Treatment Of Credit Risk Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1597 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Receivables are to be treated as NPAs if the same remain overdue for a period of 180 days or more. While this is in accordance with existing RBI norms for classification of debts as NPAs, section 3(vi) of the Guidelines also states that the board of directors of a Securitization (or Reconstruction) Company may, on default by the borrower, classify an asset as a non-performing asset even earlier that the said 180 days for the purposes of facilitating enforcement as provided for in section 13 of the Act. As per section 13, where any borrower makes a default in repayment of a secured debt and his account is classified as an NPA, the secured creditor (or as the case may be the Securitization Company) becomes entitled to exercise the recovery rights under the Act, after providing for a 60 day notice to the borrower. Don’t waste time! Our writers will create an original "Treatment Of Credit Risk Finance Essay" essay for you Create order The Guidelines therefore permit a Securitization (or Reconstruction) Company to classify a debt as an NPA and proceed to give the aforesaid 60 day notice under the Act immediately upon default by the borrower, without having to wait for the aforesaid 180 day period. Registration under the Act The Guidelines clarify that a Securitization (or Reconstruction) Company that has obtained a certificate of registration issued by the RBI under the Act can undertake both Securitization and Reconstruction activities. The Guidelines also clarify that an entity that is not registered with the RBI may conduct the business of Securitization or Asset Reconstruction outside the purview of the Act. This is a significant clarification as the Act is silent in this regard. In view of this clarification, banks and financial institutions that were engaged in securitization activities prior to the Act can continue the same without having to obtain a certificate of registration under the Act. The benefits of the enhanced enforcement rights under the Act however, will not be available to them. Restrictions on raising monies from the public The guidelines prohibit a Securitization (or Reconstruction) Company from raising monies by way of deposit. A Securitization Company is permitted to raise funds from qualified institutional buyers (as defined in the Act) by issuing security receipts to them. It has been clarified that the security receipts would be transferable/assignable only in favour of other qualified institutional buyers. Issue of security receipts The Guidelines state that security receipts are to be issued thorough one or more trusts set up exclusively for the purpose. The trusteeship of such trusts is required to vest with the Securitization (or Reconstruction) Company. The Securitization (or Reconstruction) Company is required to transfer the financial assets to the said trust at the price at which those were acquired. It is important to note that this transfer of assets will double the incidence of stamp duty, as stamp duty will have to be paid in respect of the transfer of the financial asset from the originator to the Securitization (or Reconstruction) Company, and also for the transfer of the financial asset from the Securitization (or Reconstruction) Company to the trust. Policies and plans required to be framed The Guidelines require that a Securitization (or Reconstruction) Company shall formulate policies for asset acquisition, including valuation procedure, rescheduling of debts of borrowers (to be supported by an acceptable business plans, projected earnings and cash flows of the borrower), settlement of debts due from borrower, and plans for realization of assets. Change or take over of management/sale or lease of the business of the borrower The Act allows lenders and securitization companies to change or take over the management of the borrower and sell or lease the business of the borrower for the purpose of recovery of loans. However, the Guidelines state that no Securitization (or Reconstruction) Company shall take any measures for change or take over of management/sale or lease of the business of the borrower until the RBI issues necessary guidelines in this behalf. Enforcement of Security Interest While taking recourse to the sale of secured assets, it has been clarified that a Securitization (or Reconstruction) Company may itself acquire the secured assets only if the sale is concluded through a public auction. Deployment of funds The Guidelines impose restrictions upon the permissible modes of deployment of funds by Securitization (or Reconstruction) Companies. A Securitization (or Reconstruction) Company is permitted to invest in the equity share capital of another Securitization (or Reconstruction) Company, as a sponsor and for the purpose of establishing a joint venture. A Securitization (or Reconstruction) Company is allowed to deploy any available surplus in government securities and deposits with scheduled commercial banks in accordance with a policy framed in this regard by its board of directors. No Securitization (or Reconstruction) Company is allowed to invest its owned funds in land and building. However, this restriction would not apply to funds borrowed as also to owned funds in excess of the minimum prescribed. Other requirements The Guidelines also provide for provisioning requirements, income recognition norms, disclosures required to be made in balance sheets, etc. Guidelines to banks/FIs on sale of Financial Assets to Securitization Company (SC)/ Reconstruction Company (RC) (created under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) and related issues (Sale Guidelines) These guidelines are applicable to the sale of financial assets by banks and Financial Institutions (FIs) for asset reconstruction and securitization under the Act. Financial assets which can be sold As per the Sale Guidelines, the following classes of assets can be sold by banks/FIs to Securitization (or Reconstruction) Companies : An NPA; A standard asset (i.e., an asset that is not an NPA) where : the asset is under consortium /multiple banking arrangements, at least 75% by value of the asset is classified as NPA in the books of other bank/FIs, and at lease 75% by value of the banks/FIs who are under the consortium/multiple banking arrangement agree to the sale of the asset to the Securitization (or Reconstruction) Company. Procedure for sale The sale of financial assets from a bank/FI may be on a without recourse basis, i.e., with the entire credit risk associated with the financial asset being transferred to the Securitization (or Reconstruction) Company, as well as on a with recourse basis, i.e., subject to the unrealized part of the asset reverting to the seller bank/FI. Banks/FIs are however, required to ensure that the effect of the sale of the financial assets should be such that the asset is taken off the books of the bank/FI and after the sale there should not be any known liability devolving on the bank/FI. It has also been clarified that under no circumstances can a transfer to the Securitization (or Reconstruction) Company be made at a contingent price whereby in the event of shortfall in the realization by the Securitization (or Reconstruction) Company, the banks/FIs would have to bear a part of the shortfall. Further, in the case of specific financial assets, where it is considered necessary, bank s/FIs may enter into agreements with the Securitization (or Reconstruction) Company to share, in agreed proportion, any surplus realized by the Securitization (or Reconstruction) Company on the eventual realization of the concerned asset. In the case of financial assets that cannot be revived, the Sale Guidelines recognize that a Securitization (or Reconstruction) Company may not take over these assets but act as an agent for recovery for which it will charge a fee. In such a case, the assets will not be removed from the books of the bank/FI but realizations as and when received will be credited to the asset account. Securities offered by the Securitization (or Reconstruction) Company to the banks/FIs The securities offered by the Securitization (or Reconstruction) Company to the banks/FIs are required to satisfy the following conditions: The securities must not have a term in excess of six years. The securities must carry a rate of interest which is not lower than 1.5% above the Bank Rate in force at the time of issue. The securities must be secured by an appropriate charge on the assets transferred. The securities must provide for part or full prepayment in the event that the Securitization (or Reconstruction) Company sells the asset securing the security before the maturity date of the security. The commitment of the Securitization (or Reconstruction) Company to redeem the securities must be unconditional and not linked to the realisation of the assets. Wherever the security is transferred to any other party, notice of transfer should be issued to the Securitization (or Reconstruction) Company. Other provisions The Sale Guidelines also provide various prudential norms for the sale transaction, including provisioning/valuation norms, capital adequacy and exposure norms and disclosure requirements. The Sale Guidelines also provide that in the event of consortium/multiple banking arrangements, if 75% (by value) of the banks/FIs accept the offer for purchase of financial assets from a Securitization (or Reconstruction) Company, than the remaining banks/FIs will be obligated to accept the offer. Conclusion The new RBI guidelines seek to provide healthy and uniform directions for regulating securitization activities. While these guidelines and the enhanced enforcement rights provided to Securitization Companies under the Act will provide an impetus to securitization in India, many legal impediments remain. Prominent among these legal impediments are the excessive stamp duty rates applicable to securitization transactions in several states. Also, a number of cases including the Mardia Chemicals case, are currently pending at the Supreme Court, where the constitutionality of the Act has been challenged. These cases remain pending till date with no indications as to the possible outcome of the challenge. ************

Kennedy Brennan. March 1, 2017. France. Media Ownership.

Kennedy Brennan March 1, 2017 France Media Ownership Media is not just television and radio. The French media ownership is distributed over four different forms of media. The media is consisted radio, internet, television, and newspaper. The French people are more old fashion. They rely mostly on radio and newspaper. They spend very little time in front of a television set or in front of a computer screen. The rest of the world spends so much more time in front of computer screens and televisions sets compared to the French citizens. The media in France is not like the media in the United States, the French have a greater sense of freedom in their media. Newspaper is the most popular forms of media in France. France has 86 daily†¦show more content†¦France as a very high number of Facebook users. That makes it the most popular social media in France. They have the third highest in the world. Skyrock is the second most popular social media in France. It is a blogging website. The headquarters for Skyrock is actu ally located in France. (TranslateMedia) The second most popular form of media in France is radio. In France radio is consumed for an average of 3 hours and 11 minutes a day. They have 55,300,000 radios in the country. Which is 92.9% of the country’s population. They only have a total of 14 radio stations though. One of the stations is divided up into 7 different stations. (France Basic Data) Along with internet, television is on the low end of the spectrum too. Not many people in France watch television. In France television is consumed for an average of 3 hours and 13 minutes a day. They only have 2,662,280 cable subscribers. Which is only about 4.5% of the country’s population. Although they do have satellite television also. They have 4,300,000 satellite subscribers. Which is only about 7.2% of the country’s population. With cable and satellite subscriptions combined that is only 11.7% of the country’s population having some form of television subscri ption. In fact most of the country does not even own a television. The television programing is done by multiple groups. Most of the television programing is done by the public. There

A Clockwork Orange Essay Thesis Example For Students

A Clockwork Orange Essay Thesis Wilson was an English novelist and critic. He was born in a small house inHarpurhey and was the son of a bookkeeper and part-time pianist. He was foundlying in his cot when he was a baby with his mother and sister dead beside him. They were said to have been victims of the Spanish Flu. Anthony attended theBishop Bilsborrow- Primary School, Moss Side, Xavier College and lastlyManchester University. He then spent six years as a wartime soldier and after hewent into education, he became an education officer in Malaya and Brunei. In1959 he was diagnosed with a terminal illness, so he became a professionalwriter, hoping to provide for his wife. The diagnoses turned out to be wrong;however, he decided to stick with it and he wrote over thirty novels. AnthonyBurgess was a very well-rounded artist. He drew, wrote novels, was a musicianand produced a lot of works. At the age of twelve, his drawings were beingaccepted by national newspapers and at fourteen, he taught himself to play thepiano and compose music. He wrote two symphonies, concertos, songs, sonatas andincidental music for plays. In his very first year he wrote five novels, acouple of plays and several radio scripts and stories. He had all sorts ofdifferent topics, themes and styles. Of all his writings, the most well-knownwas and still is A Clockwork Orange. It is also his most controversial work. AClockwork Orange was his eighth novel and was published in 1962. Although thiswas among his best works, he had his own thoughts on it. In an interview done in1981 in Modern Fiction Studies Burgess was quoted, Im notparticularly proud of A Clockwork Orange because it has all the thoughts I railagainst in fiction. Its didactic. It tends to pornography. John AnthonyBurgess Wilson died in 1993 and will always be remembered by the remains of someof his classic works.

Identifying and Preventing Complacency †Free Samples to Students

Question: Discuss about the Identifying and Preventing Complacency. Answer: Introduction: Randstad opened a new branch in Singapore market in October 2012. The primary issue was to become a more competitive player in the Singapore market. The market value in Singapore was 2.65 billion dollars spent on the recruitment service, while the country has almost 3.3 million people so the spent is huge (YouTube 2016). At that time there were 2800 companies in Singapore so one agency for every 20 people were already present. Differentiation is the key strategy for most organization. As a global company Randstad had to be one of the top three companies in the market. However the company was at the eighth position for their market performance at that time. The company had to grow more than 8 % as the market was growing by 8%, so the company had to perform more than 8% in order to stay ahead in the competitive market. At that time Ranstad was growing by 5% so they were losing their market share to their competitor companies. Randstad is one of the Fortune 500 companies, so it was expe cted that they would grow double or at least 50% above the average market rate (Fortune.com 2016). At that time Singapores market was growing really fast compared to the global scale, so the company had great opportunity to enhance their organizational performance. The company was also struggling to move from 8th position to 3rd position and moving the people together working to improve brand image, market positioning, increasing quality activities on a daily basis to turn the employees more productive and lead the company believe in the change was challenging for the company. The Randstad company management was suffering from complacency issues from 2010 to 2012. The growth was not improving for that period. The company was satisfied with the result and did not explore the outside market opportunity and did not develop internal infrastructure to utilize such outside market opportunities (Drucker 2017). The company did not do extensive market analysis of its competitors before starting the business venture in the highly competitive market of Singapore. Therefore the company failed to understand the growth rate of its competitors. The competitive companies structure and achievement were also unanalyzed by the company. The company fails to explore their best organizational part which they can use in the business strategies to outperform them. This led the company to perform alright for a long period but not achieve the high performance which was desired. The organization was not growing as fast as expected but it was growing and every organizational activity appeared orderly from surface but the leaders were expected to analyze every activities or employee performance minutely (Southwick et al. 2017). The leadership failed to get the granular details about how the company was operating from a client, candidate or consultant perspective. Lack of Collective aspiration and Clear strategy Individual drive and collective aspiration were missing in the organizational performance (Katzenbach and Douglas 2015). The employees were unsure where they would see themselves in a year or where the company is actually headed. The organization was purely focused on generalized recruitment. The generalized recruitment was based on individuals who would be doing everything from finding out forklift drivers to find sales professionals and to CEO that made the job complicated (Youtube.com 2016). As the country had low unemployment rate, the company had to work hard in order to find good and skilled people. The shift from to Singapore market was also large for Randstad as the Singapore government is trying to push the country towards higher qualified jobs, so the environment was shrinking for such companies. Alternatives Alternatives Merits Drawbacks Measure customer satisfaction and employee job satisfaction Employees serve the clients directly so their satisfaction will ensure better performance. Wrong measurement my lead to a wrong direction. Continue re-innovating - service and strategies Randstad follows the same traditional practice of their home country in the host country as well, the re innovation of certain strategies will help them to surpass their competitors. Proper market analysis and research on the competitors needed before implementing innovative strategies. Admitting the issues and offer compensations. Implementing a formal process for learning from those mistakes. The wise thing for Randstad would be moving on and offering compensation in the forms of rewarding the employees and offering discounts to the customers. Admitting the flaws might affect the Randstads reputation. More money needs to be invested for the rewards. Leadership needs to be more attentive to the details. The leadership will challenge the status quo of the company. As his lack of attention to detail has already affected executive presence it will help him to meet the growing demand of complacency (Llopis 2014 ). This might create tension between the management and the employees. Complacency handling As an organization of twenty first century Randstad is focused on profit sustainability and longevity. The company is working in an environment that is focused on global expansion, process innovation and increasing market pressure. The company is seeking to step ahead from their competitors in the foreign market. Compliancy has always been an issue for large industries, like in the financial companys crisis (Harraf, Soltwisch and Talbott 2016). Complacency can be found in four areas of people, culture, structure and process. The complacency of top managers can lead the company into risky investments. The organizational complacency can affect the organizational performance in various ways. The complacency of processes leads to environmental scanning that is not sufficient. The company fails to react to the external changes. The overconfidence results in lack of effective decision making process, even when it is needed (Tsai et al. 2017). The complacency of the management people encour ages little liability among them. It has also been observed that the complacency is used as the justification for retaining the leadership that is not effective enough. The complacency in the structure makes it cumbersome and the resources get wasted. The complacency leads to an organizational culture that does not encourage challenging procedures, processes in order to achieve high standards. Critical analysis at regular interval is necessary to minimize the complacency otherwise organizational failure can occur (Clancy, Hanover and Masini 2013). The business world has experienced how the complacent characteristics had led to organizational failure for such companies like Kodak, Blackberry, Circuit City, Borders and Block buster (Linkner 2012). In a recent survey, maximum numbers of the respondent who are company executives believe that their companies are not engaged in a strategy that has winning quality (Harraf, Soltwisch and Talbott 2016). There are long gap between the expectation and execution. The company needs to combine strategy with execution in everyday practice. Most company establishes a mission and vision statement that is simple yet deep. The aim that the company aspires for must be communicated through the message and is delivered to employees effectively (Gordon 2017). The management of successful companies should be engaged with market reality. For a company like Randstad the management leadership needs to be exposed to the foreign market. An effective leader assesses the organizational activities at regular interval along with the self assessment. This helps him to identify the flaws in the organizational performance and the needs. The leadership is engaged in effective communication in every level of the organization (Hackman, Michael and Johnson 2013). The leaders have to get involved in everyday activities so that the okay standard of the surface level gets addressed and the better options are searched for. Decision criteria Ranstad has to apply decision criteria before reaching any decision. Decision criteria can be defined as the characteristics or variables that are significant part of organizational decision making process (Yu 2013). And the final decision making is the selection of the most appropriate variable suitable for the organization. Decision Criteria Weight Evidence Implementing innovative strategies 25% Randstad is suffering from various management and performance related issues. Setting up core values and effectively spreading the objectives among the employees. New effective strategies can eliminate the complacency issues successfully. Customer satisfaction 25% The company is initiating in the Voluntary Service Overseas (VSO) that helps the company to include local communities and support from Singapore market (Ir.Randstad.Com 2015). Employee satisfaction 15% The company has been engaging in enhancing the labor market relationships, participating in social dialogs with employees. Ethics 25% The company has been practicing ethically since its inception however the management must be careful that the ethical conducts must meet the host countrys rules and regulations. Leadership 10% The leadership of Randstad is incorporating ambitious strategies, great execution, and agility and combining the ability to think global and act local. Identification The problem has been identified as the difference between the existing and desired state of the organization (Velasquez, Mark and Hester 2013). The problem in the case of Randstad is the complacency or the overconfidence of the management even when trying to establish a new branch in Singapore. The company has been working in a comfortable environment and failing to establish a successful business and complacency has been identified as a major problem. The leadership then frames the problem definitely so that the decision can be made accordingly. The direct and indirect competitors are Ranstad not only has to consider the direct competitors but also the competitors who are working from outside of Singapore. Randstad has to identify whether the changes initiated by its competitors are strategic or tactile. The company has to identify if the competitors are often engaging in big changes or mainly staying in their current state. How the target market, cost structure, market share have a ffected the company after implementing the strategies must be identified by the company as well. Few factors are important to identify the decision criteria like facilities, opportunity to progress that are suitable. The annual report by Randstad in 2015 the company has discussed various strategies that the company is implementing for enhancing the performance. The company has set their core values as knowing, serving, trusting, striving for perfection and promoting all interests. Therefore it can be noticed that the company has been giving much importance to knowing the other culture and its competitors. The message of Good to know you is highly effective for spreading the message of collaboration. The company has been engaging in enhancing the labor market relationships, participating in social dialogs with employees. The company is initiating in the Voluntary Service Overseas (VSO) that helps the company to include local communities and support from Singapore market (Ir.Randstad.Com 2015). The past experience has taught Randstad management about the static performance so the management is implementing newer technologies to their service to enhance the performance. The leadership of Randstad is incorporating ambitious strategies, great execution, and agility and combining the ability to think global and act local. Randstad has to address the issues related to its complacency and look for resources that are already available for resolving the issue. Randstad did not conduct a market survey before the business venture that result in negative impact. Therefore before the development f solutions the company has to analyze the competitors strategies into their strategies. The leader plays a significant role in the process where the leader of the company through his analysis, judgment and experience makes the final decision. The Randstad top management failed to analyze the problems regarding their growth in the initial phase of the business venture. Randstad should run the survey and analysis and the scientific data should be incorporated in the selection of the alternatives. Recommendation The organizational complacency is often driven by the inherent human desire for stability and they do not welcome risks. In order to avoid complacency and maintain growth the management needs to establish a business process management culture that is aligned to employee efforts (Ir.Randstad.Com 2015). In the process of overcoming organizational complacency the company needs to promote fearless functionality and challenging processes. Randstad management should address that the company is suffering from the complacency issues. The company is Australia based and the new business will be in Singapore. As we have discussed several big company failed in developing a sustainable organizational performance because they failed to maintain their complacency issues. Randstad did the similar mistakes in their initial phase of the business activity in Singapore. The elimination of the self satisfied attitude can prove to be most effective for the company to increase their competitiveness. Randst ad could use various media for advertising to attract skilled candidates but that should be rejected as in the country the unemployment rate is low. Therefore even if the company is global and possesses huge reputations outside the regional market it is not effective in this case. Instead the company should focus implementing changes internally to deal with such issues. The complacency issues can be changed by active participation by the management leadership and effective strategies. The implementation of innovative strategies can prove to be most effective in the case of Randstad. Reference "Fortune Global 500 List 2017: See Who Made It". 2016.Fortune. https://fortune.com/global500/ "Tech And Touch Annual Report 2015". 2015.Ir.Randstad.Com. https://www.ir.randstad.com/~/media/Files/R/Randstad-IR/annual-reports/annual_report_randstad_2015.pdf "Video Business Case - Michael Smith; Managing Director; Singapore, Hong Kong, Malaysia; Randstad". 2016.Youtube. https://www.youtube.com/watch?v=C7kffnb5FhUfeature=youtu.be. Clancy, K., Hanover, A. and Masini, A., 2013. Complacency not an option.Financial Executive,29(3), pp.24-28. Drucker, Peter F.The Theory of the Business (Harvard Business Review Classics). Harvard Business Press, 2017. Gordon, Gus. 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"Forbes Welcome".Forbes.Com. https://www.forbes.com/sites/glennllopis/2014/08/05/the-dangers-of-complacent-leadership/#56e470fb3de5. Southwick, Frederick S., Brenda L. Martini, Dennis S. Charney, and Steven M. Southwick. "Leadership and Resilience." InLeadership Today, pp. 315-333. Springer International Publishing, 2017. Taggart, Caroline.Misadventures in the English Language. Michael O'Mara Books, 2016. Tsai, F.S., Lin, C.H., Lin, J.L., Lu, I.P. and Nugroho, A., 2017. Generational diversity, overconfidence and decision-making in family business: A knowledge heterogeneity perspective.Asia Pacific Management Review. Velasquez, Mark, and Patrick T. Hester. "An analysis of multi-criteria decision making methods."International Journal of Operations Research10, no. 2 (2013): 56-66. Yu, Po-Lung.Multiple-criteria decision making: concepts, techniques, and extensions. Vol. 30. Springer Science Business Media, 2013.