Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2019 Summer 3rd Sem 3539222 Managerial Financial Services Previous Question Paper
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3 ? EXAMINATION ? SUMMER 2019
Subject Code: 3539222 Date:09/05/2019
Subject Name: Managerial Financial Services
Time: 02.30 P.M. to 5.30 P.M. Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q. No. Marks
Q.1 Definitions following term
(a) securitization
(b) factoring
(c) NBFC
(d) Bill Discounting
(e) Depository Participant
(f) Hire purchase
(g) Four major function role of SEBI
14
Q.2 (a) What is credit rating? Explain the importance of credit rating 07
(b) What is merchant banking? Discuss services provided by
merchant banker.
07
OR
(b) What is financial system? Discuss functions of financial system.
07
Q.3 (a) What is leasing? Discuss various type of lease. 07
(b) Differentiate lease, hire purchase, credit sales and installment
sales.
07
OR
Q.3 (a) Discuss process of securitization and the obstacles in the
development of securitization in India.
07
(b) Discuss the meaning and process of letter of credit. 07
Q.4 (a) Explain the term depositories. Give reasons for setting up
depository in India. Discuss services and benefits provided by
depository.
07
(b) What is money market? Discuss instruments of money market. 07
OR
Q.4 (a) Discuss the role of RBI, IRDA & SEBI in Indian financial
market.
07
(b) Discuss functions of primary market and role of primary market
in Indian financial system
07
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Page 1 of 3
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3 ? EXAMINATION ? SUMMER 2019
Subject Code: 3539222 Date:09/05/2019
Subject Name: Managerial Financial Services
Time: 02.30 P.M. to 5.30 P.M. Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q. No. Marks
Q.1 Definitions following term
(a) securitization
(b) factoring
(c) NBFC
(d) Bill Discounting
(e) Depository Participant
(f) Hire purchase
(g) Four major function role of SEBI
14
Q.2 (a) What is credit rating? Explain the importance of credit rating 07
(b) What is merchant banking? Discuss services provided by
merchant banker.
07
OR
(b) What is financial system? Discuss functions of financial system.
07
Q.3 (a) What is leasing? Discuss various type of lease. 07
(b) Differentiate lease, hire purchase, credit sales and installment
sales.
07
OR
Q.3 (a) Discuss process of securitization and the obstacles in the
development of securitization in India.
07
(b) Discuss the meaning and process of letter of credit. 07
Q.4 (a) Explain the term depositories. Give reasons for setting up
depository in India. Discuss services and benefits provided by
depository.
07
(b) What is money market? Discuss instruments of money market. 07
OR
Q.4 (a) Discuss the role of RBI, IRDA & SEBI in Indian financial
market.
07
(b) Discuss functions of primary market and role of primary market
in Indian financial system
07
Page 2 of 3
Q.5 Case Study 14
On May 18, 2016, Punjab National Bank (PNB), the third largest Public Sector Bank (PSB) in
India, reported Rs. 53.67 billion quarterly losses in the quarter that ended in March 2016 against
the Rs. 3.06 billion profits for the same period in 2015. This was the largest ever quarterly loss
reported by any bank in India. PNB also reported a steep rise in Gross Non-Performing Assets
(GNPAs), which increased from 8.47% of advances in the previous quarter to 12.9% of advances
in the fourth quarter of financial year 2016 (FY16) . In value terms, NPAs had increased by Rs.
214.8 billion to Rs. 558.18 billion in the fourth quarter of FY16. PNB also increased provisioning
for bad debts from Rs. 32.81 billion in the fourth quarter of FY15 to Rs. 113.8 billion in the
fourth quarter of FY16.
PNB was not the only bank to report this kind of performance. All Scheduled Commercial Banks
(SCBs), especially PSBs, reported higher NPAs in FY16.
Since ancient times, an indigenous banking industry had prevailed in India with some
communities being traditionally involved. These communities mostly ran huge businesses apart
from their small banking business. They dealt mainly in money lending, did not accept deposits
from customers, and discouraged savings.
The western type of banks came into the picture in the late 18th century in India when the Bank
of Hindustan was established in 1770 in Calcutta (now Kolkata) in eastern India. Calcutta
became the center of banking activities mainly due to the trading activities of the British Empire.
In the 19th century, the major development in the Indian banking industry was the establishment
of three presidency banks by the British East India Company. In 1935, the RBI was established
under the provisions of the Reserve Bank of India Act, 1934...
NON-PERFORMING ASSETS IN INDIAN BANKING INDUSTRY
In 1996-97, the GNPA in the Indian banking industry was 15.7%. It fell to 2.35% at the end of
March 2011 due to various reforms introduced by the RBI and the Government of India, such as
implementation of the reforms suggested by the second M. Narasimham Committee on the
banking sector in 1998, enactment of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (SARFAESI Act), and Credit Information
Companies (Regulation) Act, 2005 etc.
However, due to various reasons, the total stressed assets, which stood at 9.8% at the end of
March 2012, increased to 11.06% by March 2015 and then to 14.5% by the end of December
2015. , This affected the growth in the net profit of the SCBs, which declined from 2011-12 and
led to a fall in the ROA and the ROE of banks
REASONS FOR HIGH GROWTH IN NON-PERFORMING ASSETS
There were many environmental factors which were responsible for the high growth of NPAs in
India. One of the main reasons was the US financial crisis in 2008 which had a global impact.
In addition to this, a fall in commodity prices and dumping from China had decreased the
competitiveness of the Indian manufactures, which led to the reduction in cash flow of
manufacturers which made it tough to repay their loans. This led to the growth in NPAs...
RAGHURAM RAJAN?S POLICIES ON NPAs
Rajan became the RBI governor in September 2013 and from day one, he focused on the NPA
problem of the Indian banking system. In his very first speech as the governor, he said, ?We
have to improve the efficiency of the recovery system, especially at a time of economic
uncertainty like the present [2013]?. I have asked Deputy Governor Dr. Chakrabarty to take a
close look at rising NPAs and the restructuring/recovery process, and we too will be taking next
steps shortly...
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Page 1 of 3
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 3 ? EXAMINATION ? SUMMER 2019
Subject Code: 3539222 Date:09/05/2019
Subject Name: Managerial Financial Services
Time: 02.30 P.M. to 5.30 P.M. Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q. No. Marks
Q.1 Definitions following term
(a) securitization
(b) factoring
(c) NBFC
(d) Bill Discounting
(e) Depository Participant
(f) Hire purchase
(g) Four major function role of SEBI
14
Q.2 (a) What is credit rating? Explain the importance of credit rating 07
(b) What is merchant banking? Discuss services provided by
merchant banker.
07
OR
(b) What is financial system? Discuss functions of financial system.
07
Q.3 (a) What is leasing? Discuss various type of lease. 07
(b) Differentiate lease, hire purchase, credit sales and installment
sales.
07
OR
Q.3 (a) Discuss process of securitization and the obstacles in the
development of securitization in India.
07
(b) Discuss the meaning and process of letter of credit. 07
Q.4 (a) Explain the term depositories. Give reasons for setting up
depository in India. Discuss services and benefits provided by
depository.
07
(b) What is money market? Discuss instruments of money market. 07
OR
Q.4 (a) Discuss the role of RBI, IRDA & SEBI in Indian financial
market.
07
(b) Discuss functions of primary market and role of primary market
in Indian financial system
07
Page 2 of 3
Q.5 Case Study 14
On May 18, 2016, Punjab National Bank (PNB), the third largest Public Sector Bank (PSB) in
India, reported Rs. 53.67 billion quarterly losses in the quarter that ended in March 2016 against
the Rs. 3.06 billion profits for the same period in 2015. This was the largest ever quarterly loss
reported by any bank in India. PNB also reported a steep rise in Gross Non-Performing Assets
(GNPAs), which increased from 8.47% of advances in the previous quarter to 12.9% of advances
in the fourth quarter of financial year 2016 (FY16) . In value terms, NPAs had increased by Rs.
214.8 billion to Rs. 558.18 billion in the fourth quarter of FY16. PNB also increased provisioning
for bad debts from Rs. 32.81 billion in the fourth quarter of FY15 to Rs. 113.8 billion in the
fourth quarter of FY16.
PNB was not the only bank to report this kind of performance. All Scheduled Commercial Banks
(SCBs), especially PSBs, reported higher NPAs in FY16.
Since ancient times, an indigenous banking industry had prevailed in India with some
communities being traditionally involved. These communities mostly ran huge businesses apart
from their small banking business. They dealt mainly in money lending, did not accept deposits
from customers, and discouraged savings.
The western type of banks came into the picture in the late 18th century in India when the Bank
of Hindustan was established in 1770 in Calcutta (now Kolkata) in eastern India. Calcutta
became the center of banking activities mainly due to the trading activities of the British Empire.
In the 19th century, the major development in the Indian banking industry was the establishment
of three presidency banks by the British East India Company. In 1935, the RBI was established
under the provisions of the Reserve Bank of India Act, 1934...
NON-PERFORMING ASSETS IN INDIAN BANKING INDUSTRY
In 1996-97, the GNPA in the Indian banking industry was 15.7%. It fell to 2.35% at the end of
March 2011 due to various reforms introduced by the RBI and the Government of India, such as
implementation of the reforms suggested by the second M. Narasimham Committee on the
banking sector in 1998, enactment of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (SARFAESI Act), and Credit Information
Companies (Regulation) Act, 2005 etc.
However, due to various reasons, the total stressed assets, which stood at 9.8% at the end of
March 2012, increased to 11.06% by March 2015 and then to 14.5% by the end of December
2015. , This affected the growth in the net profit of the SCBs, which declined from 2011-12 and
led to a fall in the ROA and the ROE of banks
REASONS FOR HIGH GROWTH IN NON-PERFORMING ASSETS
There were many environmental factors which were responsible for the high growth of NPAs in
India. One of the main reasons was the US financial crisis in 2008 which had a global impact.
In addition to this, a fall in commodity prices and dumping from China had decreased the
competitiveness of the Indian manufactures, which led to the reduction in cash flow of
manufacturers which made it tough to repay their loans. This led to the growth in NPAs...
RAGHURAM RAJAN?S POLICIES ON NPAs
Rajan became the RBI governor in September 2013 and from day one, he focused on the NPA
problem of the Indian banking system. In his very first speech as the governor, he said, ?We
have to improve the efficiency of the recovery system, especially at a time of economic
uncertainty like the present [2013]?. I have asked Deputy Governor Dr. Chakrabarty to take a
close look at rising NPAs and the restructuring/recovery process, and we too will be taking next
steps shortly...
Page 3 of 3
EFFORTS OF THE INDIAN GOVERNMENT
To give a boost to the Indian banking sector, Arun Jaitley (Jaitley), Finance Minister of India,
came up with a seven-pronged plan called ?Indradhanush? in August 2015. The seven elements
of this plan were appointments, board of bureau, capitalization, de-stressing, empowerment,
framework of accountability, and governance reforms...
Questions (Attempt Any Two)
A. Analyse NPA Problem in Indian Financial System.
B. Debate on Action taken by Raghuram Rajan.
OR
A. What is your view on government initiative?
B. According to you what can be done further?
*************
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This post was last modified on 19 February 2020