Registration of Trust is mandatory in certain cases and not mandatory in some other cases. Let us examine here where the registration of trust is a mandatory requirement. Cases where Registration of Trust is compulsory: The instrument if any, by which the Trust is declared, is called the instrument of Trust or Trust Deed. Section…
The Ombudsman Scheme for NBFCs 2018 was launched by RBI on February 23, 2018, for cost-free expeditious complaint redressal against NBFCs registered with RBI under Section 45-IA of the RBI Act, 1934 and covered all deposit-accepting NBFCs to begin with. Further, on April 26, 2019 Reserve Bank extended the coverage of the Ombudsman Scheme to…
The term ‘Gilt’ is of British origin. The British called ‘Gilt edged securities’ to the bonds and the securities issued by the British Government (through Bank of England) on behalf of His/Her Majesty’s Treasury, whose paper certificates had a gilt edge. The term Gilt edged securities is used in India for the Government securities like…
The Ombudsman Scheme for Digital Transactions (OSDT) is introduced by RBI, with effect from January 31, 2019, under Section 18 of the Payment and Settlement Systems Act, 2007. The scheme provides a cost-free and expeditious complaint redressal mechanism relating to deficiency in customer services in digital transactions conducted through non-banking ‘System Participant’. The ‘system Participant’…
CRR (Cash Reserve Ratio): CRR is the minimum percentage of total deposits of customers in a commercial bank held as reserves either in the form of cash or deposit in a specified current account with central bank of the country (RBI in India) as per the mandatory guidelines of central bank of the country. How…
(This post explains about RBI’s new tool to enhance liquidity in the system) Liquidity management is an important aspect of monetary policy implementation. According to the IMF, funding liquidity is the ability lending agency agrees payment with immediacy. The attendant impact on liquidity conditions may necessitate durable liquidity absorption/injection operations by the Central Bank (Reserve…
Economic capital: There are three types of capital viz. Regulatory capital, Book capital and Economic capital. Regulatory capital is the amount of capital a bank is required to hold as per the stipulations prescribed by the banking regulator of the country. Book Capital is the actual capital that the bank has, which includes equity capital,…
The Taylor rule was first proposed by economist John B. Taylor in 1993 to provide guidance to the U.S. Federal Reserve* and other central banks for setting short-term interest rates based on economic conditions. John Taylor proposes how Central Banks should alter interest rates in response to changes in economic conditions mainly inflation and economic…
RBI on 08.04.2019 notified new minimum standard for setting up new currency chests as per recommendations of Currency Movement Committee. The Currency Movement Committee headed by Shri. D. K. Mohanty had recommended Reserve Bank that it should encourage banks to open large Currency Chests (CCs) with modern facilities and Chest Balance Limit (CBL) of at…
Reserve Bank of India (RBI) in its press release announced that it has learnt merger of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance Limited (IBHFL)through media. As per media news above entities have made a merger announcement on April 5, 2019 with approval of their respective Boards. RBI’s disclaimer said that a section of…