Research On Turning Nbfcs Into Banks Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1362 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? NBFCs are purveyors of credit to the sectors where credit gap exists. It has been observed that in many places in India, the small and local entrepreneur goes first to an NBFC for funds even before approaching banks in view of the formers convenient access, freedom from red-tape and hassle free transactions. The expansion of the consumer durable business in India over the last few years can be attributed to NBFCs entering the trade. Don’t waste time! Our writers will create an original "Research On Turning Nbfcs Into Banks Finance Essay" essay for you Create order The activities of NBFCs in India have undergone a plethora of qualitative changes over the years because of functional specialization. NBFCs have grown as an effective and critical financial intermediary due to their inherent ability to take quicker decisions, assume greater risks, and customize their services according to the needs of the clients. These features help them score over banks and thus have contributed to the proliferation of NBFCs. As can be seen from the above figures from the year 2006-07 onwards the capital has been growing at a lower rate than the loans and advances shelled out by the deposit taking NBFCs. This widening growth rate implies that most of the loans and advances are being funded using borrowings, though capital adequacy ratio is maintained but there is a shift in dependence from capital to other sources of funds. The year 2008-09 can be taken as an exception on account of the economic downturn. This signifies that the business model of deposit tak ing NBFCs is not in a right track and needs to be corrected so that the growth rates could be comparable. In the given scenario, if the loan portfolio goes bad, there is high probability of the capital being wiped out and hence depositors could be at risk. Also it has been seen that in comparison to banks which have a NPA level of around 2-3 percent, many NBFCs have a higher NPA level, thus making them more vulnerable to risk. Thus their conversion to banks on this account seems to be difficult and bumpy. Shriram transport finance, owing to it unique nature of operations, seems to be on the verge of breaking the trade off. It has a yield of 17.2 % (in line with the customers and the market segment is addresses, mostly those who have no or limited access to banking channels), a NPA figure comparable to that of banks. It has reached a scale of Rs 30000 Crore on March 2010, indicating it has managed the tradeoffs well Thus, we see that there are certain NBFCs which have comparabl e NPA levels as of banks and have better yields too, hence can put their case forward and their conversion into banks should not be as bumpy as expected, though the only problem is they target a specific segment of customers. The current guidelines that came in 2001 specify Rs. 200 crore as the minimum starting capital for new bank to be increased to Rs. 300 crore over three years from commencement of business. Industry body CII is demanding the minimum capital to be raised to Rs. 1000 crore  [1]  . The argument of RBI is that a higher minimum capital ensures only serious players enter the business and also a higher capital provides higher safety and stability in bad times. Raising a capital of Rs. 200 crore to start with will be beyond the reach of small players and hence, only large established business houses, large NBFCs and some high net worth individuals are likely to pass this criterion. Currently, In India the promoters are allowed to bring in higher stake (minimum of 40 percent of the paid-up capital of the bank) at the time of licensing of banks with a lock-in period of 5 years. The main intention is to have a stable capital base with strong professional management, but without any interference or control of management by the promoters. The February 2005 Ownership and Governance (O G) guidelines require promoters and other shareholders of the banks to divest/dilute their shareholding to a level of 10 percent or below of the banks share capital within a specified time frame. Given that, it is likely that quite a few promoters will try to create a holding company with the bank as a subsidiary  [2]  . This structure, which is called Bank Holding Company (BHC), is also open to debate as RBI feels that some promoters may find ways to control the functioning of bank and affect the integrity of the business in the process. Foreign shareholding in new banks While foreign capital providers an alternate source of capital, the plethora of r egulations over foreign investment in various sector suggests that RBI is likely to keep the cap (50% or below, locked at that level for initial 10 years  [3]  ) on aggregate foreign investment in banks. Although, this will be in contrast to the current FDI policy in private sector banking (74% foreign equity allowed). NBFCs conversion into banks NBFCs are very strong contenders of new banking licenses. Deposit taking NBFCs (NBFCs-D) have been regulated by RBI for a long time now but non-deposit taking NBFCs (NBFCs-ND) also have been brought under some stricter regulations in recent times. Still, deposit taking NBFCs are closer to banks when it comes to regulations, something that should help their claim to a new bank license. RBI thinks that the regulations for NBFCs have not been stringent enough compared to banks and NBFCs capability to work under stricter regulations can be questioned. Therefore, the track record of an NBFC cannot be taken as an automatic eligibility criterion for conversion into banks. Hence the conversion to banks for NBFCs would not be an easy ride. Considering the various issues that RBI is pondering over regarding new banking licenses, we have come with a set of criterion that can be used to evaluate few likely contenders for banking licenses. The criteria would also help us in identifying th e bumps which various NBFCs would face in their conversion to banks. As a sample, we have taken three NBFCs into consideration: 1. Religare Enterprises, 2. Reliance Capital and 3. Shriram Transport Finance Company NBFCs-D have been regulated by RBI for long time and their regulations are similar to, though not as strict as, that of banks. Gross NPAs to advances- less for NBFC-D compared to NBFC-SI ND, hence better deposit directions and other measures signify they are better suited for conversion into banks than non deposit taking NBFCs. Hence an NBFC-D can be considered forerunner in getting the new bank license. Table 5: Comparison of few NBFCs over criteria of new bank license Legend: Favorable Unfavorable As we see, large NBFCs are in better position to raise the minimum starting capital required. RBI is averse in giving license to companies that belong to groups having exposure to other industrial sectors. All NBFCs having a real estate exposure are at a disadvantage and are not preferred by RBI. Conclusion Thus, we saw that there are numerous bumps in the road which leads NBFCs to banks. But at the same time, many NBFCs have a strong case and the road for them seems to be smooth. The hurdles were manifold and had diverse origins, some stemmed from the widening gap between capital and advances base thus making the business model risky while others came from the difficulties in complying with RBI guidelines like exposure to other sectors. Some of the NBFCs though have showed that they are on par with the traditional banks, and hence are strong contenders of the license. Even if some of the NBFCs do get converted into banks, they face a bumpy ride under the stricter regulations enforced by RBI and the need to reduce their existing NPA levels. So, while analysing the future of NBFCs in Indian Financial system, we see three possibilities arising: a) Conversion into banks, b) Remain as NBFCs and serve the niche segment, and c) become Business Correspondent- There seems to be a direct match between the strengths of NBFC model and the requirements out of a Business Correspondent in terms of coverage, financial strength, better technology and governance. NBFC segment is too varied and diversified to chalk out a single future path for all of them and considering continuing different needs in present economy, it is better for economy that NBFCs continue exist in different forms.

Essay on The Internent Grows More Dangerous - 1048 Words

As the internet grows vastly the more dangerous it becomes to its users. With the new advances in technology cyberspace fraud has been increasing. These new advances have made the internet vulnerable to various kinds of e-commerce fraud. New techniques to detect and prevent cyber fraud have been developed to discover and prevent criminals before the fact, rather than after the damage have been done. Individuals and businesses should recognize each new cyber attack and make themselves aware of the consequences each attack can create. This paper will discuss the new cyber attacks that are increasing and how individuals and businesses are affected. Internet Grows More Dangerous Cyberspace fraud has been increasing vastly with new†¦show more content†¦The article then goes on to discuss how dependent society is on cyberspace and how they have become more susceptible to cyberspace threats. It also talks about how dependent society is of the internet, â€Å"online banking travel , entertainment, and stock brokerage services† (25). With this increased activity makes the internet an enticing target with more opportunities and weaknesses for cyber crime. Criminals are learning new methods to perform cyber crimes more efficiently and effectively. However, these crimes are not just affecting individuals, businesses also fallen victim to these crimes every day. Some of the largest and most profitable cyber crimes of 2010 were reported by the Internet Crime Complaint Center were:, auction frauds, counterfeit cashier’s checks, credit card fraud, debt elimination schemes, parcel courier e-mail schemes, employment and business opportunity frauds, escrow services frauds, identity theft, internet extortion, investment frauds, lotteries, hoaxes like the well-known â€Å"Nigerian letter scheme, phishing, and third-party receiver of frauds schemes. The outcome of the highest-profile frauds included company employees who unintentionally gave access to crimi nals; particularly those â€Å"seeking to steal confidential customer information† (26). This type of crime is called a lax password policy. An example of this type of

Take Me As I Am free essay sample

If someone asked: why is diversity important, I probably would have rambled on about economies, control groups, and ethnicity funding.What if instead I was asked: Why is diversity important to you? Diversity is important to me because I am part of diversity. Diversity is simply explained as different from the normalcy. You can be diverse by your sexuality, religion, ethnicity, beliefs, and how you were raised. In the world no one is the same as anybody else, though some do try to â€Å"fit in† to the standards of billboards and society stereotypes. I am diversity. You are diversity. We are all different. In specific to me I am seventeen years old. I am bi-sexual and extremely proud of that. I have many heterosexual friends, as well as many gay friends. I am Puerto Rican, Mexican and a mix of many other things whereas my friends range from Irish to Guyanese in their bloodlines. We will write a custom essay sample on Take Me As I Am or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page As a feminist I organize small movements with neighbors and friends to empower woman and help domestic abuse victims. As a Roman Catholic I was confirmed in tenth grade but I practice Wiccan rituals and Buddhist meditation daily. People should enjoy diversity but of course in life there are some who react negatively towards those who are not the same as them. In life we have different forms of prejudice: Homophobia, racism, sexism. All of which affect the lives of those attempting to live proud of who they are. We should not attempt to live our lives set to the standards of people who do not exist. There is no â€Å"normalcy† in the world. I have learned not to be who I don’t want to be. Before my generation, I’m sure there was a lot of hatred towards minority groups. Nowadays we try to accept people as who they are, not as who we want them to be. Though we are slightly more accepting now, however, there will always be hate. Diversity is important to me because without it, I would not be me as I am today. Learning to accept other people has made me able to accept who I am as well. Diversity is key to the survival of the world, but change and difference will always come as a shock to people, which will make it difficult for the world to grow. . Fitting in is not the most important part of someone’s life. I was told by one woman ,who spent her whole youth attempting to fit in to what her friends and family thought she should be, that I should let my inner light shine and I should never let anyone keep me from being who I am. I am diversity, take me as I am.

The Bay Of Pigs Essays - CubaUnited States Relations, Fidel Castro

The Bay Of Pigs The Bay of Pigs Invasion. The story of the failed invasion of Cuba at the Bay of Pigs is one of mismanagement, overconfidence, and lack of security. The blame for the failure of the operation falls directly in the lap of the Central Intelligence Agency and a young president and his advisors. The fall out from the invasion caused a rise in tension between the two great superpowers and ironically 34 years after the event, the person that the invasion meant to topple, Fidel Castro, is still in power. To understand the origins of the invasion and its ramifications for the future it is first necessary to look at the invasion and its origins. Part I: The Invasion and its Origins. The Bay of Pigs invasion of April 1961, started a few days before on April 15th with the bombing of Cuba by what appeared to be defecting Cuban air force pilots. At 6 a.m. in the morning of that Saturday, three Cuban military bases were bombed by B-26 bombers. The airfields at Camp Libertad, San Antonio de los Baos and Antonio Maceo airport at Santiago de Cuba were fired upon. Seven people were killed at Libertad and forty-seven people were killed at other sites on the island. Two of the B-26s left Cuba and flew to Miami, apparently to defect to the United States. The Cuban Revolutionary Council, the government in exile, in New York City released a statement saying that the bombings in Cuba were . . . carried out by 'Cubans inside Cuba' who were 'in contact with' the top command of the Revolutionary Council . . . . The New York Times reporter covering the story alluded to something being wrong with the whole situation when he wondered how the council knew the pilots were coming if the pilots had only decided to leave Cuba on Thursday after . . . a suspected betrayal by a fellow pilot had precipitated a plot to strike . . . . Whatever the case, the planes came down in Miami later that morning, one landed at Key West Naval Air Station at 7:00 a.m. and the other at Miami International Airport at 8:20 a.m. Both planes were badly damaged and their tanks were nearly empty. On the front page of The New York Times the next day, a picture of one of the B-26s was shown along with a picture of one of the pilots cloaked in a baseball hat and hiding behind dark sunglasses, his name was withheld. A sense of conspiracy was even at this early stage beginning to envelope the events of that week. In the early hours of April 17th the assault on the Bay of Pigs began. In the true cloak and dagger spirit of a movie, the assault began at 2 a.m. with a team of frogmen going ashore with orders to set up landing lights to indicate to the main assault force the precise location of their objectives, as well as to clear the area of anything that may impede the main landing teams when they arrived. At 2:30 a.m. and at 3:00 a.m. two battalions came ashore at Playa Gir?n and one battalion at Playa Larga beaches. The troops at Playa Gir?n had orders to move west, northwest, up the coast and meet with the troops at Playa Larga in the middle of the bay. A small group of men were then to be sent north to the town of Jaguey Grande to secure it as well. When looking at a modern map of Cuba it is obvious that the troops would have problems in the area that was chosen for them to land at. The area around the Bay of Pigs is a swampy marsh land area which would be hard on the troops. The Cuban forces were quick to react and Castro ordered his T-33 trainer jets, two Sea Furies, and two B-26s into the air to stop the invading forces. Off the coast was the command and control ship and another vessel carrying supplies for the invading forces. The Cuban air force made quick work of the supply ships, sinking the command vessel the Marsopa and the supply ship the Houston, blasting them to pieces with five-inch rockets. In the end the 5th battalion was lost, which was on the Houston, as well as the supplies for the landing teams and eight other smaller vessels. With some of the invading forces' ships destroyed, and no command and control ship, the logistics of the operation

How to Use Sociology to Counter Claims of Reverse Racism

How to Use Sociology to Counter Claims of Reverse Racism A former student recently asked me how one can use sociology to counter claims of â€Å"reverse racism.† The term refers to the idea that whites experience racism due to programs or initiatives that are designed to benefit people of color. Some claim that organizations or spaces that are exclusive to say, black people or Asian Americans, constitute â€Å"reverse racism,† or that scholarships open only to racial minorities discriminate against whites. The big point of contention for those concerned with â€Å"reverse racism† is Affirmative Action, which refers to measures in applications processes for employment or college admission that take race and the experience of racism into account in the evaluation process. To counter claims of â€Å"reverse discrimination,† let’s first revisit what racism actually is. Per our own glossary definition, racism serves to limit access to rights, resources, and privileges on the basis of essentialist notions of race (stereotypes). Racism can take a variety of forms in achieving these ends. It can be representational, manifesting in how we imagine and represent racial categories, like in costume at â€Å"Ghetto† or â€Å"Cinco de Mayo† parties, or in what kinds of characters people of color play in film and television. Racism can be ideological, existing in our world views and ideas premised on white superiority and the presumed cultural or biological inferiority of others. There are other forms of racism too, but most important to this discussion of whether or not affirmative action constitutes â€Å"reverse racism† are the ways that racism operates institutionally and structurally. Institutional racism manifests in education in the tracking of students of color into remedial or special ed courses, while white students are more likely to be tracked into college prep courses. It also exists in the educational context in the rates at which students of color are punished and reprimanded, versus white students, for the same offenses. Institutional racism is also expressed in biases teachers reveal in doling out praise more so to white students than to students of color. Institutional racism in the educational context is a key force in reproducing long-term, historically rooted structural racism. This includes racial segregation into poor communities with underfunded and understaffed schools, and economic stratification, which overwhelmingly burdens people of color with poverty and limited access to wealth. Access to economic resources is a significant factor that shapes one’s educational experience, and the extent to which one is prepared for admission to college. Affirmative Action policies in higher education are designed to counteract the near 600-year history of systemic racism in this country. A cornerstone of this system is undeserved enrichment of whites based on historical theft of land and resources from Native Americans, theft of labor and denial of rights of Africans and African Americans under slavery and its Jim Crow aftermath, and denial of rights and resources to other racial minorities throughout history. The undeserved enrichment of whites fueled the undeserved impoverishment of people of color- a legacy that is painfully alive today in racialized income and wealth disparities. Affirmative Action seeks to redress some of the costs and burdens born by people of color under systemic racism. Where people have been excluded, it seeks to include them. At their core, Affirmative Action policies are based on inclusion, not exclusion. This fact becomes clear when one considers the history of legislation that laid the groundwork for Affirmative Action, a term first used by former President John F. Kennedy in 1961 in Executive Order 10925, which referenced the need to end discrimination based on race, and was followed three years later by the Civil Rights Act. When we recognize that Affirmative Action is premised on inclusion, we see clearly that it is not consistent with racism, which uses racial stereotypes to limit access to rights, resources, and privileges. Affirmative Action is the opposite of racism; it is anti-racism. It is not â€Å"reverse† racism. Now, some might claim that Affirmative Action limits access to rights, resources, and privileges for whites who are thought to be displaced by people of color who are granted admission instead of them. But the fact is, that claim simply doesn’t stand up to scrutiny when one examines historical and contemporary rates of college admission by race. According to the U.S. Census Bureau, between 1980 and 2009, the number of African American students enrolled in college annually more than doubled, from about 1.1 million to just under 2.9 million. During that same period, Hispanic and Latino enjoyed a huge jump in enrollment, multiplying by more than five, from 443,000 to 2.4 million. The rate of increase for white students was much lower, at just 51 percent, from 9.9 million to about 15 million. What these jumps in enrollment for African Americans and Hispanic and Latinos show is the intended outcome of Affirmative Action policies: increased inclusion. Importantly, the inclusion of these racial groups did not harm white enrollment. In fact, data released by the Chronicle of Higher Education in 2012 show that white students are still slightly over-represented in terms of their presence in that year’s freshmen class at 4-year schools, while black and Latino students are still underrepresented.* Further, if we look beyond the Bachelor’s degree to advanced degrees, we see percentages of white degree earners rise as does level of degree, culminating in a stark underrepresentation of black and Latino recipients of degrees at the level of Doctor. Other research has shown clearly that university professors demonstrate a strong bias toward white male students who express interest in their graduate programs, much to the expense of women and students of color. Looking at the big picture of longitudinal data, it is clear that while Affirmative Action policies have successfully opened access to higher education across racial lines, they have not limited the ability of whites to access this resource. Rulings from the mid-1990s that have outlawed Affirmation Action at public educational institutions lead to a fast and sharp drop in enrollment rates of black and Latino students at those institutions, quite notably in the University of California system. Now, let’s consider the bigger picture beyond education. For â€Å"reverse racism,† or racism against whites, to exist in the U.S., we would first have to reach racial equality in systemic and structural ways. We would have to pay reparations to make up for centuries upon centuries of unjust impoverishment. We would have to equalize wealth distribution and achieve equal political representation. We would have to see equal representation across all job sectors and educational institutions. We would have to abolish racist policing, judicial, and incarceration systems. And, we would have to eradicate ideological, interactional, and representational racism. Then, and only then, might people of color be in a position to limit access to resources, rights, and privileges on the basis of whiteness. Which is to say, â€Å"reverse racism† does not exist in the United States.   *I base these statements on 2012 U.S. Census population data, and compare the category â€Å"White alone, not Hispanic or Latino† to the White/Caucasian category used by the Chronicle of Higher Education. I collapsed the Chronicle’s data for Mexican-American/Chicano, Puerto Rican, and Other Latino into a total percentage, which I compared to the Census category â€Å"Hispanic or Latino.†

Alcan Paper Five Essay Example | Topics and Well Written Essays - 1250 words

Alcan Paper Five - Essay Example The enterprise has operating facilities across 61 countries with a work force of about 68,000 employees (Dube, Bernier, & Roy, 2009). The organization takes the leading position in production of raw materials, fabricated products and primary metals. The enterprise is involved in creating and selling of a variety of products, which include bauxite, automobile iron, sheet ingot, aluminum recycling services, forging stock (INDUSTRY CANADA, 2005). This paper explores a report of Alcan based on the case studies. The report discusses the application of Information Technology within the Alcan organization and it is a summary of issues addressed in part 1 to part four all of which focused on the Alcan. It addresses a range of issues that concerns Alcan Organization. The issues of concern include the General Systems, Theory and Social-Technical Theory, Organizational Success, Failures and Consequences, Communication Policies, STS Practices, and application of theories within the Organization, the Alcan’s organization and operating technology, technological contributions to the organization, dominant Information Technology strategies and practices, technological barriers or success, the Alcan’s business continuity plan, the company’s organization and operating technology, technological contributions to the organization, dominant Information Technology strategies and practices, technological barriers disaster recovery plan, and business continuity plan. Organization Environment. Alcan Organization has operating facilities across 61 countries with a work force of about 68,000 employees. It has four principal business groups which are: Bauxite and Alumina, Primary Metal, packaging and the engineered products. The four business groups are the main revenue contributors for the organization (Dube, Bernier, & Roy, 2009). The company sells a variety of products, which include bauxite, automobile iron, sheet ingot, aluminium recycling services, forging stock. It is extremely vertically integrated having eight mines and deposits, a transport network with ports and facilities, seven alumina plants, 26 aluminium smelters, 17 laminated products plants, 12 electric power plants, seven alumina refineries, 180 packaging materials plants and 49 engineered products plants (Dube, Bernier, & Roy, 2009). Organizational Structure. The senior management in Alcan Company consists of a CIO and four associates (Dube, Bernier, & Roy, 2009). These associates include: Strategic IT-Program director, Chief information-security- officer director, performance-management director, and the Enterprise Architectural director. Next to these are two services that are shared. One service is for the application, and the next is for infrastructure. In the centre of the ladder, there are different business groups of Information Technology directors. Each business group is headed by an IT director referred to as VP (Dube, Bernier, & Roy, 2009). Challenges Faced by Alcan Organization. Alcan organization is faced with various environmental, economical, social as well as technological challenges. The environmental challenges facing Alcan include sustainable raw material development, industrial waste, air emissions, and water. The company overcomes this challenge by developing a clean manufacturing process and designing a method of recycling the waste products (Foster, 2005). Economic Challenges in Alcan include high costs due to funds misappropriation in the company, ineffective and inefficiency business

Lessons from Gorbachev's Doomed U.S.S.R and America's current Path Research Paper

Lessons from Gorbachev's Doomed U.S.S.R and America's current Path - Research Paper Example The relationship between the United States and the Soviet Union has been characterized by the interplay of economic, ideological and political factors that largely resulted in supper power rivalry throughout the cold war period. One of the remarkable similarities shared by the current United States and the former Soviet Union is a serious foreign debt crisis and a looming bankruptcy. Prior to its collapse Gorbachev's Doomed U.S.S.R was taking on foreign debt at unsustainable rates. A peak in the Russian oil production, as well as low world prices at the time, later sealed the fate of Soviet Union under Gorbachev. For example, his two main policies of Perestroika and glasnost significantly resulted in a political instability that eventually gave way to the dissolution of the Union (Service, 13).On the other hand, just like the former USSR, United States is also now facing similar economic problems and the current outstanding US national debt stands at over $16 trillion and is one of t he largest debts owed by a single country in the world. Even before the current economic crisis, the US grew by nearly 50% and the fact that the US debt to GDP ratio now stands at more than 100% is a serious alarm to both the policymakers and the investors. According to many analysts, the high US national debt resulted from an accumulation of federal budget deficits with the largest contributor being President Obama through his tax cuts, economic stimulus package (bailout) and increased military spending.