BANKING AFFAIRS

Detailed explanation-1: -3. Considering the progress made by PBs in furthering financial inclusion and with the objective of giving more flexibility to the PBs, it has been decided to enhance the limit of maximum balance at the end of the day from ₹1 lakh to ₹2 lakh per individual customer of PBs with immediate effect. 4.

Detailed explanation-2: -A legal lending limit is the most a bank or thrift can lend to a single borrower. The legal limit for national banks is 15% of the bank’s capital. If the loan is secured by readily marketable securities, the limit is raised by 10%, bringing the total to 25%.

Detailed explanation-3: -The lending limit code signifies that a financial institute might not issue a loan to an individual borrower for beyond 15% of the capital and surplus of the institution. This is the basic standard and needs the institution to follow surplus and capital levels that are also operated under the federal law.

Detailed explanation-4: -2.2 In accordance with these guidelines, the working capital requirement is to be assessed at 25% of the projected turnover to be shared between the borrower and the bank, viz. borrower contributing 5% of the turnover as net working capital (NWC) and bank providing finance at a minimum of 20% of the turnover.