Loan against security of NSC and KVP
Banks may lend up to 80 to 85 percent of the face value of NSCs or KVPs in the form of a loan or overdraft facility. Process To get a loan, the NSC or KVP holder must pledge the certificates to the lender. On application, the concerned post office where the certificates were purchased will…
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Loans and Advances against Shares, Debentures and Bonds
Banks offer loans against securities for customers’ short-term funding needs. Loans against shares, government bonds, insurance policies, NSCs, and other investments come under this category. For loans against shares, debenture banks are required to strictly observe regulatory restrictions on ‘Exposure Norms’ as explained below. Restrictions on Holding Shares in Companies In terms of Section 19(2)…
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How to calculate compound Interest?
The concept of compound interest or compounding interest is the interest is added back to the principal sum while charging interest for the next period so that interest is earned on that added interest. That is as a result of reinvesting interest, compound Interest (CI) / Cumulative Interest are calculated both on the principal amount…
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Advances against book-debts
Book debts are typically made up of sums owed for goods or services supplied or work carried out on credit. Any sum due under a loan may also be treated as a book debt. Book debts in the balance sheet are classified as current assets (Trade Receivables). However, it is important to know that all…
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Loan against Insurance Policies
A loan against insurance policies is available to Life Insurance policyholders on the surrender value of the policy which is usually acquired after paying premiums for at least three years. Surrender value (cash value) in an insurance policy refers to the amount of money an insurance company pays to the policyholder if they decide to…
What is Document of title to goods?
A document of title to goods is a formal document that proves ownership of goods or property. A document of title to goods is used in the ordinary course of business to prove possession or control of goods. Section 2(4) of the Sale of Goods Act defines a document of title to goods as “A…
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