Management of Financial Institutions (EDL 406)-Semester IV

Management of Financial Institutions (EDL 406)-Semester IV


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1st Module Assessment

Case Study

 # Lendingkart to offer its credit risk analytics software to financial institutionsLendingkart, an online lender to small and medium enterprises (SMEs), will offer its credit risk analytics software as a service for other financial institutions in 2018, and aim to double its reach in the next six months, a top company executive said.“We plan to offer our analytics technology to other NBFCs (non-banking financial companies) and financial institutions sometime in 2017,” said Lendingkart’s co-founder Harshvardhan Lunia in a telephonic interview. “We aim to increase our reach across various credit product, geography and customer segments by monetizing our data analytics and credit scoring platform, which other lenders can use to evaluate the credit worthiness of the borrowers…Also, it will help us to disburse more loans without increasing our book size thus, increasing returns of assets for us,” Lunia added in an email response.Since its inception in 2014, the online NBFC, Lendingkart Finance Ltd has disbursed 7,000 loans to SMEs in over 450 cities. The company expects this number to cross 10,000 covering over 800 cities in next six months. Lendingkart Finance and Lendingkart Technologies Pvt. Ltd are part of the Lendingkart Group. Lendingkart Technologies has built analytics software to evaluate borrowers’ credit worthiness.Founded by Lunia and Mukul Sachan, Lendingkart underwrites working capital loans online to SMEs, which have an annual turnover of Rs12 lakh to Rs1-1.5 crore. On an average, these SMEs are lent Rs5.5-6 lakh at an annualized interest rate ranging between 16% to 24%, for a duration of six to 12 months. Lendingkart claims to have a loan application approval rate of 22-23%. The credit risk analytics technology analyses the borrower or an SME on the basis of over 2200 variables and data points, which includes industry type, business cash-flows and transactions, income tax return filings of the business, its previous loan and repayment records, among others. This is the technology that Lendingkart plans to share with other financial institutions.Lunia explains there are two possible ways in which it could monetize this service. “Using our (risk analytics) technology, we could co-lend with other financial institution in cases where SMEs have larger (capital) needs. The other way is that we charge (the financial institutions) for using our technology,” he said. However, Lunia added that it is too soon to forecast how much revenue Lendingkart will earn from its technology.Lendingkart, which has 350 employees across offices in Ahmedabad, Bengaluru and Mumbai, has raised over $40 million from Betelsmann India Investment, Darrin Capital Management and Mayfield India, among other investors. The fintech company competes with Bengaluru-based Capital Float (Zen Lefin Pvt. Ltd), Instakash Technlogies Pvt. Ltd, Neogrowth Credit Pvt. Ltd, IndiaLends (GC Web Ventures Pvt. Ltd), among others.In May, Capital Float raised $25 million (Rs170 crore) in an investment round led by US-based Creation Investments. In August, Mumbai-based NeoGrowth raised Rs15 crore from Frontier Investments Group and IndiaLends raised about Rs6.5 crore from DSG Consumer Partners, Siddharth Parekh and other angel investors.

Question 1. According to case, the Lendingkart Finance Ltd has disbursed almost ………… loans.

 a. 70,000

 b. 700

 c. 450

 d. 7000

Question 2. AS per the case Lendingkart offered its services in 2018 primarily to ……………… .

 a. MNCs

 b. SMEs

 c. Large Sized Companies

 d. Entrepreneurs

Question 3. AS per the case, Lendingkart’s main target to tap which type of industry as its new business plan?

 a. 3

 b. 9

 c. 6

 d. 12

Question 4. Lendingkart claims to have a loan application approval rate of ………… percent.

 a. 16

 b. 18

 c. 19-20

 d. 22-23

Question 5. Lendingkart company has planned to double its targerts in next ?????.. Months.

 a. 3

 b. 6

 c. 9

 d. 12

Question 6. NBFCs stands for Non Banking ………….. Companies.

 a. Future

 b. First Cash

 c. Finance

 d. Fastest Growing

Question 7. The credit risk analytics technology analyses the borrower or an SME on the basis of over ………. variables.

 a. 1000

 b. 2000

 c. 3000

 d. 4000

Question 8. What’s the Employee strength of the Lendingkart?

 a. 300

 b. 350

 c. 260

 d. 170

Question 9. Which software has been built by Lendingkart Technologies ……………. software to evaluate borrowers’ credit worthiness.

 a. Sustainable

 b. Super

 c. Lenskart

 d. Analytics

Question 10. Who are the promoters of Lendingkart?

 a. NBFCs

 b. SMEs

 c. Lunia and Mukul

 d. Investors

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2nd Module Assessment

Case Study

Case: Marketing Mix in Banking

Promotion mix includes advertising, publicity, sales promotion, word – of – mouth promotion, personal selling and telemarketing. Each of these services needs to be applied to different degree. These components can be useful in the banking business in the following ways:

Advertising is paid form of communication. Banking organizations use this component of the promotion mix with motto of informing, sensing and persuading the customers. While advertising it is essential to be aware of key decision making areas so that instrumentally helps banks at micro and macro levels.

Finalizing the budget:

This is related to the formulation of the budget for advertisement. The bank professionals, senior executives and even the policy planners are found to be involved in the process. The business of a bank determines the scale of the advertisement budget. In addition, the intensity of competition also plays a decisive role since in the majority of cases; we find a increase in the budget due to a change in the competitor’s strategy.

Selecting a suitable vehicle:

There are a number of devices to advertise, such as broadcast media, telecast media and print media. In the face of the budgetary provisions, it is necessary to select a suitable vehicle. For promoting the banking business, the print media is found to be economic as well as effective.

Making possible creative:

The advertising professionals bear the responsibility of making the appeals, slogans and messages more creative. Here, creative means making the advertisement programs distinct to the competitive organizations, which are active in influencing the impulse of the customers and successful in informing and sensing the customers. This requires an in-depth knowledge of the receiving capacity of the target market for which the advertisements are designed.

Testing the effectiveness:

It bears an analogous significance that our advertisements are effective in influencing the impulse of customers by energizing persuasion. For making the process effective, it is essential to test the effectiveness before launching of the commercial advertisements.

An instrumentality of branch managers:

At micro level, a branch manager bears the responsibility of advertising locally so that the messages reach the target audience.

Characters and themes:

At apex level it is also important that while advertising the senior executives watch the process minutely and select events, characters having a regional orientation. The popular characters and sensational moments are likely to be impact generating. The theme for appeals and messages also needs due attention. Of course, they have a legitimate right of advertising but it is not meant that like the goods manufacturing organizations, the service generating organizations also start making invasion on culture. It is necessary to regulate a bias to gender, profession, region or so.

Public relations:

In the banking services the effectiveness of public Relations is found in high magnitude. It is in this context that difference is found in designing of the mix for promoting the banking services.


The telemarketing is a process of promoting the business with the help of sophisticated communication network. Telemarketing is found instrumental in advertising the banking services and the banking organizations can use this tool of the promotion mix both for advertising and selling. This minimizes the dependence of banking organizations on sales people and just a counter or center as listed in the call numbers may service multi- dimensional services.

Telemarketing is likely to play an incremental role in marketing the banking services. The leading foreign banks and even some of the private sector commercial banks have been found promoting telemarketing and they have been getting positive results for their efforts.


Much communication about the banking services actually takes place by word- of- mouth information, which is also known as word- of- mouth promotion. Oral publicity plays an important role in eliminating the negative comments and improving the services. This also helps the banker to know the feedback, which may simplify the task of improving the quality of services. This component of promotion mix is not to influence budget adversely or generate additional financial burden. By improving the quality of services and by offering small gifts to the word- of- mouth promoters, bankers can get more business command in their area.

The above facts make it clear that such kind of promotion is influenced by a number of factors. The most dominating factor is the quality of services offered. The bank professionals, the frontline staff and the senior executives should realize that degeneration in quality would make this tool effective.

Question-1: ………….is likely to play an incremental role in marketing the banking services

 a. Telemarketing

 b. Radio

 c. Television

 d. Posters and banners

Question 2. Advertisement are considered effective when they?..

 a. Energize persuasion

 b. Cost effective

 c. Increase profit

 d. Both option B and Option C

Question 3. In the banking services the effectiveness of??. is found in high magnitude

 a. Cost

 b. Slogans

 c. Profit

 d. Public Relations

Question 4. Promotion mix includes advertising, publicity, sales promotion, word ? of ? mouth promotion ???.

 a. Telemarketing

 b. Personal selling

 c. Both option A and option B

 d. Neither option A nor option B

Question 5. What determines the scale of the advertisement budget.?

 a. Customers

 b. Sales

 c. Profit

 d. Business

Question 6. What is more important for advertisement professionals while making the advertisement programs.?

 a. Appeals

 b. Slogans

 c. Creativity

 d. Cost effective

Question 7. What plays an important role in eliminating the negative comments and improving the services?.

 a. Informing, sensing and persuading the customers

 b. Telemarketing

 c. word- of- mouth promotion

 d. Telecast media

Question 8. Which device of advertisement is economic as well as effective.?

 a. Radio

 b. Print media

 c. Telecast media

 d. Broad cast media

Question 9. Who bears the responsibility of advertising locally.?

 a. Senior manager

 b. Branch manager

 c. sales manager

 d. Area manager

Question 10. Why organizations use advertisement.?

 a. Informing, sensing and persuading the customers

 b. Informing, selling and persuading the customers

 c. Informing, publicity and promotion

 d. Both option B and Option C

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3rd Module Assessment

Case Study

Global Depository Receipt (GDR) :

Issues and ProspectsGlobal Depository Receipt (GDR) is an instrument in which a company located in domestic country issues one or more of its shares or convertibles bonds outside the domestic country. In GDR, an overseas depository bank i.e. bank outside the domestic territory of a company, issues shares of the company to residents outside the domestic territory. Such shares are in the form of depository receipt or certificate created by overseas the depository bank.Issue of Global Depository Receipt is one of the most popular ways to tap the global equity markets. A company can raise foreign currency funds by issuing equity shares in a foreign country. A company based in USA, willing to get its stock listed on German stock exchange can do so with the help of GDR. The US based company shall enter into an agreement with the German depository bank, who shall issue shares to residents based in Germany after getting instructions from the domestic custodian of the company. The shares are issued after compliance of law in both the countries. The mechanism of GDR is understood with the help of following example – The domestic company enters into an agreement with the overseas depository bank for the purpose of issue of GDR. The overseas depository bank then enters into a custodian agreement with the domestic custodian of such company. The domestic custodian holds the equity shares of the company.On the instruction of domestic custodian, the overseas depository bank issues shares to foreign investors.The whole process is carried out under strict guidelines. GDRs are usually denominated in U.S. dollars. Let’s now look at the advantages and disadvantages of Global Depository Receipt.ADVANTAGES OF GDRThe following are the advantages of Global Depository Receipts:•         GDR provides access to foreign capital markets.•         A company can get itself registered on an overseas stock exchange or over the counter and its shares can be traded in more than one currency.•         GDR expands the global presence of the company which helps in getting international attention and coverage.•         GDR are liquid in nature as they are based on demand and supply which can be regulated.•         The valuation of shares in the domestic market increase, on listing in the international market.•         With GDR, the non-residents can invest in shares of the foreign company.•         GDR can be freely transferred.•         Foreign Institutional investors can buy the shares of company issuing GDR in their country even if they are restricted to buy shares of foreign company.•         GDR increases the shareholders base of the company.•         GDR saves the taxes of an investor. An investor would need to pay tax if he purchases shares in the foreign company, whereas in GDR same is not the case. DISADVANTAGES•         The following are the disadvantages of Global Depository Receipts:•         Violating any regulation can lead to serious consequences against the company.•         Dividends are paid in domestic country’s currency which is subject to volatility in the forex market.•         It is mostly beneficial to High Net-Worth Individual (HNI) investors due to their capacity to invest high amount in GDR.•         GDR is one of the expensive sources of finance. ConclusionGDR is now one of most important source of finance in today’s world. With globalization, every company is willing to expand its wings. GDR makes it possible for such companies to reach and tap international markets. GDR provides companies in emerging markets with opportunities for rapid growth and development.

Question1. Dividends are paid in the domestic country’s currency.

 a. TRUE


 c. Sometimes

 d. Always

Question 2. Does GDR provides access to foreign capital markets.

 a. Yes

 b. No

 c. Sometimes

 d. Never

Question 3. GDR are ????… in nature as they are based on demand and supply which can be regulated.

 a. Solid

 b. Exchange

 c. Liquid

 d. Cash Equal

Question 4. GDR is one of the ????? sources of finance.

 a. Vital

 b. Significanct

 c. Cheap

 d. Expensive

Question 5. GDR saves the taxes of an investor.

 a. TRUE

 b. Sometimes

 c. Never


Question 6. GDRs are suitable for ???????..

 a. Indians

 b. Chineese

 c. Foreigners

 d. Australians

Question 7. HNI stands for High Net-Worth ???????.. .

 a. Indians

 b. Indications

 c. Invoices

 d. Individuals

Question 8. Is it right to say that GDR can be freely transferred.


 b. TRUE

 c. Sometimes

 d. Never

Question 9. Issue of Global Depository Receipt is one of the most popular ways to tap the global ??????? markets.

 a. Bonds

 b. Equity

 c. Loans

 d. Debentures

Question 10. Under GDRs, whar are issued?

 a. Shares

 b. Notes

 c. Cheques

 d. Invoices

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4th Module Assessment

Case Study

Competition in the Insurance Sector

A simple way to get a sense of competition in the insurance sector is to look at aggregation sites like ( or for example). You will get 15-20 quotes for a query about vehicle insurance and as many if not more for other categories, such as life or health. Not so long ago, there were five Indian insurers, and each was entirely government owned. Today, the Insurance Regulatory and Development Authority lists a total of 24 life insurers, 33 general insurers, two re-insurers, and 17 health insurers. Most are private service providers, often with an overseas major partner. The opening up of the sector has meant vast improvements in terms of choices. This has also led to fraud in some cases, such as the notorious mis-selling of Unit Linked Insurance Plans or ULIPs in the early 2000s.

In the last year or so, the sector has seen the launch of multiple initial public offerings. The IRDA allowed insurers to tap the financial market only in August 2016, when it finalised the norms for making public issues, through which companies could list their stocks in the market for public investment. ICICI Prudential Life Insurance launched the first IPO in September 2016, within a month of IRDA’s go-ahead.

Numerous other companies have followed, including ICICI Lombard General Insurance, SBI Life and General Insurance Corporation to name a few. Just this month, the government-owned New India Assurance kicked off its IPO followed by HDFC Standard Life Insurance, which made its debut on the stock market on Friday after floating its IPO earlier this month. Each of these issues raised substantial sums. There are more primary issues from insurers in the pipeline, including from public sector units. The government wants to divest 25% in each of the insurers it owns, in several tranches, and it has started this process with the General Insurance Corporation and the New India Assurance IPOs. The stock market is booming, which means that the insurance sector might easily mop up Rs 35,000 crore or more through IPOs in this financial year.

Scope for growth

India is exceedingly under-insured by global standards. In the last financial year, insurance penetration reached 3.4% in India. The country accounts for less than 1.5% of all global premiums (by number) and just about 2% of life insurance premiums. But with close to 12% of global population, it can aim for a growth of at least six times in the sector. The gross premiums for general insurance (all kinds of insurance barring life, health and reinsurance) are reckoned to be about 0.8% of India’s GDP – that’s about one-third the global average of around 2.5% of the GDP.

Overall, insurance per capita is $13 for India and around $285 globally. India’s nominal per capita ($1,709 in 2016, according to World Bank Data) is also much lower than the global average per capita ($10,150). But even adjusting for that, India’s per-capita insurance cover is roughly one-fourth of what it could be. Hence, the Ministry of Commerce estimates that the Indian insurance sector could grow four times in the next decade, growing to $240 billion from its current size of $60 billion. Those estimates may not be out of line.

From a historical perspective, insurance has been the fastest-growing global industry over several centuries. The European voyages of exploration that opened up sea routes to Asia were generally backed by pioneering insurers. Marine insurance for ships and cargoes and agricultural insurance against crop failures – these were early risks covered in pre-industrial societies. By the 19th century, everything from new railway lines, to undersea telegraph cables and Chicago slaughterhouses were being insured. Modern commerce would be inconceivable without insurance cover for most big projects. Even factors like risks arising from political instability are covered by global insurers. offering a backstop to businesses that operate in volatile environments.

This business can be vastly profitable. A comparison of the insurance and banking sectors is illuminating. Banks borrow money at varied rates of interest and tenures. Some of those loans are demand deposits that can be redeemed anytime, as in savings accounts. Other loans have defined tenures for deposits. Insurers, on the other hand, receive premiums. For term insurance, which is the most common kind, customers pay a premium regularly and insurance companies need to pay up only if there is a valid claim. Even “money-back” premia on some life insurance policies carry very low interest or zero interest. Insurers, therefore, have access to long-term funds at nearly zero cost.

Banks have problems lending money out for longer than the average tenure of loans they have taken. Let us say the bulk of a bank’s funds consist of loans for tenures of one year or less (money people have put into fixed deposits or savings accounts). That bank cannot safely lend this for five-year tenures, since the creditors may want their money back. Hence, banks are always struggling to handle asset-liability mismatches, when the liabilities (loans taken) are short-tenure and profitable assets (or the loans given) are long-term.

Insurers do not have that problem. They can lend, or otherwise invest, for the very long-term. The world’s greatest investor, Warren Buffett, is also one of the world’s largest insurers. That is not coincidental. He has used his insurance funds wisely. Consider something like a toll-road project, a telecom network, or a power plant. These are capital-intensive works. These are also long-gestation – they take years to complete and earn zero revenue until they are ready. Once up and running, these projects may be highly profitable. Insurers can fund this sort of project with much greater comfort than banks.

Proceed with caution: The flip side of the equation: insurers earn a living by taking big bets that can blow up spectacularly. Usually, the premiums charged are a small fraction of the potential risk covered. One tsunami or super-cyclone that wipes out an entire coastline, or a disaster at a nuclear plant (or both), or even a military coup, might drive insurers into bankruptcy. Insurers offering crop insurance have to reckon with the possibility of seasonal droughts or floods that lead to claims across entire districts.

Hence, regulators demand that the promoters of insurance companies have plenty of their own skin in the game so as to be able to cover disasters. There are high equity and reserve requirements. That is one reason for insurers to raise cash through the equity market. So, how does one value an insurance company? This is not easy. You may have a sense of the premium growth potential or the breadth and efficiency of the marketing network, but it hard to get a sense of the risk. Public sector insurance companies are more exposed to risks because they are forced to offer highly-subsidised crop insurance or health covers. They are also often forced to invest in poor public sector assets, like bankrupt banks. As the industry gears up for a potential boom, citizens can tap into it by subscribing to insurance IPOs or buying into already-listed insurance companies. But this comes at high risk. And the old principle of caveat emptor – let the buyer beware – applies.

Question-1: As per case there are how many registered insurance companies in total.

 a. 64

 b. 74

 c. 84

 d. 57

Question 2. As per case, who is the largest insurer in the world.

 a. IRDA

 b. RBI

 c. Warren Buffet

 d. ICICI-Pru

Question 3. As per global standards, India is declared as ???..

 a. over Insurer

 b. Star Insurer

 c. Undr Insurer

 d. At Par

Question 4. India in the global premium received has how much percentage share?

 a. Less than 05%

 b. Above 10%

 c. Above 21%

 d. 25%

Question 5. Insurers have access to long-term funds at nearly ????..cost.

 a. Half

 b. Full

 c. Partial

 d. zero

Question 6. IPOs stands for ????. Public offer.

 a. Investment

 b. Indian

 c. Intrinsic

 d. Initial

Question 7. Most of the private insurers in India have taken partners from??.

 a. Overseas

 b. India

 c. US

 d. UK

Question 8. Overall, insurance per capita around globe is $ ???.

 a. 13

 b. 343

 c. 10,150

 d. 285

Question 9. The main problem of banks in India is to handle ???????.. Mismatch

 a. Asset

 b. Liability

 c. Both

 d. None

Question 10. ULIP plans are linked to ?????????. Market.

 a. Share

 b. Money

 c. Insurance

 d. Capital

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5th Module Assessment


Non-Banking Financial Companies (NBFC) are establishments that provide financial services and banking facilities without meeting the legal definition of a Bank. They are covered under the Banking regulations laid down by the Reserve Bank of India and provide banking services like loans, credit facilities, TFCs, retirement planning, investing and stocking in money market. However they are restricted from taking any form of deposits from the general public. These organizations play a crucial role in the economy, offering their services in urban as well as rural areas, mostly granting loans allowing for growth of new ventures.

NBFCs also provide a wide range of monetary advices like chit-reserves and advances. Hence it has become a very important part of our nation’s Gross Domestic Product and NBFCs alone count for 12.5% raise in Gross Domestic Product of our country. Most people prefer NBFCs over banks as they find them safe, efficient and quick in assisting with financial requirements. Moreover, there are various loan products available and there is flexibility and transparency in their services.

There are a huge number of NBFCs operating in our country but here’s a look at the current top 10 NBFCs in India. (Links to an external site.)

Power Finance Corporation Limited

Finance Corporation Limited was founded in 1986 and is a Navratna Status company. Mukesh Kumar Goel is the Chairman & Managing Director of the company. Power Finance Corporation Limited is known to provide financial assistance to different power projects in the country. It supports organizations involved in Power generation, transmission and distribution. The company is also listed in National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Shriram Transport Finance Company Limited

Transport Finance Company Limited focuses on funding commercial and business vehicles, besides others. The company was founded in 1979 and has been offering funding services for Light Duty Trucks, Heavy Duty Trucks, Mini Trucks, Passenger Vehicles, Construction Vehicles and Farm Equipments. The company’s specialisation is in general insurance, mutual funds, common assets, stock broking and general protection.

Bajaj Finance Limited

was founded in 2007 and is a unit of Bajaj Holdings and Investments. It offers loans to doctors for career enhancement, home loans, gold loans, individual Loans, business and entrepreneur loans and is an extremely popular finance company. Apart from these, Bajaj Finserv also provides services like wealth advisory, lending money and general insurance. It has over 1400 branches across the country with more than 20000 employees.

Mahindra & Mahindra Financial Services Limited

& Mahindra Financial Services Limited (MMFSL) was established in 1991 and has over 1000 branches, and a customer base of over 3 million, all over the country. MMFSL is one of the most renowned organizations and has two affiliates offering Insurance services and rural housing financial services. It also specialises in offering gold advances, vehicle advances, corporate advances, home credits, working capital advances and much more.

Muthoot Finance Ltd

Muthoot Finance Ltd is India’s first NBFC tracing its history back to 1888, when it began as a small lender from a village in Kerala. Muthoot Finance Ltd sanctions loans only against pledge of gold ornaments. It is a leader in India’s gold loan and finance market. Besides financing gold transactions, Muthoot Finance Ltd offers foreign exchange services, money transfers, wealth management services, travel and tourism services. Gold coins are also sold at Muthoot Finance Branches. The company has its headquarters in Kerala, India, and operates over 4,400 branches throughout the country.  It is also the parent company of Muthoot Housing Finance (India) Ltd, which offers home loans.

HDB Finance Services

HDB Financial Services is operated by India’s largest private sector HDFC Bank. It offers a variety of secured and non-secured financial loans through a network of more than 1,000 branches in 22 Indian states and 3 Union Territories. It provides secured and unsecured loans, including personal and business loans, doctor’s loans, auto loans, gold loans, new to credit loans, enterprise business loans, consumer durables loans, construction equipment loans, new and used car loans, equipment loans, and tractor loans. The company operates through Lending Business and BPO Services segments. It is considered the fastest growing NBFC in India today.


Cholamandalam Investment and Finance Company Limited (Chola), was incorporated in 1978 as the financial services arm of the Murugappa Group. Chola started as an equipment financing company and has surged ahead as a complete financial services provider offering all kinds of services like – vehicle finance, home loans, home equity loans, SME loans, investment advisory services, stock broking and a host of other financial services to customers. Chola has 725 branches across India with assets under management above INR 35,000 Crores.

Tata Capital Financial Services Ltd

Tata Capital Financial Services Limited is top of India’s leading NBFCs. Established in 2007, it is a subsidiary of Tata Sons Limited. TCFS describes itseld as a one-stop financial service provider that caters to the diverse needs of retail, corporate and institutional customers across businesses. It is registered with RBI as ‘Systemically Important Non-Deposit Accepting Non-Banking Financial Company (NBFC)’. Among the various products offered by TCFS to individuals, families and businesses, are commercial finance, infrastructure finance, wealth management, consumer loans and distribution and marketing of Tata Cards.

L & T Finance Limited

L & T Finance Limited is a strong player in the non banking financial sector and was established in 1994. Headquartered in Mumbai, L & T offers funding services to different sectors like trade, industry, agriculture, Commercial Vehicle loans, Individual Vehicle loans, and corporate and rural loans. The company caters to more than 10 lakh people. In 2010, L & T was awarded the “Company of the year” in the Economic Times awards.

Aditya Birla Finance Ltd.

Aditya Birla Finance Limited, a part of the Aditya Birla Financial Services, was incorporated in 1991 and is an ISO 9001:2008 certified NBFC. ABFL is registered with RBI as a ‘systemically important non-deposit accepting NBFC’ and it ranks among the top five largest private diversified NBFCs in India. It offers precise and customised solutions across a wide range, from corporate finance to commercial mortgage, and from capital markets to structured finance.

Question-1: AS per case, which Indian company is 9001:2008 certified?

 a. Larsen Turbo

 b. Tata

 c. Aditya

 d. Cholamandalam

Question 2. Indian NBFCs are regulated by ?????


 b. RBI

 c. Chola

 d. Muthoot

Question 3. NBFCs offer their services I only ??? areas.

 a. Rural

 b. Urban

 c. None

 d. Both

Question 4. Tha main feature of a NBFC ids that they can ????? funds for savings.

 a. Not Accept

 b. Accept

 c. Reject

 d. Insurance

Question 5. Tha main taskof an NBFC is to offer?. Services.

 a. Banking

 b. Financial

 c. Both

 d. None

Question 6. Which company has two affiliates offering Insurance services and rural housing financial services.

 a. Muthoot

 b. Bajaj

 c. Mahindra

 d. Aditya

Question 7. Which Indian NBFC has more than 700 branches across India with assets under management above INR 35,000ÿCrores.

 a. RBI

 b. Aditya

 c. Chola

 d. Larsen

Question 8. Which Indian NBFC is declared as Navratana Status.

 a. Bajaj

 b. Chola

 c. Power Finance

 d. Mahindra

Question 9. Which Indian NBFC is the oldest one in the country.

 a. Tata

 b. Larsen

 c. Aditya

 d. Muthoot

Question 10. Which NBFC was established in 1994?

 a. Larsen Turbo

 b. Tata

 c. Aditya

 d. Cholamandalam

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Assignment 2

Case Study # Monetary Policy working or Not?

That growth rate was “despite falling commodity prices and China’s slowdown”, Paul Bloxham, HSBC’s chief economist for Australia and New Zealand highlighted in a note to clients yesterday. Bloxham said that it’s the RBA and the way it has handled monetary policy, both during the mining boom and since, which “deserves much of the credit”.

Cuts to interest rates over the past four years and a significant fall in the AUD have been the key supports for growth. Low rates have lifted housing prices and construction, which is feeding through to a positive wealth effect on consumer spending. The lower AUD is supporting strong export growth, particularly of tourism and education services to Asia, Bloxham wrote. But Bloxham says there are still headwinds for the economy as it rebalances, meaning monetary policy still has a role to play. That’s because “although local growth has been solid in recent years, it has not been rapid enough to absorb all of the available spare capacity”. He sets out four reasons why the RBA may need to ease again.

1. Low wages, low inflation. Unemployment has fallen to 6% but it is still well above the “full employment level of 5.25-5.5%”. That means wages growth is weak, “even the state with the strongest economic conditions, New South Wales,” Bloxham said. That has contributed to underlying inflation falling to the bottom of the RBA’s 2-3% band. 2. Mining investment will keep falling and oversupplied commodity markets persist. Bloxham highlights the unwind of the mining investment boom has further to run – the RBA has said consistently that this “drag” on economic growth will continue into 2017. Notwithstanding the recent rally in commodities from recent lows, Bloxham says “over-supply in many markets is set to keep them low”.

Global growth is below trend and the Asian economies are being held back by weak global trade, he added.

3. The housing boom is over. It was household consumption that really drove the strength of recent growth, contributing 0.4% of the 1.6% growth rate in the fourth quarter of 2015. Bloxham says that is now at risk given the inevitable slowing in the housing boom. But he says “the end of the housing boom means it is unlikely that household consumption will continue at the same strong pace observed late last year”.

4. The rally in the Australian dollar threatens growth. The Aussie dollar has been a big part of the economic strength and transition. Its fall has helped facilitate the pick up in tourism and service exports. But that is at risk now with the Aussie up near 75 cents, not the 65 cents many had forecast, Bloxham says: Low global inflation, further expected rate cuts from the ECB and Bank of Japan and the markets’ doubts about whether the US Federal Reserve will hike again this year, have meant that speculative positions have turned long on the Australian dollar. The currency has climbed from its low point of US69 cents in January to now trading around US74 cents. A higher Australian dollar is unhelpful for the rebalancing story and likely to put further downward pressure on already low underlying inflation. This begs the question of will “there be enough growth to keep inflation on target?”

That’s doubly important because Australian financial conditions have tightened as the Aussie has rallied and as “effective mortgage and business lending rates have also been lifted in recent months, despite a steady RBA cash rate, as a result of regulatory changes and higher global funding costs,” Bloxham said. So in the end, his call is that if the RBA wants to keep growth on track it will need to cut rates by 25 basis points, 0.25%, in the next few months.

Question-1: According to Bloxham What is supporting strong export growth.?

 a. High AUD

 b. lower AUD

 c. Increment in interest rates

 d. Falling economy

Question 2. According to Paul Bloxham which deserves much of the credit for growth rate?

 a. RBA

 b. Monetary policy

 c. RBA and its way to handle monetary policy

 d. Neither option A nor option C

Question 3. As per the case global growth is?..

 a. Static

 b. Below trend

 c. Above trend

 d. Increasing

Question 4. As per the case oversupplied commodity markets??.

 a. Persists

 b. Ended

 c. Started

 d. Changed

Question 5. As per the case, what drove the strength of recent growth.?

 a. Australian dollar

 b. Inflation

 c. U.S dollar

 d. Household consumption

Question 6. The case study talked about the finding and forecasting of?..

 a. HSBC’s chief economist for Australia

 b. HSBC’s chief economist for Australia and New Zealand

 c. HSBC’s chief economist for New Zealand

 d. Neither option A nor option C

Question 7. What has been the key supports for growth over the past four years ?

 a. Cut in interest rates

 b. Increment in the AUD

 c. Monetary policy

 d. Both option A and option B

Question 8. What have been the key supports for growth.?

 a. Decling interest rates

 b. fall in the AUD

 c. Both option A and option B

 d. Neither option A nor option C

Question 9. What helps in pick up of tourism and service exports.?

a. Fall in Australian Dollar

 b. Increment in the Australian dollar

 c. U.S dollar

 d. Inflation

Question 10. Which state has the strongest economic conditions as per the case.?

 a. U.S

 b. Japan

 c. Australia

 d. New South Wales

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