Banks are prohibited from levying foreclosure charges/ pre-payment penalties

Reserve Bank of India on Friday (August 02, 2019) reminded all the commercial banks that they are not permitted to charge foreclosure charges / pre-payment penalties on home loans / all floating rate term loans sanctioned to individual borrowers. The above norm of prohibiting banks charging foreclosure charges/pre-payment penalties on floating rate loan is already…

Asset-backed securities (ABS) and mortgage-backed securities (MBS) explained

Both Asset-backed securities (ABS) and mortgage-backed securities (MBS) are fixed income financial securities collateralized (backed) by a pool of assets such as Auto loans, Education Loans, Housing Loan, credit card debts, and receivables etc. This pool of assets is characteristically a group of small and illiquid assets which are unable to be sold individually. Basically,…

What is stock audit?

Inspection of assets charged to the lender at a regular interval is an important and desired activity of banks for monitoring and ensuring end-use of funds.  Besides carrying out unit inspections, banks study the borrowers’ books of accounts, conducting meaningful scrutiny of quarterly progress reports and also the no-lien accounts maintained with other banks at…