The report mentions three trends that supported banks finances while the economy was in a difficult situation.
Trend 1
Gilt funds are low-yield investments that carry very low risk.
Trend 2
Bank spread is the difference between the interest rate that a bank charges a borrower and the interest rate a bank pays a depositor.
Trend 3
How did NBFCs and the Government act during the pandemic?
What needs to be done?
Special Mention Account (SMA) mentions borrowers defaulting timely payment of his debt obligations, though the account has not yet been classified as NPA as per the extant RBI guidelines.
Loans vs. Advances
- Money provided by the bank to entities for fulfilling their short term requirements is known as Advances.
- Loans can be secured or unsecured whereas Advances are secured by an asset or by a guarantee from a surety.
Reference