Friday 25 February 2011

Basic terms of business and commerce

6. What is ZERO COUPON BOND? 
Coupon = interest rate These bonds are issued at a price much lower than face value (print price) they dont carry any interest. But the benefit is in terms of price difference. Suppose you buy them in 60 and they are matured at 100 you get 40 on investment of 60. they are for fixed period they are also called deep discount bond
  
7. What is RRB? 
Regional Rural banks – they are for development of a particular area – rural area there are many RRBs in India However, most of these are in financial difficulties
  
8. What is lead bank scheme? 
This is the coordinating bank for a particular area. It tries to promote banking in a particular area and coordinates with other banks. w
   
9. What is clearing? 
If you have an account in SBI, but your friend gives you a cheque drawn on ICICI, you deposit the cheque in your bank. Your bank will not give you credit immediately. It will send the cheque for clearing. The cheque will go to ICICI which will give credit to SBI, which will then give you the credit. Local clearing takes 1 day, outstation clearing may take 10 days – and there are some charges also for this.
  
10. What is at par cheque book? 
Now many banks give at par cheque book. These cheques are such that there is no clearing charge on these chques even if you deposit them in any bank

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