Introduction An advance made by a bank is generally covered by primary or collateral securities. The effectiveness of the security depends on the nature of security. The securities can be classified into two aspects, economic and legal aspects. The economic aspect covers marketability, valuation, and other economic factors of the security. The other legal aspect […]

Introduction To safeguard their advances, a bank accepts different types of securities during the lending and creates a charge upon them. When land/buildings and fixed assets which are permanently fastened to the earth is offered as a security, it is charged by a mortgage in favour of the bank. When movable goods are offered as […]

What is Forfaiting? Forfaiting in French means to give up one’s right. Thus, in forfaiting the exporter hands over the entire export bill with the forfaiter and obtains payments. The exporter has given up his right on the importer which is now taken by the forfaiter. By doing so, the exporter is benefited as he […]

Factoring finance in India Factoring is one of the upcoming sources of finance for SMEs in India. It is particularly, relevant if a company is growing daily and when new customers are added regularly; there are chances of ending up with huge invoices. This problem often directs many businesses to look for an alternative source […]

Banks and financial institutions finance the borrower after executing the security documents. On default of the loan, the bank and FI have to initiate recovery action and file suit against the borrower. The recovery act and court only permit action if the claim is within the period of limitation. The limitation act defines the limitation […]

It is of utmost importance to obtain appropriate and correctly executed security documents before disbursing an advance to borrowers. In case the borrowers fail to repay, the recovery of Bank’s dues, banks will mainly depend upon the enforcement of the security. Banks should, therefore, take necessary care and precaution while obtaining security documents in advance […]