1. KRISHNA PRASAD GWACHHA
USES OF FUND
PREPARED BY
KRISHNA PRASAD GWACHHA
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12. LOAN AND ADVANCES
Loans and advance is one of the main products of the bank through which the banks make interest incomes.
The sum of the outstanding amount of all loans and advances extended to the customers as well as bills purchased and discounted less the amount of Loan Loss Provisioning shall be exhibited.
Loan to employees provided according to the Employees Byelaws of the licensed institution shall be exhibited under "Other Assets" of the Balance Sheet and not under this head.
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13. CREDIT PRODUCTS AND THEIR FEATURES
ON THE BASIS OF PURPOSE
Consumer loan:
Business Loan:
ON THE BASIS OF BORROWERS NEEDS
Short term loan:
Long term Loan:
ON THE BASIS OF SECURITY NEEDS:
Secured Loan:
Unsecured Loan:
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14. CREDIT PRODUCTS AND THEIR FEATURES
ON THE BASIS OF NATURE OF ACCOUNTS:
Term Loan:
Overdraft Loan:
ON THE BASIS OF FUND:
Funded Loan:
Non Funded Loan:
OTHERS:
(home loan, equipment loan, land purchase loan, consortium loan, SME loan, agricultural loan, auto loan, educational loan, hypothecation loan, margin lending, gold loan, loan against fixed deposit etc.)
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15. INTERBANK LENDING
The banks lend to each other in large volumes at low cost for periods ranging from overnight to a few months.
These interbank loans are the marginal source of funds for many banks.
Even for banks that are mostly funded by deposits, interbank loans may be a critical source of additional funds.
Interbank lending contributes greatly to the efficiency of banking and of financial markets generally.
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16. INTERBANK LENDING
It helps satisfy temporary, localized excess demand for funding liquidity that is needed for the smooth function of other financial markets.
Confidence in their trading partners usually allows banks to lend to each other even without collateral.
The market for interbank lending helps deliver funding liquidity to the banks that need it that day or week, and allows banks with a temporary excess of cash to invest it reliably.
The market is large and active.
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17. MAINTAINING RESERVE
1. Cash Reserve Ratio (CRR): Cash reserve ratio is the minimum amount of cash required to be placed/deposited at central bank.
The licensed banks and financial institution of classes 'A', 'B' and 'C' shall have to maintain the cash reserve ratio (CRR) at the rate 6%, 5%, and 4% of total deposits respectively.
The average CRR maintained by the commercial banks in the review year is percent.
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18. 2. Statutory Liquidity Ratio
Statutory liquidity ratio (SLR) is the minimum amount of liquid assets the bank has to maintain.
The licensed banks and financial institution of classes 'A', 'B‘ and 'C' shall have to maintain
the statutory liquidity ratio at the rate 12%, 9%, and 8% respectively.
The average SLR of the commercial banks in the review year is 25.27percent.
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19. INVESTMENT 1. MONEY MARKET INVESTMENT
Money market is the market where short term securities having the maturity of one year or less are traded.
It is used as a means investing for short term.
The investment in government securities such as development bond and Treasury bills shall be done for the purpose of maintaining SLR and managing returns and liquidity.
Dealers should ensure the benefit from the purchase of bond and Treasury bills.
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20. Quotation T-Bond Quotation Treasury Bill Quotation Rate Maturity M/Y
Bid
Asked
Change
Ask Yield
9 3 8
Feb 18
122:26
106:30
-16
8.56
Maturity
Days of maturity
Bid
Asked
Change
Ask Yield
Aug 29, 2017 90
5.04
5.02
+0.02
5.17
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21. CAPITAL MARKET SECURITIES
Capital market securities are the security having the maturity period of more than one year.
Capital market provide for the buying of long term debt and equity. This type of market is composed of both the primary and secondary markets.
Bank shall make the long term investment in capital market instruments such as government bond, corporate bond or debenture, preferred shares, and equity shares.
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22. Thank You!!
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