The terms used in banking business such as Support Level,Syndicate,Take-out Merger,Systematic Risk etc.
This post explains about terms used in banking such as Stabilization Policy,Standby Letter of Credit,Statutory Audit,Stop payment,Subordinated Bond,Substandard Assets,Supervisory Review Process,Support Level,Syndicate,Take-out Merger,Systematic Risk 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
Stabilization Policy:It is Government economic policy announced at reducing the cyclical and other fluctuations that take place in a market economy.
Stag: speculator who buys shares at issue to sell them as soon as they trade on the market. Also called flippers.
Stagflation:It is a state of the economy in which economic activity is slowing down, but wages and prices continue to rise. The term is a blend of the words stagnation and inflation.
Stakeholder: Any individual or group who has an interest in a firm; in addition to shareholders and bondholders, includes labour, consumers, suppliers, the local community, and so on.
Standard Setting:The Standard Overdraft Setting is automatically applied to new consumer accounts (excluding SafeBalance Banking® accounts, which are automatically set to the Decline All Setting).
Standby Letter of Credit: A guarantee issued by a bank, on behalf of a buyer that protects the seller against non-payment for goods shipped to the buyer. The buyer pays the seller directly for the goods and only if the buyer fails to pay does the seller claim under the Standby Letter of Credit.
Statement: All transactions in a bank account for a period of time. Statements are usually given once a month.
Statutory Audit: By law, certain companies need to have their accounts audited by suitably qualified accountants. This is called a statutory audit.
Stealth mode - a firewall is said to be in stealth mode if it doesn't actively respond to connections on a particular port, even if that port is operational.
Stock Splits: Wholesale changes in the number of shares. For example, a two for one split doubles the number of shares but does not change the share capital.
Stocks: Traded on a stock exchange, these are shares in a company. Essentially, one purchases shares in an exchange for owning a part of a company.
Stop Out: The lowest price that the US. Treasury will accept for a new issue of bills, notes, or bonds in a particular auction.
Stop payment: A request that the bank not pay a check or payment you have written or authorized. Stop-payment orders are generally placed for checks that have been lost or stolen, or in situations where a purchase is disputed. Stop payment orders generally expire after 6 months and a fee is usually charged for this service.
Stop Payment: You can request the bank to not honour (stop) the payment of a written cheque from your account. The stop payment request must be given before the cheque is cashed.
Stress testing: Stress testing is used to evaluate a bank's potential vulnerability to certain unlikely but plausible events or movements in financial variables. The vulnerability is usually measured with reference to the bank's profitability and /or capital adequacy.
Subordinated Bond: An issue that ranks after secured debt, debenture, and other bonds, and after some general creditors in its claim on assets and earnings. Owners of this kind of bond stand last in line among creditors, but before equity holders, when an issuer fails financially.
Subordinated debt:Refers to the status of the debt. In the event of the bankruptcy or liquidation of the debtor, subordinated debt only has a secondary claim on repayments, after other debt has been repaid.
Sub-prime loans: high-risk loans to clients with poor or no credit histories.
Subscription: An agreement to purchase a certain offering for a specific price. The offer is not binding unless it is accepted by the properly authorized representatives of the issuer. Also refers to the order made for the purchase of new securities.
Substandard Assets: A substandard asset would be one, which has remained NPA for a period less than or equal to 12 months. Such an asset will have well defined credit weaknesses that jeopardize the liquidation of the debt and are characterised by the distinct possibility that the banks will sustain some loss, if deficiencies are not corrected.
Substantial Shareholder: A person acquires an interest in relevant share capital equal to, or exceeding, 10% of the share capital.
Substitute Check:A paper reproduction of the original check that: 1) Contains an image of the front and back of the original check; 2) Bears a MICR line containing all the information appearing on the MICR line of the original check, except as provided under generally applicable industry standards for substitute checks to facilitate the processing of substitute checks (regulations may contain exceptions); 3) Conforms, in paper stock, dimension, and otherwise, with generally applicable industry standards for substitute checks; and 4) Is suitable for automated processing in the same manner as the original check. Also called Image Replacement Document (IRD): This term is used by the Accredited Standards Committee in the technical specification for substitute checks (X9.90).
Supervisory Review Process (SRP): Supervisory review process envisages the establishment of suitable risk management systems in banks and their review by the supervisory authority. The objective of the SRP is to ensure that the banks have adequate capital to support all the risks in their business as also to encourage them to develop and use better risk management techniques for monitoring and managing their risks.
Support Level: A price at which buyers consistently outnumber sellers, preventing further price falls.
Surplus Value: It is the difference between the amount paid to a factor and the revenue earned by selling the output it produced.
Swap rates: the borrowing rates between financial institutions.
Swap: An agreement for an exchange of payments between two counterparties at some point(s) in the future and according to a specified formula.
Swap: The sale of a block of securities and the purchase of another block with similar market value. May be made to achieve many goals, including establishing a tax loss, upgrading credit quality, or extending or shortening maturity.
SWOT: Acronym for Strengths, Weakness, Opportunities and Threats; an approach to formulating firm strategy via assessment of a firm’s capabilities in relation to the business environment.
Syndicate: A partnership of banks or brokers that join together in enterprises that are too large for any member to handle individually. An investment banking syndicate is headed by a manager who has made a successful bid for the wholesale purchase of a securities lot. The syndicate members agree to distribute a specified amount of the securities. The manager may allot the securities to them on a pro-rata or other agreed-upon basis. On final distribution of all securities, the syndicate is broken, and the obligation of all members to the terms of the agreement is terminated. See Underwriter.
Syndicated Loans: Loans to a company backed by a group of banks in order to share the risk in a large transaction among several financial institutions. There is usually a lead bank and several participating banks.
Synergy: The “2 + 2 = 5” effect. The output of a combination of two entities is greater than the sum of their individual outputs.
Systematic Risk: The risk that the failure of one participant in a payment or settlement system, or in financial markets generally, to meet its required obligations when due will cause other participants or financial institutions to be unable to meet their obligations (including settlement obligations in a payment and settlement system) when due.
Take-out Merger: The second-step transaction which merges the acquired firm into the acquirer and thus takes out the remaining target shares which were not purchased in the initial (partial) tender offer.
Taking a Position: The activities of a dealer who purchases a block of a certain security as inventory for the purpose of resale at a profit.
The above details describes about terms called in banking such as Stabilization Policy,Standby Letter of Credit,Statutory Audit,Stop payment,Subordinated Bond,Substandard Assets,Supervisory Review Process,Support Level,Syndicate,Take-out Merger,Systematic Risk 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 Security Dealer,Selective Credit Control ,Senior Securities etc.
Related posts about free online training on import and export trade:
How to export your product?
How to import your product?
Click here to know HS code of your product
12 Major risks and solutions in Imports and Exports
Bank Pre shipment Finance to exporters
Export Promotion Councils and Commodity Boards, product wise
MEIS scheme for Indian Exporters
Mode of payments in international trade
Specimen format of LUT for DGFT
List of Towns of Export Excellence
LC payment under Duty credit scrip and Export Obligation
How to claim scrips from DGFT, if eBRC, EP copy of shipping bill lost?
Import from US to India, Foreign Trade Policy of India 2015-20
Travelers to India under import duty exemption, Frequently Asked Questions Part 2
Triangular export
How to make DA mode of payment safe
How to make delay in delivery of Shipment?
How to minimize import cargo clearance time? An open logic proposal to WTO