RBI Issues Master Direction on Credit Information Reporting
The Reserve Bank of India (RBI) has released a Master Direction consolidating guidelines for banks and financial institutions regarding credit information reporting. Issued on January 6, 2025, this directive aims to establish a standardized framework for reporting and disseminating credit information while safeguarding the confidentiality and security of sensitive credit data. Key Highlights of the…
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How to Calculate Current Yield on a Bond?
The Current Yield on a bond represents the percentage return an investor can expect to earn over the next year if they purchase the bond at its current market price. It provides a snapshot of the bond’s income-generating potential relative to its market value. Formula for Current Yield The current yield is calculated using the…
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Know These Terms Associated with Bonds
Bonds: A bond is a debt instrument issued by a company or the government to raise capital by borrowing from investors. The investors in bonds are debt holders (lenders/creditors). The bond issuer is obliged to pay bondholders interest (the coupon) at a pre-decided rate and to repay the principal on a due date known as…
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Meaning of Debt: Types, Advantages, and Disadvantages
What is Debt? Debt refers to an amount of money borrowed by one party from another. It typically involves a borrower who owes money to a lender. While the terms “loan” and “debt” are often used interchangeably, a loan is a specific type of debt with defined repayment terms. Common Forms of Debt Types of…
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What is Debt Repayment?
Debt repayment refers to the process of returning money that has been borrowed, along with any interest and fees that have accrued. It involves repaying the principal amount and any applicable interest as per the terms agreed upon with the lender. Repaying a loan means returning the borrowed funds within the agreed timeframe. Loan repayment…
Calculation of Interest Using Products/Balances
The Product Method is a way to calculate interest on loans or deposits by multiplying the outstanding balance by the number of days it remains in the account. The daily product is the balance amount multiplied by the number of days it was outstanding. Summing these daily products over 30 or 31 days yields the…
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