Terms used in banking business such as Minimum daily balance,Minimum Payment,Mixed Economy,Maturity etc


The terms used in banking business such as Minimum daily balance,Minimum Payment,Mixed Economy,Maturity etc.



This post explains about terms used in banking such as Lump Sum Tax,Man-in-the middle,Marginal Standing Facility,Market Capitalization,Market risk,Marketability,Maturity Date,Magnetic Ink Character Recognition,Minimum daily balance,Minimum Payment,Mixed Economy,Maturity 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


Lump Sum Tax: Lump sum tax is a fixed amount which has imperative nature irrespective of the income level. This tax is not equitable in nature.


Making a Market: Any specialist permitted to act as a dealer, any dealer acting in the capacity of a block positioner, and any dealer who, with respect to a security, holds himself/herself out (by entering quotations in an interdealer communications system) or otherwise as being willing to buy and sell a security for his/her own account on a regular or continuous basis.


Malware - an abbreviation of 'malicious software', malware refers to viruses, trojans, spyware, keyloggers, diallers and browser hijackers.


The terms used in banking  business such as Minimum daily balance,Minimum Payment,Mixed Economy,Maturity etcMandate: Written authority issued by a customer to another person to act on his behalf, to sign cheques or to operate a bank account.


Man-in-the middle - an attack in which an attacker is able to read, insert and modify at will, messages between two parties without either party knowing that the link between them has been compromised. The attacker must be able to observe and intercept messages going between the two victims.


Margin Call: A notice to a client that it must provide money to satisfy a minimum margin requirement set by an Exchange or by a bank / broking firm.


Margin: A part of the value of security, which is not given as a loan by the bank or financial institution.


Margin: The difference between the collateral pledged to secure a loan and the amount of the loan itself. Federal Reserve Board requirements for margin on stocks have ranged from 40 to 100 percent of the purchase price.


Marginal Standing Facility Rate: MSF scheme has become effective from 09th May, 2011 launched by the RBI. Under this scheme, Banks will be able to borrow upto 1% of their respective Net Demand and Time Liabilities. The rate of interest on the amount accessed from this facility will be 100 basis points (i.e. 1%) above the repo rate. This scheme is likely to reduce volatility in the overnight rates and improve monetary transmission.


Market Capitalization: The total value, at market prices, of the securities at issue for a company or a stock market or sector of the stock market. Calculated by multiplying the number of shares issued by the market price per shares.


Market Capitalization: The product of the share price and number of the company’s outstanding ordinary shares.


Market Discipline: Market Discipline seeks to achieve increased transparency through expanded disclosure requirements for banks.


market economy -- An economic system permitting an open exchange of goods and services between producers and consumers, such as is found in the United States.


Market Liability Ratio: Inter-bank and money market deposit liabilities to Average Total Assets.


Market Maker: A dealer who maintains an inventory in one or more stocks and undertakes to make continuous two-sided quotes.


Market risk: Market risk is defined as the risk of loss arising from movements in market prices or rates away from the rates or prices set out in a transaction or agreement. The capital charge for market risk was introduced by the BASEL Committee on Banking Supervision through the Market Risk Amendment of January 1996 to the capital accord of 1988 (BASEL I Framework). There are two methodologies available to estimate the capital requirement to cover market risks: 1) The Standardised Measurement Method: This method, currently implemented by the Reserve Bank, adopts a 'building block' approach for interest-rate related and equity instruments which differentiate capital requirements for 'specific risk' from those of 'general market risk'. The 'specific risk charge' is designed to protect against an adverse movement in the price of an individual security due to factors related to the individual issuer. The 'general market risk charge' is designed to protect against the interest rate risk in the portfolio.2) The Internal Models Approach (IMA): This method enables banks to use their proprietary in-house method which must meet the qualitative and quantitative criteria set out by the BCBS and is subject to the explicit approval of the supervisory authority.


Market Value: The price at which a security is currently being sold in the market.


Market vs. Quote: Quote designates the current bid and asked price on a security, as opposed to the price at which the last security order was sold.


Marketability: The ease with which a security can be sold in the secondary market.


Material Alteration: Alteration in an instrument so as to alter the character of an instrument for example when date, amount, name of the payee are altered or making a cheque payable to bearer from an order one or opening the crossing on a cheque.


Maturity Date: The date by which you are expected to pay off a loan or mortgage. Also, the date on which something becomes due. For instance, if you invest in a term deposit, the day you are allowed to retrieve your money is called the maturity date.


Maturity date:The date that a CD term ends, the bank stops paying the agreed-upon interest and you can choose to take the money deposited or renew the term.


Maturity: The date that the principal or stated value of a debt instrument becomes due and payable. Also used to denote the length of time between the issue date and the due date.


Merchant Banking : When a bank provides to a customer various types of financial services like accepting bills arising out of trade, arranging and providing underwriting, new issues, providing advice, information or assistance on starting new business, acquisitions, mergers and foreign exchange.


Merit Goods: Merit goods refer those goods that are very essential to the society as a whole and hence the government ensures their availability to all consumers, regardless of their ability to pay to reasonable price.


MICR (Magnetic Ink Character Recognition) Line: Numbers printed in magnetic ink near the bottom of the front of the check to facilitate automated processing. These numbers identify the Bank the check is drawn on, the account at that Bank, the amount of the check and other information. The position and content of the MICR line are governed by industry standards.


Micro Finance: Micro Finance aims at alleviation of poverty and empowerment of weaker sections in India. In micro finance, very small amounts are given as credit to poor in rural, semi-urban and urban areas to enable them to raise their income levels and improve living standards.


Minimum daily balance:The lowest end-of-day balance in an account during a statement cycle; a certain minimum daily balance is often required with interest-bearing accounts to avoid a monthly maintenance fee or qualify for special services. See "average daily balance."


Minimum Opening Deposit: The minimum amount of money needed to open and maintain an account. Accounts that fall below the minimum balance may be subject to service charges.

Minimum Payment: The smallest amount that must be paid on a debt, such as a loan or credit card balance.


Minor Accounts: A minor is a person who has not attained legal age of 18 years. As per Contract Act a minor cannot enter into a contract but as per Negotiable Instrument Act, a minor can draw, negotiate, endorse, receive payment on a Negotiable Instrument so as to bind all the persons, except himself. In order to boost their deposits many banks open minor accounts with some restrictions.


Mixed Economy:It refers to that economic system in which both private and public sector co-exists. Indian economy is an example of a mixed economy.


Mobile Banking : With the help of M-Banking or mobile banking customer can check his bank balance, order a demand draft, stop payment of a cheque, request for a cheque book and have information about latest interest rates.


Modified Duration:Modified Duration = Macaulay Duration/ (1+y/m), where 'y' is the yield (%), 'm' is the number of times compounding occurs in a year. For example if interest is paid twice a year m=2. Modified Duration is a measure of the percentage change in price of a bond for a 1% change in yield.


The above details describes about terms called in banking such as Lump Sum Tax,Man-in-the middle,Marginal Standing Facility,Market Capitalization,Market risk,Marketability,Maturity Date,Magnetic Ink Character Recognition,Minimum daily balance,Minimum Payment,Mixed Economy,Maturity 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 Loan Documen,Lock-out,London Interbank Offered Rate,Lorentz Curve etc


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