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”

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)”

Upended Indian ratings at Baa3

 With the recent downgrade of India’s rating from Baa2 to Baa3 tethered with a negative countenance, the incumbent economic impasse has exacerbated the pressures. In fact, gravity has acted with vigor on the ratings of several other economies. The revered largest economy was downgraded for the maiden time by S&P (Standard & Poor) from AAAContinue reading “Upended Indian ratings at Baa3”

Deceptive prominence of annualised yield

Have you come across “annualised yield” in FD (Fixed deposit) advertisements? A granular search for the term would make you find it, at the bottom of the notice, printed in miniature font. Lets’ ponder on what is deceiving with the term’s usage in advertisements. Annualised Yield draws its foundation from the concept of compounding. So,Continue reading “Deceptive prominence of annualised yield”

An insight about Laffer curve & tax rates

Laffer curve suggests that increasing the tax rate beyond a threshold, does not fructify the thirst to mobilize higher revenues. What’s a Laffer curve? Laffer curve portrays tax revenue in relation to tax rates. Visualize a miniature crack in greater heights of a reservoir filled until its brim. As the miniature crack develops, the reservoirContinue reading “An insight about Laffer curve & tax rates”

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