What’s the big deal about bankruptcy law?
(This post narrates the background of introducing the ‘bankruptcy law’ and in what way the new law is likely flags the problem loans and protects the interest of lenders.) The ‘Insolvency and Bankruptcy Code, 2016’ bill will be shortly enacted as an ‘ACT’ which will be dealing with resolutions of insolvency and bankruptcy. The fundamental…
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What is Credit Rating and the Role of Credit Rating Agencies (CRA) in India
Credit Rating is an opinion provided by a Credit Rating Agency regarding the ability and willingness of an entity (Government, corporate, municipality, Bank lending, etc. to fulfill its financial obligations in completeness and within the established due dates. Such ratings are based on a comprehensive analysis of various factors, including the issuer’s financial health, debt…
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RBI Bans Pre-Payment Charges on Floating Rate Loans for Individual Borrowers
Article:The Reserve Bank of India (RBI) has issued a directive prohibiting banks and other regulated entities from levying pre-payment penalties on floating rate loans availed by individual borrowers for non-business purposes. The new framework, titled Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025, will come into effect from January 1, 2026. This move…
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Enhancing Credit Underwriting through Straight-Through Processing (STP) or Credit Underwriting Engines
IntroductionCredit underwriting is a critical process through which lenders evaluate a borrower’s creditworthiness and ability to repay a loan. With the advent of technology, traditional manual underwriting methods are increasingly being replaced by automated solutions. One such innovation is Straight-Through Processing (STP), which enables end-to-end automation of financial transactions, thereby improving speed, accuracy, and customer…
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Lending under Consortium, Multiple Banking Arrangements and Syndicated loans: A Regulatory and Operational Overview
Introduction In the evolving landscape of credit delivery, the mechanisms of consortium lending, multiple banking arrangements, and syndicated loans serve as important frameworks for financing large borrowers. These arrangements enable sharing of credit exposure among financial institutions and contribute to risk mitigation. However, they also necessitate strong inter-bank coordination and transparency to function effectively and…
Understanding Loan Disbursement: Process, Conditions, and Timelines
Meaning of Loan Disbursement Loan disbursement refers to the actual release of funds by the lender following the approval of a loan application. It marks a crucial step in enabling the borrower to utilize the loan for the intended purposes—such as purchasing assets or property, funding education, undertaking home renovations, covering travel expenses, or financing…
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