Banking information

a) Short term loans- Less than 15 months
b) Medium term loans- 15 months to 5years
c) Long term loans- more than 5 years.
Loans are acquired from institutional sources(Banks) and Non institutional sources(money lenders).

1. Export-Import Bank was set up in 1982 for financing exports and imports.
2. Amalgamation means merger. As and when necessity arises two or more companies are merged into large organization. The old firms completely loose their identity when the merger take place.
3. Auction when the commodity is sold by auction, the bids are made by buyers, who so ever makes the highest bid, gets the commodity which is being sold.The buyers make a bid taking into consideration the quality and quantity of the commodity.
4. Balance of payment it shows the relationship between the country total payment to all other countries and its receipt of them. Balance of payment includes visible export and imports but also invisible trade like shipping, banking, insurance, tourism, royalty, payment of interest on foreign debts.
5. Balance of Trade it refers to the relationship between the values of country imports and its exports, i.e visible balance. Balance of trade refers to the total of country export commodities and total value of import commodities. it include movement of goods.
6. Balance sheet is a statement showing the assest and liabilities of a business at certain date. it help to estimate the real financial position of a firm.
7. Bank bank is a financial institution, it accepts funds from current account and saving accounts. it also lends money. The bank pay the cheque drawn by customer against current and saving bank account.
8. Bank Rate it is an official rate of interest charged by RBI on loans to the other banks. it the rate at which RBI discounts first class securities including bill of exchange.
9. bankruptcy it is the situation in which a person is unable to discharge his debt obligations.
10. Bill of exchange it is an unconditional order in writing addressed by one person to another person requiring the addressee to pay on demand.
11. Budget it is an document containing a preliminary approved plan of public revenue and public expenditure.
12. Budget deficit is the difference between the estimated public expenditure and public revenue. The government meets the deficit by way of printing new currency or by borrowing.
13. call money it is a loan that made for very short period of a few days only or for a week. it carries a low rate of interest. In stock market the duration of the call money may be for a fortnight.
    
14. capital market it is the market for long term loans. capital market is the market which gives medium term and long term loans.
15. CRRin this commercial bank are required to keep the certain amount of cash at central bak i,e RBI. that percentage is called CRR cash reserve ratio.it influence the commercial bank volume of credit because variation in CRR affects the liquidity position of the bank and their ability to lend.
16. GDP is the aggregate of total flow of goods and services produced by an economy in a year.
17. GNP it is= GDP + Net factor income from abroad.
18. Hot money it is a volatile money which comes easily but can also go out easily.
19. Inflation it is a sustained increase in general price level over the particular period of time. it reduces the purchasing power of the money.
20. IMF it is a multinational institution set up in 1945 .it started working as independent organization in 1947. it seeks to maintain the cooperative and orderly currency arrangement between the members of the countries with aim of promoting the international trade and BOP equilibrium.
21. Mutual fund it is a form of collective investment that is useful in spreading risk and optimizing the returns.