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Bank guarantee
It is an instrument wherewith the bank guarantees that its client will meet some obligation towards a third party.
Currency
Monetary unit in the state monetary system.
Devaluation
It is a measure of the economic policy wherewith the value of the national currency is reduced compared to one or several foreign currencies. The devaluation is undertaken in order to eliminate the external imbalance in the economy, i.e. to improve the conditions in the balance of international payments.
Foreign currency market
Place where the supply and the demand of foreign currencies and foreign cash are faced between the entities in a national economy or between different national economies.
A plan for loan repayment
Agreed schedule of repayment of principal and interest on a loan, defined in the agreement on funds lending between the creditor and the debtor.
Acceptance
Acceptance is a statement of the person whose name is indicated in the bill of exchange, that in the maturity period for payment of the bill of exchange, the debt from the bill of exchange will be completely or partially collected.
Active interest rate
Rate according to which interest is paid for the financial assets.
Actuary
Actuary is a professional who deals with financial problems, uncertainty and risks by using mathematical methods from the theory of probability, statistics and financial mathematics. The work of the actuary includes analysis of data from the past, assessment of existing risks and development of models for design of future events.
Administrative ban
Administrative ban is a ban on the income of the debtor, that is, the borrower and the guarantors, on the basis of their consent. It is one of the basic prerequisites for loan approval.
Advance payment
is a sum of money which is given or paid in advance, before the performance of a specific work and it is part of the business relations which shall arise in the future.
Allowed overdraft
The overdraft on the transaction account is a Loan Agreement wherewith the clients get additional funds which are available on their transaction account, in an amount higher than the current balance of funds on that account.
Annuity
Annuity is a regular, usually monthly, semi-annual or annual repayment of funds (quotas) which comprises of a part of the principal and part of an interest, which the debtor must pay in the name of gradual repayment of the loan.
Assignee
Reinsurer who undertakes part of the creditor’s risk – cedent.
ATM (automated teller machine)
A device which is usually installed in a high-traffic area or in the bank’s branch, which provides the user to withdraw money from his/her account, 24 hours a day. In order to withdraw money from the ATM, the card user must enter his PIN number, which he received from the bank in a separate, closed document and it is only known to the card owner i.e. the card owner.
Authorization
A process wherewith the issuer of the card (bank or specialized company) approves the financial transactions of the card user
Balance
Calculation remainder, difference between the debt and the claims.
Balance sheet
Financial statement which expresses the state of assets, capital and liabilities, determined at the end of the period for which it is being prepared.
Bank
Legal entity with a permit from the Governor of the National Bank of the Republic of Macedonia established in accordance with the Law on Banks, whose basic activity is to accept deposits and other repayable funds from the public, and approval of loans in its own name and for its own account. A foreign bank is a legal entity registered with a seat outside of the Republic of Macedonia, which was authorized to perform banking activities by a competent authority, and is supervised by a competent authority authorized by law or another regulation of this country.
Bank branch
Organizational part of the bank, which does not have the capacity of a legal entity and which directly performs all or part of the activities performed by the bank.
Bill of exchange
A type of obligation-legal security whose content is a monetary claim. It is an unconditional written order of the issuer of a bill of exchange (drawer) intended for another person (drawee) in a specific time and in a specific place in order to pay a specific amount of money to the person indicated in the bill of exchange (remitter) or another person at his request.
Bond
Debtor’s bond, which confirms that the holder (buyer, creditor) paid to the debtor (issuer) a specific amount of money, as counter-value of the bond and that the debtor will pay to the creditor the borrowed amount, along with the interest, according to the determined interest rate and within the agreed terms. The bonds are an additional source of funds for the issuer.
Branch
In banking, a branch is a part of a bank which performs precisely determined (specific) banking activities.
Brokerage activities
Activities which are performed by the brokerage firm involving trade of financial instruments, activities in the primary market, preparation of analyses and provision of appropriate services, collection of dividends and interest coupons, representation of clients in a Shareholders’ Assembly, keeping securities, running a portfolio of securities for the account of the user of services, etc.
Capital
Principal, that is, an amount or property expressed in money.
Cash
Paper money and coins that you can dispose of at any time.
Cash in hand
Technical banking expression for cash.
Cedent
Creditor who on the basis of some legal activity transfers his/her claim or his/her property right to another person (assignee) and the debtor does not have to be notified. An insurer who transfers part of his risk to the reinsurer – the assignee in order to reduce the risk.
Cession
Transfer of the claims or the rights with a written statement of the creditor (cedent) in favor of a new creditor (assignee).
Clearing
It is determination of liabilities and claims in terms of securities and money between the participants in the organized market of securities.
Clearing in payment operations
It is an exchange of interbanking payment orders for the purpose of calculation of bilateral and multilateral net-amounts which each banks owns or which are being owned to every bank for settlements of the payment orders included in each clearing circle.
Conversion
Conversion of a currency into another currency.
Corresponding bank
A bank wherewith the national bank established corresponding relation and it would be able to conduct foreign operations through it.
Credit bureau
Electronic center for registration of the debts of the citizens and the economy.
Credit card
A credit card is a card, as the word says, wherewith you get a loan from a bank. You use this loan by using the card i.e. by purchasing or withdrawing cash. You pay the spent loan amount in monthly installments. Unlike the classical loan, the loan that you get with the card is renewed with each payment you make, in the amount of the performed payment (for this reason this loan is called revolving loan). Another advantage of the credit card is that you personally choose the amount of payment (it cannot be less than the minimum amount indicated in your monthly statement). If you pay the entire amount you own within the period indicated in the statement, the bank usually does not charge interest. The period for which you do not pay interest is called grace period.
Currency date
A banking day when the payment order should be realized, on the instructions of the provider.
Current (transaction) account
Current transaction account is an account which is used for systematic monitoring of the operation between two business partners, one of which is the bank, and the other is its client.
Debit card
Card wherewith the user can pay for goods and services in shops, at POS terminals, and withdraw cash from ATMs and banks, in accordance with the amount of funds on the user’s account.
Debt collection
Collection of outstanding bills of exchange or checks.
Decursive interest
Calculation of interest after the expiry of a specific time period, that is, backwards..
Default interest
An interest which is paid by the debtor, in addition to the regular interest, if the debtor has not settled the debt until the stipulated term.
Deflation
It is defined as reduction of the value of the monetary units. It is contrary to inflation. The occurrence of deflation in a specific region or country implies that less money could be used for the purchase of the same quantity of goods or services. The main characteristic of the deflation is not only the reduction of the value of the money, but also increase of unemployment.
Denomination
Activity to reduce the nominal value of money when the money is reduced by a specific percentage of the past nominal value.
Deposit
Claim from the bank in cash, with or without interest or a compensation of any kind, collectable immediately or within a specific time period, depending on the conditions agreed in investments of funds.
Depreciation
Annual write-off of the fixed assets.
Digital certificate
Certificate in electronic form which confirms the connection between the data for check of electronic signature with a specific person, the holder of the certificate and the identity of this person.
Discount
Interest of the nominal value for the period from the sale of the bill of exchange to its maturity. The word discount is also used for other business transactions, as well as in calculations, reduction of the value of the principal before its real maturity, etc.
Discount interest rate
Interest rate of credits which the central bank borrows to the business banks.
Dividend
Part of the profit of the company which is distributed to the partners, that is, to the shareholders of the company in accordance with the rights determined in the shares, that is, in each type and class of shares.
Down payment
Advance payment which is usually used as a payment guarantee.
Drawee
Debtor in the bill of exchange operations whose name is indicated on the issued bill of exchange.
Drawer
Issuer of a bill of exchange.
Electronic banking
Implies performance of banking transactions through telecommunication networks. In modern banking it is usually used as a term for a service which the banks offer to their clients in a form of transactions from their personal account through the internet.
Electronic payment order
An order which the Authorized person sends to the Bank in a form of an electronic message, which is in accordance with the rules determined by the User, the internal acts of the Bank, and the valid regulations for performance of payment operations.
Electronic signature
It implies a sequence of data in electronic form which are contained or logically connected to other data in electronic form and it is intended for determination of authenticity of data and for determination of the identity of the signatory.
Emission
Issuance of money and securities.
EURIBOR
Euro Interbank Offered Rate – Reference interest rate which is a section of the interest rates according to which the first-class banks in the Eurozone mutually offer the deposits for fixed period.
Evident interest
An amount of interest on a specific date between the last maturity date and the first future maturity date of the interest.
Exchange rates
List according to which a currency is converted to another currency of another country. It may be fixed or variable.
Fee
Compensation for mediation in a specific matter. It is expressed in percent of the value of the performed work. Bank fee is a price for the performance of bank services.
Finance
Monetary activity as and money management.
Financial assets
Amount of available cash (banknotes and coins) or deposit money that a business entity disposes of at the moment, as well as other claims from other business entities.
Fixed interest rate
An interest rate determined in advance, which does not change within time.
Fluctuating interest rate
An interest rate related to a variable short-term interest rate, such as LIBOR, CPI index, etc.
Foreign exchange rate
The foreign exchange rate is the price of a specific foreign currency expressed in a domestic currency.
Forfeiting
Sale of export receivables of the bank together with the means of insurance. Thereby, the seller of the claims assumes no risk, that is, the risk is transferred to the buyer.
Fund
Cash intended for a specific goal, in terms of stock, that is, constantly present assets.
Government bonds
Long-term securities emitted by the country or its authority or agency, primarily for financing of the budget deficit, that is, to cover the state debt.
Grace period
Grace period is a time period when principal of the loan is not paid, rather only the amount of the interest is paid. The grace period is usually approved at the very beginning, and the basic intent is to reduce the financial burden of the client.
Guarantee
it is an instrument wherewith the bank guarantees that its client will meet an obligation to a third party. The guarantees are off-balance sheet activities of the banks i.e. they are not registered in the balance sheet.
Guarantor
Guarantor is a person who guarantees for you and obliges that he/she would continue the payment if the user of the loan for any reason does not settle his/her obligations.
Hedge funds
Hedging is an insurance against risk that arises from the operations such as the risk from the change of interest rated, the exchange rate, etc. In a situation where the economic entities do not want to undertake risk, they can choose financial derivatives for protection against risks. This does not prevent an undesired situation, however if it does happen, its effect would be reduced.
Imbalance
Unstable condition of the balance sheet or the account.
Inflation
The inflation is a group of the general level of prices, measured through some index of prices, i.e. one cannot speak of inflation if the price of a product or a group of products has increased; second, the inflation is a trend of constant increase of prices, i.e. one-time growth of all prices (for example, due to increase of taxes) is not inflation.
Interbank interest
Interest rate according to which a bank can provide funds from another bank for refinancing of the requested period, that is, an interest rate according to which monetary transactions take place between banks in the Euromarket.
Intercalary interest
An interest which is calculated and collected only during the period of use of the loan, that is, until the moment when the repayment of the loan starts, the bank calculates and collects interest by transferring the loan in repayment or through repayment in installments or annuities.
Interest
It is compensation in money for temporary borrowing of money or expressed in percent, it is a compensation (price) which the debtor pays to the creditor for temporary use of the borrowed money or capital.
Interest rate
It is a price expressed in percent which is paid for the use of someone else’s money or capital.
Joint stock company
It is a company whose statute specifies its core capital which is divided into equal parts (shares),
Leasing
Trading activity through which the commercial entities, usually the small and medium-sized enterprises contact a specialized institution in order to lease investment equipment for a specific period and for a specific compensation.
Leasing Agreement
This agreement implies an obligation of a contractual party – leasing grantor to cede the agreed subject to use and to undertake all other activities regarding appropriate and orderly use of the agreed subject by the other party – leasing user which in turn, obliges to pay the agreed reward, that is, leasing installment to the other contracting party.
Letter of credit
A letter wherewith the bank obliges towards another institution or a person who obliges after the performed contractual relations that he/she will pay a specific amount in favor of a third party. The documented letter of credit is an efficient instrument for payments in international trade.
Liabilities
Part of the balance of the enterprise that includes: Liabilities (short-term and long-term) and equity, that is, proprietary principal (shareholders’ equity, accumulated profit).
LIBOR-London Interbank Offered Rate
Interest rate of the short-term interbanking market in London according to which the banks offer money to each other. LIBOR is a reference interest rate for the international banks and it is used as a reference during approval of loans. It is determined by five main banks from London every work day.
Limit
Amount of the highest allowed overdraft of the account, that is, an amount of the highest possible indebtedness for an approved loan.
Liquidity
It is an ability of the funds to be sold without causing important price changes and with a minimum loss of value.
Loan
A loan is an agreement wherewith the client – borrower gets money from the lender (creditor) with an agreement that within an agreed period of time he will repay the money.
Loan requirements
The loan requirements include the data about the determined deadlines, prices, insurance and other loan characteristics, that is, all other important elements which are regulated between the creditor and the loan user.
Mortgage
Pledge of property as a guarantee for the borrowed money.
Nominal interest rate
net interest rate and it is not a final price of the loan. The installments for payment, that is, the amount of interest of the deposits, are calculated on the basis of this interest rate.
Non-resident
Individual person with a constant residence abroad; a legal entity registered abroad.
Nostro account
Bank’s account in another bank.
Obligation
Security, receipt or bond which confirms the existence of someone’s debt.
Passive interest
An interest that the bank pays for the funds deposited in the bank.
Payment
Financial activity wherewith money is directed towards a specific account (of a legal entity or an individual person).
Payment card
Instrument for non-cash payments. The basic classification of the cards implies classification into debit and credit cards.
Payment order
Unconditional instruction given to the bank in order to perform payment or to pay a specific amount of money indicated in the account.
PIN
Personal Identification Number – personal identification number which comprises of 4 numbers and it is used as an identification of the user. It is an electronic signature of the user when withdrawing cash in ATMs.
Pledge
Property owned by the borrower which is used for security if the debtor does not meet the debtor obligations.
Pledge statement
A document which is being certified by a notary public and it is a statement of the owner of the property wherewith the owner unilaterally obliges that if the debt is not repaid within the maturity period, the creditor can collect the provided claim from the value of the pledged property.
Principal
Basic, borrowed amount which the debtor owns to the creditor, which is usually subject to an interest.
Profit and loss statement
Financial report which presents all revenues and expenditures and the operating result, realized in the period for which it is being prepared.
Rate
Market price according to which something is sold or purchased.
Record (treasury, commercial)
Short-term security which refers to a specific amount of money with a specified maturity date and a specific interest rate.
Reference interest rate
Interest rate according to which the other interest rates are determined.
Refinancing
Provision of funds for approval of loans – by accepting deposits from the bank’s clients, with sale of securities, by using a loan from the central bank on the basis of a rediscount of bills of exchange or by taking a Lombard loan.
Remittance
Manner of payment when an order is given to the bank from the account of the borrower in this bank, to pay to a third party the amount which is indicated in the remittance.
Resident
An individual person with a constant stay in the country or a legal entity registered in the domicile country.
Restriction on transferability
Full or partial transmission of the claim of the insurance right to a third party wherewith the right is limited.
Revalorization
Way to maintain the value of money in circumstances of inflation. It is conducted by increasing the amounts by the percent of growth of the retail prices for a specific time period.
Revalorization rate
Inflation rate for a specific accounting period.
Revaluation
Increase of the rate of a currency compared to another currency.
Revolving loan
Short-term loan whose renewal is agreed in advance. When the loan is fully or partially approved, it is automatically prolonged under the same conditions and in the same amount.
Safe
numbered compartment in the bank’s treasury, which the bank issues for storing money or other valuable items.
Security
It is a manner of insuring the payment of a debt where a third party obliges that it will pay the debt of the debtor to the creditor within a specific period of time and under specific conditions.
Share
Security (which may be issued by the joint stock company and the limited partnership with shares) which presents part of the core capital and it embodies the rights of the shareholder, who, being an owner of the share, is not a creditor of the company, neither an owner of a part of the company’s property.
Shareholder
Owner of one or several shares who is not held responsible for the obligations of the joint stock company or the limited partnership with shares. Any foreign national can be a shareholder. A foreign national can also acquire a share or shares in a way and under the conditions stipulated for the residents of the Republic of Macedonia and for the legal entities written in the trade register on the territory of the Republic of Macedonia, unless it is differently determined by law.
Shareholders’ book
Book of the joint stock company which is kept in the Central Depositary for Securities where it includes electronically registered information, with indicated name and surname of the shareholder, as well as unique master citizen number (identification number), passport number, that is, identification card number, if the shareholder is a foreign national or another document for identity determination – valid in the persons’ country and his/her citizenship, as well as the place of residence, that is, the company, the seat, unique company registration number (legal entity identifier), if the shareholder is a legal entity, and other information.
Sight deposit
Savings deposits, current (transaction) accounts and bank accounts. The money of the sight deposits are available to the owner of the account (investor) at any time and the owner can freely dispose of them at any time.
Solvency
It implies formal and material properties of the entity which make it a secure debtor, regardless of whether it is a matter of a bank where funds are invested or it is an individual person/ a legal entity who/which is given a loan.
Solvency control
Control of the creditworthiness of the borrower. The control of the income of the borrower is the primary target, as well as the borrower’s future income. The control includes the use of balance sheets, profit and loss statements, plans for product placement, etc. In addition, the borrower’s reputation in the business world is checked, as well as his expertise and entrepreneurial ability.
Solvency report
Systematized set of data, indicators and documents about the solvency of the legal entities and the entrepreneurs. These are prepared in standardized (multi-purpose) and specialized (for a specific purpose) form of reports.
Standing order
An order wherewith the owner of the current account requests the bank to pay funds from his/her account to another account within a specific period of time.
Stock exchange
It is an institution for organized trade with financial instruments (shares, bonds, foreign currencies...).
Stock market index
An indicator which shows the movement of prices of representative securities which are listed in a stock exchange. The stock exchange itself chooses the representative securities which best reflect the entire movement of prices. The stock exchange can determine several indices for different securities, divided according to different criteria (type of industry, type of security).
SWIFT
Society for worldwide interbank financial telecommunications – It is a computer system for simple transmission of funds between the banks and other financial institutions which are members of SWIFT. This interbank network is established in 1973 by 238 banks from 15 countries. It started to operate in 1977, when the first European banks exchanged a message.
Term savings
This refers to a specific fixed period for which the client’s funds are deposited in a bank in a bankbook and the minimum duration of this period can be 1 month, and maximum 36 months. The deposited funds are related to the specified period and the client can withdraw the funds earlier, unless it is differently defined in the Agreement on term deposits which is concluded between the Bank and the client. In an event of early terminated term deposit, usually the Bank does not pay to the client the regularly agreed interest rate, rather a sight interest is paid which is defined in accordance with the list of tariffs of the Bank.
Term works
Activities wherewith the obligations of the agreement are met within a period and under circumstances determined at the conclusion of the agreement. The term sale and purchase is particularly specific for works with securities.
The creditworthiness (credit rating)
Characteristic of the debtor which speaks of the preparedness of the debtor to meet his/her obligations in regard to the borrowed loan, which is also one of the criteria for analysis of the securities.
Title Deed
A document which proves the ownership of the real estate. The title deed is obtained in the real estate cadastre.
Total cost rate
The total cost rate provides a realistic figure of the total loan price because it is based on total costs which the client pays to the bank when he withdraws the loan and during the payment of the loan. Total cost rate is a total loan price and it comprises of the following data: the loan amount, the repayment period, the amount of the nominal interest rate of the loan and the amounts of costs which are included in the calculation of the total cost rate.
Transaction
Transfer of money of the creditor to the account of the debtor or the account of the creditor. In the transaction, debtor and creditor could be different individual persons or legal entities, that is, the same individual person or legal entity.
Treasury bill
Short term security issued by the National Bank of the Republic of Macedonia, which is being sold at a discounted value, and on the maturity day the issuer pays the nominal value.
User name
Web application access code for Online Banking (е-Banking).
Variable interest rate
The variable interest rate changes in accordance with the changes of the financial market and it is usually related to the reference interest rate (EULIBOR, LIBOR…).