Q: Is there any upper limit for loans against security of NRI’s term deposits like FCNR/NRE? Ans.: Except usual margin requirement, no upper ceiling is prescribed for loans to NRIs or third parties in India against security of FCNR/NRE deposits. However, the loan shall be for the purpose other than the investments specified in FEMA…
A Power of attorney (POA) is a written instruction by which one person is empowered to act on behalf of another. That is to say, to do any lawful act or series of lawful acts on behalf of the principal person by his agent. The Power of Attorney can be made in two types, special…
The mandate and power attorney are the rights cast upon a third person to act on behalf of the principal person/s. The rights of mandate and power of attorney holders are very similar in the operation of bank accounts but they are issued for different reasons and purposes. A mandate, is a simple letter of authority,…
Credit monitoring strategies in a bank taking place in two stages namely pre-sanction stage and post sanction stage of loans and advances. Pre-sanction process involves identification of borrower, the purpose of the loan, quantum of loan, period of loan, source of repayment, security for advance, profitability, pre-sanction unit inspection, appraisal of credit proposal, and sanctioning…
LIBOR is the acronym for London Interbank Offered Rate. The ‘LIBOR’ serves as the key benchmark rate in calculating interest rates on various loans across the world. Each morning before 11 a.m. (GMT), the sets of major banks that have a significant presence in the London market are asked the rate at which they could…
MIBOR stands acronym for ‘Mumbai Inter- bank Outright Rate’, the benchmark of the Indian call money market. It is the rate at which banks borrow unsecured funds from one another in the inter bank market. The bid rate on how much interest banks would pay to borrow money on a short-term basis from other institutions…
A strategic alliance is an agreement between two or more independent organizations that agree to share resources to undertake a specific, mutually beneficial objective. The strategic alliance is akin to partnership project, the relation fall short of legally banded partnership. The agreement may be formal or informal in nature, but each party’s responsibilities must be…
A depository receipt or depositary receipt (DR) is a negotiable financial instrument that represents a foreign company’s (issuing company which is incorporated outside India) publicly traded debt or equity in domestic exchanges. The depository receipts (DRs) which are created by a Domestic Depository bank against the underlying equity shares of the issuing company are termed…
P-Notes or PNs are acronym to Participatory Notes. These instruments are issued to overseas buyers by the foreign institutional investors (FII) who are registered with SEBI. These notes are actually Overseas Derivative Instruments that have Indian stocks as their underlying assets. The foreign institutional investors (FII) who have registered with SEBI issue these instruments to…
Scheduled Commercial Banks in India are those banks which are included in the second schedule to Reserve Bank of India Acts 1934. Scheduled Commercial Banks in India are categorised in five different groups according to their ownership and/or nature of operation. These bank groups are: (i) State Bank of India (ii) Nationalised Banks, (iii) Regional…