Tag: bank

Loan Commitment definition explanation

What is Loan Commitment?
A loan amount that may be drawn down, or is due to be contractually funded in the future. Loan commitments are found at commercial banks and other lending institutions and consist of both open-end and closed-end loans. Open-end loan commitments act like revolving credit lines, whereby if a portion of the loan is paid off, the principle repayment amount is added back to the allowable loan limit. Closed-end loans are reduced once any repayments are made.

Banks and investment shops must account for the value of outstanding loan commitments so that funds are available should the borrower request them. They represent a future obligation in full, even though a percentage of the notional loan amounts will never be utilized by the borrowers themselves.

Also known as “”unfunded loan commitments,”” because the total capital outlay is not provided by the lender up front. Read more for examples and further explanation including related video clips and also comments
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Islamic Financial Services Board – IFSB definition explanation

What is Islamic Financial Services Board – IFSB?
An international organization that issues guiding principles and standards within the banking, insurance and capital market sectors in order to promote stability in the Islamic financial services industry.

The ISFB consists of:

The general assembly, which includes all members of the ISFB
The council, which acts as the policy making body of the IFSB and includes the senior executive of each full member of the organization
The technical committee, which advises the council on issues and consists of up to 15 persons appointed by the council
The working group, which drafts standards and guidelines and reports to the technical committee
The secretariat, which acts as the permanent administrative body and is headed by a secretary-general appointed by the council Read more for examples and further explanation including related video clips and also comments
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Federal Open Market Committee – FOMC definition explanation

What is Federal Open Market Committee – FOMC?
The branch of the Federal Reserve Board that determines the direction of monetary policy. The FOMC is composed of the Board of Governors, which has seven members, and five reserve bank presidents. The president of the Federal Reserve Bank of New York serves continuously, while the presidents of the other reserve banks rotate in their service of one-year terms. Read more for examples and further explanation including related video clips and also comments
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Demand Draft definition explanation

What is Demand Draft?
A method used by individuals to make transfer payments from one bank account to another. Demand drafts are marketed as a relatively secure method for cashing checks. The major difference between demand drafts and normal checks is that demand drafts do not require a signature in order to be cashed.

Also known as “”remotely created checks””. Read more for examples and further explanation including related video clips and also comments
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Community Investing definition explanation

What is Community Investing?
Investments made directly into low-income or disadvantaged communities through channels such as community development banks, credit unions, loan fund and microfinance institutions. Community investing is closely tied to socially responsible investing and focuses on economically improving run-down communities by offering banking services and small loans to fund businesses, non-profit groups and affordable housing initiatives. Read more for examples and further explanation including related video clips and also comments
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Cashier’s Check definition explanation

What is Cashier’s Check?
A check written by a financial institution on its own funds. It is then signed by a representative of the financial institution and made payable to a third party. A customers who purchases a cashier’s check pays for the full face value of the check and usually also pays a small premium for the service. These checks are secured by the funds of the issuer – usually a bank – and include the name of a payee (the entity to which the check is payable), and the name of the remitter (the entity that paid for the check). Read more for examples and further explanation including related video clips and also comments
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Bankable Funds definition explanation

What is Bankable Funds?
Forms of payment that are accepted at financial institutions. Retailers and other organizations that directly accept payments from customers typically request that any payments be made in forms that can be redeemed and accepted by the bank. Read more for examples and further explanation including related video clips and also comments
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