Author: chowdhury.munna

Corporate guarantee is a guarantee made by a limited company on behalf of another company or individual. The corporate guarantee is a contract between the limited company and the guarantor, in which the limited company agrees to pay the debt or liabilities of the other company or individual if they are unable to do so. The corporate guarantee can be used as security for a loan or other financial agreement. In a word a corporate guarantee is a type of financial guarantee made by a corporation to back the debts or financial obligations of another party. Advantage of corporate guarantee…

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Define Portfolio management, the portfolio is a collection of investment instruments like shares, mutual funds, bonds, FDR and other cash equivalents, etc. Portfolio management is the art of selecting the right investment tools in the right proportion to generate optimum returns with a balance of risk from the investment made Objectives of Portfolio Management Capital Growth Capital growth is the increase in value of an asset over time. The asset may be a physical object, such as a piece of real estate, or a financial asset, such as a stock or bond. Capital growth can be positive or negative, depending on…

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Loan pricing means determining the interest rate for granting loan to creditors. Individuals or business firms it is one of the most important. However difficult task in lending funds to business firms & other customers. Because it is always very difficult to exactly know what the actual loan risk a particular loan application is. What is the importance of loan pricing Generally the lender wants to charge a high enough rate to make sure that the loan will be profitable as well as it will covers enough compensation against the default risk. On the other hand loan price must be…

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Loan write-off facility means the provision to remove the debt from the balance sheet by providing adequate resources instead of inflating the accounting sector unnecessarily when the quality of a loan is declining and there is uncertainty of recovery. What is loan write-off facility? Coming to the term Write-Off loans, one major point that differentiates it from waive-off is that the loan amount is not cleared out or waived off. For example, a person has taken a loan from a bank for a foreign trip and has not returned the loan amount to the bank after the promised time duration.…

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Good borrower qualities is similar to Prospective borrower quality. Good borrower means any person who seeks to borrow money to finance in business , construction, export or import trading, fisheries or agricultural sector. Special point to select good borrower qualities 1.Credit-worthiness.  Bank or financial institutions have to deal with the applicant’s credit history, their capacity to pay, and in some cases, the value of their collateral., stable incomes, loan payment history, and liquid assets.2. Management skills.  Banks not only justify proof of income, but also proof of business management policy, ownership of assets, and so on.3. Sense of integrity. Integrity means Keeping word in all financial…

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Mortgage papers and types is important knowledge for credit officer in bank and financial institution. Firstly we will discuss what is mortgage “A mortgage is a mode of creation of charges on the immovable assets for securing the investment facility” According to Section 58 (a) of the Transfer of Property Act-1882, “ A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payments of money advanced by way of investment/loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary (financial) liability. The transferor…

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Types of loan securities is something of value given to a lender by a borrower to support his or her intention to repay. In the case of a mortgage, the security is the property that the loan is being used to purchase. It may include tangible, intangible assets, or even a personal guarantee. Types of loan securities for Bank Credit Personal securities: When a bank lends to a borrower on the security of a third party. Then it is called lending on personal security. In the case of personal security, one has to look at the financial status, character, reputation, amount of debt,…

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Fund flow statement refers to the transfer of economic value from one asset to another, from one equity to another. The term ‘flow’ indicates change, and hence, a fund flow refers to a change in funds or a change in working capital. Importance of Fund Flow Statement 1. It shows the various sources and uses or applications of funds between the two accounting periods. 2. Fund flow statements assist in determining the shift in amount of current assets investment and current liabilities financing. 3. It works as a crucial instrument for allocation of resources of a firm. It allows an organization for making plans…

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Bank deals with document not with goods. Bank business main thing is credit business either in local business or export import business. All types of credit needs proper documents. It seems that bank business related with product but actually bank deals with documents not with goods. What is loan document A loan document is a contract between a borrower and a lender that outlines the terms of a loan. The document includes information on the loan amount, interest rate, repayment schedule, and any other relevant details.The documents used in international trade are: (a) Commercial Invoice (b) Bill of Exchange (c)…

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Loan syndications are often syndicated in order to avoided the risk among a large number of financial institutions. A loan syndicate is a group of several lenders. It may be a syndicated term loan, in which case the syndicate provides the borrower with a large amount of funds for a specified period of time, or it may be a syndicate of revolving loans, in this case the fund-providing institutions commit to lending the borrower a specified amount of money over a specified period of time. Syndicate loan main theme In a syndicated term loan, the credit is syndicated to a…

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