ECGC is designed to guard exporters from the consequences of the payment risks, both political and commercial, which enables the exporters to expand their overseas business without fear of loss. ECGC covers losses that may be incurred in extending loans by the banks and other financial intermediaries to exporters. The major forms of Guarantees offered…
(This post explains how bank calculate early delivery or cancellation losses of forward contract with examples) Whenever an exporter wants to undertake a Forward (Sale) Contract against his receivable he will do so with a rough idea of the time period in which he can expect his buyer to send the payment. Forward contract is…
NDS-OM Web Module is only an electronic front end for accessing the main NDS-OM system. It is a screen based electronic anonymous order matching system for secondary market trading in Government securities. Earlier, Gilt Account Holders (GAH) who have gilt account with the PMs were permitted to have indirect access to the NDS-OM system i.e…
A forward contract is a customized contract between two parties to buy or sell an asset at a price agreed upon today on a specified future date. Under forward contract, there is an obligation for the buyer to pay for what has been bought and receive delivery thereof as per the contract, and for the…
CASA deposit and Bulk deposit: CASA stands for Current Account and Savings Account in banking parlance. Besides in India, the term CASA is popularly is used in West Asia and South-east Asia countries. The high-cost deposits or bulk deposits are those deposits which are solicited by banks at rates higher than card rates’. Card rates…
The international bonds issued in a domestic country by a non-domestic entity are known as Euro Bonds, Foreign Bonds and global bonds. Whether it is a foreign bond, a Eurobond, Global bond or Foreign-Pay Bond or some other format, the investors in these bonds will get back in full the amount originally invested by them…
Section 2(j) of FEMA states that ‘Current Account Transaction’ means a transaction other than a capital account transaction. Non-trade current account transaction refers to transactions not related to foreign trade transactions (such as exports and imports of goods and services of a country). Effective 1 June 2015, under the Liberalised Remittance Scheme (LRS) made available…
The AD Category-I banks are permitted to issue Bank Guarantee to non-resident service provider on behalf of resident customer of the bank. The maximum limit for issue of such guarantee is fixed up to USD 500,000 (increased from previous limit of USD 100,000) or its equivalent. The above limit is not applicable in the case…
The resident individuals are permitted to make Rupee loan to their close relative who is a NRI/PIO. U/s 2(77) companies act 2013, ‘‘relative’’, with reference to any person, means anyone who is related to another, if (i) they are members of a Hindu Undivided Family; (ii) they are husband and wife; or(iii) one person is…
Risk management and capital Management are two sides of the same coin. Both of these indicate that the sufficient capital contribution in the business provides stable resources to help the owner to absorb any losses arising from the risks in a business. The objective of Capital management as well as its risk appetite is to…