A bank discount is interest paid on a loan upfront. The total amount of interest due, based on projected repayment, is deducted in one lump sum from the initial distribution of the loaned funds. The bank discount is expressed as a percentage of the loan amount.
Bank holding company
A bank holding company is a commercial entity that owns or operates at least two banks or applicable financial services companies.
The bank rate is the interest rate that a central bank (e.g., the Federal Reserve) charges to lend money to its member banks. Changes to the bank rate affect the national money supply by encouraging or discouraging borrowing.
Bank Secrecy Act
The Bank Secrecy Act ("BSA") is legislation that requires financial institutions to document potentially suspicious, high-dollar depositor transactions. The legislation is intended to prevent, or at least discourage, money-laundering activities. The BSA is also known as the Currency and Foreign Transactions Reporting Act.
The bank spread is the difference between the bank's cost of funds, in terms of interest paid to depositors, and the rate the bank charges to debtors on bank loans.
Bank term loan
A bank term loan is a debt facility that's offered by a banking institution to a business. The bank term loan is characterized by a fixed maturity date and a loan life that's longer than one year. Repayments, which can be monthly or quarterly, most commonly involve some level of principal amortization prior to maturity.
The bank wire is an electronic system that banks use to transmit and receive account information and transaction requests from one another.
A banker's acceptance (also called bankers acceptance or BA) is an order to pay a sum of money at a certain date. The BA is created by a banking customer and provided to a third party. The third party presents the BA to the bank; when the bank "accepts" the BA, it is assuming responsibility to make the specified payment. The BA is now a bank-guaranteed obligation and can therefore be traded on the secondary market. BAs are commonly used in international trade, where parties to a transaction are unwilling to offer credit terms.
Banker's hours are the hours of the week that a bank branch is open for business. The term is a remnant from the days when bank branches commonly closed early during the work week and weren't open on weekends.
The banker's year has 360 days, rather than 365. The 360-day year simplifies monthly interest calculations by allowing for 12 equal periods of 30 days each.
Banking is the practice of accepting deposits for safekeeping, making payments as requested by depositors and, in many cases, loaning deposited funds for profit.
Bankrupt is the state of being financially insolvent. In the legal sense, an individual or business must be declared bankrupt by a court proceeding.
It is a leagally declared inability of an individual or organization to pay their creditors. Bankruptcy is filed in a Federal Court. Bankruptcies are of various types. The most common one however, is the 'Chapter 7 No Asset' bankruptcy which relieves the individual/borrower of his debts and liabilities. The borrower remains ineligible for an 'A' paper loan for a period of two years after the bankruptcy has been discharged. He is also required to re-eatablish the ability to reapy debt.
Bankruptcy Code is another name for United States Code Title 11-Bankruptcy, the federal legislation governing bankruptcy proceedings.
A bankruptcy trustee is the person who's assigned to represent creditors' interests in a Chapter 7 or Chapter 13 bankruptcy proceeding. The trustee's responsibilities include reviewing the debtor's assets, and reviewing claims of exemptions, among other things. Trustees are appointed and managed by the United States Trustee, but are not government employees.