Accomodation Bills
An accommodation bill of exchange is a bill of exchange which has been drawn for the mutual financial accommodation of the parties involved. Generally it is drawn not for value received. In order to oblige friends, many times bills are drawn, accepted and endorsed by businessmen without any consideration. By accepting such a bill the acceptor is able to lend his name, and the other party (drawer) taking advantages of the reputation of the acceptor gets it discounted with his bank. After meeting his aim with this temporary finance, he (drawer) sends back money to the acceptor thus making it possible for him to meet the bill on the due date. Since such bills are accepted without consideration, therefore, there is no liability of the acceptor to the drawer but since the third party takes such a bill for value, therefore, the acceptor is liable to the third party.
Bank Rate
Bank rate means the rate at which the central bank of a country is offering loans to others banks against
eligible approved securities. Changes in the bank rate are often used by central banks to control the money supply. At present Bank Rate is 5% per annum.
What is Clearing House ?
Clearing House is an arrangement of the member banks which settle their inter-bank claims/ liabilities due
to transfer of deposits by the customers from one bank to another.
Banker‘s clearing house is a common place usually located at the Central Bank or any other designated
bank where officials of different banks settle their inter-bank claims daily through their accounts maintained
by the Central Bank. This happens because each bank receives many cheques, drafts etc. drawn on other banks. Collection of those by sending officials to those bank is costly. So clearing/settling mutual claims and debts is done through clearing. In absence of Bangladesh Bank, Sonali Bank acts as the clearing house in our country.
What do you mean by CAMEL(S) Rating?
The performances of the scheduled banks in Bangladesh are now a-days evaluated by the Central Bank on
the basis of Criteria called ―CAMEL(S) Rating‖. Bangladesh Bank has been using this comprehensive
rating system since 1997.
The word ―CAMEL(S)‖ is the combination of the first letters of some important performance indicators of a bank. These are as follows: C = Capital Adequacy, A = Assets Quality, M = Management Soundness, E = Earnings,
L = Liquidity, S = Sensitivity to market
Camel Rating : 01. Strong 02. Satisfactory 03. Fair 04. Marginal 05.
Unsatisfactory.
Merchant Bank:
Merchant Bank is a traditional term for an Investment Bank. Merchant Banks work as a financial
intermediary, offering such services as takeover, merger, acquisition advice/assistance, financial restructurings & associated finance (raising necessary funds), equity investments in companies and the placing of new share and bond issues, but do not offer usual banking services to the general public. A full fledged merchant bank provides diversified services for the capital market to investors. The offered services are:
01. Portfolio Management. 02. Issue Management. 03. Underwriting. 04. Corporate Advisory 05. Banker to the Issue