Page 228 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 10: Credit Rating and Consumer Finance

Securitisation: Securitisation involves pooling assets together and turning them into a tradable Notes
security. In the case of loans it is pooling the receivables from a loan and then selling them to a
third party.

10.8 Review Questions

1. What do you think is the advantage for an economy to have multiple credit rating agencies?
2. What are the limitations of multiple credit rating agencies?
3. Do you think that SEBI itself is unable to handle the rating issue of the credit companies
and that is why it registers credit rating agencies under it?
4. Evaluate the working of:
(a) CRISIL

(b) CARE
(c) DCR India
(d) ONICRA as credit rating agencies in India.
5. Critically evaluate the contribution of credit rating system in Indian economy.

6. What are the suggestions that you would give to various credit rating agencies operating
in India for further improvement and why?
7. What do you mean by Consumer finance?

8. "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." Explain.
9. Discuss the concept of Retail consumer finance.

10. Discuss the restrictions on the listing of securities by the promoters.

Answers to Self Assessment

1. credit worthiness
2. ability, willingness
3. Securities and Exchange Board of India

4. records, documents
5. two
6. three
7. ONICRA

8. Duff & Phelps Credit Rating India Private Ltd
9. forex debt obligations
10. promoter
11. consumer

12. Consumer finance
13. retail banking

LOVELY PROFESSIONAL UNIVERSITY 223