Glossary of Malaysian Banking Acronyms

AAOIFI
Accounting and Auditing Organization for Islamic Financial Institutions - an Islamic international autonomous non-profit making corporate body that issues accounting, auditing, governance, ethics and Shariah standards for Islamic financial institutions.

AB
Accepted Bills

ABF
Asset Based Financing

ACF
Account Credit Facility

AFT
Automated Funds Transfer

AG
Accountant General (Ministry of Finance, Government of Malaysia)

AIBIM
Association of Islamic Banking Institutions Malaysia

AITAB
Al-Ijarah Thumma Al-Bai - a type of lease that concludes with an option to buy back in which the legal title of the leased asset will be passed to the lessee at the end of the lease period. AITAB technically comprises two contracts: an ijarah (leasing/renting) contract and then a bai (sale) contract.

AKPK
Agensi Kaunseling dan Pengurusan Kredit

AL
Agreement to lease

ALCO
Asset-Liability (Management) Committee – which formulates, reviews and approves policies and strategies regarding the balance sheet structure, liquidity needs and trading activities.

ALM
Asset Liability Management

AMA
Advanced Measurement Approach (for Operational Risk specified in Basel II)

AML
Anti-Money Laundering

AMLA
Anti-Money Laundering Act 2001

AMLATFA
Anti Money Laundering and Anti-Terrorism Financing Act 2001

AML/CTF
Anti-Money Laundering/Counter Financing of Terrorism

AP
Agreement to purchase

AUM
Assets Under Management

BA
Banker's Acceptance, a bill of exchange, drawn on and accepted by finance institutions on behalf of their clients, for trade financing. The tenure of financing ranges from 21 to 200 days. Banker's Acceptance is a discounting instrument and interest is paid up front by deducting from the principal amount. There are both conventional and Islamic Banker's Acceptance.

BAFIA
Banking and Financial Institutions Act 1989 - which lays out laws for licensing and regulation of financial institutions carrying out banking, finance, merchant banking, discount house and money-broking businesses.

BBA
Bai Bithaman Ajil - a common mode of Islamic financing used for property, vehicle, as well as financing of other consumer goods. Technically, this financing facility is based on the activities of buying and selling, i.e., the property that the customer wishes to purchase for example, are bought by the bank and sold to the customer at an agreed to price.

BC
Banker’s Cheque

BCA
Basic Current Account

BCP
Business Continuity Plan

BDS
Branch Delivery System

BG
Bank Guarantee - usually a written undertaking issued by a bank at a customer's request in favour of a third party (the beneficiary) guaranteeing payment in case of default.

BGB
Bank Guaranteed Bonds

BIA
Basic Indicator Approach (for Operational Risk specified in Basel II), or
Business Impact Analysis

BICOS
Bulk Issuance of Cashier's Order Service

BIDS
Bonds & Information Dissemination System (BNM)

BIS
Bank for International Settlements

BPM
Bank Pertanian Malaysia (Agriculture Bank of Malaysia) now known as AgroBank

BLR
Base Lending Rate - minimum interest rate calculated by banking institutions based on a formula which takes into account the institutions' cost of funds and other administrative costs.

BNM
Bank Negara Malaysia (Malaysia's Central Bank)

BSA
Basic Savings Account

BSN
Bank Simpanan Nasional (National Savings Bank)

CA
Capital allowance (for Tax purposes)

CAFIB
Capital Adequacy Framework for Islamic Banks - Issued by BNM

CAGAMAS
Malaysian National Mortgage Corporation

CAS
Capital Adequacy Standard - issued by the Islamic Financial Services Board

CASA
Current Account and Savings Account

CASAIA
Current, Savings and Investment Account

CCIRS
Cross Currency Interest Rate Swap

CCM
Companies Commission of Malaysia

CCR
Customer Risk Rating

CCRIS
Central Credit Reference Information System, which is a computerised database system developed and maintained by the Credit Bureau to collect, process, store and generate credit information.

CDL
Credit Discretionary Limit

CDM
Cash Deposit Machine

CDRC
Corporate Debt Restructuring Committee (BNM)

CDS
Central Depository System

CF
Commodities finance

CIB
Corporate and Investment Banking or Corporate and Institutional Banking

CIF
Customer Information File

COB
Close of Business

CP
Commercial Paper

CPR
Customer Profit Rate

CRM
Customer Relationship Management or Credit Risk Management

CTCS
Cheque Truncation and Conversion System, which is a new facility introduced by Bank Negara Malaysia expected to be in full operation in 2009 for all cheque clearing processing replacing the SPICK cheque clearing system with the aim of improving the operational efficiency of the cheque clearing system, such as cheque clearance, whether local or outstation, within half a day (e.g. if a cheque is deposited after banking hours, it will be cleared by 2pm the next day).

CTOS
Credit Tip Off Service Sdn Bhd (Malaysian version of Dun & Bradstreet)

CTR
Cash Threshold Reports (for AML)

DBEP
Domestic Bills Exchange Purchased

DBEP/AP
Domestic Bills Exchange Purchased/Authority to Purchase

DC
Documentary Credit (Trade Finance)

DD
Demand Draft

DFI
Development Financial Institutions

DIF
Domestic Input Financing

DOF
Domestic Output Financing

DP
Discretionary Power or Domestic Purchase Order

DRP
Disaster Recovery Plan

EAD
Exposure at Default - A total value that the bank is exposed to the borrower at the time of default (specified in Basel II)

EALIS
External Assets & Liabilities Information System - BNM's system to facilitate report on external assets & liabilities position of banking and non banking sector

ECM
Exchange Control of Malaysia (Exchange Control Rules from BNM)

ECR
Export Credit Refinancing (Trade Finance)

ECR-i
Export Credit Refinancing Islamic is a Pre-Shipment ECR facility based on Murabahah contract, granted to exporters to prepare goods prior to shipment.

ECT
Electronic Cheque Terminal

EDMS
Electronic Documents Management System

EEFS-i
Indirect Exporter Financing Scheme (an Islamic financing facility granted or a without recourse basis to the indirect exporters based on the contract of deferred payment sales as agreed with the direct exporters)

EFT
Electronic Funds Transfer

EMV
Europay-Mastercard-Visa - standards for chip-based payment cards and POS terminals/ATMs, for authenticating credit and debit card payment transactions.

EPF
Employees Provident Fund or KWSP

FAST
Fully Automated System for Tendering - BNM's automated system for tendering, bids submission and processing of tender for scriptless securities in the Malaysian debt securities market.

FATF
Financial Action Task Force (AML)

FBEP
Foreign Bills Exchange Purchased

FBEP/AP
Foreign Bills Exchange Purchased/Authority to Purchase

FCA
Foreign Currency Accounts

FCS
Financing Collection System

FCY
Foreign Currency

FD
Fixed Deposit

FDD
Foreign Currency Demand Drafts

FEA
Facility Excess Application

FEC
Forward Exchange Contract - an agreement to buy or sell currencies at a future date (more than 2 trading days) at a predetermined price.

FICPS
Financial Institutions Corporate Profile System - BNM's database on the profile of all banking institutions.

FIDS
Fraud Information Database System - BNM's repository of all fraud and attempted fraud cases reported by the financial institutions, and frauds detected and investigated by BNM

FINS
Financial Intelligence System - BNM's reporting system developed to cater for submission of Suspicious Transaction Reports (STRs) and Cash Threshold Reports (CTRs) from reporting institutions.

FISS
Financial Information Statistical System (BNM)

FMB
Financial Mediation Board

FOBC
Foreign Bills of Collection

FOREX
Foreign (currency) exchange or FX

FOS
Financial Origination System

FPX
Financial Process Exchange (facility for payment or transfer of funds via the Internet provided by MEPS)

FRA
Forward Rate Agreement - a contractual agreement between two parties to fix the rate of interest for a future period on a specified notional principal, such as a loan or deposit. A FRA is used to hedge an asset or liability. It is also a widely used instrument for investment, trading and arbitraging.

FRR
Facility Risk Rating

FRS
Financial Reporting Standards - issued by the Malaysian Accounting Standards Board

FSMP
Financial Sector Master Plan (issued by BNM)

FT
Funds Transfer

FTP
Funds Transfer Pricing

FTT
Foreign Currency Telegraphic Transfer

FWTT
Foreign Worker Telegraphic Transfer

FX
Foreign (currency) exchange or FOREX

GIA
General Investment Account

GLC
Government Linked Company

GP
General Provision

GP5
“Guidelines on the Credit Limit to a Single Customer" (BNM)

HP
Hire Purchase

IAB
Islamic Acceptance Bills

IBA
Islamic Banking Act 1983

IBBM
Institut Bank-Bank Malaysia (Institute of Bankers Malaysia)

IBFIM
Islamic Banking and Finance Institute Malaysia Sdn. Bhd.

IBG
Interbank GIRO - An electronic funds transfer payment system for interbank payments up to a maximum of RM100,000 per transaction via MEPS

IBI
Islamic Banking Institutions

IBT
Interbank Transfer

IC
Inward Bill Collection (Trade Finance)

ICCS
Inward Cheque Clearing System (SPICK) - replaced by CTCS in 2008

ICP
Islamic Commercial Papers

ICULS
Irredeemable Convertible Unsecured Loan Stock

IDB
Islamic Development Bank

IECR-DPO
IECR Domestic Purchase Order

IFRS
International Financial Reporting Standards

IFSB
Islamic Financial Services Board

IIB
International Islamic Bank

IIFM
International Islamic Financial Market

IIMM
Islamic Interbank Money Market

IIS
Interest in suspense

ILC
Inward Letter of Credit

IMB
Ijarah Muntahia Bittamleek

IOFC
International Offshore Financial Centre

IPRE
Income-producing Real Estate

IPRS
Islamic Profit Rate Swap

IRB
Internal Ratings Based Approach (for Credit Risk specified in Basel II)

IRB-A
Internal Ratings Based (Advanced) approach for Credit Risk specified in Basel II

IRB-F
Internal Ratings Based (Foundation) approach for Credit Risk specified in Basel II

IRR
Investment Risk Reserve, or
Internal Rate of Return

IRS
Interest Rate Swap. IRS transaction is a contract between two parties to exchange interest rate payments (cash flows) at a future date. It allows the flexibility to convert a fixed rate asset/liability to a floating rate asset/liability and vice versa. There are basically two types of swaps which are traded daily by most markets - interest rate swaps (IRS) and currency swaps.

ISO 8583
Standard used to define the interface file format used for financial transaction messages

ISP98
International Standby Practices 1988 (Trade Finance)

ITEPS
International Transactions and External Position System - BNM's database comprising detailed information on the payments and receipts between residents and non-residents effected through the banking system

ITIS
International Transactions Information System - the balance of payment module of the ITEPS (BNM)

IVR
Interactive Voice Response - a phone technology that allows a computer to detect voice and touch tones using a normal phone call

JANM
Jabatan Akauntan Negara Malaysia (Accountant General)

KLIBOR
Kuala Lumpur Inter Bank Offered Rate

KWSP
Kumpulan Wang Simpanan Perkerja or Employees Provident Fund

KYC
Know Your Customer (Policy) required under AMLA

LC
Leased Contract

L/C
Letter of Credit (Trade Finance)

LCP
Local Cheque Purchase

LCS
Loan Collection System

LCY
Local Currency

LGD
Loss given default - the fraction of EAD that will not be recovered following default, and is expressed as a percentage of the exposure (specified in Basel II).

LHDN
Lembaga Hasil Dalam Negeri (Inland Revenue Board)

LME
London Metal Exchange

LO
Letter of Offer

LOFSA
Labuan Offshore Financial Services Authority

LOS
Loan Origination System

MARC
Malaysian Rating Corporation Berhad

MASB
Malaysian Accounting Standards Board

MCS
Micro-Credit Scheme

MCTF
Multi Currency Trade Financing

MECD
Ministry of Entrepreneur and Coorperative Development

MEPS
Malaysian Electronic Payment System Sdn Bhd - A consortium set up by Malaysian banking institutions to provide shared banking services, such as shared ATM network and Interbank GIRO.

MGIA
Mudharabah General Investment Account

MGS
Malaysian Government Securities

MIA
Months in Arrears

MICR
Magnetic Ink Character Recognition (character recognition technology for cheque printing)

MIFC
Malaysia International Islamic Financial Centre

MM
Money Market

MoF
Ministry of Finance

MOPO
Money Orders / Postal Orders

MPO
Murabahah for the Purchase Order

MRTA
Mortgage Reducing Term Assurance - A form of term life insurance which reduces over the tenure of the mortgage

MTM
Mark-to-Market

MTN
Medium Term Notes

MYKAD
Malaysian National Identity Card

NAB
Non-accrual basis

NCD
Negotiable Certificate of Deposit

NID
Negotiable Instruments of Deposit, a financial instrument issued by banks for the deposit of a specific sum of money for a fixed period of time at a prefixed interest rate. An NID can be bought or sold before the date of maturity.

NID-i
Islamic Negotiable Instruments of Deposit

NIDC
Negotiable Islamic Debt Certificate is the Shariah-based alternative to the Negotiable Certificate of Deposit (NCD), e.g., using the concept of Al-Mudharabah (profit-sharing) or Al-Bai Bithaman Ajil (Deferred payment sale)

NII
Net Interest Income

NOP
Net Open Position (FX)

NPF
Non-Performing Financing

NPL
Non-Performing Loan

OBS
Off Balance Sheet

OC
Outward Bill Collection (Trade Finance)

OCCO
Outward Cheque Clearing Outsourcing

OCP
Outstation Cheque Purchase

OD
Overdraft

OOP
Overnight Open Position

OPR
Overnight Policy Rate (set by BNM’s Monetary Policy Committee)

OTC
Over-the-counter

PCE
Private Commercial Enterprise

PD
Probability of Default (credit risk)

PDS
Private Debt Securities

PF
Performing Financing or Project Finance

PIDM
Perbadanan Deposit Insuran Malaysia (Malaysia Deposit Insurance Corporation) - which currently covers up to RM60,000 per depositor per banking institution

PL
Promise to Lease

PMPC
Payment Multi-Purpose Card (chip embedded EMV-compliant smart card)

POS
Point-of-Sale

PP
Promise to Purchase

PS
Pre-Shipment (Trade Finance)

PSIA
Profit Sharing Investment Account

PSR
Profit sharing ratio

PTPTN
Perbadanan Tabung Pendidikan Tinggi Nasional Malaysia (National Higher Education Fund Corporation)

PWR
Purchase With Recourse

PWOR
Purchase Without Recourse

RAM
Rating Agency Malaysia Berhad

RAPM
Risk Adjusted Pricing Model

RAROC
Risk Adjusted Return on Capital

RBSF
Risk based supervision framework (issued by BNM)

RC
Receivable Charges, or Revolving Credit

RENTAS
Real Time Electronic Transfer of Funds & Securities - BNM's system for electronic funds transfer, replacing SPEEDS. Minimum amount per transmission is RM10,000 except if the remitting party is a government body.

REPO
Repurchase Agreement - the bank sells its money market instruments approved by Bank Negara Malaysia to an investor, with an understanding to buy back the said instruments at an agreed price (interest rate) on a specific future date.

RM
Relationship Manager

RSB
Redeemable Secured Bonds

RUB
Redeemable unsecured bonds

RW
Risk Weights

RWA
Risk weighted Asset

RWCAF
Risk Weighted Capital Adequacy Framework (BNM)

RWCR
Risk Weighted Capital Ratio

SAS
SWIFT Alliance Access

SBBA
Sale and buy back agreements

SBLC
Standby Letter of Credit

SC
Securities Commission

SCCL
Single customer credit limit

SG
Shipping Guarantee (Trade Finance)

SI
Standing instruction

SIA
Special Investment Account, or Specific Investment Accounts

SMF
Share Margin Financing

SOD
Sum of Digits

SP
Specific Provisions

SPA
Sale and Purchase Agreement

SPEEDS
Sistem Pemindahan Elektronik Dana dan Sekuriti (BNM) - this has been replaced by RENTAS

SPI
Skim Perbankan Islam – Islamic Banking Scheme launched by BNM in 1993 allowing conventional banking institutions in Malaysia to offer Islamic banking products and services using their existing infrastructure, including staff and branches.

SPICK
Sistem Penjelasan Imej Cek Kebangsaan - national cheque clearing system

SPV
Special Purpose Vehicle

SSC
Signature Specimen Card

SST
Self Service Terminals

SSPN
Skim Simpanan Pendidikan Nasional (National Education Savings Scheme by PTPTN)

STI
Short Term Investments

STR
Suspicious Transaction Report (for BNM required under AMLA)

STRC
Short Term Revolving Credit, is a financial tool for short-term non trade-related activities. The tenor ranges from 1 to 12 months.

SVS
Signature Verification System

SWIFT
Society for Worldwide Interbank Financial Telecommunication - operates a worldwide financial messaging network allowing financial institutions to securely and reliably exchange financial transactions.

TC
Travellers’ Cheques

TT
Telegraphic Transfer

TQH
Temporary Qardhul Hasan

TWCF
Trade Working Capital Financing

UCP600
Uniform Customs and Practice for Documentary Credits. UCP600 is a set of trade global finance guidelines implemented in July 2007. UCP is the work of ICC, an international organisation founded in 1919.

UMA
Unclaimed Moneys Act 1965

VaR
Value at Risk - VaR is a measure of the loss in market value of a position/portfolio, which is expected over a given holding period for a given confidence interval. The underlying premise of VaR is that the historical volatility and correlation's between different types of risk factors can be used to estimate the overall variation in the value of different and numerous cashflows.

WRA
Weighted Risk Assets

ZBA
Zero Balance Account

(updated: 26.9.08)