Course Title: Investment Banking and Financial Services

Merchant Banking

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Session Objectives

At the end of Session Students will be able to :

 Discuss the meaning of Consumer Finance
Analyse the types of consumer finance

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Consumer Finance

• The term ‘Consumer Financing’ is when a business or retailer offer

customer financing options to its customers using either their own
funds or the funds of a lending company or bank
• This allows the consumer to purchase an item that they would
otherwise not be able to, or may not want to pay for using
immediate funds
• The term is typically used to describe debt for everyday goods and
services
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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Consumer Finance

• Consumer finance refers to the segment of the financial services

industry that provides credit to consumers who are unable to
directly borrow from a bank or a financial institutions.
• Consumer finance is the highest growing segment in the Indian
Financial service Sector
• Includes wide variety of loans, credit cards, debit cards, mortgage
loans etc

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Consumer Finance

• Credit cards: Used by consumers to finance everyday purchases

• Auto loans: Used by consumers to finance the purchase of a vehicle
• Student loans: Used by consumers to finance education

• Personal loans: Used by consumers for personal purposes

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Credit Cards

• Phenomenal growth in the last few years

• Modern trend of thinking in India

• No longer an item of luxury

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Growth of Credit Card

• Rising Consumerism

• Online Purchasing
• Improved Payment infrastructure
• Competition and Lower Costs

• Co-Branding
• Reward points

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Players in Authorizing and Settling a Credit Card
Transaction

• Cardholder

• Merchant
• Acquiring bank(Merchant Bank)
• Issuing Bank

• Card Association

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Types of Credit Cards
Regular
• Among the different kinds of Credit Card is the regular card -- like
the HDFC Bank Platinum Plus Credit Card
• It’s great as your first Credit Card.

• It offers all the convenience and safety of a Credit Card and

combines it with benefits like Reward Points
• There are also free add-on cards, which you can give to your
spouse, adult children, parents, brothers or sisters

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Types of Credit Cards
Premium
• As your income and needs increase, you can upgrade to a premium
card like the HDFC Bank Visa Signature Credit Card
• A premium card gives you higher credit limits, more magnificent
Reward Points and more benefits
• It also provides some lifestyle-related benefits such as free lounge
access at airports
• This is particularly useful if you are a frequent flyer and spent a lot
of time in airports
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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Types of Credit Cards

• Co-branded cards

• Cash Back cards

• Life time credit card
• Low interest Credit Card

• Business Credit Cards

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Advantages to Digital payment

• Easy and Convenient

• Pay or send money from anywhere

• Written record
• Less Risk

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences
 Demerit of Digital Payment

• Difficult for non technical person

• Risk of data theft

• Overspending

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Faculty of Management and Commerce ©. Ramaiah University of Applied Sciences