Banking Glossary (A)

Acceptance Letter
	Acceptance letter is the letter that a borrower or applicant gives to the lender after reading the terms of the loan. This letter denotes the borrower's willingness to accept the loan offer within a particular time frame.
Account Balance
	Opening Account Balance / Beginning of the Day (BOD) Balance : The balance in an account at the beginning of each business day; includes all deposits and withdrawals that were posted from the previous night, whether or not funds have been collected.
	Closing Account Balance / End of the Day (EOD) Balance : The account balance computed at the end of the business day, and is the adjusted balance of the credits and debits during the business day in the account of the customer.
Account Statement
	Periodic statement of all the debit and credit transactions on an account for a given statement cycle.
Acquirer
	Acquirers are banks and financial institutions that collaborate with businesses to accept credit / debit card payments.
Active Account
	A bank account in which there are regular transactions. A bank account that is not dormant or inoperative or under an attachment order of the court or enforcement authorities.
Additional Cardholder
	Another member added to an existing card thus extending its usage is called an additional cardholder. Thus by adding an additional cardholder the existing cardholder allows him / her to make purchases and use the credit card. However, the responsibility to repay the monthly outstanding balance rests with the original (principal) cardholder.
Administrative Fee
	A one time non-refundable levy to bank's customers for meeting expenses related to appraisal of loan proposals.
Advance EMI
	Number of equated monthly installments, paid in advance at the time of disbursal of loan.
Affinity Card
	Credit cards linked to special organizations like sports clubs, exclusive clubs and charities. Affinity credit cards can also help raise funds, when a part of income from every transaction goes toward the benefit of relevant organization.
ALCO
	Asset-Liability Management Committee (ALCO) is a strategic decision making body, formulating and overseeing the function of asset liability management (ALM) of a bank.
ALM
	Asset Liability Management (ALM) is concerned with strategic balance sheet management involving all market risks. It also deals with liquidity management, funds management, trading and capital planning.
Amortization
	Amortization is the repayment of Principal and Interest components of a Loan, over a period of time. Certain category of expenses or charges are also amortized over a period of time.
Annual Fee
	An annual amount charged by the credit card companies to maintain the credit card.
Annual percentage yield (APY)
	A percentage rate reflecting the total amount of interest paid on a deposit account (savings, CDs etc.), based on the interest rate and the effect of interest compounding for one year.
Anywhere Banking
	Customer can deposit / withdraw cash at any branch other than the branch in which he holds the account. Anywhere banking frees the customer from geographical boundaries and limitations and gives the flexibility to the customer to use his account across the board.
Application Form
	A form to be filled in and signed as per the Bank's requirements to avail Banking facilities. Requirement of details to be filled in will vary for each facility. Applications may also require certain specified documents also to be attached.
Arrears Outstanding
	The arrears outstanding comprises of the unpaid EMI's and other charges, if any, levied in the account.
Asset
	Cash or anything you own that can be turned into cash. This includes property, goods, savings or investments.
	These are things that people own such as buildings, vehicles, shares and money in the bank. The opposite is liabilities. For a bank, its assets are mainly the loans it makes
ATM
	Acronym for automated teller machine, a machine at a bank branch or other location, which enables a customer to perform basic banking activities (checking one's balance, withdrawing or transferring funds) even when the bank is closed.
Attestation
	Authentication of signatures of a customer of the branch required by the customer for any legal purposes.
Automatic Funds Transfer
	An arrangement that moves funds from one account to another automatically on a pre-arranged schedule; for example, every payday or once a month.
Automatic Payment
	An arrangement that authorizes payments to be deducted automatically from a bank account (usually a savings / current account) to pay bills (such as insurance payments, rent, mortgage or loan payments). Payments are usually scheduled to be made on a certain day of the month.
Available Balance
	The available balance is the account balance in the account that is available for immediate use at any given point of time
Available Credit
	Available credit is your credit limit minus your current balance. It is the unused portion of your credit line.
Available for Sale (AFS)
	The securities available for sale are those securities where the intention of the bank is neither to trade nor to hold till maturity. These securities are valued at the fair value which is determined by reference to the best available source of current market quotations or other data relative to current value.
Average Cost
	(Interest expended on deposits and borrowings / Average interest bearing liabilities) x 100
Average daily Balance
	The average balance in a deposit account, equals the sum of the daily account balances during an accounting period, usually a monthly or a quarterly cycle, divided by the number of days in the accounting period. Banks normally specify certain minimum average daily balance to be maintained in current and savings accounts.
Average Yield
	(Interest and discount earned / average interest earning assets) x 100