Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
This document provides a summary of a study on non-performing assets (NPAs) in India with a focus on State Bank of India and its associates from 2008 to 2014. It finds that NPAs have been steadily increasing in India's banking sector, reaching Rs. 1,198 billion (4.36% of total advances) by 2014. The study also examines the gross and net NPAs of SBI and its associates over the period, finding that while gross NPAs increased, provisions also rose. The document outlines objectives, methodology, definitions, literature reviewed, reasons for rising NPAs, measures taken by banks and government to address the problem, and recommendations of committees to control NPAs in India's banking system.
The document discusses the concept of a bad bank in India. It outlines the need for a bad bank due to rising non-performing assets (NPAs) in the banking sector. A bad bank would involve setting up an asset reconstruction company (ARC) and asset management company (AMC) that would acquire bad loans from commercial banks. This would allow banks to clean up their balance sheets while the bad bank tries to recover as much of the loan value as possible. The document discusses the opportunities and challenges of implementing a bad bank in India, comparing it to examples from other countries. It concludes that while resolving bad loans quickly will be difficult, successful examples from other nations indicate that a bad bank could ultimately be effective in India as
Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
The document discusses non-performing assets (NPAs) in the Indian banking system. It defines key NPA terms like gross NPA, net NPA, and standard, substandard, doubtful, and loss assets. It identifies causes of NPAs on both the borrower side, like lack of planning and fund diversions, and banker side, like defective sanctioning and slow decision making. It outlines RBI guidelines on NPA classification and provisioning requirements. Methods for recovering NPAs like Debt Recovery Tribunals, Lok Adalats, SARFAESI Act, and asset reconstruction companies are summarized.
Economic Analysis of NPA’s in the Indian Banking IndustryOindrilla Dutta Roy
Indian banks have faced rising levels of non-performing assets (NPAs) that have impacted bank operations and profitability. Gross NPAs are loans considered irrecoverable while net NPAs are obtained after deducting provisions, interest, and payments from gross NPAs. The high levels of NPAs stem from historical poor credit recovery in public sector banks and loans to government entities. Strategies to address NPAs include preventative measures during lending as well as curative measures post-default like one-time settlement schemes, debt recovery tribunals, and asset reconstruction companies.
This document summarizes the issue of bad loans in the Indian economy. It notes that non-performing assets (NPAs) or bad loans have been surging in both public and private sector banks in India. Public sector banks have higher NPAs of around Rs. 154 lakh crore compared to Rs. 46,000 crore for private banks. The key causes of bad loans are speculation, willful default, fraud, and diversion of funds. This high level of NPAs impacts banks' capital adequacy and restricts new lending and economic growth. The government has proposed solutions like setting up a "Bad Bank" called PARA that would acquire stressed assets from banks and try to recover loans. Other measures mentioned include debt
Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
This document provides a summary of a study on non-performing assets (NPAs) in India with a focus on State Bank of India and its associates from 2008 to 2014. It finds that NPAs have been steadily increasing in India's banking sector, reaching Rs. 1,198 billion (4.36% of total advances) by 2014. The study also examines the gross and net NPAs of SBI and its associates over the period, finding that while gross NPAs increased, provisions also rose. The document outlines objectives, methodology, definitions, literature reviewed, reasons for rising NPAs, measures taken by banks and government to address the problem, and recommendations of committees to control NPAs in India's banking system.
The document discusses the concept of a bad bank in India. It outlines the need for a bad bank due to rising non-performing assets (NPAs) in the banking sector. A bad bank would involve setting up an asset reconstruction company (ARC) and asset management company (AMC) that would acquire bad loans from commercial banks. This would allow banks to clean up their balance sheets while the bad bank tries to recover as much of the loan value as possible. The document discusses the opportunities and challenges of implementing a bad bank in India, comparing it to examples from other countries. It concludes that while resolving bad loans quickly will be difficult, successful examples from other nations indicate that a bad bank could ultimately be effective in India as
Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
The document discusses non-performing assets (NPAs) in the Indian banking system. It defines key NPA terms like gross NPA, net NPA, and standard, substandard, doubtful, and loss assets. It identifies causes of NPAs on both the borrower side, like lack of planning and fund diversions, and banker side, like defective sanctioning and slow decision making. It outlines RBI guidelines on NPA classification and provisioning requirements. Methods for recovering NPAs like Debt Recovery Tribunals, Lok Adalats, SARFAESI Act, and asset reconstruction companies are summarized.
Economic Analysis of NPA’s in the Indian Banking IndustryOindrilla Dutta Roy
Indian banks have faced rising levels of non-performing assets (NPAs) that have impacted bank operations and profitability. Gross NPAs are loans considered irrecoverable while net NPAs are obtained after deducting provisions, interest, and payments from gross NPAs. The high levels of NPAs stem from historical poor credit recovery in public sector banks and loans to government entities. Strategies to address NPAs include preventative measures during lending as well as curative measures post-default like one-time settlement schemes, debt recovery tribunals, and asset reconstruction companies.
This document summarizes the issue of bad loans in the Indian economy. It notes that non-performing assets (NPAs) or bad loans have been surging in both public and private sector banks in India. Public sector banks have higher NPAs of around Rs. 154 lakh crore compared to Rs. 46,000 crore for private banks. The key causes of bad loans are speculation, willful default, fraud, and diversion of funds. This high level of NPAs impacts banks' capital adequacy and restricts new lending and economic growth. The government has proposed solutions like setting up a "Bad Bank" called PARA that would acquire stressed assets from banks and try to recover loans. Other measures mentioned include debt
This document presents a case study on non-performing assets and financial performance at Kerala Gramin Bank. It discusses how NPAs affect bank profitability and discusses the objectives, scope, and significance of studying NPAs. The study examines trends in KGB's gross advances, NPAs, provisions for NPAs, and other financial metrics over several years. It finds that while some NPA metrics like the net NPA ratio are declining, others like additions to NPAs have increased. Suggestions for improving NPA management include better loan appraisal and recovery processes. In conclusion, controlling NPAs requires measures to avoid lending to non-creditworthy borrowers and closely monitor loan usage.
Against the backdrop of important structural reforms and terms of trade gains, India recorded strong growth in recent years in both economic activity and financial assets. Increased diversification, commercial orientation, and technology-driven inclusion have supported growth in the financial industry, backed by improved legal, regulatory, and supervisory frameworks. Yet, the financial sector is grappling with significant challenges, and growth has recently slowed. High nonperforming assets (NPAs) and slow deleveraging and repair of corporate balance sheets are testing the resilience of the banking system and holding back investment and growth.
BASEL CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION DETAILED ASSESSMENTJalaj Jain
The Reserve Bank of India (RBI) is to be commended for its tightly controlled
regulatory and supervisory regime, consisting of higher than minimum capital
requirements, frequent, hands-on and comprehensive onsite inspections, a conservative
liquidity risk policy and restrictions on banks’ capacity to take on more volatile
exposures. The Indian banking system remained largely stable during the global financial
crisis. Since then, the government of India and RBI have taken additional measures to
enhance the soundness and resilience of the banking system, such as the establishment of a
Financial Stability and Development Council (FSDC), the implementation of a
countercyclical provisioning regime, and the development of a roadmap for the introduction
of a holding company structure.
Empowering MSMEs - Policies of Financial Regulator - Part - 5Resurgent India
To ensure formal finance to priority sectors such as agriculture and MSME, Priority Sector Lending guidelines have been in place for commercial banks since 1972. Under these guidelines, domestic commercial banks are required to allocate 40 percent of the net bank credit for priority sectors (32 percent norm for foreign banks.
Report of The Committee to Review Governance of Boards of Banks in IndiaJalaj Jain
The financial position of public sector banks is fragile, partly masked by regulatory
forbearance. Forbearance delays, but does not extinguish, the recognition of this fragility.
Capital is significantly eroded with the proportion of stressed assets rising rapidly. The Report
projects, under different scenarios, the capital requirements till March 2018 in order that
provisions are prudent, there is adequate balance sheet growth to support the needs of the
economy, and capital is in line with the more demanding requirements of Basel 3.
This document summarizes an article from the International Journal of Advanced Research in Management that assesses risk management in the Indian banking sector, with a focus on public and private sector banks. It provides context on risk management and non-performing assets (NPAs) in banking. The study analyzes trends in NPAs for public and private sector banks from 1992 to 2012 and examines capital adequacy ratios after the implementation of Basel II regulations from 2007 to 2012. The document reviews previous literature on risk management and NPAs and outlines the objectives and methodology of the research.
Effect of capital adequacy on the profitability of theolufemiadebayo
This document examines the effect of capital adequacy requirements on the profitability and performance of Nigerian banks from 1999-2008. It analyzes the relationship between capital adequacy ratios and various performance indicators like return on assets, return on capital employed, and efficiency ratios. The study finds that increases in banks' capital bases did not significantly improve their profitability or performance. This suggests that simply increasing capital requirements is not enough and other factors like corporate governance, personnel training, and macroeconomic stability also influence banks' financial health. The paper recommends pragmatic reforms in these areas to help ensure soundness in the Nigerian banking sector.
This document is a project report on non-performing assets (NPAs) in Indian commercial banks. The primary objectives are to study the challenges faced by public and private sector banks with NPAs and analyze the NPA position of selected banks. Secondary objectives are to understand what NPAs are, their underlying causes, and their impacts on bank operations. The report finds that NPAs are increasing yearly for all commercial banks due to rising loan amounts. It provides data on the gross NPAs and percentages for various public sector banks in 2013-14, with one bank having the highest gross NPAs and another having the highest NPA percentage. The report recommends actions like securitization, improved staff training, and motivating delinquent customers to reduce
Inclusive Development In Financial Sector Of Bangladesh: After 1971 To Presen...Sifat Hasan
This presentation summarizes the inclusive development of Bangladesh's financial sector from 1971 to the present. It provides an overview of the country's financial system, including formal, semiformal, and informal sectors. It also describes the various types of financial institutions that operate in Bangladesh, such as commercial banks, Islamic banks, and non-bank financial institutions. The presentation highlights key products, services, and technological developments in the banking sector, and discusses both challenges and recent improvements to the financial system. It concludes by emphasizing areas for future development, such as investing in information technology and improving regulatory oversight.
Comparative Analysis of NPA in Public, Private & in Private Sector Banks.Rajath Kunder
This document discusses non-performing assets (NPAs) in banks in India. It defines NPAs as loans that are in jeopardy of default if interest or principal payments are overdue for 90 days. Growing NPAs can negatively impact bank profitability, liquidity, and management resources. The document categorizes NPAs as sub-standard, doubtful or loss assets depending on the period of default. It also analyzes reasons for NPAs like internal factors related to borrowers or external economic issues, and lists early symptoms of emerging NPAs.
Key Takeaways:
- Overview of the FSR
- Global Macro Financial Developments
- Economic Growth and Financial Conditions in India
- Performance of Scheduled Commercial Banks
Econometrics Analysis of Capital Adequacy Ratios and the Impact on Profitabil...iosrjce
This paper examines the econometrics analysis of capital adequacy ratios and the impact on the
profitability of Commercial Banks in Nigeria from 1980 – 2013. The objective is to investigate whether there is
a dynamic long run relationship between capital adequacy ratios and the profitability of commercial banks.
Time series data were sourced from Stock Exchange factbook and financial statement of quoted commercial
banks and the Johansen co-integration techniques in vector error correction model setting (VECM) as well as
the granger causality test were employed. The study has Return on Asset (ROA), Return on Investment (ROI)
and Return on Equity (ROE) as the dependent variables and the independent variables are Adjusted Capital to
Risk Asset Ratio (ACRR), Capital to Deposit Ratio (CTD), Capital to Net Loans and Advances Ratio (CNLAR),
Capital to Risk Asset Ratio (CRA) and Capital to Total Asset Ratio (CTAR). The empirical result demonstrated
vividly in the models that there is a positive long run dynamic and significant relationship between return on
asset and capital to risk asset ratio and capital to deposit ratio while others are negatively correlated. The
findings also revealed that there is bi-directional causality running from ROA to ACRR and ROA to CNLAR. We
therefore recommend that financial policies should be strengthened to deepen the capital base of Nigerian
Commercial banks to enhance bank profitability and sustain economic growth.
A Project Report on LRES_Anurag Ghosh_16PGDMBFS08Anurag Ghosh
This document is a project report on the SARFAESI Act and NPA management submitted by Anurag Ghosh. It begins with an acknowledgement expressing gratitude to the project guide Prof. Deepak Tandon. The methodology section describes the use of primary and secondary data sources from organizations like RBI and banks to analyze NPA levels and cases related to the SARFAESI Act. The document contains an index and sections on the overview of SARFAESI Act and NPA management, global and Indian loan scenarios, data analysis of top banks' NPAs showing a correlation between loans and NPAs, details of the SARFAESI Act, cases studies, recommendations and a conclusion.
1. The document discusses the structure and regulation of India's banking industry, which is dominated by public sector banks that account for 65% of credit. 2. It analyzes key metrics like non-performing assets, credit composition, profitability, and financial inclusion efforts. 3. The challenges facing the Indian banking sector are increasing infrastructure loan stress, the need for bank consolidation, competition in retail banking, and improving risk management and customer grievance redressal.
This document contains notes to accounts from a bank's annual report for the years ending 2015, 2014, and 2013. It includes sections on earnings per share, business ratios, capital adequacy ratios, liquidity coverage ratios, investments, derivatives, non-performing assets, and asset health management. Key details provided include the bank's CRAR, LCR ratio, non-SLR investments breakdown, HTM securities balances, NPA provisions, and that the bank did not originate any securitized loans in 2015.
Indian Construction Equipment and Infrastructure Financing MarketNiraj Singhvi
This report is prepared by Maple Growth Partners, an investment research and strategic advisory firm.
One of our Singapore-based impact investing fund client had asked us to conduct a detailed study within the Indian NBFC market to identify growth segments based on their investment criteria. They were looking for tech-oriented companies with an investment ticket size of less than $1 million. This full report is a 300 pager document providing a detailed overview of the Indian NBFC industry.
We first provided a broad overview of the Indian NBFC market and identified 12 service segments such as SME, education, healthcare, auto, housing, infra finance, construction equipment finance, loan against property (LAP), affordable housing, microfinance, gold, and wholesale finance. Of these identified segments, we carried out a detailed study on the following 9 segments our client was broadly interested into: SME, auto, healthcare, education, housing, affordable housing, construction equipment finance, infra finance, and LAP.
Then, we compared and evaluated all these segments based on a strict investment parameter framework to come up with a more fact-based (rather than intuitive) investment rationale and go-to-market strategies. We later presented our sector insights, value creation game plan, and actionable targets for each of the attractive segments, along with a directory of industry experts and influencers so that our client had the primary first-hand resource to assess the investment opportunities within the identified attractive service segments.
While the entire report is exclusive for the said client, we have provided our piecemeal analysis of the two least interested sectors (from the client perspective) i.e. infrastructure financing and construction equipment finance in order to showcase our research and analytical skill-sets and capabilities.
The document summarizes the Central Bank of Sri Lanka's plans to consolidate the financial sector in Sri Lanka. It notes that the banking and NBFI sectors are currently dominated by a small number of large institutions. The consolidation aims to have 5 banks with over Rs. 1 trillion in assets, a reduced number of banks and NBFIs, and increased minimum capital requirements for banks and NBFIs. NBFIs will be categorized and larger Category A NBFIs will be expected to absorb Category B NBFIs through mergers by set deadlines. The changes aim to strengthen financial system stability as Sri Lanka's economy grows to US$100 billion.
Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
This document analyzes trends in non-performing assets (NPAs) for selected commercial banks in India from 1996-1997 to 2009-2010. It finds that gross NPAs as a percentage of total advances and total assets have generally declined over time for State Bank of India, Punjab National Bank, and Central Bank of India. However, NPAs still represent a major challenge for banks, as they reduce profitability by requiring provisions and eroding the capital base. The document also examines reasons for NPAs including internal factors like poor management and external factors like economic conditions. It analyzes the effect of high NPAs, such as reduced interest income and erosion of profits from provisioning requirements.
NBFC's have played a key role in financing the needs of the Indian industry especially the small and medium enterprises and the small entrepreneurs, both in the urban and the rural areas. While the under-penetration of banking network, rising affluence, large working age population and rising need for financial services point to the tremendous potential for the growth of NBFC's. A vigorous banking and financial sector is critical for facilitating higher economic growth. Financial intermediaries like Non-Banking Financial Companies (NBFCs) constitute a significant element of the financial system and have penetrated into those areas where banks did not dare by taking both the operational and regulatory risks. NBFCs form an integral part of the Indian financial system. They have been very instrumental in contribution to the Government’s agenda of financial inclusion by filling the important gap of supplying credit to retail customers in the relatively under-served and un-banked areas. They play an active complementary role to the banking system by broadening access to financial services, enhancing competition and diversification of financial sector. NBFCs are known for their higher risk taking capacity than the banks. The intention of this study is to analyze the investment strategies of non-bank finance companies (NBFCs) which are providing the financial services.
Financial services contribute to economic growth and development by facilitating banking, investment, savings, insurance, stock markets, debt, and equity shares. These services help private entities and individuals save funds, compete in the market, and protect against risks and ambiguity. They also contribute to the GDP and promote liquidity. Financial services generate employment, reduce the cost of transactions and borrowing, and minimise asymmetric information.
Visit: https://m1nxt.blogspot.com/2023/11/stay-informed-latest-financial-services.html
This document presents a case study on non-performing assets and financial performance at Kerala Gramin Bank. It discusses how NPAs affect bank profitability and discusses the objectives, scope, and significance of studying NPAs. The study examines trends in KGB's gross advances, NPAs, provisions for NPAs, and other financial metrics over several years. It finds that while some NPA metrics like the net NPA ratio are declining, others like additions to NPAs have increased. Suggestions for improving NPA management include better loan appraisal and recovery processes. In conclusion, controlling NPAs requires measures to avoid lending to non-creditworthy borrowers and closely monitor loan usage.
Against the backdrop of important structural reforms and terms of trade gains, India recorded strong growth in recent years in both economic activity and financial assets. Increased diversification, commercial orientation, and technology-driven inclusion have supported growth in the financial industry, backed by improved legal, regulatory, and supervisory frameworks. Yet, the financial sector is grappling with significant challenges, and growth has recently slowed. High nonperforming assets (NPAs) and slow deleveraging and repair of corporate balance sheets are testing the resilience of the banking system and holding back investment and growth.
BASEL CORE PRINCIPLES FOR EFFECTIVE BANKING SUPERVISION DETAILED ASSESSMENTJalaj Jain
The Reserve Bank of India (RBI) is to be commended for its tightly controlled
regulatory and supervisory regime, consisting of higher than minimum capital
requirements, frequent, hands-on and comprehensive onsite inspections, a conservative
liquidity risk policy and restrictions on banks’ capacity to take on more volatile
exposures. The Indian banking system remained largely stable during the global financial
crisis. Since then, the government of India and RBI have taken additional measures to
enhance the soundness and resilience of the banking system, such as the establishment of a
Financial Stability and Development Council (FSDC), the implementation of a
countercyclical provisioning regime, and the development of a roadmap for the introduction
of a holding company structure.
Empowering MSMEs - Policies of Financial Regulator - Part - 5Resurgent India
To ensure formal finance to priority sectors such as agriculture and MSME, Priority Sector Lending guidelines have been in place for commercial banks since 1972. Under these guidelines, domestic commercial banks are required to allocate 40 percent of the net bank credit for priority sectors (32 percent norm for foreign banks.
Report of The Committee to Review Governance of Boards of Banks in IndiaJalaj Jain
The financial position of public sector banks is fragile, partly masked by regulatory
forbearance. Forbearance delays, but does not extinguish, the recognition of this fragility.
Capital is significantly eroded with the proportion of stressed assets rising rapidly. The Report
projects, under different scenarios, the capital requirements till March 2018 in order that
provisions are prudent, there is adequate balance sheet growth to support the needs of the
economy, and capital is in line with the more demanding requirements of Basel 3.
This document summarizes an article from the International Journal of Advanced Research in Management that assesses risk management in the Indian banking sector, with a focus on public and private sector banks. It provides context on risk management and non-performing assets (NPAs) in banking. The study analyzes trends in NPAs for public and private sector banks from 1992 to 2012 and examines capital adequacy ratios after the implementation of Basel II regulations from 2007 to 2012. The document reviews previous literature on risk management and NPAs and outlines the objectives and methodology of the research.
Effect of capital adequacy on the profitability of theolufemiadebayo
This document examines the effect of capital adequacy requirements on the profitability and performance of Nigerian banks from 1999-2008. It analyzes the relationship between capital adequacy ratios and various performance indicators like return on assets, return on capital employed, and efficiency ratios. The study finds that increases in banks' capital bases did not significantly improve their profitability or performance. This suggests that simply increasing capital requirements is not enough and other factors like corporate governance, personnel training, and macroeconomic stability also influence banks' financial health. The paper recommends pragmatic reforms in these areas to help ensure soundness in the Nigerian banking sector.
This document is a project report on non-performing assets (NPAs) in Indian commercial banks. The primary objectives are to study the challenges faced by public and private sector banks with NPAs and analyze the NPA position of selected banks. Secondary objectives are to understand what NPAs are, their underlying causes, and their impacts on bank operations. The report finds that NPAs are increasing yearly for all commercial banks due to rising loan amounts. It provides data on the gross NPAs and percentages for various public sector banks in 2013-14, with one bank having the highest gross NPAs and another having the highest NPA percentage. The report recommends actions like securitization, improved staff training, and motivating delinquent customers to reduce
Inclusive Development In Financial Sector Of Bangladesh: After 1971 To Presen...Sifat Hasan
This presentation summarizes the inclusive development of Bangladesh's financial sector from 1971 to the present. It provides an overview of the country's financial system, including formal, semiformal, and informal sectors. It also describes the various types of financial institutions that operate in Bangladesh, such as commercial banks, Islamic banks, and non-bank financial institutions. The presentation highlights key products, services, and technological developments in the banking sector, and discusses both challenges and recent improvements to the financial system. It concludes by emphasizing areas for future development, such as investing in information technology and improving regulatory oversight.
Comparative Analysis of NPA in Public, Private & in Private Sector Banks.Rajath Kunder
This document discusses non-performing assets (NPAs) in banks in India. It defines NPAs as loans that are in jeopardy of default if interest or principal payments are overdue for 90 days. Growing NPAs can negatively impact bank profitability, liquidity, and management resources. The document categorizes NPAs as sub-standard, doubtful or loss assets depending on the period of default. It also analyzes reasons for NPAs like internal factors related to borrowers or external economic issues, and lists early symptoms of emerging NPAs.
Key Takeaways:
- Overview of the FSR
- Global Macro Financial Developments
- Economic Growth and Financial Conditions in India
- Performance of Scheduled Commercial Banks
Econometrics Analysis of Capital Adequacy Ratios and the Impact on Profitabil...iosrjce
This paper examines the econometrics analysis of capital adequacy ratios and the impact on the
profitability of Commercial Banks in Nigeria from 1980 – 2013. The objective is to investigate whether there is
a dynamic long run relationship between capital adequacy ratios and the profitability of commercial banks.
Time series data were sourced from Stock Exchange factbook and financial statement of quoted commercial
banks and the Johansen co-integration techniques in vector error correction model setting (VECM) as well as
the granger causality test were employed. The study has Return on Asset (ROA), Return on Investment (ROI)
and Return on Equity (ROE) as the dependent variables and the independent variables are Adjusted Capital to
Risk Asset Ratio (ACRR), Capital to Deposit Ratio (CTD), Capital to Net Loans and Advances Ratio (CNLAR),
Capital to Risk Asset Ratio (CRA) and Capital to Total Asset Ratio (CTAR). The empirical result demonstrated
vividly in the models that there is a positive long run dynamic and significant relationship between return on
asset and capital to risk asset ratio and capital to deposit ratio while others are negatively correlated. The
findings also revealed that there is bi-directional causality running from ROA to ACRR and ROA to CNLAR. We
therefore recommend that financial policies should be strengthened to deepen the capital base of Nigerian
Commercial banks to enhance bank profitability and sustain economic growth.
A Project Report on LRES_Anurag Ghosh_16PGDMBFS08Anurag Ghosh
This document is a project report on the SARFAESI Act and NPA management submitted by Anurag Ghosh. It begins with an acknowledgement expressing gratitude to the project guide Prof. Deepak Tandon. The methodology section describes the use of primary and secondary data sources from organizations like RBI and banks to analyze NPA levels and cases related to the SARFAESI Act. The document contains an index and sections on the overview of SARFAESI Act and NPA management, global and Indian loan scenarios, data analysis of top banks' NPAs showing a correlation between loans and NPAs, details of the SARFAESI Act, cases studies, recommendations and a conclusion.
1. The document discusses the structure and regulation of India's banking industry, which is dominated by public sector banks that account for 65% of credit. 2. It analyzes key metrics like non-performing assets, credit composition, profitability, and financial inclusion efforts. 3. The challenges facing the Indian banking sector are increasing infrastructure loan stress, the need for bank consolidation, competition in retail banking, and improving risk management and customer grievance redressal.
This document contains notes to accounts from a bank's annual report for the years ending 2015, 2014, and 2013. It includes sections on earnings per share, business ratios, capital adequacy ratios, liquidity coverage ratios, investments, derivatives, non-performing assets, and asset health management. Key details provided include the bank's CRAR, LCR ratio, non-SLR investments breakdown, HTM securities balances, NPA provisions, and that the bank did not originate any securitized loans in 2015.
Indian Construction Equipment and Infrastructure Financing MarketNiraj Singhvi
This report is prepared by Maple Growth Partners, an investment research and strategic advisory firm.
One of our Singapore-based impact investing fund client had asked us to conduct a detailed study within the Indian NBFC market to identify growth segments based on their investment criteria. They were looking for tech-oriented companies with an investment ticket size of less than $1 million. This full report is a 300 pager document providing a detailed overview of the Indian NBFC industry.
We first provided a broad overview of the Indian NBFC market and identified 12 service segments such as SME, education, healthcare, auto, housing, infra finance, construction equipment finance, loan against property (LAP), affordable housing, microfinance, gold, and wholesale finance. Of these identified segments, we carried out a detailed study on the following 9 segments our client was broadly interested into: SME, auto, healthcare, education, housing, affordable housing, construction equipment finance, infra finance, and LAP.
Then, we compared and evaluated all these segments based on a strict investment parameter framework to come up with a more fact-based (rather than intuitive) investment rationale and go-to-market strategies. We later presented our sector insights, value creation game plan, and actionable targets for each of the attractive segments, along with a directory of industry experts and influencers so that our client had the primary first-hand resource to assess the investment opportunities within the identified attractive service segments.
While the entire report is exclusive for the said client, we have provided our piecemeal analysis of the two least interested sectors (from the client perspective) i.e. infrastructure financing and construction equipment finance in order to showcase our research and analytical skill-sets and capabilities.
The document summarizes the Central Bank of Sri Lanka's plans to consolidate the financial sector in Sri Lanka. It notes that the banking and NBFI sectors are currently dominated by a small number of large institutions. The consolidation aims to have 5 banks with over Rs. 1 trillion in assets, a reduced number of banks and NBFIs, and increased minimum capital requirements for banks and NBFIs. NBFIs will be categorized and larger Category A NBFIs will be expected to absorb Category B NBFIs through mergers by set deadlines. The changes aim to strengthen financial system stability as Sri Lanka's economy grows to US$100 billion.
Teams will study the existing Financial Sector Regulations of various Regulators in India i.e SEBI, RBI, IRDA, PFRDA, FMC etc, (all or any of them) as well as compare them with regulations by global regulators viz SEC, Regulatory Authorities in UK, Singapore etc.
This document analyzes trends in non-performing assets (NPAs) for selected commercial banks in India from 1996-1997 to 2009-2010. It finds that gross NPAs as a percentage of total advances and total assets have generally declined over time for State Bank of India, Punjab National Bank, and Central Bank of India. However, NPAs still represent a major challenge for banks, as they reduce profitability by requiring provisions and eroding the capital base. The document also examines reasons for NPAs including internal factors like poor management and external factors like economic conditions. It analyzes the effect of high NPAs, such as reduced interest income and erosion of profits from provisioning requirements.
NBFC's have played a key role in financing the needs of the Indian industry especially the small and medium enterprises and the small entrepreneurs, both in the urban and the rural areas. While the under-penetration of banking network, rising affluence, large working age population and rising need for financial services point to the tremendous potential for the growth of NBFC's. A vigorous banking and financial sector is critical for facilitating higher economic growth. Financial intermediaries like Non-Banking Financial Companies (NBFCs) constitute a significant element of the financial system and have penetrated into those areas where banks did not dare by taking both the operational and regulatory risks. NBFCs form an integral part of the Indian financial system. They have been very instrumental in contribution to the Government’s agenda of financial inclusion by filling the important gap of supplying credit to retail customers in the relatively under-served and un-banked areas. They play an active complementary role to the banking system by broadening access to financial services, enhancing competition and diversification of financial sector. NBFCs are known for their higher risk taking capacity than the banks. The intention of this study is to analyze the investment strategies of non-bank finance companies (NBFCs) which are providing the financial services.
Financial services contribute to economic growth and development by facilitating banking, investment, savings, insurance, stock markets, debt, and equity shares. These services help private entities and individuals save funds, compete in the market, and protect against risks and ambiguity. They also contribute to the GDP and promote liquidity. Financial services generate employment, reduce the cost of transactions and borrowing, and minimise asymmetric information.
Visit: https://m1nxt.blogspot.com/2023/11/stay-informed-latest-financial-services.html
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Summer Training Project Report on
Credit Appraisal System IN Commercial Vehicle loans
Undertaken at
INDIA INFOLINE FINANCE LTD
Submitted in Partial Fulfilment of the Requirement for the Award of the Degree of
Master of Business Administration
By
Danish Showkat Dhar
Roll No.14036113030
Reg. No.:-29437-IC-2011
Under The Supervision of
MR. Sachin Gupta
(AVP: CREDIT & OPS)
INDIA INFOLINE FINANCE LTD
DEPT. OF MANAGEMENT STUDIES
SOUTH CAMPUS UNIVERSITY OF KASHMIR
ANANTNAG
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2. Index of Slides
• Introduction
• Risk Analysis
• Regulations
• Trends in the industry
• Key players
• Funding and Opportunities for investments for institutions and HNIs
• News about potential opportunities
• Threats or risk involved & Risk Mitigates
• Approach to Investment Decision Making
• Your recommendations
• Conclusion
• Sources of Information
• Alternate investment options – Healthcare
• Alternate investment options – Education
• Alternate investment options – Real Estate 2
3. Introduction to Micro Finance
• Microfinance is defined as the large-scale provision of small loans and other
financial services to low-income people by conveniently located commercial
financial institutions.
• Approaches to lending
• Not-for Profit - the poverty lending approach, which is donor- and
government-funded, and the financial systems approach, which is
operated by self-sufficient financial intermediaries. The Self-Help Group
(SHG)-Bank Linkage Program (SBLP) which was launched Reserve Bank of
India, in 1992 marks the beginning of Organised Micro Finance in India.
• For Profit - the financial systems approach
• Business Model - The success of microfinance as a sustainable business
model largely depends on
• scale
• high repayment rates
• low transaction costs relative to traditional financial institutions
3
4. Risk Analysis
The MFIs run three important risks :
• Concentration risk – Concentration of loans to a particular
geography or types of business.
• Credit risk – Lending beyond the capacity of the borrowers to
repay, lack of proper due diligence, etc.
• Compliance risk – Non-compliance on the part of MFIs in
following the RBI guidelines.
• Governance risk – refers to lack of transparency in the
decision making process and accountability for action taken
(more relevant for the investors in MFIs)
4
6. Regulations
• The regulatory regime of Microfinance Institutions commenced with
the notification of Directions by RBI, vide Notification no.
DNBS.PD.No.234 CGM (US) 2011 dated December 02, 2011
containing the regulatory framework for NBFC-MFIs .
• NBFC lending less than 10% of their total assets need not register
under these separate regulations. They can continue to be
registered under their existing category.
• Cap on Lending - Lower of the following:
• A - Cost of Funds + 10% (in case of Large MFIs) or 10% (in case of other MFIs). For
this purpose large MFI are those with loan portfolios exceeding n Rs... 100 crores.
• B – Average Base Rate of five largest Commercial Banks as notified by RBI on
quarterly basis, multiplied by 2.75 , currently 25.8775% (9.41*2.75) applicable for
the quarter beginning 1-Jan-2017.
• Capital Adequacy Ratio – 15% of the Aggregate Risk Weighted
Assets shall be maintained as Tier-I and Tier-II Capital.
• Code of Fair Practices to be followed. 6
7. Trends in the industry
• As of 31st Dec 2016, MFIs provided microcredit to over 3.38 Cr clients, an increase of
42% over Q3 FY 15-16.
• The aggregate gross loan portfolio (GLP) of MFIs stood at Rs.. 56,634 Cr (excluding
non performing portfolio i.e. PAR > 180 days in Andhra Pradesh and Telangana). This
represents a YoY growth of 53% over Q3 FY 15-16 and a decrease of 2% over the last
quarter.
• Loan amount disbursed in Q3 FY 16-17 reduced by 16% compared to Q3 FY 15-16
reaching to Rs.. 12,424 Cr.
• Total number of loans disbursed by MFIs dropped by 26% in Q3 FY 16-17 compared
with Q3 FY 15-16 and by 33% compared with Q2 FY 16-17.
• Portfolio at Risk (PAR) 30 has increased considerably from half a percentage in the
previous quarters to 7.52% in Q3 FY 16-17. This is directly attributed to the impact of
demonetization.
• Average loan amount disbursed per account is now Rs.. 20,981. The figure for Q3 FY
15-16 was Rs.. 18,425.
• MFIs now cover 31 states/union territories.
• In terms of regional distribution of portfolio (GLP), south accounts for 33% of the
total industry portfolio, north for 27%, west for 24%, and east for 16%. Top five top
states, viz. Karnataka, Tamil Nadu, Maharashtra, Uttar Pradesh and Madhya Pradesh
account for 54% of GLP
7
8. Key Players
As on 31st Dec 2016, microfinance industry has total loan portfolio of
Rs.. 98,625 Cr. Based on data captured for 31st March 2016, this roughly
represents over 90% of the total industry portfolio excluding SHGs. It
may be noted that
Seven MFI which are designated to be Small Finance Banks (SFBs)
account for 46% of NBFC-MFIs portfolio amounting to Rs.. 26,228 Cr.
These are -
1. Disha,
2. ESAF Microfinance
3. Janalakhsmi Financial Services
4. RGVN (North East) Microfinance
5. Suryoday Microfinance
6. Ujjivan
7. Utkarsh 8
9. Funding and Opportunities for
investments for institutions and HNI
• As of 31st December 2016, the Total equity of the industry
stand at Rs.. 15,100 Cr.
• At an aggregated industry level, 56% is domestic equity and
the rest is foreign equity.
• As per the FDI Policy 100% Foreign Equity is allowed into
“Micro Credit” under automatic route. Similarly, in SFBs
foreign equity is allowed up to 49% under automatic route and
49% to 74% under government approval route.
• There are ample opportunities for both domestic and foreign
investors to be make investments in MFI Sector.
• These opportunities could come both in the form of Debt and
Equity Investments. 9
10. NewsaboutMFIspotentiallylookingforinvestments
Some of the MFI that are looking to raise finance include
1. M Power Micro Finance (http://www.vccircle.com/news/micro-
finance/2016/11/03/exclusive-m-power-micro-finance-raise-capital-early-
investor-part )
2. Annapurna Micro Finance (http://www.vccircle.com/news/micro-
finance/2016/10/12/exclusive-annapurna-microfinance-plans-fresh-
fundraising-early)
3. Utkarsh Micro Finance (Exclusive: Utkarsh Micro Finance’s new funding to
value it at $150 mn)
4. Jana Lakshmi Financial Services (Janalakshmi Financial Services to raise $50
mn from IFC)
Note: Some of these deals may have already achieved financial closure. The
above list has been given only for illustrative purposes.
10
11. Threats or risks involved& RiskMitigates
Threats / Risks Risk Mitigates
Concentration Risk Diversification into various geographies and business segments
Credit Risk Devise and implement robust processes in the area of
1. Client Selection and Due Diligence.
2. Centralisation of Credit Application Processing.
3. Layered hierarch of sanctioning process.
4. Strict adherence to KYC norms
5. Evaluation of the ability of the borrower to repay the loan
through income generating activities.
Compliance Risk 1. Establishment of Compliance Cell that receive all the
communications relating to compliance matters.
2. Regular training programs to be conducted to all the employees
both at the time of induction and also on an on going basis.
3. Active monitoring of Asset Liability Management
4. Proactive action to be taken to maintain and exceed CAR norms.
Governance Risk Devise and implement progressive corporate governance policies in
accordance with the RBI / Company Law regulations. 11
12. ApproachtoInvestmentDecisionMaking
• The primary approach towards any investment decision making shall be driven
by analytical insights into the financial fundamentals of and future business
opportunities relevant a particular MFI.
• The investment opportunism could be both in Private Equity and Public
(Listed) Equity.
• Some of the fundamentals to be looked into would be as follows:
• Operational Efficiencies (Industry Average during FY 2015-16)
• Clients per Loan Officer (554)
• Clients per Branch (3,721)
• GLP per Loan Officer (Rs... 84 lakhs)
• GLP per Branch (Rs... 5.70 crores)
• Cost Per Loan i.e. cost of acquiring and servicing a client(Rs. 1,100)
• Financial Parameters to be evaluated
• OSS i.e. Operational Self Sufficiency (119%)
• Return on Assets (2.12%)
• Return on Equity (12.60%)
• Profit Margin (15.00%)
• Write Off Ration (0.25%)
12
13. ApproachtoInvestmentDecisionMaking ..Contd.
In addition to the financial parameters mentioned in the previous slide
there are quite a few non-financial parameters to be considered. These
include:
1. Integrity and the track record of the Promoters and the Senior
Management Team.
2. Geographical and segmental spread of the business.
3. Risk Profile of customer segments.
4. Robustness of the business practices, Systems, Procedures and the
related internal controls.
5. Transparency and Corporate Governance Practices.
6. Investment Exit avenues in case of Private Equity (IPO Listing, Buy back
etc.)
7. Linkages with Self Help Groups linkages which help the MFIs to
a. Get insights into their borrowers
b. Provided guidance on their income generating activities
c. Constant mentoring on their spending patterns
d. Guide and support on Health, Safety and Education matters
13
14. Recommendations – SFB Designates
• For the purpose of this study the following ten companies, which received in-
principle approval from RBI to set up a SFB can be shortlisted for the initial
consideration:
• 1. Au Financiers (India) Ltd., Jaipur
• 2. Capital Local Area Bank Ltd., Jalandhar
• 3. Disha Microfin Private Ltd., Ahmedabad
• 4. Equitas Holdings P Limited, Chennai
• 5. ESAF Microfinance and Investments Private Ltd., Chennai
• 6. Janalakshmi Financial Services Private Limited, Bengaluru
• 7. RGVN (North East) Microfinance Limited, Guwahati
• 8. Suryoday Micro Finance Private Ltd., Navi Mumbai
• 9. Ujjivan Financial Services Private Ltd., Bengaluru
• 10.Utkarsh Micro Finance Private Ltd., Varanasi
Since all the above listed Companies have got in-principle sanction, they would
looking forward to raise capital expand their Branch Network and thereby their
business. Companies like AU Financiers have already raised funds from IFC, Warburg
Pincus, Chrys Capital and Kedara Capital. Similarly, Disha is backed by India Value
Fund . 14
15. Recommendations – Large MFI (NBFCs)
Apart from the SFB designated entities listed in the previous slide the
following entitles which are large have the potential to expand their
business further and seek growth capital :
Sl. No. Name Sl. No. Name
1 Annapurna Micro Finance 8 Muthoot Microfin
2 Arohan Financial Services 9 RGVN (North East) Micro Finance
3 Asirvad Micro Finance 10 Sahre Microfin
4 BSS Micro Finance 11 Satin Microfin
5 Fusion Micro Finance 12 Sonata Microfin
6 GK Micro Finance 13
Spandana Spoorty Financial
Limited
7 Madura Microfin 14 SVCL Micro Finance
15
16. Recommendations ……….contd.
However it may be noted that the final investment decision shall
depend on the following:
• Financial & Operational Parameters, which shall be better than
that of industry average.
• Promoters integrity, experience, dedication and commitment to
the business.
• Robustness of their internal controls and business practices.
• Willingness and ability of the promoters to scale up on business
and corporate governance practices.
16
17. Conclusion
The MFI Sector though has been in existence for over four
decades now, it has come under formal regulatory regime of
RBI only in 2011. The best performing entities in the sector
have got a shot in the arm now with the gradual growth and
conversion into SBFs as listed in Slide no. 14.
Apart from those entities that have already got the In-
principle Sanctions from RBI to set up SFBs, there would
opportunities in the entities that are on the growth path to
move into the next orbit of SFBs, as mentioned in slide no.
15.
One has to check the capital appetite of each of both these
classes of entities and carefully plan an investment due
diligence based on the investment criteria mentioned
elsewhere in this study.
17
18. Sources of Information
• This entire study is based on the secondary research of the
following:
1. RBI Guidelines
2. Periodic data released by MFIN Micro Finance Institutions
Network, a Trade Body of MFIs)
3. Research Papers submitted to NSE
4. University Research Papers
5. Websites of various MFIs
6. News Paper Articles
7. Government of India Websites
8. Report on MFI Sector by the Sub-Committee of RBI Directors
headed by Mr Y H Malegam
18
19. Other Investment Opportunities in India
Healthcare
1. Healthcare –During the year 2014, the overall spend on
healthcare as a percentage to GDP was around 4.70% in
India v. 17.10% in the US, as per the World Bank statistics.
This points to a huge scope for increase in both public and
private spend on healthcare.
2. Currently the government spending on healthcare is less
than 1%. NITI Ayog is discouraging direct spending by the
Government on healthcare. This approach throws open
huge opportunity for private sector / FDI investment in
Healthcare, in the areas of Hospitals, Diagnostic Centres,
etc.
3. Medical Tourism is another segment within Healthcare that
offers immense potential. 19
20. Other Investment Opportunities in India
Education
• The education sector in India is poised to witness major growth in the
years to come as India will have world’s largest tertiary-age (school
going age) population and second largest graduate talent pipeline
globally by the end of 2020.
• In FY 2015-16, the education market was worth about US$ 100 billion
and is expected to reach US$ 116.4 billion in FY 2016-17. Currently,
higher education contributes 59.7 per cent of the market size, school
education 38.1 per cent, pre-school segment 1.6 per cent, and
technology and multi-media the remaining 0.6 per cent.
• Higher education system in India has undergone rapid expansion.
Currently, India’s higher education system is the largest in the world
enrolling over 70 million students while in less than two decades, India
has managed to create additional capacity for over 40 million students.
At present, higher education sector witnesses spending of over Rs
46,200 crore (US$ 6.93 billion), and it is expected to grow at an average
annual rate of over 18 per cent to reach Rs 232,500 crore (US$ 34.87
billion) in next 10 years.
20
21. Other InvestmentOpportunitiesin India
Real Estate
As per the Knight Frank FICCI study, pertaining to Q4 of 2016, due to
the effect of demonetisation, the current sentiment is at 41 percentile
(below 50 is pessimistic) and future sentiment is 59 percentile. What
it really means is that this the most opportune time to acquire real
estate assets.
However, one shall have a segmental approach to make investments in
the Indian Real Estate sector.
While the residential real estate is currently under stress. The office
market is buoyant. Some of the opportunities that can be considered
in select geographies (Mumbai and NCR to be avoided) are as follows:
1. Acquisition of pre-occupied and ready to occupy office spaces.
2. Development of industry specific infrastructure.
3. Affordable Housing 21