Banking

Definition: The Co-Branded Credit Cards are the credit cards issued by the banks in joint sponsorship with the retail merchants. In other words, a card issued jointly by two parties, wherein one is the lending institution (bank), and the other is a non-financial group (retail merchant). Co-Branded Credit Cards are often used by hotels, airlines, big retail chains with the … [Read more...] about Co-Branded Credit Cards

Definition: The Net Demand and Time Liabilities or NDTL shows the difference between the sum of demand and time liabilities (deposits) of a bank (with the public or the other bank) and the deposits in the form of assets held by the other bank. In other words, the net demand and time liabilities of a bank can be calculated by using the following formula: Bank’s NDTL = … [Read more...] about Net Demand and Time Liabilities

Definition: The Liquidity Adjustment Facility or LAF is the principal operating monetary policy tool that allows banks to borrow money through repurchase agreements. This means, in order to meet short-term cash needs, bank, borrow money against government approved securities with an agreement to repurchase the same at a predetermined rate and date. The liquidity adjustment … [Read more...] about Liquidity Adjustment Facility

Definition: The Marginal Standing Facility (MSF) is the rate at which the scheduled commercial banks borrow funds fortnight from the Reserve Bank of India against the government approved securities. Now the question arises, why to use the marginal standing facility when banks can borrow funds through a Repo Rate? The need for MSF arises, to meet the short-term emergency … [Read more...] about Marginal Standing Facility

Definition: The Wholesale Banking refers to the provisions of banking services offered to the industrial and business entities which are rich in resources and have sound income statements. These institutes are generally the mortgage brokers, corporate houses, multinationals, government agencies, real estate investors, other banks and financial institutions. The wholesale … [Read more...] about Wholesale Banking

Definition: A Bridge Loan is a temporary short term loan usually used by a person to finance a new house before the sale of the existing or the old one. Simply, a loan is taken till the permanent financing is arranged. It is also called as Interim Financing or Gap Financing or Swing Financing. A bridge loan is generally raised to bridge the gap between the times the finance … [Read more...] about Bridge Loan

Definition: The Mezzanine Financing is a quick way to raise loans for the expansion of current business operations, from the investors or the financial institution such as a bank, without keeping any collateral security against it. But however, the lender has the right to convert the debt capital to ownership or equity interest in the company, in case the borrower defaults in … [Read more...] about Mezzanine Financing

Definition: CAMELS Rating is the rating system wherein the bank regulators or examiners (generally the officers trained by RBI), evaluates an overall performance of the banks and determine their strengths and weaknesses. CAMELS Rating is based on the financial statements of the banks, Viz. Profit and loss account, balance sheet and on-site examination by the bank regulators. … [Read more...] about CAMELS Rating

Definition: The Lockbox Banking is the service offered by the commercial banks to the companies wherein, the payment made by the customers is directed to the special post office box rather than to the company. Under the lockbox banking system, the company opens up a lockbox account with a bank, which is generally at the central location, easily accessible to the bank. The … [Read more...] about Lockbox Banking

Definition: The NEFT Transaction Timing refers to the period during which the electronic transaction can be made, and the same can be presented to the RBI for its clearance. If the transaction is not made within the time limit, the RBI will work on it on the next working day. Transaction Timings for NEFT are: All working days (except 2nd and 4th Saturday): 8 am to 7 pm The … [Read more...] about NEFT Transaction Timings