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Acknowledgement
Declaration
Table of content
1.Introduction
2.Historical background of NBFC
3.Factors contributing to the growth of NBFC
4.Classification of NBFC
5.Role of NBFC
6.Function of NBFC
MUTHOOT FINANCE
1.Introduction
2.Overview
3.Board of Directors
4.How does Gold loan benefit
companies.
In
recent
times,
the
non-financial
Financial
Companies
constitute
an
important
the clients.
Bankers
Muthoot
Financial
comprising
debt
and
Some of the
Based on these
NBFC
sector.
recommendations
This
committee
covering,
inter-alia
made
entry
wide
point
ranging
norms,
Introduction
of
supervisory
rating
system
for
the
various intervals.
Supervisory attention and focus of the Reserve Bank to be
directed in a comprehensive manner only to those NBFCs
having net owned funds of Rs.100 laths and above.
iii.
through the off-site surveillance mechanism and their onsite inspection to be conducted selectively as deemed
necessary depending on circumstances.
iv.
activities
units
including
were
also
acceptance
undertaking
of
deposits,
a company
business
of
loans
and
advances,
shares/stock/bonds/debentures/securities
Government
or
local authority or
acquisition of
issued
by
not
of
include
any
agriculture
institution
whose
activity, industrial
or
any
other
manner,
or
lending
in
any
DEFINITIONS OF NBFC.
accepted.
Norms
were
laid
down
regarding
CLASSIFICATION OF NBFCs:
into
deposit-taking
and
Non-deposit-taking
NBFCs.
companies
can
be
classified
into
the
following
(b)
(c)
(d) Hence, the lessee does not purchase the capital equipment,
but he buys the right to use it.
(e)
(i)
(ii)
Benefits/Advantages of Leasing:
(1) 100% finance:
They borrower in the equipment can get up to 100% finance
for the use of capital through leasing arrangement in the
sense, that the leasing company provides the equipment
immediately and the borrower need not pay the full amount
at once. Hence, the borrower can use the amount for
fulfilling other needs such as expansion development, etc.
(2) Payment is easier:
Leasing finance is costlier. However, the borrower finds it
convenient (easy) as he has to pay in installments out of
the return from the investment in the equipment. Hence,
the borrower does not feel the burden of payment.
purchase,
interest
on
the
loan
and
the
finance.
(g) The problem of recovery of loans does not occur in most
cases, as the borrower is able to pay back the loan out of
future earnings through the regular generation of funds out
of the asset purchased.
(h) In India, there are many individuals and partnership firms
doing this business. Even commercial banks, hire-purchase
companies and state financial corporations provide hirepurchase credit.
Housing Finance Companies:
(a)
(d) The ICICI and the Canara Bank took the lead to sponsor
housing finance companies, namely, Housing Development
Corporation Ltd. and the Canfin Homes Ltd.
(e)
Investment Companies:
(a)
companies.
(2) Other Investment Companies:
(i) Investment companies are also known as Investment
trusts.
(ii)Investment companies collect the deposits from the public
of
expertise
in
investing.
Hence,
investing
and
holding
company
business
besides
financing.
(ix)These investments trusts help in the survival of business
in the economy by keeping the capital market alive, active
and busy.
Loan company:
(a)
(f)
(g) Due to this reason, the loan company charges high rate of
interest on its loans. Loans are generally given for short
period of time but they can be renewed.
Mutual Benefit Financial Company:
(a)
They
are
the
oldest
form
of
non-banking
financial
companies.
(b) A mutual benefit financial company means any company
which is notified under section 620A of the Companies Act,
1956.
(c)
Chit-fund Companies:
History:
The chit fund schemes have a long history in the southern states
of India. Rural unorganized chit funds may still be spotted in
many
southern
villages.
However,
organized
chit
fund
companies are now prevalent all over India. The word is Hindi
and refers to a small note or piece of something. The word
passed into the British colonial lexicon and is still used to refer
to a small piece of paper, a child or small girl
How Chit Fund Help?
Chit Funds have the advantage both for serving a need and as
an investment. Money can be readily drawn in an emergency or
could be continued as an investment.
Interest rate is determined by the subscribers themselves, based
on mutual decisions and varies from auction to auction.
The money that you borrow is against your own future
contributions.
The amount is given on personal sureties too; unlike in banks
and other financial institutions which demand a tangible
security.
Chit funds can be relied upon to satisfy personal needs. Unlike
other financial institutions, you can draw upon your chit fund for
any purpose - marriages, religious functions, medical expenses,
just anything...
Cost of intermediation is the lowest.
(a)
who
join
together
and
subscribe
(contribute)
(f)
(b) It
generally
accepts
deposits
by
operating
different
These companies get the funds at low cost for longer terms,
at they invest them in investments which generates good
amount of return.
(f)
(4)
form.
In
turn
the
NBFCs
issue
debentures,
units
(v/s)
Non-banking
Financial Companies
While commercial banks and non-banking financial companies
are both financial intermediaries (middleman) receiving deposits
from public and lending them. Commercial bank is called as Big
brother while the NBFC is called as the Small brother. But
there are some important differences between both of them,
they are as follows:
No.
Commercial Banks.
Issue of cheques:
In case of commercial banks,
interest on loans as
interest on loans as
compared to NBFCs.
compared to Commercial
banks.
Facilities provided by
them:
facilities.
regulated by Banking
Types of assets:
NBFCs specialize in one
commercial banks hold a
purchase companies
About Us
We are the largest gold financing company in India in terms of
loan portfolio. (Source: IMaCS Industry Report (2010 Update). We
provide personal and business loans secured by gold jewellery,
or Gold Loans. We are a Systemically Important Non-deposit
taking NBFC headquartered in the southern Indian state of
Kerala. Our promoters are Mr.M.G.George Muthoot , Mr.George
Thomas Muthoot , Mr. George Jacob Muthoot and Mr.George
Alexander Muthoot. Our operating history has evolved over a
period of 70 years since M George Muthoot (the father of our
Promoters) founded a gold loan business in 1939 under the
heritage of a trading business established by his father, Ninan
Mathai Muthoot, in 1887. As of March 31, 2010 our branch
network was the largest among gold loan NBFCs in India(Source:
IMaCS Industry Report (2010 Update). Our branch network as of
August 31, 2010 was 1,921 branches
The Muthoot Group is an 123-year-old business house based in
India.
It
has
interestsin Financial
Services, InformationTechnology,Media, Healthcare, Education, P
owergeneration, Infrastructure, Plantations, Precious
Metals and Hospitality. The Muthoot Group operates in 21 states
in India, and has a customer base of over 25 million. It is wholly
owned and managed by the Muthoot Family.
The Group takes its name from the Muthoot Family based in
Kerala. The Company was set up by Muthoot Ninan Mathai in
1887 at Kozhencherry, a small town in the erstwhile Kingdom of
Travancore (Kerala). It was then later taken over by his son M
George Muthoot who incorporated the Finance division of the
group which was till then primarily involved in wholesale of
grains. The company is now managed by the third and fourth
generation of its family members.
Overview
We are the largest gold financing company in India in terms of
loan portfolio. (Source: IMaCS Industry Report (2010 Update). We
provide personal and business loans secured by gold jewellery,
or Gold Loans. We are a Systemically Important Non-deposit
taking NBFC headquartered in the southern Indian state of
Kerala. Our promoters are Mr.M.G.George Muthoot , Mr.George
Thomas Muthoot , Mr. George Jacob Muthoot and Mr.George
Alexander Muthoot. Our operating history has evolved over a
period of 70 years since M George Muthoot (the father of our
Promoters) founded a gold loan business in 1939 under the
heritage of a trading business established by his father, Ninan
Mathai Muthoot, in 1887. As of March 31, 2010 our branch
network was the largest among gold loan NBFCs in India(Source:
IMaCS Industry Report (2010 Update). Our branch network as of
August 31, 2010 was 1,921 branches.
Type
Private Conglomerate
Industry
Finance
Hotels & Resorts
Information technology
Broadcast Media
Healthcare
Education
Energy & Power Generation
Infrastructure
Founded
muthootgroup.com
Board of Directors
M.G. George Muthoot, Chairman is a graduate in engineering
from Manipal University, and is a businessman by profession. He
is the National Executive Committee Member of the Federation of
Indian Chamber of Commerce and Industry (FICCI) and the
current Chairman of FICCI Kerala State Council. He was conferred
the Mahatma Gandhi National Award for social service for the
year 2001 by the Mahatma Gandhi National Foundation. He is an
active member of various social organisations including the Delhi
Malayalee Association, Kerala Club, Rotary Club, National Sports
Club and has been chosen for several awards by the Rotary
International and the Ys Mens International for community
development and social service. He has been the member of the
Managing Committee of Malankara Orthodox Syrian Church for
over 31 years and is presently the lay trustee of the Malankara
Orthodox Syrian Church and a member of the working committee
of the Indian Orthodox Church. Recently, he was conferred the HH
Baselios Mathew I Award by Catholicate of the Syrian Orthodox
Church Mathews the First Foundation for the year 2008 for his
services to the Church.
FINANCE
Muthoot Finance a subsidiary of Muthoot Group was established
in 1939, and is primarily involved in the Financial sector of the
country. Muthoot Finance falls under the category of Non
Banking Financial Company (NBFCs) of the RBI guidelines. The
company has more than 2038 branches spread across 23 states
of the country and is the largest gold loan company in India..
Muthoot Finance, according to the IMaCS Research & Analytics
Industry Reports [Gold Loans Market in India, 2009 (IMaCS
Industry Report 2009) and the 2010 update to the IMaCS
IndustryReport 2009 (IMaCS Industry Report (2010 Update))],
is the largest Gold Loan NBFC and has the largest network of
branches for a Gold Loan NBFC in India.. Muthoot Finance is also
the highest credit rated Gold Loan company in India, with a
credit rating of AA- (CRISIL) for its Long Term Debts and P1+
(CRISIL) & A1+ (ICRA) for its Short Term Debt Instruments.
Muthoot Gold Power is the lifestyle product of Muthoot Finance
aimed at mobilizing the Household gold in India which is
estimated to be more than 15000 tonnes. Muthoot Finance
according to its company website has "the largest gold loan
portfolio in the country". Muthoot also provides various financial
services such as Insurance distribution, Wealth Management,
INFORMATION TECHNOLOGY
Emsyne, the information technology wing of the group develops
products for the service, education and healthcare industry.
Emsyne offers on site and offshore services, whether projectbased outsourcing / assignments, or based on time and
materials. The Core Products of Emsyne are Edge - Educational
Institutions Management System Finex - Innovative Banking
Automation System
SECURITIES
Muthoot Securities offers broking services in cash and
derivatives segments at the National Stock Exchange and
Bombay Stock Exchange. It has a network of more than 100
branches. Muthoot Securities launched its portfolio management
services on 20 August 2009.
MEDIA
Chennai Live 104.8 is India's first talk radio FM station. The
station would be focusing on knowledge centric and local
content and will be targeting the information and entertainment
needs of Chennai's intelligent community.
HEALTHCARE
The Group operates several Diagnostic &
throughout Kerala and 2 multi-specialty
Kozhencherry and Pathanamthitta.
Scan centers
hospitals in
Insurance
Andhra
pradesh (334)
Bihar (5)
Chandigarh
(13)
Chathisgarh
(6)
Daman (1)
Delhi (180)
Goa (4)
Gujarat (106)
Haryana (86)
Himachal
pradesh (3)
Jammu &
kashmir (10)
Jharkhand (3)
Karnataka
(252)
Kerala (624)
Madhya
pradesh (34)
Maharashtra
(103)
Orissa (14)
Pondicherry
(7)
Punjab (105)
Rajasthan (70)
Tamilnadu
(610)
Financial Inclusion
Financial Inclusion is
(A) Ensuring access to financial
services (B) Timely and adequate credit (C) Vulnerable
groups (D) Affordable Cost.
India is ranked 50th in the first ever index of financial
inclusion.
Out of the more than 6,00,000 rural habitations, only about
32,000 have a commercial branch.
Just over 40% of the population have bank accounts.
Immense benefits for government (A) Route the social
welfare schemes directly (B) Reduce leakage (C) Reduction
in time taken for the impact of benefit to be visible (D)
Substantial savings in transaction cost.
How does Gold Benefit this?
A 27% fall over the period of 2 years due to recession.
India accounts for 18% of the global gold jewelry
consumption.
Consumers demand trends for individual countries for 2009
show that India is still the top consumer, thanks to a 57%
consumption growth.
The Debt Trap faced by Middle-Class & Poors.
to
Features
Secured Loan: Gold loan is essentially borrowings against the
security i.e. gold. Thus this loan should be taken only if youre
absolutely sure that you will be able to repay the loan else you
may end up losing your gold.
Tenure: Gold loans are typically for duration of 3 to 12 months.
They are thus best used to fund short term monetary
requirements.
No end use restrictions: The loan can be taken for any
purpose so long as the money is not being used for speculative
purposes
Advantages
Quick processing: Gold loans require minimum documentation
and hence it can be resorted to in times of urgent need. Banks
maintain that it takes a few hours to get a gold loan and in
NBFCs like MANAPPURAM FINANCE (GOLD LOAN SUPER
COMPANY) it takes only a few minutes.
More attractive than a personal loan: The rate of interest
charged on gold loans tends to be much lower than that of a
personal loan. Therefore, it may be worthwhile putting you asset
to work and thus reducing your cost of loan.
Emotional attachment will ensure timely payment: Most
families have an emotional attachment to gold and that will
make you morally responsible to repay the loan in time so that
you can get back the gold that you had placed as a security
Cash flow management: In a typical loan against gold
transaction, only interest needs to be paid during the tenure of
the loan and the principal amount has to be repaid at the end of
business model, while clients, who need money quickly, find this
the best way to raise funds, says Jayant Manglik, president of
Religare Commodities.
Secondly, it is low interest rates. In fact, borrowing against
gold is fast emerging as the most preferred financing option as
the interest rate charged by institutions are less compared to
other retail loans such as personal loans. For instance, the rate
of interest on these loans is between 10% and 24% per annum.
In comparison, personal loans charge 16-26 % per annum,
depending on your credit profile.
Loan against gold better than a personal loan
This is, however, not to suggest that you should throw all
caution to the wind while opting for a gold loan, as the chances
of losing your family heirlooms are higher in case of a dispute or
default. That is because gold loans are secured loans. So if you
fail to repay the loan within the stipulated loan period, a higher
interest will be charged and the gold may even be auctioned off.
Typically jewellery is an item of personal use and its emotional
value is sometime far higher than its market value. If for any
reason you are unable to pay pack the loan, the lender can sell
your jewellery in the market to recover its dues after which you
can never get your jewellery back, says Harsh Roongta, CEO,
Apnapaisa .com, a price & features comparison engine for loans,
insurance and investments.
Gold loans are good in a rising market
www.google.com
www.wikipedia.com
www.nbfc.com
www.muthootfinance.co.in
Finance dept. muthoot finance gandhidham.