Transcript Of the Subprime Mess and Securitization

BANK
 A BANK is a financial intermediary which allocates
funds from the savers to the borrowers.
 3 types of banks exist:
 Central banks (RBI in India)
 Commercial banks
 Merchant/ investment banks
TYPES OF BANKS
CORPORATE BANKING
 It is a broad term given to the different banking
services that large companies, governments, or other
big institutions need in order to function from day to
day.
 It comprises of three main verticals
 Transaction Services
 Client-Relationship Management
 Treasury Services
TRANSACTION SERVICES
Cash Management
 Centered on the seemingly simple job of efficient
management of receivables and payables
 Web-based cash management is bringing the capabilities
directly to the corporate customers through the Internet.
 The following constitutes the main functional modules -
Collection Services, Customer Billing, Information
Management, Electronic Invoice Presentment and
Payment (EIPP), Electronic Bill Presentment & Payment.
(EBPP)
TRANSACTION SERVICES
Trade Services
 Provide trade finance solutions that enhance
organizations global competitiveness and maximize
trading partner relationships
Working Capital Management
 To ensure that the firm is able to continue its
operations and that it has sufficient cash flow to satisfy
both maturing short-term debt and upcoming
operational expenses.
CLIENT RELATIONSHIP
MANAGEMENT
 Relationship management is important for winning
and maintaining profitable business in the corporate
banking market.
 The relationship manager is knowledgeable of the
company, senior management, financial needs and the
range of capabilities that the bank offers.
 They manage the relationship proactively as a
problem-solving professional using their knowledge to
tailor unique and innovative financial solutions that
will create company value.
TREASURY MANAGEMENT
 Money Market Desk
 Management of assets and liabilities of the bank viz.
Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio
(SLR) of the bank
 Daily Funds/ Balance Sheet Management for the Bank
Equity Desk
 Offers services to enable the corporate client to trade in
equities in stock markets all over the world
TREASURY MANAGEMENT
 Forex Desk
 Offers corporate clients access to foreign markets and
manages financial exposures and risks
 Offers trading capabilities in different currencies in
established and emerging markets worldwide—giving
organizations ready access to the world’s currency
markets
 Asset Liability Management
 Coordinates the management of assets and liabilities so
that an adequate return may be earned
RETAIL BANKING
 PERSONAL FINANCE
 Credit Cards

There are around 18 million credit cards in India and this
number is growing rapidly Hence, there’s tremendous growth
potential in this segment.
 Loans for SMEs
 Wealth Management

It is an off-balance sheet activity. It is fee-based and the bank
sells third party products. Investment services provided to
wealthy clients fall under this category.
PERSONAL
FINANCE
 Consumer Finance
 This division is responsible for giving loans to small-
ticket customers. Foreign banks face a lot of regulations
in this segment in India.
 Mortgages
 Popular sections under this category are Home loans and
Auto loans
 Current account and liabilities
 Caters to trade needs and cash needs of the customers
INTERNATIONAL FINANCE
 In India, this department caters mainly to the NRIs.
There are many NRIs who want to invest in India.
These banks provide advisory services in this regard
and also execute the transaction on behalf of the
clients.
 Moreover, transfer payments by NRIs can be made
through commercial banks. Banks also assist them in
real estate investment
PRIORITY BANKING
 This is a service provided by banks to HNI (High Net
Worth) individuals. The products sold are same but
the ticket size is different.
 A Relationship Manager is appointed to do overall
profiling of priority banking client. Special services are
provided keeping in view the importance of the
clients.