Financial Services & Products (Functional Electives Finance)

Paper Code: 
MBF- 523
Credits: 
4.0
Contact Hours: 
40.00
Max. Marks: 
100.00
Objective: 
  • After completing the course, students will be able to recognize which financial instruments solutions are appropriate and required. They can perform various valuation techniques. To develop understanding of management techniques and problems including regulatory aspects of  Merchant Banking, Factoring ,Credit rating agency etc.
8.00
Unit I: 
An Introduction to Financial Services and Money Market

Meaning, Features, Constituents in Financial Service Market, Factors affecting the growth of Financial Services, Challenges facing the financial service sector. Reserve Bank of India- Role and Functions. Money Market Instruments in India- Treasury Bills, Commercial Paper, Certificate of Deposits, Call Money, Money Market Mutual Funds, Difference between Money Market and Capital Market.

8.00
Unit II: 
Venture Capital

Meaning, rationale, Features, Origin and Growth of Venture Capital, Stages of Venture Capital Financing, Buy-Outs, Exit Mechanism.

Credit Rating

Meaning and Origin, Functions of Credit Rating, Benefits of Credit Rating, The Credit Rating System- Growth Factors, Credit Rating Agencies in India- CRISIL, ICRA and CARE, Global Credit Rating Agencies- Moody’s and Standard & Poor’s, Major Factors considered while determining the rating profile of a Security. Credit Rating- Regulatory Framework in India, Credit Rating for Debenture and Equity Grading, Limitations of Rating.

10.00
Unit III: 
Credit Cards

Features of Credit Card, Types of Credit Card, Credit Card Cycle, Benefits of Credit Card, Drawback of Credit Cards

Bancassurance

Meaning, Benefits to Banks and Insurance Companies

Factoring

Meaning, Mechanism, Types of Factoring, Advantages of Factoring, Functions of Factoring, Disadvantages of Factoring

8.00
Unit IV: 
Merchant Banking Activities

Introduction, Meaning and Definition, Services of Merchant Bankers, Qualities of Merchant Banker, Problems faced by Merchant Bankers, Guidelines for Merchant Bankers by SEBI, Future Prospects of Merchant Banking in India. An introduction: Methods of Marketing New Issues- Pure Prospectus Method, Offer for Sale Method, Private Placement Method, Rights Issue Method, Bonus Issue Method, Book- Building Method.

6.00
Unit V: 
Securitization

Introduction, Mechanism of Securitization, Importance and Utility, Advantages of Securitization- Gains to Originators, Gains to Investors, Gains to Borrowers, General Gains,  Challenges.

Mutual Funds

Introduction, Types of Mutual Fund Schemes- Functional Classification, Portfolio Classification, Investment Classification, Benefits of Mutual Funds, Managing Mutual Funds in India- The Sponsor, The Trustees, The Custodians, Asset Management Company, Evaluating Mutual Funds Performance, Recent Trends in Mutual Fund Industry.

Essential Readings: 
  • Khan, M.Y. Financial Services, Tata McGraw Hill, 2009.
  • V. A. Avadhani Marketing of Financial Services, Himalaya Publicatons.2008.
  • Merchant Banking and Financial Services, Dr S Gurusamy, Mc Graw Hill, 2009
  • The Indian Financial System, Bharati V. Pathak, Pearson, 2011
  • Dynamics of Indian Financial System, Preeti Singh, Ane Books Pvt. Ltd., 2009
References: 
  1. Economics Times
  2. Various notification of the Reserve Bank of India