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.
Showing posts with label PBCI. Show all posts
Showing posts with label PBCI. Show all posts
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.
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.
Defination of Islamic Banking
As per OIC
Islamic Banking is a financial Institution whose statutes, rules and procedures expressly state its commitment to the principles of Islamic Shariah and to the banning of receipt and payment of interest on any of its operations.
Islamic Banking is a financial Institution whose statutes, rules and procedures expressly state its commitment to the principles of Islamic Shariah and to the banning of receipt and payment of interest on any of its operations.
Negotiable Instrument
The term 'Negotiable' means transferable by delivery and the term 'Instrument' means a written document by which a right is created in favor of some person.
According to Section 13 of the NI Act-1881, Negotiable Instrument means ' a promissory note, bill of exchange or cheque' payable either to order or to bearer. These are transferable from one person to another by mere delivery or by endorsement and delivery.
According to Section 13 of the NI Act-1881, Negotiable Instrument means ' a promissory note, bill of exchange or cheque' payable either to order or to bearer. These are transferable from one person to another by mere delivery or by endorsement and delivery.
Cheque
Cheque: As per Negotiable Instrument Act-1881, Article-6
A 'Cheque' is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
A Cheque is an unconditional order in writing drawn on a banker signed by the drawer, requiring the banker to pay on demand a sum/certain money to or to the order of a specified person or to bearer.-Dr. Hart.
A 'Cheque' is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
A Cheque is an unconditional order in writing drawn on a banker signed by the drawer, requiring the banker to pay on demand a sum/certain money to or to the order of a specified person or to bearer.-Dr. Hart.
Categories of Investment for classification and provisioning
Investments are grouped into four categories for the purpose of classification and provisioning:
i) Continuous Investment: Cash Credit (CC), Overdraft(OD), Bai-Muajjal, Bai Murabaha etc
ii) Demand Investment: Loan against Imported Merchandise(LIM), Payment against Documents(PAD), Inland Bills Purchase(IBP), Foreign Bills Purchase(FBP) etc.
iii) Fixed Term Investment: HPSM, Leasing etc.
iv) Short term Agricultural and Micro credit/Investment: Any micro credit/investment.
i) Continuous Investment: Cash Credit (CC), Overdraft(OD), Bai-Muajjal, Bai Murabaha etc
ii) Demand Investment: Loan against Imported Merchandise(LIM), Payment against Documents(PAD), Inland Bills Purchase(IBP), Foreign Bills Purchase(FBP) etc.
iii) Fixed Term Investment: HPSM, Leasing etc.
iv) Short term Agricultural and Micro credit/Investment: Any micro credit/investment.
Offshore Banking
Offshore bank:
An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax area that provides financial and legal advantages like greater privacy, low or no taxation, easy access to deposits in terms of regulation, protection against local political or financial instability.
An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax area that provides financial and legal advantages like greater privacy, low or no taxation, easy access to deposits in terms of regulation, protection against local political or financial instability.
Contingent Contract
Contingent contracts:
A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. (sec31)
Illustration: A contracts to pay B Tk 10000, if B’s house is burnt. This is a contingent contract.
A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. (sec31)
Illustration: A contracts to pay B Tk 10000, if B’s house is burnt. This is a contingent contract.
Bank Guarantee
Guarantee means 'a promise' usually in writing that some thing will be done.
Bank Guarantee: A Bank Guarantee is a written undertaking given by a Bank to perform the promise or discharge the liability of its customer in case of his default.
Bank Guarantee: A Bank Guarantee is a written undertaking given by a Bank to perform the promise or discharge the liability of its customer in case of his default.
Principles for the management and supervision of liquidity risk
Fundamental principle
1. A bank is responsible for the sound management of liquidity risk. A bank sould establish a robust liquidity risk management framework that ensures it maintains sufficient liquidity, including a cushion of unencumbered, high quality liquid assets, to withstand a range of stress events, including those involving the loss or impairment of both unsecured and secured funding sources.
1. A bank is responsible for the sound management of liquidity risk. A bank sould establish a robust liquidity risk management framework that ensures it maintains sufficient liquidity, including a cushion of unencumbered, high quality liquid assets, to withstand a range of stress events, including those involving the loss or impairment of both unsecured and secured funding sources.
Promissory Note
Promissory Note:
As per section 4 of the Negotiable Instrument Act. 1881, 'A promissory note is an instrument in writing( not being a bank-note of currency-note) containing an unconditional undertaking signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money only to , or to the order of, a certain person, or to the bearer of the instrument.'
As per section 4 of the Negotiable Instrument Act. 1881, 'A promissory note is an instrument in writing( not being a bank-note of currency-note) containing an unconditional undertaking signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money only to , or to the order of, a certain person, or to the bearer of the instrument.'
Islamic Financial Terms
Islamic Financial Terms:
1. Amanah (Deposits in trust): A person can hold a property in trust for another, sometimes by express contract and sometimes by implication of a contract. Current accounts are regarded as Amanah.
2. Arbun: Down payment, a nonrefundable deposit paid by a buyer retaining a right to confirm or cancel the sale.
1. Amanah (Deposits in trust): A person can hold a property in trust for another, sometimes by express contract and sometimes by implication of a contract. Current accounts are regarded as Amanah.
2. Arbun: Down payment, a nonrefundable deposit paid by a buyer retaining a right to confirm or cancel the sale.
Basel 2 and Basel 3
A. Tier 1 Capital
A1. Basel 2:
Tier 1 capital ratio=4%
Core Tier 1 capital ratio=2%
The difference between the total capital requirement of 8.0% and the Tier 1 requirement can be met with Tier 2 capital.
A2. Basel 3:
Tier 1 capital ratio=6%
Core Tier 1 capital ratio (common equity after deduction)=4.5%
Core Tier 1 capital ratio ( common equity after deduction) before 2013=2%
Ist January 2013=3.5%
Ist January 2014=4%
Ist January 2015=4.5%
The difference between the total capital requirement of 8.0% and the Tier 1 requirement can be met with Tier 2 capital.
B. Capital Conservation Buffer
B1. Basel 2:
There is no capital conservation buffer.
B2. Basel 3: Banks will required to hold a capital conservation of 2.5% to withstand future periods of stress bringing the total common equity requirement to 7%.
Capital conservation buffer of 2.5%, on top of Tier 1 capital, will be met with common equity, after the application of deductions.
Capital conservation buffer before 2016=0%
Ist January 2016=0.625%
Ist January 2017=1.25%
Ist January 2018=1.875%
Ist January 2019=2.5%
The purpose of the conservation buffer is to ensure that banks maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress. While banks are allowed to draw on the buffer during such periods of stress, the closer their regulatory capital ratios approach the minimum requirement, the greater the constraints on earnings distributions.
C. Countercyclical Capital Buffer
C1. Basel 2:
There is no countercyclical capital buffer
C2. Basel 3:
A countercyclical buffer within a range of 0%-2.5% of common equity or other fully loss absorbing capital will be implemented according to national circumstances.
Banks that have a capital ratio that is less than 2.5%, will face restrictions on payouts of dividends, share buybacks and bonuses.
The buffer will be phased in from January 2016 and will be fully effective in January 2019.
Countercyclical capital buffer before 2016=0%,
1st January 2016=0.625%
1st January 2017=1.25%
1st January 2018= 1.875%
1st January 2019=2.5%
D. Capital for Systemically Important Banks only
D1. Basel 2:
There is no capital for systemically important banks
D2. Basel 3:
Systemically important banks should have loss absobing capacity beyond the standards announced today and work continues on this issue in the Financial Stability Board and relevant Basel committee work streams.
The Basel Committee and the FSB are developing a well integrated approach to systemically important financial institutions which could include combinations of capital surcharges, contigent capital and bail-in debt.
Total Regulatory Capital Ratio=A+B+C+D
A1. Basel 2:
Tier 1 capital ratio=4%
Core Tier 1 capital ratio=2%
The difference between the total capital requirement of 8.0% and the Tier 1 requirement can be met with Tier 2 capital.
A2. Basel 3:
Tier 1 capital ratio=6%
Core Tier 1 capital ratio (common equity after deduction)=4.5%
Core Tier 1 capital ratio ( common equity after deduction) before 2013=2%
Ist January 2013=3.5%
Ist January 2014=4%
Ist January 2015=4.5%
The difference between the total capital requirement of 8.0% and the Tier 1 requirement can be met with Tier 2 capital.
B. Capital Conservation Buffer
B1. Basel 2:
There is no capital conservation buffer.
B2. Basel 3: Banks will required to hold a capital conservation of 2.5% to withstand future periods of stress bringing the total common equity requirement to 7%.
Capital conservation buffer of 2.5%, on top of Tier 1 capital, will be met with common equity, after the application of deductions.
Capital conservation buffer before 2016=0%
Ist January 2016=0.625%
Ist January 2017=1.25%
Ist January 2018=1.875%
Ist January 2019=2.5%
The purpose of the conservation buffer is to ensure that banks maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress. While banks are allowed to draw on the buffer during such periods of stress, the closer their regulatory capital ratios approach the minimum requirement, the greater the constraints on earnings distributions.
C. Countercyclical Capital Buffer
C1. Basel 2:
There is no countercyclical capital buffer
C2. Basel 3:
A countercyclical buffer within a range of 0%-2.5% of common equity or other fully loss absorbing capital will be implemented according to national circumstances.
Banks that have a capital ratio that is less than 2.5%, will face restrictions on payouts of dividends, share buybacks and bonuses.
The buffer will be phased in from January 2016 and will be fully effective in January 2019.
Countercyclical capital buffer before 2016=0%,
1st January 2016=0.625%
1st January 2017=1.25%
1st January 2018= 1.875%
1st January 2019=2.5%
D. Capital for Systemically Important Banks only
D1. Basel 2:
There is no capital for systemically important banks
D2. Basel 3:
Systemically important banks should have loss absobing capacity beyond the standards announced today and work continues on this issue in the Financial Stability Board and relevant Basel committee work streams.
The Basel Committee and the FSB are developing a well integrated approach to systemically important financial institutions which could include combinations of capital surcharges, contigent capital and bail-in debt.
Total Regulatory Capital Ratio=A+B+C+D
Bai-Muajjal
Bai-Muajjal: Bai means 'Sale and purchase' Ajal means a fixed time or a fixed period.
So, Bai-Muajjal means 'sale for which payment is made at a fixed date or within a fixed period. In short, it is a sale on credit.
So, Bai-Muajjal means 'sale for which payment is made at a fixed date or within a fixed period. In short, it is a sale on credit.
Bai-Murabaha
Bai-Murabaha:
Bai means 'Sale and purchase'. Ribhun means 'an agreed upon profit'. So, Bai-Murahaba means 'Sale on agreed upon profit.'
Bai means 'Sale and purchase'. Ribhun means 'an agreed upon profit'. So, Bai-Murahaba means 'Sale on agreed upon profit.'
Bai Salam
Defination: Bai-Salam means advance sale and purchase. Bai means sale and purchase. Salam means advance.
What is Unit Banking?
Unit Banking:
Unit Banking means a system of banking under which banking services are provided by a single banking organisation. Such a bank has single office of place of work. It has its own governing body or board of directors. It functions independently and is not controlled by any other individual, firm or body corporate. It also does not control any other bank. Such banks can become member of the clearing house and also of the Banker's Association. Unit banking system originateed and grew in the USA. Different unit banks in the USA are linked with each other and with other financial centres in the country through 'correspondent banks.'
Advantages of Unit banking
Disadvantages of Unit banking
Unit Banking means a system of banking under which banking services are provided by a single banking organisation. Such a bank has single office of place of work. It has its own governing body or board of directors. It functions independently and is not controlled by any other individual, firm or body corporate. It also does not control any other bank. Such banks can become member of the clearing house and also of the Banker's Association. Unit banking system originateed and grew in the USA. Different unit banks in the USA are linked with each other and with other financial centres in the country through 'correspondent banks.'
Advantages of Unit banking
Disadvantages of Unit banking
Disadvantages of Unit Banking
Disadvantages of Unit Banking:
1. No Economies of Large Scale
2. Lack of Uniformity in Interest Rates
3. Lack of Control
4. Risks of Bank's Failure
5. Limited Resources
6. Unhealthy Competition
7. Wastage of National Resources
8. No Banking Development in backward Arear
9. Local Pressure
1. No Economies of Large Scale
2. Lack of Uniformity in Interest Rates
3. Lack of Control
4. Risks of Bank's Failure
5. Limited Resources
6. Unhealthy Competition
7. Wastage of National Resources
8. No Banking Development in backward Arear
9. Local Pressure
Advantages of Unit Banking
Advantages of Unit Banking:
1. Efficitent Management
2. Better Service
3. Close Customer-banker Relation
4. No Evil Effects Due to Strike or Closure
5. No Monopolistic Practices
6. No Risks of Fraud
7. Closure of Inefficient Banks
8. Local Development
9. Promotes Regional Balance
1. Efficitent Management
2. Better Service
3. Close Customer-banker Relation
4. No Evil Effects Due to Strike or Closure
5. No Monopolistic Practices
6. No Risks of Fraud
7. Closure of Inefficient Banks
8. Local Development
9. Promotes Regional Balance
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