Glossary of banking terms in India | Banking Dictionary | Important Banking terms to be known every Bank aspirant - PART 2

No.	TERM	DEFINITION
51	Certificate of Title (Title Deed)	An official document, showing the ownership or title of the property in question is called the certificate of title/title deeds. It describes  various  details  about  the  property  such  as  the  area,
		location, registered owner and other factors and charges related to the property.
52	Certificate of Deposit (CD)	A time deposit that is payable at the end of a specified term. CDs generally pay a fixed interest rate and generally offer a different interest rate than other types of deposit accounts. If an early withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. CD is sold at discount value and being a money market instrument, can be transferred to other person through negotiaion.
53	Certified cheque	A cheque for which the bank guarantees payment. Banks in India do not generally, certify cheques.
54	Charge back	A credit card transaction, which is returned or not honored, is called a charge back. Usually done by the credit card holder in response to faulty products, credit card fraud, a dispute or non- compliance with the rules and regulations, charge back restores the funds back with the credit card.
55	Charge back Period	It is the time period from a particular credit card transaction within which, the credit card holder must initiate a charge back.
56	Charge Card	A card that requires full payment of the balance before the end of the billing period. It is not a line of credit  and no interest is charged.
57	Cheque for Collection	An instrument drawn on another Bank or Branch tendered by a customer of a Bank or by his representative, at the branch or in the drop box provided for the purpose for collecting the amount of the cheque.
58	Cheque purchase	Bank may, at its sole discretion, purchase local/outstation cheque tendered for collection at the specific request of the customer or as per prior arrangement subject to levy of service charges.
59	Cheque return fee / EMI return fee)	This is a ‘service charge’ that would be levied in the account due to return of cheque sent for collection/EMI cheque. Usually, both the collecting bank and paying bank leavy cheque eturn charges on their customers.
60	Clear Title	When the  property in question is free  from any doubt, is not disputed and is not having any encumbrances it is said to have a clear title.
61	Co-borrower	A person who applies for any loan with the primary borrower and takes on the responsibility for repayment of the debt. This is done to improve the eligibility for loan and simultaneously mitigating
		the risk of banks who can exercise the option of recovery from both parties- jointly as well as severally.
62	Co-Branded Card	It is a special type of credit card which is sponsored by both the credit card issuing company and the participating retail company or vendor. Co-branded credit card carries special deals and savings from the participating merchants.
63	Collateral	An asset pledged to a lender to guarantee repayment. Collateral could include savings, bonds, insurance policies, jewelry, property or other items that are pledged to pay off a loan if payments are not made according to the contract. Collateral is not required for unsecured credit card accounts.
64	Collected Balance	The balance in a deposit account, not including deposited items that have not yet been paid, or collected. See also Glossary term, "account balance." It is also known as cleared balance.
65	Combined Balance	Any combination of balances from linked accounts, such as savings, current and CDs. Can be used to meet the balance required to waive the monthly fee on some accounts.
66	Commitment Fee	It is an interest, which is charged on a loan applicant if he doesn’t withdraw the sanctioned loan within a stipulated time period.
67	Common Areas	Areas such as staircase, lifts, sanitation ducts, electricity ducts, air- conditioning ducts etc. kept aside for common use by the property owners. This area is generally divided proportionately in relation to the size of property and charged accordingly.
68	Compound Interest	Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. The more frequently interest is  compounded, the higher the effective rate. In India interest on loans and advances is compounded on monthly basis as per RBI order.
69	Consolidation Loan	If you owe money to several creditors, you can combine your payments and balances into a single account with one creditor. This can be done in several ways. For example, you can transfer several high interest credit card balances onto one card with a lower rate. If you own a home, you can consolidate your debt with a low-interest home equity loan. Or, you can get a loan specifically designed for this purpose.
70	Contact Point Verification	This refers to contact by bank staff on the phone numbers/ address provided by the customer to establish correctness of the contact points. CPV is an important parameter in banks and a negative verification can lead to decline of the banking facilities sought.
71	Contract	A written, oral, partly written partly oral or behavioral agreement between two or more parties or people, which is legally binding, can be termed as a contract.
72	Conveyance	It is the process of legally transferring the ownership of interest in land.
73	Co-sign	To sign a credit agreement with someone and agree to share the debt with that person or assume the debt if the other person defaults and doesn't pay.
74	Co-signer (Co-obligant)	A co-signer is a person who signs a loan or credit card with the primary applicant, pledging to be responsible for repaying the loan or debt in the event the applicant is unable.
75	Credit Appraisal	This is the process for evaluating credit worthiness of any loan proposal. This helps establish the risks involved in the proposal and debt servicing capacity of the borrower. A wide range of criteria viz. age of borrower, credit score, existing loan obligations, nature/ sources/ stability of income etc. are taken into account. Credit History of the person is an important criteria for sanction of credit.
76	Credit Available	The amount of unused credit that is available. Your credit available is your outstanding balance subtracted from your total credit line. For example, if your credit line is Rs 50,000 and you have an outstanding balance of Rs 40,000, your credit available is Rs 10,000, which means that you have Rs 10,000 of credit left that you can use to make purchases with your credit card.
77	Credit Bureau (Credit Information Company)	A credit bureau is a company that collects and shares information about how you manage your credit. Many banks and credit issuers regularly update the credit bureaus about your payment habits and how much money you owe. Potential creditors may check your credit report when you apply for a loan or a credit card. Reporting to at least one Credit Bureau is mandatory in India.
78	Credit Card Debt	The total unpaid balances on all of your credit cards (not to be confused with the minimum amount you owe each month).
79	Credit Criteria	Factors used by lenders to rate the credit worthiness or ability to repay debt. They may include the following: income, amount of personal debt carried, number of accounts from other credit sources and credit history. A lender is free to use any credit-related information in approving or denying a credit application
80	Credit History	A financial profile of any person created by credit rating agencies based on how he repays his bills, clears his debt and the amount a
		person owes to various credit card companies and other lenders.
81	Credit Limit	It is the maximum amount of money one can draw on his account based on prior sanction or approval from the bank. Borrowing or drawing limit fixed by a bank for a customer depending on his credit history, repaying capacity and relationship with bank.
82	Credit Management	The way you handle the money you borrow from banks or credit issuers. A good credit management will ensure optimum utilization of borrowed funds and meet repyment obligations on time.
83	Credit Report	A credit report is a record of all of the information that credit bureau have collected about the way you've managed your finances over the last 5 years. It is the official record of how you pay the money you owe to your creditors. The information on your report can either qualify or disqualify you from obtaining credit cards, mortgages, loans etc. An individual can obtain credit report on himself from the credit bureau on payment of a fee.
84	Credit-worthy	You are judged to be qualified to have credit.
85	Current Account	An account used for commercial purpose. It attracts no rate of interest and is generally charged by the bank with maintenance charges. There is no limit to the number of transactions in this type of account.
86	Custodial Account	An account created for the benefit of a minor with an adult as the custodian.
87	Daily Periodic Rate	The interest rate factor used to calculate the interest charges on a daily basis. The factor is computed by dividing the yearly rate by 365 days.
88	Debit Card	A plastic card issued by a Bank for cash withdrawal from a/c(s) through ATMs and payments at point of sale for purchases made. Debit Card denotes immediate debit to the customer's account.
89	Debt	An amount of money you owe to banks or credit issuers. More specifically, it is the amount of money that you have borrowed.
90	Debt Ratio/Debt Burden	An amount of money you owe to banks or credit issuers. It is the percentage of your income that goes to paying your debts every month. Debt ratio usually gives a clear picture of your overall financial well-being. To calculate your debt ratio, first add up all your monthly income including take-home pay (after taxes). Then add up all your monthly payments for interest bearing loans and accounts, such as mortgages, student loans, credit cards and car loans. If you rent your home, include that amount, but do not
		include utilities and telephone charges because they can vary on a monthly basis. Finally, divide your monthly payments by your income. Multiply the result by 100 and that number is your debt ratio percentage. ·         A low ratio is under 20%, which means that you are in good financial health and are doing a good job of managing your money. ·         A moderate ratio is between 21% and 40%. This means that you should look carefully at your monthly payments and start decreasing your overall level of debt, including credit cards. A high debt burden is over 40%. You should immediately stop accumulating debt and start looking for ways to decrease your debt or increase your income.
91	Default	Failure to repay a loan according to the agreed upon terms.
92	Deferred Payment	Payments put off to a future date or extended over a period of time. Interest will usually still accumulate during deferment.
93	Delinquency	When loan payments are not paid according to the terms of the agreement/promissory note. Late fees are often levied on delinquent accounts.
94	Deposit	Money  placed  in  a  customer's  account  at  a  Bank/Financial Institution.
95	Deposit at Call	Receipts issued to customers for amount deposited and repayable on demand. A facility normally extended for payment of earnest money deposits in tenders.
96	Depreciation	Depreciation means a decline in the value of capital asset. It represents a cost of ownership and the consumption of an asset over time.
97	Detailed Statement	The detailed statement of account depicts the details of the transactions in the account (ie. Loan disbursal, EMI credit, interest debit, unpaid return of EMI, penal interest debit, if any, etc.).
98	Disclosure	Information pertaining to the account services, fees and regulatory requirements.
99	Disclosure Statement	A disclosure statement details the actual cost of a loan, including all estimated interest costs and loan fees. For credit card accounts, this information may be found in the Card member Agreement.
100	Disposable Income	Disposable income is the amount of income left after deductions such as income tax, pension contributions and personal insurance. It is often known as 'take home pay' - the actual pay a worker receives.

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