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Para Banking & Financial Services Proved By Banks
What is the meaning of 'para banking' activities?
Para banking refers to financial services offered by banks that go beyond traditional banking activities such as accepting deposits and lending, including services like insurance, mutual funds, and merchant banking.
What is the definition of non-fund-based para banking services?
Services not involving direct lending, like guarantees and letters of credit.
Which RBI guideline governs banks' entry into insurance business?
RBI guidelines permit banks to undertake insurance business either as corporate agents, brokers, or through joint ventures, subject to conditions laid down in the Banking Regulation Act and RBI circulars.
What is a letter of credit (LC) and under which category of banking does it fall?
A payment guarantee instrument classified under non-fund-based para banking.
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