FINANCE TERMS I

Authorized capital is the maximum capital that a company is authorized to raise.

Issued capital is that part of the authorized capital which is offered by the company for being subscribed by members of the public or anybody.

Subscribed capital is that part of the issued capital which is subscribed (accepted) by the public.

Called up capital is a part of subscribed capital which has called up by the company for payment. For example, if 10,000 shares of Rs. 100 each have been subscribed by the public and of which Rs. 50 per share has been called up. Then the subscribed capital of the company works out to Rs. 1,000,000 of which the called up capital of the company is Rs. 5, 00,000.

Paid up capital refers to that part of the called up capital which has been actually paid by the shareholders. Some of the shareholders might have defaulted in paying the called up money. Such defaulted amount is called arrears. From the called up capital, calls in arrears is deducted to obtain the paid up capital.

Statutory Liquidity Ratio (SLR) is the percentage of total deposit a bank has to keep in approved securities.

Cash Reserve Ratio (CRR) is the percentage of its total deposit a bank has to keep with RBI in cash or near cash assets.

PECULIAR FINANCIAL WORD

ASSET TRIPPING:
buying a company to sell its assets.