What do you mean by Network?::
It is simply a group of two or more personal computers linked together
for communicating the data or any other mode of communication.
What do you mean by
networking?:
It is the practice of linking two or more computing devices together for
the purpose of sharing data. They are built with a mix of computer hardware and
computer software.
What do you mean by
winding up ?:
It means the life of the company is put to an end. It is a mode by which
the dissolution of the company is brought about and its assets realized and
applied in payment of its debts and after satisfaction of the debts, the
balance, if any, is paid back to the members in proportion to the contribution
made by them to the capital of the company.
What do you mean by
secured creditor?
It means the creditor in whose
favour the company has created charge on the properties/assets of the company
for due repayment of the loans/advances availed from him.
What do you mean by
contributory?
Every person, such as
shareholders, directors, debtors etc. of the company, who are liable to
contribute to the assets of the company at the time of its winding up is called
contributory.
What do you mean by
receiver?
Receivers appointed by the court for keeping the property involved in
the suit in safe custody or for management of the same is called court
receiver. Usually advocates are being appointed as receivers, however, in some
cases depending on the gravity of the issue may appoint the High Court judges,
Civil Court Judges, District Collector etc also as Receivers to take over the
control of and manage the property in issue.
What do you mean by
credit scoring?:
It is a technique which is being increasingly utilized by banks for
assessing informationally opaque borrowers. In developing economies, banks have
started using the credit scoring technique in a big way, especially for retail
lending including housing loans and credit cards. It is essentially a
statistical number that indicates the level of risk associated with the
borrowers. Higher/lower credit score reflects lower/higher level of risks of
borrowers.
What do you mean by
outsourcing?
: It can be defined as use of a third party to perform activities on a
continuing basis that would normally be undertaken by the bank itself. Third
party or service provider refers to the entity that is undertaking the
outsourced activity on behalf of the bank.
What do you mean by
six sigma?
It is a rigorous methodology that
uses data and statistical analysis to measure and improve a company's
operational performance by identifying and eliminating "defects"
thereby eliminating the cost of defects. Six Sigma practitioners focus on
systematically eliminating the defects so that they can get as close to
"zero defect" as possible.
What do you mean by
bank rate?
It is the rate at which RBI
allows finance to commercial banks. Bank Rate is a tool used by RBI for short
term purposes. Any revision in Bank Rate is a signal to banks to revise deposit
rates as well as Prime Lending rate.
What do you mean by
tier two capital?
It is also known as supplementary capital and it comprises of property
revaluation reserve, undisclosed reserves, hybrid capital, subordinated term
debt and general provisions.
Wht do you mean by
intermediary agencies?
The category comprises of state
sponsored organisations' lending to weaker sections. RBI also considers the
distributors of agricultural inputs and implements and agencies involved in
assisting the decentralized sector as intermediary agencies.
What do you mean by
statutory liquidity ratio?
Under section 24(b) of the
Banking Regulation Act, 1949, every bank is required to maintain at the close
of the business every day, a minimum proportion of their net demand and time
liabilities as liquid assets in the form of cash, gold and unencumbered
approved securities. The ratio of liquid assets to demand and time liabilities
is known as SLR. Present SLR is 25% and RBI is empowered to increase SLR upto
40%.
What do you mean by
immunization?
The construction of an asset and a liability that are subject to
offsetting changes in value.
What do you mean by
indenture?
It is a formal agreement establishing the terms of a bond issue
What do you mean by
indexed fund?
Bonds whose payments are linked to an index such as a consumer price
index.
What do you mean by
index fund?
Investment fund designed to match the returns on a stock market index.
What do you mean by
bounce protection?
California has introduced "bounce protection" a kind of short
term, high-interest credit, for its local banks. Banks can attach it to current
accounts without authorization. The customer may be charged a fee of as much as
$5 each day, if the account is overdrawn or may have to pay interest on the
amount of insufficient funds
What do you mean by
real effective exchange rate?
It is an indicator to grasp a country's international competitiveness in
terms of its foreign exchange rate, as this cannot be known by examining
individual exchange rates between the domestic and other currencies. It is the
product of nominal bilateral exchange rate between countries and their relative
price differentials. It is a trade-weighted index which gives an indication of
a country's export competitiveness vis-à-vis the rest of the world taking into
account the effect of its exchange rate as well as price differentials
vis-à-vis its trading partners.
What do you mean by
internal rate of return?
It is the discount rate at which
net present value of cash inflows and cash outflows is zero. In case of debt
instruments, it is the rate at which instrument's future cash flows, discounted
back to today, equals its price. In a project evaluation IRR should be equal to
the cost of capital or threshold rate of return.
What do you mean by
asset liability management system?
it is a system to manage the assets and liabilities of a bank. It aims
at achieving maximum returns while maintaining adequate liquidity at all times.
ALM involves assessment of various types of risks and altering the asset
liability mix-portfolio in a dynamic way in order to manage risks.
What do you mean by
samurai bonds?
They are offered in the Japanese domestic market by a non-Japanese
entity. Lower incidence of withholding tax is a major attraction for raising
funds in the Japanese markets. Although there is only a small quantum of saving
between the interest charges of a straight Libor-linked borrowing and Yen-borrowing
linked to a Dollar swap, the withholding tax factor is what makes a significant
difference.
What do you mean by
liquidity policy?
It is a monetary tool used by RBI
to modulate the very short term liquidity(daily) in the system. It does so
through repo(repurchase agreement) and reverse repo transactions. RBI uses repo
operations in the LAF window to inject liquidity into the system by buying
government securities from banks. RBI uses the reverse repo to suck out
liquidity from the system by selling government securities to banks. LAF has
emerged as the primary tool for monetary control, interest rate signaling and
sterilization operations, among others.
What do you mean by
demutualization?
It is a process that changes a
mutual or a cooperative association into a public company by converting the
interests of the members into shareholdings. These holdings can then be traded
like the shares of a company. The objective of such an exercise is to change
the structure of exchanges that were originally formed as trusts.
Demutualisation allows such associations to conduct commercial business, to
make profits like any other corporate entity.
