Wednesday, October 15, 2008

ARE MY MONEY SAFE WITH INDIAN BANKS?????



Going by the fiscal 2008 data, none of the Indian banks, big or small, can fail.
This fiscal, beginning April, the situation has changed slightly for certain banks as their non-performing assets,
or NPAs, are going up as consumers have started defaulting on their payment obligations with the rise in interest
rates.
The best way of judging a bank’s health is looking at the most critical parameters such as capital adequacy ratio, asset quality and earnings, which define their ability to pay service depositors. On all these parameters, Indian banks more than meet the accepted norms.
NET WORTH State Bank of India has the highest net worth—capital and reserves—among all Indian banks, followed by ICICI Bank.
Each has about four times the net worth of the third biggest bank in this category, Punjab National Bank. Overall, seven banks have more than Rs10,000 crore net worth.
Net worth (capital+reserve) in Rs crore NET NPAs Most Indian banks have less than 1% NPA. The average NPA of all banks operating in India (including foreign banks) is 1%. So, no worry on the quality of assets, as of now. % of net NPA to net advances CAPITAL ADEQUACY RATIO Among the big Indian banks, ICICI Bank has the highest capital adquacy ratio, or CAR—13.97% against the regulatory requirement of 9%.
Four banks have a higher CAR than ICICI Bank, but they are relatively smaller banks.
Overall, 30 banks have more than 12% CAR. Not a single bank has less than 9% CAR.
Under the norms, for every Rs. 100 worth of assets, banks need Rs. 9 worth of capital. The higher capital base shows they are less leveraged and, hence, strong.

Tuesday, October 14, 2008

FRIENDLY LOAN WILL COST TOO.....



Now you a Interest on friendly loan also.
Mumbai High Court bench, Justice B H Marlapalle and D B Bhosale said while ruling one such case, "people who default on friendly loans should be treated in there stages while determining the rate of interest".
  • No interest is applicable from the day the loan was given to the day the lender approached to the court to recover it.
  • 9% of interest should be paid for the period the suit remained pending in the court.
  • 6% of interest was to be paid from the day of the court decree to the day the loan amount was finally realized.

Court also said that while dealing such matters, judges should "exercise sound judicial principles". The bench said judges could even deny or reduce the rate of interest to the time the matter was pending in court. Court also warned that doing so would only, amount to penalising the creditor for approaching the court and encouraging the debtor deliberately to prolong the litigation.