NPA Full Form| What is NPA: Loan or Advance?

NPA Full Form

NPA Full Form-What is NPA? NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.Banks are required to classify NPAs further into Substandard, Doubtful and Loss assets.

NPA Full Form

FAQs About NPA:

In practice, the way loans are classified is done by various banks on their own. Among various factors, the "feasibility and suitability" of the projects, 'Gross Fixed Assets Ratio', etc., are taken into consideration. The banks evaluate a loan given by the borrower to assess the risk that the loan will default in some way. How many NPAs are there? Every lender monitors its NPAs. In case of banks, NPAs in each stage - phase I, II, III, IV and C are classed. Phase I (funded or unfunded) are loans given for projects (usually limited- period bonds or loans with a reasonable cost of refinancing). Phase II (available- for- or committed) are loans for projects or firms which are viable, and have enough earnings to meet the interest and principal commitments.

A Non Performing asset is classified as a loan, whose value has not improved or otherwise fallen in the following months, but the interest and principal are still due or payable. A Loan is a loan which has started to yield interest and principal and is under its maturing phase and has the owner’s ability to make payment, however due to a variation in business conditions, economic or political reasons, the borrower is unable to pay off the loan. The loan remains unpaid as per the terms and conditions of the loan. According to media reports, Union Bank of India’s gross NPA (including those under review) was Rs 55,671 crore as of 31 March 2018, which is 12.34% of the total loans.

With a NPA, you are faced with a problem. The banks do not want to give the loans and the borrowers will take it back and create huge losses for the banks and will also make it difficult for the banks to offer more loans. Are you in trouble? There are things which banks are required to report to the RBI. In fact, an internal vigilance team may flag certain issues. Some of them could be erroneous reporting or documentation. In such cases, the bank may take some corrective measures for certain loans, but the reports need to be made in a timely manner. It is in these reports where you find errors in the NPA classification. These reports are sent to RBI for their monitoring.

Chances of you defaulting on a loan are higher when you don't have a balance due in your bank account, less when you have minimum money in your bank account, and lastly when your regular cash flows in your business are still intact.

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PAN Full Form| What is PAN:Tax related information?

PAN Full Form

PAN Full Form-What is  PAN? PAN is an electronic system through which, all tax related information for a person/company is recorded in a  single PAN number.PAN is the foundation of e-commerce and seamless tax compliance and  has multiple uses.

 

PAN Full Form

Permanent Account Number

FAQs About PAN:

Taxation of citizens has always been a contentious issue, particularly in the last one year, with tax authorities given orders to detain the data of individuals with unconfirmed PAN numbers. PAN is the number which serves as an identification mechanism to regulate the taxation of an individual. PAN is an electronic system through which, all tax related information for a person/company is recorded against a single PAN number. Currently, there are 34 million PAN holders in India, but only 50 million taxpayers of the total 99.5 million companies registered with the Registrar of Companies (ROCs) in India are PAN-compliant. Hence, PAN is a system through which all such entities can file returns, as well as pay taxes online without much hassle.

PAN is an allotted to a person for identification purpose, and an individual can obtain it in several ways. All you need is an Aadhaar card number. The individual has to register with the Central Board of Direct Taxes (CBDT) for getting an Aadhaar and an individual PAN. The tax department issues an enrolment ID number which can be used for registering with the CBDT. PAN is issued based on the address of the person and it can be changed at any time. You can create a PAN for a new address, which is not in your tax records. However, when you get the current PAN, you have to declare the new address. If you haven't done this, PAN would be invalidated. The details in PAN Whenever you file tax returns, your PAN would be linked to the details given in the tax return.

Well, it is because of the income tax return filing. For individual, filing income tax return is mandatory. But filing for tax return is not required for companies.

PAN is beneficial as the tax payers can simply put down his/her PAN number at any business or company and a payment can be made in that amount without worrying about hidden accounts. Let us see some benefits of PAN

1) The e-transactions on PAN are fast and secure.

2) When a person buys something online or by using debit or credit card the transaction is considered legal and no-questions asked.

3) In case of any medical emergency, citizens can directly go to a doctor using PAN card.

4) PAN number is the basic identification for businesses as it gives them a virtual store to showcase their products.

Merely being not registered in PAN will now attract penalty, even if there is no turnover of taxable income Under the regime, even a service provider can also have PAN. However, there is a new provision for paying penalty to a person even for not filing the tax return

According to the finance ministry, PAN is used to comply with various legal requirements and it is required for any transaction involving tax, customs, etc. It is also needed for certain financial transactions, such as money transfer, opening a bank account or making any financial transaction through an electronic payment system. It is mandatory to link PAN with Permanent Account Number (PAN) for income tax, indirect tax and payroll tax to avoid multiple taxation.

PAN is an electronic system through which, all tax related information for a person/company is recorded against a single PAN number. Further, it allows the government to communicate with individuals and entities on specified need to seek and obtain their information.

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RTGS Full Form| What is RTGS:Easy Money Transfer?

RTGS Full Form

RTGS Full Form-What is  RTGS? RTGS is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank.

RTGS Full Form

Real Time Gross Settlement

FAQs About RTGS:

RTGS is required because central banks can only issue fiat currency. Digital fiat currencies in countries with stable macroeconomic and financial environment will suffice. RTGS allows the central bank to deal with 'thin' markets. In physical currency trading, one could hardly trade from one central counterparty to another due to large transaction costs. RTGS eliminates this costly transactions. Also, this allows central banks to clear transactions without issuing physical currency. The use of RTGS allows the central bank to reach out to the public without taking the risk of holding fiat currency in custody and people's ready cash to buy the currency. So, in order to drive the demand for digital currencies, its adoption should happen in the same framework.

Central banks carry balances and transactions across the money market, so they cannot actually make real time payment to a person. To work around this, a central bank will undertake a daily auction or an auction-cycle of transfers across their banking system in order to make the transfer from one bank account to another. The net effect is that the payment in question is paid across the banks; not across individual accounts.

In an RTGS system, all payments at the central bank are in black and white, unless the orders do not match the reported net positions. The transactions can be done in real time, the transactions can be settled and reversed at will without delays or the delays associated with day traders or the layered risk of a single location.

If a payment system is built on the RTGS structure, all of the payments must flow through a central bank. This means that the central bank is in the role of the banker to the world. This is not the case with credit, which flows from the payer to the payee directly. It is precisely this centralization of banking that provides us with the potential for the manipulation of the whole currency system. Banks can increase the stock of money if they know that the system will store the new money in the bank's vault, which would then create more deposits. In fact, most new money in the system originates in the treasury, which does not create new deposits but simply pays for existing ones. The other commonality between RTGS and credit is that both do not allocate new money directly to anyone.

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IFSC Full Form | What is IFSC- Code,Benefits,Where to Find? Explained

ifsc full form

IFSC Full Form 

IFSC Full form -What is IFSC ? IFSC is an alphanumeric code that facilitates electronic funds transfer in India.It’s an 11-digit code written in an alphanumeric format, and it identifies the branches in the National Electronic Funds Transfer (NEFT) network.

ifsc full form

IFSC Full Form is mentioned below :
Indian Financial System Code

 

What is IFSC code ?

While India has been improving its e-banking infrastructure, over 300 million Indians still aren’t connected to the internet. This limits the growth of India’s digital economy and the potential of money transfer companies like Google. India’s population is so vast that it’s difficult to estimate exactly how many people in the country are online, though a Brookings Institute estimate puts the number at around 340 million people. This number is only expected to increase. More from Wong: 4 Things Indians Can Do to Become Financially Independent in 10 Years Google’s #NoCashIndia campaign highlights how payments between banks can be limited in this country of 1.2 billion.

Why you should care ?

If you transfer money via NEFT, the payment will either be recognised as a domestic or a international transaction, depending on the branch code and the time of day. On Thursday, it was a domestic transaction that had a realisation. The moment NEFT sends a payment between two banks, it recognises that two transactions are made, and the first transaction will be to the bank of the recipient. If the recipient bank is not the originating bank, the payment will go to the bank of the receiver instead. In other words, the payment should not be recognised as a domestic transaction and the recipient bank should be the receiving bank. The payment will then go to the home branch of the recipient bank. This is the reason the banking sector has such a huge quantity of rupees.

What are the benefits of IFSC ?

It’s a way to handle any size of transaction. In fact, Nandan Nilekani, the architect of India’s Aadhaar database said, “Without IFSC, large financial institutions will not start looking at India because of the kind of money transfers that go through SWIFT.” : It’s a way to handle any size of transaction. In fact, Nandan Nilekani, the architect of India’s Aadhaar database said, “Without IFSC, large financial institutions will not start looking at India because of the kind of money transfers that go through SWIFT.” Interoperability : Using IFSC gives you an opportunity to do cross-border transfers. The most recent example is Prime Minister Narendra Modi’s announcement to move all Rs 500 notes to the new Rs 2000 notes.

How do I get my IFSC ?

Because IFSC is an algorithm based on an alphanumeric code, it is always changing. A client can purchase a IFSC code (only available by the account holder), and there is a small processing fee. Some smaller firms, such as Paysense, will also sell you IFSC code to list on a secondary market, or as a replacement for your current bank. Will I be able to access funds on my IFSC? The largest banks have recently started offering IFSC for their consumer customers. It is available in cities like Mumbai, New Delhi and Bengaluru. Some lenders have also started offering IFSC for their SME customers, or for those with account balances between Rs.10 and Rs.1 crore. How are IFSC codes different from my current bank’s number?

Check your Bank’s IFSC code at : bankifsccode

FAQs about IFSC :

1.The IFSC is an 11-character code.
2.How is exactly an IFSC code made – 1st part is the first four alphabet characters representing the Bank. Next character is 0(zero), which is reserved for future use. The last six characters are the branch code.

3.All the banks have also been advised to print the IFSC of the branch on cheques issued by branches.

4.Bank IFS Code is used by the NEFT & RTGS systems to route the messages to the destination banks.

5.The IFSC code of each bank branch is assigned by the Reserve Bank of India.
6.For Online Banking, the IFSC code is important.
 

EMI full form – What is EMI- Concept,Process, Benefits ? Explained

 EMI full form

EMI Full Form -What is EMI ? It  is a banking term. EMI is a kind of loan that bank gives you in need or you purchase anything. EMI works as part of repayment of the loan that you have availed form a bank or any Loan company.

 
EMI full form is mentioned below :
Equated Monthly Installments

What is EMI?

EMI is an annual interest that a bank charges on your loan amount, whereas you pay by monthly installments. In short EMI means interest-free monthly installments. EMI is a convenient payment scheme because you pay a single amount at the end of the month and not by installments. Also, the finance charges is not applicable. You need not make any payments in every month which means that you do not have to worry about owing any EMI at the end of the month. Before availing an EMI to you, a bank sends a proposal to the borrower and advises him to opt for this EMI and pay this amount for the outstanding amount and then you are free of any EMI.

The EMI Process :

The EMI is not really expensive and it’s not complicated. You need to pay a sum of money towards EMI and this is known as pre payment. How much can you afford to pay to pay for EMI? Well, you might have a number of income which you can pay for EMI. It really depends on your budget. In the case of any necessity, you are able to pay it as per your financial condition. How much can you afford to pay for EMI? You can easily pay more than what the EMI term suggests. You can easily pay the EMI for longer time also if you don’t have any stress. The Conclusion EMI is a kind of loan that you will find almost in every households but you never used it before. It’s a kind of loan where you are able to pay through a pre-paid method.

The EMI Concept :

EMI money that is made for EMI repayment is made up of two parts: One is the principal and second is the interest. Both of these are added to the EMI amount. If your EMI amount is 200, you need to pay an additional 50 as EMI. The principal and the interest of EMI is similar to the amount of loan that you have availed from a bank. When you file a loan application from a bank, you can choose one of the four categories available, each category has EMI type of repayment and you can choose from the same based on your need:

1. Fixed Period of EMI Fixed Period of EMI means that the EMI is repayable over a fixed period of time ie – 6 months.

2. Variable Period of EMI Variable Period of EMI means that the EMI is repayable at the end of every quarter.

 

EMI Benefits :

EMI is really a hassle free loan that works and becomes easy to repay. EMI also offers you the benefit of loan security. EMI Savings This loan also offers you the chance to make some savings over a period of time. EMI Savings allows you to make the above EMI payments automatically from your bank account. EMI Withdrawal In order to meet your EMI payments, you need to make your EMI payments upfront but you don’t have to do it immediately. The Pains Of EMI Most people would agree that EMI is not for everyone. EMI gives you the opportunity to claim part of the loan amount from your employer or the EMI payments also take up a chunk of your income. Fees On default of EMI, you have to bear with some charges from your lender which makes EMI not very popular in banking industry.

Conclusion :

EMI is a kind of loan that is kind of responsible and the interest rates are always based on the level of risk involved in the bank’s working. It works as the third leg in the repayment chain. It is usually charged only when you purchase something or take a loan from a loan company.

IMPS full form | What is IMPS -Process,Benefits,Downsides,FAQs?Explained

 IMPS full form

IMPS Full Form – What is IMPS ? It is a real-time electronic fund transfer facility .IMPS service is convenient as it is quick, IMPS is paperless and does not require sender to have a detailed information of the related bank account to transfer funds.

 
IMPS full form is mentioned below  :
 
Immediate Payment Service

 

What is the IMPS System? The Best, Simplest Way to Pay Your Bills

 

What is the IMPS System?

IMPS is a real-time electronic fund transfer facility which allows bank account holders to make payments through IMPS codes for their utility bills. It is fast, it does not require the sender to know the recipient account and it does not involve the withdrawal of the required funds from the account holder’s account. It is secure and bank accounts are always protected. What is the IMPS Service Fee? The cost of IMPS Service Fee is determined by the Central Reserve Bank of India (the RBI) and hence varies from bank to bank. Some banks also charge a nominal or minimum fee which is basically a small sum to cover their own cost. The latest fee rates are as follows: IMPS service Fee for Jan 2018 Kumari Bank 0.10% IBIC 0.01% ICICI Bank 0.02% IndusInd Bank.

 

How IMPS Works :

IMPS is a real-time electronic fund transfer facility which gives you the opportunity to send and receive funds across any part of the country through the banking networks. IMPS transfers are easy to carry out with all the permissions, and the payments are made instantly. Sending payments by IMPS is free of cost. IMPS Fee Structure There are 3 types of charges to be paid. First, the amount being transferred to the recipient. The IMPS charges are applicable when the amount to be transferred is from 5,000 to 25,000. Second, the charges would be applicable on the receiver of the fund transfer. In addition to the money sent by the sender, the receiver has to pay some charge as well on any amount from 25,000 and above.

 

Advantages of IMPS :

The good thing about IMPS is that there is no physical exchange of funds, neither any documents are required to transfer money from sender to payee, the process of sending money through IMPS is completely paperless. It is also a safe and secure process. The sender can check that the funds are transferred to the payee without visiting a bank branch. It has become the most preferred and widely used method of transferring funds from sender to payee in India. In 2017 alone the IMPS processed a whopping Rs 34,157.48 crores of money as compared to Rs 16,695.67 crores of National Electronic Fund Transfer which is only Rs. 1,473 crores. The Immediate Payment Service (IMPS) scheme of RBI (Reserve Bank of India) was introduced in 2010 as a very secure and fast payments system in India.

 

Disadvantages of IMPS :

Like with any other facility, payments made through IMPS have their own set of inconveniences. Like with any other facility, payments made through IMPS have their own set of inconveniences. Before making a payment through the IMPS System, it is better to know the pros and cons of it. With the increase in volume of retail transactions, the transmission and settlement problems have also increased. The magnitude of the problem is evident from the fact that some bank customers have complained about not getting a proper statement and that there is no standardization on the amounts that can be transferred through it. It is imperative that users check their billing statement thoroughly before transferring funds to avoid complications later on.

 

FAQs about  IMPS :

  • IMPS payments can be made for a maximum amount of ₹ 20 Lakh in general.
  • IMPS payments can be made 24/7 and 365 days in a year.
  • There is no minimum fund transaction limit on IMPS.
  • IMPS payments are end to end encrypted, so no worries of security.
  • Fund transfer charges on IMPS may range between ₹ 2.5 to ₹ 15, excluding GST.

 

Conclusion :

Existing e-payment players are failing to provide the customers an easy to use and convenient payment service. Some of them are unable to deploy products that suit to the demands of the customers. Bankers’ association in India are doing a great job of providing services to customers. Even there is a B2B payment service. But still, a lot of things can be done to improve the existing system to make it more convenient and hassle-free.