corporate finance

2. FINANCIAL SERVICES

3. In financial economics, a financial
institution acts as an agent that provides
financial services for its clients. Financial
institutions generally fall under financial
regulation from a government authority.

4.  Banks
 Insurance Co
 Leasing Co
 Investment Co
 Mutual Funds

5.  A bank is a commercial or state institution
that provides financial services, including
issuing money in various forms, receiving
deposits of money, lending money and
processing transactions and the creating of
credit.

6.  A central bank, reserve bank or monetary
authority, is an entity responsible for the
monetary policy of its country or of a group
of member states.
 RBI- Lender of last resort

7.  A commercial bank accepts deposits from
customers and in turn makes loans, even in
excess of the deposits; a process known as
fractional-reserve banking. Some banks
(called Banks of issue) issue banknotes as
legal tender.
 Canara bank

8.  Investment banks help companies and
governments and their agencies to raise money
by issuing and selling securities in the primary
market.
 Indbank
4. Saving Banks
 A savings bank is a financial institution whose
primary purpose is accepting savings deposits.
It may also perform some other functions.
 CUB

9.  For the purpose of poverty reduction
program, such kind of banks are working in
the different countries with the contribution
of UNO or World Bank.
 SBImicro.

10.  It is the premier financial
institution geared towards the
development of the agricultural
sector through the provision of
financial services and technical
know-how.
 NABARD

11.  Non-bank financial companies (NBFCs) also
known as a non-bank or a non-bank bank,
are financial institutions that provide banking
services without meeting the legal definition
of a bank, i.e. one that does not hold a
banking license.

12.  Generally, an "investment company" is a
company (corporation, business trust,
partnership, or limited liability company) that
issues securities and is primarily engaged in
the business of investing in securities.

13.  A lease or tenancy is the right to use or
occupy personal property or real property
given by a lessor to another person (usually
called the lessee or tenant) for a fixed or
indefinite period of time, whereby the
lessee obtains exclusive possession of the
property in return for paying the lessor a
fixed or determinable consideration
(payment).

14.  Insurance companies may be classified as
1. Life insurance companies, which sell
life insurance, annuities and pensions
products.
2. Non-life or general insurance
companies, which sell other types of
insurance.

15. An investment which is comprised of a pool
of funds collected from many investors for
the purpose of investing in securities such as
stocks, bonds, money market securities and
similar assets.

16. Mutual funds are operated by money
mangers, who invest the fund's capital and
attempt to produce capital gains and income
for the fund's investors. A mutual fund's
portfolio is structured and maintained to
match the investment objectives stated in its
prospectus.

17. 1.Depository Institutions.
2.Non-depository Institutions
Classification Or Types Of
Financial Institutions

18. Depository Institutions
The depository types of financial institutions
include
Commercial banks,
Credit unions,
Saving and loan associations and
Mutual saving banks

19. Commercial banks
Commercial banks are those financial institutions,
which help in pooling the savings of surplus units and
arrange their productive uses. They basically accepts
the deposits from individuals and institutions, which are
repayable on demand. These deposits from individuals
and institutions are invested to satisfy the short-term
financing requirement of business and industry.

20. Credit Unions
Credit unions are cooperative associations
where large numbers of people are voluntarily
associated for savings and borrowing purposes. These
individuals are the members of credit unions as they
make share investment along with deposits. The saving
generated from these members are used to lend the
members of the union only.

21. Saving And Loan Associations
Saving and loan associations are the financial
institutions involved in collecting funds of many small
savers and lending these funds to home buyers and
other types of borrowers.

22. Mutual Saving Banks
Mutual saving banks are more or less similar to saving
and loan associations. They primarily accepts savings of
individuals and they are lent to the home users and
consumers on a long-term basis.

23. Foreign institutional investor (FII)

24. Meaning Of FII Foreign Institutional Investment (FII)
FII denotes all those investors or investment companies that
are not located within the territory of the country in which
they are investing.
“SEBI”s definition of FIIs presently includes foreign pension
funds, mutual funds, charitable/endowment/university funds
etc. as well as asset management companies and other
money managers operating on their behalf.”

25. Foreign Institutional Investor„(FII) means an entity
established or incorporated outside India which
proposes to make investment in India and which is
registered as a FII in accordance with the SEBI (FII)
Regulations 1995.

26. Advantages for Foreign Institutional
Investors
• FIIs Can Individually Purchase Up To 10% And
Collectively Up To 24% Of The Paid-up Share Capital Of
An Indian Company
• This Limit Of 24% Can Be Increased To Sectorial Cap/
Statutory Limit Applicable To The Indian Company By
Passing A Board Resolution/Shareholder Resolution
• FII Can Purchase Shares Through Open Offers/Private
Placement/Stock Exchange

27. • Shares Purchased By FII Through Stock Exchange Cannot
Be Sold Through A Private Arrangement
• Proprietary Funds, Foreign Individuals And Foreign
Corporate Can Register As A Sub- Account And Invest
Through The FII. Separate Limits Of 10% / 5% Is Available
For The Sub-accounts
• FIIs Can Raise Money Through Participatory Notes Or
Offshore Derivative Instruments For Investment In The
Underlying Indian Securities
• FIIs In Addition To Investment Under The FII Route Can
Invest Under FDI Route

28. Disadvantages of FII
•Problems of Inflation
• Problems for small investor
• Adverse impact on Exports Hot Money

29. 2. Non-depository institutions
 Insurance companies
 Pension / Provident funds
 Finance companies
 Mutual funds

30. The flexibility to alter the course of action
in a real assets decision, depending on
future developments
Option that involves tangible assets
(building, facilities, land, machines) and
physical actions (digging, grading,
construction) instead of financial instruments
(bonds, CDs, shares) and cash flows.

31.  Timing option
 Growth option
 Staging option
 Exit option
 Flexibility option
 Operating option
 Learning option

32. ADVANTAGES
◦ Successfully explains valuation of multiple
companies believed to have substantial real options
◦ Explain some of the difference in markets not
accounted by traditional techniques

33. DISADVANTAGE
◦ Real option can be miscalculated / misused and
misvalue a company
◦ Provides a method to exemplify market outcomes
using nontraditional techniques

35.  IDBI Bank is an Indian government-owned financial service
company, formerly known as Industrial Development Bank
of India, headquartered in Mumbai, India. It was established
in 1964 by an Act of Parliament to provide credit and other
financial facilities for the development of the fledgling Indian
industry.
 It is currently 10th largest development bank in the world in
terms of reach, with 3350 ATMs, 1852 branches, including
one overseas branch at Dubai, and 1382 centers. It is one of 27
commercial banks owned by the Government of India.
 The Bank has an aggregate balance sheet size of INR
3.74 trillion as on 31 March 2016.

36. OVERVIEW OF DEVELOPMENT BANKING IN
INDIA
 Development Banking emerged after the Second World War and the Great Depression in
1930s. The demand for reconstruction funds for the affected nations compelled in setting
up of national institutions for reconstruction.
 At the time of Independence in 1947, India had a fairly developed banking system. The
adoption of bank dominated financial development strategy was aimed at meeting the
sectoral credit needs, particularly of agriculture and industry.
 Towards this end, the Reserve Bank concentrated on regulating and developing
mechanisms for institution building. The commercial banking network was expanded to
cater to the requirements of general banking and for meeting the short-term working
capital requirements of industry and agriculture.
 Specialised development financial institutions (DFIs) such as the IDBI, NABARD,
NHB and SIDBI, etc., with majority ownership of the Reserve Bank were set up to meet
the long-term financing requirements of industry and agriculture.

37.  The Industrial Development Bank of India (IDBI) was established in 1964
under an Act of Parliament as a wholly owned subsidiary of the Reserve
Bank of India.
 In 1976, the ownership of IDBI was transferred to the Government of India
and it was made the principal financial institution for coordinating the
activities of institutions engaged in financing, promoting and developing
industry in India.
 IDBI provided financial assistance, both in rupee and foreign currencies,
for green-field projects as also for expansion, modernisation and
diversification purposes. In the wake of financial sector reforms unveiled
by the government since 1992, IDBI also provided indirect financial
assistance by way of refinancing of loans extended by State-level financial
institutions and banks and by way of rediscounting of bills of exchange
arising out of sale of indigenous machinery on deferred payment terms.

38.  After the public issue of IDBI in July 1995, the Government shareholding in
the Bank came down from 100% to 75%.
 IDBI played a pioneering role, particularly in the pre-reform era
(1964–91), in catalyzing broad based industrial development in
India in keeping with its Government-ordained ‘development
banking’ charter.
 Some of the institutions built with the support of IDBI are the
Securities and Exchange Board of India (SEBI), National Stock
Exchange of India (NSE), the National Securities Depository
Limited (NSDL), the Stock Holding Corporation of India Limited
(SHCIL), the Credit Analysis & Research Ltd, the Exim Bank
(India), the Small Industries Development Bank of India (SIDBI)
and the Entrepreneurship Development Institute of India.

39.  A committee formed by RBI under chairmanship of S.H.Khan
recommended the development financial institution (IDBI) to
diversify its activity and harmonise the role of development
financing and banking activities by getting away from the
conventional distinction between commercial banking and
developmental banking.
 To keep up with reforms in financial sector, IDBI reshaped its role
from a development finance institution to a commercial institution.
With the Industrial Development Bank (Transfer of Undertaking
and Repeal) Act, 2003, IDBI attained the status of a limited
company viz., IDBI Ltd.
 Subsequently, in September 2004, the Reserve Bank of India
incorporated IDBI as a 'scheduled bank' under the RBI Act, 1934.
Consequently, IDBI, formally entered the portals of banking
business as IDBI Ltd. from 1 October 2004. The commercial
banking arm, IDBI BANK, was merged into IDBI in 2005.

40.  In 2006, IDBI Bank acquired United Western
Bank (headquartered at Satara) in a rescue. By
acquiring UWB, IDBI Bank more than doubled
the number of its branches from 195 to 425.

41.  IDBI Bank's equity shares are listed on
Bombay Stock Exchange and the National
Stock Exchange of India.
 As on 31 March 2016, Government of India
held 73.98% shares in IDBI Bank and Life
Insurance Corporation of India held approx.
14.37% of the shares.

42.  As on 31 March 2015, the bank had 16,555 employees,
out of which 197 were employees with disabilities. The
average age of bank employees on the same date was
34 years.The bank reported business of INR 25.64
crores per employee and net profit of INR 12.17 lakhs
per employee during the FY 2012-13.The company
incurred INR 1,538 crores towards employee benefit
expenses during the same financial year.

43.  IDBI Bank was ranked #1197 in the Forbes Global
2000 in May 2013.
 It received the 'Overall Best Bank' and 'Best Public
Sector Bank' awards in the Dun & Bradstreet Banking
Awards, 2011.
 In 2011, it received Banking Technology awards for
best use of Business Intelligence and the best Risk
Management from Indian Banks Association.

44.  On 29 feb 2016, the Finance Minister Shri Arun Jaitley
declared that there is a chance of dilution of the
Government of India stake in IDBI Bank to below
50%.

45.  It is one of India’s growing life insurance companies and offers a
diverse range of wealth management, protection and retirement
solutions to individual and corporate customers.
 IDBI Federal Life Insurance Co Ltd is a three way joint-venture
of IDBI Bank, an Indian development and commercial bank;
Federal Bank, one of India’s leading private sector banks and
Ageas, a multinational insurance giant based out of Europe.
 Through a nationwide network of over 2,000 branches of IDBI
Bank and Federal Bank, and a sizeable network of advisors and
partners, IDBI Federal Life Insurance has achieved presence
across the length and breadth of the country. IDBI Federal
distributes its products through a multi-channel network
consisting of Insurance agents, Bancassurance partners (IDBI
Bank, Federal Bank) Direct channel, and Insurance Brokers.

46.  It is a wholly owned subsidiary of IDBI Bank, established in 2000. It
provides IT related services in the area of Consultancy, System Integration,
System implementation & support, Applications & Server hosting and
other IT related managed services and specialized training.
 IDBI Intech has been accredited with ISO 9001:2000 certification for IT
related services including Data Center Management and Call Center, and
also Certified IT Security Auditing Organisation with the Indian Computer
Emergency Response Team (CERT-In).

48. Industrial Credit and Investment Corporation of India
(ICICI):
 ICICI was established in 1955 as public limited
company, for developing medium and small industries
of private sector.
 In march 2002, the ICICI was merger with the ICICI
bank and created first universal bank in India.
 At present its equity capital is owned by – Banks, LIC

49.  To provide loans to industrial projects in private sector
 To stimulate the promotion of new industries
 To assist expansion and modernization of existing
industries
 To provide technical and managerial aid to increase
production

50.  Long term and medium term loans
 Participating in equity capital and in debentures
 Underwriting new issues of shares and debentures
 Guarantee to suppliers of equipment and foreign
loaners

51.  Project finance
 Leasing
 Project advisory services
 Facilities of foreign currency loans
 Provision of foreign currency loans
 Other institution promoted

52. THANK YOU