Instruments of Credit Control Used by the Reserve Bank of India
The Reserve Bank of India (RBI), as the central monetary authority of the country, employs credit control as a critical tool of monetary policy to regulate the availability, cost, and direction of credit in the economy. The objective is to achieve key macroeconomic goals such as price stability, sustainable economic growth, and overall financial stability.…
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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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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 is Credit Rating and the Role of Credit Rating Agencies (CRA) in India
Credit Rating is an opinion provided by a Credit Rating Agency regarding the ability and willingness of an entity (Government, corporate, municipality, Bank lending, etc. to fulfill its financial obligations in completeness and within the established due dates. Such ratings are based on a comprehensive analysis of various factors, including the issuer’s financial health, debt…
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