How banks measure credit risk?
Credit risk measurement: Credit risk arises when a bank borrower or counter- party fails to meet his obligations according to specified schedule in terms of predetermined agreement either due to genuine problems or willful default. Banks are using two broad methodologies for computing their capital requirements for credit risk as per Basel II guidelines. First…
Read article
What is capital adequacy framework?
Adequate capital is required by banks to absorb any losses that arise during the normal course of the bank’s operations. Each Capital contribution/Equity contribution is a contribution of capital, in the form of money or property, to a business by an owner, partner, or shareholder. The capital adequacy frame work in banking business emphasizes adequate…
Read article
What is capital account convertibility (CAC)?
Capital Account Convertibility means that the currency of a country can be converted into foreign exchange without any controls or restrictions. The Report of the Tarapore Committee on Capital Account Convertibility (1997) provided the following working definition of CAC: “freedom to convert local financial assets into foreign financial assets and vice versa at market determined…
Read article
Activities of Bank for International Settlements (BIS)
The Bank for International Settlements (BIS) was set up in 1930 with its head office in Basel, Switzerland and two representative offices in Hong Kong SAR and in Mexico City. The above organisation is owned by 60 central banks, representing several countries around the world that account for about 95% of world GDP. The aim…
Read article
Health Insurance policy for Bank employees/Officers 2018-19
IBA has advised all banks to renew the Medical Insurance Policy for in-service employees /Officers based on a revised quotation received from UIIC for the period 1.10.2018 to 30.09.2018 Premium payable on Policy for each in-service employees will be as under Premium Amount:Rs.11613 Plus GST:Rs.2090 Total: Rs.13703 Premium payable on Policy for each in-service officers…
Interest rates on Small Savings Scheme (October -December 2018)
The Finance Ministry in its notification had communicated that the rates of interest on various small savings schemes for the Third quarter of the financial year 2018-19 starting October 1 and ending on December31, 2018. There is an increase of 30 to 40 basis in interest rates on various schemes compared to previous quarter. The…
Read article