What’s the difference between Demand Bills Purchase and Usance Bills Discount?
Bills finance is short term and self- liquidating finance in nature. Demand Bills are purchased and Usance bills are discounted and the bills drawn under Letter of Credit (LC may be on sight draft or usance draft) are negotiated by the banks. The advantage of bills finance is that the seller of goods (borrower) gets immediate…
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Government facilities to Micro and Small Enterprises
The Reserve Bank of India has recently launched National Mission for Capacity Building of Bankers for financing MSME sector (NAMCABS) for sensitizing and on imparting skills to bank officials. The main focus will be to up-skill 3 lakh banking personnel who have joined the system over the past six years and perhaps who have very…
Read articleThe issue price of Sovereign Gold Bond (SGB) fixed at Rs.2684/ per gram of gold
Benefits of Sovereign Gold Bond (SGB) over physical form of gold Today (October 3, 2015), the Government announced the issue price of Sovereign Gold Bond (SGB) at Rs.2684/- per gram of gold. The SGB bonds are denominated in grams of gold to be issued on November 26, 2015 by RBI on behalf of Government of…
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How the Liquidity Risk manifests in Banks?
Liquidity risk arises when a bank fails to meet its contractual obligation in its daily operations due to non-receipt of adequate inflow of funds. If you call a bank is having adequate liquidity, it means that bank is in a position to efficiently discharge its financial obligations both at expected and unexpected short term financial…
Read articleRBI nicks rate by 50 BPS, REPO rate under LAF reduced to 6.75%
RBI nicks rate by 50 BPS, The policy repo rate under LAF reduced to 6.75 per cent In the fourth bi-monthly monitory policy statement for 2015-16 (29.09.2015), RBI said that on the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to reduce the policy repo rate under the…
What is Integrated Risk Management in Banks?
Traditionally, banks used to have two separate track approach for credit risks and market risks. The Asset –Liability Management Committee (ALCO) of the bank used to deal with various types of market risks whereas the Credit Policy Committee (CPC) continued taking care of credit/counterparty and country risks. However, in the recent years, as a result…
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