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ASSIGNMENT
DRIVE
|
FALL 2014
|
PROGRAM
|
MBADS (SEM 4/SEM 6)
MBAFLEX/ MBA (SEM 4)
PGDBMN (SEM 2)
|
SUBJECT CODE & NAME
|
MA0044 &
INSTITUTIONAL BANKING
|
BK ID
|
B1818
|
CREDITS
|
4
|
MARKS
|
60
|
Note: Answer all
questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.
Q. 1. In
Development Finance Institution (DFI) explain the changing face of DFIs in
India. Write about the challenges faced by DFIs and reorientation of DFIs.
Answer:While banks have
traditionally met short-term working capital requirements of industry, development
finance institutions (DFIs) have mainly catered to the medium to long-term
financing requirements. Industrial Finance Corporation of India (IFCI) was the
first DFI which was established to extend long-term finance to industry. This
was followed
Q. 2. Give a
brief introduction of Small Industries Development Bank of India (SIDBI).
Explain the important schemes of SIDBI. Write any few challenges in financing
Small Scale Industries (SSIs).
Answer: SIDBI was
established on April 2, 1990. The Charter establishing it, The Small Industries
Development Bank of India Act, 1989 envisaged SIDBI to be "the principal
financial institution for the promotion, financing and development of industry
in the small scale sector and to co-ordinate the functions of the institutions
engaged in the promotion and financing or developing industry in the small
scale sector and for matters connected therewith or incidental thereto. The
business domain of SIDBI consists of Micro, Small and Medium Enterprises
(MSMEs),
Q. 3. Explain the
role of Non-Banking Financial Companies (NBFCs) in agricultural finance.
Explain the RBIs regulation over DFIs.
Answer: The definition of
the term NBFC entails a very wide meaning. NBFCs include not just the finance
companies that the general public is largely familiar with; the term also
entails wider group of companies that are engaged in investment business,
insurance, chit fund, nidhi, merchant banking, stock broking, alternative
investments, etc. as their principal business. Today I would be concentrating
only on those NBFCs that are under the regulatory purview of the
Q. 4.Write about
the Power Finance Corporation Limited (PFC). Explain about Indian Railways
Finance Corporation (IRFC) and Venture Capital Funds(VCFs).
Answer: Explanation
of PFC: PFC (power factor correction; also known as power factor
controller) is a feature included in some computer and other power supply boxes
that reduces the amount of reactive power generated by a computer. Reactive
power operates at right angles to true power and energizes the magnetic field.
Reactive power has no real value for an electronic device, but electric
companies charge for both true and reactive power resulting in
Q. 5.Explain the
role of technology in institutional banking and also write about the advantages
and challenges of technology in institutional banking.
Answer: Institutional
Banking and Markets is responsible for managing the Group's relationships with
major corporate and government clients and institutional investors, and provides
a full range of capital raising, transactional and risk management products and
services. When many of your most
important relationships are across different time zones it makes
Q. 6. Give short
notes on:
External
Commercial Borrowings(ECBs)
Board for
Financial Supervision(BFS)
Prompt Corrective
Action(PCA) scheme
Management of
Non-Performing Assets (NPAs)
Answer: External
Commercial Borrowings(ECBs): An external commercial borrowing (ECB) is an
instrument used in India to facilitate the access to foreign money by Indian
corporations and PSUs (public sector undertakings). ECBs include commercial
bank loans, buyers' credit, suppliers' credit, securitised instruments such as
floating rate notes and fixed rate bonds etc., credit from official export
credit agencies and commercial
Board for
Financial Supervision(BFS): The Board of Financial Supervision (BFS) was
constituted in November 1994 as a committee of the Central Board of Directors
of the Reserve Bank of India with an objective to undertake consolidated
supervision of the financial sector comprising commercial banks, financial
institutions and non-banking finance
Prompt Corrective
Action(PCA) scheme: Prompt Corrective Action is a US federal law mandating
progressive penalties against banks that exhibit progressively deteriorating
capital ratios. At the lower extreme, a critically undercapitalized Federal
Deposit Insurance Corporation (FDIC)-regulated institution (i.e., one with a
ratio of total capital / assets below 2
Management of Non-Performing
Assets (NPAs): A Non-performing asset (NPA) is defined as a credit facility
in respect of which the interest and/or installment of principal has remained
‘past due’ for a specified period of time. NPA is a classification used by
financial institutions that refer to loans that are in jeopardy of default.
Once the borrower has failed to make
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