Implementation of Positive Confirmation for RTGS transactions
Up till now, NEFT system has been providing a positive confirmation to the remitter of the funds regarding completion of the funds transfer, thus giving an assurance to the remitter that the funds have been successfully credited to the beneficiary account. Now onwards same facility will be extended by the banks to the remitter of…
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What is modified duration?
Modified duration is a concept that interest rates and bond prices move in opposite directions. It tells you how sensitive a bond is to interest rate changes. It is expressed in a formula that expresses the measurable change in the value of a security in response to a change in interest rates. Key points about…
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What is Duration or Macaulay duration?
‘Duration’ or Macaulay duration measures the price volatility of fixed income securities. As the term suggests, duration is expressed as a number of years and measures a bond’s sensitivity to change in interest rates. Usually, the higher the duration, the more is the volatility in the prices. To be precise, it measures the change in market…
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What is the meaning of currency Basket?
Basket of currencies or currency basket means a currency in the basket (group) can be freely convertible to another currency of the basket without the special approval from the Central Bank of that country. The resulting exchange rate can be fixed or variable according to the demand for that currency in the international market.Majority of…
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What is Deferred Tax Liabilities (DTL)?
Deferred Tax Liability (DTL) can be defined as Provision for Future Taxation or an obligation to pay taxes in the future.The DTL reported on an organization’s balance sheet represents the net difference between the taxes that are paid in the current accounting period and the tax that is assessed or is due for the current…
What is Leverage Ratio of assets to capital?
Assume, a bank keeps all the deposits collected from the customers in its vaults. It is an ideal situation to a bank that it has large quantity of liquid capital to return the money back to the depositors as and when they demand it. However, keeping customer’s deposits without using doesn’t earn any money to…
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