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Understanding ETFs Uses, Returns and Comparison with Mutual Funds and Stocks

 Exchange-Traded Funds (ETFs) have gained popularity among investors for their unique features and benefits. In this blog, we'll explore the uses of ETFs, their potential returns, how they differ from mutual funds and stock investments, and their safety profile. What is an ETF? An ETF is a type of investment fund that trades on stock exchanges, much like individual stocks. It holds a collection of assets, such as stocks, bonds, or commodities, and aims to track the performance of a specific index, sector, or asset class. Uses of ETFs Diversification : ETFs allow investors to gain exposure to a wide range of assets without having to purchase each individually. For instance, an ETF tracking the S&P 500 gives you exposure to 500 different stocks, reducing the risk associated with individual stock investments. Cost Efficiency : ETFs often have lower expense ratios compared to mutual funds. They typically pass on lower management costs to investors since they are often passively man
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Loan Restructuring & Willful defaulter

Benchmark Parameter for Restructuring 

  • Viability - Within 5 Years
  • Repayment - Within 10 Years
  • Promoter Contribution - 20%  

Classification 

Additional Loan - Remain Standard for One Year
Existing Loan - Upgraded to Standard category after regular repayment for 1 year


Willful Defaulter - RBI Guidelines (Based on Kohli Comittee)
One who has defaulted in loan payment and 
1) he has the the capacity to pay the loan or
2) loan used for different purpose
3) fund used for unrelated to the business (Shiphon-Off)
4) unauthorized sale of loan security
 
Committee headed by ED in a bank declares willful defaulter after giving an opportunity to the borrower and he gets 15 days to respond.

CMD has to review before declare of willful defaulter

If loan amount is greater than or equal to 25 lac,  report has to made to all credit information companies for suit filed. 

If loan amount is less than 25 lac, reporting to Credit Information companies is not required.

Action by Other Bank of Willful Declaration 
1. No Additional Loan
2. No Loan to new project of defaulter for 5 years

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