Identification: When a person provides a document to a bank or is
being identified by a person, who is known to the bank, it is called
identification. Banks ask for identification before paying an order cheque or a
demand draft across the counter.
Indemnifier: When a person indemnifies or guarantees to make good
any loss caused to the lender from his actions or others' actions.
Indemnity: Indemnity is a bond where the indemnifier undertakes
to reimburse the beneficiary from any loss arising due to his actions or third
party actions.
Income: The amount of money an individual receives in a particular
time period.
Index Fund: A mutual fund that holds shares in proportion to
their representation in a market index, such as the S&P 500.
Initial Public Offering (IPO): An event where a company sells
its shares to the public for the first time. The company can be referred to as
an IPO for a period of time after the event.
Inside Information: Non-public knowledge about a
company possessed by its officers, major owners, or other individuals with
privileged access to information.
Insider Trading: The illegal use of non-public
information about a company to make profitable securities transactions
Insolvent: Insolvent is a person who is unable to pay his debts
as they mature, as his liabilities are more than the assets . Civil Courts
declare such persons insolvent. Banks do not open accounts of insolvent persons
as they cannot enter into contract as per law.
Interest Warrant: When cheque is given by a company
or an organization in payment of interest on deposit , it is called interest
warrant. Interest warrant has all the characteristics of a cheque.
International Banking: involves more than two nations or
countries. If an Indian Bank has branches in different countries like State
Bank of India, it is said to do International Banking.
Introduction: Banks are careful in opening any account for a
customer as the prospective customer has to be introduced by an existing
account holder or a staff member or by any other person known to the bank for
opening of account. If bank does not take introduction, it will amount to
negligence and will not get protection under law.
Intrinsic Value: The difference of the exercise price
over the market price of the underlying asset.
Investment: A vehicle for funds expected to increase its value
and/or generate positive returns.
Investment Adviser: A person who carries on a
business which provides investment advice with respect to securities and is
registered with the relevant regulator as an investment adviser.
IPO price: The price of share set before being traded on the
stock exchange. Once the company has gone Initial Public Offering, the stock
price is determined by supply and demand.
JHF Account : Joint Hindu Family Account is account of a firm whose
business is carried out by Karta of the Joint family, acting for all the family
members.. The family members have common ancestor and generally maintain a
common residence and are subject to common social, economic and religious
regulations.
Joint Account: When two or more individuals jointly open an account
with a bank.
Junk Bond: High-risk securities that have received low ratings
(i.e. Standard & Poor’s BBB rating or below; or Moody’s BBB rating or
below) and as such, produce high yields, so long as they do not go into
default.
Karta: Manager of a Hindu Undivided Family (HUF) who handles the
family business. He is usually the eldest male member of the undivided family.
Kiosk Banking: Doing banking from a cubicle from which food,
newspapers, tickets etc. are also sold.
KYC Norms: Know your customer norms are imposed by R.B.I. on
banks and other financial institutions to ensure that they know their customers
and to ensure that customers deal only in legitimate banking operations and not
in money laundering or frauds.
Law of Limitation: Limitation Act of 1963 fixes the
limitation period of debts and obligations including banks loans and advances.
If the period fixed for particular debt or loan expires, one cannot file a suit
for is recovery, but the fact of the debt or loan is not denied. It is said
that law of limitation bars the remedy but does not extinguish the right.
Lease Financing: Financing for the business of
renting houses or lands for a specified period of time and also hiring out of
an asset for the duration of its economic life. Leasing of a car or heavy
machinery for a specific period at specific price is an example.
Letter of Credit: A document issued by importers
bank to its branch or agent abroad authorizing the payment of a specified sum
to a person named in Letter of Credit (usually exporter from abroad). Letters
of Credit are covered by rules framed under Uniform Customs and Practices of
Documentary Credits framed by International Chamber of Commerce in Paris.
Limited Companies Accounts: Accounts of companies
incorporated under the Companies Act, 1956 . A company may be private or
public. Liability of the shareholders of a company is generally limited to the
face value of shares held by them.
Leverage Ratio: Financial ratios that measure the amount of debt being
used to support operations and the ability of the firm to service its debt.
Libor: The London Interbank Offered Rate (or LIBOR) is a daily
reference rate based on the interest rates at which banks offer to lend
unsecured funds to other banks in the London wholesale money market (or
interbank market). The LIBOR rate is published daily by the British Banker’s
Association and will be slightly higher than the London Interbank Bid Rate
(LIBID), the rate at which banks are prepared to accept deposits.
Limit Order: An order to buy (sell) securities which specifies the
highest (lowest) price at which the order is to be transacted.
Limited Company: The passive investors in a
partnership, who supply most of the capital and have liability limited to the
amount of their capital contributions.
Liquidity: The ability to convert an investment into cash quickly
and with little or no loss in value.
Listing: Quotation of the Initial Public Offering company’s shares on
the stock exchange for public trading.
Listing Date: The date on which Initial Public Offering stocks are
first traded on the stock exchange by the public.
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