What is AFS/ Available for Sale

The investment portfolio of the banks are classified under three categories viz. ‘Held to Maturity’, ‘Available for Sale’ and ‘Held for Trading’. Banks take decision to categorise their investments at the time of acquisition of these securities and recorded on the investment proposals of the bank. The Available for Sale (AFS) are debt and equity…

What is HTM/ held to maturity?

The entire investment portfolio of the banks (including SLR securities and non-SLR securities) are  classified under three categories viz. ‘Held to Maturity’, ‘Available for Sale’ and ‘Held for Trading’. Held-to-maturity securities are debt security investments which the holder has the intention and ability to hold them until specific date of maturity. The investments classified under…

What is economic capital?

There are three types of capital viz. Regulatory capital, Book capital, and Economic capital. Regulatory capital is the amount of capital a bank is required to hold as per the stipulations prescribed by the banking regulator of the country. Book Capital is the actual capital that the bank has, which includes equity capital, loans, and…