Ante date : To give a date prior
to that on which it is written, to any cheque, bill or any
other document.
Appreciation of Money : It is a rise in the value of
money caused by a fall in the general price level.
. Assets : Property of any kind available towards the
discharge of the liabilities of a testator, intestate debtor
or company.
At Sight : A form of notification written on bills or
notes denoting that they are not payable on demand but after
expiry of a specified period and allowing three days of
grace there after.
Arbitration : A method for compounding dispute,
generally of an industrial nature, between the employer and
his employees by reference to disinterested parties-called
arbitrators.
Advice : Any notification of a business transaction,
apprising an agent, correspondent, or customer that a
certain thing has been done.
Bear : A speculator in the market who believes that
price will go down.
Bill of Credit : A letter authorising the advance of
money to a specified person, implying thereby the obligation
on the part of the writer to repay that amount.
Black Money : Unaccounted money on which no
Income-tax has been paid. The main reason for accumulation
of black money has been the steep rise in rate of taxation :
tax evasion becomes attractive and profitable. The business
community, politicians and bureaucrats all have accumulated
black money during the last few years. The Government of
India demonetised high denomination notes in Jan. 1978 in
order to reduce the evil or black money. Voluntary
Disclosure Income Scheme was introduced in 1977 by the Govt.
Over Rs. 10,000 crores were netted by the Govt. by Feb 28,
1998.
Bond : A written monetary agreement between two
persons, or between two governments or between a person and
a government or corporation, or between a corporation and a
government.
Bull : A speculator in the stock market who buys
goods, in some cases without money to pay with, anticipating
that prices will go up.
Balance of Trade : The difference between the imports
and exports of a country. It is favourable when the value of
exported goods exceeds the value of imported goods. And it
is unfavourable if the imports exceed exports.
Bankers' Cheque : A cheque drawn by one bank on its
own branch.
Bank Rate : The rate at which the Central Bank
(Reserve Bank of India) will discount first class bills of
exchange.
Basket Currencies : 14 currencies whose average value
has been taken to calculate the value of S.D.R. Similarly,
the rupee exchange rate is announced on the basis of average
value of half a dozen basket currencies.
Buyers' Market : An area in which the supply of
certain goods exceeds the demands, so that purchasers can
drive hard bargains.
Carat : Measure or weight for precious stones, about
4 grains; 24 carat gold is the purest gold, thus 22 carat
gold means a piece of gold in which 22 .parts are pure gold
and 2 parts of an alloy, usually copper.
Caution Money : It is money deposited as security for
the fulfilment of a contract of obligation.
Central Bank : A bank which is (a) banker to the
Government, (b) banker to the commercial banks, and (c)
manages the currency and credit policy of that country. The
Reserve Bank of India is the Central Bank.
Clearing House : The place where clerks from the
different banks meet daily, bringing with them all bills
cheques drawn on each other bank on that day. The bills/cheques
are then exchanged and outstanding differences settled.
Letter of Credit : A letter from a bank, firm or one
person to another authorising payment to a third person of a
specific sum, for which the sender assumes full
responsibility.
Crossed Cheque : A cheque is crossed for protection.
In a crossed cheque two parallel lines are drawn across its
face and the words 'and Co'. are written between the lines.
Such a cheque must be paid into one's own account in the
ban} and then realised.
Debentures : A debenture is a certificate issued by a
company to its creditors promising the payment of a stated
sum at fixed rate of interest, after a specified period of
time. A debenture is the first charge on the assets of the
company.
Deflation : A state in monetary market when money in
circulation has decreased and is characterised by low
prices, unemployment, etc.
Demand Draft : An instrument drawn by one bank on any
of its own branches or on another bank under agency
arrangement is payble on demand.
Devaluation : A deliberate reduction in the value of
the home currency to foreign currency. It is done always by
a governmental action, and is resorted to in order to reduce
imports and increase exports. India devalued her currency by
37 per cent on 6th June, 1966. Of late so many countries,
viz., U.K., U.S.A., and France have resorted to this
expedient to balance their payment positions.
Draft : A cheque drawn by one bank on another.
Estate Duty : A form of death duty and a method of
direct taxation, imposed when the property is transferred on
the death of its owner. It has been abolished in India but
was reintroduced in a limited way in 1988.
EURO : The European Union declared to introduce a
common currency for its member countries, called EURO.
Eleven of the fifteen countries agreed to become members of
the common currency introduced on Jan. 1, 1999. Four
countries are likely to become members later. By 2002, it is
hoped that the local currencies will disappear and replaced
by EURO.
Excise Duty : It is the duty charged on goods
manufactured within the country; excise duties on alcohol,
tobacco, sugar, match-box, cIoth, etc., have been levied by
the Government of India.
Floating Currency : On account of too wide a fluctuation
between the
official and unofficial rates for various currencies of the
world, some of the
countries decided not to fix any particular rate of the
currency vis-a-vis
others and let the value be determined on a daily basis.
Foreign Exchange : The method by which transactions in
international
trade are financed.
Fixed Exchange Rate : When the exchange rate of the currency
is fixed
by the concerned government and it can only be changed
either by devaluation or revaluation.
Floating Exchange Rate : A situation in which the exchange
rate of any
currency is determined by the forces of demand and supply
for this currency.
Today rupee is also floating and its exchange rate with
other currencies is
determined by the demand and supply. Periodically the
Reserve Bank of
India announces the exchange rates of rupee with other
currencies. The
exchange rate is calculated by taking average value of
basket currencies.
Free Trade : A tariff system which treats foreign imports and
home produced
articles on the same basis, either taxing both equally or
exempting both.
Gold Standard : It is a system of currency based on the free
coinage of
gold. It presupposes that the state will sell and buy gold
at fixed price in
terms of the local currency; For all practical purposes, the
system is dead now.
Green Revolution : The term applied for the steep rise in the
production
of agricultural products, during the past few years. The
Green Revolution
was made possible by : (i) better use of fertilizers {ii)
intensive cultivation,
(iii) latest varieties of seeds and especially the hybrid
varieties (iv) pesticides
and insecticides and (v) availability of assured means of
irrigation green
revolution turned gray in 1973-74 when food production was
considerably
lower. The main reason, according to a few, is not the
non-availability of
food articles, but faulty distribution. There were food
grain shortages in 1980
on account of severe drought in 1979. In 1998, the country
reaped a large
harvest of over 194 million tones and over 200 million tones
in 1999.
Hard Currency : The currency of a country in relation to
which we have
an adverse balance of payment, i.e., which is hard to be
obtained.
Hot Money : Money which moves from one place to another to
seek profit
or higher rate of interest is called hot money.
Index Number : A statistical method of indicating
approximately the
variations in the prices of essential commodities over
certain periods of time.
Inflation : It is an increase in the quantity of money in
circulation
without any corresponding increase in goods, and, therefore,
it leads to an
abnormal rise in the price level.
Key Currency : A currency which is internally acceptable and
is used in
international payments.
