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As of Adjustment: A Comprehensive Guide to Its Legal Meaning
Definition & meaning
The term "as of adjustment" refers to a financial transaction that involves either a debit or credit applied to a bank's reserve or clearing balance. This adjustment is made for the purpose of maintaining the required balance and occurs when a bank sends or receives a payment order through a Federal Reserve Bank. Essentially, it serves as an alternative to charging interest or making a payment for these transactions.
Table of content
Legal use & context
This term is primarily used in the banking and financial sectors, particularly in relation to transactions processed through the Federal Reserve System. It is relevant in legal contexts involving banking regulations, financial compliance, and the management of funds. Users may find it useful when dealing with forms related to bank transactions or when navigating issues regarding reserve requirements.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A bank sends a payment order to a Federal Reserve Bank for a large transaction. To maintain its required reserve balance, the Federal Reserve applies an as of adjustment to the bank's account, ensuring it meets regulatory requirements.
Example 2: A bank receives a payment order from a Federal Reserve Bank. To avoid a penalty for not maintaining sufficient reserves, the bank receives a credit adjustment to its clearing balance (hypothetical example).
Comparison with related terms
Term
Definition
Difference
Reserve Requirement
The amount of funds that a bank must hold in reserve against deposits.
As of adjustment is a specific transaction for maintaining balance, while reserve requirement is a broader regulatory standard.
Interest Charge
A fee paid for borrowing funds, typically expressed as a percentage.
As of adjustment serves as an alternative to interest charges for maintaining balances.
Common misunderstandings
What to do if this term applies to you
If you are involved in banking transactions that may require an as of adjustment, ensure you understand your bank's policies regarding reserve maintenance. You can explore US Legal Forms for templates related to banking transactions, which may help you manage your obligations effectively. If the situation is complex, consider seeking professional legal assistance.
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