Management Of Financial Institution

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  • Topic: Money market, Bank, Financial market
  • Pages : 10 (1874 words )
  • Download(s) : 496
  • Published : November 27, 2014
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 Management of Financial Institution

1 .
Define money market. What are its broad objectives and functions? How is money market different from capital markets?

2 .
What is a derivative contract? Explain forward, future and options contracts.

3 .
In every lending decision, credit officers refer to a principle of lending known as the 5 Cs of credit.< !--[if !support Lists]--> (a) What is the relevance of this principle in a loan evaluation process?< !--[if !support Lists]--> (b) Explain with details, the 5 Cs of credit.

4 .
Outline the main elements of the prudential norms relating to the credit and investment portfolios of banks. Discuss briefly the capital adequacy norms applicable to banks.

5 .
Explain briefly the main elements of the Asset Liability Management Framework prescribed by the RBI, for the banks in India.

6 .
Explain briefly the major types of risks to which banks are exposed.

7 .
Describe the role of developmental financial institutions in industrial financing. Give examples of some of the developmental financial institutions in India.

8 .
Write short notes on any three of the following:-
 Commercial Banks  NBFC
 Universal Banking  Securitizations.  NASDAQ

Case Study
Dilemma of Asian Bags
Asia Paper Bag has since 1990 operated as a manufacturer of plastic carrier bags supplying them on a contract-manufacturing basis to well-known supermarket chains, fast-food outlets, pharmacies and department stores. Lately, Asia Paper Bag exports customized plastic carrier bags to Marks n Spencer and Boots Pharmacy in the United Kingdom. During the Asian financial crisis, Asia Paper Bag had difficulties in meeting its term loan repayment, and had to restructure the term loan last year. The term loan was restructured by way of a debt moratorium of 24 months on the principal and an extension of the maturity period from five years to eight years. Currently, Asia Paper Bag‘s turnover is about Rs 3million per month with an average net profit margin of 7%. Lately, with the increase in world oil prices, raw materials for plastic bag production have increased by over 5% to USD1,200 per ton. Asia Paper Bag’s capacity utilization is still low at only 40%, after it expanded rapidly pre-crisis. Asia Paper Bag Sdn Bhd ‘s production capacity increased from 200,000tonnes per annum to 350,000tonnes per annum during the pre-crisis period. This was when the company borrowed a term loan of Rs. 10 million to finance the machinery. The raw materials, PE resins, are purchased mainly from Singapore and Thailand, whilst only 15% is sourced domestically. 1.

List the qualitative risks of Asia Paper Bag relation to bank lending

2.
List and explain the appropriate financial ratios to analyze the financial performance (profitability) of Asia Paper Bag Sdn Bhd (Malay equivalent of incorporated).

The role of Financial Markets and institutions--

Options

Involves the movement of huge quantities of money.

Affects the profits of businesses.

Affects the types of goods and services produced in an economy.

Does all of the above.

Which of the following is a money market instrument?

Options

T-bill

IPO

Share

Option

Which of the following is a derivatives instrument ?

Options

Commercial Paper

Certificate of Deposit

Forward Contract

Reliance Shares

Which of the following is a capital market instrument ?

Options

Debenture

T-bill

Commercial Paper

Certificate of Deposit

Which Interest rates are important to financial institutions since an interest rate increase ?

Options...
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