Banking Terms - Set 13 (Foreign housing, CIBIL, Cambist, Bill buying rate, FIE)

Foreign invested enterprise (FIE)

A legal structure that permits a company to set up business in a foreign country. Various types of foreign invested enterprises exist in different countries. They tend to be highly regulated, especially in China. Deep regulation tends to limit avenues the enterprise may pursue to make a profit. Limitations on control of the enterprise by the parent company are common.

Bill Buying Rate

Bill Buying Rate is to be applied when a foreign bill is purchased. When a bill is purchased, the rupee equivalent of the bill value is paid to the exporter immediately. However, the proceeds will be realized by the bank after the bill is presented to the drawee at the overseas centre. In case of a usance bill, the proceeds will be realized on the due date of the bill which includes the transit period and the usance period of the bill.

Cambist

An individual or broker considered to be an expert in foreign exchange rates. Cambist may also refer to book providing information such as exchange rates on world currencies and other medium of exchange.

CIBIL [Credit Information Bureau (India) Limited]

Credit Information Bureau (India) Limited or CIBIL is a Credit Information Company (CIC) founded in August 2000. CIBIL collects and maintains records of an individual‘s payments pertaining to loans and credit cards. These records are submitted to CIBIL by banks and other lenders, on a monthly basis. This information is then used to create Credit Information Reports (CIR) and credit scores which are provided to lenders in order to help evaluate and approve loan applications.

Foreign housing exclusion and deduction

An IRS deduction that allows a taxpayer to exclude payment from an employer to cover foreign housing expenses when filing annual income tax forms. The payment is not considered income, whether the employer pays on the employee's behalf or pays directly to the employee.

Banking Terms - Set 12 (Allotment Letter, Transformation, Basket Trading, BIN, CDPD)

Cellular Digital Packet Data (CDPD)

A method of sending data through cellular networks. CDPD is used with wireless credit card terminals to transmit transactions and deposits in mobile environments.

Bank Identification Number (BIN)

A unique series of numbers assigned by Visa/MasterCard to a member institution, which identifies that institution in transaction processing. The BIN comprises the first six digits of a standard credit card number.

Basket Trading

A group of securities that can be traded, managed and tracked as one entity. One of the aims of creating a basket is to spread risk. Basket trading is common for institutional investors and investment funds who wish to hold a large number of securities in certain proportions.

Index Funds are good example, which holds all kinds of securities at certain proportions

Transformation

Transformation are the second type of claims [similar to compensation discussed on Tuesday]. They occur in corporate actions events where the ISIN/Nominal Value changes. All trades instructed before the ex-date have to be cancelled on the ex-date and they have to be replaced by new trades in which new ISIN or ratio getting applied.

For E.g. :  10:1 stock split takes place with ex-date July 30, 2013. "A" instructs to buy 100 shares from "B" with trade date July 29, 2013 and contractual settlement date of Aug 01, 2013 at Rs. 10000 (the price per share = Rs. 100). On the ex-date, the pending trade will have to be reversed and replaced with a new trade for 1000 shares at Rs. 10000 (the price per share post-split = Rs. 10).

Allotment Letter

A legal document sent to shareholders during a Rights Issue. It represents the unconditional right to buy new shares. Shares should be paid for in advance. Allotment letters can be traded as renounceable documents, where the seller signs over the rights to a buyer.