Laws and Practice of Banking

Laws and Practice of Banking (LPB), JAIBB, JAIBB examination study materials, Laws and Practice of Banking (LPB), Junior Associate of the Institute of Bankers, Bangladesh (JAIBB), Banking diploma, JAIBB, JAIBB examination study materials, Laws and Practice of Banking (LPB):

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What is Inclusive Banking?

financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable. Financial inclusion or inclusive.

What is Secret Reserve?

An amount not identified to anyone involved in the process of bidding on stocks or bonds accept for the individual who is issuing the option to buy.

What is stale check?

Stale check is a check that is presented to be cashed or deposited at a bank six months or more after the date it was written. The date when the check is presented to be cashed or deposited in a bank account is known as the payment date.
A stale check is not an invalid check, but it may be deemed an 'irregular' bill of exchange. A bank may refuse to honor it unless its drawer reconfirms it payment either by inserting a new payment date or by issuing a new check. Also called stale dated check.

What is a Garnishee Order?

A garnishee order is a common form of enforcing a judgment debt against a creditor to recover money. Put simply, the court directs a third party that owes money to the judgement debtor to instead pay the judgment creditor. The third party is called a 'garnishee'.
Garnishment is a drastic measure for collecting a debt. A court order of garnishment allows a creditor to take the property of a debtor when the debtor does not possess the property. A garnishment action is taken against the debtor as defendant and the property holder as garnishee.

What are the documents of title to goods?

A document of title is usually either issued or addressed by a bailee—an individual who has custody of the goods of another—to a bailor—the person who has entrusted the goods to him or her. Its terms must describe the goods covered by it so that they are identifiable as well as set forth the conditions of the contractual agreement. Possession of a document of title is symbolic of ownership of the goods that are described within it.
Documents of title are an integral part of the business world since they facilitate commercial transactions by serving as security for loans sought by their possessors and by promoting the free flow of goods without unduly burdening the channels of commerce.
A person who possesses a document of title can legally transfer ownership of the goods covered by it by delivering or endorsing it over to another without physically moving the goods. In such a situation, a document of title is a negotiable instrument because it transfers legal rights of ownership from one person to another merely by its delivery or endorsement. It is negotiable only if its terms state that the goods are to be delivered to the bearer, the holder of the document, to the order of the named party, or, where recognized in overseas trade, to a named person or his or her assigns. The Uniform Commercial Code and various federal and state regulatory laws define the legal rights and obligations of the parties to a document of title.

What is Know your customer (KYC)?

Know your customer (KYC) is the process of a business identifying and verifying the identity of its clients.[1] The term is also used to refer to the bank and anti-money laundering regulations which governs these activities. Know your customer processes are also employed by companies of all sizes for the purpose of ensuring their proposed agents, consultants, or distributors are anti-bribery compliant. Banks, insurers and export creditors are increasingly demanding that customers provide detailed anti-corruption due diligence information.

What is Mobile banking?

Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses software, usually called an app, provided by the financial institution for the purpose.
Mobile banking is the act of doing financial transactions on a mobile device (cell phone, tablet, etc.). This activity can be as simple as a bank sending fraud or usage activity to a client’s cell phone or as complex as a client paying bills or sending money abroad. Advantages to mobile banking include the ability to bank anywhere and at any time. Disadvantages include security concerns and a limited range of capabilities when compared to banking in person or on a computer.

What is Bank Rate?

Definition: Bank rate is the rate charged by the central bank for lending funds to commercial banks.

Description: Bank rates influence lending rates of commercial banks. Higher bank rate will translate to higher lending rates by the banks. In order to curb liquidity, the central bank can resort to raising the bank rate and vice versa.

What is Subordinated debt?

Subordinated debt is a class of debt whose holders have a claim on the company's assets only after the senior debtholders' claims have been satisfied. Subordinated debt offers investors a risk/return profile above that of senior debt, but below the risk/return profile of pure equity.
Subordinated debt can be used for growth capital, acquisitions, recapitalizations, and management and leveraged buyouts. This type of debt usually carries an interest rate between 13% and 25%, and may include equity kickers to further compensate the holders for the additional risk and lack of asset security.

What is Asian Clearing Union (ACU)?

Asian Clearing Union (ACU) is a payment arrangement whereby the participants settle payments for intra-regional transactions among the participating central banks on a net multilateral basis.
The objectives of the ACU are:
(1) To provide a facility to settle payments, on a multilateral basis, for current international transactions among the territories of participants; (2) To promote the use of participants' currencies in current transactions between their respective territories and thereby effect economies in the use of the participants' exchange reserves;
(3) To promote monetary cooperation among the participants and closer relations among the banking systems in their territories and thereby contribute to the expansion of trade and economic activity among the countries of the ESCAP region; and
(4) To provide for currency SWAP arrangement among the participants so as to make Asian Monetary Units (AMUs) available to them temporarily.

What is a Dormant/Inactive account?

A checking or money market account is considered Dormant/Inactive if the account has had no deposit or withdrawal activity (other than posting interest) for a period of one year.

A Certificate of Deposit account is considered Dormant/Inactive if there is no account activity for a period of one year after the first date of renewal.

If your account has been placed in a dormant/inactive status, please contact a Customer Service Center Advisor at 1-877-768-2265, 6 a.m. to 10 p.m. ET, seven days a week (excluding Christmas Day), an Advisor will reactivate your account.

What is Online banking?

Online banking, also known as internet banking, e-banking or virtual banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website. The online banking system will typically connect to or be part of the core banking system operated by a bank and is in contrast to branch banking which was the traditional way customers accessed banking services.

To access a financial institution's online banking facility, a customer with internet access will need to register with the institution for the service, and set up a password and other credentials for customer verification. The credentials for online banking is normally not the same as for telephone or mobile banking. Financial institutions now routinely allocate customers numbers, whether or not customers have indicated an intention to access their online banking facility. Customer numbers are normally not the same as account numbers, because a number of customer accounts can be linked to the one customer number. Technically, the customer number can be linked to any account with the financial institution that the customer controls, though the financial institution may limit the range of accounts that may be accessed to, say, cheque, savings, loan, credit card and similar accounts.

What is Call Money?

Money loaned by a bank or other institution which is repayable on demand. Call money is money loaned by a bank that must be repaid on demand. Unlike a term loan, which has a set maturity and payment schedule, call money does not have to follow a fixed schedule. Brokerages use call money as a short-term source of funding to cover margin accounts or the purchase of securities. The funds can be obtained quickly.
Brokerages know that they are taking on risk by using funds that can be called at any time, so they typically use call money for transactions that will be resolved quickly. If the bank recalls the funds then the broker can issue a margin call on its clients in order to make the repayment. The call money rate is used as the interest rate on the loans.

What is a CELS ratings or Camels Rating in banking?

The CELS ratings or Camels rating is a supervisory rating system originally developed in the U.S. to classify a bank's overall condition. It is applied to every bank and credit union in the U.S. (approximately 8,000 institutions) and is also implemented outside the U.S. by various banking supervisory regulators.

List of subjects for Junior Associate of the Institute of Bankers, Bangladesh (JAIBB) Exam:
1. Principles of Economics & Bangladesh Economy (PBE).
2. Business Communication (BC).
3. Laws and Practice of Banking (LPB).
4. Organization & Management (OM).
5. Accounting for Financial Services (AFS).
6. Marketing of Financial Services (MFS).

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