In the backdrop of Andhra Pradesh -MFI crisis, RBI had made modifications to its earlier directions to NBFC-MFIS to regulate the credit system in the country. Pursuant to being satisfied that the sector has largely moved forward since then, RBI now amended the Non-Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve…
RBI has been imposing heavy penalties on banks that have not complied or the account opened in contravention of various directions and instructions issued by it, which includes failure to obtain adequate documents for opening accounts, failure to carry out identification procedures, and failure to examine the control structure of entities. However, to help the…
Recovery through award of Lok Adalat is the easiest and fastest mode of recovery. The literal meaning of Lok Adalat is people’s Court. The concept comes under the ‘Alternative Disputes Redressal Mechanism’ like arbitration, conciliation etc. The pre-litigation up to Rs.20 lacs and suit filed accounts where plaint amount does not exceed Rs.20 lacs can be…
Latest amendment: The notification of finance ministry, Government of India on September 6, 2018 increased the monetary limit up to Rs.20 lakh from earlier limit of Rs.10 lakh for filing loan recovery application in the Debt Recovery Tribunals (DRT) by banks and financial institutions. As per the plan, a common e-auction platform will be set…
Edited on 20.10.2022 Every commercial bank in India has to maintain reserves under statutory provisioning norms. The change in SLR and CRR either increases or decreases the money supply to commercial banks. This, in turn, affects the lendable resources of banks. Therefore ups and downs of the money supply to the market caused due to…
Bank rate is actually the rate of interest at which Reserve Bank of India is lending to commercial banks. Reserve Bank of India is prepared to buy or re-discount bills of exchange or other eligible commercial paper from commercial banks. Bank rate is governed by Section 49 of Reserve Bank of India Act 1934.The effect of…
The basic functions of RBI (Reserve Bank of India) are “to regulate the issue of Bank Notes and keeping of reserves to secure monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”In addition, to control the supply of portable money circulation, Reserve Bank of India…
(This article explains how the garnishee order and IT attachment orders are different and explains the method of disposal by the Bank branches when they receive such orders from the authorities.) Garnishee order & I.T. Attachments are two different types of attachment orders. The Garnishee order is an order issued by the Court to Garnishee…
GAAR is a short form of General Anti-Avoidance Rules. The tax avoidance by the individuals and companies is a common fact all over the world. In order to realize more revenues and reduce the revenue loss due to avoidance of tax, the Governments of different countries enact various rules in their country or territory. The…
“Trust Receipt” under the contract of pledge In “trust receipt” under the contract of pledge, the borrower gets his assets/goods released from the pledge, only on full payment of his dues which automatically terminates contract of pledge. However in case of Key cash Credit or Key Loan, if bank desire to release the assets/goods retained…