RBI’s new QR Code Rules According to RBI’s latest rules, all QR codes have to be interoperable which means that the merchant might have a wallet/payment app of a certain payment app, it’s QR code will accept payments from all kinds of payment apps used by customers. RBI's Aim: To ease the friction and enable … Continue reading RBI’s new rules for QR Codes and why they matter
The Idea of a Bad Bank
Business of Banking: A bank raises money through deposits and lends it to borrowers. It makes money through the difference in the interest rates it charges from borrowers and what it pays to the depositors. This is based on the premise that not all depositors will demand their money back at the same time. Regulators … Continue reading The Idea of a Bad Bank
RBI Loan Restructuring Scheme
What is Restructuring? RBI recently announced to open a restructuring window for stressed loans. Those accounts which had been in default for not more than 30 days as on March 1, 2020, can be restructured if the borrowers are unable to service them because of their businesses being affected by the Covid-19 pandemic. RBI has … Continue reading RBI Loan Restructuring Scheme
Why Moratorium wasn’t extended…
RBI had announced Moratorium a 3-month moratorium which was extended for another 3 months. We have seen what the Moratorium was and why was it announced here. But RBI has decided not to extend Moratorium beyond August. Let us see why? ALM (Asset Liability Management) Issues: Banking is a business where Banks borrow for a … Continue reading Why Moratorium wasn’t extended…
Explained: Moratorium on Loans
What is Moratorium Moratorium here meant that the borrower can choose not to pay Interest and Principal due for the time decided. Payments are deferred.RBI has allowed Banks and NBFCs to offer Moratorium to all Term loans. Term loans here will include all kinds of retail loans such as vehicle loan, home loan,Credit card and … Continue reading Explained: Moratorium on Loans
Explainer: When Microfinance blew up in Andhra Pradesh
If one wants to understand Microfinance space, it's important to know the Microfinance Crisis in Andhra Pradesh. It's important to study failures and the reasons. Background: A SHG (self help group) is a community based group with 10-20 members. They are usually A SHG (self help group) is a community based group with 10-20 members. They are … Continue reading Explainer: When Microfinance blew up in Andhra Pradesh
Explained: Micro-finance
Microfinance is providing financial services to that section of the population which is not served by the traditional financial institutions. Micro-credit refers to the granting of very small loans to impoverished borrowers, with the aim of enabling the borrowers to use that capital to become self-employed and strengthen their businesses. Microfinance Institutions give loans in … Continue reading Explained: Micro-finance