In this presentation you will be introduced to concept of “Banking” along with Types of Loans and advances.
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Such loans are given to stock brokers and market makers Banks also grant loans against units of mutual fund. However in this case the amount of advance should be linked to Net Asset Value or market value whichever is less. One of the guidelines to be followed while granting this loan is that banks should satisfy themselves with the marketability of this loan. And banks should not advance against partly paid shares. Banks may determine the rate of interest without referring to Benchmark Prime Lending Rate. Certain prohibitions apply. For instance, banks cannot sanction loans against equity shares of the banking company to its directors. Banks cannot lend to their employees through employee trusts set up by them. Also, a bank’s total exposure including both fund and non fund categories should not exceed 15% of the total advances as of 31 March in the previous year.
Such loans are given to stock brokers and market makers Banks also grant loans against units of mutual fund. However in this case the amount of advance should be linked to Net Asset Value or market value whichever is less. One of the guidelines to be followed while granting this loan is that banks should satisfy themselves with the marketability of this loan. And banks should not advance against partly paid shares. Banks may determine the rate of interest without referring to Benchmark Prime Lending Rate. Certain prohibitions apply. For instance, banks cannot sanction loans against equity shares of the banking company to its directors. Banks cannot lend to their employees through employee trusts set up by them. Also, a bank’s total exposure including both fund and non fund categories should not exceed 15% of the total advances as of 31 March in the previous year.
This presentation expalins the nuances of acquiring distressed debt secured by real estate or mezzanine debt secured by the ownership interests in an entity owning real property, including the process of foreclosure, intercreditor issues, and other key points.
What role does collateral play in surety bonds? In this publication, we take a look at the types of collateral that sureties may accept, the right time to release a collateral, what happens to a collateral if you change sureties, and why a collateral may be necessary for riskier bonds.
Promissory note and loan agreement are legally binding financial documents for repayment of loan amount by the issuer to the lender.
https://efinancemanagement.com/sources-of-finance/promissory-note-vs-loan-agreement
Brief overview of Debentures & Bonds and Term Loans.
A project given to our class group for the subject Corporate Finance. Hope it helps.
Contact for additional information
www.facebook.com/Sahith1
ansahithkrishna@gmail.com
This presentation expalins the nuances of acquiring distressed debt secured by real estate or mezzanine debt secured by the ownership interests in an entity owning real property, including the process of foreclosure, intercreditor issues, and other key points.
What role does collateral play in surety bonds? In this publication, we take a look at the types of collateral that sureties may accept, the right time to release a collateral, what happens to a collateral if you change sureties, and why a collateral may be necessary for riskier bonds.
Promissory note and loan agreement are legally binding financial documents for repayment of loan amount by the issuer to the lender.
https://efinancemanagement.com/sources-of-finance/promissory-note-vs-loan-agreement
Brief overview of Debentures & Bonds and Term Loans.
A project given to our class group for the subject Corporate Finance. Hope it helps.
Contact for additional information
www.facebook.com/Sahith1
ansahithkrishna@gmail.com
Loans and Advances
Principles of Good lending
Creditworthiness of borrowers
Securing advances
Lien
Pledge
Mortgage
Hypothecation
Documents of title to goods
Life Insurance Policy
Fixed Deposit Receipts
Mutual Funds
Government Securities
Gold Loans
Basic Concepts Applicable to All Borrowers & Lenders (Series: Business Borrow...Financial Poise
A business borrows when it purchases goods or services on credit. And a small business may only “borrow” money in this fashion. At the other extreme is a large business with multiple lending facilities, with multiple lenders. Regardless, and regardless of the type of loan (i.e. cash flow, asset-based, etc.), many of the concepts are the same. This webinar arms the attendee with the basic vocabulary necessary to negotiate any type of loan.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/basic-concepts-applicable-to-all-borrowers-lenders-2020/
Basic Concepts Applicable to All Borrowers & LendersFinancial Poise
A business borrows when it purchases goods or services on credit. And a small business may only “borrow” money in this fashion. At the other extreme is a large business with multiple lending facilities, with multiple lenders. Regardless, and regardless of the type of loan (i.e. cash flow, asset-based, etc.), many of the concepts are the same. This webinar arms the attendee with the basic vocabulary necessary to negotiate any type of loan.
Part of the webinar series: Business Borrowing Basics 2021
See more at https://www.financialpoise.com/webinars/
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Gain a better understanding of the various industry functions, business trends and industry regulations in the travel and tourism industry to emerge as a powerful team leader.
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Mc donalds Recruitment Case Study will explain you each and every thing about the Recruitment. hiring a right person at your workplace will be one of the best part of your business management. learn how to hire or recruit perfect person in your company with this case study of Mc donalds Recruitment.
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How to Split Bills in the Odoo 17 POS ModuleCeline George
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The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
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Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
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Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
The Indian economy is classified into different sectors to simplify the analysis and understanding of economic activities. For Class 10, it's essential to grasp the sectors of the Indian economy, understand their characteristics, and recognize their importance. This guide will provide detailed notes on the Sectors of the Indian Economy Class 10, using specific long-tail keywords to enhance comprehension.
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Overview on Edible Vaccine: Pros & Cons with Mechanism
Banking - An Introduction
1. ADVANCES
Learning Objectives :
To explain the different kinds of advances.
Structure:
1.1 Introduction.
1.2 Secured Loans.
1.3 Unsecured Loans.
1.4 Partly Secured.
1.5 Status of Banker.
Chapter One Advances & Credit Analysis 1
2. ADVANCES
1.1 Introduction
- Banking
“ the acceptance for the purpose of lending or
investment , of deposits from the public,
repayable on demand or otherwise, and
withdrawal by cheque, draft, order or
otherwise.’
Chapter One Advances & Credit Analysis 2
3. ADVANCES
1.1 Introduction
The rate of income from lending or
investment , is greater than
the rate allowed for the acceptance of
deposits from the public.
- This provides a source of income to banks.
Chapter One Advances & Credit Analysis 3
4. ADVANCES
1.1 Introduction
The rate of income from lending, is greater
than
the rate of income from investment .
- Thus lending, loans or advances provide a
major portion of income to banks.
Chapter One Advances & Credit Analysis 4
5. ADVANCES
1.1 Introduction
A bank’s strength is,
therefore,
dependant on the quality
of its lending operations
or advances.
Loans or advances can be
● Secured.
● Unsecured or
● Partly secured.
Chapter One Advances & Credit Analysis 5
6. ADVANCES
1.2 Secured Advances
“ A loan or advance made on the security of
assets, the market value of which is not at
anytime less than the amount of such loan
or advance. ”
- Secured loan or advance.
- Section 5(n)
- Banking Regulation Act, 1949.
Chapter One Advances & Credit Analysis 6
7. ADVANCES
1.2 Secured Advances
Banks try to make secured advances as it
reduces their risk. The stronger the
security lesser the risk.
examples –
Loan on
ﺖmortgage of house [ or any immovable
property].
ﺖhypothecation of a vehicle.
ﺖpledge of shares or fixed deposit [
or any other title deed].
Chapter One Advances & Credit Analysis 7
8. ADVANCES
1.2 Secured Advances
Types of security -
‘ ﺖprimary’ one offered by the borrower
herself.
ﺖ ‘collateral’ one deposited by a third
party to secure loan made to bank’s
customer.
ﺖ ‘tangible’ one that is visible,
transferable etc.
‘ ﺖpersonal’ promise from a borrower or
guarantor.
Chapter One Advances & Credit Analysis 8
9. ADVANCES
1.2 Secured Advances
Distinguishing features –
ﺖA charge on any such assets offered as
security must be created in favour of the
banker.
ﺖ The market value of such security must
not be less than the amount of the loan
at anytime, until it is fully repaid. In
case it becomes less, the advance is
partly secured.
Chapter One Advances & Credit Analysis 9
10. ADVANCES
1.2 Secured Advances
Distinguishing features –
ﺖ The market value of security in the form
of wasting assets such as vehicles or
machinery , decreases with passage of time
due to wear tear.
Banker must ensure that sufficient amount
of principal of the loan is repaid
periodically in a manner that amount
outstanding is lower than the new
realizable value of the security.
Chapter One Advances & Credit Analysis 10
11. ADVANCES
1.3 Unsecured Advances
ﺖ Are loans without any security from the
borrower.
ﺖ Such advances are arranged based on
borrower’s assurance to repay.
ﺖBankers rely on borrower’s reputation &
credit standing.
examples
Overdrafts or personal loans to meet
medical, holiday, education expenses.
Chapter One Advances & Credit Analysis 11
12. ADVANCES
1.4 Partly Secured Advances
ﺖ Are loans with security from the
borrower that does not fully cover the
amount of the advance.
ﺖ Such advances are arranged based on
borrower’s reputation & credit standing
and not necessarily because borrower has
insufficient assets to offer as a
security.
Chapter One Advances & Credit Analysis 12
13. ADVANCES
1.5 Status of a Banker
ﺖ For secured advances:
As a secured creditor, in case of
default, banker has right to sell
assets over which a charge is created
in his favour and recover advance from
sale proceeds.
ﺖ For unsecured advances:
The legal status is that of an
unsecured creditor. In case of default
he is at par with other unsecured
creditors. The End
Chapter One Advances & Credit Analysis 13
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