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NBFS-BFS10
(PGPBFS 2010-11 : Term-III)

Non Banking Financial Services and Institutions
Instructor: Prof. S. G. Deb
Office : Room no 518
Tel : Extn : 802
email : soumya@ximb.ac.in

A. Objective :

Welcome to the course. Financial Services are the services provided by finance industry encompassing a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, credit rating companies, insurance companies, leasing and hire purchase companies, consumer finance companies, stock brokerages, and investment funds. The objective of this course will be to impart the basic understanding of the way the institutions apart from banks, insurance companies and mutual funds (these being already addressed in separate courses) structure, market and deliver some of these services. The course will help the participants to obtain a holistic and better understanding of the financial services industry.


Best wishes to all of you!

B. Readings :

[1] Class discussion slides: Slides will be elaborate and made available to the students for reference
[2] Financial Services : T Siddaiah , Pearson Education Latest edition
[3] Financial Services, M Y Khan, 5th ed, Tata Mcgraw Hill
[4] Financial Services , N P Tripathy, Prentice Hall of India
[5] Financial Services in India : concept and application : R Kothari, Sage Texts
[6] Financial Services and System : Sashidharan and Mathews, latest edition , Tata McGraw Hill
[7] Financial Services , Gordon and Natarajan, Himalaya Publishing
[8] Financial Institutions and Markets by F S Mishkin, and S G Eakins ( Pearson Education )
[9] Financial Markets and Institutions, 3rd Edition, by Anthony Saunders and Marcia Cornett, (Tata McGraw Hill).
[10] Foundations of Financial Markets and Institutions, 3rd Edition, by Fabozzi, Modigliani, Jones and Ferri (Prentice-Hall, 2003).
[11] Financial Institutions and Markets, 3rd Edition, by L. M. Bhole (Tata McGraw Hill)
[12] Financial Markets and Institutions ,2nd edition by S Guruswamy(Tata McGraw Hill
[13] Financial Press:
I. Economic Times , www.economictimes.com
II. The Wall Street Journal, www.wsj.com
III. The Economist, www.economist.com
IV. Financial Times, www.ft.com
[10] Internet resources and other sources as intimated to you from time to time.

Tentative Session Plan :

Sessions 1,2 :
• Introduction, brief overview of Financial Services industry in India
Leasing : Basics of leasing-what it is and parties to a lease contract, Types of leases , lease payments and residual values , lease versus loans,, end of term lease options, Accounting ,tax and legal consequences of leasing ,leases and bankruptcy, lease versus buy( an unfair comparison), lease versus borrow( the right comparison), reasons for leasing, leasing scenario in India
Session 3:…
Hire Purchase: Conceptual Framework, parties to a hire purchase contract, hire purchase versus installment payment, lease financing versus hire purchase financing, legal framework, accounting ,taxation and reporting ,financial evaluation,
Consumer credit: salient features, parties to a transaction and structure of a transaction. , financial evaluation.

Session 4 :
Venture Capital Funds : Theoretical Framework, VC Equity Vs Traditional Equity , Stages of Financing in a VC deal , Pricing and Valuation by VCs, Examples, Exit routes of VCs, Venture Capital Scenario in India . Session 5, 6 : Factoring , Forfaiting and Bill discounting :
• Factoring .. Origin in India, Factoring … sequence of processes, Functions of a Factor(Finance, Debt administration, Credit Advisory services, Relieving the client from Credit risk totally, Follow up and collection of Receivables, Recourse and Non Recourse Factoring, Advance and Maturity Factoring, Full Factoring, Disclosed and undisclosed factoring, Domestic and Export/Cross Border/International Factoring , Sequence of Processes in Export Factoring , Costs of availing Factoring Service, Cost benefit analysis in a factoring arrangement, Factoring Service providers in India
• Bill discounting : Process , Factoring vs Bill Discounting,
• Forfaiting : . Sequence of processes, Forfaiting vs. Export factoring
Session 7 ) Credit Rating Agencies :
• Credit Rating 4 Cs , Why should one resort to rating ( advantages to issuers, advantages to investors), Rating: sequence of Process in India, Credit rating agencies in India :Origin, Regulation of CRA s : Registration of CRA s, General Obligation/ Code of Conduct, Restriction on Rating of Securities, Inspection/Investigation of CRA, Action in case of Default , Principal rating symbols and implication.

Pedagogy : Interactive class discussions, numerical problem and caselet solving, assignments

Evaluation Criteria and grading pattern:

i) Quiz: 20 marks (40%): There will be a single quiz of weightage 40%. Under no circumstances any make up or additional quizzes can be accommodated.
ii) Class participation : 5 marks (10%)
iii) End term : 25 marks ( 50% )

The grading pattern will be a curtailed normal distribution. If a student fails to secure at least 12.5 marks (25%) out of 50 he/she will get an ‘F’ in the course. Over and above that the grading pattern is expected to be a normal distribution.

Created By: Bijoy Kar on 04/18/2011 at 11:25 AM
Category: PGPBFS Doctype: Document

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