. These phrases may help importers and exporters on their day to day business activities. The readers can also add more information about terms used in overseas trade below this post.Terms used in banking business such as Budget Deficit,Bull Market,Buoyancy, Business of Banking etc

 

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