Académique Documents
Professionnel Documents
Culture Documents
Acquisition
Actuary
Authorized Dealers
Advising Bank
AEZs
Affidavit
Agent Bank
and deals with the borrower on behalf of the members of the syndicate.
AIDB
AIFI
ALCO
ALM
AMC
American
Receipt (ADR)
American option
An option that can be exercised on or any time before the date of expiry.
Amortization
Amount at risk
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Annuity
time.
Agricultural and Processed Food Products Exports Development
APEDA
Authority.
Simultaneous purchase and sale of identical or equivalent financial
Arbitrage
ASB
Asset/Liability Risk:
Assets
Assignment
Audit Risk
Automated
Banking Terminals that allow bank customers to perform many everyday banking
Machines (ABMs)
Automated
Machines (ATMs)
Available Balance
Average life
Back-end value
Amount paid to the remaining shareholders in the second stage of a twotier or partial tender offer.
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Balance of Payment
Balance Sheet
Balloon Payment
Bank Credit
Bank Debits
The sum of the value of all cheques and other instruments charged against
the deposited funds of a banks customer.
Bank Rate
Interest rate paid by major banks if they borrow from RBI, the Central
Bank of the country. The Bank Rate influences the rates of interest major
banks/ financial institutions charge and pay their customers.
Bank Statement
Bankers Acceptance
Bankruptcy
Basis Point
Bid/Bond Guarantee
BIFR
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Bill Discounting
Bill of Exchange
Bill of Lading
Blue Chips
Shares in leading quoted companies that can be easily bought and sold
without influencing their price (liquidity) and are regarded as low-risk
investments.
Bond
Book Value
Bought financing
BR Act
Break-even point
Bridge Loan
BSE
Bull
Bull Market
Bullet redemption
Repayment of a debt in one lump sum at the end of the maturity period.
A common practice in Euro markets in respect of bond issues.
Bundling
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Bust-up takeover
Buy-back
A public company, which buys its own shares, by tender offer, in open
market, or in a negotiated buy-back from a large block holder.
CIF
Call Date
Call Money
Loaned funds that are repayable upon the request of either party.
Call Option
An option that gives its holder the right to buy an asset at a fixed price
during a certain period
Call Provision
A feature of a bond that entitles the issuer to retire the bond before
maturity
Cap
Capital
Funds invested in a firm by the owners for use in conducting the business.
Capital Adequacy Ratio A ratio of total capital divided by risk-weighted assets and risk-weighted
(CAR)
Capital budget
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 investments
Capital Market
Capital Structure
Cash cows
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markets, which generate more cash flow than needed for reinvestment.
An arrangement whereby the bank gives a short-term loan against the
self-liquidating security.
Cash Discount
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.
Cheque
money.
CIBIL
CLB
Clean-up merger
Also called Take-out merger. The consolidation of the acquired firm into
the acquiring firm after the acquirer has obtained control.
CMS
Collateral
Collusion
Risk
Extension of credit can take the form of direct loans and contingencies/
guarantees.
Commercial Paper (CP) Issue of short-term notes, without any underwriting, representing a
promise to repay the amount at a specified future date.
Commitment fee
Compound Interest
Conglomerate
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Consumer Price Index An index that measure movements in the average price of products and
(CPI)
services.
Convertible Bond
Convertible Security
Corporate Banking
Corporate Governance
Corporate Tax
Coupon Rate
Covenant
CRAR
CRAs
Credit Crunch
Credit History
Credit Risk
Creditworthiness
CRISIL
Cross default
Cumulative Dividends
Currency basket
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The risk of loss from having positions in any of the currency markets.
The risk can be from outright positions. It can also reside in the balance
sheet or in the income flows of a company.
Current assets
Current liabilities
Short-term liabilities, due to be paid in less than one year, such as bank
overdrafts, money owed to suppliers and employees.
Current Yield
D/A (documents against Refer to shipping documents presented to a bank on a collection basis to
acceptance)
D/P (documents against Refer to shipping documents presented to a bank on a collection basis to
payment)
DCF
Debenture
Default
Default Risk
The risk that a borrower may not repay principal and/or interest as
originally agreed.
Depreciation
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Direct Financing
Direct taxes
Taxes which affect the consumer directly, such as income tax, corporate
tax, capital gains tax etc.
Discount
The amount by which a bond or preferred stock sells below its par or face
value. In foreign exchange market, it is the amount by which forward
price is less than the spot price.
reduction in the price / value of the asset/ product which is given when it
is sold.
Dividends
Documentary Credit
DRT
Due diligence
While finalizing documentation, the lead manager and the legal counsel
conduct a thorough review of the borrowing entity with reference to the
financials, legality, and all such matters relevant in a public offering of
securities.
Earning Yield
ECBs
ECGC
Effective rate of interest The percentage rate of return on an annual basis, reflecting the effect of
intra-year compounding.
Entrepreneur
EOUs
Export-Oriented Units.
Equitable mortgage
A type of mortgage under which one still owns the property which is
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security for the mortgage. The owner can occupy or live in the property.
Equity
The value of a business after all debts and other claims are settled. Also,
the amount of cash a business owner invests in a business and/ or the
difference between the price for which a property could be sold and the
total debts registered against it.
Escrow Account
Exchange Rate
Excise duties
Duties levied on items manufactured within the country and paid by the
manufacturer.
Exports
Face Value
Factoring
Fixed assets
Fixed Rate
Foreign Exchange
Foreign Trade
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Forfaiting
A contract in which one party agrees to buy, and the other to sell, a
specified product at a specified price on a specified date in the future.
Forward Cover
FRNs
Funded debt
Generally, a short-term debt that has been converted into long-term debt
funding.
Contracts to buy something in the future at a price agreed upon in
Futures
The value of the firm as a whole over and above the sum of the values of
each of its parts; the value of an organizations learning and reputation.
The excess of the purchase price paid for a firm over the book value
Goodwill
Domestic The total of market value of the finished goods and services produced in a
Product (GDP)
The difference between the sales a business generates and the costs it pays
out for goods.
Guaranty
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debtor is responsible for the debt, the guarantor becomes liable in the
event of a default.
Haircut
The difference between the market value of a security and its value when
used as collateral. The haircut is intended to protect a collateral taker
from losses due to declines in collateral values.
Hedge
Holding company
ICD
Inter-Corporate Deposit.
Imports
Indemnity
Indirect financing
The process by which deficit spending units obtain funds from financial
intermediaries who, in turn, them from ultimate surplus spending units.
Indirect taxes
stage:
Consumer
acceptance,
expanding
sales,
high
Inflation Premium
Initial Public Offering The first offering to the public of common stock, e.g. of a former privately
(IPO)
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subsidiary.
Insolvent
The condition when one is unable to pay ones debt obligations when due.
Insufficient Funds
Insurance
A contract whereby one party agrees to pay a sum to another party for a
fee (premium) in the event that the latter suffers a particular loss. The
person or firm that undertakes the risk is the insurer. The party desiring to
be protected from loss is the insured party.
Intangible assets
Assets that cannot be touched. Examples are goodwill and patent rights.
Internal Rate of Return The rate of discount at which the net present value of an investment is
(IRR)
zero.
Lease
A contractual arrangement whereby one party (the lessor) grants the other
party (the lessee) the right to use an asset in return for periodic rental
payments.
Lessee
Lessor
Lien
Line of Credit
Liquidation
Divestment of all the assets of a firm so that the firm ceases to exist.
Liquidity
The extent to which or the ease with which an asset may quickly be
converted into cash with the least administrative and other costs.
Loan Document
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This is the risk of loss from loaning money and having the borrower fail
to repay, either due to genuine reasons or willfully.
Long-term Liabilities
Money that one owes over a period longer than 12 months, such as
mortgages, bank loans and other obligations.
Margin
A part of the value of security, which is not given as a loan by the bank or
financial institution.
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.
NBFC
NCD
Non-Convertible Debenture.
Net Worth
Non Performing Assets When due payments in credit facilities remain overdue above a specified
(NPA)
Non-Recourse
Discounting
to allow for funding of the advance from the discount date until the
maturity date of the bills. When the discount is provided on a nonrecourse basis the financing bank has no recourse to the seller in the event
of non-payment by the buyer or the buyers bank.
NSE
Obligation
The responsibility to perform some act or pay a sum of money when due.
OD
Overdraft
Off-Balance Sheet
Includes all banking transactions that do not appear on the balance sheet
of a bank as an asset or as a debt. Includes all commitments for which a
cash flow arises conditional on a specific event. For instance, a loan
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A computer system where input data are processed as received and output
data are transmitted as soon as they become available to the point where
they are required.
Open-End Credit
Open-End Lease
Operating Cycle
The length of time taken by a firm to produce its final product, sell it to
customers, and collect proceeds of the sale in cash.
Operating Lease
Operating synergy
Operational Risk
Includes all risks not included in market risks and credit risks, such as
losses arising from fraud, failure in computer systems and data entry
errors.
Opportunity Cost
The rate of return that can be earned on the best alternative investment. In
general, the gain or return on the next best investment opportunity or the
next best use of resources, which is forgone by putting the resources to a
given use.
Option
A formal contract which grants the holder of the option the right to buy or
sell a certain quantity of an underlying interest or asset at a stipulated
price within a specific period of time.
Option Contract
A contract that gives the buyer the right, but not the obligation, to buy or
sell an underlying asset by (or on) a specific date for a specific price. For
this right the purchaser pays a premium.
Overdraft System
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The value of a security when it is issued. For bonds and preferred stock,
Par Value
Partnerships
Pass
Certificates
Length of time required for an asset to generate cash flows just enough to
Payback period
Plain
Transactions
Pledge
goods, but the person pledging the goods still owns them. It is often done
as security for money owed or to make sure that something is done as
promised.
Power of Attorney
Prepayment
Present Value
Prime
Lending
Rate The rate of interest charged on loans by banks to their most creditworthy
(PLR)
customers.
Principal
Amount of debt that must be repaid. Also means a person who deals in
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Product Mix
Productivity
Promissory Note
PSB
PSE
PSU
Purchasing
Power The concept that homogeneous goods cannot have more than one price
measured in any one currency. If the price increases domestically, the
Parity
Merger
Rating
Ratio
Reconciliation
Checking all bank account papers to make sure that the banks records
and customers records are in sync.
Recourse
In the context of a sale of a loan by a bank to investors, they have the right
to call the guarantee from the bank should the borrower be unable to meet
its obligations
Redemption
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agreement.
A formal document expressing the intention of a board of directors of a
Resolution
corporation.
Revolving
Letter
Credit
Rights Issue
Issue of securities offered to existing shareholders/ bond holders on a preemptive or priority basis.
Risk Assessment
A process used to identify and evaluate risks and their potential effect.
Sale
Salvage
Scale Economies
SEBI
SEBs
Securitization
Selective Credit Control Control of credit flow to borrowers dealing in some essential commodities
(SCC)
Senior Debt
Serial Bonds
Series Bond
Bond which may be issued in several series under the same indenture.
Service Charge
Service Provider
SEZ
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SFC
Short-term Loan
Loan to a business for less than one year, usually for operating needs.
SICA
Sinking Fund
A legal corporate entity created to buy loans from banks. It finances itself
with securities issued to investors.
Any individual or group who has an interest in a firm; in addition to
Stakeholder
Letter
Credit
Statement
Statutory Audit
Stocks
Swap
SWOT
Syndicate
Syndicated Loans
There is
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Synergy
Systematic Risk
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.
Tangible Assets
Tax Avoidance
Tax Evasion
Tax Haven
Tax Incentives
Tax benefits. Most tax incentive measures fall into one or more of the
following categories: tax exemption (tax holiday); deduction from the
taxable base; reduction in the rate of tax; tax deferment, etc.
Term Loan
Tier 1 Capital
Tier 2 Capital
This is
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Title Deeds
Documents which prove who owns a property and under what terms.
Trade Creditors
Organisations, which are owed money for goods and services supplied.
Trade Debtors
Trade Deficit
Transaction
Trust
Declaration
Trust
or
of administer and manage the trust assets and how they are to distribute and
Instrument)
Trustee
Trustees have a fiduciary duty to act in accordance with a trust deed and
for the benefit of the beneficiary (ies).
UCPDC
Undervaluation
When a firms securities sell for less than their intrinsic, or potential, or
long-run value for one or more reasons.
Underwriting
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.
Value Creation
Variable Expenses
Costs of doing business that vary with the volume of business, such as
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A variable rate loan or credit agreement, calls for an interest rate that may
fluctuate over the life of the loan. The rate is often tied to an index that
reflects changes in market rates of interest. A fluctuation in the rate
causes changes in either the payments or the length of the term.
VCF
Venture Capital
Vertical Merger
VRS
Winding up
Yield
A bond issued at a discount (i.e. below par value), earning no interest but
redeemable at its par value, thus providing a guaranteed capital gain.