The interest Equalisation Scheme (IES) for pre and post shipment rupee export credit is being implemented by Directorate (DGFT) through commercial banks.The scheme came into effect from 01.04.2015 and is for a period of 5 years.(The scheme was earlier called as ‘interest subvention scheme’ which was existing for the period from August 2010 to 31.03.2015).…
[This article elucidates the gains of NPA recovery and the difference between Gross NPA and Net NPA] An asset (loan and advances of the bank) becomes non-performing asset (NPA) when it ceases to generate income for the bank. If interest and or installment of principal amount of loan remain ‘overdue’* for a period of more…
A mortgage-backed security (MBS) is a bond type security in which the collateral is provided by a pool of mortgages. For example, A borrows money from Bank ‘B’ mortgaging his house to Bank ‘B’. The Bank ‘B’ sells the mortgage to a company ‘C’ (which may be a government agency or investment bank or private…
Let us take an example, one of your friends borrowed a sum of Rs.10000/-from you, but he was unable to repay because of his unusual financial difficulties. You have realized the situation of your friend that the repayment of loan is beyond his control; so you forgave the loan amount given to him and informed…
(This article explains the definition of non-performing assets (NPAs), classification of assets, Income recognition and provisioning requirement under prudential norms for all type of accounts including NPA norms for Agricultural loan and specialy KCC) Internationally income from Non-Performing Assets (NPAs) is not recognized on accrual basis but is booked as income only when it is…
The government on Tuesday (September 25, 2018) announced 3 new major initiatives viz. Quick loan for MSME, Financial inclusion index, and Geographical mapping of banking services. The Finance Minister on Tuesday launched a new portal “Quick loan for MSME” which sets, for a new benchmark in loan processing and reduces the turnaround time from 20-25…
In general terms loans and debts are synonyms for liabilities. When you look at a balance sheet of a company, at the left side of the balance-sheet (liability side) below the heads like share capital, reserves etc. you may find a head ‘loans and debts’ where the company shows the money raised by it by…
The notification dated September 6, 2018 of finance ministry, Government of India increased the monetary limit up to Rs.20 lakh for filing loan recovery application in the Debt Recovery Tribunals (DRT) by banks and financial institutions. It is reported that there are 38,376 cases pending in 39 debt recovery tribunals (DRTs) in the country, as…
Mr. Arun Jaitley Finance Minister of India announced today (September 5, 2018) that the Government of India decided to make Pradhan Mantri Jan Dhan Yojana ( PMJDY) an open-ended scheme, meaning that the scheme will continue indefinitely. The minister said that in view of the above scheme has been “runway success” the Government made it…
The calculation of legal due date of a bills of exchange is dependent on the type of bills of exchange viz. Demand bill or term bill. As the name suggests, a demand bill or sight bill is payable on demand (on presentation)/at sight. Whereas, a term bill (also known as ‘Usance Bill’) is payable after…