Bank Finance: Assessment of working capital Limits
Working capital is a financial metric that measures a company’s short-term liquidity and ability to pay its bills. It’s calculated by subtracting current liabilities from current assets. The credit limits are normally considered by the banks on the basis of annual statements of accounts or other documents such as returns filed with sales-tax (GST) /…
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Profit maximization and wealth maximization concepts explained
Profit maximization and wealth maximization are two different financial strategies that aim to increase a company’s value, but they do so in different ways. In economics, profit maximization is a term which denotes the maximum profit to be earned by a company in given period of time. The concept of profit maximization focuses generally on…
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Claim settlement by banks where survivor/nominee clause exist
There are two possibilities in a bank account maintained by a customer viz. (i) a deposit account is opened in a bank with a valid nomination or with the survivorship clause like ‘either or survivor’, or ‘anyone or survivor’, or ‘former or survivor’ or ‘latter or survivor’ etc. (ii) A deposit account is opened in…
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Procedure for claim settlement of FCNR/NRE deposits to non-resident nominees and others
Based on the Reserve Bank of Indi (RBI) advisory, Indian Bank’s Association (IBA) had circulated a Model Operational Procedure (MOP) for settlement of claims of deceased depositors. IBA had also finalized the guidelines for settlement of claims in respect of deceased locker- hirers/depositors of safe custody articles. All the Banks were advised to have a…
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Solvency certificate why is it required?
Solvency is defined as the ability of an individual or entity to meet long-term financial commitments. A solvency certificate is a most important document that provides information about the financial stability of an individual or partnership firm or company. A solvency certificate is required for applying for tenders, obtaining contracts, Visa interviews, Legal/court matters like…
What are the papers examined by banks for credit appraisal?
Commercial Banks extend varieties of credit facilities to different types of customer viz. Individual, Sole Proprietor, Partnership firm, HUF, Trust, Club, Societies, Association, Limited Company, Public Sector Undertaking, Consortium advance etc. Depending upon type of borrower and nature of credit facilities required, bank will call for certain non-financial papers to examine along with financial papers.…
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