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4 Foreign Exchange Banking in PK Guide CHAPTER - IV Exchange Position Cash flow position There is said to be a position if circumstances are such that a change in a rate will create a profit or loss. If cash inflows and cash outflows are unequal or have mismatched value dates, there is a net cash flow position.  Separate net cash flow positions apply for each value date.   Net cash flow position = cash Inflow - cash Outflow A positive net cash flow position reflects an excess of cash inflow, over cash outflow, on the relevant value date. The surplus cash will be available for investment. If interest rates rise the return will be higher. If interest rates  fall, the return will be lower. A negative net cash flow position reflects an excess of cash outflow over cash inflow on the relevant value date. Assuming there are no idle balances, the account will become overdrawn. The shortfall of cash will require funding. If interest rates rise it will become more expensive to fun...

23 W Basic Banking Guide A to Z W Wire transfer A transfer of funds from one point to another by wire or network such as online transfer . in this mode of transfer funds are transferred on real-time bases. Wage Wage drift Wage freeze Waiver Warehouse warehousing warrant warranty war risk insurance wasting assets waybill white paper wholesale wholesale banking wholesale cost will wind bill windfall window-dressing withholding tax without prejudice without recourse with particular average with recourse witness working capital working day work-in-progress world bank writ of attachment writ of execution writ of possession writ of summons write down write off write-up

22 V Basic Banking Guide A to Z V Vacant possession Property not occupied, or with no tenant in possession. Valid An agreement, document authorized by law or otherwise having legal effect or force. Validate To make any document, instrument, legally effective. In banking a cheque becomes state after six months of its issuance, after that it requires validation. Validity The period for which an agreement, negotiable instrument, bid, offer ,claim, document, letter of credit, guarantee etc remains in force. Value It refers to the monetary worth of an asset, business entity, goods sold or service rendered, or liability or obligation acquired. Value added cost It refers to the resources consumed in enhancing the value of a goods or services. Value added tax (VAT) This is a consumption tax which is levied at each stage of production based on the value added to the product at that stage. Value date The date on which an account holder can use the funds from deposited cheques that have passed th...

21 U Basic Banking Guide A to Z U Ullage certificate This is a certificate issued for removal of liquid (oil etc) from the tanker. For example palm oil is imported by three parties and on port it is stored in one tanker and oil is released through measurement. Ultimate balance Balance arrive after combining all accounts. Uncleared effects Ultimo It refers to in or of the month preceding the current one, such as on the 15th ultimo. Ultra vires It refers to some thing beyond the legal power or authority of a company association or officer, etc. Ultra violet The purplish-blue light which highlights un-visible fields .It also refers to, producing, or utilizing light having such wavelengths such as an ultraviolet lamp that are used to detect fake currencies etc. Unauthorized signature Forged signatures, or signature on behalf of any person company, firm  or association etc  without any lawful authority. Unbanked area Under develop areas where banking facilities are not available. A...

4 D Basic Banking Guide A to Z D D/A Documents against acceptance, Arrangement under DA L/C or documentary collection in which an exporter instructs the presenting bank to hand over shipping and title documents to the importer only if the importer accepts the accompanying bill of exchange or draft by signing it.. Damages Compensation for causing loss or injury through negligence, or a courts estimate or award of a sum as a fine for breach of a contract. Data General Information in raw or unorganized form, in Computers terminology it refers to the basic details  that are input, stored, and processed by a computer, for obtaining desired  information, in required form. Dead Stock Obsolete inventory, it exists in trading organizations and negatively impacts companies cash flow. Dead weight A maximum burden that a carrier can carry. Full loading capacity of a Ship. Dealer Individual or firm that buys goods from a producer  for wholesale or retail reselling. Debenture Debenture...

24 Y Z Basic Banking Guide A to Z Y Yearly Yearly tenancy Yield Yield gap Yours Z Zero budgeting Zero coupon Bond Zero rating Zone Zoning Zoological certificate

3 Foreign Exchange Banking in PK Guide CHAPTER - III Forward Exchange Facilities According to the chapter IV of the SBP foreign exchange manual, Banks and DFIs can enter into forward purchase and sale of foreign currencies against genuine and firm transactions of approved nature. Forward cover can be provided even if letter of credit has been opened through an other bank or export documents have been handled by an other bank. In that case cover shall be provided on the basis of a certificate indicating that no cover has been provided by the concerned bank or DFI against the transaction. Bank can provide forward cover for export, import, foreign private loan, and repatriable foreign currency loan within the relevant provisions of SBP manual. No forward cover transaction can be made for period of less than one month.   Forward purchase of foreign exchange against �Export of Goods� Banks can purchase foreign currencies forward for delivery up to six and half months from the ...