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Clerk & PO : Important Quiz for Bank Part-08

Garnishee Order: When a Court directs a bank
to attach the funds to the credit of customer's
account under provisions of Section 60 of the
Code of Civil Procedure, 1908.
General Lien: A right of the creditors to retain
possession of all goods given in security to him
by the debtor for any outstanding debt.
Guarantee: A contract between guarantor and
beneficiary to ensure performance of a
promise or discharge the liability of a third
person. If promise is broken or not
performed, the guarantor pays contracted
amount to the beneficiary.
Hedge: A combination of two or more
securities into a single investment position for
the purpose of reducing or eliminating risk.
Holder: Holder means any person entitled in
his own name to the possession of the cheque,
bill of exchange or promissory note and who is
entitled to receive or recover the amount due
on it from the parties. For example, if I give a
cheque to my friend to withdraw money from
my bank,he becomes holder of that cheque.
Even if he loses the cheque, he continues to be
holder. Finder cannot become the holder.
Holder in due course : A person who receives
a Negotiable Instrument for value, before it
was due and in good faith, without notice of
any defect in it, he is called holder in due
course as per Negotiable Instrument Act. In
the earlier example if my friend lends some
money to me on the basis of the cheque,
which I have given to him for encashment, he
becomes holder-in-due course.
Hypothecation: Charge against property for an
amount of debt where neither ownership nor
possession is passed to the creditor. In pledge,
possession of property is passed on to the
lender but in hypothecation, the property
remains with the borrower in trust for the
lender.
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.

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