MB 764 FINANCIAL INSTITUTIONS AND SERVICES

Unit I Structure of Financial System

The nature and role of financial system-
Financial structure-
Different financial functions –
Financial system and economy-
Reforms in the financial system-
Recent developments.

Topic: Unit I Structure of Financial System

1. What is a financial system? Discuss the components of a formal financial system. (Team III)
2. Discuss the types of financial markets and their inter-relationship. (Team IV)
3. What are the characteristics and functions of financial markets? (Team IV)
4. ‘A market-based financial system is preferable over a bank-based system.’ Comment
critically. (Team VI)
5. ‘A financial system is a well-integrated system whose parts interact with each other.’ Explain.
(Team VII)
6. (a) Discuss the various indicators of financial development. (Team VII)
(b) How are the macro - economic developments linked to financial Institutions (Team VII)
7. ‘There is a close relationship between financial system and economic growth.’ Comment
critically. (OR) How does a financial system influence the economic development of a country?
(Team VII)
8. (a) Explain surplus-spending and deficit-spending units briefly. What role do they play in
economic growth? (Team VIII)
(b). Why should saving and investment be studied? Discuss the trends in saving and
investment in India. (Team VIII)
9.(a) Explain the profile of the Indian financial system in the pre-reform period. (Team X)
(b) Describe the Indian financial system in the post-reform periods (or) State the major changes
in Indian financial system after 1991 (Team X)
10. Why were financial system reforms under taken in India? Discuss. (Team X)
11. Write short notes on:
(i) Banking Sector Reforms. (Or) Why were reforms undertaken in the banking system? How
were the banking reforms initiated in India? (Team XI)
(ii) Capital Market Reforms (Team XI)
12. What is the strategy adopted by the Reserve Bank of India to maintain financial stability.
(Team XI)
13. Discuss the Impact of Demonetization on Indian Financial system (Team XII)
14. Critically evaluate the strength and weakness of Indian Financial System in 2020. (Team XII)
15. Discuss the Impact of COVID-19 on Indian financial system and give a brief account of
recovery measures taken by Ministry of Finance (Team XII)
 Unit II Financial institutions
Regulatory and non regulatory institutions-
Banking and nonbanking institutions –
Development financial institutions .

Topic: Unit II Regulatory and non-regulatory institutions-

Team I
1. What are the important functions of Reserve Bank of India?
2. “Reserve Bank of India acts as a promoter of the financial system.” Justify.
3. Discuss the role of RBI as a monetary authority.
4. Discuss the role of the RBI as a regulator and supervisor of financial system.
5. Discuss the risk management guidelines of Reserve Bank of India.
6. State the powers and functions of the SEBI.
7. How far has the SEBI been in a position to protect the interest of investors in securities
market?
8.Discuss the constitution , powers and regulatory functions of (a) IRDAI (b) PFRDA (c ) IBBI
9.Bring out the functions of (a) NABARD (b) NHB (c) SIDBI (d) NPCI
10. Discuss the activities of (a) AMFI (b) MFIN (c) IBA
11. What role does a regulator play in a financial system?

Topic: Unit II Banking Institutions

Team II

1. Explain the various types of commercial banks operating in India.

2. What is capital adequacy? What are the capital adequacy norms stipulated by the RBI?
3. Bring out the difference between time deposit and term deposit.
4. ‘Regional rural banks are important financial institutions in the rural credit structure.’ Discuss.
5. Discuss the various types of credit facilities offered by commercial banks to business.
6. Should banks lend to large corporates only? Discuss.
7. What is priority sector? State the priority sector norms laid down for commercial Banks.
8. Describe the risk management process of banks.
9. ‘Technology has changed the face of banking services in India,’ Discuss.
10. What are the recent developments in commercial banking in India? (Mergers, NPA etc.,)
11. Discuss the structure of co-operative banks in India.
12. What measures have been taken by the RBI to restore the confidence of depositors in urban
cooperative banks?
13. What are the steps taken by NABARD to revive the rural cooperative banks?
14. Discuss the role and growth of Micro finance institutions in India
15. Briefly portray the regulations and growth of electronic payment mechanism (Payment apps,
payment gateways) in India.
16. Discuss the structure and role of payment banks in India.
 Topic: Unit II NBFC-
Team III

1. Give the structural detail of NBFCs in India.

2. How a Non Banking Financial Companies aid in the economic development of the country?
OR How have NBFCs contributed to the economic growth of the country?
3. Compare the similarities and differences between NBFCs and commercial banks
4. Discuss the recent regulatory changes adopted for the better governance of NBFCs in India.
5. Explain the significance of NBFCs with respect to small business.
6. Highlight the performance of NBFCs in India in the current context.
7. Explain the issues in IL&FS, First Leasing Company of India Ltd.,

Topic: Unit II Development Financial Institutions-

Team IV

1. State the objectives of development financial institutions.

2. What is universal banking? How has ICICI and IDFC First bank transformed into a universal
bank?
3. What are the different products and services offered by EXIM Bank?
4. Give a brief profile of IFCI and SIDBI.
5. Discuss the changing role of development financial institutions in India.
6. Explain the major Refinancing institutions operating in India and their role in Indian Financial
system.
7. State the role and functions State Financial Corporations (SFCs) in India.
8. Differentiate between Development banks and commercial banks.
9. Give a brief account on various development institutions in India like (a) ECGC (b) DICGC
(c) NSDL (d) CDSL (e) SHCIL

Unit III Financial Markets and Financial Instruments

Money market-
Capital markets-
Debt market-
Derivatives market –
Primary and secondary markets-
Financial instruments in the respective markets.

Topic: Unit III Money market-

Team VIII
1. What is a money market? What steps have been taken to develop the Indian money market?
2. ‘Treasury bills are an important short term source of finance for the government.’ Discuss.
3. Compare certificates of deposit and commercial Papers?
4. Why has the commercial bills market not developed in India?
5. What steps have been taken to curb the call money market volatility?
6. What are repos? State the different types of repos. How does the Reserve Bank use repos as a
tool for managing liquidity in the money market?
7. ‘The market for interest rate swaps and forward rate agreements have not grown at the
anticipated pace.’ Discuss.
8. What is CRR? What is the implication of a cut in CRR? What is the indication of a hike in
CRR?
9. Discuss the link between monetary policy and money market?
10. What is CBLO? How has it emerged as a predominant segment in money market?
11. What are the different money market instruments in India?

Topic: Unit III Capital Market

Team III

1. What is a capital market? How does it aid economic growth? What are the functions of the
capital market?
2. Compare and contrast the Harshad Mehta and Ketan Parekh scams.
3. List down the major reforms in the primary and secondary capital market.
4. State the differences between FDI and FII?
5. What is primary market? State the nature of fund raising in primary market? Or 3. Explain the
various methods for floating new issue in India.
6. How do primary and secondary markets contribute to economic growth?
7. What are the recent developments in Indian capital market?
8. Distinguish between capital market and money market.

Topic: Unit III Debt market

Team VII

1. Why is the debt market an important segment of the capital market? Who are the participants
in the debt market?
2. What should be done to revive the corporate debt market and public sector undertakings bond
market?
3. Discuss the role played by the RBI in the government securities market.
4. Which are the tools for managing liquidity in the government securities market?
5. State the objectives for the introduction of the primary dealer system? Discuss the role played
by them in the government securities market.
6. Explain in brief the NDS and the role of the CCIL in the government securities market.
7. Explain uniform price auctions and multiple price auctions.
8. Write short notes on
a. STRIPS in the government securities market
b. Retailing of government securities
c. When-issued market in government securities
d. Open market transaction
9. What is ways and means advances? What are its advantages?
10. Describe briefly the auction process for central government securities.
11. State the steps taken to develop the secondary market for government securities.
12. Describe the trading and settlement system of government securities.

Topic: Unit III Derivatives market

Team IX

1. What are derivatives? State the reasons for the explosive growth of derivatives.
2. Explain the difference between hedging, speculation, and arbitrage.
3. How do futures contracts differ from forward contracts?
4. How do futures differ from options?
5. Explain the cost of carry model of future prices.
6. What are options? Explain the different types of options.
7. When is a call option in the money, out of the money, and at the money?
8. Which issues still need to be resolved for the growth of the Indian derivatives market?

Topic: Unit III Primary Market

Team V

1. How are funds mobilized in the primary market?

2. What are the reasons for growth of the private placement market in India?
3. Why do blue-chip companies opt to raise funds through GDRs/ ADRs?
4. Describe the primary market scenario in India.
5. What is a green-shoe option? What are the advantages and disadvantages of exercising this
option?
6. What is an IPO? State the entry norms laid by the SEBI for making an IPO. What are the
requirements that need to be fulfilled by an unlisted company wishing to go public?
7. What are the requirements to be fulfilled by an issuer making a follow-on public offer?
8. Which companies are eligible for raising funds through fast-track route?
9. Describe the process of trading of rights entitlement.
10. What is a preferential issue? State the norms issued by SEBI for preferential allotment. Why
do companies prefer to allot preferential shares?
11. State the guidelines relating to Qualified Institutions Placement.
12. State the guidelines relating to External Commercial Borrowings.
13. What are the salient features of the Indian Depository Receipts (IDR) rules? Also mention
the SEBI norms to be adhered by the IDR issuer.
14. What is book building? Describe the book building process. List the benefits and limitations
of book-building.
15. What is ASBA? Explain the ASBA process.
16. What is the role of the Anchor investor in the Indian primary market.
 Topic: Unit III Secondary Market
Team VI

1. What are the services provided by a stock exchange? What are the distinctive features of stock
markets in India?
2. What is listing of securities? Why should there be central listing?
3. What is a stock market index? Which are the major indices in India?
4. Explain badla and comment on this system.
5. How is the OTCEI different from other exchanges? State the reasons for the dismal
performance of the OTCEI.
6. What are the measures taken by the SEBI for increasing liquidity in stock markets?
7. What is buy back of shares? What are the different methods of buy back?
8. Discuss the impact of reforms in secondary market.
9. What is security lending and borrowing (SLB)? State the revised norms for SLB. What are the
benefits of SLB?
10. What is margin trading? Explain the mechanism of margin trading. State the salient features
of the SEBI margin-trading norms.
11. What is rolling settlement? State the advantages of a rolling settlement.
12. State the routes through which an FII can invest in the Indian Stock Market. What are the
conditions required to be fulfilled for an FII to qualify for grant of registration by the SEBI?
Discuss the impact of FIIs on the Indian Stock Market.
13. ‘FIIs are fair-weather friends.’ Do you agree? Why?
14. Describe the clearing and settlement process of NSCCL.
15. What is listing of securities? State the process to be undertaken by a company to list its
shares?

Unit IV Financial Services

Merchant banking services-
Mutual funds-
Bill discounting – Factoring-
Venture capital –
Leasing Hire Purchase

Topic: Unit IV Merchant Banking

Team

1. What is investment banking? How is it different from commercial banking?

2. What is the role of investment banks? State the different types of investment banks.
3. What kind of financial advisory services do investment banks provide?
4. Define merchant banker. What is the role of a merchant banker in the capital market?
5. What are the pre- and post-issue obligations of merchant bankers?
 Topic: Unit IV Mutual Fund
Team VIII

1. What is Mutual fund? Who are the participants? How it is organized?

2. How will you classify Mutual fund Portfolio? Discuss the various types of Equity and Debt
funds
3. Is investment in Mutual Funds risky?
4. Discuss SEBI guidelines for Mutual funds.

Topic: Unit IV Bill discounting and Factoring

Team X

1. What is factoring? Explain the types and mechanism of factoring.

2. How does factoring differ from bills discounting and cash credit?
3. What is international factoring? How does it differ from forfaiting? Explain the mechanism of
International factoring.
4. State the major factors inhibiting the growth of factoring in India.

Topic: Unit IV Venture Capital

Team IX

1. What is Venture capital? How is it different from bank finance?

2. What are the criteria on which Venture capital funds will lend money?
3. What are the different forms in which Venture capital will invest in startup companies.
4. Discuss the risk associated with venture capital finance
5. Discuss the different stages of VC investment. Give an account on exit strategies

Topic: Unit IV Leasing and Hire Purchase

Team X

1. What is leasing? State the importance of leasing.

2. State the obligations, rights and responsibilities of the lessor and the lessee.
3. Distinguish between: Lease and Hire purchase; Hire Purchase and Installment Purchase; and
Financial Lease and Operating Lease.
4. What is a wet lease? How is it different from dry lease?
5. What are the elements in a lease structure?
 Unit V Financial Services
Non fund based financial services:,-
Credit cards-
Insurance-
Pension-
Micro Finance-
Depositories and custodians –
Credit rating,-
Securitization –
Stock exchanges and their functioning

Topic: Unit V Credit Cards

Team XI

1. What do you mean by credit card. Discuss the major terms and conditions associated with the
usage of credit cards.
2. List out different types of credit cards
3. Give an overview of benefits and drawbacks associated with credit card.

Topic: Unit V Insurance

Team XI

1. Why was the insurance sector opened up in India?

2. What is reinsurance? State the different types of reinsurance.
3. ‘Intermediaries are a key distribution channel to an insurer.’ State the different types of
intermediaries in the insurance sector.
4. ‘Life Insurance Corporation is still a monolith.’ Do you agree? Why?
5. Discuss the changing trends in life insurance in India.
6. Why is the general insurance market smaller than the life insurance market in India?
7. What is health insurance? Briefly describe the health insurance products available in the
market.
8. What is life insurance? State the benefits of life insurance? State the advantages and
disadvantages of the different types of life insurance?
9. State the pattern of investments specified by IRDA for both life and non-life companies?
10. What are the different kinds of risks that insurers have to counter in the business of
insurance?
11. What are the factors inhibiting the growth of health insurance?

Topic: Unit V Pension

Team XII

1. Discuss the various pension schemes operating in India.

2. Elaborate the contributions of pension funds to the economic development of the country.
 Topic: Unit V Micro Finance
Team IV

1. Define financial inclusion. What initiatives have been undertaken to enlarge financial
inclusion?
2. What is a no-frills account? Why is it being offered by banks?
3. Explain the BF and BC models.
4. Describe the SHG–bank linkage programme.
5. ‘The potential for the microfinance industry is still large.’ Discuss.

Topic: Unit V Depositories

Team I

1. Explain the term ‘depositories’. What type of services do depositories provide? What are the
benefits of a depository system?
2. Are custodians required today when the depository system is functioning successfully?
3. Explain the functioning of the NSDL and the SHCIL.
4. Explain the depository process.
5. Answer the following in brief:
a. Compare depository with a bank.
b. What was the need for setting up a depository in India?
c. State the difference between a demat share and a physical share?
d. What is rematerialization?
e. Who are the business partners of NSDL?
f. What kind of services do custodians provide?

Topic: Unit V Credit Rating

Team XII

1. What is credit rating? Explain the importance of credit rating.

2. How do credit rating agencies rate an instrument?
3. What are the limitations of credit rating in India?
4. Give a brief profile of CRISIL, ICRA, and CARE.
5. What is grading of IPOs?
6. Explain the rating process and methodology.
7. Would the rating methodology in case of banks differ from that of a manufacturing concern?
Why?
8. Why have the business volumes of credit rating agencies expanded in India?

Topic: Unit V Securitization

Team XII
1. What is Securitisation? Elaborate the process of securitization.
2. How can Securitization help in reducing NPAs in banks?

Topic: Unit V Stock exchanges and their Functions

Team IX

1. Explain in detail regulatory framework for Indian capital market.

2. Write a short note on the functions of stock exchanges
3. What is the difference between Stock brokers and underwriter?