Banking Abbreviations
80 abbreviations · part of Business & Finance Abbreviations
Abbreviations from retail and commercial banking, payment systems, cards, financial-crime compliance and bank regulation, such as ATM, ACH, IBAN, SWIFT, KYC and AML. They appear on bank statements, wire instructions, card terms, compliance manuals and bank earnings reports. Many payment systems are national, so entries state which country or region each code or network belongs to and how it differs from look-alikes elsewhere.
| Abbreviation | Stands for | Description |
|---|---|---|
| A/C | Account | Abbreviation for account used on bank statements, cheques, forms and invoices, as in "A/C No." for account number or "A/C payee only" written across UK and Indian… |
| ABA | American Bankers Association (routing number) | In US banking, shorthand for the nine-digit ABA routing transit number that identifies a financial institution for checks, ACH transfers and domestic wires. |
| ACH | Automated Clearing House | US electronic payments network that moves money between bank accounts in batches, used for direct deposit of paychecks, bill payments, Social Security benefits… |
| ALLL | Allowance for loan and lease losses | Balance-sheet reserve, deducted from a bank's gross loans, that estimates the portion of loans and leases that will not be collected. |
| ALM | Asset-liability management | Practice of managing a bank's or insurer's balance sheet so that assets and liabilities are matched in interest-rate sensitivity, maturity and liquidity, protecting… |
| AML | Anti-money laundering | Laws, regulations and internal controls designed to stop criminals from disguising illegally obtained money as legitimate income through banks and other businesses. |
| ATM | Automated teller machine | Self-service machine that lets bank customers withdraw cash, check balances, deposit cash or checks and transfer money using a debit card and PIN, without visiting a… |
| BACS | Bankers' Automated Clearing Services | UK electronic payment system for direct debits and direct credits, such as salaries, pensions, utility bills and supplier payments, processed on a three-working-day… |
| BG | Bank guarantee | Bank's written promise to pay a beneficiary up to a specified amount if its customer fails to fulfill a contractual obligation, used to secure performance, advance… |
| BHC | Bank holding company | Company that owns or controls one or more banks, regulated in the United States by the Federal Reserve under the Bank Holding Company Act of 1956. |
| BIC | Business Identifier Code | Eight- or eleven-character code, defined by ISO 9362 and issued by SWIFT, that identifies a bank or other institution in international transfers. |
| BIN | Bank identification number | First six or eight digits of a payment card number, identifying the card network and the issuing institution. |
| BSA | Bank Secrecy Act | Anti-money-laundering law of 1970 requiring banks and other financial institutions to keep records, file currency transaction reports for cash transactions over $10,000… |
| BSB | Bank-State-Branch | Six-digit number that identifies a bank branch in Australia, used together with an account number for domestic transfers, direct debits and direct credits. |
| CAR | Capital adequacy ratio | Bank's total regulatory capital as a percentage of its risk-weighted assets, used to judge whether it can absorb losses. |
| CASA | Current account and savings account | Indian banking term for low-cost deposits held in current (checking) and savings accounts, as opposed to term deposits. |
| CBDC | Central bank digital currency | Digital form of a country's money issued directly by its central bank, as distinct from commercial bank deposits or private cryptocurrencies. |
| CD | Certificate of deposit | Bank or credit union savings product that pays a fixed interest rate for a fixed term, such as 6 months or 5 years, in exchange for leaving the money untouched until… |
| CDD | Customer due diligence | Process of understanding a customer's identity, the nature and purpose of the relationship and its expected activity, so a bank can assess risk and spot unusual… |
| CET1 | Common Equity Tier 1 | Highest-quality form of bank capital, consisting mainly of common shares and retained earnings minus deductions such as goodwill. |
| CFT | Countering the financing of terrorism | Measures banks and other institutions take to detect and prevent money from reaching terrorist organizations, including sanctions screening, transaction monitoring and… |
| CHAPS | Clearing House Automated Payment System | UK's high-value, same-day sterling payment system, used for house purchases, large corporate payments and interbank transfers, settled in real time through the Bank of… |
| CHIPS | Clearing House Interbank Payments System | Private US system for large-value dollar payments between banks, operated by The Clearing House, which nets payments continuously and finalizes them the same day. |
| Chq | Cheque | Abbreviation for cheque used on bank statements, deposit slips and accounting records in the UK, Ireland, India, Australia and Canada. |
| CIP | Customer identification program | US requirement, introduced under the USA PATRIOT Act, that banks verify each new customer's identity by collecting at least name, date of birth, address and an… |
| CRA | Community Reinvestment Act | US law of 1977 that encourages banks to meet the credit needs of the communities where they take deposits, including low- and moderate-income neighborhoods. |
| CRR | Cash reserve ratio | Share of a bank's deposits that it must hold as reserves with the central bank, unavailable for lending. |
| CTR | Currency transaction report | Report US financial institutions must file with FinCEN for cash transactions over $10,000 by or on behalf of one person in a single business day, including multiple… |
| CU | Credit union | Member-owned, not-for-profit financial cooperative that offers savings, checking, loans and other services to members who share a common bond, such as an employer… |
| CVV | Card verification value | Three- or four-digit security code printed on a payment card, on the back of Visa and Mastercard cards and on the front of American Express cards, used to show that the… |
| DD | Demand draft | Prepaid negotiable instrument issued by a bank in South Asia, ordering payment of a fixed sum to a named payee, used when a guaranteed payment is required, such as for… |
| DDA | Demand deposit account | Bank account from which the holder can withdraw money at any time without notice, typically a checking account. |
| EDD | Enhanced due diligence | More intensive checks applied to high-risk customers, such as politically exposed persons, clients from high-risk countries or businesses handling large amounts of cash. |
| EFT | Electronic funds transfer | Any transfer of money initiated electronically rather than by paper check or cash, including ACH payments, wire transfers, debit card purchases, ATM withdrawals and… |
| EMV | Europay, Mastercard and Visa | Global standard for chip-based payment cards and terminals, named after the three companies that developed it, in which a cryptographic chip creates a unique code for… |
| FD | Fixed deposit | Term deposit offered by banks and non-bank finance companies in India and other South Asian countries, paying a fixed interest rate for a set period, from seven days to… |
| FI | Financial institution | Company that provides financial services such as deposits, loans, payments, investments or insurance, including banks, credit unions, savings institutions, brokerages… |
| FPS | Faster Payments Service | UK payment system, launched in 2008, that moves money between bank accounts in near real time, usually within seconds, 24 hours a day, every day of the year. |
| G-SIB | Global systemically important bank | Bank whose size, interconnectedness, complexity and cross-border activity are such that its failure could disrupt the global financial system, as designated each year… |
| IBAN | International Bank Account Number | Standardized account number of up to 34 characters that identifies a bank account for international and domestic transfers in Europe and many other countries. |
| IFSC | Indian Financial System Code | Eleven-character alphanumeric code assigned by the Reserve Bank of India to identify each bank branch that takes part in electronic payments such as NEFT, RTGS and IMPS. |
| IMPS | Immediate Payment Service | Indian instant interbank transfer service, operated by the National Payments Corporation of India since 2010 and available 24 hours a day through mobile apps, internet… |
| KYC | Know your customer | Process banks and other financial institutions use to verify customers' identities and assess their risk, collecting documents such as photo ID, proof of address and… |
| LCR | Liquidity coverage ratio | Basel III liquidity requirement that a bank hold enough high-quality liquid assets, such as cash and government bonds, to cover its expected net cash outflows during a… |
| LDR | Loan-to-deposit ratio | Bank's total loans divided by its total deposits, showing how much of its deposit funding it has lent out. |
| LLP | Loan loss provision | Expense a bank records in its income statement to build reserves against expected losses on loans, reducing profit in the period. |
| LOC | Line of credit | Flexible borrowing arrangement that lets a customer draw money up to a set limit, repay and borrow again, paying interest only on the amount used. |
| MT103 | SWIFT MT103 message (single customer credit transfer) | Standard SWIFT message type used for international wire transfers between banks on behalf of a customer, containing details of the sender, beneficiary, amount, currency… |
| NACHA | Nacha (formerly National Automated Clearing House Association) | Nonprofit association that writes the operating rules for the US ACH network and oversees its use by banks, credit unions and payment companies. |
| NEFT | National Electronic Funds Transfer | Indian electronic payment system, operated by the Reserve Bank of India, for transferring money between bank accounts, settled in half-hourly batches. |
| NII | Net interest income | Difference between the interest a bank earns on loans and securities and the interest it pays on deposits and other borrowings. |
| NIM | Net interest margin | Bank profitability measure equal to net interest income divided by average interest-earning assets, showing the spread between what a bank earns on loans and securities… |
| NPA | Non-performing asset | Indian banking term for a loan or advance on which interest or principal has been overdue for more than 90 days, as defined by the Reserve Bank of India. |
| NPL | Non-performing loan | Loan on which the borrower has stopped making scheduled payments, usually for 90 days or more, or that is unlikely to be repaid in full. |
| NSF | Non-sufficient funds | Status of a bank account that lacks enough money to cover a check, debit or electronic payment presented against it. |
| NSFR | Net stable funding ratio | Basel III requirement that a bank's available stable funding, such as capital and long-term deposits, be at least equal to its required stable funding over a one-year… |
| OD | Overdraft | Negative balance that occurs when a bank pays a transaction for more than the money available in the account, effectively lending the customer the shortfall. |
| ODP | Overdraft protection | Optional bank service that covers transactions when a checking account lacks sufficient funds, either by transferring money from a linked savings account, credit card… |
| PAN | Primary account number | Card number printed or embossed on a payment card, typically 16 digits, that identifies the card account. |
| PEP | Politically exposed person | Individual who holds or has held a prominent public function, such as head of state, senior politician, judge, military officer or executive of a state-owned company… |
| PIN | Personal identification number | Short secret numeric code, usually four to six digits, that cardholders enter to authorize ATM withdrawals and card payments, proving they are the legitimate user. |
| PSD2 | Second Payment Services Directive | EU directive, applied from 2018, that opened up banking by requiring banks to give licensed third parties access to customer account data and payment initiation, with… |
| RD | Recurring deposit | Indian savings product in which the customer deposits a fixed amount every month for a set term, earning interest at a rate similar to fixed deposits. |
| RDC | Remote deposit capture | Service that lets customers deposit checks by scanning or photographing them, typically with a smartphone app or desktop scanner, instead of visiting a branch or ATM. |
| RTGS | Real-time gross settlement | Funds transfer system in which large-value payments between banks are settled individually and immediately in central bank money, making them final and irrevocable. |
| RTN | Routing transit number | Nine-digit code that identifies a US bank or credit union in domestic payments, printed on checks and used for ACH and wire transfers. |
| RTP | Real-Time Payments | US instant payment network launched in 2017 by The Clearing House that lets participating banks send and settle payments within seconds, 24 hours a day, with immediate… |
| RWA | Risk-weighted assets | Bank's assets weighted by their credit, market and operational risk, used as the denominator of regulatory capital ratios. |
| S&L | Savings and loan association | US financial institution, also called a thrift, that historically specialized in taking savings deposits and making home mortgage loans. |
| SAR | Suspicious activity report | Confidential report that banks and other financial institutions file with authorities when they detect transactions that may involve money laundering, fraud, terrorist… |
| SBLC | Standby letter of credit | Bank's undertaking to pay a beneficiary if its customer fails to meet a contractual obligation, such as paying a supplier or completing a project. |
| SCA | Strong customer authentication | Security requirement under the EU's PSD2 that online payments and account access be verified with at least two independent factors: something the customer knows (a… |
| SEPA | Single Euro Payments Area | European scheme that lets people and businesses make euro credit transfers and direct debits across more than 35 countries under the same rules, costs and timescales as… |
| SIFI | Systemically important financial institution | Bank, insurer or other financial firm whose failure could threaten the stability of the financial system, the kind of institution often described as "too big to fail."… |
| SLR | Statutory liquidity ratio | Indian requirement that banks hold a set share of their deposits in liquid assets, mainly government securities, cash and gold. |
| SO | Standing order | Instruction a customer gives their bank to pay a fixed amount to another account at regular intervals, such as monthly rent or savings transfers, until canceled. |
| SWIFT | Society for Worldwide Interbank Financial Telecommunication | Member-owned cooperative based in Belgium that runs the secure messaging network banks use to send international payment instructions and other financial messages. |
| TT | Telegraphic transfer | Term, common in Asia, the Middle East, Australia and the UK, for an international electronic wire transfer between banks, typically sent over the SWIFT network. |
| UBO | Ultimate beneficial owner | Natural person who ultimately owns or controls a company or other legal entity, directly or through layers of intermediaries, typically defined as holding more than 25… |
| UPI | Unified Payments Interface | India's real-time mobile payment system, run by the National Payments Corporation of India (NPCI), that lets users send money instantly between bank accounts using a… |
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