Recap Daily Points – January 2025

 

                               The Banking Tutor                                    

Recap Daily Points  – January 2025

 

1935. BEPS

BEPS stands for Base Erosion and Profit Shifting. It refers to a corporate tax planning strategy used by multinationals to move profits from higher-tax jurisdictions to lower-tax or no-tax locations. This can be done by eroding tax bases through deductible payments like royalties or interest.

 

1936. Difference between NPAs and Stressed Assets

Stressed Assets - It is a broader term and comprises of NPAs, restructured loans and written off assets.

NPAs (Non-performing Assets) - A loan whose interest/instalment for more than 90 days.

Restructured Loans - assets/loans which have been restructured by giving a longer duration for repayment, lowering interest or by converting them to equity.

Written off Assets - assets/loans which aren’t counted as dues. They are compensated through some other way.

 

1937. Peer-To-Peer Lending (P2P)

It is a method of debt financing that enables individuals to borrow and lend money - without the use of an official financial institution as an intermediary.

 

1938. BCTT (Banking Cash Transaction Tax)

BCTT is a type of tax that was levied on cash transactions above a specified limit by an individual or HUF from any non-saving account of a scheduled bank in a single day. The tax was first introduced in 2005 under the Finance Act, 2005. It was later rolled back from 1 April, 2009.

1939. Safeguard Duty

The government extended the safeguard duty on steel import to March 2018 in order to protect the domestic manufacturers.

It is another duty levied in order to protect the domestic industry.

However, it is done so after an enquiry and when the government is satisfied that the concerned good when imported in large quantities or at cheap price will affect the domestic industry.

 

1940. Intellectual Property Rights (IPR)

Intellectual Property Rights are the rights given to a creator over the use of his creations. It is aimed at incentivizing creativity and innovation.

 

1941. Vulnerable Employment

As per ILO, vulnerable employment covers the own account workers and unpaid family workers.

 

1942. Teaser Loan

Teaser home loans are offered at a fixed low rate of interest in the initial years and are subsequently adjusted to a higher floating rate for the rest of their tenure.

Teaser loans try to entice borrowers by offering an artificially low rate and small down payments, claiming that borrowers should be able to refinance before the increases occur.

 

1943. Fair wages

Fair Wage is a mean between living wages and minimum wages, which may roughly be said to approximate to the need based. 

 

1944. Secrecy jurisdictions

Secrecy jurisdictions are locations that have laws and structures that promote secrecy and allow people to evade laws and regulations. These jurisdictions can be used for illegal activities like money laundering, tax evasion, and funding terrorism. Some examples of secrecy jurisdictions: Switzerland, Luxembourg, British Virgin Islands, Singapore, and South Dakota

 

1945. Living Wage: A "living wage" refers to a threshold that allows workers and their families to have decent living standards. Location-specific living wage standards usually identify a minimum amount of money required to cover food, basic non-food items and other discretionary expenditures.

 

1946. Land Bank

Land bank is a pool of land which allows government to offer land to investors without waiting for the process of land acquisition.

 

1947. Eco-mark

It is a voluntary labelling scheme for easily identifying environment friendly products.  The scheme was launched by the Ministry of Environment and Forests.

 

1948. Pro-cyclical Lending

In business cycle theory & finance, any economic quantity that is positively correlated with the overall state of the economy is said to be procyclical. A 'procyclical lending’ means that the banks keep the lending rates low & reduce buffers during an economic boom and therefore, promote increase in the credit uptake. Similarly, they lend less during a recession. 

 

1949. Counter-cyclical Lending

Any economic quantity that is negatively correlated with the overall state of the economy is said to be countercyclical. Under ‘countercyclical lending’, banks tend to maintain higher buffers during the period of boom, limit lending and thus ‘cool down’ the economy and stimulate the economy when it is in a downturn.

While there is an opportunity cost in following a countercyclical policy (in not lending more while there are reserve funds), it prepares the market well for the future declines.

 

1950. Inverted Duty Structure (IDS)

It implies a situation where import duty on finished goods is low compared to the import duty on raw materials that are used in the production of such finished goods.

 

1951. Freight Village

A freight village is a defined area within which all activities relating to transport, logistics and the distribution of goods, both for national and international transit, are carried out by various operators.

 

1952. Elephant Bonds

An advisory group to GOI has suggested issuance of ‘Elephant Bonds’.

Elephant Bonds would be sovereign bonds issued for a period of 25 years in which people declaring undisclosed income will be bound to invest 50 per cent, similar to an amnesty scheme.  These funds will be utilized only for infrastructure projects.

 

1953. Cabotage

In shipping, cabotage is the transportation of passengers or goods between two places in the same country by a vessel registered in another country. The term comes from the French word caboter, which means "going from port to port".

 

1954. Consol Bonds

A consol bond, also known as a "perpetual bond" or "prep," isa fixed income security with no maturity date.

 

1955. Negative Yield Bond

Negative Yield Bond are debt instruments that offer to pay the investor a maturity amounts lower than the purchase price of the bond.

 

1956. Tab Banking

Tab banking, or tablet banking, is a service that allows customers to open bank accounts or access financial services at their home or office using a tablet. Tab banking is designed to be paperless, efficient, and digitally driven.

 

1957.  Outplacement

Outplacement is any service that assists a departing employee with obtaining a new job or transitioning to a new career. Access to outplacement services is offered by some employers as an employee benefit for their staff.

 

1958. Hard to Abate Industries

The industries—steel, power, chemical, cement and refining to name a few—are considered hard to abate, meaning it's difficult to lower their greenhouse gas emissions. This also means they will need creative solutions in order to decrease their carbon intensity. 

 

1959. eShram portal

Ministry of Labour & Employment has developed eShram portal for creating a National Database of Unorganized Workers (NDUW), which will be seeded with Aadhaar.

 

1960. eAwas

The Indian government launched GPRA to offer affordable housing solutions to its employees. While e-Sampada is an online portal to allocate residential units to eligible candidates, e-Awas is the primary software handling the entire process of online house allotment. The primary objective of this software is to facilitate hassle-free, corruption-free, fair, transparent, and paperless house allotments to eligible government employees.

 

1961. e-HRMS envisions to facilitate data-driven decisions for training and personnel management. It would help the Government to digitally manage the service matters of officials leading to reduction in transaction time and cost, availability of digital records, dashboards for Management Information System, real time monitoring of manpower deployment as well as serving as a productivity enhancement tool amongst others. It is, thus, also aimed to help cadre management with less manual interface.

 

1962. e-Sampada site

The Department of Housing and Urban Affairs launched the e-Sampada site in 2020 to centralise the process of reserving government-provided housing and real estate services

 

1963. e-Samridhi portal

The e-Samridhi portal which was launched in 2023 for registration of farmers to avail MSP benefits. The portal was launched through the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED)

 

1964. The 4 T's of Risk Management are Tolerate ; Terminate Treat and Transfer

 

1965. Operational Risk

 Operational risk is the risk of loss resulting from many normal aspects of business. This includes the risk of loss caused by failed processes, unskilled employees, inadequate systems, or external events. In many ways, operational risk can't be avoided as it is part of the daily business activity of a company. In other ways, companies can seek to reduce, mitigate, or accept operational risk. 

TBT Team

01-02-2025                                                                                +91 94406 41014