NMIMS Semester 3 December 2024 Banking & Finance Assignment
Marketing of Financial Services
Q1. A Finance Head (CFO) of Finance Company is deeply analyzing the criticalities of outside Market environment from Customer point of view. While analyzing Consumer Choices for Financial Services, how CFO & his team can demarcate the ‘Non- Controllable’ Consumer Choices in rendering of Financial Services? Kindly elaborate.
Q2. A 60-year-old senior citizen, recently retired from a GM position at an MNC, has received a substantial retirement corpus. Seeking to ensure a comfortable and secure post- retirement life, he approaches an investment planning firm for guidance. What guidelines should the Firm’s Investment Advisor follow in developing a retirement plan for this individual?
Q3. a) In case if a NBFC is being set up at Town place and planning to render core financial services to young & mid age Crowd (50% population) what they can enlist as most Distinct Characteristics of Financial Services? Elaborate any 4 to 5 Distinct Financial Services.
Q3. b) How a Bank Manager foresee their Customers Important Choices while availing different types of Banking Services? Explain Paradigm as Internal Factors.
Retail banking
Q1. The Retail Banking segment has become extremely competitive and hence it has become challenging for Retail banks to setup strategies to establish their presence, and grow in the market by reaching to as many customers as possible. Discuss the various Corporate level marketing strategies deployed for the same. Also discuss the need and relevance of distribution management
Q2. The banking transactions has seen a drastic shift in the payment mechanism especially post covid. Discuss the relevance of a payment system in the context of the retail banking scenario by enlisting the various payment systems. Explain any three such payment systems in detail.
Q3. Retail banks have faced a long-standing challenge in the form of repayment defaults which may convert to non-performing assets (NPAs) in many cases. Thus banks need to critically evaluate their lending process. Discuss the following aspect of Credit provision in Retail banking
a. Discuss the basic lending principles followed by retail banks.
b. Discuss the components of the credit score and the importance of the CIBIL score.
Cost & Management Accounting
Q1. ABC Ltd., has given the following budgeted and actual sales figures:
Budgeted Actual
Quantity Sale Price Value Quantity Sales Price Value
Rs. Rs. Rs. Rs.
Product A 500 60 30,000 600 65 39,000
Product B 700 40 28,000 650 38 24,700
The cost per unit of product A and B was Rs. 55 and Rs. 32 respectively. Compute variances to explain difference between budgeted and actual profit.
Q2. Discuss the role of management accounting in shaping strategic decisions within an organization. Provide examples of how management accounting practices can influence long-term planning and sustainability.
Q3. (a) Analyze the differences between standard costing and budgetary control. How do these tools help in managing operational performance within an organization?
Q3 (b) Evaluate the importance of understanding cost behaviours in decision-making. How can misinterpretation of cost behaviours impact a company’s financial decisions?
Commercial Banking System & Role of RBI
1. Capital formation is important for economic growth of any country. It helps in making a particular country self-sufficient in such a way that it does not have to be dependent on other nations for foreign investments. Explain the different factors affecting capital formation.
2. Commercial banks are life-line of any economy. They play a very important role in development of trade & commerce in the country. Describe different functions of Commercial banks and do SWOT analysis of Commercial Banks.
3. One of the critical source of income of commercial banks is interest income which bank earns from interest on loans and advances to the customer. Advances may be classified as fund based and non-fund based. In today’s scenario of increasing Non Performing Assets (NPA) of the bank, banks are focusing more on non-fund based loans.
a) Discuss any three fund based loans and its advantages.
b) Discuss any three non-fund based loans and its advantages.
Corporate Finance
1. ABC Limited has equity with a market value of Rs. 20 Lacs and debt with a market value of Rs. 15 Lacs. The Balance sheet of the company showed the Capital Structure as under:
Capital Structure BV
Share Capital 10,00,000
Debentures 5,00,000
Bank Loan 8,00,000
Cost of debt is 9%. The risk-free rate is 8% and the market rate is 18%. The beta of the company is 0.15. The firm pays no taxes.
What is ABC Limited’s debt to equity ratio?
What is ABC Limited’s weighted average cost of capital based on Market value as well as Book value? Answer up to 2 decimal places.
ABC Limited is in growing stage and soon the company will be under 35% tax bracket, in such a scenario the company is thinking to raise the debt up to 70%. Under these conditions, what will be the new DE ratio and the new cost of capital of the company?
What is the impact of change in DE ratio as above on the Company and why?
2. XYZ Ltd. is evaluating a new project proposal with a cash outlay of Rs. 80,000. Cash inflows are 25,000 , 28,200 , 32,000, 12,000, 15,000. The project is being funded entirely by a bank loan raised at an interest rate of 9% p.a. Currently there is no tax applicability to the firm. Evaluate the project using NPV and IRR methodologies.
The Board of Directors want a minimum of 12% as its rate of return on the project. Will the company take up the project? How will the situation be different if the company is subject to a tax of 25%?
3a. Maya bought a house of value Rs. 65,00,000. She got a loan of 80% of the value of the house from the bank. The bank offered her a loan for 10 years @ 8.5% interest payable annually. Calculate the equated annual payment to be made by her and draw up her annual payment schedule.
b) With the following data, calculate DSO and Debtor Turnover Ratio (in no. of times) for FY 2021-22. What is better for the company, a higher ratio or lower ratio? Give brief reasons? (In one line)
FY 2021-22 FY 2020-21
Sales 1,500,000 1,650,000
Receivables 30,000 35,000
60% of the sales are on credit basis.
Financial Institutions and Markets
Q1. As a financial advisor at your advisory firm, you have a client who is seeking to diversify their investment portfolio by venturing into capital market instruments alongside their existing investments. This discussion will enable your client to make informed decisions regarding their investment strategy and portfolio diversification. Assist your client by providing comprehensive insights into various capital market instrument including their key characteristics.
Q2. Sunshine Ltd. Corporation, a fast-growing technology start-up, is poised for expansion and seeks to raise capital to fund its ambitious growth plans. The company’s management team, led by CEO John Ceth, recognizes the importance of strategically accessing the primary market to secure the necessary funds. As an advisor to the company, help the corporation to provide a brief overview on the numerous techniques as how the corporation can raise fresh capital in the primary market.
Q3A. “The capital market, a crucial component of the global financial system, serves as a platform for investors to buy and sell securities, facilitating the allocation of capital to businesses and governments. However, amidst the myriad opportunities for growth and investment, instances of scams and fraudulent activities have tarnished the integrity of the capital market “. Provide examples of regulatory interventions and their impact on restoring investor confidence. Conclude with recommendations for enhancing regulatory effectiveness in combating financial misconduct.
Q3B. India’s financial sector plays a crucial role in driving economic growth and stability. As MBA students specializing in finance, it is imperative to have a comprehensive understanding of the regulatory landscape governing financial institutions in India. Discuss the various financial Regulatory Institutions in India with their functions.
