RBI’s Gold Loan Guidelines: Reform or Roadblock? Vinu: Manu, what’s this big issue about RBI’s draft norms for gold loans? I read somewhere that it’s creating a lot of fuss. Manu: That’s true, Vinu. The RBI has recently proposed draft norms for gold loans, especially those issued against high-value ...
Collateral Coverage Ratio vs Loan-to-Value Ratio: What’s the Difference? Vinu: Manu, I came across two terms in a credit proposal — Collateral Coverage Ratio and Loan-to-Value Ratio. Are they the same thing? Manu: Great question, Vinu. They're related but not the same. In fact, they’re almost like m...
Land Loans for SMEs: What’s Allowed and What’s Not Vinu: Manu, I’ve got a question. Can banks give a term loan to an SME just to buy a piece of commercial land? Manu: That’s a good question, Vinu. Generally speaking, banks are not allowed to give loans just for the purchase of land, especially when ...
Temporary vs Seasonal Overdraft: What’s the Difference? Vinu: Manu, I’m trying to understand the difference between temporary and seasonal overdraft (OD) facilities. Could you explain them to me? Manu: Sure, Vinu! Both temporary and seasonal ODs are credit facilities provided by banks, but they serv...
Understanding the Difference Between Renewal and Review in Bank Credit Vinu: Manu, I’m a bit confused about the terms renewal and review of working capital credit facilities by banks. Could you explain the difference, especially with reference to RBI guidelines? Manu: Sure, Vinu! The concepts of ren...