Hire-purchase: Meaning and evolution of hire-purchase in India
Under the hire-purchase system, goods are delivered to the buyer at the time of the purchase agreement with a condition that Payment will be made in installments but a buyer will become the owner of goods only on the payment of the last installment. In this system, the buyer pays the price of the goods…
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Legal Aspects of Hire Purchase and Parties to a Hire Purchase Contract explained
The Hire Purchase Act, of 1972 defines a hire purchase agreement as an agreement under which goods are let on hire and under which the hirer has an option to purchase them by the terms of the agreement and includes an agreement under which: (i) Possession of goods is delivered by the owner thereof to…
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Market Share of Various Leased Asset Classes
Leasing in India is expected to become the preferred financial device for businesses seeking agility and cost-efficiency, promising significant growth with increasing awareness, new market players, and diversification of asset classes. The promising and growth-hungry small and medium Enterprises (SMEs) and startups, having a close eye on capital efficiency, are a confined user base for…
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Impact of lease accounting on financial ratios
The impact of lease accounting on financial statements is substantial. Financial ratios are important tools used in accounting and financial analysis to gauge a company’s overall financial health. They are derived from financial statements like the balance sheet, income statement, and cash flow statement. These ratios can help in assessing various aspects of a business,…
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Regulatory Aspects of Leasing Activities
The paramount job of a regulator is ensuring transparency, professional reliability, and minimum damage to the public interest. In India, the Regulatory body for financial leases is the Reserve Bank of India (RBI). As per RBI regulations, it is mandatory for a company that is in the business of financing to have a certificate of…
RBI’s new circular on declaring accounts as ‘fraud’
The Reserve Bank of India lenders on Monday to give defaulting borrowers enough time to respond before they are classified as “fraud accounts. The amendment to current rules incorporates a Supreme Court judgment in March last year that a bank cannot unilaterally declare an account as fraud without providing the defaulter the right to be…
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