Frequently Asked Questions (FAQ)
Mortgage is a legal agreement by which a bank or an institution lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt
Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.
- Arbitration is often faster than litigation in court
- Arbitration can be cheaper and more flexible for businesses
- Arbitral proceedings and an arbitral award are generally non-public, and can be made confidential
The term "mediation" broadly refers to any instance in which a third party helps others reach agreement. More specifically, mediation has a structure, timetable and dynamics that "ordinary" negotiation lacks. The process is private and confidential, possibly enforced by law. Participation is typically voluntary.
Conciliation is an alternative out-of-court dispute resolution instrument.Conciliation is a voluntary proceeding, where the parties involved are free to agree and attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to define the time, structure and content of the conciliation proceedings.
- Conciliation ensures party autonomy
- Conciliation ensures the expertise of the decision maker
- Conciliation is time and cost efficient
A financial instrument is the one that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date. A promissory note typically contains all the terms pertaining to the indebtedness by the issuer or maker to the note's payee, such as the amount, interest rate, maturity date, date and place of issuance, and issuer's signature.
The Holder in Due Course (HDC) doctrine is a rule in commercial law that protects a purchaser of debt, where the purchaser is assigned the right to receive the debt payments. The doctrine insulates the purchaser of debt, or other obligation to pay, against charges that either party to the original transaction might have had against the other.
Banker’s lien is an enforceable right of a bank to hold in its possession any money or property belonging to a customer and to apply it to the repayment of any outstanding debt owed to the bank, provided that, to the bank's knowledge, such property is not part of a trust fund or is not already burdened with other debts.
The name "letter of credit" derives from the French word "accréditation", a power to do something, which derives from the Latin "accreditivus" meaning trust. A letter of credit is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met. In the event that the buyer is unable to make payment on the purchase, the bank will cover the outstanding amount.
A one-time settlement scheme for recovery of NPAs is proposed which is required to be implemented by all public sector banks. These guidelines will provide a simplified, non-discretionary and non-discriminatory mechanism for one-time settlement of chronic NPAs in the SME sector.
Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. As burgeoning court queues, rising costs of litigation, and time delays continue to plague litigants, more states have begun experimenting with ADR programs.
A financing method in which a business owner sells accounts receivable at a discount to a third-party funding source to raise capital. One of the oldest forms of business financing, factoring is the cash-management tool of choice for many companies. Factoring is not a loan; it does not create a liability on the balance sheet or encumber assets.
A pledge is a bailment that conveys possessory title to property owned by a debtor (the pledgor) to a creditor (the pledgee) to secure repayment for some debt or obligation and to the mutual benefit of both parties. The term is also used to denote the property which constitutes the security. A pledge is type of security interest.
A formal assurance (typically in writing) that certain conditions will be fulfilled, especially that a product will be repaired or replaced if not of a specified quality.
- An undertaking to answer for the payment or performance of another person's debt or obligation in the event of a default by the person primarily responsible for it.
- Provide a formal assurance, especially that certain conditions will be fulfilled relating to a product, service, or transaction.
Promise with certainty.
A legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination of the good being carried. The bill of lading also serves as a receipt of shipment when the good is delivered to the predetermined destination.
Lok Adalat is a system of alternative dispute resolution developed in India. It roughly means "People's court". India has had a long history of resolving disputes through the mediation of village elders. The system of Lok Adalats is a success of democracy and is a most up-to-date and cheap method of providing justice at your doorstep.
Banking Ombudsman is a quasi judicial authority functioning under India's Banking Ombudsman Scheme, and the authority was created pursuant to the a decision by the Government of India to enable resolution of complaints of customers of banks relating to certain services rendered by the banks.
Reserve Bank of India has introduced, in a phased manner, prudential norms for income recognition, asset classification and provisioning for the advances portfolio of the banks so as to move towards greater consistency and transparency in the published accounts.