• Banking Terms – S

    Term

    Meaning

    Safe Custody  When valuable articles are given to a bank for safe keeping in its safe vault, it is called safe custody.. Bank charges a fee from its clients for such safe custody.
    Safe deposit box It is sometime called as Safety deposit box. It’s a locker kind inside bank where the valuable things such as gold, jewels and all is kept having the locker in the customer’s name and keys for the same is given to the customer.
    Sale Contract A sale contract refers to a written agreement between the buyer and the seller of an asset (usually real estate), with details regarding the terms and conditions of the sale.
    Same Day Funds This banking term refers to the funds or money balances, which can be transferred or withdrawn on the same day of presenting and collection.
    Saving Accumulating amount in a particular account in bank of any other means.
    Savings Account Savings accounts are accounts maintained by commercial banks, savings and loan associations, credit unions, and mutual savings banks that pay interest but cannot be used directly as money (by, for example, writing a cheque). These accounts let customers set aside a portion of their liquid assets that could be used to make purchases while earning a monetary return.
    Savings and Loan Using the savings account few banks provide loan for the customers.
    Savings Bank Account  All banks in India are having the facility of opening savings bank account with a nominal balance. This account is used for personal purposes and not for business purpose and there are certain restrictions on withdrawals from this type of account. Account holder gets nominal interest in this account.
    SBA SBA is Small Business Administration. It is the Agency in US Government which will provide loans for small business through Government Banks.
    SCBs  Scheduled Commercial Banks
    Scrutiny of Documents This is the process of verification of originality and completeness of documents submitted by the borrower customer.
    Seasonal Unemployment It is that unemployment which is caused by seasonal variation in demand for labour by various industries, such as agriculture, construction and tourism.
    SEC (Securities Exchange Commission) The SEC is a federal agency that regulates the US financial markets. The SEC oversees the securities industry and promotes full disclosure in order to protect investors and promote honest trading.
    Second Mortgage A mortgage that is in a second position behind (or subordinate to) the original first mortgage are known as second mortgage. A second mortgage is a good alternative to refinancing when one has an original first mortgage loan with a low interest rate. It typically refers to a secured loan (or mortgage) that is subordinate to another loan against the same property. In real estate; a property can have multiple loans or liens against it. The loan which is registered with county or city registry first is called the first mortgage or first position trust deed. The lien registered second is called the second mortgage. A property can have a third or even fourth mortgage, but those are rarer. In most cases, a second mortgage takes the form of a home equity loan and the two are synonymous, from a financial standpoint. The difference in terminology is that a mortgage traditionally refers to the legal lien instrument, rather than the debt itself.
    Secondary Market Secondary market is where normal buy-sell transactions or trading are taken place after the company gets listed on the stock exchanges. It acts as a medium between the sellers and buyers to facilitate the trading process.
    Secondary Offering The subsequent trading of the securities traded during primary offering is called Secondary Offering. The proceeds of the sale go to the holder and not the company. This trading is done in the years following a Primary Offering. Owners of closely held company sell their shares to loosen their position. This is done gradually so that the share price does not fall as it generally happens when stocks are sold in large volumes. The total number of shares does not change and it does not dilute the owner’s holdings.
    Secured Loan A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower. From the creditor’s perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property.
    Secured Loans A secured loan is one where the lender has a physical security to fall back on in case the borrower defaults in repayment persistently. Thus, a car loan is secured by the specific car financed by the lender and a home loan is secured by creating mortgage over the house property financed by the lender.
    Securities A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities, such as bonds and debentures, and equity securities, e.g. common stocks. They are the Paper certificates (definitive securities) or electronic records (book-entry securities) evidencing ownership of equity (stocks) or debt obligations (bonds).
    Securities and Exchange Commission This is a body which supervises the capital market players as well as stock exchanges in USA. The Stock Exchanges are registered with the Commission as per the Securities Exchange Act of 1934, as amended from time to time.
    Securitization  Securitization is a process of transformation of a bank loan into tradable securities
    Security Security refers to a share, bond or government stock that can be bought and sold, usually on the stock exchange or on a secondary market, and carries a right to some form of income, either in the form of a fixed rate of interest or dividends.
    Selective Credit Control (SCC) Control of credit flow to borrowers dealing in some essential commodities to discourage hoarding and black-marketing
    Seller Carryback A form of financing, wherein the seller of a property finances the buyer, who finds it difficult to procure a loan or falls short of the amount needed to buy the property. In short, it is a part of the purchase amount, which the seller offers to finance. This term is also known as carryback loan or seller’s second.
    Seller’s Market A market, which has more buyers, as compared to the number of sellers. This condition leads to a rise in the prices, which is favorable for sellers.
    Senior Bond A bond that has priority over other bonds in claiming assets and dividends.
    Service charge The amount which the bank charges for the customer for handling the account
    Settlement Settlement is the last process in the Life Cycle of a Trade. In settlement all the counterparties exchange securities and money as per their obligations.
    Settlement Date The Settlement date is the date by which an executed securities transaction must be settled, by paying for a purchase or by delivering a sold asset; usually three business days after the trade was executed (T+3); or one day for listed options and government securities.
    Shadow Calendar This refers to the securities that are with the regulatory body for their approval for issuance but the no actual date has been set for issuance. This lists the securities that are waiting for permission to be issued.
    Shadow Price It is an imputed value for a good based on the opportunity costs of the resources used to produce it such values are of particular significance in resolving problems of resource allocating with respect to the effect on welfare.
    Share Capital It is the amount of money raised by a company by issuing shares. The authorized share capital is the amount that a company is allowed to issue as laid down in its Articles of Association. The issued share capital is the amount actually issued i.e., the number of issued shares multiplied by their par value. Fully paid share capital is the amount raised by payment of the full par value of the issued shares.
    Shares A share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT’s. A share is one of a finite number of equal portions in the capital of a company, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends and to a portion of the value of the company in case of liquidation. Shares can be voting or non-voting, meaning they either do or do not carry the right to vote on the board of directors and corporate policy.
    Short Hedge A transaction that protects the value of an asset held by taking a short position in a futures contract.
    Short Position Investors sell securities in the hope that they will decrease in value and can be bought at a later date for profit.
    Short Selling The sale of borrowed securities, their eventual repurchase by the short seller at a lower price and their return to the lender.
    Short term loan Loan less than a year usually for operating needs used in business
    Short-term Interest Rates Interest rates on loan contractor debt instruments such as Treasury bills, bank certificates of deposit or commercial paper having maturities of less than one year are known as short term interest rates. They are often called money market rates.
    Sight draft A draft which is payable on presentation.
    Simple interest It’s a kind of interest which is paid for the principal amount alone.
    Skip-tracing Techniques used to trace a debtor whose address is unknown.
    SLR SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities.  Thus, we can say that it is ratio of cash and some other approved to liabilities (deposits). It regulates the credit growth in India.
    Smart Cards Unlike debit and credit cards (with magnetic stripes), smart cards possess a computer chip, which is used for data storage, processing and identification.
    Soft Currency A currency with limited convertibility into gold and other currencies, either because it is depreciating due to balance of payments difficulties or because controls have been placed on it to prevent the exchange rate falling.
    Special Drawing Rights (SDRs) It is a reserve asset created within the framework of the International Monetary Fund in an attempt to increase international liquidity, and now forming a part of India’s total forex reserves along with gold, reserve positions in the IMF and convertible foreign currencies.
    Specific Regulations A regulation may be specific to the industry such as the Securities Exchange Act, which is specific to the financial services industry like broking. The latest specific act aimed at the capital market which was introduced in the US as late as in July 2010 is the Dodd Frank Wall Street Reform and Consumer Protection Act.
    Spread This refers to the difference between total cost of deposits and interest earned by the bank by way of loans.
    Stagflation It is a state of the economy in which economic activity is slowing down, but wages and prices continue to rise. The term is a blend of the words stagnation and inflation.
    Standby Letter of Credit A guarantee issued by a bank, on behalf of a buyer that protects the seller against non-payment for goods shipped to the buyer
    Standing order It is the order given by the customer to the bank to pay some amount at regular intervals to another account. This instruction is also called as banker’s order.
    Stock Stock is a share in the ownership of a company. Stock represents a claim on the company’s assets and earnings.
    Stock Dividends Stock dividends are dividends paid in shares of the issuing corporations stock instead of cash. It is the dividend paid as additional shares of stock rather than as cash. If dividends paid are in the form of cash, those dividends are taxable. When a company issues a stock dividend, rather than cash, there usually are not tax consequences until the shares are sold.
    Stock Exchange Indices Stock Exchange Indices provide an overall picture of the trend in prices of stocks covered by the index during a particular period.
    Stock Split Stock Split is when the face value of existing shares is split into smaller lots so that the number of shares goes up.
    Stocks The Stock capital of a corporation or a joint-stock company is the capital raised through the issuance, sale and distribution of shares. A person or organization that holds at least a partial share of stock is called a shareholder.In the United Kingdom, South Africa, and Australia, the terms stock and share(s) are used the same way, but stock can also refer to completely different financial instruments such as government bonds or, less commonly, to all kinds of marketable securities.In the plural, stocks are often used as a synonym for shares especially in the United States.
    Stop Payment The depositor gives the order for the bank to stop the payment for the particular cheque.
    Sub-prime Rate This is opposite of prime which refers to a standard rate of interest against which all interest rates for loans are computed by the bank. The term prime rate refers to interest rate quoted for the best borrowers who carry practically no risk of default. Sub-prime means an interest rate which is higher than this rate of interest.
    Surety The person who gives a legally binding assurance to the Lender on behalf of the borrower that if the later fails tope, the former [surety] shall repay the amount defaulted by the borrower. This assurance is legally binding.
    Surety bond A bond or a guarantee signed by a person who satisfies the policy of the company, binds to pay instead of Obligor the person who takes up, usually loan, absconds from repaying.
    Surplus Value It is the difference between the amount paid to a factor and the revenue earned by selling the output it produced.
    Survey A survey is a measurement of land that shows its location and dimensions. It also shows the location and dimensions of any buildings on that land.
    Swap In financial term, Swap is a special type of derivative through which one party can swap some financial benefit with other party in exchange of other’s financial benefit so that both the parties can gain the maximum out of the deal. The financial benefit of the swap transaction depends on the type of financial investment or instrument they are using.
    Sweep Account A bank account automatically transfers the excess amount exceeds the certain limit into the money market funds.
    Syndicated Loan A very large loan extended by a group of small banks to a single borrower, especially corporate borrowers. In most cases of syndicated loans, there will be a lead bank, which provides a part of the loan and syndicates the balance amount to other banks.
    Syndication Many banks involves in one loan with transparency to the customer.
    Syndication Members The members who participated in the syndication.
    Systematic Risk Systemic risk describes the likelihood of the collapse of a financial system such as a general stock market crash or a joint breakdown of the banking system. As such, it is a type of “aggregate risk” as opposed to “idiosyncratic risk”, which is specific to individual stocks or banks.

     

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