Banking Glossary (F)

Fiscal Year

A fiscal year is a 12-month accounting period used by any company and it does not necessarily follow the calendar year. India fiscal year is April to March.

Fixed Deposit

A deposit of funds in a bank under an agreement stipulating that the funds must be kept on deposit for a stated period of time at a predefined interest rate.

Fixed Rate

Also called the fixed interest rate, it is a fixed amount of interest, which is chargeable for a specified duration or for the entire tenure of the loan.

Floating Rate

Floating rate or variable interest rate as it is also called doesn't remain fixed for the entire tenure of the loan. It varies according to the market conditions. This rate is linked to an external, market determined benchmark e.g. LIBOR. The lending is expressed with a spread above or below the benchmark rate. Repricing takes place after a predetermined period say, 6 months when the lending rate will be revised with reference to the benchmark rate as on that day.

Floor Limit (Credit Card)

Floor limit is the maximum amount; credit card brands like Visa and MasterCard have set forth for a single transaction for specific types of merchants, outlets and branches. An authorization is required, usually via a phone call to exceed the floor limit.

Foreclosure

Foreclosure is a legal procedure whereby property pledged as security for a debt is sold by the lender to pay the debt in the event of default in repayment.

Foreign Currency Convertible Bond

A bond issued in foreign currency abroad giving the investor the option to convert the bond into equity at a fixed conversion price or as per a pre-determined pricing formula.

Fraudulent Transaction (Credit Card)
A fraudulent credit card transaction is one in which the rules and regulations are not properly followed. Generally such transactions are unauthorized by credit card holders and involve a lost, stolen, fabricated, counterfeit and fraudulent processing of a credit card.

Fraud

Frauds have been classified as under, based mainly on the provisions of the Indian Penal Code :

(a) Misappropriation and criminal breach of trust. (b)

Fraudulent encashment through forged instruments, manipulation of books of account or through fictitious accounts and conversion of property.

(c) Unauthorised credit facilities extended for reward or for illegal gratification. (d) Negligence and cash shortages. (e) Cheating and forgery. (f) Irregularities in foreign exchange transactions. (g) Any other type of fraud not coming under the specific heads as above.

Funding Volatility Ratio

Liquid assets to current and savings deposits - (Higher the ratio, the better).