Forfaiting Glossary

Glossary Items beginning with : N

Negotiable Instrument

A written financial undertaking by means of which ownership to a future payment claim can be transferred between two parties, usually by endorsement. Promissory Notes and Bills of Exchange are the most common types of claim used in forfaiting.

Negotiation

The purchase of documents, typically under a Letter of Credit.

Non Performing Asset

A facility in which principal and interest, if applicable, remains unpaid for a specific period of time. We also refer to non performing loans or distressed assets.

Nostro Account

The account of a bank with its agent or correspondent in a foreign country and recorded in the currency of that country, to facilitate international payments.

Novation

The legal act of discharging the rights and obligations of an existing party and replacing these with equivalent rights and obligations of a new party. A novation also takes place when the original parties continue their obligation to one another, but a new agreement is substituted for the old one.