Terms used in banking business such as Unit trust,Universal Banking,Validation Proceedings, Value at Risk etc.


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The terms used in banking business such as Unit trust,Universal Banking,Validation Proceedings, Value at Risk etc.


This post explains about terms used in banking such as Tranche, Transaction, Transactional User,Treasury Bill ,Trust Deed,Trustee,Turnover Limits for Trades, Underlying Security,Unit trust,Universal Banking,Validation Proceedings, Value at 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

Trading Market: The secondary market for bonds that have already been issued. See Secondary Market.

Trading Rules: Stipulation of parameters for opening and intra-day quotations, permissible spreads according to the prices of securities available for trading and board lot sizes for each security.

Tranche: See CMO Class.

transaction date -- The date that a purchase was made or a cash advance was taken.

Transaction limitations: Refers to a Federal Reserve Board regulation that limits certain types of withdrawals and/or transfers you can make from your savings and / or money market deposit accounts. With such accounts, no more than 6 preauthorized or automatic transfers (including check, draft and point-of-sale transactions, if checks or debit cards are allowed on the account), or telephone / PC transfers (including bill payments) may be made each month. However, an unlimited number of withdrawals may be made at ATMs and teller windows.

Transaction: Action in a bank account. Could be a deposit, withdrawal, debit card payment, service charge or interest payment.

Transactional User (GAH): These are GAH employees (GAH Users) who are authorized by PM to place, modify, cancel their bids, view status of their bids and view the limits set by the PM & along with the current utilization.

Transfer Payment: It is a payment made by public authority other than one made in exchange for goods or services produced. Transfer payments are not the part of National Income. Examples includes unemployment benefit and child benefits.

Transfer:The movement of funds from one account to another.



Travelers cheque/travelers check: Check issued by a financial institution which functions as cash but is protected against loss or theft. Useful when traveling.

Treasury Bill (T Bill): An obligation of the U.S. government with a maturity of one year or less. T -bills bear no interest but are sold at a discount.

Treasury Bonds and Notes: Obligations of the U.S. government that bear interest. Notes have maturities of one to ten years; bonds have longer maturities.

Trojan - programs (often malicious) which install themselves or run secretly on a victim's machine. They do not install or run automatically, but may entice users into installing or executing by masquerading as another program altogether (such as a game or a patch).

Truncate:To remove an original check from the forward collection or return process and send to a recipient, in lieu of such original check, a substitute check or, by agreement, information relating to the original check.

Truncating Bank:The Bank that truncates the original check. Also called: Converting Bank, but this is not the preferred term. See Truncate.

Trust Deed (Settlement Deed, Declaration of Trust or Trust Instrument): Document that lays down the foundations of how the trustees are to administer and manage the trust assets and how they are to distribute and dispose of trust assets during the lifetime of the trust.

Trust Deed: A formal document that creates a trust. It states the purpose and terms of the name of the trustees and beneficiaries.

Trust:An entity created for the purpose of protecting and conserving assets for the benefit of a third party, the beneficiary- A contract affecting three parties, the settlor, the trustee and the beneficiary.

Trustee: A bank designated as the custodian of funds and the official representative of bondholders. In this capacity, the trusteeis responsible for enforcing the bondholders' contract with the issuer.

truth in lending act -- A law that required a lender to inform a borrower of the amount financed, total finance charges, annual percentage rate, payment schedule, and many more important figures.

Turnover Limits for Trades: Turnover limits represent the gross amount in face value terms computed by aggregating individual "buys" + "sells" orders inputted on behalf of a GAH across all its users. This value is expressed in consideration terms of the underlying security instrument and shall reflect the total aggregate value that can be undertaken by the GAH for that trading session. This control shall be set for every GAH at the user level. This limit constitutes a trading limit which shall get reinstated at the beginning of every trading session for every GAH;

UCPDC:‘Uniform Customs and Practice for Documentary Credit’ developed by the International Chamber of Commerce as the rules that govern the operation of Letter of Credit transactions worldwide. ICC publication No.500 contains details of the rules currently in use.

Uncollected funds: Refers to items deposited in an account that have not yet been collected (paid) by the bank on which they were drawn.

Underlying Security: The security subject to being purchased or sold upon exercise of the option contract.

Undervaluation: When a firm’s securities sell for less than their intrinsic, or potential, or long-run value for one or more reasons.

Underwriter: A bank or other financial institution that arranges for the sale and distribution of securities and assumes the responsibility for paying the net purchase price. In most instances, the underwriter deals in new issues and with the issuing entity. An investment underwriter guarantees the sale of a securities issue by purchasing the entire issue from the company and then selling it to the public. Underwriting is one function of an investment banker. See also Syndicate.

Unit trust: the trust issues units which represent holdings of the underlying shares. The fund is divided into units which investors trade with the fund management group.

Universal bank: bank offering financial services typical of both investment and commercial banking to consumers and small businesses as well as corporate clients.




Universal Bank:A bank or a financial institution that has the legal authority to offer all financial services and may, thus, be engaged in securities dealing, insurance, underwriting, and the full range of more traditional banking services.

Universal Banking : When Banks and Financial Institutions are allowed to undertake all types of activities related to banking like acceptance of deposits, granting of advances, investment, issue of credit cards, project finance, venture capital finance, foreign exchange business, insurance etc. it is called Universal Banking.

Unlimited Tax Bond: A municipal bond secured by the pledge of taxes that are not limited by rate or amount.

Unlisted Securities: Securities that are traded in the over-the-counter markets rather than through a recognized exchange.

Unsecured Credit Card; A credit card which does not require you to provide a cash deposit.

unsecured debt -- A credit source that is not guaranteed with collateral.

URL- Uniform Resource Locator is the specifying of the location of something on the Internet, eg, "http://www.boq.com.au" is the URL for the Bank of Queensland corporate website.

Validation Proceedings: The legal proceedings required in some states whereby the courts decide the validity of proposed bond issues.

Valuation: Process by which an investor determines the worth of a security using risk and return concept.

Value at Risk (VAR): VAR is a single number (currency amount) which estimates the maximum expected loss of a portfolio over a given time horizon (the holding period) and at a given confidence level. VaR is defined as an estimate of potential loss in a position or asset/liability or portfolio of assets/liabilities over a given holding period at a given level of certainty. The following are the three main methodologies used to calculate VaR: Parametric Estimates - Estimates VaR using parameters such as volatility and correlation. Accurate for traditional assets and linear derivatives, but less accurate for non linear derivatives. Monte Carlo simulation- Estimates VaR by simulating random scenarios and revaluing positions in the portfolio. Appropriate for all types of instruments, linear and nonlinear. Historical simulation- Estimates VaR by reliving history; takes actual historical rates and revalues positions for each change in the market

The above details describes about terms called in banking such as Tranche, Transaction, Transactional User,Treasury Bill ,Trust Deed,Trustee,Turnover Limits for Trades, Underlying Security,Unit trust,Universal Banking,Validation Proceedings, Value at 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.


The above information is a part of Export Import Training course online

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