Financial Services and System

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ISBN 9789393665928

Publication Date Mon Nov 01 00:00:00 UTC 2004

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Table of contents

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Financial Services and System imparts knowledge in the various areas of financial services and system including topics on credit rating, mutual funds merchant banking and factoring. Comprehensive and student friendly this book in two parts is content rich and up to date.

Cover
Title Page
Copyright Page
Preface
Dedication
Contents
Part I — Financial System
- 1. Financial System—An Overview
  - Financial System
  - Features
  - Constituents
  - Financial Institutions
  - Financial Services
  - Financial Markets
  - Financial Instruments
  - Summary
  - Key Terms and Concepts
  - Review Questions
- 2. Macroeconomic Aggregates
  - Meaning
  - The Aggregates
    - Employment and Unemployment
    - Inflation and Deflation
    - Trade Cycles
    - Stagflation
    - Economic Growth
    - Exchange Rate and Balance of Payments
    - Deregulatory Measures
    - Technological Changes
    - Enhanced Competition
    - Global Portfolio Preferences
  - Macroeconomic Aggregates in India
    - Real Sector Policies
    - Agriculture Policy
    - Manufacturing, Infrastructure and Services
    - Trade Policies
    - Export and Import (EXIM) Policy (2002-2007)
    - Policies for External Capital Flows
    - Fiscal Policy
    - Tax Measures
    - Structural Reforms
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 3. Indian Financial System
  - Framework
  - Department of Banking Supervision (DBS)
  - Supervisory Role
  - Department of Non-Banking Supervision
  - Supervisory Process
    - Inspection
    - On-site Inspection
    - Off-site Monitoring & Surveillance System (OSMOS)
  - Board for Financial Supervision (BFS)
  - Advisory Council to BFS
  - Sub Committee (Audit) to BFS
  - Supervisory Jurisdiction
    - Supervision Strategies — Elements
    - Revised Strategies for Financial Supervision
  - Other Measures
    - Corporate Governance Framework
  - Transparency and Disclosure
  - Internal Controls and Housekeeping in Banks
    - Reconciliation of Inter-branch Accounts
    - Balancing of Books
    - Reconciliation of Nostro Accounts
    - Strengthening of Internal Audit/Control System
    - Audit System in Banks
    - Fraud Monitoring
  - Effective Banking Supervision—Core Principles
  - Summary
  - Key Terms and Concepts
  - Review Questions
- 4. Profile of Entrepreneur
  - Definition and Characteristics of Entrepreneur
  - The Changing Role of Entrepreneurs
  - Entrepreneur — Individual or Group?
  - Approaches to Entrepreneurship
  - Entrepreneurship Qualities
  - General Qualities
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 5. Global Financial System
  - Genesis
  - Essential Considerations
    - Supervision
    - Intermediation Process
    - Settlement System
    - Proliferation
    - Economic Instability
  - Summary
  - Key Terms and Concepts
  - Review Questions
- 6. Capital Structure Decisions
  - Capital Structure
  - Optimal Capital Structure
    - Simplicity
    - Low Cost
    - Maximum Return & Minimum Risks
    - Maximum Control
    - Liquidity
    - Flexibility
    - Equitable Capitalization
    - Optimum Leverage
  - Pattern of Capital Structure
  - Taking Decisions on Capital Structure
    - Cost Principle
    - Control Principle
    - Returnl Principle
    - Flexibility Principle
    - Timing Principle
  - Factors Affecting Capital Structure Decisions
    - Economy Characteristics
    - Industry Characteristics
    - Company Characteristics
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
Part II — Financial Services
- 7. Financial Services— -An Overview
  - Genesis
  - Financial Services — Concept
  - Financial Services — Objectives/Functions
  - Financial Services — Characteristics
  - Financial Services Market - - Concept
  - Financial Services Market - - Constituents
  - Growth of Financial Services in India
    - Merchant Banking Era
    - Investment Companies Era
    - Modern Services Era
    - Depository Era
    - Legislative Era
    - FIIs Era
  - Financial Services Sector — Problems
    - Lack of Expertise
    - Inadequate Accommodation
    - Inadequate Technology
    - Inadequate Quality Service
    - Captive Organizations
    - Restricted Scope of Operations
    - Limited Innovation
    - Lack of Sound Institutional Mechanism
    - Other Problems
  - Regulatory Framework
    - The Need for Regulation
    - Types of Regulatory Framework
  - The Regulatory Framework
    - Framework for Banking and Financing Services
    - Framework for Insurance Services
    - Framework for Investment Services
    - Framework for Merchant Banking and Other Services
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 8. Book-Building
  - Concept
  - Characteristics
    - Tendering Process
    - Floor Price
    - Price Band
    - Bid
    - Allotment
    - Participants
  - The Process
    - 75 Percent Book-building
    - 100 Percent Book-building
  - Allocation Procedure
  - Case I - Initial Public Offer (IPO) Issue
  - Case II —Additional Issue by Listed Company
  - Case III - Offer by Unlisted Company
    - Normal Public Issue Vs. Book-Building Process
  - Reverse Book-Building
    - Meaning
    - Features/Benefits
    - Mechanism
    - Criticisms
    - Suggestions
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Reading
- 9. Credit Cards
  - Genesis
  - Origin and History
    - Non-bank Cards
    - Bankcards
    - Visa & Mastercard
    - Cards in Europe
    - Electronic Cards
    - Special Purpose Cards
  - Features of Modern Credit Card
  - Facilities and Services
    - Risk Coverage
    - Emergency Cash Withdrawal
    - Twenty-four Hour Service
    - Photocard Option
    - Travel Privileges
    - Credit-Line Increase
    - Service Over Phone
    - Purchase Protection
    - Fuel Facility
    - Medical Advance Facility
    - Supplementary Cards
    - Hotels Discount Facility
    - News Letters
    - Joint Credit Card and ATM Facility
  - Classification of Credit Cards
    - Based on Mode of Credit Recovery
    - Based on Status of Credit Card
    - Based on Geographical Validity
    - Based on Franchise/Tie-up
    - Based on the Issuer Category
  - Innovative Cards
    - ATM Cards
    - Debit Cards
    - Prepaid Cards
    - Private Label Cards
    - Affinity Group Cards
    - Smart Cards
    - Chip Card
    - Co-branded Card
  - Credit Card Cycle
  - Bank Card Associations
    - Function of Interchange
    - Clearing Function
  - Credit Card Structure
    - Issuer Bank
    - Acquirer Bank
    - Options for Service Delivery
    - Stand-alone
    - Co-branding
    - Regional Associations
    - Outside Service Providers
  - Validity and Renewal
  - Credit Cards and E-commerce
  - Credit Card Frauds
    - Major Sources
    - Prevention
  - Credit Information Bureau (CIB)
  - Future Outlook
  - Benefits of Credit Cards
    - Benefits to Cardholders
    - Benefits to Merchants
    - Benefits to Issuer Banks
  - Drawbacks of Credit Cards
  - The Indian Scenario
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 10. Debit Card
  - Genesis
  - Concept
  - Mechanism
  - Promotion and Progress
  - Dangers of Debit Cards
  - Liability for Fraud
  - Consumer Protection
  - Precautions
    - Guard PIN
    - Understand Your Card
    - Guard Your Receipts Carefully
    - Contact Your Bank
    - Check Bank Statement
  - The Indian Scenario
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 11. Smart Cards
  - Concept
  - Features
    - Data Carrier
    - Personal Identification
    - Financial Usage
  - Evolution
  - Types of Smart Cards
    - Contact Smart Cards
    - Contactless Card
    - Super Smart Card
  - Security Features
    - Physical and Manufacturing Security
    - Personal Identification Security
    - Communications Security
  - Financial Applications
    - Debit and Credit Cards
    - Electronic Cheque
    - Electronic Cash
    - Electronic Token
    - Cash Management Services
    - Other Applications
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Reading
- 12. Credit Rating
  - Genesis
  - Impetus
  - Origin
  - Definition of Credit Rating
  - Features
    - Specificity
    - Relativity
    - Guidance
    - Not a Recommendation
    - Broad Parameters
    - No Guarantee
    - Quantitative and Qualitative
  - Advantages
    - To Investors
    - To Issuers
    - To Intermediaries
    - To Regulators
  - The Credit Rating System - Growth Factors
    - Credibility and Independence
    - Capital Market Mechanism
    - Disclosure Requirements
    - Credit Education
    - Creation of Debt Market
  - Major Issues
    - Investment Vs. Speculative Grades
    - Continuous Monitoring
    - Grade Surveillance
    - Rating Ceiling
    - Evaluation of Line
    - Ownership Considerations
  - Global Credit Rating Agencies
  - Domestic Credit Rating Agencies
  - Credit Rating—Regulatory Framework
    - Global Scenario
    - Indian Scenario
  - Credit Rating Symbols
    - ICRA (Investment Information and Credit Rating Agency of India Limited)
    - CRISIL (Credit Rating and Information Services of India Ltd.)
    - CRISIL Fixed Deposit Rating Symbols
  - CRISIL Ratings for Short-Term Instruments
  - Rating Framework — Major Factors
    - Business Factors
    - Financial Factors
  - Equity Grading
    - The Need
    - Equity Grading by ICRA - Methodology
  - Equity Grading Process by ICRA
    - Mandate from the Issuer
    - Assigning Team of Analysts
    - Data Collection
    - Data Analysis
    - Discussions
    - Credit Report
    - Grade Communication
    - Equity Grades of ICRA
    - Credit Rating - Drawbacks
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 13. Commercial Bill Financing
  - Definition of Commercial Bills
  - Features
    - Written Instrument
    - Negotiable Instrument
    - Making a Bill of Exchange
    - Discounting a Bill
  - Types of Bills
    - Demand Bills
    - Usance Bills
    - Documentary Bills
    - D/A Bills
    - D/P Bills
    - Clean Bills
    - Inland Bills
    - Foreign Bills
    - Accommodation Bills
    - Supply Bills
    - Hundis
  - Commercial Bill Discounting
  - Definition
  - Features
    - Discount Charge
    - Maturity
    - Ready Finance
    - Discounting & Purchasing
  - Advantages
    - Easy Access
    - Safety of Funds
    - Certainty of Payment
    - Profitability
    - Smooth Liquidity
    - Higher Yield
    - Ideal Investment
    - Facility of Refinancing
    - Relative Stability of Prices
  - Precautions by Banker
    - Credit Standing
    - Complete Bills
    - Genuine Trade Bills
    - Proper Documentation
    - Credit Appraisal
    - Safeguards on Bills
    - Goods
    - Noting and Protesing
  - Steps in Discounting and Purchasing
    - Examination of Bill
    - Crediting Customer Account
    - Control Over Accounts
    - Sending Bills for Collection
    - Action by the Branch
    - Dishonour
  - Bills Systems
    - Drawer Bills System
    - Drawee Bills System
  - Summary
  - Key Terms and Concepts
  - Review Questions
- 14. Consumer Finance
  - Definition
  - Types
    - Revolving Credit
    - Fixed Credit
    - Cash Loan
    - Secured Finance
    - Unsecured Finance
  - Sources of Consumer Finance
    - Traders
    - Commercial Banks
    - Credit Card Institutions
    - NBFCs
    - Credit Unions
    - Middlemen
    - Other Sources
  - Mode of Consumer Finance
    - Open Account
    - Credit Card
    - Revolving Account
    - Option Plan
    - Instalment Account
    - Cash Loan
  - Demand for Consumer Finance—Factors
  - Consumer Finance—Practice in India
  - Products Covered
  - Terms of Finance
    - Eligibility
    - Guarantee
    - Tenure
    - Rate of Interest
    - Other Charges
    - Mode of Payment
    - Credit Evaluation
  - Pricing of Consumer Finance
  - Marketing Consumer finance
  - Consumer Finance Insurance
  - Consumer Credit Scoring
    - Dunham Greenberg Formula
    - Specific Fixed Formula
    - Machinery Risk Formula
  - Case for Consumer Finance
    - Enjoying Possession
    - Compulsory Saving
    - Convenient Mode
    - Meeting Emergency
    - Maximization of Revenue
    - Realization of Dreams
    - Accelerates Industrial Investment
    - Enhanced Living Standard
    - Promoting Economic Development
    - Exportation
    - Effective Stock Management
    - Large-scale Production
    - Protection Against Inflation
    - National Importance
  - Case Against Consumer Finance
    - Thoughtless Buying
    - Insolvency
    - Costly Credit
    - Risk to Traders
    - Artificial Boom
    - Bad Debt Risk
    - Economic Instability
  - Boom in Consumer Financing
  - Hire Purchase System (HPS)
    - Definition
    - Characteristics
  - Hire Purchase Agreement
  - Advantages of Hire Purchase System
  - Disadvantages of Hire Purchase System
  - Hire Purchase Cost
    - Eligibility
  - Instalment Credit System (ICS)
    - Definition
    - Features
    - HPS & ICS
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 15. Hire Purchase Finance
  - Definition
  - Rights of Hirer
    - Right of Protection
    - Right of Notice
    - Right of Repossession
    - Right of Statement
    - Right to Excess Amou nt
  - Rate of Interest
    - Add-on Rate of Interest
    - Flat Rate of Interest
    - Effective Rate of Interest
  - Lease Financing Vs Hire Purchase Financing
  - Accounting for Hire Purchase
  - Methods of Interest Calculation
    - Effective Rate of Interest (ERI)
    - Sum-of-years Digits Method
    - Straight-Line Method
  - Method of Reporting
    - Disclosure in Hirer’ Books
    - Disclosure in Hire Vendor Books
  - Lease Vs. Hire purchase Evaluation
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 16. Insurance Services
  - Definition
  - Basic principles of Insurance
    - Good Faith
    - Insurable Interest
    - Compensation
    - Subrogation
    - Contribution
    - Loss Mitigation
    - Causa Proxima
  - Reinsurance
  - Life Insurance
    - Definition
    - Policies
  - General Insurance
  - Types
  - Fire Insurance
  - Marine Insurance
    - Policies
  - Other Insurances
  - Liability Insurance
  - Concept of Insurance Services
  - Profile of Insurance Service Providers
  - General Insurers
  - Life Insurers
  - Life Insurance Corporation of India (LIC)
    - Objectives
    - Superiority of Life Insurance
    - Medical and Non-Medical Schemes
    - With Profit and Without Profit Plans
  - Keyman Insurance
    - Plans For Individuals
  - HDFC Standard Life Insurance Company
    - Individual Products
  - Group Products
    - Tax Benefits
  - Max New York Life Insurance Company
    - Whole Life Policy
    - Term Policy
    - Endowment Policy
  - ICICI Prudential Life Insurance Company
  - TATA AIG
    - Liability Insurance
  - SBI Life Insurance Company
  - ING Vysya Life Insurance
  - Allianz Bajaj Life Insurance Company
  - Royal Sundaram
    - Motor Insurance
    - Health Insurance
    - Travel Insurance
    - Accident Insurance
    - Home Shield
  - Regulatory Framework
  - The Insurance Act
  - Insurance Regulatory and Development Authority (IRDA)
    - Composition
    - Duties
    - Powers and Functions
    - Constitution
    - Composition of Authority
    - Tenure of Office
    - Administrative Powers
  - Meeting of Authority
    - Grants by Central Government
    - The Fund
    - Accounts and Audit
    - Powers of Central Government
    - Superceding Powers
  - Insurance Advisory Committee
  - Power to Make Regulations
  - Major Amendments to Insurance Act
  - The First Schedule
    - Definitions
    - Registration
    - Capital Requirements
    - Divesting Excess Shareholding
    - Conditions of Investment
    - Rural or Social Sector
    - Investigation and Inspection
  - Insurance Agents, Intermediaries and Surveyors
    - Insurance Agents
    - Issue of Licence to Intermediary
    - Surveyors
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 17. Factoring and Forfaiting
  - Genesis
  - Definition
  - Mechanism
  - Characteristics
    - The Nature
    - The Form
    - The Assignment
    - Fiduciary Position
    - Professionalism
    - Credit Realizations
    - Less Dependence
    - Recourse Factoring
    - Compensation
  - Factoring and Off-balance Sheet Financing
  - Types of Factoring
    - Domestic Factoring
    - Export Factoring
    - Cross Border Factoring
    - Modus Operandi
    - Full-service Factoring
    - With Recourse Factoring
    - Without Recourse Factoring
    - Advance and Maturity Factoring
    - Bank Participation Factoring
    - Collection/Maturing Factoring
  - Legal Aspects of Factoring
    - Factoring Contract—Terms and Conditions
    - Legal Implications of Factoring
  - Advantages of Factoring
    - Cost Savings
    - Leverage
    - Enhanced Return
    - Liquidity
    - Credit Discipline
    - Cash Flows
    - Credit Certification
    - Prompt Payment
    - Information Flow
    - Infrastructure
    - Better Linkages
    - Boon to SSI Sector
    - Efficient Production
    - Reduced Risk
    - Export Promotion
  - Disadvantages of Factoring
  - Factoring—Players
    - The Buyer
    - The Seller
    - The Factor
  - Functions of a Factor
    - Sales Ledger Administration
    - Provision of Collection Facility
    - Financing Trade Debts
    - Credit Control and Protection
    - Advisory Services
  - Factoring Cost
  - Line of Credit- Methods
    - Objective Method
    - Subjective Method
  - Factoring Vs Bills Discounting
  - RBI Guidelines for Factoring
  - Factoring—Indian Scenario
  - Major Factoring Firms
  - SBI Factors and Commercial Services
    - Features
    - Services
    - Canara Bank Factors
    - Fair growth Factors
    - Foremost Factors Ltd (FFL)
  - Operational Profile of Indian Factoring
    - Domestic Factoring
    - Export Factoring
  - Operational Problems in Indian Factoring
  - Factoring—A Cost-benefit Analysis
    - Principles of Factoring
  - Methods of Evaluation
    - Net Benefit Method
    - Effective Rate of Interest Method
  - Steps in Evaluation
  - Alternative Steps
  - Forfaiting
    - Definition
    - Characteristics
    - Modus Operandi
    - Advantages of Forfaiting
  - Factoring Vs. Forfaiting
  - Forfaiting—Indian Scenario
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
  - Annexure
    - Background
    - Terms of Reference
    - Concept and Types of Factoring Services
    - Need for Factoring Services
    - Pricing of Various Services
    - Organizational Set-up
    - Educating Business Community
    - Mechanism of Factoring Operation
    - Credit Investigation
    - Linkages Between Banks and Factors
    - SSI Units and Factoring
    - Export Factoring
    - Legal Framework
- 18. Leasing—An Overview
  - Definition
  - Characteristics of Lease
    - The Parties
    - The Asset
    - The Term
    - The Lease Rentals
  - Types of Lease
    - Financial Lease
    - Operating Lease
    - Conveyance-type Lease
    - Leveraged Lease
    - Sale and Leaseback
    - Partial Pay-out Lease
    - Consumer Leasing
    - Balloon Lease
    - Close-end Leasing
    - Open-end Leasing
    - Swap Leasing
    - Wrap Leasing
    - Import Leasing
    - Cross-border Leasing
    - Double-dip
    - Triple-dip
    - Japanese Cross-border Leasing
    - International Leasing
  - Financial Lease Vs Operating Lease
  - Test for Financial lease
    - Substance Test
    - Full Payment Test
    - Transfer of Title Test
    - Lease Term Test
  - Myths About Leasing
    - 100% Financing
    - Off-balance Sheet Financing
    - Better Performance
    - No Evaluation
  - Participants
    - Lessors
    - Lessees
    - Lease Brokers
    - Lease Financiers
  - The Leasing Process
    - Lease Selection
    - Order & Delivery
    - Lease Contract
    - Lease Period
  - Services of Lessor
    - Provision of Credit Facility
    - Absorbing Obsolescence Risks
    - Comprehensive Package
  - Advantages of Leasing
    - Advantages to Lessor
    - Advantages to Lessee
  - Limitations of Lease Financing
    - Disguised Debt Financing
    - Costly Option
    - Loss of Tax Shield
    - Double Sales-tax
    - Loss of Residual Value
    - Unfavorable Gearing
    - No Ownership
    - Risk of Default
    - No Working Capital
    - Indiscriminate Finance
    - Long-term Venture
  - Tax Aspects of Leasing
    - Income Tax Implications
  - Implications For Lessor—Depreciation Tax Shield
  - Implications for Lessee
    - Allowability of Lease Rentals
    - Deduction of Incidental Expenses
  - Tax Planning Aspects
    - For the Lessor
    - For the Lessee
  - Financial Implications
  - Implications under Sales Tax
    - On Purchase of Equipment
    - On Lease Rentals
    - Sale of Asset
    - Financial Implications
  - Funding Aspects of Leasing
    - Deposits
    - Bank Borrowings
  - Maximum Permissible Bank Finance
    - Requirements
    - Borrowings from Institutions
    - Eligibility Criteria
    - Terms and Conditions
  - Types of Finance
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 19. Accounting and Reporting for Lease
  - Lease
    - Financial Lease
    - Operating Lease
  - Accounting and Reporting for Financial Lease—Books of the Lessor
    - Adjustment in Balance Sheet
    - Important Computations
  - Accounting and Reporting for Financial Lease—Books of the Lessee
  - Accounting and Reporting for Operating Lease — Books of the Lessor
    - Type of Lease Activity
    - Implicit Rate of Interest
    - Method I Implicit Interest Method — Computation Table
    - Method II Weighted Method - Computation Table
  - Summary
  - Key Terms and Concepts
  - Review Questions
- 20. Lease Evaluation
  - Definition of Lease
  - Loan Repayment Schedule
    - Steady Principal Reduction (SPR) Method
    - Steady Payment Method/Annual Net Equivalent Cash Out Flow Method
    - Balloon Payment Method
    - The Level-Rental Plan
    - Steps for Constructing Loan Repayment Schedule
    - Building Loan Repayment Schedule—Illustration
  - Lease Evaluation—Advantage To Lessor
    - Net Leasing Advantage
    - Desired Lease Rentals or Minimum Lease Rental for Lessor
    - Break-even Lease Rental for Lessor
  - Lease Evaluation—Advantage to Lessee
    - Borrowing, Buying & Owning Vs Leasing of an Asset
    - Break-even Lease Rental or Maximum Lease Rental Payable by Lessee
    - Method of Choosing Discounts Rates
    - Break-even/ Maximum Lease Rentals Payable by Lessee
    - Minimum Annual Lease Rental Chargeable by Lessor
  - Evaluating Independent Lease Option as Advantage to Lessee
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Practical Questions
  - Further Readings
- 21. Merchant Banking
  - Genesis
  - Definition
    - Merchant Bankers
  - Functions
    - Corporate Counselling
    - Project Counselling
    - Pre-investment Studies
    - Capital Restructuring Services
    - Credit Syndication
    - Issue Management and Underwriting
    - Portfolio Management
    - Working Capital Finance
    - Acceptance Credit & Bill Discounting
    - Merger and Acquisition
    - Venture Financing
    - Lease Financing
    - Foreign Currency Financing
    - Brokering Fixed Deposits
    - Mutual Funds
    - Relief to Sick Industries
    - Project Appraisal
  - Merchant Bankers’ Code of conduct
  - Regulatory Framework
    - Operational Guidelines
    - Pre-issue Obligations
    - Post-issue Obligations
    - Guidelines on Advertisement
  - Offer by Unlisted Companies — Guidelines
    - Listing of Shares
    - Market Makers
    - Listing of Pure Debt/Convertible Instruments
    - Disclosures
    - Net Offer
    - Offer by IT Sector Companies
    - Reservation
    - Capital Structure
    - Firm Allotments and Reservations
  - Terms of Issue
    - Minimum Issue
    - Securities Issued to be made Fully Paid Up
    - Restriction on Further Capital Issues
    - Period of Subscription
    - Price Band
    - Retention of Over-subscription
    - Underwriting
    - Updating Offer Document
    - Compliance Officer
    - Incentives to Prospective Shareholders
    - New Financial Instruments
    - Issue of Debentures with Interest Less Than Bank Rate
    - Monitoring Agency
    - Safety Net or Buy Back Arrangement
    - Utilization of Funds in Case of Rights Issues
    - Securities in Dematerialized Form
    - Issue Opening Date
    - Change of Denomination
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 22. Money Market Mutual Funds
  - Genesis
  - Features
    - Eligibility
    - Structure
    - Size
    - Investors
    - Minimum Size of Investment
    - Investment by MMMFs
    - Reserve Requirements
    - Stamp Duty
    - Regulatory Authority
  - Summary
  - Key Term and concepts
  - Review Questions
- 23. Mutual Funds
  - Genesis
  - Definition
    - Features/Role/Benefits
  - Products/Schemes
    - Operational Classification
    - Return-based Classification
    - Investment-based Classification
  - Mutual Funds in India
  - Managing Mutual Funds in India
    - The Sponsor
    - The Trustees
    - The Custodians
    - Asset Management Company (AMC)
  - SEBI’s requirements of AMC
  - Functions of AMC
    - Registrars and Transfer Agents
    - Fund Accountants
    - Lead Managers
    - Investment Advisors
    - Legal Advisors
    - Auditors
    - Underwriters
  - Working Mechanism of AMC
    - Creating Fund Manager
    - Research and Planning
    - Creating Dealers
  - Portfolio Management Process in Mutual Funds
    - Setting Investment Goal
    - Identifying Specific Securities
    - Portfolio Designing
    - Portfolio Revision
  - Operational Efficiency of Mutual Funds
    - Net Return
    - Net Asset Value (NAV)
    - Load
    - Disclosures
    - Voting Right to Investors
    - Investors’ Protection
  - Evaluating Mutual Funds
    - Treynor Model
    - Sharpe Model
  - Mutual Fund Holders’ Account
    - Regular Account
    - Accumulation Account
    - Withdrawal Account
  - Causes for Poor Performance of Mutual Funds
  - Unit Trust of India
    - Genesis
    - Management
    - Investment Committee
    - Investment Restrictions
    - Reorganization of UTI
    - U.S.-64 as Bonds
  - Regulatory Structure of Mutual Funds
  - RBI guidelines
    - Constitution and Management Guidelines
    - Investment Objectives and Policies
    - Prudential Exposure Ceiling Limits
    - Pricing
    - Income Distribution
    - Statement of Accounts and Disclosures
  - UTI Guidelines
    - Constitution and Management
    - Investment Objectives and Policies
    - Investment Limits
    - Pricing and Income Distribution
    - Account Statement and Disclosures
  - SEBI (Mutual Funds) Regulations, 1996
    - Registration of Mutual Fund
    - Constitution and Management of Mutual Fund
    - Schemes of Mutual Funds
    - Investment Objectives and Valuation Policies
    - Fees and Expenses
    - Inspection and Audit
    - Procedure for Action in Case of Default
  - SEBI Schedules
  - Fifth Schedule - Code of Conduct
  - Seventh Schedule—Restrictions on Investments
  - Eighth Schedule — Investment Valuation Norms
    - For Traded Securities
    - For Non-traded Securities
  - New Regulations, 1999
    - Investments
    - Borrowings
    - Underwriting of Securities
    - Option Trading etc.
    - Valuation of Investments
    - Pricing of Units
    - Income Distribution
    - Expenses
    - Accounting Requirements
  - Association of Mutual Funds Industry (AMFI)
    - Policy Developments Relating to Mutual Funds
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 24. Public Issue Management
  - Concept
  - Functions
  - Categories of Securities Issue
    - Public Issue of Securities
    - Rights Issue
    - Private Placement
  - Issue Manager
    - Requirements
    - Categories of Issue Managers
    - Restrictions on Issue Managers
  - Role of Issue Manager
  - Activities involved in Public Issue Management
    - Pre-Issue Activities
    - Post-Issue Activities
  - Marketing of issue
    - The Need
    - The Steps
  - Public Issue Proposal—Factors
    - Promoters Profile
    - Company Profile
    - Project Profile
    - Capital Market Profile
    - Other Factors
  - Pricing of Issues
    - The CCI model
    - Safety Net Scheme
  - Law Relating to Issue Management
    - SEBI Rules & Regulations
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 25. Securitization
  - Genesis
  - Definition
  - Illustration
    - Simple Financing
    - Asset Securitization
  - Meaning of Security
  - Pass Through Certificates
  - Features of Securitization
    - Marketability
    - Merchantable Quality
    - Wide Distribution
    - Homogeneity
    - Commoditisation
    - Integration and Differentiation
    - De-construction
  - Need for Securitization
    - Helping Small Investor
    - Facilitating Liquidity
    - Utility of Instruments
  - Special Purpose Vehicle (SPV)
  - Asset Securitization—Mechanism
    - Origination
    - Asset Identification and Pooling
    - Security Creation
    - SPV’s Task
    - Security Issue
    - Security Purchase
    - Receipt of Benefits
    - Rating and Trading
    - Redemption
  - Purposes
  - Asset Characteristics
    - Cash Flow
    - Security
    - Distributed Risk
    - Homogeneity
    - No Executory Clauses
    - Capacity
    - Independence from Originator
  - Applications of Securitization
    - Securitization of Receivables
  - Securitization - Benefits
    - Benefits to Originator
    - Benefits to Investors
    - Benefits to Borrowers
    - General Benefits
  - Economic Functions of Securitization
    - Creating Financial Market
    - Diversification
    - Promoting Savings
    - Reduced Costs
    - Diversified Risks
    - Focus on Use of Resources
  - Global Scenario
  - Indian Scenario
  - Limitations
    - Debility to Central Bank
    - Heightened Volatility
    - Pressure on Profitability
    - Eroding Capital Base
  - Securitization and Financial Disintermediation
    - Pooling of Resources
    - Informational Needs
    - Diversified Risk
  - Change in the Function of Intermediation
  - Capital Markets and Securitization
    - Rating Advantage
    - Bank Regulators
  - Securitization and Structured Finance
  - Securitization as a Risk Management Tool
  - Securitization and Credit Derivatives
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 26. Stock-Invest
  - Genesis
  - Meaning
  - Features
    - Additional Mode
    - No Locking up of Funds
    - Denominations
    - Interest Income
    - Participation
    - Release of Funds
    - Nature
    - Validity
    - Bank Charges
  - Modus Operandi
    - Account
    - Request
    - Issue
    - Enclosure
    - Collecting Banker
    - Entitlement
    - Allotment
    - Intimation
  - Benefits
    - Convenient Mode
    - Safe Mode
    - No Funds Misuse
    - Satisfied Investor
    - Income
    - Source of Funds
    - Bank Lien
    - Benefit to Issuers and Registrars
    - Boon to Investors
  - Drawbacks
    - No Float Funds
    - Additional Work
    - Additional Manpower
    - Risks
  - Procedures for Payment
    - Submitting Stock-invests
    - Requesting Issue
    - Particulars to be Provided
    - Signing and Stamping
    - Registrar to the Issue
    - First Applicant
    - Usage
    - Ceiling
    - Precautions
  - Summary
  - Key Terms and Concepts
  - Review Questions
- 27. Underwriting of Securities
  - Definition
  - Types
    - Firm Underwriting
    - Sub-underwriting
    - Joint Underwriting
    - Syndicate Underwriting
  - Benefits/Functions
    - Adequate Funds
    - Expert Advice
    - Enhanced Goodwill
    - Assurance to Investors
    - Better Marketing
    - Benefits to Buyers
    - Price Stability
  - Indian Scenario
  - Underwriting Agencies
    - Private Agencies
    - Investment Companies
    - Commercial Banks
    - DFIs
  - Obstacles
    - Chaotic Capital Market
    - Slow Industrialization
    - Managing Agency System
    - Bashful Investors
    - Lack of Specialized Institutions
    - Unsuccessful Corporates
  - Underwriter
  - Underwriting Agreement
  - SEBI Guidelines
    - Optional
    - Number of Underwriters
    - Registration
    - Obligations
    - Sub-underwriting
    - Underwriting Commission
  - Variants of Underwriting
    - Offer for Sale
    - Bought-out Deals (BODs)
    - Private Placement
    - Grey Market
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 28. Venture Capital-Conceptual Framework
  - Genesis
  - Meaning
  - Definition
  - Rationale
  - Features
    - New Ventures
    - Continuous Involvement
    - Mode of Investment
    - Objective
    - Hands-on Approach
    - High Risk-return Ventures
    - Nature of Firms
    - Liquidity
  - Methods of Evaluation
    - Conventional Method
    - First Chicago Method
    - Revenue Multiplier Method
  - Origin amd Growth of Venture Capital
    - USA
    - UK
    - Europe
    - Japan and Asia
    - Taiwan
    - Israel
    - India
  - Venture Capital and Other Funds
    - Venture Capital and Development Capital
    - Venture Capital, Seed Capital and Risk Capital
    - Venture Capital and National Equity Fund for Small Entrepreneur
  - Stages of Venture Capita I Financing
    - Seed Capital
    - Start-up Financing
    - Early-Stage Financing
    - Follow-on Financing
    - Expansion Financing
    - Replacement Financing
    - Turnaround Financing
    - Management Buy-Outs (MBOs)
    - Management Buy-ins
    - Mezzanine Finance
  - Analyzing Venture Capital Proposals — Criteria
    - Fundamental Analysis
    - Financial Analysis
    - Portfolio Analysis
    - Divestment Analysis
  - Buy-outs
    - Advantages
    - Precautions
    - Types
    - Management Buy-outs
    - Shareholder Buy-outs
    - Receivership Buy-outs
  - Financial Sources
  - Investment Nurturing
    - Definition
    - Objectives
    - Elements
  - Styles of Venture Financing
    - Hands-on Nurturing
    - Hands-off Nurturing
    - Hands-holding Nurturing
  - Nurturing Methods
    - Personal Discussions
    - Plant Visits
    - Feedback
    - Periodic Reports
    - Commissioned Studies
  - Compensation
  - Forms of Organization
    - Limited Partnership
    - Investment Company
    - Investment Trust
    - Offshore Investment Company
    - Offshore Unit Trust
    - Small Business Investment Company
  - Exit Mechanism
    - Methods of Exit
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 29. Venture Capital Funds—Regulatory Framework
  - Genesis
  - SEBI - (Venture Capital Funds) Regulations, 1996
    - Definition
    - Application for Grant of Certificate
    - Eligibility Criteria
    - Furnishing of Information
    - Consideration of Application
    - Procedure for Grant of Certificate
    - Minimum Investment
    - Restrictions on Investment
    - Prohibition on Listing
    - General Obligations and Responsibilities
    - SEBI’s Power to Call for Information Reports
    - Winding-up
    - Inspection and Investigation
    - Procedure for Action in Case of Default
  - Regulations Under Income Tax Act
    - Definition
    - Nature of Business
    - Tax Exemptions
  - Summary
  - Key Terms and Concepts
  - Review Questions
- 30. Venture Capital in India
  - Genesis
  - Critical Factors
  - Objectives/Benefits of Venture Capital Funds
    - High-risk and High-return Financing
    - Focus on New Ideas
    - Economic Growth
    - Catalyst Role
    - Capital Support
    - Vast Scientific and Technical Power
    - Quality Public Offerings
    - Employment Generation
  - Venture Capital Funds in India — A Profile
  - VCF of IDBI, 1986
    - Features
    - Seed Capital Scheme of IDBI
    - Special Capital Scheme of IDBI
    - VCF of ICICI
    - VCF of IFCI
    - Other Venture Funds
  - Organization Structure
    - Investment Company
    - Unit Trust
    - Scheme of UTI
  - Registration of Venture Capital Fund (VCF)
  - Application for Registration
    - Additional Information
    - Other Documents to be Submitted to SEBI
  - Grant of Certificate of Registration
    - Registration of Foreign Venture Capital Investor (VCI)
    - Application for Registration
    - Additional Information
    - Other Documents to be Submitted to SEBI
    - Grant of Certificate of Registration
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 31. Infrastructure Financing
  - Genesis
  - Definition
  - Sectors
  - Financing Options
    - Concession Approach
    - Structured Financing Option (SFO)
    - SPV
    - GPV
    - FG
  - Financing Instruments
    - Asset-Backed Securitization (ABS)
    - Municipal Bonds
  - Infrastructure Financing—Issues in India
    - High Levels of Lag
    - Local Revenue
    - Project Risk
  - RBI Guidelines
    - Criteria for Financing
    - Types of Financing by Banks
    - Financing Promoter’s Equity
    - Appraisal—Factors
    - Prudential Requirements
  - Recent Developments
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
- 32. Housing Finance Services
  - Genesis
  - Housing
  - Housing Finance
  - Models of Housing Projects
    - Town Planning Schemes
    - Development Authority Projects
    - Housing Board Projects
    - Co-operative Society Projects
    - Private Real Estate Developers
    - Public-private Partnership
    - Slum Boards Projects
    - Government Employees’ Housing
    - Government Programmes
  - Housing Finance In India — Major Issues
    - Archaic Laws
    - Lack of Clear Title
    - High Stamp Duty
    - Obsolete Rental Laws
    - Foreclosure Laws
    - Inadequate Building Codes and Standards
    - Inadequate Development and Planning
    - Inadequate Infrastructure
    - Recognition of Housing as an Industry
    - Slum Clearance and Public Housing
    - Land Supply
    - Rent Control Act
    - Real-Estate Mortgages
  - Housing Finance in India—Growth Factors
    - Budgetary Support
    - New Dynamics
    - Distinguishing Service
    - Access to Resources
    - Changing Contours
  - Housing Finance Assistance—Factors
    - The Loan Amount
    - Loan Cost
    - Fixed and Floating Rate
    - Prepayment Charges
    - Value Addition
  - Housing Finance Institutions in India
    - The National Housing Bank (NHB)
    - Objectives
    - Role and Rationale
    - Businesses
    - Borrowings and Acceptance of Deposits
    - Power to Acquire Rights
    - Access to Records/Power to Inspect
  - Advisory Services
    - Income Tax Exemption
    - Housing Development Finance Corporation Limited (HDFC)
    - Main Objectives of HDFC
    - Type of Loans Offered
    - Special Features of HDFC
    - Life Insurance Corporation Housing Finance Limited (LICHFL)
    - Purposes
    - Housing and Urban Development Corporation of India (HUDCO)
    - Objectives
    - Housing Programmes
  - Summary
  - Key Terms and Concepts
  - Review Questions
  - Further Readings
Glossary
Abbrevations
Bibliography
Index

Dr. Gurusamy is currently Professor and Head, Department of Commerce, University of Madras, Chennai.

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