What is 'Window Dressing'?

Window Dressing: Window dressing is a strategy used by financial institutions near the quarter end or year end to improve the appearance of a portfolio to be presented to clients or shareholders. It is made to look the portfolio performance attractive. Generally the institution sells its stocks with large losses and purchase high flying stocks. Thus they show their better performance to the prospective investors. The practice is also known a dressing up a portfolio.

What is a 'Proxy Tax'?

Proxy Tax: A tax on lobbying or political expenses that exceed an allowlable amount is known as proxy tax.  The rate of proxy tax is set as the same rate of the highest corporate tax rate for that particular year. Organizations may be required to pay a proxy tax if they spend more on lobbying efforts than they initially estimated.

What is an 'Active Management'?

Active Management: The use of a human element, such as a single manager, co-managers or  a team of managers, to actively manage a fund's portfolio. Active managers rely on analytical research, forecasts, and their own judgement and experience in making investment decisions on what securities to buy, hold and sell.

What is the meaning of 'Painting the tape' ?

Painting the Tape: It is an illegal action by a group of market manipulators buying and /or selling a security among themselves to create artificial trading activity, which, when reported on the ticker tape, lures in unsuspecting investors as they perceive an unusual volume.

Who is a Bag Man?

Bag Man: Any person in charge of organizing, collecting and transporting money, generally in connection with illigal or illicit activities. A bag man is someone who collects and delivers money on behalf of a boss or an organization.  Bag man also can be used to describe an individual who is in charge of collecting and delivering contributions to political parties or fundsgathered for political purposes.

What is a Golden Parachute?

Golden Parachute:  It is a lucrative benefits given to the top executives in the event that a company is taken over by another firm, which causes in the loss of their own job. The benefits may be bonuses, severance pay, stock options or any other agreed types of benefits.

What is a Debenture?

Debenture is a type of debt insturment that is not secure by physical asset or collateral. Debentures are backed only

What is an Indenture?

An Indenture is a contract between an issuer of bonds and bondholder stating
i. the time period before repayment
ii. amount of interest paid

Inflation

Inflation:
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services.

Prima facie

Prima facie is a Latin expression meaning 'on its first appearance', or 'by the first instance'.Prima-First, facie-face. It is use to signify that on first examination, a matter appears to be self-evident from the facts. Prima facie denotes evidence which would be sufficient to prove a particular proposition or fact.

Setoff

Setoff:

Bank's legal right to seize a borrower's any account balance in the same bank to apply it toward the borrower's any loan in arrears, or in anticipation of a default. In some jurisdictions (USA), this right is not applicable to consumer and credit card loans.

Garnishee order

Garnishee order:
A court order instructing a garnishee ( a bank) that funds held on behalf of a debtor ( the judgment debtor) should not be released until directed by the court. The order may also instruct the bank to pay a given sum to the judgment creditor ( the person to whom a debt is owed by the judgment debtor) from these funds.

Deliquency Cost

Deliquency means failure to pay an obligation when due. Normally consumer installment laons are considered deliquent if two consecutive payments are missed. A bank credit car is often treated as a deliquent account if a payment is not received within the allowed say 7-15 days grace preiod.

Bill of Exchange

Bill of Exchange: It is a negotiable instrument. It is an unconditional order, signed by the maker, to pay a certain sum of money, to a certain person, at the given date.

Certified Invoice

Certified Invoice: It is an invoice bearing a signed statement by some one in the importer's country, who have inspected the goods and found them in accordance with those specified in the contract.

Custom Invoice

Custom Invoice: These are specific forms supplied by the consular office of the importer duly filled and signed by the shipper and serve the purpose of making easy entry of the merchandise into the importing country. These invoices are for easy custom clearance.

Consular Invoice

Consular Invoice: This is an invoice issued or certified by the consulate or embassy of the importing country, stationed in the exporting country. This type of invoice is called Legalized Invoice.

3 pillars of Basel-II

Pillar-I: Minimum Capital Requirements
i) Capital for Credit Risk
 a) Standardized Approach (upto 2012)
 b) Internal Rating Based Approach( from 2013)
2 Rating Agencies are CRISL and CRAB
(BRPD circular-05 29/04/2009)

Tier 3 Capital ( Additional Supplementary Capital)

Tier 3 Capital (Additional Supplementary Capital) consisting of short term subordinated debt maturity less than or equal of five years but greater than or equal to two years is meant solely for purpose of meeting a proportion of the capital requirements for market risk.

Tier 1 Capital (Core Capital)

Tier 1 Capital (Core Capital) comprises of highest quality capital elements:

1. Paid up capital/capital deposited with BB
2. Non-repayable share premium account
3. Statutory Reserve
4. General Reserve
5. Retained Earnings
6. Minority Interest in subsidiaries
7. Non-Cumulative irredeemable Preference Shares
8. Dividend Equalization Account