Bank Rate: The interest rate at which the Central Bank of a country (Reserve Bank of India in case of India) lends to the banking system through rediscounting eligible bills of exchange and other commercial papers. Short-term interest rates are geared to the bank rate through the banking system. Bad Delivery: The delivery of a share relating to the transaction is considered “BAD” when there are some defects in the share certificate or the transfer deed. SEBI has formulated uniform guidelines for good and bad delivery of documents. The bad delivery may pertain to the transfer deed being torn, mutilate, overwritten, defaced etc. Book Value: The book value of a stock is determined from a Company’s records, by adding all assets then deducting all debts and other liabilities plus the liquidation price of any preferred issue. The sum is divided by the number of common shares. Book value of the assets of a company or a share security may have little or no significant relationship to market value. Bonus: A free allotment of shares made in proportion to existing shares out of accumulated reserves. A bonus share does not constitute additional wealth to the shareholders. It merely signifies recapitalisation of reserves into equity capital. However, the expectation of bonus shares has a bullish impact on market sentiment and causes share prices to go up. Balance of Payments: A tabulation of the credit and debit transactions of a country with foreign countries and international institutions during a specific period. Transactions are divided into two broad groups: current account and capital account. The current account is made up of trade in goods (so-called visible trade) and in services and the profits and interest earned from overseas assets, net of those paid abroad (invisible trade). It is the current account that is generally referred to in the discussion on the balance of payments. The capital account is made up of such items as the inward and outward flow of money for investment and international grants and loans. Balanced Budget: A situation wherein the government’s planned expenditure equals its expected income. In public finance, it is a situation where current income from taxation and other receipts of central government are sufficient to meet payments for goods and services, transfer payments and debt interest. The Indian budget is often in deficit on both current account and capital account and these deficits are financed by net borrowing and changes in the money supply. The importance of the budget balance and how it is financed is that it may affect levels of demand and prices in the economy. Banker’s Draft: A cheque drawn by a bank as opposed to a bank’s customer. Banker’s drafts are drawn at the customer’s request and that customer’s account is debited. They are regarded as cash, since they cannot be returned unpaid and are used when a creditor is not willing to accept a personal cheque in payment.
Posted on: Sun, 05 Oct 2014 09:07:29 +0000
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