Liquidity risk arises when a bank fails to meet its contractual obligation in its daily operations due to non-receipt of adequate inflow of funds. If you call a bank is having adequate liquidity, it means that bank is in a position to efficiently discharge its financial obligations both at expected and unexpected short term financial…
Yes, lender bank or Financial Institution (FI) can also file application form for registration of charge with the Registrar of Companies. However, it is the responsibility of the company to register the each charge against its assets. If the borrower company fails to file form for registration of charge with ROC, the lender bank or…
The salient features of the framework for Rupee denominated bonds overseas under External Commercial Borrowing policy are as follows. Eligibility to borrow: All corporate or corporate body, Real Estate Investment Trust (REIT) and Infrastructure Investment Trusts (REITs) are eligible to borrow under ECB policy. Investors in bonds: Any investor from a Financial Action Task Force…
RBI nicks rate by 50 BPS, The policy repo rate under LAF reduced to 6.75 per cent In the fourth bi-monthly monitory policy statement for 2015-16 (29.09.2015), RBI said that on the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to reduce the policy repo rate under the…
Traditionally, banks used to have two separate track approach for credit risks and market risks. The Asset –Liability Management Committee (ALCO) of the bank used to deal with various types of market risks whereas the Credit Policy Committee (CPC) continued taking care of credit/counterparty and country risks. However, in the recent years, as a result…
The shipping or airlines company incorporated outside India can open, hold and maintain non-interest bearing foreign currency account with AD category-I bank in India. The balance available in that type of foreign currency account can be used by Shipping or Airlines Company for the purpose of local expenses. The AD banks who open such foreign…
Prime security is an asset acquired by a borrower under a loan and it is the same asset that is offered to the lender as a security for the financed amount. The collateral security is one where the lender asks the borrower to provide extra security in addition to the prime security. The situation of…
A Subsidiary company can be described as an enterprise, the management of which is controlled by a parent company. The parent company is one which has one or more subsidiaries. In all cases the parent company will hold more than half of the voting power of the subsidiary company and controls financial and operating policy…
RBI on September 16, 2015 granted in-principle approval to 10 entities to set up small finance banks. The in princile approval is valid for 18 months.The entities who got the permission are Ujjivan Financial Service (Bengaluru),Janalakshmi Financial Service ( Bengaluru) Au Financiers (Jaipur), Equitas Holdings (Chennai),Capital Local Area Bank (Punjab), Disha Microfin (Ahmedabad), ESAF Microfinance (Chennai), RGVN (North East)…
The authorized agent who canvasses for sale of Kisan Vikas Patra (KVP) is eligible to receive the commission from the bank to which he/she is attached for the purpose.The agent can register at multiple branches of banks in his/her area of operation for the purpose of canvass and purchase of KVP certificates on behalf of…