When a lender grants loan to a borrower, he charges fee (interest) on money lent. The interest payable by the borrower may be simple interest or compound interest. Simple interest means interest charged at flat rate only on the principal amount. In the other words the interest will not be charged on the interest debited…
The concept of compound interest or compounding interest is the interest is added back to the principal sum while charging interest for the next period so that interest is earned on that added interest. That is as a result of reinvesting interest, compound Interest (CI) / Cumulative Interest are calculated both on the principal amount…
A fixed rate loan is a loan where the interest rate on the loan doesn’t fluctuate during the entire term of loan or part of the total term of loan. This allows the borrower to accurately predict their future payments. In floating rate loan (also called variable rate loan) the rate of interest on the…
Banks provide a number of credit facilities to customers engaged in activities related to agriculture. Many a time banks take the brunt when unforeseen disaster strikes the farmers in the form of ‘on-farm loss’ and or ‘off-farm losses. These types of losses caused mainly due to production risk and price risk. The risk management in…
The farmers in India have been inherently facing with on-farm risks like famine; flood, extreme weather etc. Though these types of natural risks cannot be totally avoided, there are many new on-field techniques developed in India to minimize the loss. However, the most important strategy to mitigate the risk is agriculture insurance. The insurance company…
Debit cards are issued by banks by linking it to inddividual custmers like SB/Current account holders,(in case of properietory concerns of Current Account/Cash Credit account,card will be issued in the name of the proprietor). The debit cards are akin to credit cards; the only difference is that the debit card holders do not enjoy credit…
Banks are issuing credit cards to their customers as well as to general public. The bank on receipt of application from individuals for credit cards, process the same and decides about issuing the cards and fixing credit limit on the basis of the creditworthiness of the customers.The credit cards are issued in the form of…
An instrument (negotiable instrument like cheque/bill of exchange/promissory note) is called forged instrument when forgery takes place in signature of the drawer, signature of the endorser, and alteration in name of the payee, alteration in amount, alteration in date etc. validated by forged signature. A forged instrument is meaningless as far as drawer/endorser whose signature…
In terms of RBI guidelines the paying bank should return dishonoured cheques presented through clearing houses strictly as per the return discipline prescribed for respective clearing house in terms of Uniform Regulations And Rules for Bankers’ Clearing Houses. According to RBI circular DBOD.No.BC.74/09.07.001/91-92 dated 28th January 1992, RBI had advised all the banks implement the…
Prevention of Money Laundering Act, 2002 came into force with effect from July 1; 2005. The Government of India has enacted PML Act to prevent money-laundering and to provide for confiscation of property derived from or involved in, money-laundering. The Directorate of Enforcement in the Department of Revenue, Ministry of Finance is responsible for investigating…