22.6 ndian onom
usually to neutralise the transportation cost of the
bAD Debt bulky products such as cement, iron and steel,
An accounting term to show the loans which are petroleum, etc.
unlikely to be paid back by the borrower as the
borrower has become insolvent/bankrupt. Banks bellwether stock
might write off such bad debts against the profits
A share which often reflects the state of the whole
of the trading as a business cost.
stock market. The technical analysts, associated
with the stock market, usually keep a track-record
bADlA of such shares and go on to forecast the future
An Indian term for ‘contango’ associated with stock movements.
the trading system in the stock market which is
a postponement of either payments by the share bfs
buyer, or the person who needs to deliver the
For the purpose of supervision and surveillance of
shares against the payment.
the Indian financial system, a Board for Financial
Supervision (BFS) was set up by the RBI in
bAlAnceD buDget November 1994. The board supervises commercial
The annual financial statement (i.e., the budget) banks, non-banking financial companies
of a government which has the total expenditures (NBFCs), financial institutions, primary dealers,
equal to the taxes and other receipts. and the clearing corporation of India (CCI).
Most governments, in practice run unbalanced
budgets, i.e., deficit budgets or surplus budgets– blAck-scholes
either the expenditures being higher or lower than A formula devised for the pricing of financial
the taxes and the other receipts, respectively. It is derivatives or options—made explosive growth
done to regulate the economic activities. possible in them by the early 1970s in the US.
Myron Scholes and Robert Merton were
bAlAnce of pAyments awarded Nobel Prize for Economics for their part
A balance sheet of an economy showing its in devising this formula—the co-inventor Fischer
total external transactions with the world– Black had died (1995) by then.
calculated on the principles of accounting–is an
annual concept. bonD
An instrument of raising long-term debt on which
bAlloon pAyment the bond-issuer pays a periodic interest (known
When the final payment of a debt is more than the as ‘coupon’ ). In theory, bonds could be issued by
previous payments, it is balloon payment. governments as well as private companies.
Bonds generally have a maturity period,
bAsing point price system however, some bonds might not have any definite
maturity period (which are known as ‘Perpetual
A method of pricing in which a differential (i.e., Bonds’ ).
varying) price is fixed for the same product for
Bonds are supported/secured by collateral in
the customers of the different locations—nearer
the form of immovable property (i.e., fixed assets)
the customer, cheaper the product. This is done