Definition: The Stock Option is a security that gives the right to its holder, but not the obligation to buy or sell the outstanding stocks at a specific price and a specific date. The stock options are traded on the securities exchange like other shares. People purchase these stock options if they believe that the stock price is likely to go up or down in the near future. … [Read more...] about Stock Option
Monetised Deficit
Definition: The Monetised Deficit is the extent to which the RBI helps the central government in its borrowing programme. In other words, monetised deficit means the increase in the net RBI credit to the central government, such that the monetary needs of the government could be met easily. The monetized deficit results in the increase in the net holdings of treasury bills … [Read more...] about Monetised Deficit
Primary Deficit
Definition: The Primary Deficit is the difference between the fiscal deficit of current year and the interest paid on the previous borrowings. Thus, primary deficits are government’s borrowings exclusive of interest payment. Generally, the loan raised by the government is inclusive of the interest amount, and if that amount is deducted from the principal loan amount, the … [Read more...] about Primary Deficit
Fiscal Deficit
Definition: Fiscal Deficit refers to the financial situation wherein the government’s total budget exceeds the total receipts excluding borrowings made during the fiscal year. Thus, it can be expressed as: Fiscal Deficit = Total Expenditure – Total Receipts Excluding Borrowings Through Fiscal deficit, the government can determine the amount that needs to be borrowed in … [Read more...] about Fiscal Deficit
Revenue Deficit
Definition: The Revenue deficit refers to the financial position wherein the government’s revenue expenditure exceeds its total revenue receipts. This means that government’s own earnings are not sufficient to meet the day-to-day functioning of its departments and other provisions of services. The revenue deficit is only concerned with the revenue receipts and the revenue … [Read more...] about Revenue Deficit
Budget Deficit
Definition: The Budget Deficit is the financial situation wherein the expenditures exceed the revenues. The Budget Deficit generally relates to the government’s expenditure and not the business or individual’s spending. The government’s collective deficits are termed as “National Debt”. In the case of a budget deficit, be it the Government or any business, it has to resort … [Read more...] about Budget Deficit
Cheque Truncation System
Definition: The Cheque Truncation System or CTS is the cheque clearance system introduced by RBI to fasten up the clearing of cheques. In this system, instead of producing the physical cheques to the payee bank, just the electronic image of the cheque along with the MICR code and other cheque credentials are transmitted to the drawee bank for the payment through a clearing … [Read more...] about Cheque Truncation System
Microfinance
Definition: The Microfinance is the cluster of banking services, relatively of lower monetary amounts, designed specifically to meet the banking requirements of an unemployed or low-income people. In other words, Microfinance is the arrangement of financial services including loans, savings, insurance, money transfers and remittances offered to the lower income groups or … [Read more...] about Microfinance
Articles of Association
Definition: The Articles of Association or AOA are the legal document that along with the memorandum of association serves as the constitution of the company. It is comprised of rules and regulations that govern the company’s internal affairs. The articles of association are concerned with the internal management of the company and aims at carrying out the objectives as … [Read more...] about Articles of Association
Memorandum of Association
Definition: The Memorandum of Association or MOA is the legal document that has to be filed with the registrar of companies at the time of incorporation of the company. It is often called as a memorandum and is comprised of fundamental conditions on the basis of which a company operates. The memorandum of association is the most important document that needs to be formulated … [Read more...] about Memorandum of Association