Garnishee Order

A legal procedure by which a creditor can collect what a debtor owes by reaching the debtor's property when it is in the hands of someone other than the debtor. Garnishment is a drastic measure for collecting a debt. A court order of garnishment allows a creditor to take the property of a debtor when the debtor does not possess the property. A garnishment action is taken against the debtor as defendant and the property holder as garnishee. Garnishment is regulated by statutes, and is usually reserved for the creditor who has obtained a judgment, or court order, against the debtor. A debtor's property may be garnished before it ever reaches the debtor. For example, if a debtor's work earnings are garnished, a portion of the wages owed by the employer go directly to the Judgment Creditor and is never seen by the debtor. Some property is exempt from garnishment. Exemptions are created by statutes to avoid leaving a debtor with no means of support. For example, only a certain amount of work income may be garnished. Under 15 U.S.C.A. 1673, a garnishment sought in federal court may not exceed 25 percent of the debtor's disposable earnings each week, or the amount by which the debtor's disposable earnings for the week exceed thirty times the federal minimum hourly wage in effect at the time the earnings are payable. In Alaska, exemptions include a burial plot; health aids necessary for work or health; benefits paid or payable for medical, surgical, or hospital care; awards to victims of violent crime; and assets received from a retirement plan (Alaska Stat. 09.38.015, .017). Because garnishment involves the taking of property, the procedure is subject to DUE PROCESS requirements. In Sniadatch v. Family Finance Corp. of Bay View, 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969), the U.S. Supreme Court struck down a Wisconsin statute that allowed pretrial garnishment of wages without an opportunity to be heard or to submit a defense. According to the Court, garnishment without prior notice and a prior hearing violated fundamental principles of due process. Garnishment may be used as a provisional remedy. This means that property may be garnished before a judgment against the debtor is entered. This serves to protect the creditor's interest in the debtor's property. Prejudgment garnishment is usually ordered by a court only when the creditor can show that the debtor is likely to lose or dispose of the property before the case is resolved. Property that is garnished before any judgment is rendered is held by the third party, and is not given to the creditor until the creditor prevails in the suit against the debtor. Garnishment is similar to lien and to attachment. Liens and attachments are court orders that give a creditor an interest in the property of the debtor. Garnishment is a continuing lien against nonexempt property of the debtor. Garnishment is not, however, an attachment. Attachment is the process of seizing property of the debtor that is in the debtor's possession, whereas garnishment is the process of seizing property of the debtor that is in the possession of a third party.

ATM
An electronic banking outlet, which allows customers to complete basic transactions without the aid of a branch representative or teller. There are two primary types of automated teller machines, or ATMs. The basic units allow the customer to only withdraw cash and receive a report of the account's balance. The more complex machines will accept deposits, facilitate credit card payments and report account information. To access the advanced features of the complex units, you will usually need to be a member of the bank that operates the machine. ATMs are scattered throughout cities, allowing customers easier access to their accounts. Anyone with a debit or credit card will be able to access most ATMs. Using a machine operated by your bank is usually free, but accessing funds through a unit owned by a competing bank will usually incur a small fee.

Bank Rate
Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances to a commercial bank. Whenever a bank has a shortage of funds they can typically borrow it from the central bank based on the monetary policy of the country. The borrowing is commonly done via Repos (Repurchase) where the Repo rate is the rate at which the central bank lends short-term money to the banks against securities. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from the central bank becomes more expensive. It is more applicable when there is a liquidity crunch in the market. The reverse repo rate is the rate at which the banks can park surplus funds with reserve bank, while the repo rate is the rate at which the banks borrow from the central bank. It is mostly done when there is surplus liquidity in the market. The interest rate that is charged by a countrys central or federal bank on loans and advances to control money supply in the economy and the banking sector. This is typically done on a quarterly basis to control inflation and stabilize the countrys exchange rates. A fluctuation in bank rates triggers a ripple-effect as it impacts every sphere of a countrys economy. For instance, the prices in stock markets tend to react to interest rate changes. A change in bank rates affects customers as it influences prime interest rates for personal loans. It is the rate which central bank provides to the commercial bank for the excess reserves being kept with the central bank.

Mobile Banking
Mobile banking (also known as M-Banking, mbanking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). Mobile banking and Mobile payments are often, incorrectly, used interchangeably. The two terms are differentiated by their service provider-to-consumer relationship; financial institutionto-consumer versus commercial institution-to-consumer for mobile banking and payments, respectively. Mobile Banking involves using mobile devices gain to access financial services. Mobile payments on the other hand may be defined as the use of mobile devices to pay for goods or services either at the point of purchase or remotely. Bill payment is not considered a form of mobile payment because it does not occur in real time. The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile banking typically operates across all major mobile providers in the U.S. through one of three ways: SMS messaging; mobile web; or applications developed for iPhone, Android or Blackberry devices. Mobile text and alert is the simplest, allowing the user to transfer funds or access account information via text message. Texting terminology varies from bank to bank, but the overall function is generally the same. For example, texting "Bal" will obtain the account balance while "Tra" will allow inter-account transfers. Users need to first register and verify their phone numbers with their bank, but once that's completed, they can also set up alerts to let them know about negative balances or deposit confirmations. Mobile web is the second mobile banking option. Similar to online account access from a homebased computer, this option allows for checking balances, bill payment and account transfers simply by logging into the user's account via a mobile web browser. Mobile banking applications for Android, iPhone and Blackberry, connect the user directly to the bank server for complete banking functionality without having to navigate a mobile web browser. These applications can be downloaded either through the bank's website or through the iTunes store.

Claytons Rule
Devaynes v Noble (1816) 35 ER 781, best known for the claim contained in Clayton's case, created a rule, or rather common law presumption in relation to the distribution of monies from a bank account. The rule is based upon the deceptively simple notion of first-in, first-out to determine the effect of payments from an account, and will normally apply in the absence of evidence of any other intention. Payments are presumed to be appropriated to debts in the order in which the debts are incurred. The ruling was based on the legal fiction that, if an account is in credit, the first sum paid in will also be the first to be drawn out and, if the account is overdrawn, the first sum paid in is allocated to the earliest debit on the account which caused the account to be overdrawn. It is generally applicable in cases of running accounts between two parties, e.g., a banker and a customer, moneys being paid in and withdrawn from time to time from the account, without any specific indication as to which payment out was in respect of which payment in. In such case, when final accounts, which may run over several years, are made up, debits and credits will be set off against one another in order of their dates, leaving only final balance to be recovered from the debtor by the creditor. The rule is only a presumption, and can be displaced. The rule is one of convenience and may be displaced by circumstances or by agreement. In Commerzbank Aktiengesellschaft v IMB Morgan plc and others [2004] EWHC 2771 (Ch) the court elected to not to apply the rule on the fact of the case (sums held in bank accounts derived from victims of Nigerian advance fee frauds). Notwithstanding the criticisms sometimes levelled against it, and despite its antiquity, the rule is commonly applied in relation to tracing claims where a fraudster has commingled unlawfully obtained funds from various sources. The rule does not apply to payments made by a fiduciary out of an account which contains a mixture of trust funds and the fiduciary's personal money. In such a case, if the trustee misappropriates any moneys belonging to the trust, the first amount so withdrawn by him will not be allocated to the discharge of his funds held on trust but towards the discharge of his own personal deposits, even if such deposits were, in fact made later in order of time. In such cases, the fiduciary is presumed to spend their own money first before misappropriating money from the trust; see Re Hallett's Estate (1879) 13 Ch D 696. The rule is founded on the principles of Equity. If a fiduciary has mixed his or her own money with sums of trust money in a private account, withdrawals are attributed to his or her own money as far as possible, Re MacDonald [1975] Qd R 255. However, if the funds of two beneficiaries, or of a beneficiary and an innocent volunteer, are mixed the rule determines their respective entitlements, Re Diplock [1948] Ch 465. The rule has special application in relation to partnerships upon the death of a partner. In most jurisdictions, the death of a partner ordinarily has the legal effect of dissolving the firm.The partners' personal representatives have no right to step into the partner's shoes; they cannot take

part in its management; they can only claim the deceased partner's share in the assets of the firm. The banker, who provides financial accommodation to the firm, can have no objection in continuing the account; the bank can presume that the surviving partners will account to the representatives of the deceased for his share in the assets. Where the firm has a debit balance the account should be stopped to fix the liability of the estate of the deceased partner and to avoid the operation of the rule in Clayton's case.

KYC
Know Your Customer (KYC) refers to due diligence activities that financial institutions and other regulated companies must perform to ascertain relevant information from their clients for the purpose of doing business with them. The term is also used to refer to the bank regulation which governs these activities. Know Your Customer processes are also employed by companies of all sizes for the purpose of ensuring their proposed agents', consultants' or distributors' antibribery compliance. Banks, insurers and export credit agencies are increasingly demanding that customers provide detailed anti-corruption due diligence information, to verify their probity and integrity. Know your customer policies are becoming increasingly important globally to prevent identity theft, financial fraud, money laundering and terrorist financing. The objective of KYC guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Related procedures also enable banks to know or understand their customers, and their financial dealings better. This helps them manage their risks prudently. Banks usually frame their KYC policies incorporating the following four key elements: Customer Acceptance Policy; Customer Identification Procedures; Monitoring of Transactions; and Risk management. For the purposes of a KYC policy, a Customer may be defined as : a person or entity that maintains an account and/or has a business relationship with the bank; one on whose behalf the account is maintained (i.e. the beneficial owner); beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the law, and Any person or entity connected with a financial transaction which can pose significant reputational or other risks to the bank, say, a wire transfer or issue of a high value demand draft as a single transaction. +

KYC controls typically include below details: Collection and analysis of basic identity information (CIP) Name matching against lists of known parties (such as politically exposed person) Determination of the customer's risk in terms of propensity to commit money laundering or identity theft Creation of an expectation of a customer's transactional behaviour Monitoring of a customer's transactions against their expected behaviour and recorded profile as well as that of the customer's peers. Banks monitor KYC data for anti-money laundering (AML) and checks relating to combating the financing of terrorism (CFT). Specialized software such as names analysis software and risk scoring algorithm software is used for this purpose. Typically, these software systems will identify potentially suspicious or risky customer accounts and create "alerts" which are then subject to manual due diligence or Enhanced Due Diligence (EDD) - an investigative processes.

Subordinate Debt
In finance, subordinated debt (also known as subordinated loan, subordinated bond, subordinated debenture or junior debt) is debt which ranks after other debts should a company fall into liquidation or bankruptcy. Such debt is referred to as subordinate, because the debt providers (the lenders) have subordinate status in relationship to the normal debt. A typical example for this would be when a promoter of a company invests money in the form of debt, rather than in the form of stock. In the case of liquidation (e.g. the company winds up its affairs and dissolves) the promoter would be paid just before stockholdersassuming there are assets to distribute after all other liabilities and debts have been paid. Subordinated debt has a lower priority than other bonds of the issuer in case of liquidation during bankruptcy, below the liquidator, government tax authorities and senior debt holders in the hierarchy of creditors. Because subordinated debt is repayable after other debts have been paid, they are more risky for the lender of the money. It may be secured or unsecured, but has lesser priority than that of any senior debt claim on the same asset. Subordinated loans typically have a lower credit rating, and therefore a higher yield, than senior debt. While subordinated debt may be issued in a public offering, frequently, major shareholders and parent companies are the buyers of subordinated loans. These entities may prefer to inject capital in the form of debt, but due to the close relationship to the issuing company they may be more willing to accept a lower rate of return on subordinated debt than general investors would. A particularly important example of subordinated bonds can be found in bonds issued by banks. Subordinated debt is issued periodically by most large banking corporations in the U.S. Subordinated debt can be expected to be especially risk-sensitive, because subordinated debt

holders have claims on bank assets after senior debtholders and they lack the upside gain enjoyed by shareholders. This status of subordinated debt makes it perfect for experimenting with the significance of market discipline, via the signalling effect of secondary market prices of subordinated debt (and, where relevant, the issue price of these bonds initially in the primary markets). From the perspective of policy-makers and regulators, the potential benefit from having banks issue subordinated debt is that the markets and their information-generating capabilities are enrolled in the "supervision" of the financial condition of the banks. This hopefully creates both an early-warning system, like the so-called "canary in the mine," and also an incentive for bank management to act prudently, thus helping to offset the moral hazard that can otherwise exist, especially if banks have limited equity and deposits are insured. This role of subordinated debt has attracted increasing attention from policy analysts in recent years. For a second example of subordinated debt, consider asset-backed securities. These are often issued in tranches. The senior tranches get paid back first, the subordinated tranches later. Finally, mezzanine debt is another example of subordinated debt. Subordinated bonds are regularly issued (as mentioned earlier) as part of the securitization of debt, such as asset-backed securities, collateralized mortgage obligations or collateralized debt obligations. Corporate issuers tend to prefer not to issue subordinated bonds because of the higher interest rate required to compensate for the higher risk, but may be forced to do so if indentures on earlier issues mandate their status as senior bonds. Also, subordinated debt may be combined with preferred stock to create so called monthly income preferred stock, a hybrid security paying dividends for the lender and funded as interest expense by the issuer.

Definition of 'Risk Management

The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making. Essentially, risk management occurs anytime an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given their investment objectives and risk tolerance. Inadequate risk management can result in severe consequences for companies as well as individuals. For example, the recession that began in 2008 was largely caused by the loose credit risk management of financial firms. Simply put, risk management is a two-step process - determining what risks exist in an investment and then handling those risks in a way best-suited to your investment objectives. Risk management occurs everywhere in the financial world. It occurs when an investor buys low-risk government bonds over more risky corporate debt, when a fund manager hedges their currency exposure with currency derivatives and when a bank performs a credit check on an individual before issuing them a personal line of credit.

Definition of 'Prime Rate'

The interest rate that commercial banks charge their most credit-worthy customers. Generally a bank's best customers consist of large corporations. The prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate which banks lend to one another. The prime rate is also important for retail customers, as the prime rate directly affects the lending rates which are available for mortgage, small business and personal loans. Default risk is the main determiner of the interest rate a bank will charge a borrower. Because a bank's best customers have little chance of defaulting, the bank can charge them a rate that is lower than the rate that would be charged to a customer who has a higher likelihood of defaulting on a loan.

Definition of 'Bill Of Lading'

A bill of lading (sometimes abbreviated as B/L or BOL) is a document used in the transport of goods by sea. It serves several purposes in international trade, both as transit information, and title to the goods. The Bill of Lading is issued by a carrier, which details a shipment of merchandise, gives title, and requires a carrier to deliver the merchandise to the appropriate party. A legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination of the good being carried. The bill of lading also serves as a receipt of shipment when the good is delivered to the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.

For example, suppose that a logistics company must transport gasoline from a plant in Texas to a gas station in Arizona via heavy truck. A plant representative and the driver would sign the bill of lading after the gas is loaded onto the truck. Once the gasoline is delivered to the gas station in Arizona, the truck driver must have the clerk at the station sign the document as well.

Definition of Microfinance
Microfinance is usually understood to entail the provision of financial services to microentrepreneurs and small businesses, which lack access to banking and related services due to the high transaction costs associated with serving these client categories. The two main mechanisms for the delivery of financial services to such clients are (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group. In some regions, for example Southern Africa, microfinance is used to describe the supply of financial services to low-income employees, which, however, is closer to the retail finance model prevalent in mainstream banking. For some, microfinance is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."Many of those who promote microfinance generally believe that such access will help poor people out of poverty. For others, microfinance is a way to promote economic development, employment and growth through the support of micro-entrepreneurs and small businesses. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Although microcredit is one of the aspects of microfinance, conflation of the two terms is endemic in public discourse. Critics often attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few studies have tried to assess its full impact.

A type of banking service that is provided to unemployed or low-income individuals or groups who would otherwise have no other means of gaining financial services. Ultimately, the goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance. Microfinancing is not a new concept. Small microcredit operations have existed since the mid 1700s. Although most modern microfinance institutions operate in developing countries, the rate of payment default for loans is surprisingly low - more than 90% of loans are repaid. Like conventional banking operations, microfinance institutions must charge their lenders interests on loans. While these interest rates are generally lower than those offered by normal banks, some opponents of this concept condemn microfinance operations for making

profits off of the poor. The World Bank estimates that there are more than 500 million people who have directly or indirectly benefited from microfinance-related operations.

Treasury Bill
Short-term (usually less than one year, typically three months) maturity promissory note issued by a national (federal) government as a primary instrument for regulating money supply and raising funds via open market operations. Issued through the country's central bank, T-bills commonly pay no explicit interest but are sold at a discount, their yield being the difference between the purchase price and the par-value (also called redemption value). This yield is closely watched by financial markets and affects the yield on municipal and corporate bonds and bank interest rates. Although their yield is lower than on other securities with similar maturities, Tbills are very popular with institutional investors because, being backed by the government's full faith and credit, they come closest to a risk free investment. Issued first time in 1877 in the UK and in 1929 in the US.

Factioring
Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. In "advance" factoring, the factor provides financing to the seller of the accounts in the form of a cash "advance," often 70-85% of the purchase price of the accounts, with the balance of the purchase price being paid, net of the factor's discount fee (commission) and other charges, upon collection from the account client. In "maturity" factoring, the factor makes no advance on the purchased accounts; rather, the purchase price is paid on or about the average maturity date of the accounts being purchased in the batch. Factoring differs from a bank loan in several ways. The emphasis is on the value of the receivables (essentially a financial asset), whereas a bank focuses more on the value of the borrower's total assets, and often also considers, in underwriting the loan, the value attributable to non-accounts collateral owned by the borrower. Such collateral includes inventory, equipment, and real property, That is, a bank loan issuer looks beyond the credit-worthiness of the firm's accounts receivables and of the account debtors (obligors) thereon. Secondly, factoring is not a loan it is the purchase of a financial asset (the receivable). Third, a nonrecourse factor assumes the "credit risk", that a purchased account will not collect due solely to the financial inability of account debtor to pay. In the United States, if the factor does not assume credit risk on the purchased accounts, in most cases a court will re-characterize the transaction as a secured loan.

Liquidity Ratio
A class of financial metrics that is used to determine a company's ability to pay off its shortterms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. Common liquidity ratios include the current ratio, the quick ratio and the operating cash flow ratio. Different analysts consider different assets to be relevant in calculating liquidity. Some

analysts will calculate only the sum of cash and equivalents divided by current liabilities because they feel that they are the most liquid assets, and would be the most likely to be used to cover short-term debts in an emergency. A company's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern.

Convertible Bond
In finance, a convertible note (a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features. Although it typically has a coupon rate lower than that of similar, nonconvertible debt, the instrument carries additional value through the option to convert the bond to stock, and thereby participate in further growth in the company's equity value. The investor receives the potential upside of conversion into equity while protecting downside with cash flow from the coupon payments and the return of principal upon maturity. From the issuer's perspective, the key benefit of raising money by selling convertible bonds is a reduced cash interest payment. The advantage for companies of issuing convertible bonds is that, if the bonds are converted to stocks, companies' debt vanishes. However, in exchange for the benefit of reduced interest payments, the value of shareholder's equity is reduced due to the stock dilution expected when bondholders convert their bonds into new shares.

Contingent Liability
Contingent liabilities are liabilities that may or may not be incurred by an entity depending on the outcome of a future event such as a court case. These liabilities are recorded in a company's accounts and shown in the balance sheet when both probable and reasonably estimable. A footnote to the balance sheet describes the nature and extent of the contingent liabilities. The likelihood of loss is described as probable, reasonably possible, or remote. The ability to estimate a loss is described as known, reasonably estimable, or not reasonably estimable. Examples are; Letter of Credit, Acceptance & Endorsements, Bank Guarantee, Bills for Collection, Bills Discounted.

Mutual Fund
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.

One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or shares, are issued and can typically be purchased or redeemed as needed at the fund's current net asset value (NAV) per share, which is sometimes expressed as NAVPS.

SME
A business that maintains revenues or a number of employees below a certain standard. SME firms tend to spend a lot of money on IT and, as a result, these businesses are strongest in the area of innovation. The need to attract capital to fund projects is therefore essential for small and medium-sized enterprises. To be competitive SME firms require "out of the box" solutions, even if they involve surrendering some functionality. Small Enterprise has less than 50 employees and / or less than 15 m Tk in Fixed Capital Investment & Medium Enterprise has51-99 employees and / or Fixed Capital Investments between 1.5 and 100 m Taka.

CAMELS
An international bank-rating system where bank supervisory authorities rate institutions according to six factors. The six factors are represented by the acronym "CAMELS." The six factors examined are as follows: C - Capital adequacy A - Asset quality M - Management quality E - Earnings L - Liquidity S - Sensitivity to Market Risk Bank supervisory authorities assign each bank a score on a scale of one (best) to five (worst) for each factor. If a bank has an average score less than two it is considered to be a high-quality institution, while banks with scores greater than three are considered to be less-than-satisfactory establishments. The system helps the supervisory authority identify banks that are in need of attention.

Online Banking
Online banking (or Internet banking or E-banking) allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution, which can be a

retail or virtual bank, credit union or building society.It may include of any transactions related to online usage To access a financial institution's online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password (under various names) for customer verification. The password for online banking is normally not the same as for telephone banking. Financial institutions now routinely allocate customer numbers (also under various names), whether or not customers intend to access their online banking facility. Customer numbers are normally not the same as account numbers, because a number of accounts can be linked to the one customer number. The customer will link to the customer number any of those accounts which the customer controls, which may be cheque, savings, loan, credit card and other accounts. To access online banking, the customer would go to the financial institution's website, and enter the online banking facility using the customer number and password. Some financial institutions have set up additional security steps for access, but there is no consistency to the approach adopted. he common features fall broadly into several categories

A bank customer can perform some non-transactional tasks through online banking, including o viewing account balances o viewing recent transactions o downloading bank statements, for example in PDF format o viewing images of paid cheques o ordering cheque books o Downloading applications for M-banking, E-banking etc. Bank customers can transact banking tasks through online banking, including o Funds transfers between the customer's linked accounts o Paying third parties, including bill payments (see, e.g., BPAY) and telegraphic/wire transfers o Investment purchase or sale o Loan applications and transactions, such as repayments of enrollments Financial institution administration Management of multiple users having varying levels of authority Transaction approval process

Clearing House
A clearing house is a financial institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions. These transactions may be executed on a futures exchange or securities exchange, as well as off-exchange in the over-thecounter (OTC) market. A clearing house stands between two clearing firms (also known as member firms or clearing participants) and its purpose is to reduce the risk of one (or more)

clearing firm failing to honor its trade settlement obligations. A clearing house reduces the settlement risks by netting offsetting transactions between multiple counterparties, by requiring collateral deposits (a.k.a. margin deposits), by providing independent valuation of trades and collateral, by monitoring the credit worthiness of the clearing firms, and in many cases, by providing a guarantee fund that can be used to cover losses that exceed a defaulting clearing firm's collateral on deposit. Once a trade has been executed by two counterparties either on an exchange, or in the OTC markets, the trade can be handed over to a clearing house which then steps between the two original traders' clearing firms and assumes the legal counterparty risk for the trade. This process of transferring the trade title to the clearing house is called novation. It can take fractions of seconds in highly liquid futures markets; or days, or even weeks in some OTC markets. As the clearing houses concentrates the risk of settlement failures into itself and is able to isolate the effects of a failure of a market participant, it also needs to be properly managed and wellcapitalized in order to ensure its survival in the event of a significant adverse event, such as a large clearing firm defaulting or a market crash. Many clearing house guarantee funds are capitalized with collateral from its clearing firms. In the event of a settlement failure, the clearing firm may be declared to be in default and clearing house default procedures may be utilized, which may include the orderly liquidation of the defaulting firm's positions and collateral. In the event of a significant clearing firm failure, the clearing house may draw on its guarantee fund in order to settle trades on behalf of the failed clearing firm.

Material Alteration
Addition to or deletion of text from a legal instrument (contract, deed, will, etc.) that significantly changes its legal sense or effect, and may thus invalidate it.

Conversion
The exchange of a convertible type of asset into another type of asset, usually at a predetermined price, on or before a predetermined date. The conversion feature is a financial derivative instrument that is valued separately from the underlying security. Therefore, an embedded conversion feature adds to the overall value of the security. An example of an asset that can undergo conversion is a convertible bond. This type of bond gives the bondholder the option to exchange the bond for a predetermined amount of the bond issuer's equity. Typically, the bondholder will exercise the option when the total value of the shares received from conversion exceeds the bond's worth.

Legal Tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal

tender in many countries. The origin of the term "legal tender" is from Middle English tendren, French tendre (verb form), meaning to offer. The Latin root is tendere (to stretch out), and the sense of tender as an offer is related to the etymology of the English word extend (to hold outward).The noun form of a tender as an offering is a back-formation of the noun from the verb. Legal tender is variously defined in different jurisdictions. Formally, it is anything which when offered in payment extinguishes the debt. Thus, personal cheques, credit cards, debit cards, and similar non-cash methods of payment are not usually legal tender. The law does not relieve the debt obligation until payment is accepted. Coins and banknotes are usually defined as legal tender. Some jurisdictions may forbid or restrict payment made other than by legal tender. For example, such a law might outlaw the use of foreign coins and bank notes or require a license to perform financial transactions in a foreign currency. In some jurisdictions legal tender can be refused as payment if no debt exists prior to the time of payment (where the obligation to pay may arise at the same time as the offer of payment). For example vending machines and transport staff do not have to accept the largest denomination of banknote. Shopkeepers may reject large banknotes: this is covered by the legal concept known as invitation to treat. However, restaurants that do not collect payment until after a meal is served must accept that legal tender for the debt incurred in purchasing the meal. The right, in many jurisdictions, of a trader to refuse to do business with any person means a purchaser may not insist on making a purchase and so declaring a legal tender in law, as anything other than an offered payment for debts already incurred would not be effective.

Offshore Banking
Offshore banking refers to the deposit of funds by a company or individual in a bank that is located outside their national residence. Although the term implies that these banks are located on islands, many offshore banks are, in fact, found in onshore locations, such as Panama, Luxembourg and Switzerland. The advantage of offshore banking is that, in many cases, funds are tax exempt where the banks are located. Offshore banks also offer the same services as domestic banks, and frequently they offer more anonymity than would otherwise be available in "onshore" banks. A shell branch located in an international financial center. OBUs' activities are not restricted by local monetary authorities or governments, but they are prohibited from accepting domestic deposits. They do their business in foreign currency.

Basel 2
Baasel II is the second of the Basel Accords, (now extended and effectively superseded by Basel III), which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. Basel II, initially published in June 2004, was intended to create an international standard for banking regulators to control how much capital banks need to put aside to guard against the types of financial and operational risks banks (and the whole economy) face. One focus was to maintain sufficient consistency of regulations so that this does not become a source of competitive inequality amongst internationally active banks. Advocates of Basel II believed that such an international standard could help protect the international financial system from the types of problems that might arise should a major bank or a series of banks collapse. In theory, Basel II attempted to accomplish this by setting up risk and capital management requirements designed to ensure that a bank has adequate capital for the risk the bank exposes itself to through its lending and investment practices. Generally speaking, these rules mean that the greater risk to which the bank is exposed, the greater the amount of capital the bank needs to hold to safeguard its solvency and overall economic stability. Politically, it was difficult to implement Basel II in the regulatory environment prior to 2008, and progress was generally slow until that year's major banking crisis caused mostly by credit default swaps, mortgage-backed security markets and similar derivatives. As Basel III was negotiated, this was top of mind, and accordingly much more stringent standards were contemplated, and quickly adopted in some key countries including the USA.

Merchant Banking
A bank that deals mostly in (but is not limited to) international finance, long-term loans for companies and underwriting. Merchant banks do not provide regular banking services to the general public. A merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters

to the firms they lend to. In the United Kingdom, the term "merchant bank" refers to an investment bank. Today, according to the U.S. Federal Deposit Insurance Corporation (acronym FDIC), "the term merchant banking is generally understood to mean negotiated private equity investment by financial institutions in the unregistered securities of either privately or publicly held companies." Both commercial banks and investment banks may engage in merchant banking activities. Historically, merchant banks' original purpose was to facilitate and/or finance production and trade of commodities, hence the name "merchant". Few banks today restrict their activities to such a narrow scope.

Subordinate Debt

In finance, subordinated debt (also known as subordinated loan, subordinated bond, subordinated debenture or junior debt) is debt which ranks after other debts should a company fall into liquidation or bankruptcy.

Such debt is referred to as subordinate, because the debt providers (the lenders) have subordinate status in relationship to the normal debt. A typical example for this would be when a promoter of a company invests money in the form of debt, rather than in the form of stock. In the case of liquidation (e.g. the company winds up its affairs and dissolves) the promoter would be paid just before stockholdersassuming there are assets to distribute after all other liabilities and debts have been paid. Subordinated debt has a lower priority than other bonds of the issuer in case of liquidation during bankruptcy, below the liquidator, government tax authorities and senior debt holders in the hierarchy of creditors. Because subordinated debt is repayable after other debts have been paid, they are more risky for the lender of the money. It may be secured or unsecured, but has lesser priority than that of any senior debt claim on the same asset. Subordinated loans typically have a lower credit rating, and therefore a higher yield, than senior debt. While subordinated debt may be issued in a public offering, frequently, major shareholders and parent companies are the buyers of subordinated loans. These entities may prefer to inject capital in the form of debt, but due to the close relationship to the issuing company they may be more willing to accept a lower rate of return on subordinated debt than general investors would. A particularly important example of subordinated bonds can be found in bonds issued by banks. Subordinated debt is issued periodically by most large banking corporations in the U.S. Subordinated debt can be expected to be especially risk-sensitive, because subordinated debt holders have claims on bank assets after senior debtholders and they lack the upside gain enjoyed by shareholders. This status of subordinated debt makes it perfect for experimenting with the significance of market discipline, via the signalling effect of secondary market prices of subordinated debt (and, where relevant, the issue price of these bonds initially in the primary markets). From the perspective of policy-makers and regulators, the potential benefit from having banks issue subordinated debt is that the markets and their information-generating capabilities are enrolled in the "supervision" of the financial condition of the banks. This hopefully creates both an early-warning system, like the so-called "canary in the mine," and also an incentive for bank management to act prudently, thus helping to offset the moral hazard that

can otherwise exist, especially if banks have limited equity and deposits are insured. This role of subordinated debt has attracted increasing attention from policy analysts in recent years. For a second example of subordinated debt, consider asset-backed securities. These are often issued in tranches. The senior tranches get paid back first, the subordinated tranches later. Finally, mezzanine debt is another example of subordinated debt. Subordinated bonds are regularly issued (as mentioned earlier) as part of the securitization of debt, such as asset-backed securities, collateralized mortgage obligations or collateralized debt obligations. Corporate issuers tend to prefer not to issue subordinated bonds because of the higher interest rate required to compensate for the higher risk, but may be forced to do so if indentures on earlier issues mandate their status as senior bonds. Also, subordinated debt may be combined with preferred stock to create so called monthly income preferred stock, a hybrid security paying dividends for the lender and funded as interest expense by the issuer.

Overdraft
An extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically the bank allows people to borrow a set amount of mone If you have an overdraft account, your bank will cover checks which would otherwise bounce. As with any loan, you pay interest on the outstanding balance of an overdraft loan. Often the interest on the loan is lower than credit cards. An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn". If there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft limit, then interest is normally charged at the agreed rate. If the negative balance exceeds the agreed terms, then additional fees may be charged and higher interest rates may apply.

Endorsement
1. A legal term that refers to the signing of a document which allows for the legal transfer of a negotiable from one party to another. 2. An attachment to a document that amends or adds to it. Typically, it is an added provision to an insurance policy. Also referred to as a "rider". 1. When an employer signs a check, they are endorsing the transfer of money from the business accounts to the account of the employee. 2. If an insurance contract has a provision stating that in the event of the policy holder's death the family of the policy holder will continue to receive the policy holder's monthly income for a period of time, this is an example of an endorsement or a rider. Endorsements and riders cause the price of the premium to rise as they provide a positive benefit.

Endorsement (alternatively spelt indorsement) may refer to:

Testimonial in advertising, written or spoken statement endorsing a product Political endorsement, the action of publicly declaring one's personal or group's support of a candidate for elected office a form added to an insurance policy, modifying the terms A signature on a negotiable instrument (such as a cheque), indicating a person's intent to become a party to the instrument Blank endorsement, such a signature, without indicating payee Notation made on a Driver's license