Various Banking Terms with Letter(G-I)

This article includes all the banking terms from letter G-I.

Garnishment Order:A legal process that allows a creditor to remove funds from your bank account to satisfy a debt that you have not paid. If you owe money to a person or company, they can obtain a court order directing your bank to take money out of your account to pay off your debt.

General Lien: A right of the creditors to retain possession of all goods given in security to him by the debtor for any outstanding debt.

Guarantee: A contract between guarantor and beneficiary to ensure performance of a promise or discharge the liability of a third person. If promise is broken or not performed, the guarantor pays contracted amount to the beneficiary.

Guarantor:A party who agrees to be responsible for the payment of another party's debts should that party default.Guaranteed Student Loan: An extension of credit from a financial institution that is guaranteed by a Federal or State government entity to assist with tuition and other educational expenses.

Hedge: A combination of two or more securities into a single investment position for the purpose of reducing or eliminating risk.

Holder: Holder means any person entitled in his own name to the possession of the cheque, bill of exchange or promissory note and who is entitled to receive or recover the amount due on it from the parties.

Holder in due course : A person who receives a Negotiable Instrument for value, before it was due and in good faith, without notice of any defect in it, he is called holder in due course as per Negotiable Instrument Act.

Home Equity Line of Credit (HELOC): A line of credit secured by the equity in a consumer's home. It can be used for home improvements, debt consolidation, and other major purchases. Interest paid on the loan is generally tax deductible (consult a tax advisor to be sure).

Hypothecation: Charge against property for an amount of debt where neither ownership nor possession is passed to the creditor. In pledge, possession of property is passed on to the lender but in hypothecation, the property remains with the borrower in trust for the lender.

Inactive Account:An account that has little or no activity; neither deposits nor withdrawals having been posted to the account for a significant period of time.

Identification: When a person provides a document to a bank or is being identified by a person, who is known to the bank, it is called identification. Banks ask for identification before paying an order cheque or a demand draft across the counter.

Indemnifier: When a person indemnifies or guarantees to make good any loss caused to the lender from his actions or others' actions.

Indemnity: Indemnity is a bond where the indemnifier undertakes to reimburse the beneficiary from any loss arising due to his actions or third party actions.

Income: The amount of money an individual receives in a particular time period.

Index Fund:  A mutual fund that holds shares in proportion to their representation in a market index, such as the S&P 500.

Initial Public Offering (IPO): An event where a company sells its shares to the public for the first time. The company can be referred to as an IPO for a period of time after the event.

Inside Information: Non-public knowledge about a company possessed by its officers, major owners, or other individuals with privileged access to information.

Insider Trading: The illegal use of non-public information about a company to make profitable securities transactions

Insolvent: Insolvent is a person who is unable to pay his debts as they mature, as his liabilities are more than the assets . Civil Courts declare such persons insolvent. Banks do not open accounts of insolvent persons as they cannot enter into contract as per law.

Insufficient Funds:When a depositor's checking account balance is inadequate to pay a check presented for payment.

Insurance: Insurance to protect the homeowner and the lender against physical damage to a property from sources such as but not limited to fire, wind, or vandalism.

Interest Warrant: When cheque is given by a company or an organization in payment of interest on deposit , it is called interest warrant. Interest warrant has all the characteristics of a cheque.

Interest Rate Index:IA table of yields or interest rates being paid on debt that is used to determine interest-rate changes for adjustable-rate mortgages and other variable-rate loans.

International Banking: involves more than two nations or countries. If an Indian Bank has branches in different countries like State Bank of India, it is said to do International Banking.

Introducer: The prospective customer has to be introduced by an existing account holder or a staff member or by any other person known to the bank for opening of account. If bank does not take introduction, it will amount to negligence and will not get protection under law.

Intrinsic Value: The difference of the exercise price over the market price of the underlying asset.

Investment: A vehicle for funds expected to increase its value and/or generate positive returns.

Investment Adviser: A person who carries on a business which provides investment advice with respect to securities and is registered with the relevant regulator as an investment adviser.

IPO price: The price of share set before being traded on the stock exchange.