Banking News

Category Archives: Loans and advances

  • What is Provisioning Coverage Ratio?

    What is Provisioning Coverage Ratio?

    In banking lexicon, provisioning means to set aside or provide some funds to cover up losses if things go wrong and some of their loans turn into bad assets. Provisioning Coverage Ratio (PCR) refers to the prescribed percentage of funds to be set aside by the banks for covering…

  • Prudential norms for income recognition and provisioning of NPAs

    Prudential norms for income recognition and provisioning of NPAs

    (This article  explains the definition of non-performing assets (NPAs), and basis on which accounts are classified into Special Mention Accounts (SMA) /sub-standard Assets, Doubtful assets, and Loss Assets. Income recognition and provisioning requirement are specified in the article.) Internationally income from Non-Performing Assets (NPAs) is not recognized on accrual basis…

  • What is revival letter for a bank loan?

    What is revival letter for a bank loan?

    According to Section 2 (j) of the Limitation Act, 1963, the life of a loan document (DPN) is three years. Once the original Demand Promissory Note (DPN) is expired then the bank will not be able to enforce money suit to recover its due through Court of Law. If…

  • What is Commitment Charge?

    What is Commitment Charge?

    A fee charged by a lender to a borrower for the unused/underutilized working capital limit and or undisbursed loan amount is known as commitment charge. A commitment fee is generally specified in the sanction endorsement of loans as a fixed percentage of fee payable by the borrower on the…

  • What is a Bridge Loan?

    What is a Bridge Loan?

    Bridge loan is a temporary short term loan taken by a person or company for a period ranging from 2-3 weeks to 52 weeks. Such loans are known as bridge loan because the loan helps in bridging the gap between short-term cash requirements and long-term loans or permanent source…

  • Resolution of Stressed Assets: RBI scraps all existing debt restructuring schemes

    Resolution of Stressed Assets: RBI scraps all existing debt restructuring schemes

    The Reserve Bank of India on Monday (12.02.2018) scrapped  all existing frameworks for revitalizing distressed assets such as Corporate Debt Restructuring (CDR) scheme , Flexible restructuring of long-term project loans(5/25) scheme, Strategic Debt Restructuring (SDR) scheme, Scheme for Sustainable Structuring of Stressed Assets(S4A). The Joint Lendes’ Foroum (JLF) as…

  • Home loan takeover process by banks explained

    Home loan takeover process by banks explained

    The first item a bank which shows interest to takeover of loan from another lender is to verify the statement of existing Home loan account as well as statement of SB account maintained by the proposed borrower in the existing bank. Do remember that loan transfer is only possible…

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