Stress Testing in banks: the objective and new challenges
A bank stress test is an exercise conducted under hypothetical scenarios designed to determine whether the bank has enough capital to withstand a negative economic shock. Most risk management models, including stress tests, use historical statistical relationships to assess risk. They assume that risk is driven by a known and constant statistical process, ie they…
Read article
What is Marginal Standing Facility (MSF)?
Marginal Standing Facility (MSF) by RBI is a liquidity adjustment facility extended to Scheduled banks, as a measure to reduce volatility in call money rates in the inter-bank market. The scheme is introduced by RBI, with effect from 09.05.2011. Under the scheme RBI lends to Scheduled Commercial Banks, for an overnight, having Current Account and…
Read article
What is the meaning of the Revaluation Reserves of a bank?
Revaluation reserves arise from revaluation of assets that are undervalued in the bank’s books. These assets which can be revalued are bank premises and marketable securities. Such revalued reserves often serve as a cushion against unexpected losses, but they may be temporary in nature and cannot be considered as ‘Core Capital’ of a bank. The…
Read article
Timeline extended for implementation of lockable cassette swap in all ATMs
Reserve Bank of India on Monday (July 12) extended the timeline for implementation of using lockable cassettes in their ATMs which shall be swapped at the time of cash replenishment, till March 31, 2022. The Reserve Bank of India (RBI) had constituted a Committee on Currency Movement (CCM) under the chairmanship of Shri D.K. Mohanty,…
Read article
RBI bans issuance of Mastercard from July 22
The Reserve Bank of India (RBI) has on Wednesday indefinitely barred Mastercard (Mastercard Asia / Pacific Pte. Ltd) from issuing new debit or credit cards to domestic customers in India from July 22, 2021, for violating data storage rules. Citing its circular on ‘storage of payment system data’ dated April 6, 2018, the RBI said…
What is a Shipping Bill?
Shipping Bill which is also known as bill of export is a document prepared by an exporter or his agent for the purpose of custom authorities to grant permission for exports. Whether the shipment is by air, sea, or road, an exporter cannot load the goods without filing the Shipping Bill which the customs authority…
Read article