Banks offer loans against securities for customers’ short-term funding needs. Loans against shares, government bonds, insurance policies, NSCs, and other investments come under this category. For loans against shares, debenture banks are required to strictly observe regulatory restrictions on ‘Exposure Norms’ as explained below. Restrictions on Holding Shares in Companies In terms of Section 19(2)…
A loan against a term deposit, also known as a loan against a fixed deposit (FD), is a secured loan that allows bank depositors to borrow against the security of the deposits. Loans or cash credit limits can be availed against Fixed Deposits, or Cash Certificate and Recurring deposits. Loans can be availed against domestic…
Book debts are typically made up of sums owed for goods or services supplied or work carried out on credit. Any sum due under a loan may also be treated as a book debt. Book debts in the balance sheet are classified as current assets (Trade Receivables). However, it is important to know that all…
A loan against insurance policies is available to Life Insurance policyholders on the surrender value of the policy which is usually acquired after paying premiums for at least three years. Surrender value (cash value) in an insurance policy refers to the amount of money an insurance company pays to the policyholder if they decide to…
A document of title to goods is a formal document that proves ownership of goods or property. A document of title to goods is used in the ordinary course of business to prove possession or control of goods. Section 2(4) of the Sale of Goods Act defines a document of title to goods as “A…
Banks and non-banking financial institutions lend for purchase or construct a new home. For a smooth home loan (also known as housing loan in some banks) process, the prospective borrower must submit a duly filled application along with important documents such as identity proof, address proof, income proof, etc. If there is a co-borrower they…
Banks in India with a net worth of `100 crore and above can undertake credit card business either departmentally or through a subsidiary company set up for the purpose. They can also undertake domestic credit card business by entering into tie-up arrangements with one of the banks already having arrangements for the issue of credit…
Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday (October 9) announced changes in transaction limits of UPI 123 and UPI Lite wallet. During the Statement on Developmental and Regulatory Policies announcement, Das said that the per-transaction limit for UPI 123Pay will be increased from ₹5,000 to ₹10,000, while the UPI Lite wallet limit…
The Reserve Bank of India (RBI) announced its fourth bi-monthly monetary policy for FY25 today, October 9. The RBI’s rate-setting committee (MPC) kept the benchmark repo rate unchanged at 6.5% for the tenth straight meeting. However, RBI maintains the status quo on policy rates, but changes its stance to Neutral from ‘withdrawal of accommodation’; GDP…
Credit cards offer several benefits to merchants and cardholders. Benefits to merchants: Credit card transaction processing directly impacts a business’s ability to provide convenient and secure payment options for customers, which can affect sales, customer satisfaction, and overall growth. Enhanced customer experience By offering a simple, convenient credit card payment experience, businesses can meet the…