List of banking terms starting with A

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Alphabetical List

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Absolute advantage:
The capability of a nation, entity, corporation, or state to generate a product or service at a lesser price per unit than the price at which any other unit generates that product or service. For instance: The generation capacity of Japan in producing television sets is more as compared to other nations and is considered to have an absolute advantage in this aspect.

Accrued Interest:
The interest amount collected on purchase of an equity share/ bond or debenture since the preceding coupon imbursement, excluding the completion date. Accrued interest is included to the indenture price of a bond contract. There are two ways for computing accrued interest:
  • (a) On the basis of 360-day a year, employed for commercial and public shares
  • (b) On the basis of 365-day a year, employed for government shares.
Advance Payment:
Compensation made to the indemnified person by the insurance firm prior to the completion date is called the advance payment. For instance, if the maturity dates of the claim is premeditated on July 1, 2002 and the insurance firm forfeits the petitioner before the settlement date, the payment is considered as an advance payment.

Distribution of shares or bonds in support of new concerns is termed as Allotment. In other words securities allocated to associates of a countersigning consortium for the reselling to shareholders/investors.

Alternative Investments:
A phrase indicating to any kind of non-conventional property with hidden fiscal value that cannot be discovered in an ordinary investment portfolio. Because of the exceptional features of these investment properties, assessment may arise as an issue.

Amalgamation or consolidation is the procedure of merging or joining of two business entities into one new entity. The permutation can be an outcome of one business entity obtaining the other, uniting of two or more business entities, or either by suspension of obtainable firms and creation of a new firm to control the merged entities.

Also known as diminution, liquidation, or approval of an obligation, Amortization refers to the amount utilized for meeting that need. In short, it is the distribution of an approximate amount during various durations, especially for mortgages and other type of investment which incorporates associated interest or other monetary charges. Amortization is generally used in determining the investment cost of securities.

Amortization Schedule:
When you take a loan, the lending institution gives you a sheet that contains details like your EMI, schedule of payments, the breakup of EMI and the opening and closing balance on your loan account for every payment that you make. If your lending institution has not given you this sheet, you can take a printout of the amortization schedule either from the lending institutions website or from the numerous calculators available on line. For this, you will need to mention your loan amount, the rate of interest and the loan tenure. The amortization schedule helps you keep track of your loan payments and balance loan amount payable.

Authorized Signer:
An individual employed by the account holder to sign and deliver cheques, demand drafts, receipts or any other form of payment in cash or kind is known as an Authorized Signer.

Automated Clearing House (ACH):
An online money-transfer method established by the National Automated Clearing House Association is known as Automated Clearing House. This compensation method transacts in context of payroll, undeviating investment, tariff reimbursements, customer invoices, tax fee and other payment facilities. The usage of online payment houses is to assist online fund-transfers and accelerate competence and suitability of government and commercial dealings.

Last Updated on 1/18/2012