• Banking Terms – N

    Term

    Meaning

    NABARD  National Bank for Agriculture & Rural Development was setup in 1982 under the Act of 1981. NABARD finances and regulates rural financing and also is responsible for development agriculture and rural industries.
    NBFCs Non-Banking Financial Corporations
    NEFT  National Electronic Funds Transfer – Used to transfer from one account to other accounts in a different bank.
    Negative Amortization A gradual increase in mortgage debt that occurs when the monthly payment is insufficient to cover the interest due, and the balance owed keeps increasing (at least in the first few years).
    Negotiable instrument A promise to pay the amount of money.
    Negotiable Instruments Promissory note / bill of exchange signed by the borrower in favor of the bank and post-dated cheques issued in favor of the bank by the borrower towards loan repayments.
    Negotiable Order Of Withdrawal Account (NOW) It is an interest-earning account on which checks may be drawn. Withdrawals from NOW accounts may be offered by commercial banks, mutual savings banks, and savings and loan associations and may be owned only by individuals and certain nonprofit organization. NOW accounts are watched by the Fed as a determinant of money movement within an economy.
    Negotiation  In the context of banking, negotiation means an act of transferring or assigning a money instrument from one person to another person in the course of business.
    Net asset value (NAV) Net asset value represents difference between the current market value of all the holdings (stocks, bonds etc.) including the cash and all the liabilities including all the redemption requests. The NAV is usually expressed as per share or unit amount and calculated by dividing the total net asset value by the number of total units.
    Net Income The amount that is left after paying the taxes is called the net income.
    Net National Product (NNP) When depreciation is deducted from GNP i.e., Gross National Product, we get Net National Product (NNP).
    Net Worth Net worth (sometimes “net assets”) is the total assets minus total liabilities of an individual or a company. For a company, this is called shareholders’ equity and may be referred to as book value. Net worth is stated for a particular point in time. In personal finance, net worth is also used to refer to an individual’s net financial position; similarly, it also uses the value of all assets minus the value of all liabilities (debt).
    NHB National Housing Bank
    No Documentation Loan When the applicant furnishes minimum information, giving, only name, address, contact information for the employer and social security number, for the application of the loan, it is called a no-documentation loan.
    No Ratio Loans The consumer is not required to justify his/her total debt compared with his/her total income. These loans typically are continuing obligations such as car loans and student loans.
    Non- bank subsidiaries These are bank holding companies which offer non-bank products and other services namely insurance.
    Non-Performing Assets (NPA) NPA is Non-Performing Asset or Non-Performing Loan. Loan is the asset for the Bank. If banks are getting amount from Customer for past 90 Days, then it will be considered as Non-performing loan or non-performing asset.
    Non-Recourse Loan A loan which is secured by collateral and for which the borrower is not personally liable, is called a non-recourse loan.
    Non- sufficient funds It is used when there are insufficient funds in the account of the customer. This is mainly used when the cheque is presented for clearing.
    Non-Accruing Loans Loans in which No payments had made for more than 60 Days.
    Non-Fund Based Limits  Non-Fund Based Limits are those type of limits where banker does not part with the funds but may have to part with funds in case of default by the borrowers, like guarantees, letter of credit and acceptance facility.
    Non-Liquid Asset A possession or asset which cannot be changed into cash very easily is called non liquid asset. Best example would be Land, property etc.
    Non-Recurring Closing Costs A lump sum fees paid at a real estate set up, which includes appraisal, origination, title insurance, credit report and points, is referred to as non-recurring closing costs.
    Non-Resident Accounts  Accounts of non-resident Indian citizens opened and maintained as per R.B.I. Rules.
    Notes A note is a negotiable record of an unsecured loan with a maturity of more than one year – in other words, a bond.
    Notice Money Notice Money is a money market instrument, where the tenor is more than 1 day but less than 15 days. Here, the lender simply issues a notice to the borrower 2-3 days before the funds are to be repaid. On receipt of this notice, the borrower will have to repay the funds within the given time.
    NRE Accounts Non-Resident External accounts are the ones in which NRIs remit money in any permitted foreign currency and the remittance is converted to Indian rupees for credit to NRE accounts. The accounts can be in the form of current, saving, FDs, recurring deposits. The interest rates and other terms of these accounts are regulated by RBI.

     

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