The Satisfaction Academy

Banking Basics RBI: The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the RBI Act, 1934. RBI was nationalized in 1949 and it is fully owned by the Government of India. RBI was established on the recommendation of the Hilton Young Commission. RBI’s FUNCTIONS: 1. Issue of currency notes 2. Controlling the monetary policy 3. Regulator and supervisor of the financial system 4. Banker to other banks 5. Banker to the government 6. Granting licenses to banks 7. Control over NBFIs (Non Banking Financial Institutions) 8. Manager of Foreign Exchange of India (also known as FOREX) RBI & Monetary Policy: Monetary policy refers to the use of instruments under the control of the central bank to regulate the availability, cost and use of money and credit. The main objectives of monetary policy in India are: Maintaining price stability Ensuring adequate flow of credit to the productive sectors of the economy to support eco...

1.Net Working Capital Formula : NWC = CURRENT ASSETS - CURRENT LIABILITY The formula for net working capital (NWC), sometimes referred to as simply working capital, is used to determine the availability of a company's liquid assets by subtracting its current liabilities. Use of Net Working Capital Formula Net working capital is used in various other financial formulas that deal with cash flows. Examples of these formulas include the free cash flow to equity formula and free cash flow to firm formula. In the formula for free cash flow to equity, the change in net working capital is subtracted. An increase in net working capital is considered a negative cash flow and not available for equity. In other words, an increasing requirement for capital for short term operations in the company is not available to equity. The variables of the net working capital formula are the same as those used in the current ratio. The current ratio formula instead divides current assets...