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Bad bank- a lantern at the end of a Tunnel

Securitization is an aspect of asset reconstruction. The recent budget exuded a sense of amelioration by hinting at establishing a “Bad Bank @ Asset Reconstruction Company” Modus Operandi of an Asset Reconstruction Company (ARC) ARCs purchase bad loans at deep discounts. The bank transfers its right to receive interest, principal, collaterals et al to theContinue reading “Bad bank- a lantern at the end of a Tunnel”

Growth & inflation – two sides of the same coin

Liquidity in the economy is a double-edged sword. Policy makers stimulate growth, as well as arrest inflation using it. The expected results are to be achieved by sustaining the abundance / crunch in liquidity. The initiative starts with printing more currency notes; bond buybacks & Long-Term Repo Operations (LTRO) are frequently used methods to infuseContinue reading “Growth & inflation – two sides of the same coin”

Chronicles of gold rally

Yellow Metal (aka ‘gold’) is lucrative, lustrous, an electrical conductor, malleable and a safe haven. The list is not exhaustive. Given the current circumstance, the price of the yellow metal continues to remain bullish, subject to moderate corrections. Gold has seldom failed in maintaining its store of value. Lets ponder a bit on the rationaleContinue reading “Chronicles of gold rally”

A deep dive into Special Drawing Rights (SDR)

Rupee’s performance since 2020 has not been encouraging. The domestic currency has depreciated about 6%. Incumbent, it hovers in 74-76 ball park. In line with the principles of managed floating exchange system – RBI intervenes only in days of acute volatility. Theoretically the exchange rate system is trifurcated. Fixed, floating & managed floating system ofContinue reading “A deep dive into Special Drawing Rights (SDR)”

Swiss Challenge – an innovative bidding

A system which entails an appropriate price for an object is an ‘auction’. Auctioning methods have under gone radical change over the years. Inter alia ‘Request for proposals’ / ‘Public private partnership’ / ‘Swiss-challenge’ methods are popular incumbent methods used for government projects. What’s Swiss Challenge? Swiss challenge is a sophisticated method of bidding, comprisingContinue reading “Swiss Challenge – an innovative bidding”

Floating rate bonds: a sophisticated version of inflation indexed bonds

A pall of eclipse glossed one of the secured investment abodes in India on 28th May 2020. RBI announced subscription cessation of its 7.75% Savings bonds w.e.f 28th May 2020. Such bonds were the only respite available to investors, then. Whilst, deposit rates  were edging decade low trajectories. It was widely anticipated, that the schemeContinue reading “Floating rate bonds: a sophisticated version of inflation indexed bonds”

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