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Clerk & PO : Important Quiz for Bank Part-06

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
Margin Call: A notice to a client that it must
provide money to satisfy a minimum margin
requirement set by an Exchange or by a bank /
broking firm.
Market Capitalization: The product of the
number of the company’s outstanding ordinary
shares and the market price of each share.
Market Maker: A dealer who maintains an
inventory in one or more stocks and
undertakes to make continuous two-sided
quotes.
Market Order: An order to buy or an order to
sell securities which is to be executed at the
prevailing market price.
Money Market: Market in which short-term
securities are bought and sold.
Marginal Standing Facility Rate: MSF scheme
has become effective from 09th May, 2011
launched by the RBI. Under this scheme, Banks
will be able to borrow upto 1% of their
respective Net Demand and Time Liabilities.
The rate of interest on the amount accessed
from this facility will be 100 basis points (i.e.
1%) above the repo rate. This scheme is likely
to reduce volatility in the overnight rates and
improve monetary transmission.
Mandate: Written authority issued by a
customer to another person to act on his
behalf, to sign cheques or to operate a bank
account.
Material Alteration: Alteration in an
instrument so as to alter the character of an
instrument for example when date, amount,
name of the payee are altered or making a
cheque payable to bearer from an order one or
opening the crossing on a cheque.
Merchant Banking : When a bank provides to
a customer various types of financial services
like accepting bills arising out of trade,
arranging and providing underwriting, new
issues, providing advice, information or
assistance on starting new business,
acquisitions, mergers and foreign exchange.
Micro Finance: Micro Finance aims at
alleviation of poverty and empowerment of
weaker sections in India. In micro finance,
very small amounts are given as credit to poor
in rural, semi-urban and urban areas to enable
them to raise their income levels and improve
living standards.
Minor Accounts: A minor is a person who has
not attained legal age of 18 years. As per
Contract Act a minor cannot enter into a
contract but as per Negotiable Instrument Act,
a minor can draw, negotiate, endorse, receive
payment on a Negotiable Instrument so as to
bind all the persons, except himself. In order
to boost their deposits many banks open minor
accounts with some restrictions.
Mobile Banking : With the help of M-Banking
or mobile banking customer can check his
bank balance, order a demand draft, stop
payment of a cheque, request for a cheque
book and have information about latest
interest rates.
Money Laundering: When a customer uses
banking channels to cover up his suspicious
and unlawful financial activities, it is called
money laundering.
Money Market: Money market is not an
organized market like Bombay Stock Exchange
but is an informal network of banks, financial
institutions who deal in money market
instruments of short term like CP, CD and
Treasury bills of Government.
Moratorium: R.B.I. imposes moratorium on
operations of a bank; if the affairs of the bank
are not conducted as per banking norms. After
moratorium R.B.I. and Government explore
the options of safeguarding the interests of
depositors by way of change in management,
amalgamation or take over or by other means.
Mortgage: Transfer of an interest in specific
immovable property for the purpose of
offering a security for taking a loan or advance
from another. It may be existing or future
debt or performance of an agreement which
may create monetary obligation for the
transferor (mortgagor).
Mutual Fund: A company that invests in and
professionally manages a diversified portfolio
of securities and sells shares of the portfolio to
investors.

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