Page 226 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 10: Credit Rating and Consumer Finance

5. The order of suspension or cancellation of certificate of registration is published by the Notes
Board in at least …………………… daily newspapers.
6. The period of validity of certificate of registration shall be …………………… years.

7. ……………………, a path breaking innovative organization analysis data and provides
individual credit rating solutions that enable the lender or service provider to take a
valued judgment on financial and other transactions.

8. The services provided by …………………… (DCR India) are considered to be at par with
other leading providers of credit rating services in India.
9. Duff & Phelps Credit Rating India Private Ltd (DCR India) has played an important role in
rating India's …………………… .
10. …………………… means a person who holds ten percent or more, of the shares of the
credit rating agency.
10.4 Consumer Finance

Consumer finance has to do with the lending process that occurs between the consumer and a
lender. In some instances, the lender may be a bank or financial institution. At other times, the
lender may be a business that offers in house credit in exchange for the business of the consumer.
Consumer finance can include just about any type of lending activity those results in the extension
of credit to a consumer.
Most people have received financial assistance in obtaining desirable products through the use
of consumer finance methods. In retail banking, the lender extends secured and unsecured loans
to consumers who wish to purchase automobiles, homes, or engage in other activities that
require substantial financing, such as remodeling a home. Generally, consumer lending of this
type caries some degree of competition, since the consumer with a solid credit rating can often
shop around and secure superior interest rates and terms for the loan agreement.
At the same time, not all forms of consumer finance are in the best interests of the consumer. In
many parts of the world, institutions are in the business of lending money even to consumers
with poor credit ratings, or who lack a reasonable ability to repay the borrowed funds. This can
take the form of credit card offers, loans with extremely high rates of interest included in the
finance structure of the loan, and other terms that will be difficult if not impossible for the
consumer to meet.

As with any type of financial arrangement, it is important for the consumer to understand the
exact nature of the commitment that is made as part of any consumer finance strategy. By
understanding and accepting the terms and conditions associated with any lending situation,
the consumer is pledging that the ability to repay within terms is present, and that the consumer
has every intention of complying with each component or section of the loan agreement. To this
end, it is in the best interests of the individual consumer to seek out the most desirable
arrangements for any type of consumer finance, taking care to avoid any situation that will
place an undue amount of stress on the resources in the possession of the consumer.

10.5 Retail Consumer Finance

Most people have received financial assistance in obtaining desirable products through the use
of consumer finance methods. In retail banking, the lender extends secured and unsecured loans
to consumers who wish to purchase automobiles, homes, or engage in other activities that
require substantial financing, such as remodeling a home.

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