Options: What are In the Money-ITM and Out of the Money-OTM?
Options are contracts through which a seller gives a buyer the right, but not the obligation, to buy or sell a specified asset (Ex: Foreign currency, shares, equities, commodities etc.) at a predetermined price, by a certain date. It means they acquire or dispose of the underlying asset at that price called the strike price.…
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Understanding Rights Debentures for Working Capital
A “right debenture” is a form of convertible debenture, granting the holder additional rights beyond just receiving interest payments. It allows the holder to convert the debenture into a certain number of shares of the issuing company at a predetermined price within a specific timeframe, essentially giving them the option to become part-owners of the…
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Govt Announces ₹100 Cr Credit Guarantee Scheme for MSMEs (MCGS-MSME)
The Government of India has introduced the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) to enhance access to credit for Micro, Small, and Medium Enterprises (MSMEs). The scheme provides a 60% guarantee coverage through the National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs) for credit facilities up to ₹100 crore. Key…
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Regulation of Bank Finance in India
Introduction The Banking Regulation Act of 1949 is the primary legislation governing banking activities in India. Bank regulation involves establishing and enforcing rules for banks and other financial institutions. It aims to maintain the stability and integrity of the financial system, protect consumer interests, and promote fairness and efficiency in markets. The Reserve Bank of…
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What is International factoring?
International factoring usually has two factors viz. export factor and import factor. The export factor looks at financing the exporter and collection of account receivables. The import factor evaluates the importer in respect of collecting the dues in time and assessment of chances of default by the importer. The exporter on receipt of export order…
Public Deposits and Inter-Corporate Deposits
Public Deposits Public deposits refer to unsecured deposits raised by companies from the public, primarily to finance their working capital requirements. These deposits serve as a short-term financing option for companies. In India, companies are subject to strict regulatory limits regarding public deposits. A company can accept deposits from the public up to a maximum…
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