MBA ASSIGNMENTS: 2019-20

KARNATAK UNIVERSITY DHARWAD

Date: 30/05/2020

Title: 1] Debit & Credit cards, 2] SMERA, 3] NSE

Subject Code: …………. Assignment No: ………….

Subject: FINANCIAL MARKETING SERVICES

Submitted By: TEAM NO : - 01

Registration No: 19MBA005, 008, 012, 014.

Submitted To: DR. SHIVAPPA SIR

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STATE BANK OF INDIA DEBIT CARDS
State bank of India (SBI) Is a leading Indian multinational public
sector banking and financial
Services company headquarters in Mumbai, Maharashtra. As record
in 2016-2017, SBI as asset of worth Rs.30.72trillion with a network
consisting of over 14000 branches and presence in more than 36
countries worldwide with 191 foreign offices. SBI holds the
distinction as India’s largest banking and financial company by assets.
SBI offers a host of banking services and financial products including
personal banking, NRI, services agriculture banking, corporate
services, international banking and much more to a diverse clientele
spread across the world.
ABOUT STATE BANK OF INDIA DEBIT CARDS
State bank of India offers a wide array of debit cards suitable for life
style needs of all and sundry. SBI debit cards can be used to transact
at more than 1lackh ATMs and POS terminals worldwide. Customers
are entitled to 5free ATM transactions every month along with special
benefits and signature privileges such as insurance, discount
vouchers, reward points on every transaction and much more. SBI
debit cards can be used for booking train or flight tickets, movie
tickets, making online purchases and dinner reservations, travelling,
retail expenditures and more. In order to ensure safety of online
transactions, SBI debit cards are secured with 2 factors authentication
using verified by VISA/Mastercard’s secured code.
BENEFITS OF SBI CARDS
• Use your SBI card for shopping at over 5lackh merchant outlets
established within India.
• Earn assured rewards with state bank of India debit card loyalty
program

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• Keep yourself and your assets safe. Get complimentary insurance
coverage with your debit card.
• Use your SBI debit card to transact at online merchant outlets and
retail stores across the globe.
TYPES OF DEBIT CARDS
The state bank of India Offers a wide range of debit cards that are
designed to suit the unique requirements of its numerous customers.
STATE BANK OF INDIA CLASSIC DEBIT CARD
The following are some of the key of the state bank of India classic
debit card.
Perks:
• Earn 50 freedom Rewards points on first purchase within one month
from the date of
card issuance.
• Earn 100 freedom Rewards points on making third transaction
within one month
from the date of card issuance.
• Earn 1 freedom rewards point on every RS200 spent on dining,
travelling, online
shopping etc.
• Use your state bank classic debit card to make at least 3 transactions
every quarter
and double your reward points.
• Get instant SMS alerts for every ATM withdrawal and transaction
you make.

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STATE BANK SILVER INTERNATIONAL DEBIT CARD
The following are the key features of the state bank of India silver
international debit card:
• Use your debit card for shopping at more than 5lakh merchant
outlets established
within India and over 30 million outlets world wide.
• Use your state bank silver international debit card for at least 3
transaction per
quarter and get double reward points on your all spends.
• Earn bonus reward points on first three transactions you make using
your state bank
of India silver International debit card within one month of card
issuance.
• Redeem your accumulated reward points for existing gifts and
vouchers.
STATE BANK OF GLOBLE INTERNATIONAL CARD
The following are the key features of the state bank of India global
international debit card,
a top choice among international travellers:
• Enjoy shopping at over 6lackh merchant outlet in India and over 30
million across the
global.
• Swipe your card for at least 3 times in a quarter and earn double
reward points for
your transactions

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• use your card for online shopping, booking movie tickets, travelling,
paying bills and
much more.
• Ensure secure online transactions with master Card Secure code or
verified by VISA
• Avail 100 bonus freedom rewards points on your third transaction
within one month
of card issuance.
STATE BANK OF GOLD INTERNATIONAL DEBIT CARD
The following are the key features of the state bank of India gold
international debit card.
• Earn state bank rewards bonus points while making first three
transactions within first month of card issuance.
• Earn 1 state bank Rewards points for Rs.200 spent on dining,
shopping, fuel spends, travelling and much more.
• Avail higher cash withdrawal and transactions limits with your state
bank gold international debit card.
• Get complementary personal accidental death insurance worth
Rs.2lakhs and purchase protection insurance of up to Rs.5000.
STATE BANK PLATINUM INTERNATIONAL DEBIT CARD
The following are the key features of the state bank of India platinum
international debit card.
• Get higher transaction and withdrawn limit.
• Triple your reward points by making at least 3 transactions within a
quarter. Redeem your accumulated reward points for existing gift and
offers.

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• Get complementary personal death insurance worth Rs5lakhs and
purchase protection insurance of up to RS.50000.
• Earn 50 points on your first and second transaction within 1 calendar
month of card issuance. Also earn 100 bonus reward points on your
third card transaction made with one month of card issuance.
• Earn 1 state bank reward point for every RS.200 spent on dining,
shopping, traveling, booking train tickets and more. • SBI Debit Card
Related Charges

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1) How can one apply for an SBI debit card? SBI Debit cards are
offered to all savings bank account holders of the bank. One can
contact the nearest branch, submit the appropriate form to obtain a
debit card. One can also apply through their internet banking page.
(2) What is Verified by VISA and Mastercard Secure Code? These
two are security features offered by VISA and Mastercard on debit
cards powered by them. This feature allows you to create your own
security password to be used during online transactions. This gives an
additional layer of security for online transactions using debit cards.
(3) What is a contactless card? spinout Tap & Go Debit Card is an
international debit card embedded with the Near Field
Communication (NFC) technology. It allows you to make payments
at POS terminals with just a tap or wave of the card near the machine
instead of using the PIN. The contactless card is embedded with an
EMV contact & contactless chip along with the regular Magstripe and

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an NFC antenna. Hence the card can be used as a regular card as well
as a contactless card as required.
(4) What is SBI Rewardz? SBI Rewardz is a loyalty program
initiated by SBI to award its customers with reward points for
transactions across different banking transactions. These reward
points can be later redeemed for a wide range of merchandize and
discount offers.
(5) What are some of the benefits offered to the customers through
SBI Rewardz? Customers are offered numerous discounts and offers
while redeeming their reward points. Some of the offers are • Branded
merchandize at discounted rates • Mobile/DTH recharges •
Discounted air tickets • Purchase gift cards • Discounts on movie
tickets
(6) What are the complimentary insurance covers offered by SBI?
SBI Gold International and Platinum card holders are offered
complimentary insurance covers. The insurance covers • Personal
Accident Death cover • Personal Air Accident Death cover • Purchase
protection • Lost card liability Apart from the above covers, a few
add-on covers are available to eligible card variants, as a value-add
feature • Family transportation & mortal remains transport • Checked-
in baggage loss cover • Accidental death or permanent total disability
– for RuPay debit cards only • The Conclusion Of The Debit Card
And Credit Card Debate!: Plastic money is trending and the two most
common types moving around in the market are debit and credit
cards. They look alike, with 16-digit numbers on them, expiration
dates and PIN codes. However, the usage and functionality of each
card is entirely different. • Debit cards provide bank customers the
option to spend money by drawing the amount already deposited with
the card provider. Whereas a credit card, as the name implies, allows
a bank customer to borrow money from the card issuer to purchase

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items or withdraw cash up to a certain limit. So, Debit Card or Credit
Card? Which one is better?
• There are various factors to consider when making a decision. This
article elaborates on a few important ones. • Fees Debit cards usually
have less or no fees of any kind, unless of course the customer spends
more than there is present in their account. Overdraft facility is not
available in all debit cards. On the other hand, credit cards typically
charge annual fees, exceeding-limit fees, delay in payment fees and
monthly interest on the card’s outstanding balance as well. • Control
A debit card gives more control on spending as compared to a credit
card. Frugal spenders opt for debit cards and compulsive spenders
should opt for debit cards as a debit card draws on money the bank
customer already has. • To avoid the temptation of credit, impulsive
buyers should shop with debit cards; research tells that people usually
spend more using credit cards compared to dealing in cash. • Rewards
• A bank customer can reap more rewards with credit cards, including
cash, discounts, travel points and many other purchases offers not
available to debit card holders. • Warranties • As opposed to debit
cards, credit cards at times provide additional warranties and
insurance for items purchased, which the retailer may not offer. For
instance, if you buy something with a credit card and it becomes
defective post the manufacturer’s warranty expiration date, you can
claim it at your credit card company. • There are various factors to
consider when making a decision. This article elaborates on a few
important ones.

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CREDIT CARDS:
A Credit card is a payment card issued to users to enable the
cardholder to pay a merchant for goods and services based on the
cardholder’s promise to the card issuer to pay them for the amounts
plus the other agreed charges. The card issuer creates a revolving
account and grants a line of credit to the cardholder, from which the
cardholder can borrow money for payment to a merchant or a cash
advance. In contrast credit cards allow the consumers to build a
continuing balance of debt, subject to interest being charged.

HISTORY OF CREDIT CARD IN INDIA:

In 1951, the first bank credit card appeared in New York’s Franklin
National Bank for loan customers. The idea, though, had already been
experimented with in various forms much before. In India, Andhra
Bank was the first to introduce credit cards in 1981.
As per recent industry estimates there are about 20 million credit and
debit card users in India. The number of credit and debit cards in
active use in 2008 has been in the range of 25 and 40 million. And the
number continues to multiply.

FEATURES:
As well as convenient credit, credit cards offer consumers an easy
way to track expenses, which is necessary for both monitoring
personal expenditures and the tracking of work-related expenses for
taxation and reimbursement purposes. Credit cards are accepted in
larger establishments in almost all countries, and are available with a
variety of credit limits, repayment arrangements. Some have added
perks.

• Interest rates
• Fees

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• Free travel insurance
• Travel extras
• Concierge
• Security
• Purchase protection
• Guaranteed pricing
• Rewards
SPECIALIZED TYPES:
1. Business credit cards:
Business credit cards are specialized credit cards issued in the name
of a registered business, and typically they can only be used for
business purposes. Their use has grown in recent decades. Business
credit cards offer a number of features specific to businesses. They
frequently offer special rewards in areas such as shipping, office
supplies, travel, and business technology.

2. Secured credit cards:

A secured credit card is a type of credit card secured by a

deposit account owned by the cardholder. Typically, the cardholder
must deposit between 100% and 200% of the total amount of credit
desired. In some cases, credit card issuers will offer incentives even
on their secured card portfolios. In these cases, the deposit required
credit limit, and can be as low as 10% of the desired credit limit. This
deposit is held in a special savings account.

3. Prepaid cards:

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 A Prepaid credit card is not a true credit card, since no credit is
offered by the card issuer, the cardholder spends money which has
been stored via a prior deposit by the cardholder or someone else,
such as a parent or employer. After purchasing the card, the
cardholder loads the account with any amount of money, up to the
predetermined card limit and then uses the card to make purchases the
same way as a typical credit card. Prepaid cards can be issued to
minors since there is no credit line involved. With prepaid credit cards
purchasers are not charged any interest but are often charged a
purchasing fee plus monthly fees after an arbitrary time period. Many
other fees also usually apply to a prepaid card.

4. Digital cards:

A digital card is a digital cloud-hosted virtual representation of

any kind of identification card or payment card, such as a credit card.

BENEFITS TO CARDHOLDER:

The main benefit to the cardholder is convenience. Compared to

debit cards and checks, a credit card allows small short-term loans to
be quickly made to a cardholder who need not calculate a balance
remaining before every transaction, provided the total charges do not
exceed the maximum credit line for the card. Many credit cards offer
rewards and benefits packages, such as enhanced product warranties
at no cost, free loss/damage coverage on new purchases, various
insurance, common carrier accident protection, and travel medical
insurance. Credit cards can also offer a loyalty program, where each
purchase is rewarded with points, which may be redeemed for cash or
products. Research has examined whether competition among card
networks may potentially make payment rewards too generous,
causing higher prices among merchants, thus actually impacting
social welfare and its distribution, a situation potentially warranting
public policy interventions.

SBI Credit Card Features:

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• Global Acceptance – The SBI Credit Card is accepted both in India
as well as in the foreign countries.

• Loan Facilities – The SBI Credit Card provides hassle-free loan

facilities on demand. One-time processing fee of 2%, up to a
minimum amount of Rs 499 and a maximum amount of Rs 3,000 has
to

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be paid. Loan repayment can be done within 12 or 24 or 36 months.
The rate of interest is very low. Documentation is not required, there
is no paper-work involved to secure the loan.

• Balance Transfer – SBI Credit Cards provide ‘low-interest rate on

balance transfer’ facility. It is available to all the residents of India
who are holders of a valid and current primary SBI Credit Card.
Balance Transfer amount ordered by a primary SBI Cardholder would
be processed by SBI Cards and Payment Services Private Limited
subject to a minimum ordered amount of Rs 5,000 and a maximum
ordered amount of 75% of the available credit limit assigned to the
concerned primary SBI card account.

• Balance Transfer on EMI- SBI Credit Card provides Balance

Transfer on EMI, with a minimum transfer amount of Rs 5,000 and a
maximum amount of 75% of the available credit limit as assigned to
the SBI Cardholder. The cardholder shall be levied a foreclosure fee
amounting to 3% of the Principal amount outstanding in case of the
Offer being voluntarily pre-closed by the customer prior to the
maturity of the tenure period opted for.

• Flexi pay –SBI Credit Card charges a default rate of interest of 22%
on this facility. A differential rate of interest is applicable from the
select set of cardholders. The Rate of interest charged will be
intimated to cardholder prior to availing the facility. Factors which
determine the rate of interest are credit risk prole and past transactions
or repayment behavior of the customer.

• En cash – SBI Credit Card provides en cash offer to its credit

cardholders. SBI cardholders can avail the benefits under this offer by
requesting for a cheque book which would be sent to the cardholders
registered address. The monthly repayment amount will be calculated
based on the cities in India. The services will be available to the
registered cardholders and to the exclusion of all others. The
cardholder agrees to pay a convenience charge while registering
through SBI Card website.

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Benefits of SBI Credit Card: -
The following are the benefits of using SBI Credit Card.
1. Lower Interest Option – SBI Credit Card charges the lower
interest rate on the outstanding credit balance. One can use this option
and transfer the outstanding balances of other credit cards to SBI
Credit Card at a lower interest rate or can convert transactions into
easy monthly installments (EMI). The current rate of interest is 0.75%
per month for a period of three months and 1.27% per month for six
months.

2. En cash – With the SBI Card Payment, the cardholder can

have easy accessibility for cash. The holder of the card can en cash up
to or above the set credit limit. The user can enjoy hassle-free money
using SBI Credit Card Payment as per the requirements. The
repayment option is also made convenient by SBI, it doubles up the
benefit for the customer.

3. Simplified Form of Money – With the introduction of SBI

Card net banking, one need not have to visit the bank every time for
withdrawing money. Cards can be used to pay for bills and thus the
process of paying bills has been simplified.

4. Insurance – SBI Credit Cardholder can choose different types

of Insurance cover, provided by State Bank of India empowering the
account holder to tackle the future unforeseen events in life. It is
currently providing the following types of insurance cover for
cardholders – Health Insurance, Personal Accident Insurance, and
Card Protection Plan.

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 5. Utility Bill Payments – By using SBI Credit Card, an
individual can avail the benefits of Auto Bill Pay. After registering for
Auto Bill Pay, one can ensure that all the bills will be paid
automatically on time and one need not have to worry about missing
the deadlines for bill payment. Using Auto Bill Pay mechanism you
can pay telephone, mobile, electricity bills, insurance premium and so
on. By registering the billers and setting up the standard instructions
to pay the bills on time, all the bills will be paid on time every time,
automatically. Once the bills are paid automatically you will receive
an SMS and e-mail confirming the payment information, bill due
dates, and new biller additions. The SBI Credit Card Online Payment
facility comes in handy to pay utility bills.

6. Easy Access – One can access SBI Card account anytime,

anywhere with sbicard.com or you can also use Simply SMS or can
download the SBI Card mobile app or can download yono by SBI
Android App. The process of accessing SBI Credit Card has been
simplified to a great extent.

7. Rewards – SBI Credit cards provides its users to earn reward

points on every purchase. These reward points do have an expiry
period within which it should be redeemed.

SBI Credit Card Apply Online:

Applicants can visit the official website of SBI credit cards and
click on apply which is shown at the top right side of the page. Under
the apply tab, the applicant will have to choose from the following
options
• Help Me Find a Card
• Track My Application
• Retrieve My Application The ‘Help Me Find a Card’ will lead the
applicant to a list of credit cards that they can choose from as per
there requirements. Applicants can choose from these cards after
considering their minimum annual income and the reward points that
a particular credit card has to offer. Once the suitable credit card is
chosen, the applicant needs to select the ‘Apply Now’ option that will

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direct them to a new page and further information has to be filled as
mentioned below.
• Name
• City
• Occupation
• Date of Birth
• Qualification
• Annual Income
• PAN Number
• Email id
• Mobile Number
• Enter OTP (this will be sent the applicant’s registered mobile
number)

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Once the details are filled in, the bank will check whether the
candidate is eligible to avail the credit card for which they have
applied for. Based on the eligibility of the customer, they may or may
not receive the credit card, it will be on the discretion of the SBI Bank
to decide if a customer has to be given Credit Card or not. Applicants
can also apply for an SBI Credit Card, by sending an email to SBI
bank directly.

SBI Credit Card Eligibility

To apply for SBI Credit Card, the individual should have attained 21
years of age to a maximum of 60 years
• • The applicant should be a resident of India.
• • The applicant should have 200 credit score or above
• • The applicant should have a regular source of income.
• • Must have a minimum salary of Rs 20,000.

Required Documents for SBI Credit Card

• • One identity proof issued by the government of India –
Election Voters ID, Driving License, Aadhaar Card, Passport, Ration
Card.
• • PAN Card.
• • Income Proof – Latest Income Tax Return Form/ Form 16/
Salary Slip/ Salary Certificate
• • Address Proof – Telephone Bill/ Passport/ Electricity Bill/
Bank Passbook / Letter from recognized public authority / Aadhaar
Card/ Ration Card
• • Passport size photograph.

SBI Credit Card Activation:

When the cardholder receives his or her credit card, it will be in
inactive mode due to security reasons. The cardholders should
activate the same to use it for further purposes. SBI recommends its
credit cardholders to visit their official web portal to activate their
credit card.
Procedure to activate SBI Credit Card Online:

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• • First, visit the web portal of SBI (sbicard.com)
• • Login to your SBI net banking account using your credentials
• • After you log in, proceed further and navigate to the
‘Requests’ menu which appears on the left-hand side of the screen.
• • Now choose the option ‘Card Activation’ from the available
options.
• • If in case, you hold multiple credit cards which are linked to
SBI net banking account, then you will be asked to choose the right
card from the available drop-down menu.
• • After you choose the right SBI credit card, click on the
‘Activate’ button and your card will get activated instantly.

SBI Credit Card Lost: -

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In case if you have lost your SBI Credit Card, then the first thing one
should do is to block the credit card to avoid the use of the card for
fraudulent activities. The lost credit card should be blocked
immediately and reissued. The user should raise a request to block
and reissue of card which can be made via:
• • Mobile App.
• • Web portal – sbicard.com.
• • SMS send BLOCK XXXX (last 4 digits of your credit card
number) to 5676791 from your registered mobile number.
• • 24X7 helpline Dial 39020202 (prefix with local STD code) or
Dial 1860 180 1290 (SBI Credit Card Customer Care No).

How to Register with SBI Credit Card Online?

Follow the below-mentioned steps to register with SBI Credit Card

Online:
• • Step 1: Visit the official web portal of SBI Credit Card at
www.sbicard.com and click on the ‘First time user link’.
• • Step 2: Enter your Credit Card number, CVV number, date of
birth, the expiry date of your credit card and click on the ‘Proceed’
button
• • Step 3: You will now receive an OTP (one-time-password) on
your registered mobile number.
• • Step 4: Now, fill in the OTP as mentioned and press on
‘Proceed’ option again
• • Step 5: The system will now ask you your preferred user ID
followed by the password and confirm password. Fill in all the
required details and click on the ‘Confirm’ button.
• • Step 6: Your user name and password will get generated which
can be used every time to log in to your SBI Card online account.

Procedure to report Lost/ Stolen SBI Credit Card and Reissue

through website
Follow the below-mentioned steps to report Lost/Stolen SBI Credit
Card
• • Step 1: Login to your online account on sbicard.com

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• • Step 2: Now choose the ‘Report Lost/Stolen Card’ under the
Request tab
• • Step 3: Select the card number to report the lost card
• • Step 4: If you are looking for a reissue of SBI credit card then
choose the “Reissue Card” option Step
• • 5: Proceeding further click on the ‘Submit’ button.

How to make Credit Card Bill Payment?

In today’s digitized world, credit card bill can be paid through any
one of the following way – Cash, Cheque, Demand Draft, Debit Card,
Net Banking, Visa Money Transfer, NEFT/RTGS Transfer. Users can
even make bill payments using SBI Credit Card Net Banking Facility.
SBI Credit Card Payment

The holders of SBI Credit card can do payment using an array of

options which are available both in online and online. Customers can
choose any of the payment option as per their convenience.

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SBI Credit Card Online Payment Modes

India’s largest public sector bank offers 12 online modes for SBI
Credit Card online payment. They are:
• • VISA Credit Card Pay
• • SBI Mobile Banking
• • NEFT
• • Online SBI
• • SBI Auto Debit
• • Pay net –Pay Online
• • Electronic Bill
• • Payment Debit Card
• • Pay via UPI
• • Pay via Mobile App
• • National Automated Clearing House
• • Pay via YONO

How to Close SBI Credit Card?

A cardholder can close the Credit Card Account by writing to SBI
Credit Card or calling the SBI Card Helpline.
After placing the request for account closure, the cardholder is
required to cut their credit card(s) diagonally. The request will
automatically lead to the termination of the add-on cards.
Termination will be effective after payment of all amounts
outstanding on the card account.
Procedure to follow by a Cardholder if the credit card gets
deactivated due to inactivity
If in case, it the credit card of the holder gets deactivated due to
dormancy, then one should follow the below-mentioned steps to
prevent any kind of altercations in future
Check the Credit Card Score
If in case, the limit of the deactivated card is very high, then it may
take a deep plunge on your credit card as it will increase the
cardholders overall credit utilization ration. One has to check if the
credit score is least impacted and if there is any considerable drop in

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the score, you can take corrective measures in future to rebuild the
credit score.
Monitor the credit report for closure
The cardholder must monitor their credit report every month to ensure
that the credit card accounts remain in your credit report for at least
seven years and if in case your account is not closed under the agreed
circumstances as settled, then your credit report may be left impaired.

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Contacting the Issuer for Reactivation
Sometimes, the cardholder can follow this simple procedure to
reactivate his or her deactivated card. However, you can send in a
written request to the issuer to reactivate the credit card by
mentioning that you promptly made the necessary payments on time
and do have a good credit history.
Who can avail SBI Credit Card Net Banking Services?
• • All non-individual customers
• • Small business enterprises
• • Firms
• • Trusts
• • Institutions
• • Government organizations
• • Corporates
• • Public Sector Undertakings
• • Non-Agency Banks
• • Sole Proprietors

Benefits:
• • Track all your transactions in one platform
• • Get access to your account 24x7
• • Manage and view cash and credit limits, billed and unbilled
transactions, due dates, reward points
• • Get unique and convenient services such as pay bills, register
new card, hotlist lost card, register for autopay, change ATM PIN,
request email statement, etc.
• • Get unique features such as Cash on Call and Dial an EMI
Increase your credit card limit and upgrade your card
• • Pay all your dues or transfer money through NEFT, RTGS or
IMPS
• • Pay utility bills or recharge your mobile through easy Bill pay
service
• • Get online deposit products (Fixed, Recurring, Flexi, Tax
Saving etc.)
• • Setup Standing Instructions and Scheduling payments

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• • Get E- Tax for online tax payment
• • Get E – Pay for automatic bill payments.

SBI Credit Card Against Loan :

With SBI Card En cash schedule your vacations, events, schooling
and more. Get hassle-free fund transfer with easy options.
Features
•
• • Get flexible option of 12,24 or 36 months

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• • With one-time processing charges fulfill your extra cash
necessity within 48 hours
• • Get credit card loan with minimum interest rates
• • Get pre-approved offer over and above or within the existing
limit of your credit
• • No physical documents or post-dated cheque is required to
avail the loan
• • Money will be credited with NEFT facility directly to your
bank account within 48 working hours
• • Call to 39 02 02 02/ 1860 180 1290 or SMS En cash to 56767
and share your SBI Card and Date of Birth details to the customer
care executive to avail the loan.

SBI Credit Card Pin Generation

To avail the unique benefits of ATM transaction like withdrawing
cash, view the details for all your accounts, transfer money, change
mobile number and much more, applicants are required to generate
PIN for the Net Banking and ATM facility provided State Bank of
India. Applicants can generate their credit card Pin through ATM and
Net Banking. Below given steps are for online PIN Generation. Go
through all the steps to make your process complete
SBI Credit Card PIN Generation through ATM
• • Visit the nearest SBI ATM and insert your credit card in the
ATM machine
• • Select your preferred language to begin the process
• • Click on Create PIN Using OTP,
• • Now you will receive an OTP, on your registered mobile
number
• • Enter the OTP on the required section
• • Now you can enter the 4-digit PIN of your choice
• • Retype the Pin on the required section and click on Submit
• • Now you will get a successful message on your registered
mobile number.

SBI Credit Card PIN Generation through Net Banking

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• • Visit the site https://www.sbicard.com/
• • Click on Login, which is located on the right side of the page
• • Log in to your account with your Net Banking Id and
Password
• • Click on Credit Card Requests
• • Now you will receive an OTP, on your registered mobile
number Enter the OTP on the required section Now you can enter the
4-digit PIN of your choice
• • Retype the Pin on the required section and click on Submit
• • Now you will get a successful message on your registered
mobile number.

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National Stock Exchange of India

The National Stock Exchange of India Limited (NSE) is the leading

stock exchange of India, located in Mumbai. The NSE was
established in 1992 as the first dematerialized electronic exchange in
the country. NSE was the first exchange in the country to provide a
modern, fully automated screen-based electronic trading system
which offered easy trading facility to the investors spread across the
length and breadth of the country. Vikram Limaye is Managing
Director & Chief Executive Officer of NSE.

National Stock Exchange

National Stock Exchange of India's Logo

TYPE STOCK EXCHANGE

LOCATION MUMBAI, INDIA
FOUNDED 1992
OWNER NATIONAL STOCK
EXCHANGE OF INDIA
LIMITED
KEY PEOPLE GIRISH CHANDRA
CHATURVEDI
(CHAIRMAN)

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 VIKRAM LIMAYE
(MD & CEO)
CURRENCY INDIAN RUPEE (₹)
NO. OF LISTINGS 1,952[1]
MARKET CAP US$2.27 TRILLION (APRIL
2018)[1]
VOLUME ₹28,692 BILLION
(US$400 BILLION) (JUNE
2014)
INDICES NIFTY 50
NIFTY NEXT 50
NIFTY 500
WEBSITE WWW.NSEINDIA.COM
National Stock Exchange has a total market capitalization of more
than US$2.27 trillion, making it the world's 11thlargest stock
exchange as of April 2018.[1] NSE's flagship index, the NIFTY 50,
the 50-stock index is used extensively by investors in India and
around the world as a barometer of the Indian capital markets. NSE
building at BKC, Mumbai Nifty 50 index was launched in 1996 by
the NSE.[2] However, Vaidyanathan (2016) estimates that only about
4% of the Indian economy / GDP is actually derived from the stock
exchanges in India.[3] Unlike countries like the United States where
nearly 70% of the GDP is derived from larger companies and the
corporate sector, the corporate sector in India accounts for only 12-
14% of the national GDP (as of October 2016). Of these only 7,800
companies are listed of which only 4000 trade on the stock exchanges

49
at BSE and NSE. Hence the stocks trading at the BSE and NSE
account for only around 4% of the Indian economy, which derives
most of its income-related activity from the so-called unorganized
sector and households.[3] Economic Times estimated that as of April
2018, 60 million (6 crore) retail investors had invested their savings in
stocks in India, either through direct purchases of equities or through
mutual funds.[4] Earlier, the Bimal Jalan Committee report
estimated that barely 1.3% of India's population invested in the stock
market, as compared to 27% in USA and 10% in China.[5][6][7][8]

History
NATIONAL STOCK EXCHANGE is mainly set up in the early
1990s to bring in transparency in the markets. Instead of trading
membership being confined to a group of brokers, NSE ensured that
anyone who was qualified, experienced and met minimum financial
requirements was allowed to trade.[9] In this context, NSE was ahead
of its times when it separated ownership and management in the
exchange under SEBI's supervision. The price information which
could earlier be accessed only by a handful of people could now be
seen by a client in a remote location with the same ease. The paper-
based settlement was replaced by electronic depository-based
accounts and settlement of trades was always done on time. One of
the most critical changes was that a robust risk management system
was set in place, so that settlement guarantees could protect investors
against broker defaults. NSE was set up by a group of leading Indian
financial institutions at the behest of the government of India to bring
transparency to the Indian capital market. Based on the
recommendations laid out by the Pherwani committee, NSE has been
established with a diversified shareholding comprising domestic and
global investors. The key domestic investors include Life Insurance
Corporation of India, State Bank of India, IFCI Limited, IDFC
Limited and Stock Holding Corporation of India Limited. And the key

49
global investors are Gagil FDI Limited, GS Strategic Investments
Limited, SAIF II SE Investments Mauritius Limited, Aranda
Investments (Mauritius) Pte Limited and PI Opportunities Fund I.
[10] The exchange was incorporated in 1992 as a tax-paying company
and was recognized as a stock exchange in 1993 under the Securities
Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the
Prime Minister of India and Manmohan Singh was the Finance
Minister. NSE commenced operations in the Wholesale Debt Market
(WDM) segment in June 1994. The capital market (equities) segment
of the NSE commenced operations in November 1994, while
operations in the derivatives segment commenced in June 2000. NSE
offers trading, clearing and settlement services in equity, equity
derivatives, debt, commodity derivatives, and currency derivatives
segments. It was the first exchange in India to introduce an electronic
trading facility thus connecting together the investor base of the entire
country. NSE has 2500 VSATs and 3000 leased lines spread over
more than 2000 cities across India. NSE was also instrumental in
creating the National Securities Depository Limited (NSDL) which
allows investors to securely hold and transfer their shares and bonds
electronically. It also allows investors to hold and trade in as few as
one share or bond. This not only made holding financial instruments
convenient but more importantly, eliminated the need for paper
certificates and greatly reduced the incidents of forged or fake
certificates and fraudulent transactions that had plagued the Indian
stock market. The NSDL's security, combined with the transparency,
lower transaction prices and efficiency that NSE offered, greatly
increased the attractiveness of the Indian stock market to domestic
and international investors.

NSE EMERGE
NSE EMERGE is NSE's new initiative for SME & Start-up
companies from India.[11] These companies can get listed on NSE
without Initial Public Offer (IPO). This platform will help SME &

49
Startup to connect with investor and help them for the funding.[12]
During August 2019, NSE gets 200th company listed on its SME
platform.[13]

Markets

NSE offers trading and investment in the following segments

Equity
 Equities
 Indices
 Mutual Funds
 Exchange Traded Funds Initial Public Offerings Security
Lending and Borrowing Scheme etc.

Derivatives
 Equity Derivatives (including Global Indices like CNX 500,
Dow Jones and FTSE )
 Currency Derivatives
 Commodity Derivatives
 Interest Rate Futures

Debt

Corporate Bonds

Equity Derivatives
The National Stock Exchange of India Limited (NSE) commenced trading in
derivatives with the launch of index futures on 12 June 2000. The futures and
options segment of NSE has made a global mark. In the Futures and Options
segment, trading in NIFTY 50 Index, NIFTY IT index, NIFTY Bank Index,
NIFTY Next 50 index and single stock futures are available. Trading in Mini

49
Nifty Futures & Options and Long-term Options on NIFTY 50 are also
available.[14] The average daily turnover in the F&O Segment of the Exchange
during the financial year April 2013 to March 2014 stood at ₹1.52236 trillion
(US$21 billion). On 29 August 2011, National Stock Exchange launched
derivative contracts on the world's most-followed equity indices, the S&P 500
and the Dow Jones Industrial Average. NSE is the first Indian exchange to
launch global indices. This is also the first time in the world that futures
contracts on the S&P 500 index were introduced and listed on an exchange
outside of their home country, USA. The new contracts include futures on both
the DJIA and the S&P 500 and options on the S&P 500. On 3 May 2012, the
National Stock exchange launched derivative contracts (futures and options) on
FTSE 100, the widely tracked index of the UK equity stock market. This was
the first of its kind of an index of the UK equity stock market launched in India.
FTSE 100 includes 100 largest UK listed blue chip companies and has given
returns of 17.8 per cent on investment over three years. The index constitutes
85.6 per cent of UK's equity market cap.[15] On 10 January 2013, the National
Stock Exchange signed a letter of intent with the Japan Exchange Group, Inc.
(JPX) on preparing for the launch of NIFTY 50 Index futures, a representative
stock price index of India, on the Osaka Securities Exchange Co., Ltd. (OSE), a
subsidiary of JPX.[16] Moving forward, both parties will make preparations for
the listing of yendenominated NIFTY 50[17] Index futures by March 2014, the
integration date of the derivatives markets of OSE and Tokyo Stock Exchange,
Inc. (TSE), a subsidiary of JPX. This is the first time that retail and
institutional investors in Japan will be able to take a view on the
Indian markets, in addition to current ETFs, in their own currency and
in their own time zone. Investors will therefore not face any currency
risk, because they will not have to invest in dollar denominated or
rupee denominated contracts. In August 2008, currency derivatives were
introduced in India with the launch of Currency Futures in USD–INR by NSE.
It also added currency futures in Euros, Pounds, and Yen. The average daily
turnover in the F&O Segment of the Exchange on 20 June 2013 stood at
₹419.2616 billion (US$5.9 billion) in futures and ₹273.977 billion (US$3.8
billion) in options, respectively.

Interest Rate Futures

49
In December 2013, exchanges in India received approval from market regulator
SEBI for launching interest rate futures (IRFs) on a single GOI bond or a basket
of bonds that will be cash settled. Market participants have been in favour of the
product being cash settled and being available on a single bond. NSE will
launch the NSE Bond Futures on 21 January on highly liquid 7.16 percent and
8.83 percent 10-year GOI bonds. Interest Rate Futures were introduced for the
first time in India by NSE on 31 August 2009, exactly one year after the launch
of Currency Futures. NSE became the first stock exchange to get an approval
for interest-rate futures, as recommended by the SEBI-RBI committee.

Debt Market
On 13 May 2013, NSE launched India's first dedicated debt platform to provide
a liquid and transparent trading platform for debt related products. [18] The
Debt segment provides an opportunity for retail investors to invest in corporate
bonds on a liquid and transparent exchange platform. It also helps institutions
who are holders of corporate bonds. It is an ideal platform to buy and sell at
optimum prices and help Corporates to get adequate demand when they are
issuing the bonds.

Trading schedule
Trading on the equities segment takes place on all days of the week (except
Saturdays and Sundays and holidays declared by the Exchange in advance). The
market timings of the equities segment are:

(1) Pre-open session:

Order entry & modification Open: 09:00 hrs Order entry & modification Close:
09:08 hrs* *with random closure in last one minute. Pre-open order matching
starts immediately after the close of pre-open order entry.

(2) Regular trading session

Normal/Retail Debt/Limited Physical Market Open: 09.15 hrs Normal/Retail
Debt/Limited Physical Market Close: 15:30 hrs. Exchange Traded Funds
and Derivatives on National Stock Exchange The following products are
trading on NIFTY 50 Index in the Indian an international Market: 7 Asset
Management Companies have launched exchange-traded funds on NIFTY 50
Index which are listed on NSE 15 index funds have been launched on NIFTY

49
50 Index Unit linked products have been launched on NIFTY 50 Index by
several insurance companies in India World Indices Derivatives Trading on
NIFTY 50 Index: Futures and Options trading on NIFTY 50 Index Trading in
NIFTY 50 Index Futures on Singapore Stock Exchange(SGX ) Trading in
NIFTY 50 Index Futures on Chicago Mercantile Exchange(CME)

Technology:
NSE's trading systems is a state-of-the-art application. It has an uptime record
of 99.99% and processes more than a billion messages every day with the sub
millisecond response time.[19] NSE has taken huge strides in technology in
these 20 years. In 1994, when trading started, NSE technology was handling 2
orders a second. This increased to 60 orders a second in 2001. Today NSE can
handle 1,60,000 orders/messages per second, with infinite ability to scale up at
short notice on demand, NSE has continuously worked towards ensuring that
the settlement cycle comes down. Settlements have always been handled
smoothly. The settlement cycle has been reduced from T+3 to T+2/T+1.

Financial Literacy
NSE has collaborated with several universities like Gokhale Institute of Politics
& Economics (GIPE), Pune, Bharati Vidyapeeth Deemed University (BVDU),
Pune, Guru Gobind Singh Indraprastha University, Delhi, the Ravenshaw
University of Cuttack and Punjabi University, Patiala, among others to offer
MBA and BBA courses. NSE has also provided mock market simulation
software called NSE Learn to Trade (NLT) to develop investment, trading and
portfolio management skills among the students.[20] The simulation software is
very similar to the software currently being used by the market professionals
and helps students to learn how to trade in the markets. NSE also conducts
online examination and awards certification, under its Certification in Financial
Markets (NCFM) programmes.[21] At present, certifications are available in 46
modules, covering different sectors of financial and capital markets, both at the
beginner and advanced levels. The list of various modules can be found at the
official site of NSE India. In addition, since August 2009, it offered a short-term
course called NSE Certified Capital Market Professional (NCCMP).[22] The
NCCMP or NSE Certified Capital Market Professional is a 100-hour
program for over 3–4 months, conducted at the colleges, and covers
theoretical and practical training in subjects related to the capital

49
markets. NCCMP covers subjects like equity markets, debt markets,
derivatives, macroeconomics, technical analysis, and fundamental
analysis. Successful candidates are awarded joint certification from
NSE and the concerned.

NSE co-location case

On 8 July 2015, Sucheta Dalal wrote an article on Money life
alleging that some NSE employees were leaking sensitive data related
to high-frequency trading or co-location servers to a select set of
market participants so that they could trade faster than their
competitors. NSE alleged defamation in the article by Moneycontrol.
On 22 July 2015, NSE filed a ₹1 billion (US$14 million) suit against
Moneycontrol.[23] However, on 9 September 2015, the Bombay High
Court dismissed the case and fined NSE ₹5 million (US$70,000) in
this defamation case against Money control (www.moneylife.in).[24]
The High Court asked NSE to pay ₹150,000 (US$2,100) to each
journalist Debashis Basu and Sucheta Dalal and the remaining ₹4.7
million (US$66,000) to two hospitals. The Bombay High Court has
stayed the order on costs for a period of two weeks, pending the
hearing of the appeal filed by NSE.[25] In May 2019 SEBI has
debarred NSE from accessing the markets for a period of 6 months.
While NSE confirmed this will not impact their functioning, they
won't be able to list their IPO or introduce any new trading products
for that period. Additionally, the watchdog also ordered NSE to
disgorge Rs 624.9 crores (along with accrued interest for the period),
an amount equivalent to the profits it made from the unfair trade
practice of colocation servers they provided during the period from
2010–11 to 2013–14. The board also passed orders against 16
individuals including former managing directors and CEOs Ravi
Narain and Chitra Ramakrishna ordering them to disgorge 25% of
their salaries during that period along with interest. All money is to be
paid into the Investor protection and education fund. These

49
individuals have also been debarred from the markets or holding any
position in a listed company for a period of five years.[26]

See also
 Stock market crashes in India
 Companies listed on the National Stock
 Exchange of India
 List of stock exchanges in the
 Commonwealth of Nations
 List of South Asian stock exchanges
 Mahurat trading
 Clause 49
 Bombay Stock Exchange
 NSE EMERGE

References
1. "Monthly Reports - World Federation of Exchanges" . WFE.
2. https://www.nseindia.com/global/cont
ent/about_us/history_milestones.htm
3. "National economic debate – Stock markets or rigged casinos - talk
by Professor Dr. R. Vaidyanathan (IIM Bangalore) - 21 Jan 2011,
Mumbai”. National Economic Debates. Retrieved 1 November 2016.
4. Thukral, Arun (24 April 2018). "For those who do not make much
money in stocks, here's the catch”. Economic Times. Retrieved 24
April 2018.
5. "Increasing retail investor base: SEBI has a tough job ahead" .
Moneylife. 2 June 2011. Retrieved 24 April 2018.

49
6. Jalan, Bimal (1 November 2010). Jalan Committee report 2010 -
Review of Ownership and Governance of Market Infrastructure
Institutions (PDF). Mumbai: SEBI. Retrieved 24 April 2018.
7. Chandrasekhar, C.P.; Mallick, Sarat; A, Akriti. The elusive retail
investor: How deep can (and should) India's stock markets be? (PDF).
SEBI. Retrieved 24 April 2018.
8. Library of Congress, Federal Research Division (30 December
2011). FINANCIAL LITERACY AMONG RETAIL INVESTORS
IN THE UNITED STATES (PDF). Washington DC: SEC / The
library of congress. Retrieved 24 April 2018.
9. CORRESPONDENT, SPECIAL. "National Stock Exchange to file
IPO document by 2017”. The Hindu. Retrieved 26 February 2017.
10. "NSE Shareholding Pattern (For the quarter ended on September
30, 2014)" (PDF). /www.nseindia.com. National Stock Exchange of
India Limited. Retrieved 7 January 2015.
11. "NSE launches SME exchange with first listing- Business News”.
www.businesstoday.in. Retrieved 7 October 2019.
12. "Raising capital: Why SME IPO may be a good choice for small
businesses”. The Economic Times. 10 June 2019. Retrieved 7
October 2019.
13. Laskar, Anirudh (22 August 2019). "NSE gets 200th company
listed on its SME platform”. Mint. Retrieved 7 October 2019.
14. Sanchit, Taksali. "Nifty Option Chain”. Investiture.in. Sanchit.
Retrieved 20 January 2020.
15. [1]
16. UPDATE 1-India's NSE, Japan's JPX plan Nifty futures for
Osaka. Reuters. Retrieved on 2013-12-06.

49
17. https://www.nseindia.com/products/c
ontent/equities/indices/broad_indice s.htm
18. NSE launches debt trading platform | Business Line.
Thehindubusinessline.com (2013-05- 13). Retrieved on 2013-12-06.
19. CXO-Dialogue. Moneycontrol.com. Retrieved on 2013-12-06.
20. Patnaik, Santosh. "NSE to spread financial literacy" . The Hindu.
Retrieved 26 February 2017.
21. NSE ties with deemed University to offer pg. diploma in financial
markets. Edu-Leaders (2012-11-29). Retrieved on 2013-12-06.
22. NCFM (Bhandarkar Road, Pune) – Pune - Maharashtra - India.
Puneeducation.in. Retrieved on 2013- 12-06.
23. "NSE files Rs 100-cr suit against money control”. The Indian
Express. 22 July 2015. Retrieved 19 October 2015.
24. "Court fines NSE Rs50 lakh in defamation case against
Moneylife”. http://www.livemint.com/. Retrieved
19 October 2015. External link in
website= (help) Wikimedia Commons has media related to National
Stock Exchange of India.
25. https://economictimes.indiatimes.com
/markets/stocks/news/bombay-highcourt- stays-order-imposing-rs-50-
lakhcost- onnse/ articleshow/49043716.cms
26. "Sebi bars NSE from accessing securities market for 6 months in
colocation case”. The Economic Times. 1 May 2019. Retrieved 1
May 2019.

External link:
Official website

49
https://www.tradingfuel.com/nse-indianational-
stock-exchange/
Retrieved from
"https://en.wikipedia.org/w/index.php?
title=National_Stock_Exchange_of_India&oldid=956
434737"

49
 SME Rating Agency of India
INTRODUCTION:
SMERA, widely known as ‘The SME Rating Agency’, was
conceptualised by Ministry of Finance, Govt. of India and the Reserve
Bank of India to help Indian MSMEs grow and get access to credit
through independent and unbiased credit opinion that banks can rely
on. SMERA offers SME Ratings, New Enterprise Credibility Scores,
SME Credit Due Diligence and SME Trust Seal to Indian MSMEs to
help lenders take informed decisions

SMERA Gradings & Ratings Private Limited:

Industry Credit Ratings

Founded January 1, 2020
Headquarters 905, Lodha Supremus,
Kanjurmarg East,
Mumbai,
Maharashtra, India
Key people Reshma Polasa,
Mohit Jain
Products Small & Medium
Enterprises (SME)

49
 Rating, Credit Due
Diligence, Solar
Grading, Vendor
Assessment
MFI Grading - Mircofin
Analytics,
SMERA Terminal
Parent Acuité Ratings &
Research Limited
Website www.smeraonline
.com
SMERA is now a wholly owned subsidiary of Acuité Ratings &
Research Limited. Acuité, a joint initiative of Small Industries
Development Bank of India (SIDBI), Dun & Bradstreet Information
Services India Private Limited (D&B) and leading public and private
sector banks in India, is registered with SEBI as a credit rating
agency.
Microfin Analytics is an initiative of SMERA Gradings & Ratings to
facilitate financial inclusion through grading,
research and advisory services exclusive to the Microfinance
Institutions (MFI)sector. It aims to provide valuable and timely
insights to the MFI lenders and investors for meeting their social,
financial and business objectives.

History:

49
SMERA was as an initiative of Ministry of Finance, Govt. of India
and the Reserve Bank of India. Thus, SMERA became the world’s
first MSME focused rating agency
and introduced the concept of SME Ratings in India. SMERA is now
a wholly owned subsidiary of Acuité Ratings & Research Limited.

Achievements:
1) SMERA has pioneered SME ratings in the country and has till
date completed over 52,000 ratings across sectors and geographies.
SMERA Ratings have gained wide acceptability and are now an
integral part of the risk assessment process within the lending and
investing community.

2) In 2005, SMERA was incorporated under the directive of the

Government of India. In the same year it was approved by the
Ministry of MSME and Government of
India for PCR Scheme of NSIC.

3) The Department for International Development, UK extended

Technical Assistance grant under World Bank Project in the year
2006.

4) The Association of Development Financing Institutions in Asia

and the Pacific (ADFIAP) has awarded SIDBI with "Outstanding
Development Project Award" for setting up SMERA. The award was
given under the SME Development Category during the 30th
ADFIAP Annual Meeting held on 10 May 2007 at Hanoi,
Vietnam.[1].

49
5) SMERA had an eloquent mention in IFC's report in 2010, as a
novel and sustainable initiative of the Govt. of India to increase credit
flow to the MSME sector
in India.

6) In 2017, SMERA launched its product SMERA Terminal - a

fintech platform for connecting lenders and MSME's.

7) SMERA bought the launch of New Enterprise Credibility score

(NECS) in 2018, for start-ups in the country.

49
SME Rating Scale:

49
49
Rating process flow:

Rating Methodology – A Brief:

SMERA’s rating methodology consists of identifying and

evaluating credit quality drivers of the
enterprise being rated and covers both, quantitative and qualitative
aspects. Typically, it is a 360
degree assessment of an enterprise as the factors impinging on the
credit quality can emerge
from any aspect of the enterprise. For the purpose of credit
assessment SMERA takes into
account the data/ information provided by the entity and those
available on public domain such
as Watch out Investor etc. SMERA arrives at the credit risk of an
enterprise by evaluating four
main parameters –
Industry Risk
Management Risk
Financial Risk
In addition, wherever necessary, the ability of the entity to
execute and operationalize a project
(Brownfield, Greenfield) and the projects impact on the debt
repayment capabilities is also assessed.

49
Risk Assessment
1. INDUSTRIAL:
The characteristics of an industry are common and applicable to
all the entities operating within that industry. A company/ firm needs
to be assessed in the context of the industry it belongs to. Industry
evaluation brings out the effect of various factors on the business
prospects and the general operating environment. Besides, the analyst
takes into account the niche strength and weakness of the entity
arising out of the various factors such as linkages with the suppliers
and the customers of the entity being rated. The other aspects
such as the bargaining power of the entity with its suppliers/
customers, the strategic tie up with them, the relative importance of
the entity to the consumer etc. is also taken into account while
evaluating the business risk.
The other areas considered under business risk are relationship with
the suppliers and major customers, market competition, regulatory
environment (Price controls etc.) as well as entry barriers/ restrictions
and the government policies.
A. Operating Efficiency
The operating efficiency of the entity is evaluated taking into account
the cost trends of raw material and their impacts to analyses if the
entity is facing or likely to face pressure on this front. Similarly, the
sales trends are also evaluated to understand the market penetration of
the entity.
The business risk thus essentially evaluates the long-term
sustainability and viability of the operations taking into account the
contributory aspects.

2. MANAGEMENT RISK:

This is the most important aspect of the evaluation. The quality and
capability of the management are crucial and has bearing on the
performance of an enterprise, as the success of an enterprise solely
rest on the capabilities, competencies and resourcefulness of the
promotors. This is so because a SME may not have a large
organization to take care of various functional aspects of the entity. In
a vast majority of the SME’s, the main promotor looks after the

49
important functional areas. Management risk assessment focuses on
the following aspects:
Quality
Competence
Governance
Risk attitude
Resourcefulness

A. Promotor/Management:
The promotor influences the decision making and future course
of the company. The analyst during the management discussion and
during site visit as the ease may be, understand and evaluate certain
aspects about the promotor viz.
Promotor’s background and previous business undertaken and the
track record Growth plans, risk appetite, style of conducting business
(cautious or aggressive) Promotor’s ability and intention of
professionalizing management Promotor’s integrity/Value system
(adherence to local laws, environmental laws, litigation etc.)
Resourcefulness

B. Management Practice:
The following aspects are evaluated

*Soundness of accounting practices

*Extent of group transactions & their disclosures
*Presence of planning team
*Automation of operations and use of technology

The Financials of an enterprise is a clear indicator of its performance

and SMERA carriers out its analysis based on the financial statements
made available by the entity being rated. The focuses on accounting
quality, track record of financial performance in the terms of the
growth, profitability, liquidity, level of indebtedness, level of reach,
outside liabilities, quality of receivables and quality of investments.
Aspects such as contingent liabilities, auditor’s qualifications and
notes to accounts are studied in detail.

49
While a number of ratios are considered important ones are
debt/equity, return on capital employed, profitability margin, asset
turnover, interest cover, debt service coverage, cash accruals to debt
and the size of net worth. The relative importance placed on different
ratios would depend on the nature of business.
The historical financial analyses considered by the analyst are:
Trends: sales, profitability (ROCE, operating profit, PAT), debt-
equity, debt protection cover
(interest coverage ratio; debt service coverage ratio).
Operating efficiency: cost as a percentage of sales, productivity per
employee etc.
Margins: Operating profit margins, PAT margins etc.
Liquidity: Current ratio, quick ratio, inventory days, receivable days,
payable days, working capital days.
Return Measures: Return on net worth, ROCE, Return on assets etc.
Solvency: Debt/Equity mix, debt service coverage ratio, interest
coverage ratio etc. These
factors are compared with the nearest peers to find the relative risk
standing.

49