Академический Документы
Профессиональный Документы
Культура Документы
1970 - 1995
Post 1995
- Exit of large no. of companies: * Small & Large * Indian & Foreign - Regulation by RBI - Few companies diversified into related financial services
- Entry into equipment finance through: - Automobile financing * Leasing mainly for * Hire Purchase commercial vehicles - Fixed Deposit: main source of funds - Commencement of car finance - Access to Capital Markets - Funds from FDs and Banks
Shriram Finance
Tata Finance
Cholamandalam Finance
Mahindra & Mahindra GE Capital
Countrywide Finance
Citicorp
STEPS IN LEASING:
Classification of Lease:
1. Finance Lease and Operating Lease 2. Sales and Lease Back and Direct lease
Bipartite Lease Tripartite Lease
3. Single Investor Lease and Leveraged Lease 4. Domestic Lease and International Lease
Import Lease Cross Border Lease
Key Features:
FL is suitable for ships, aircrafts, railway wagons, lands, buildings and heavy machines. FL is long term, non cancellable lease agreements. In FL the cost of an assets is fully amortized during primary lease period. In FL, the lessee has an option to purchase the asset at the end of lease period. FL is also called as Full Pay Out Lease. Maintenance of asset is done by lessee.
Operating Lease:
According to the IAS - 17, an operating lease is one which is not a finance lease. In an operating lease, the lessor does not transfer all the risks and rewards incidental to the ownership of the asset and the cost of the assets is not fully amortized during the primary lease period. Key Features: OL is useful in case of computers, office equipments, trucks, automobiles etc. OL refers to short term lease agreement or the term of lease is always lesser than the economic life of an asset. The primary lease period does not cover the cost of an asset. Maintenance of asset is done by lessor.
Direct Lease: A. Bipartite Lease: In such lease, there are two parties in the lease transaction namely equipment supplier cum lessor and lessee. B. Tripartite Lease: In such lease, there are three parties in the lease agreement namely equipment supplier, lessor and lessee.
Avoids conditionalities
viz. conditionalities associated with EQ/DEBT Issue and Bank Loan
Advantages to Lessor:
Full security
Only becoz of Ownership Preserved
Tax benefit
Mainly Depriciation
High profitability
Since return from business is more than CoC
Limitations of Leasing:
Restrictions on use of Equipment
Addition/alteration of asset is not permissible
Consequences of default
Violation of clauses of Lease Contract may result in to termination of Lease.