APR: What It Means and How It Works. What is a too high APR? There is no definitive answer to this question as it depends on the individual’s financial situation and goals. However, as a general rule of thumb, an APR that is significantly higher than the average APR for similar products (e.g. credit cards, … Read more
Group banking is a term used to describe a banking arrangement where a group of banks cooperate in providing banking services to a common group of customers. This type of arrangement is typically used by large companies or organizations that have operations in multiple countries. Under a group banking arrangement, each member bank provides banking … Read more
Branch banking is a banking system whereby a bank has a network of branches which are spread out across a geographical area. Customers can choose to bank at any of the branches, and their deposits and withdrawals will be reflected in their account at the main bank. This type of banking is convenient for customers … Read more
The cash reserves definition is the amount of cash that a bank is required to hold in its reserve account, as stipulated by the central bank. The reserve requirements vary from country to country, and are typically a percentage of the bank’s total deposits. For example, if a bank has deposits of $100 million and … Read more
A night deposit is a type of bank deposit made after bank branches have closed for the day. The deposit is typically made into a night deposit box, which is a safe located inside or near the bank. The bank processes the deposits the following morning. A night deposit may be made by an individual … Read more
Tier 1 capital refers to a core set of assets that banks are required to hold to cushion against losses. What are the components of core capital? Core capital consists of a bank’s Tier 1 capital, which is composed of the following: – Common stock – Retained earnings – Undistributed profits – Non-cumulative preference shares … Read more
A combined statement definition is a statement that includes both the activity of an account and the balance of the account. This type of statement is typically used by businesses in order to keep track of both their income and expenses. When can you combine financial statements? You can combine financial statements when you are … Read more
A note issuance facility (NIF) is a type of short-term borrowing arrangement that allows a company to issue corporate notes in the commercial paper market. The NIF is typically used by companies to raise working capital or to finance short-term business needs. The NIF is established by a lending agreement between the company and a … Read more
An allonge is a document that is attached to a promissory note or other negotiable instrument for the purpose of providing additional space to write endorsements. An allonge is not valid if it is not physically attached to the negotiable instrument. Why are there 2 notes on a reverse mortgage? There are two notes on … Read more
The term “relationship banking” is used to describe a type of banking in which the bank establishes a long-term relationship with its customers. This type of banking is characterized by the bank providing a wide range of services to its customers, including financial advice and planning, loans, and investment products. The bank also provides its … Read more
