The Reserve Bank of India has today (June 26, 2023) issued the Master Direction on Minimum Capital Requirements for Operational Risk. The Central Bank said that the circular is issued after appropriately considering the feedback received from stakeholders. According to the Directions require all specified Commercial Banks (excluding Local Area Banks, Payments Banks, Regional Rural…
In accounting parlance, a going concern is a business that is assumed to be able to meet its financial obligations when they become due. In the case of going concern, statutory auditors do not foresee the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or…
Some banks have introduced innovative Housing Loan Schemes in association with developers/builders. The normal process of these schemes, is upfront disbursal of sanctioned individual housing loans to the builders without linking the disbursals to various stages of construction of the housing project, Interest/EMI on the housing loan availed of by the individual borrower being serviced…
Interest rate risk is the potential for investment losses that can be prompted by a move upward in the prevailing rates for new debt instruments. Interest rate changes can affect many investments, but it impacts the value of bonds and other fixed-income securities most directly. As interest rates rise bond prices fall, and vice versa.…
(This article gives the details like rights of secured creditors, Application of mind and care is required in the service of notice of SARFAESI DEMAND NOTICE, POSSESSION NOTICE & SALE NOTICE, Special care to be taken while taking possession of movable properties, method of sale of secured property by way of inviting tenders from the public or by…
In this article, we’ll explain what credit migration risk and credit metrics are, and how to incorporate them into the financial analysis of companies by lenders and investors. Credit Migration risks: Credit ratings for public companies or Governments are similar to credit scores for individuals. These ratings for the long-term and short-term are provided by…
The difference between Credit rating agencies and credit information bureaus lies in their meaning and functions. Credit information bureaus in India (CIB): Credit Information bureaus maintain a repository of credit information of individual borrowers, offer comprehensive risk management tools, and provide lenders with portfolio reviews of borrowers that help them study a borrower’s behaviour and…
In a review of Prudential Norms regarding Risk Weights for Exposures to Corporates and NBFCs, the Reserve Bank of India on Monday said that “It is observed that the Press Releases (PRs) issued by ECAIs on rating actions are often devoid of the lenders’ details. The absence of such information may result in banks applying…
In the Statement on Developmental and Regulatory Policies announced by RBI on Friday, RBI said that as a step towards converging with globally accepted prudential norms, it will issue a discussion paper on the proposed transition for stakeholder comments. Banks currently follow the incurred loss approach for provisioning on their loan assets, whereby provisions on…
In today’s (June 8, 2022) statement of development and regulatory policies the Reserve Bank of India issued guidelines to market participants regarding the exchange of variation margin (VM) for non-centrally cleared derivatives (NCCDs). Derivatives are financial instruments whose value is derived from other underlying assets. There are mainly four types of derivative contracts such as…