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Financial services
This document provides an overview of various financial services including banking, loan syndication, project finance, and wealth management in India. It discusses the structure of banks in India including commercial banks like SBI and private banks, co-operative banks, and development banks. It also summarizes how banks facilitate international trade through letters of credit and payments. Loan syndication and its types are defined. Project financing is described as financing long-term infrastructure projects based on cash flows. Sources of project financing include equity, debt, and subsidies. Finally, wealth management is summarized as a professional service combining financial advice, tax services, and planning to meet objectives like risk management and lifestyle enhancement.
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Financial services
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- 4. Accepting, for thepurpose of lending or of investment of deposit of money form the public repayable on demand or otherwise or withdrawable by cheque, draft order or otherwise. Banking regulation act of India 1949
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- 6. COMMERCIAL BANKS Commercial bankscomprising public sector banks, foreign banks, and private sector banks represent the most important financial intermediary in the Indian financial system
- 7. Some of CommercialBanks…… SBI & ASSOCIATES NATIONALISED BANKS FOREIGN BANKS State Bank of India Andhra Bank ABNAmro Bank State Bank of Indore Bank Of India BNP Paribas State Bank of Mysore Bank Of Maharashtra Citi Bank State Bank of Patiala Dena Bank Deutsche Bank State Bank of Hyderabad Canara Bank Standard Chartered Bank
- 8. Co-Operative Banks • Aco-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. • Co-operative banks are often created by persons belonging to the same local or professional community of sharing a common interest.
- 9. Some of Co-OperativeBanks…… Sr. No. Name of the Bank 1 Abhyudaya Co-Operative Bank Ltd. 2 Maratha Co-Operative Bank Ltd 3 Janseva Co-Operative Bank Ltd 4 Naval DockyardCo-Operative Bank Ltd
- 10. Abhyudaya Co-Operative BankLtd… • A dedicated group of social workers and labour movement activists, imbued with the spirit of service to the cause of mill workers, other industrial and hitherto neglected economically weaker sections of society started Abhyudaya Co-op. Credit Society Ltd. in 1964, with a small share capital of Rs. 5,000. • The area of Kalachowki, Sewri, Parel and their surroundings were predominantly populated by low income industrial labour and lower middle class people at that time. Example…….
- 11. Development Banks Its defineas a financial institution concerned with providing all types of financial assistance to business units in the foam of loans, underwriting investments, economic development etc.
- 12. Some of DevelopmentBanks…… • NABARD - National Bank For Agriculture and Rural Development • EXIM – Export-Import Bank of India • NHB – National Housing Bank • IFCI – Industrial Finance Corporation of India • IDBI – Industrial Development Bank Of India • SIDBI – Small Industry Development Bank Of India
- 13. International Trade Financing •Trade finance relates to financing certain activities related to commerce and international trade for bridging the funding gaps between paying suppliers and receiving customer payments. • While the seller / exporter can require importer to prepay for goods shipped, the importer on other hand may require to reduce the risk by requiring the exporter to document the goods that have been shipped.
- 14. HOW DO BANKSFACILITATE INTERNATIONAL TRADE…….? • Exporter’s bank and importer’s bank facilitate this process with the help of Letter of Credit (LCs), that is among the most secure and popular instruments available to international traders. • An LC is a commitment by a bank on behalf of the buyer that payment will be made to the exporter provided that the terms and conditions have been met, as verified through the presentation of all required shipping & commercial documents. Cont.…….
- 15. • An LCalso protects the buyer since no payment obligation arises until the goods have been shipped. • The responsibility of the banks is to deal with documents. • An LC is useful when reliable credit information about a foreign buyer is difficult to obtain, but you are satisfied with the creditworthiness of your buyer’s foreign bank.
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- 17. Banks’ role inInternational Trade Finalization 17 Importer Exporter Importer (Buyer) Issuing Bank Exporter (Seller) Advising/ Confirming bank 1 Sales Contract (Issuing Bank) (Advising Bank) Foreign BANK PNC Bank 2 Application 3 LC Issued 4 LC Advised
- 18. Banks Role inPayment and Settlement in Int. Trade 18 Buyer Seller Foreign BANK PNC Bank Shipment 5 Documents6 Payment Claim 7 Buyer pays BEFORE receipt of goods $ 8 $ 9 $10
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- 20. • An arrangementwhere a group of banks participate for a single loan… • Loans made by two or more lenders and administered a common agent using similar terms and conditions and common documentation
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- 22. INITIAL DISCUSSIONS WITH PROMOTERS ASSESSMENTOF PROJECT LOCATING SOURCES OF FUNDS PRELIMINARY DISCUSSIONS WITH THE LENDERS PREPARATION OFTHE LOAN APPLICATION AND FOLLOW – UP RENDERING ASSISTANCE IN PROJECT APPRAISAL OBTAINING LETTER OF INTENT FROMTHE LENDING INSTITUTION OR BANK LOAN SYNDICATION PROCESS…….
- 23. ARRANGER OR LEAD MANAGER UNDERWRITING BANK PARTICIPATING BANKS FACILITYMANAGER / AGENT PARTIES & THEIR ROLES…….
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- 26. Project.......? A Project isnormally…a long-term infrastructure, industrial or public services scheme , development or undertaking having : • large size. • Intensive capital requirement – Capital Intensive. • finite and long Life. • few diversification opportunities i.e. assets specific. • Stand alone entity. • high operating margins. • Significant free cash flows
- 27. Project Financing…….? “The financingof long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cash flows generated by the project.” International Project Finance Association
- 28. Key characteristics…… • Financingof long term infrastructure and/or industrial projects using debt and equity. • Debt is typically repaid using cash flows generated from the operations of the project. • Limited recourse to project sponsors. Debt is typically secured by project’s assets, including revenue producing contracts.
- 29. STAGES IN PROJECTFINANCING Pre Financing Stage Financing Stage Post Financing Stage • Project identification. • Risk identification & minimizing. • Technical and financial feasibility. • Equity arrangement • Negotiation and syndication. • Commitments and documentation. • Disbursement. • Monitoring and review. • Financial Closure / Project Closure. • Repayments & Subsequent monitoring.
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- 31. Share capital –equity capital and preference capital Term loan Debenture capital Commercial banks Government subsidies METHOD OF PROJECT FINANCING……
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- 35. Wealth = Money WealthManagement = Money Management Wealth management is a high-level professional service which combines :- • Financial and investment advice • Accounting and tax services • Retirement planning and legal or estate planning
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- 37. Process Flow…. 1. Establish Objective 2.Set Strategy 3. Look for Solution 4. Implement Solution 5. Review The Objective
- 38. Mr. Singh Occupation :CEO of IT Firm Age : 50 Wealth Manager
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