Glossary of Banking Terms

ABA # or Bank Routing #:
The nine digit number that designates the bank and location to which the transfer must be delivered. This applies to transfers only within the U.S.

Account Name:
The actual name of the individual or entity on the bank account. All official Indiana University accounts at financial institutions are named “Trustees of Indiana University”.

Account Analysis:
A banking service for business customers that provides a finely detailed statement of all activity related to the account. An earnings credit is typically offered to offset the monthly fees on the account.

Automated Clearing House (ACH) System:
A domestic electronic funds transfer system.

Bank Codes:
Three letter codes used to identify banks used by the University. Bank Code list 

Beneficiary:
The individual or entity receiving the funds transfer.

Bursar External Upload (BEX):
Provides interface to Indiana University’s Bursar system for billing student accounts.

Campus Administration:
Vice Chancellor for Finance and Administration or their delegate.

Correspondent Bank:
A financial institution that regularly performs services for other banks.

Currency Code:
A three letter code representing the currency of a particular country. Currency Code List

Custodial Fund:
A designated sum of money granted to an individual or a department for purposes that cannot be achieved through normal procedures. Common custodial funds are petty cash funds, change funds, and revolving funds.

Depository Bank:
The bank that accepts incoming paper or electronic funds and credits it to a beneficiary bank account.

Disbursement Voucher:
A type of KFS document used solely to request a transfer of funds to a recipient outside the University. These documents can be used to generate either a check or an electronic funds transfer.

Domestic Transfer:
A funds transfer with the receiving bank located in the U.S. or the correspondent bank is located in the U.S.

Drawdown:
A transaction method that allows a customer to authorize one bank to wire in funds from a second bank. Use of drawdowns centralizes transaction decisions and cash flow to a single bank.

Drawee Bank:
The bank on which the electronic transfer is drawn, the payor's bank.

Drop Box:
A drop box is similar to a bank night depository box. Items placed in the drop box will be retrieved by the department and then be mailed to a designated Indiana University lockbox operation or accounts receivable processing location.

Earnings Credit:
An interest rate on collected balances in a commercial account using account analysis. The interest rate is typically tied to government issued securities. The earnings credit is not deposited to the account as interest earned. It is solely used to offset account analysis fees. Any earnings credit above the total fees for a month is forfeited.

Electronic Funds Transfer (EFT):
The movement of funds by non-paper means (i.e., electronically) usually through a payment system such as the ACH network or Fedline.

Encryption:
The process of encoding electronic transaction information, to allow secure transmission of data over the Internet.

Fed Reference Number:
A tracking number given to a wire transfer, to identify it and to assist in research.

FDRS:
The Financial Data Retrieval System is an Indiana University database and report generating system, containing information from the KFS.

FBO:
For Benefit Of is used in electronic funds transfers to notate a second beneficiary or to designate a contact person or organization.

FFC:
For Further Credit is used in electronic funds transfers to notate a second beneficiary.

Federal Reserve System (Fed):
An independent agency of the U.S. government that plays a central role in monetary policy, domestic payments systems, and the regulation of financial institutions.

Fedline:
The same-day value electronic funds transfer system operated in the U.S. by the Fed.

FFELP:
The Federal Family Educational Loan Program is a government program that provides loans for higher education expenses.

KFS:
The Kuali Financial System is the internal bookkeeping system for Indiana University. The system facilitates transfers amongst all University Ledger accounts as well as incoming and outgoing wire and ACH transfers.

Initiating Bank:
The bank responsible for sending the transfer.

Initiator:
The individual responsible for communicating funds transfer information to the financial institution. An Office of the Treasurer staff member is the initiator for most electronic funds transfers.

International Transfer:
A funds transfer with the receiving bank located outside the U.S.

Lockbox:
A banking service in which payments or deposits are collected by the bank at a postal or drop box, and then processed by a special department in the bank.

Negotiable Instrument:
A commitment to pay a specific sum of money, most commonly in the form of a check or draft. For an instrument to be negotiable, it must be signed by the maker, must have a specific currency value, must be made payable to a person or organization, and must be payable on demand.

Non-Check Disbursement:
A type of KFS document used to initiate payments by methods other than check issuance. Repetitive outgoing electronic funds transfers and debits to University bank accounts are handled through use this type of document.

Payees:
A person to whom money is being paid or is due, especially in a transaction such as the payment of a check or money order.

Payor:
The party that issues the transfer.

Presentment:
The delivery of an electronic funds transfer or negotiable instrument to the payor’s bank.

Receiving Bank:
The bank where the beneficiary account is held.

Repetitive Transfer:
Repeated electronic funds transfers in which the credit parties and transaction description remain the same and only the amount and date of the transfer changes.

Revolving Fund:
A type of Custodial Fund that involves the establishment of a bank account in the name of an individual or department. This account is solely operated by the individual or department, but is responsible for operating the account according to University Policy.

Remote Check Capture:
Electronically transmits check images and deposits to a bank for processing and clearing .

Revenue Producing Activities:
A revenue producing activity is established when revenue is generated from the sale of products and/or services by Indiana University or its employees.

RFP:
A Request For Proposal is a method used to solicit business plans from corporations. The RFP process allows for the equitable and simultaneous comparison and analysis of competing businesses’ product and service offerings.

Settlement Date:
Date of electronic funds transfer that determine the availability of funds.

Society for Worldwide Interbank Financial Telecommunications (S.W.I.F.T.):
The major international financial telecommunications network that transmits international payment instructions as well as other international financial messages.

Verifier:
The individual responsible for completing the funds transfer. An Office of the Treasurer staff member is the verifier on most electronic funds transfers.

Wire transfer:
A same day transfer of funds between financial institutions, conducted through the Federal Reserve’s Fedline system.

Contact Banking Services.