Do you know the meaning of ‘Non-Cooperative Borrowers’?
The definition of Non-Cooperative Borrowers is originally defined in RBI circular dated 26.02.2014 on ‘Frame work for Revitalizing Distressed Assets in the Economy-Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action Plan (CAP). The definition of a Non-Cooperative Borrower as contained therein is modified by RBI on December 22,2014, which reads as under: “A non-cooperative…
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The Importance and Purpose of Credit Control and Monitoring
IntroductionCredit control is a structured approach employed by businesses and financial institutions to manage credit risk and ensure that customers meet their payment obligations in a timely manner. It plays a pivotal role in sustaining financial stability and optimizing cash flow. What is Credit Control?Credit control refers to the procedures used by businesses to determine…
Read article How to identify a wilful defaulter?
[The identification of a ‘wilful defaulter’ is done on the basis of eventual conclusion that the default is intentional, deliberate and calculated. The process of categorizations of the ‘wilful defaulter’ is required to be done thoughtfully on the basis of track record of the borrower/guarantor and not on the basis of an isolated transaction or incident.…
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Factors considered while Rating Companies/Instruments and Process of Credit Ratings explained
Ratings are based on a comprehensive evaluation of the strengths and weaknesses of the company fundamentals including financials along with an in-depth study of the industry and macroeconomic, regulatory, and political environment. Some factors that may be considered for credit rating are the Issuer Company’s operational efficiency, level of technological development, financials, competence and effectiveness…
Read article Characteristics, Importance, and Benefits of Credit Ratings
Credit rating agencies provide an objective and unbiased evaluation of the credit risk of diverse entities, including individuals, groups, businesses, non-profit organisations, governments, and even nations. They provide transparency and consistency in assessing institutions/borrowers’ creditworthiness, making it easier for lenders and investors to make informed decisions. The main characteristics of credit rating are that these…
What’s the big deal about bankruptcy law?
(This post narrates the background of introducing the ‘bankruptcy law’ and in what way the new law is likely flags the problem loans and protects the interest of lenders.) The ‘Insolvency and Bankruptcy Code, 2016’ bill will be shortly enacted as an ‘ACT’ which will be dealing with resolutions of insolvency and bankruptcy. The fundamental…
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