Archive for ‘Banking’

November 11, 2011

Standard & Poor’s Upgrades Indian Banking Sector Contrary to Moody’s Downgrades

The downgrade of Indian banking sector from stable to negative by Moody’s shaken the Indian equity market and as result of this downgrade the Indian banking sector stocks faced huge selling pressure and the prices of the stocks of almost every bank fell.

Contrary to the Moody’s downgrade, it’s competitor in rating market today the leading rating company Standards & Poor’s has upgraded the Indian banking sector on the basis of strict and stringent domestic banking regulations and proper enforcement by the Reserve Bank of India.

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September 26, 2011

Get Out of Debt Trap

One often takes the route of debt to satisfy his/her needs when the needs are beyond his/her financial capacity. At that point of time s/he feels blessed but if this is not managed properly, this blessing turns out to be a curse and then s/he feels cheated and finds her/him caught in a trap of debts.

Various Forms of Debt

There are so many kinds of debt available in the market; formal as well as informal. You can borrow in such ways:

Credit Cards: These are the most risky debt available in the market. The cost of credit card loans ranges between 35%- 50% per annum. Use only when it is necessary.

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September 26, 2011

Introduction to the Concept of Tier Capital

Under the provisions of Basel Banking Reforms, banks are required to maintain different types of tier capital with purpose of making banks more reliable and stable and lower the risks relating to various areas. The tier capital is categorized and explained as below

Tier 1 capital

Tier 1 capital is the core measure of a bank’s financial strength from a regulator’s point of view. It consists of the types of financial capital considered the most reliable and liquid, primarily equity.

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September 26, 2011

NPA: Non Performing Assets

Non Performing Asset means an asset or account of borrower, which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset, in accordance with the directions or guidelines relating to asset classification issued by RBI. In simple words the non performing assets are the lending by the bank that bank considers to be defaulted and no future payment will be received. Under the guidelines of RBI, the action for enforcement of security interest can be initiated only if the secured asset is classified as Non Performing Asset. In case of unsecured assets that turn non-performing assets, the bank has very limited options in their hands.

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