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Clerk & PO : Important Quiz for Bank Part-05

NABARD: National Bank for Agriculture &
Rural Development was setup in 1982 under
the Act of 1981. NABARD finances and
regulates rural financing and also is
responsible for development agriculture and
rural industries.
Negotiation: In the context of banking,
negotiation means an act of transferring or
assigning a money instrument from one person
to another person in the course of business.
Net Asset Value: The underlying value of a
share of stock in a particular mutual fund; also
used with preferred stock.
Non-Fund Based Limits: Non-Fund Based
Limits are those type of limits where banker
does not part with the funds but may have to
part with funds in case of default by the
borrowers, like guarantees, letter of credit and
acceptance facility.
Non-Resident: A person who is not a resident
of India is a non-resident.
Non-Resident Accounts: Accounts of non-
resident Indian citizens opened and maintained
as per R.B.I. Rules.
Notary Public: A Lawyer who is authorized by
Government to certify copies of documents .
NPA Account: If interest and instalments and
other bank dues are not paid in any loan
account within a specified time limit, it is
being treated as non-performing assets of a
bank.
Off Balance Sheet Items: Those items which
affect the financial position of a business
concern, but do not appear in the Balance
Sheet E,g guarantees, letters of credit . The
mention "off Balance Sheet items" is often
found in Auditors Reports or Directors Reports.
Offer for Sale: An offer to the public by, or
on behalf of, the holders of securities already
in issue.
Offer for Subscription: The offer of new
securities to the public by the issuer or by
someone on behalf of the issuer.
Online Banking: Banking through internet site
of the bank which is made interactive.
Open-end (Mutual) Fund: There is no limit to
the number of shares the fund can issue. The
fund issues new shares of stock and fills the
purchase order with those new shares.
Investors buy their shares from, and sell them
back to, the mutual fund itself. The share
prices are determined by their net asset value.
Open Offer: An offer to current holders of
securities to subscribe for securities whether
or not in proportion to their existing holdings.
Option: A security that gives the holder the
right to buy or sell a certain amount of an
underlying financial asset at a specified price
for a specified period of time.
Oversubscribed: When an Initial Public
Offering has more applications than actual
shares available. Investors will often apply for
more shares than required in anticipation of
only receiving a fraction of the requested
number. Investors and underwriters will often
look to see if an IPO is oversubscribed as an
indication of the public’s perception of the
business potential of the IPO company.
Pass Book: A record of all debit and credit
entries in a customer's account. Generally all
banks issue pass books to Savings Bank/
Current Account Holders.
Par Bond: A bond selling at par (i.e. at its face
value).
Par Value: The face value of a security.
Perpetual Bonds: Bonds which have no
maturity date.
Placing: Obtaining subscriptions for, or the
sale of, primary market, where the new
securities of issuing companies are initially
sold.
Personal Identification Number
(PIN): Personal Identification Number is a
number which an ATM card holder has to key
in before he is authorized to do any banking
transaction in a ATM .
Plastic Money: Credit Cards, Debit Cards, ATM
Cards and International Cards are considered
plastic money as like money they can enable us
to get goods and services.
Pledge: A bailment of goods as security for
payment of a debt or performance of a
promise, e.g pledge of stock by a borrower to
a banker for a credit limit. Pledge can be made
in movable goods only.
Post-Dated Cheque: A Cheque which bears
the date which is subsequent to the date when
it is drawn. For example, a cheque drawn on
8th of February, 2007 bears the date of 12th
February, 2007.
Power of Attorney: It is a document executed
by one person - Donor or Principal, in favour
of another person, Donee or Agent - to act on
behalf of the former, strictly as per authority
given in the document.
Portfolio: A collection of investment vehicles
assembled to meet one or more investment
goals.
Preference Shares: A corporate security that
pays a fixed dividend each period. It is senior
to ordinary shares but junior to bonds in its
claims on corporate income and assets in case
of bankruptcy.
Premium (Warrants): The difference of the
market price of a warrant over its intrinsic
value.
Premium Bond: Bond selling above par.
Present Value: The amount to which a future
deposit will discount back to present when it is
depreciated in an account paying compound
interest.
Present Value of an Annuity: The amount to
which a stream of equal cash flows that occur
in equal intervals will discount back to present
when it is depreciated in an account paying
compound interest.
Price/Earnings Ratio (P/E): The measure to
determine how the market is pricing the
company’s common stock. The price/earnings
(P/E) ratio relates the company’s earnings per
share (EPS) to the market price of its stock.
Privatization: The sale of government-owned
equity in nationalized industry or other
commercial enterprises to private investors.
Prospectus: A detailed report published by the
Initial Public Offering company, which includes
all terms and conditions, application
procedures, IPO prices etc, for the IPO
Put Option: The right to sell the underlying
securities at a specified exercise price on of
before a specified expiration date.
Premature Withdrawals: Term deposits like
Fixed Deposits, Call Deposits, Short Deposits
and Recurring Deposits have to mature on a
particular day. When these deposits are sought
to be withdrawn before maturity , it is
premature withdrawal.
Prime Lending Rate (PLR): The rate at which
banks lend to their best (prime) customers.
Priority Sector Advances : consist of loans
and advances to Agriculture, Small Scale
Industry, Small Road and Water Transport
Operators, Retail Trade, Small Business with
limits on investment in equipments,
professional and self employed persons, state
sponsored organisations for lending to SC/ST,
Educational Loans, Housing Finance up to
certain limits, self-help groups and
consumption loans.
Promissory Note: Promissory Note is a
promise / undertaking given by one person in
writing to another person, to pay to that
person , a certain sum of money on demand or
on a future day.
Provisioning: Provisioning is made for the
likely loss in the profit and loss account while
finalizing accounts of banks. All banks are
supposed to make assets classification and
make appropriate provisions for likely losses in
their balance sheets.
Public Sector Bank: A bank fully or partly
owned by the Government.

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