Articles

What is Letter of Credit?

A letter of credit is issued (opened) bank a Bank on the request of his buyer customer in favour of seller, which is an undertaking by the bank to make payment to the seller if fulfills his obligations. The process of Letter of Credit is described in the following images and also Read more…

By BankersClub, ago
Articles

What is working Capital?

Working Capital is a financial indicator of operational liquidity of a business organization. Working Capital is the short term assets to cover the short term liabilities of the organization. Working Capital is calculated as Current Assets – Current Liabilities, also represented as Net Working Capital. The Working Capital Ratio or Read more…

By BankersClub, ago
Articles

What is RBI’s 5/25 Scheme?

Infrastructure and core industries projects have a long gestation periods and large capital investments. The repayment period for loans to such sectors should be corresponding to their gestation period of cash flows. However, Banks were unable to provide such long tenor financing due to asset-liability mismatch issues. Banks were restricting Read more…

By Jai, ago
Articles

What is Pari Passu Charge?

Meaning of pari passu charge – Pari-passu is a Latin phrase, which means “equal footing”.  Thus pari passu charge means, having equivalent charge/ rights or say charge-holders have equal rights over the asset on which pari pasu charge is created. “Pari Passu” charge means that when borrower company goes into Read more…

By Jai, ago