What is credit spread?
In banking jargon the word ‘spread’ is used in issuance of corporate bonds,interest levied on loans and in foreign exchange transactions. In foreign exchange transactions the difference between the buying rate and selling rate is referred as spread or margin. The term ‘credit spread’ is used in the fixed income corporate bonds and bank loans.…
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What are Risk management and capital Management?
Risk management and capital Management are two sides of the same coin. Both of these indicate that the sufficient capital contribution in the business provides stable resources to help the owner to absorb any losses arising from the risks in a business. The objective of Capital management as well as its risk appetite is to…
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What is Basis Point Value?
In the financial market many investors prefer for investments in bond portfolio which can provide them the decent yields with a lower level of volatility than equities. Further, the bonds issued by corporates offer with a higher income than the money market funds or bank instruments. However, the volatility in interest rate in the financial…
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RBI guidelines on Capital Treatment of Banks’ Balance Sheet
In simple words the bank capital is the difference between a bank’s assets and liabilities. However, Banking regulators all over the word have their own definition of regulatory capital of banks in closer alignment with Basel Framework. The core banking regulatory framework across the banking sector consists of international standards enacted by the Basel Committee…
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WHAT IS DELIVERY VERSUS PAYMENT ?
Delivery versus payment (DvP) is the mode of settlement system that stipulates that cash payment must be made prior to or simultaneously with the delivery of the security. The system ensures that unless the funds are paid, the securities are not delivered and vice versa and it completely eliminates the settlement risk in transactions. The…
Corporation and Allahabad Bank are taken out of Prompt Corrective Action (PCA) Framework
Corporation, Allahabad Bank and Dhana Lkshmi Banks are taken out of Prompt Corrective Action (PCA) Framework. Pursuant to Government of India has infused fresh capital on February 21, 2019 into various banks including Allahabad Bank and Corporation Bank. Allahabad resevied Rs.6896 crre and Corporation Bank had received Rs.9086 crore. The infusion of fresh capital has…
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