Banking Awareness

What is a Bridge Loan?

A bridge loan is short-term with high-interest rates and is backed by some collateral or security. The collateral can be either real estate or inventory. It is often helpful to the user to be able to meet current liabilities till the person is able to arrange a permanent financing obligation. It is also known as […]

What is BASEL-III?

BASEL-III is a milestone in the supervision of banking systems in the world which defines guidelines for stringent supervision of the banks across the world and thereby sets standards for the same. It gives regulations for capital adequacy in banks, liquidity risk in markets and also stress testing. The norms of BASEL are formulated by […]

Who is an Assignee?

An Assignee refers to any person, any firm, a trust or an entity who is the ultimate recipient of the rights, benefits and ownership of an insurance policy or a contract. The one who transfers the latter to the assignee is known as the assignor. Usually, the assignment contracts are made in writing but in […]

What is the meaning of Annualized Premium?

The premium which is paid annually is called the annualised premium. Insurance policies come up with many options to pay a premium which can be paid monthly, quarterly, bi-annually or even annually. It is the choice of the insured person to pick any one option for the premium. E.g. if the monthly premium of any […]

What is the meaning of Balloon Payment?

A Balloon Payment is a huge sum which is to be paid at the end of the balloon loan like a mortgage, commercial loan and even an amortized loan. It can be a part of both a fixed and flexible interest rate regime. In a balloon loan, only a small part of the principal balance […]

What is Bank Rate?

Bank Rate is defined as the rate at which Central Bank gives loans to other domestic banks like commercial banks, cooperative banks, development banks etc. The loans are generally given on a short-term basis. It is the way the Central Bank manages the economic activity in the country. The Bank Rate, in turn, goes to […]

What is the meaning of automated underwriting?

Automated underwriting is a computerised loan underwriting decision. It is widely seen that screening and processing a loan application is a time-consuming process and is also prone to human errors. However, automated underwriting involves checking complete loan applications for retrieving relevant data based on the credit history of the borrower and finally arriving at a […]

What is the meaning of 3rd Party Insurance?

Motor third-party insurance cover is basically a statutory requirement as per the Motor Vehicles Act. It is also known as third-party cover or just act-only cover. It is so named as the beneficiary of the policy is not the one from two parties under contract i.e. the car owner or the insurance company. Thus it […]

What is Bancassurance?

Bancassurance is a term which means selling of insurance products through banks. Various banks and insurance companies enter into a partnership and the banks then sells the company’s insurance products to its clients. It is a win-win situation for both the parties as the bank earns non-interest income in form of fee amount from the […]

What is earliest evidence of Banking in Ancient India?

The History of Banking in India is as old as Vedic Civilization. For example, in Vedic age the loan deeds called rnapatra or rnalekhya were prevalent. Interest rates as well as usury (सूदखोरी ) was prevalent in Vedic India. The Vedic word Kusidin refers to an usurer. Manusmriti condemns usury  and calls it an acceptable […]