The document discusses the history and functions of merchant banking in India. It begins by defining merchant bankers and non-bank financial institutions. It then outlines the origins of merchant banking in London and how merchant bankers helped develop underdeveloped countries and domestic business. Over time, merchant bankers formed associations and began offering more services. The functions of merchant bankers grew to include corporate counseling, project counseling, loan syndication, issue management, and underwriting. Merchant banking gained prominence in India in the 1980s during a boom in new stock issues.
The document summarizes the evolution of leasing in India from 1973 to the present. It discusses key milestones such as the establishment of the first leasing company in 1973, the entry of banks and financial institutions into leasing in the 1980s and 1990s, changes in regulations in the 1990s and 2000s, and the increasing presence of foreign lessors in recent years. It also compares leasing to hire purchase and notes that historically the two were treated separately but distinctions have blurred over time as regulations and tax treatment have converged.
Bill discounting allows banks to purchase bills or notes from customers before their maturity and credit the discounted value to the customer's account. It provides working capital financing to the customer. Factoring involves the ongoing assignment of accounts receivable invoices from a client to a factoring company, which provides working capital financing, invoice collection services, and accounts receivable management. Forfaiting involves the discounted purchase of medium-term bills of exchange associated with international trade transactions by a forfaiter, typically with tenors of 6 months to 10 years.
This document provides information on leasing and hire purchasing. It defines leasing as a contract that conveys the right to use an asset for a specified period of time in exchange for rental payments. Hire purchasing allows goods to be bought through periodic installment payments, with ownership transferring after the final payment. The document discusses the participants in leasing agreements, different types of leases such as financial and operating leases, and regulations related to leasing in India. It also provides basics of hire purchasing agreements.
This document outlines an NBFC's new business plans, target markets, loan products, and loan approval process. It discusses several loan products like secured loans, unsecured loans, transport loans, gold loans, loans against property, and consumer durable loans. It identifies target markets like small businesses, government employees, and retail traders. It also describes the loan approval process, criteria for sanctioning loans, recovery procedures, interest rates, and expected business outputs over the next six months. The document provides details on the NBFC's various loan products and services to potential customers.
The document discusses leasing and hire purchase. It provides definitions of leasing and hire purchase. It outlines the key parties involved in leasing (lessor and lessee) and hire purchase (owner and hirer). It also discusses the history and development of leasing and hire purchase in various regions including India. The document then covers types of leases, guidelines for banks involved in hire purchase business, and factors to consider like customer assessment, purpose, amount, period, repayment, and security."
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) allows banks and financial institutions to seize assets like property from borrowers who have defaulted on loans above Rs. 1 lakh. Under this Act, banks can take possession of secured assets without court intervention and auction them to recover unpaid debts. It aims to reduce non-performing assets of banks by expediting the recovery process. The Act also establishes Asset Reconstruction Companies that can acquire NPAs from banks to help resolve bad loans.
The document summarizes the evolution of leasing in India from 1973 to the present. It discusses key milestones such as the establishment of the first leasing company in 1973, the entry of banks and financial institutions into leasing in the 1980s and 1990s, changes in regulations in the 1990s and 2000s, and the increasing presence of foreign lessors in recent years. It also compares leasing to hire purchase and notes that historically the two were treated separately but distinctions have blurred over time as regulations and tax treatment have converged.
Bill discounting allows banks to purchase bills or notes from customers before their maturity and credit the discounted value to the customer's account. It provides working capital financing to the customer. Factoring involves the ongoing assignment of accounts receivable invoices from a client to a factoring company, which provides working capital financing, invoice collection services, and accounts receivable management. Forfaiting involves the discounted purchase of medium-term bills of exchange associated with international trade transactions by a forfaiter, typically with tenors of 6 months to 10 years.
This document provides information on leasing and hire purchasing. It defines leasing as a contract that conveys the right to use an asset for a specified period of time in exchange for rental payments. Hire purchasing allows goods to be bought through periodic installment payments, with ownership transferring after the final payment. The document discusses the participants in leasing agreements, different types of leases such as financial and operating leases, and regulations related to leasing in India. It also provides basics of hire purchasing agreements.
This document outlines an NBFC's new business plans, target markets, loan products, and loan approval process. It discusses several loan products like secured loans, unsecured loans, transport loans, gold loans, loans against property, and consumer durable loans. It identifies target markets like small businesses, government employees, and retail traders. It also describes the loan approval process, criteria for sanctioning loans, recovery procedures, interest rates, and expected business outputs over the next six months. The document provides details on the NBFC's various loan products and services to potential customers.
The document discusses leasing and hire purchase. It provides definitions of leasing and hire purchase. It outlines the key parties involved in leasing (lessor and lessee) and hire purchase (owner and hirer). It also discusses the history and development of leasing and hire purchase in various regions including India. The document then covers types of leases, guidelines for banks involved in hire purchase business, and factors to consider like customer assessment, purpose, amount, period, repayment, and security."
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) allows banks and financial institutions to seize assets like property from borrowers who have defaulted on loans above Rs. 1 lakh. Under this Act, banks can take possession of secured assets without court intervention and auction them to recover unpaid debts. It aims to reduce non-performing assets of banks by expediting the recovery process. The Act also establishes Asset Reconstruction Companies that can acquire NPAs from banks to help resolve bad loans.
This document discusses Non-Banking Financial Companies (NBFCs) in India. It defines an NBFC as a non-banking institution that is registered under the Companies Act and is engaged in financial activities like lending, but not banking. NBFCs cannot accept demand deposits, are not part of the payment system, and deposit insurance is not available for NBFC depositors unlike bank depositors. It is mandatory for NBFCs to register with the Reserve Bank of India (RBI) to operate. Registered NBFCs are further classified into asset finance companies, investment companies, and loan companies. The document also outlines some requirements for NBFC registration with RBI and discusses the evolution and growth of the NBFC
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of Loans , Advances, Acquisition of shares/stock/bonds/debentures/ securities issued by Government or local authority or other securities of like marketable nature, Leasing, Hire-purchase, Insurance business, Chit business.
A non-banking institution which is a company and which has its principal business of receiving deposits under any scheme or arrangement or any other manner, or lending in any manner is also a non-banking financial company (Residuary non-banking company).
Rs.25,000
The document discusses non-banking financial companies (NBFCs) in India. It defines NBFCs as companies that engage primarily in financial activities like lending but cannot accept demand deposits. It classifies NBFCs into different types and outlines some prominent NBFCs in India including Mahindra Finance, Muthoot Finance, Bajaj Finance, and IndiaBulls Finance. It provides details on the business models, loan portfolios, funding sources, growth prospects and risks of these NBFCs.
NBFCs are non-banking institutions that are registered under the Companies Act and engaged in financial activities like lending, but not agriculture or real estate. They perform important financial intermediation and supplement banking. The RBI regulates different types of NBFCs under various acts and directions. To operate, an NBFC must register with the RBI and maintain a minimum net owned fund of Rs. 200 lakh. NBFCs are subject to prudential norms on income recognition, asset classification, provisioning, and capital adequacy set by the RBI.
A Non Banking Financial Company (NBFC) is a company registered under the Companies Act that engages in financial activities like lending, but does not have a banking license. NBFCs cannot accept demand deposits or issue cheques. They must register with the Reserve Bank of India and are regulated differently than banks. NBFCs are classified into categories like Asset Finance Companies, Investment Companies, and Loan Companies. NBFCs can accept public deposits if authorized by RBI and if they meet minimum capital requirements. There are also regulations around interest rates, gifts/incentives, and disclosures for deposits accepted by NBFCs.
Merchant Banking - Indian Corporate Market, Clause 49 & Masala BondsAbhijeet Deshmukh
A comprehensive presentation on merchant banking. It starts with Indiann corporate bond market and go on to basics of merchant banking and it digs deep into merchant banking activity. It also has few slides on Clause 49 (Corporate governance) and ends with latest topic Masala Bonds
Non-banking financial companies (NBFCs) are financial institutions that are registered under the Companies Act and provide financial services like loans and advances. The key differences between NBFCs and banks are that NBFCs cannot accept demand deposits and do not have checking facilities. There are different types of NBFCs including asset finance companies, investment companies, and loan companies. NBFCs play an important role in financing sectors like transportation and providing credit to those not served by banks. However, NBFCs also have higher costs and non-performing assets compared to banks.
The document discusses India's Credit Guarantee Scheme for NBFC-MFIs/MFIs (CGSMFI) which provides credit guarantees to lending institutions that provide funding to NBFC-MFIs and MFIs for on-lending to eligible small borrowers during the COVID-19 pandemic. It outlines the key features of the scheme including eligible institutions, guarantee coverage of 75% of loan defaults for up to 3 years, responsibilities of member lending institutions, and eligibility criteria for loans extended to ultimate borrowers. The scheme aims to provide competitive funding to NBFC-MFIs/MFIs to support existing and new micro-enterprises during the pandemic.
Non-banking financial companies (NBFCs) are financial institutions that are registered under the Companies Act and provide services like loans, acquiring shares/bonds, leasing, and insurance. NBFCs are becoming an important part of India's financial system as they provide diversified financial services to individuals and corporations, help traditional institutions, support small enterprises, and promote economic growth. NBFCs raise funds from the public and lend them to both wholesale and retail sectors. They are seen as complementary to banks due to their customer-oriented services and flexibility in meeting credit needs.
Non-banking financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank. This document provides an overview of NBFCs in India, including their history, regulations, types, and roles. It defines various types of NBFCs such as investment companies, equipment leasing companies, loan companies, and housing finance companies. It also discusses the historical committees that shaped NBFC regulations and compares NBFCs to banks.
The document discusses non-banking financial companies (NBFCs) in India. It defines NBFCs as financial institutions that are registered under the Companies Act and engage in financial activities like lending but do not hold banking licenses. NBFCs play important roles like providing credit to sectors that banks may neglect, generating employment, and financing economically weaker sections. The document outlines the regulatory framework for NBFCs, including requirements for registration with the Reserve Bank of India, rules around accepting public deposits, and prudential norms on liquidity and reporting.
The document discusses non-banking financial companies (NBFCs) in India. It notes that NBFCs are financial institutions registered under the Companies Act of 1956 that primarily engage in lending and accepting deposits. Unlike banks, NBFCs cannot accept demand deposits or issue checks. The document outlines the different types of NBFCs including equipment leasing companies, hire purchase companies, loan companies, investment companies, and infrastructure finance companies. It provides examples of NBFCs and discusses their key functions like providing loans and advances, acquiring shares, leasing, insurance, and hire purchasing.
Non-banking financial companies (NBFCs) provide financial services like loans and investing in stocks without taking deposits. Mahindra and Mahindra Financial Services is a leading NBFC in India that provides financing for vehicles and farm equipment, especially in rural areas. It has over 450 branches and aims to be the preferred financial services provider in rural India. The company focuses on inclusive growth and currently employs over 6,200 people locally. It offers a variety of loan and insurance products and has strong relationships with dealers and customers after over 70 years of operations.
What is NBFC:
A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business.
Benefits of NBFC:
NBFC can provide loan and credit facility to any person and take property on mortgage from borrower as security
NBFC can recover money through sale of property mortgage of borrower on default of borrower in repayment of loan
NBFC can also finance for Hire-purchase, lease
Our deliverables:
Set up of NBFC
We provide service of setting up of NBFC. We have team of competent professional expertise in providing assistance for setting up of NBFC and offer various related services to our clients who do not have to make any extra efforts for the formation of NBFC. We provide full services in regard to setting up of NBFC and other requirements needed for it.
Compliances related to NBFC after set up of NBFC
We also provide service for compliances related to NBFC after set up of NBFC. After setting up of NBFC, NBFC needs do compliances as per act of Reserve bank of India and also need to reply to Reserve bank of India on their regular notices. We have team of competent professional expertise in providing assistance for such matter.
This document defines and describes non-banking financial companies (NBFCs) in India. It states that NBFCs are companies registered under the Companies Act of 2013 that are engaged in financial activities like lending, leasing, investments, but do not carry out regular banking activities. NBFCs must be registered with the Reserve Bank of India and comply with regulations around minimum capital, liquid assets, public deposits, interest rates, and credit ratings. The document also outlines different types of NBFCs including mutual benefit companies, investment companies, equipment leasing companies, hire purchase companies, and loan companies.
The document provides an overview of the organization of India's financial system. It outlines the major financial intermediaries such as banks, NBFCs, mutual funds, and insurance companies. It also describes the key financial assets and markets in India, including primary markets, secondary markets, and various debt and equity instruments.
This document provides information on non-banking finance companies (NBFCs) in India, including their classification and types. It discusses how NBFCs are classified into different categories based on whether they accept public deposits and their principal business activities. Some key NBFC categories mentioned include asset finance companies, investment companies, loan companies, infrastructure finance companies, and microfinance institutions. The document also briefly outlines the regulations for mutual benefit finance companies and the leasing and hire purchase services that can be provided by NBFCs.
The document discusses the role of merchant banks in India. It begins by defining merchant banking as financial institutions that provide services related to issuing securities, such as preparing prospectuses and advising on corporate finance issues. It then outlines several key services provided by merchant banks, including corporate counseling, project counseling, credit syndication, issue management and underwriting, and portfolio management. Merchant banks play an important role in raising capital and advising corporations.
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Resurgent India
The dynamic and evolving NBFC sector necessitates reforms and evolution to ensure orderly growth. While NBFCs have been on the growth trajectory over the years, there are few areas of concern which need to be addressed. The key challenges have been highlighted below:
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Resurgent India
NBFC sector has garnered a lot of interest and deliberations of late with recommendations being made in the Committee reports or representations made by the NBFC industry players for the benefit of the NBFC sector as a whole. We have analyzed many of such reports and surveys to present the most pressing of such recommendations below:
The document provides an overview of various fund based financial services. It discusses topics like leasing, hire purchase, factoring, venture capital, insurance, mutual funds and housing finance. For each topic, it provides definitions, key aspects, types and mechanisms. The summary is as follows:
The document defines and compares various fund based financial services like leasing, hire purchase, factoring and their mechanisms. It also discusses venture capital process, insurance types and regulation in India. Different mutual fund schemes and housing finance products are outlined. Key intermediaries and regulations for different financial sectors are highlighted.
This presentation covers Merchant Banking History; Categories; Services provided by them; Methods of placement; underwriting; Issue management & SEBI guidelines.
This document discusses Non-Banking Financial Companies (NBFCs) in India. It defines an NBFC as a non-banking institution that is registered under the Companies Act and is engaged in financial activities like lending, but not banking. NBFCs cannot accept demand deposits, are not part of the payment system, and deposit insurance is not available for NBFC depositors unlike bank depositors. It is mandatory for NBFCs to register with the Reserve Bank of India (RBI) to operate. Registered NBFCs are further classified into asset finance companies, investment companies, and loan companies. The document also outlines some requirements for NBFC registration with RBI and discusses the evolution and growth of the NBFC
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of Loans , Advances, Acquisition of shares/stock/bonds/debentures/ securities issued by Government or local authority or other securities of like marketable nature, Leasing, Hire-purchase, Insurance business, Chit business.
A non-banking institution which is a company and which has its principal business of receiving deposits under any scheme or arrangement or any other manner, or lending in any manner is also a non-banking financial company (Residuary non-banking company).
Rs.25,000
The document discusses non-banking financial companies (NBFCs) in India. It defines NBFCs as companies that engage primarily in financial activities like lending but cannot accept demand deposits. It classifies NBFCs into different types and outlines some prominent NBFCs in India including Mahindra Finance, Muthoot Finance, Bajaj Finance, and IndiaBulls Finance. It provides details on the business models, loan portfolios, funding sources, growth prospects and risks of these NBFCs.
NBFCs are non-banking institutions that are registered under the Companies Act and engaged in financial activities like lending, but not agriculture or real estate. They perform important financial intermediation and supplement banking. The RBI regulates different types of NBFCs under various acts and directions. To operate, an NBFC must register with the RBI and maintain a minimum net owned fund of Rs. 200 lakh. NBFCs are subject to prudential norms on income recognition, asset classification, provisioning, and capital adequacy set by the RBI.
A Non Banking Financial Company (NBFC) is a company registered under the Companies Act that engages in financial activities like lending, but does not have a banking license. NBFCs cannot accept demand deposits or issue cheques. They must register with the Reserve Bank of India and are regulated differently than banks. NBFCs are classified into categories like Asset Finance Companies, Investment Companies, and Loan Companies. NBFCs can accept public deposits if authorized by RBI and if they meet minimum capital requirements. There are also regulations around interest rates, gifts/incentives, and disclosures for deposits accepted by NBFCs.
Merchant Banking - Indian Corporate Market, Clause 49 & Masala BondsAbhijeet Deshmukh
A comprehensive presentation on merchant banking. It starts with Indiann corporate bond market and go on to basics of merchant banking and it digs deep into merchant banking activity. It also has few slides on Clause 49 (Corporate governance) and ends with latest topic Masala Bonds
Non-banking financial companies (NBFCs) are financial institutions that are registered under the Companies Act and provide financial services like loans and advances. The key differences between NBFCs and banks are that NBFCs cannot accept demand deposits and do not have checking facilities. There are different types of NBFCs including asset finance companies, investment companies, and loan companies. NBFCs play an important role in financing sectors like transportation and providing credit to those not served by banks. However, NBFCs also have higher costs and non-performing assets compared to banks.
The document discusses India's Credit Guarantee Scheme for NBFC-MFIs/MFIs (CGSMFI) which provides credit guarantees to lending institutions that provide funding to NBFC-MFIs and MFIs for on-lending to eligible small borrowers during the COVID-19 pandemic. It outlines the key features of the scheme including eligible institutions, guarantee coverage of 75% of loan defaults for up to 3 years, responsibilities of member lending institutions, and eligibility criteria for loans extended to ultimate borrowers. The scheme aims to provide competitive funding to NBFC-MFIs/MFIs to support existing and new micro-enterprises during the pandemic.
Non-banking financial companies (NBFCs) are financial institutions that are registered under the Companies Act and provide services like loans, acquiring shares/bonds, leasing, and insurance. NBFCs are becoming an important part of India's financial system as they provide diversified financial services to individuals and corporations, help traditional institutions, support small enterprises, and promote economic growth. NBFCs raise funds from the public and lend them to both wholesale and retail sectors. They are seen as complementary to banks due to their customer-oriented services and flexibility in meeting credit needs.
Non-banking financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank. This document provides an overview of NBFCs in India, including their history, regulations, types, and roles. It defines various types of NBFCs such as investment companies, equipment leasing companies, loan companies, and housing finance companies. It also discusses the historical committees that shaped NBFC regulations and compares NBFCs to banks.
The document discusses non-banking financial companies (NBFCs) in India. It defines NBFCs as financial institutions that are registered under the Companies Act and engage in financial activities like lending but do not hold banking licenses. NBFCs play important roles like providing credit to sectors that banks may neglect, generating employment, and financing economically weaker sections. The document outlines the regulatory framework for NBFCs, including requirements for registration with the Reserve Bank of India, rules around accepting public deposits, and prudential norms on liquidity and reporting.
The document discusses non-banking financial companies (NBFCs) in India. It notes that NBFCs are financial institutions registered under the Companies Act of 1956 that primarily engage in lending and accepting deposits. Unlike banks, NBFCs cannot accept demand deposits or issue checks. The document outlines the different types of NBFCs including equipment leasing companies, hire purchase companies, loan companies, investment companies, and infrastructure finance companies. It provides examples of NBFCs and discusses their key functions like providing loans and advances, acquiring shares, leasing, insurance, and hire purchasing.
Non-banking financial companies (NBFCs) provide financial services like loans and investing in stocks without taking deposits. Mahindra and Mahindra Financial Services is a leading NBFC in India that provides financing for vehicles and farm equipment, especially in rural areas. It has over 450 branches and aims to be the preferred financial services provider in rural India. The company focuses on inclusive growth and currently employs over 6,200 people locally. It offers a variety of loan and insurance products and has strong relationships with dealers and customers after over 70 years of operations.
What is NBFC:
A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business.
Benefits of NBFC:
NBFC can provide loan and credit facility to any person and take property on mortgage from borrower as security
NBFC can recover money through sale of property mortgage of borrower on default of borrower in repayment of loan
NBFC can also finance for Hire-purchase, lease
Our deliverables:
Set up of NBFC
We provide service of setting up of NBFC. We have team of competent professional expertise in providing assistance for setting up of NBFC and offer various related services to our clients who do not have to make any extra efforts for the formation of NBFC. We provide full services in regard to setting up of NBFC and other requirements needed for it.
Compliances related to NBFC after set up of NBFC
We also provide service for compliances related to NBFC after set up of NBFC. After setting up of NBFC, NBFC needs do compliances as per act of Reserve bank of India and also need to reply to Reserve bank of India on their regular notices. We have team of competent professional expertise in providing assistance for such matter.
This document defines and describes non-banking financial companies (NBFCs) in India. It states that NBFCs are companies registered under the Companies Act of 2013 that are engaged in financial activities like lending, leasing, investments, but do not carry out regular banking activities. NBFCs must be registered with the Reserve Bank of India and comply with regulations around minimum capital, liquid assets, public deposits, interest rates, and credit ratings. The document also outlines different types of NBFCs including mutual benefit companies, investment companies, equipment leasing companies, hire purchase companies, and loan companies.
The document provides an overview of the organization of India's financial system. It outlines the major financial intermediaries such as banks, NBFCs, mutual funds, and insurance companies. It also describes the key financial assets and markets in India, including primary markets, secondary markets, and various debt and equity instruments.
This document provides information on non-banking finance companies (NBFCs) in India, including their classification and types. It discusses how NBFCs are classified into different categories based on whether they accept public deposits and their principal business activities. Some key NBFC categories mentioned include asset finance companies, investment companies, loan companies, infrastructure finance companies, and microfinance institutions. The document also briefly outlines the regulations for mutual benefit finance companies and the leasing and hire purchase services that can be provided by NBFCs.
The document discusses the role of merchant banks in India. It begins by defining merchant banking as financial institutions that provide services related to issuing securities, such as preparing prospectuses and advising on corporate finance issues. It then outlines several key services provided by merchant banks, including corporate counseling, project counseling, credit syndication, issue management and underwriting, and portfolio management. Merchant banks play an important role in raising capital and advising corporations.
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Resurgent India
The dynamic and evolving NBFC sector necessitates reforms and evolution to ensure orderly growth. While NBFCs have been on the growth trajectory over the years, there are few areas of concern which need to be addressed. The key challenges have been highlighted below:
Making NBFCs relevant to ‘Make-in India’& ‘Start-up India, Stand-up India’ - ...Resurgent India
NBFC sector has garnered a lot of interest and deliberations of late with recommendations being made in the Committee reports or representations made by the NBFC industry players for the benefit of the NBFC sector as a whole. We have analyzed many of such reports and surveys to present the most pressing of such recommendations below:
The document provides an overview of various fund based financial services. It discusses topics like leasing, hire purchase, factoring, venture capital, insurance, mutual funds and housing finance. For each topic, it provides definitions, key aspects, types and mechanisms. The summary is as follows:
The document defines and compares various fund based financial services like leasing, hire purchase, factoring and their mechanisms. It also discusses venture capital process, insurance types and regulation in India. Different mutual fund schemes and housing finance products are outlined. Key intermediaries and regulations for different financial sectors are highlighted.
This presentation covers Merchant Banking History; Categories; Services provided by them; Methods of placement; underwriting; Issue management & SEBI guidelines.
Corporate banking, financial advisory and merchant banking servicesKalpesh Arvind Shah
The document discusses syndicated loans, which involve multiple lenders jointly providing loans to one or more borrowers under the same terms. One bank is appointed as the lead bank to manage the loan process. Syndicated loans account for around half of India's investment banking revenue. They provide large sums of money for projects and allow risk spreading among lenders. The roles of different players like the arranger, lead bank, manager, participants and agency bank in syndicated loans are also outlined.
Fund based financial services provide financing through the use of company assets. They include venture capital, leasing, factoring, forfaiting, housing finance, and infrastructure financing. Venture capital finances new businesses and ideas. Leasing allows use of an asset in exchange for periodic payments. Factoring converts receivables into immediate cash. Forfaiting finances international trade receivables. Housing finance provides loans for housing construction, purchase, and repairs. Infrastructure financing develops projects like roads, railways, and airports.
This document provides an overview of fund-based financial services. It discusses six main types of fund-based services: 1) leasing, 2) hire purchase, 3) consumer credit, 4) factoring, 5) venture capital financing, and 6) housing finance. For each type, it provides definitions, key features, and advantages. The overall purpose is to classify and explain different methods of providing structured financing that is secured or supported by company assets.
This document summarizes various types of fund-based financial services. It discusses six main types: 1) leasing, 2) hire purchase, 3) consumer credit, 4) factoring, 5) venture capital financing, and 6) housing finance. For each type, it provides definitions, key features, parties involved, and advantages. Overall, the document aims to describe and classify different methods of providing loans and financing that are secured or supported by company assets.
Other Financial Services-Leasing and Hire Purchase; Debt Securitization; Hous...Ashish Hande
This document discusses leasing and related financial concepts. It begins by defining leasing as an agreement between two parties, a leasing company and user, for the temporary possession and use of an asset for a specified period in exchange for rental payments. It then covers essential elements of leasing agreements, types of leasing, steps in leasing transactions, advantages and limitations of leasing, contents of lease agreements, and the structure of the leasing industry in India.
The document discusses the roles of merchant banks and underwriters in India. It begins by providing a brief history of merchant banking, noting it started in Italy and later spread to other European countries and the US. It then outlines some of the key functions of merchant banks, such as providing commercial banking services, long-term loans, and underwriting stocks. Next, it discusses the underwriting process, including different types of underwriting agreements and regulations around underwriting in India. It concludes by emphasizing the importance of underwriters and merchant banks in facilitating capital raising and protecting investor interests.
The document provides an overview of various financial services and concepts:
- It defines financial services and lists examples like banks, insurance companies, and investment funds.
- It also covers concepts like financial markets, instruments, products, and institutions. Specific financial services like leasing, hire purchase, factoring, and venture capital are explained.
- Regulations and types of mutual funds, housing finance, and the insurance industry in India are summarized as well.
This document provides information on non-banking financial companies (NBFCs) in India. It defines what an NBFC is, provides historical background on regulations of NBFCs, discusses various committees formed to address NBFC regulations, compares NBFCs and banks, outlines key NBFC regulations, and describes the different types of NBFCs including their roles and business models. The types of NBFCs discussed include mutual benefit companies, investment companies, housing finance companies, equipment leasing companies, loan companies, chit funds, and factoring companies.
Merchant banking provides essential financial services that help corporate growth and economic development. It includes functions like issue management, pre-investment studies, corporate counseling, project counseling, loan syndication, portfolio management, project finance, and working capital arrangements. Registered merchant banks in India include Kotak Mahindra Capital, HDFC Bank, ICICI Bank, and IDBI Bank.
The document discusses various sources of business finance including internal sources like retained earnings and equity share capital, and external sources like debentures, term loans, public deposits, commercial banks, lease financing, and special financial institutions. It provides details on each source like their key features, terms, and advantages. Statistical data is also presented on the sources of finance most commonly used. The document aims to provide a comprehensive overview of the different avenues available for businesses to raise funds.
Shiva sir factoring,discounting& forfaitingBarotlaxman
This document discusses factoring, forfaiting, and bill discounting as methods of short-term trade financing. It begins by outlining the objectives and structure of the unit. Factoring involves the sale of receivables to a factor who provides various services like financing, debt collection, and administration. Forfaiting allows exporters to receive funds by transferring debt rights to a forfaiter. Bill discounting allows financing through the acceptance of bill liabilities by a third party. The document then goes on to provide details on the operations, types, terms, advantages, and mechanics of factoring services.
Ipo process, how price band determined, role of merchant banker & underwriterBiswajit Bhattacharjee
The document discusses the IPO process and the roles of merchant bankers and underwriters. It provides details on how the price band for an IPO is determined, with the company deciding the price band in consultation with merchant bankers. It also outlines the services provided by merchant bankers such as corporate counseling, credit syndication, issue management, and portfolio management. Underwriters ensure subscription to shares by committing to subscribe to any shares not purchased by investors, for a commission.
The document describes various types of term loans and lease financing. It discusses term loans, provisions of loan agreements, sources and types of equipment financing, and different types of lease financing including operating leases and financial leases. It also provides an example comparing the present value of cash outflows for a company deciding between leasing or purchasing a new machine.
The document discusses various long term financing options for companies including venture capital, initial public offerings, rights issues, private placements, preferential allotments, and term loans. It provides details on the process and requirements for each type of financing. Some key points covered include the roles of merchant bankers and underwriters in IPOs, the pricing and allotment process for rights issues, and the steps involved in applying for and disbursing a term loan.
This document discusses various types of long-term financing including leases, hire purchase financing, project financing, and venture capital financing. It provides details on operating leases, financial leases, sale and lease back arrangements, and differences between hire purchase and lease financing. Project financing relies on cash flows from the specific project, while venture capital involves equity participation and management involvement to support new firms over the long term.
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Non banking financial intermediaries (1)
1.
2. Non-Bank Financial Intermediaries (NBFIs)
is a heterogeneous group of financial
institutions other than commercial and co-
operative banks. They include a wide variety
of financial institutions, which raise funds
from the public, directly or indirectly, to lend
them to ultimate spenders.
3. The Notification of the Ministry of Finance
defines a merchant banker as, ’any person
who is engaged in the business of issue
management either by making arrangements
regarding selling, buying or subscribing to
the securities as manager, consultant,
advisor or rendering corporate advisory
service in relation to such issue
management’
4. Entering of London merchants in financing
foreign trade through acceptance of bill
They helped government of under developed
countries to raise long term funds
Extended their activities to Domestic business
Later these merchants formed an association
which called ”Merchant Banking and Securities
House Association”
5. prior to the enactment of Indian companies act
1956, managing agents acted as issue houses
for securities and few share broking firms also
functioned as merchant bankers.
rapid growth in the number and size of the issues
made in the primary market
The merchant banking service by foreign banks,
‘Grindlays Bank’ in 1967 and the city bank in
1970.
the banking commission recommended the
setting up of merchant banking institution by the
commercial banks and financial institutions in
1972.
6. In the mid-eighties the banking regulations
act was amended permitting commercial
banks to offer a wide range of financial
service through the subsidiary route.
The state bank of India was the first Indian
bank to set-up merchant banking division in
1972 followed by ICICI, bank of India, Bank
of Baroda, Canara bank, Punjab national
bank, UCO bank.
The merchant banking gained prominence
during 1983-84 due to new issue boom
7. Commercial Banks Merchant Banks
Deals in debt and debt-
related finance
Deals in equity and equity-
related finance
Asset oriented Management Oriented
Risk averse Accepts risk
Mere Financiers Varied Functions
8. Corporate Counselling
Covers the entire field of merchant banking but
is limited to giving suggestions and opinions to
clients
Project Counselling
preparation of project reports
deciding upon the financing pattern
appraising the project relating to its technical,
commercial and financial viability
filling up of application forms for obtaining
funds from financial institutions.
9. Loan Syndication
Assistance rendered to raise loans for
projects
can be obtained from a single institution or
a consortium
Appraisal of the project
Designing Capital Structure
Fixing of Preliminary meeting
Filling and submitting the application along
with other documents
10. A. Pre-Issue Management
Issue through Prospectus, offer for sale and
Private Placement
Co-ordinating the activities with Government,
public bodies, professionals and private
agencies
Obtaining the copies of consent from experts,
legal advisor, attorney, solicitor, bankers,
brokers and underwriters
Send the prospectus to be vetted by SEBI
After clearance from SEBI, file the
prospectus and necessary documents with
the registrar of Companies
Appointment of brokers to the issue, Principal
agent and bankers
11. Marketing
Arrange a meeting with company
representatives and advertising agents
Selection of media
Decide the number of copies to be printed
Deliver the material to the stock exchange,
brokers to the issue and the bankers atleast
21 days before the issue opens
12. Pricing of issues
Free pricing of issue
Premium to be decided after considering
NAV, profit earning capacity and market
price
Justification of price in prospectus
13. B) Post-issue Management
Collection of application forms and statement
of account from bankers
Screening applications
Deciding allotment procedure
Mailing of allotment letters, share certificates
and refund orders
Allotment/refund orders to be sent within 70
days from the close of the issue
14. C) Underwriting of Public issue
Only category I, II, III merchant bankers
permitted
The outstanding commitments of any
merchant banker must not exceed 5times of
his net worth
Lead managers must mandatorily
underwrite 5% of the issue or Rs.2,50,000
whichever is less
15. D) Managers, Consultants or Advisors to the
issue
SEBI insists atleast one authorised
merchant banker as lead manager for an
issue
Not more than two merchant bankers to
be associated as lead managers
Upto 4 managers permitted in issue
above Rs. 100 crores
16. Carefully blended asset combination
Maximize returns and minimise risk
Safety, liquidity and Profitability
Conduct surveys to analyse
Monetary and Fiscal policies of the
government
Financial statements of various corporates
Secondary market condition
Changing pattern of the industry
Competition between industries
17. Negotiator between offeree and offeror for
purchase consideration and mode of
payment
Safeguard interest of the shareholders
Appraise the proposal for financial and
technical feasibility
Draft scheme of Amalgamation
Get approval from Government and
Financial institutions
18. Long term foreign currency loan
Joint venture abroad
Financing exports and imports
Foreign collaboration arrangement
20. Find out the lead managers in the
prospectus published
SEBI Vs Imperial Corporate Finance &
Services pvt ltd
21. Method of selling goods
Goods let out on hire by finance
company(creditor) to the hire purchase
consumer(hirer)
Periodic installments to be paid
Ownership passes on to the hirer on the
payment of last instalment
22. Buyer takes the possession of goods
immediately
Periodic instalments treated as hire charges
Ownership transferred to hirer on the payment
of last installment
Any default in payment by hirer, the seller can
reposses the goods and forfeit the hire charges
already received
Hirer can terminate the agreement by returning
the goods but cannot recover the hire charges
already paid
23. No specific format but has to be in writing
and signed by both the parties
Must contain the following
The description of goods
The hire purchase price
The date of commencement of
agreement
The number of instalments to be paid
and due date
24. Industrial Development in UK
Henry Moore, a piano maker in UK 1946
Cooperwait & Sons, a furniture dealer in US
1807
Idea developed by Wagon companies who
bought wagons and let it on hire purchase to
collieries
Financed by manufacturers or dealers
themselves
Consumer articles, automobiles, Industrial
Machinery
25. Pre-Independence period, businesses
extending credit to buyers
Non-banking Finance companies entered in
50s and 60s
Pioneers were Commercial Credit
Corporation Ltd, Motor and General Finance
ltd. And Investment Supply Ltd.
26. In 1987-88 Hire purchase business was
around Rs. 635 crores of which 55%
contributed by automobiles
The growth of 20% pa in Indian middle class
and their willingness to mortgage future for
today’s enjoyment also covered consumer
articles
NSIC, IDBI, ICICI etc
28. According to the Dictionary of Business and
Management, “Lease is a form of contract
transferring the use or occupancy of land,
space, structure or equipment, in
consideration of payment, usually in the form
of a rent”.
29. Agreement between two parties
Leasing company or lessor and user or lessee
The former arranges to buy capital equipment
for the use by the latter
Predetermined and payable at fixed intervals of
time
Lessor remains the owner of the equipment
over the primary period
Lease rentals are tax deductible
30. Modernisation of business
Balancing equipment
Cars, scooters and other vehicles and
durables
Items entitled to 100% or 50% depreciation
Assets not financed by banks/Institutions
31. Lessee decides the asset required and selects the supplier
Lessee enters into an agreement with the lessor. The
agreement must contain
Basic lease period during which it is irrecoverable
The timing and amount of periodical rental payments
Details of any option to renew lease or purchase asset at
the end of the period
Details regarding payment of cost of maintenance and
repairs, taxes, insurance and other expenses
The lease agreement is signed, the lessor makes payment to
the manufacturer after the lessee has received and accepted
the asset
32. Financial Lease
Operating Lease
Leverage Lease
Sale and Lease back
Cross-border lease
Wet Lease and Dry Lease
Vendor Leasing
33. Also known as capital lease, long-term lease,
net lease and close lease.
Irrevocable and non-cancellable contractual
agreement
The lessee is responsible for the maintenance
and insurance of the equipment and also bears
the risk of obsolescence
Non-cancellable clause, purchase option
Leasing company also charges nominal service
charges and other costs
34. Also known as service lease, short – term
lease or true lease.
Contractual period less than the full
expected economic life of equipment
For a limited period say a month, six months,
a year or few years
Terminable by giving stipulated notice
Lease rentals comparatively higher
35. The lessor is responsible for the
maintenance and insurance of the
equipment and also bears the risk of
obsolescence
Lease is suitable for
Equipments that are sensitive to
obsolescence
For tiding over a temporary problem
36. Basis Financial Lease Operating Lease
Nature of Lease Instalment Loan Rental agreement
Provision for
maintenance or taxes
To be paid by the lessee To be paid by the lessor
Risk of obsolescence Assumed by the lessee Assumed by the lessor
Contract Period Medium to Long term Intermediate to short
term
Cancellation Non-Cancellable Cancellable
Function by Lessor Financial Function Service Function
Examples Air craft, Land and
Building, Heavy
Machinery etc
Computers, automobiles,
office equipments etc
37. Involves 3 parties – the lessor, the lessee
and the lender
Lessor finances only a part of the total
investment and the balance is provided as a
loan to the lessor by a lender
Loan is secured by mortgage of the asset
besides the assignment of lease rental
payments
Example, Railroad, Coal mining, electricity
generating plants, ships etc
38. Attractive investment features
For lessor, Depreciation and interest
charges are tax deductible
For Lessee, Lease payments can be
debited to P&L a/c
39. A firm sells the asset to leasing company
and gets it back on lease
Sold at its market value
On a net-to-net basis
Repurchase option
Examples, Retail stores, office buildings,
shopping centres etc
40. Permit alternate use of funds
Faster and cheaper credit
Flexibility
Facilitates additional borrowing
Protection against obsolescence
No restrictive covenants
100% Financing
Boon to small firms
41. Not suitable mode for project Finance
Certain tax benefits/incentives not available
on leased equipment
Increase in value of real assets
High cost of financing
High penalties for terminating a contract
Lessor faces loss if lessee defaults
Lessee not entitled to any protection
Absence of exclusive laws
42. Private
Sector
Pure leasing
Companies
Hire purchase and
Finance companies
Subsidiaries of
manufacturing
group companies
Public
sector
Leasing divisions of
Financial institution
Subsidiaries of public
sector banks
Other public sector
Leasing
organizations
In -
House
Vendor
43. Ownership
Method of financing
Depreciation
Tax benefits
Salvage value
Deposit
Rent purchase
Extent of Finance
Maintenance
Reporting
44. The Housing Finance Company is yet
another form of non-banking financial
company which is engaged in the principal
business of financing of acquisition or
construction of houses that includes the
development of plots of lands for the
construction of new houses.
45. Large Investment
Long-term advance
High Inflation rate
High stamp duties
Defective title
High delinquency rate
Keen competition
46. Surplus funds with bankers due to capital
markets
Greater risk of lending to industries
Entry of Foreign players with innovative retail
products
High competition with varied products
Increase in the middle income group
Shift in the attitude from ‘save and buy’ to
‘buy and repay’
47. Low cost construction techniques
Reduction in Interest rates
Expanded period of loans
Government Initiatives
Tax relief
Repealing of Land Ceiling Act in 1999
Diversification of risk
48. RBI initiatives
Housing loans under priority sector
advances
Risk weightage reduced from 100% to 50%
Deregulating interest rates
Reducing the CRR and SLR
49. Housing Loan for Purchase of Homes
Home construction Loan
Home Extension Loan
Home Improvement Loan
Flexible Repayment Plan
Flexible Loan Instalment Plan
Home Transfer or Conversion Loan
50. Home furnishing Loan
Housing Repayment or Refinance Loan
Housing Loan Transfer Plan
Bridge Loan for Housing
51. Definition
“A financing institution which joins an
entrepreneur as a co-promoter in a project
and shares the risks and rewards of the
enterprise”
52. Venture Capital is a long term risk capital to
finance high technology projects which
involve risk but at the same time has strong
potential for growth. Venture capitalists pool
their resources including managerial abilities
to assist new entrepreneurs in early years of
the project. Once the project reaches the
stage of profitability, they sell their equity
holdings at a high premium.
53. Usually in the form of equity participation,
may also take the form of convertible debt or
long term loan
Investment only in high risk but high growth
potential projects
Only for commercialisation of new ideas or
new technologies
Venture capitalists joins the entrepreneur as
co-promoter and shares the risks and
rewards
54. Continuous involvement by the investor after
making an investment
Once the venture reaches full potential, the
venture capitalists disinvests his holdings
either to the promoters or in the market. The
objective is capital appreciation not profit.
Investment is usually made in small and
medium-scale businesses
Not just injection of money but also input
needed to set up the firm, design its
marketing strategy and organise and
manage it.
55. Promoter’s buy back
Public issue
Sale to other venture capital funds
Sale in OTC market
Management buyouts
56. Providing seed capital
Providing additional capital at various stages
of growth
Bridge Finance/Project Financing
Equity financing for taking over other
companies
Capital to new entrepreneurs in foreign
operations
57. Capital for expansion, diversification and
restructuring
Research and development financing for
product development
Start-up capital for initial production and
marketing
Development financing for facilitating public
issue
Acquisition or buyout financing
Turnaround financing
58. Development of an idea- seed finance
Implementation stage- start-up finance
Emerging stage/First stage
Expansion stage
Mezzanine/ pre IPO/ Bridge stage
59. VC able to reduce malpractices by
management
VC able to analyse the prospects of the
business
VC having representatives on the Board of
Directors ensures business conducts its
affairs prudently
60. VC provides long-term equity financing
Eliminating the efforts of the entrepreneurs
and letting them concentrate on the activities
of business
Assistance from VC does not require huge
expenditure
Business partner
Mentoring
Alliances
61. Reduces the time lag between a
technological innovation and its commercial
exploitation
Helps in developing new processes/
products
Acts as a cushion to support business
borrowings
Channelize investment in new high-tech
business
62. Helps in stabilizing the industries and also
contributes to faster industrial development
Intermediary between investors and
entrepreneurs
Paves the way for private sector to share the
responsibility with public sector
66. In the words of Kohok, “Factoring is an asset
based means of financing by which the
factor buys up the book debts of a company
on a regular basis, paying cash down
against receivables, and then collects the
amounts from the customers to whom the
company has supplied goods”.
67. Factoring agreement
Preparation of invoice
Goods sent without raising Bills of exchange
but accompanied by invoice
Debt due by the purchaser assigned to the
factor and advising the customer to pay the
due amount to the factor
68. Invoices, copies of receipt delivery challans,
copies of other documents handed over to
factor
80% of the assigned invoice amount is paid
immediately to the client and the rest 20% is
paid after realizing the debt
69. Assignment of debt in favour of the factor
Selling limits of the client
Conditions within which the factor will have
recourse in case of non payment
Circumstances under which the factor will
have recourse in case of non payment
Details regarding the payment to the factor
70. Interest to be allowed to the factor when
credit has been sanctioned to the supplier
Limit of any overdraft facility and the rate of
interest to be charged by the factor
71. Purchase and Collection of debts
Sales ledger management
Credit investigation and undertaking of credit
risk
Provision of finance against debts
Rendering consultancy services
72. Full service Factoring or without recourse
Factoring
With recourse Factoring
Maturity Factoring
Bulk Factoring
Invoice Factoring
Agency Factoring
International Factoring
73. Supplier’s guarantee Factoring
Limited Factoring
Buyer based Factoring
Seller based Factoring
74. Financial service
Collection service
Credit risk service
Provision of expertise ‘Sales ledger
Management’ service
Consultancy service
Economy in servicing
Off- balance sheet financing