Bill discount: Discount rate and effective interest rate explained
A bill of exchange is a negotiable instrument issued by the seller (the creditor) and orders the buyer (the debtor) to pay a particular amount within a given period of time for the goods supplied or services rendered by the seller. On the due date of payment, the financial intermediary or the seller directly collects…
Read article
The K.V.Kamath committee constituted by RBI names 26 sectors for restructuring: COVID 19 related stress
Based on the report of the Expert Committee (K.V.Kamath Committee) on Resolution Framework for Covid-19 related Stress the Reserve Bank of India (RBI) on Monday announced the financial parameters for the resolution plans under the scheme. The Committee has recommended financial parameters that, inter alia, include aspects related to leverage, liquidity, and debt serviceability. The…
Read article
When is the time to classify Infrastructure and Industrial projects as NPA?
As per RBI master circular, it is a prerequisite for banks to fix a Date of Commencement of Commercial Operations (DCCO) for all project loans at the time of sanction of the loan or financial closure in the case of multiple banking or consortium arrangements. Financial closure is defined as a stage when all the…
Read article
Blanket suspension of Insolvency and Bankruptcy Code (IBC) for a period of six months may extend
The government of India promulgated an ordinance to suspended initiation of fresh insolvency proceedings for a period of six months to shield companies impacted by the outbreak of Covid-19. Ministry of Finance has announced that the Insolvency & Bankruptcy Code (“IBC”) proceedings under Section 7, 9 and 10 would be suspended for a period of…
Read article
What is Service Area Approach?
Service area approach (SAA) is a developed version of the ‘area approach’ structure of the Lead Bank Scheme. Under SAA plan each commercial bank / RRB branch in a rural and semi-urban area is designated to serve 15 to 25 villages for the planned and orderly development of the areas. The designated branch of a…
What is Lead Bank Scheme?
Background: In October 1969, the study group lead by Prof. D. R. Gadgil (Gadgil Study Group) recommended the adoption of an ‘Area Approach‘ to evolve plans and programmes for the development of an adequate banking and credit structure in the rural areas. Further, under the chairmanship of Shri F. K. F. Nariman (Nariman Committee) a…
Read article