Allahabad Bank e-Learning Project

IRT, Panchkula OFF BALANCE SHEET Claims against bank not acknowledged as debt LC / Guarantee ( Warrantees are in principles much the same as guarantees in that the credit risk hinges on the ability of a third party ( banks customer ) to meet its obligations, but they are generally not direct credit substitutes ) Acceptance, Endorsements (Guarantees and acceptance, are obligations to stand behind a third party. They are regarded as direct substitutes, and the credit risk is equivalent ) BillsForward Contract Liabilities Usually means an asset or debt or financing Activity not on the companys Balance Sheet It is being viewed that the individual types of risk associated with most offbalance-sheet business are in principles no different from those associated with on balance-sheet business
The particular perspective of supervisory authorities in relation to off-balance-sheet risk is to seek to ensure that banks are adopting appropriate procedures to measure and control the risks

OBU
One OBU in SEZ to carry on whole sale operations Maintain balance sheet in foreign currency Parent bank to provide minimum $ 10 mn SLR, CRR requirements exempted Sources for raising foreign funds would be external KYC, AML norms to be followed All prudential norms applicable OCB

This is culled from various sources by IRT Panchkula. Consult HO circulars for finality. 1

Allahabad Bank e-Learning Project

IRT, Panchkula Entity in which NRI or PIO own at least 60 pc can play in the Indian Capital market with impunity OLIGOPOLY The control of a market by a few producers. Its danger is that the few producers get together and agree among themselves fix prices as if they were a monopoly . OPEN POSITION A situation in which an investor has an obligation to buy more securities of a certain type in the future than his future obligations to sell securities of that type . OPPORTUNITY COST The amount that could have been gained if the factor of productions had been put to an alternative use. OPTION The right to buy and sell securities ) within the time, it expires OPERATIONAL RISK The risk of direct or indirect loss resulting from in-adequate or failed internal processes, people & systems or from external events a specified amount of commodity ( or of at the specified prices within a specified time.. If it is not exercised

This is culled from various sources by IRT Panchkula. Consult HO circulars for finality. 2