What is stock audit?

In our previous posts we talked about (1) Tax audit, (2) What is a forensic audit?  (3) What is a Legal Audit? (4) Concurrent Audit System in bank. (5) What is a statutory audit? In this post let us study what is a stock audit? Inspection of assets charged to the lender at a regular…

What is restructuring of loan?

A restructured or rescheduled account is practically a new loan replacing the older account. The purpose of restructuring of a loan is to accommodate the borrower who is in financial difficulty and unable to repay the loan as per repayment schedule. Restructuring of loans involve modification of terms and conditions of the loan usually with…

CGTMSE guarantee for credit facility covered by collateral security

The Credit Guarantee fund Trust for Micro Small Enterprises (CGTMSE) has been providing guarantee coverage to any collateral / third party guarantee free credit facilities extended by eligible institutions (Member lending institutions (MLI) like banks, financial institutions, select NBFCs and Small Finance banks etc.).  Hitherto, all activities* that come under manufacturing and service sector as…

Effects of NPA on profitability

The assets of the bank, classified under NPA cease to generate income to the bank. In addition to stoppage of income generation to the banks, banks are required to make provision for NPA. Therefore NPA is a double edged razor; damaging the profit, weakening the capital structure and reducing the rating of the bank. Measures…

What is credit spread?

In banking jargon the word ‘spread’ is used in issuance of corporate bonds,interest levied on loans and in foreign exchange transactions. In foreign exchange transactions the difference between the buying rate and selling rate is referred as spread or margin.  The term ‘credit spread’ is used in the fixed income corporate bonds and bank loans.…

What is Commercial Real estate

In simple words, Commercial Real Estate (CRE) can be described as any property which is used for non-residential purposes such as housing buildings, hotels, restaurants, gymnasiums, hospitals, condominiums, shopping malls, office blocks, theatres, amusement parks, cold storages, warehouses, educational institutions, industrial parks etc. In terms of Basel II definition if  the repayment primarily depends on…