Cash Reserve Ratio (CRR) in India: Transmission, Bank Balance Sheets, and Macroeconomic Impact
The Cash Reserve Ratio (CRR) is a core liquidity tool of the Reserve Bank of India (RBI) that directly alters banks’ lendable resources, influences interest rates and credit growth, and transmits into inflation and output dynamics in the wider economy. Higher CRR tightens liquidity and credit conditions, while lower CRR releases primary liquidity, supporting credit…
Read article
Distinction Between Income Tax Attachment and Garnishee Order in India: Implications for Banks
Income Tax Attachment and Garnishee Orders are both legal mechanisms that enable recovery of dues through attachment of funds held in banks. However, they differ significantly in terms of origin, procedure, and implications for banks. The following sections explain these distinctions in detail. Garnishee Order A Garnishee Order is issued by a Court attaching the…
Read article Understanding the Bank Rate in India: Evolution, Role, and Compliance Implications
Overview The Bank Rate in India is the standard rate at which the Reserve Bank of India (RBI) is prepared to buy or re-discount eligible bills of exchange or other commercial paper under Section 49 of the RBI Act, 1934. In modern practice, it functions primarily as an administered benchmark aligned with the Marginal Standing…
Read article RBI Releases Draft Ombudsman Scheme 2025: Stronger Consumer Protection & Faster Grievance Redressal
The Reserve Bank of India (RBI) has released the draft Reserve Bank – Ombudsman Scheme, 2025, aimed at improving customer grievance redressal and enhancing accountability among regulated entities such as banks, NBFCs, and payment system operators. 🔑 Key Highlights * Higher Compensation Limits: Customers can now receive compensation of up to **₹30 lakh for…
Read article
Trust Receipt under the contract of pledge
“Trust Receipt” under the contract of pledge In “trust receipt” under the contract of pledge, the borrower gets his assets/goods released from the pledge, only on full payment of his dues which automatically terminates contract of pledge. However in case of Key cash Credit or Key Loan, if bank desire to release the assets/goods retained…
Essence of Pledge and Pledgee’s right & duties
Pledge is only a special kind of bailment where the object of the delivery of assets/goods is to provide a security for a loan or for the fulfillment of an obligation. Section 148 of the Indian Contract Act, 1872 defines the” bailment”. Section 172 to 176 of the Indian Contract Act, 1872 deals with pledge…
Read article