Tag: Corporate Governance

Management Notes

Some important provisions of Banking Regulation Act of 1949

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Different types of banks, such as commercial banks, cooperative banks, rural banks, and private sector banks exist in India. The Reserve Bank of India (RBI) is the governing body for regulating and supervising the banks. Banking Regulation Act, 1949 is an Act that provides a framework for regulating the banks of India. The Act came into force on 16th March 1949. This Act gives RBI the power to control the behaviour of banks. This Act was passed as Banking Companies Act, 1949. It did not apply to Jammu and Kashmir until 1956. This Act monitors the day-to-day operations of the bank. Under this Act, the RBI can licence banks, put ​​regulation over shareholding and voting rights of shareholders, look over the appointment of the boards and management, and lay down the instructions for audits. RBI also plays a role in mergers and liquidation.

Objectives of the Banking Regulation Act, 1949

  • To meet the demand of the depositors and provide them security and guarantee.
  • To provide provisions that can regulate the business of banking.
  • To regulate the opening of branches and changing of locations of existing branches.
  • To prescribe minimum requirements for the capital of banks.
  • To balance the development of banking institutions.

Provisons

  1. Prohibition of Trading (Sec. 8):

According to Sec. 8 of the Banking Regulation Act, a banking company cannot directly or indirectly deal in buying or selling or bartering of goods. But it may, however, buy, sell or barter the transactions relating to bills of exchange received for collection or negotiation.

  1. Non-Banking Assets (Sec. 9):

According to Sec. 9 “A banking company cannot hold any immovable property, howsoever acquired, except for its own use, for any period exceeding seven years from the date of acquisition thereof. The company is permitted, within the period of seven years, to deal or trade in any such property for facilitating its disposal”. Of course, the Reserve Bank of India may, in the interest of depositors, extend the period of seven years by any period not exceeding five years.

  1. Management (Sec. 10):

Sec. 10 (a) states that not less than 51% of the total number of members of the Board of Directors of a banking company shall consist of persons who have special knowledge or practical experience in one or more of the following fields:

(a) Accountancy;

(b) Agriculture and Rural Economy;

(c) Banking;

(d) Cooperative;

(e) Economics;

(f) Finance;

(g) Law;

(h) Small Scale Industry.

The Section also states that at least not less than two directors should have special knowledge or practical experience relating to agriculture and rural economy and cooperative. Sec. 10(b) (1) further states that every banking company shall have one of its directors as Chairman of its Board of Directors.

  1. Minimum Capital and Reserves (Sec. 11):

Sec. 11 (2) of the Banking Regulation Act, 1949, provides that no banking company shall commence or carry on business in India, unless it has minimum paid-up capital and reserve of such aggregate value as is noted below:

(a) Foreign Banking Companies:

In case of banking company incorporated outside India, aggregate value of its paid-up capital and reserve shall not be less than Rs. 15 lakhs and, if it has a place of business in Mumbai or Kolkata or in both, Rs. 20 lakhs.

It must deposit and keep with the R.B.I, either in Cash or in unencumbered approved securities:

(i) The amount as required above, and

(ii) After the expiry of each calendar year, an amount equal to 20% of its profits for the year in respect of its Indian business.

(b) Indian Banking Companies:

In case of an Indian banking company, the sum of its paid-up capital and reserves shall not be less than the amount stated below:

(i) If it has places of business in more than one State, Rs. 5 lakhs, and if any such place of business is in Mumbai or Kolkata or in both, Rs. 10 lakhs.

(ii) If it has all its places of business in one State, none of which is in Mumbai or Kolkata, Rs. 1 lakh in respect of its principal place of business plus Rs. 10,000 in respect of each of its other places of business in the same district in which it has its principal place of business, plus Rs. 25,000 in respect of each place of business elsewhere in the State.

No such banking company shall be required to have paid-up capital and reserves exceeding Rs. 5 lakhs and no such banking company which has only one place of business shall be required to have paid- up capital and reserves exceeding Rs. 50,000.

In case of any such banking company which commences business for the first time after 16th September 1962, the amount of its paid-up capital shall not be less than Rs. 5 lakhs.

(iii) If it has all its places of business in one State, one or more of which are in Mumbai or Kolkata, Rs. 5 lakhs plus Rs. 25,000 in respect of each place of business outside Mumbai or Kolkata? No such banking company shall be required to have paid-up capital and reserve excluding Rs. 10 lakhs.

  1. Capital Structure (Sec. 12):

According to Sec. 12, no banking company can carry on business in India, unless it satisfies the following conditions:

(a) Its subscribed capital is not less than half of its authorized capital, and its paid-up capital is not less than half of its subscribed capital.

(b) Its capital consists of ordinary shares only or ordinary or equity shares and such preference shares as may have been issued prior to 1st April 1944. This restriction does not apply to a banking company incorporated before 15th January 1937.

(c) The voting right of any shareholder shall not exceed 5% of the total voting right of all the shareholders of the company.

  1. Payment of Commission, Brokerage etc. (Sec. 13):

According to Sec. 13, a banking company is not permitted to pay directly or indirectly by way of commission, brokerage, discount or remuneration on issues of its shares in excess of 2½% of the paid-up value of such shares.

  1. Payment of Dividend (Sec. 15):

According to Sec. 15, no banking company shall pay any dividend on its shares until all its capital expenses (including preliminary expenses, organisation expenses, share selling commission, brokerage, amount of losses incurred and other items of expenditure not represented by tangible assets) have been completely written-off.

But Banking Company need not:

(a) Write-off depreciation in the value of its investments in approved securities in any case where such depreciation has not actually been capitalized or otherwise accounted for as a loss;

(b) Write-off depreciation in the value of its investments in shares, debentures or bonds (other than approved securities) in any case where adequate provision for such depreciation has been made to the satisfaction of the auditor;

(c) Write-off bad debts in any case where adequate provision for such debts has been made to the satisfaction of the auditors of the banking company.

Floating Charges:

A floating charge on the undertaking or any property of a banking company can be created only if RBI certifies in writing that it is not detrimental to the interest of depositors Sec. 14A. Similarly, any charge created by a banking company on unpaid capital is invalid Sec. 14.

  1. Reserve Fund/Statutory Reserve (Sec. 17):

According to Sec. 17, every banking company incorporated in India shall, before declaring a dividend, transfer a sum equal to 20% of the net profits of each year (as disclosed by its Profit and Loss Account) to a Reserve Fund.

The Central Government may, however, on the recommendation of RBI, exempt it from this requirement for a specified period. The exemption is granted if its existing reserve fund together with Securities Premium Account is not less than its paid-up capital.

If it appropriates any sum from the reserve fund or the securities premium account, it shall, within 21 days from the date of such appropriation, report the fact to the Reserve Bank, explaining the circumstances relating to such appropriation. Moreover, banks are required to transfer 20% of the Net Profit to Statutory Reserve.

  1. Cash Reserve (Sec. 18):

Under Sec. 18, every banking company (not being a Scheduled Bank) shall, if Indian, maintain in India, by way of a cash reserve in Cash, with itself or in current account with the Reserve Bank or the State Bank of India or any other bank notified by the Central Government in this behalf, a sum equal to at least 3% of its time and demand liabilities in India.

The Reserve Bank has the power to regulate the percentage also between 3% and 15% (in case of Scheduled Banks). Besides the above, they are to maintain a minimum of 25% of its total time and demand liabilities in cash, gold or unencumbered approved securities. But every banking company’s asset in India should not be less than 75% of its time and demand liabilities in India at the close of last Friday of every quarter.

  1. Liquidity Norms or Statutory Liquidity Ratio (SLR) (Sec. 24):

According to Sec. 24 of the Act, in addition to maintaining CRR, banking companies must maintain sufficient liquid assets in the normal course of business. The section states that every banking company has to maintain in cash, gold or unencumbered approved securities, an amount not less than 25% of its demand and time liabilities in India.

This percentage may be changed by the RBI from time to time according to economic circumstances of the country. This is in addition to the average daily balance maintained by a bank.

Again, as per Sec. 24 of the Banking Regulation Act, 1949, every scheduled bank has to maintain 31.5% on domestic liabilities up to the level outstanding on 30.9.1994 and 25% on any increase in such liabilities over and above the said level as on the said date.

But w.e.f. 26.4.1997 fortnight the maintenance of SLR for inter-bank liabilities was exempted. It must be remembered that at the start of the preceding fortnights, SLR must be maintained for outstanding liabilities.

  1. Restrictions on Loans and Advances (Sec. 20):

After the Amendment of the Act in 1968, a bank cannot:

(i) Grant loans or advances on the security of its own shares, and

(ii) Grant or agree to grant a loan or advance to or on behalf of:

(a) Any of its directors;

(b) Any firm in which any of its directors is interested as partner, manager or guarantor;

(c) Any company of which any of its directors is a director, manager, employee or guarantor, or in which he holds substantial interest; or

(d) Any individual in respect of whom any of its directors is a partner or guarantor.

Note:

(ii) (c) Does not apply to subsidiaries of the banking company, registered under Sec. 25 of the Companies Act or a Government Company.

  1. Accounts and Audit (Sees. 29 to 34A):

The above Sections of the Banking Regulation Act deal with the accounts and audit. Every banking company, incorporated in India, at the end of a financial year expiring after a period of 12 months as the Central Government may by notification in the Official Gazette specify, must prepare a Balance Sheet and a Profit and Loss Account as on the last working day of that year, or, according to the Third Schedule, or, as circumstances permit.

At the same time, every banking company, which is incorporated outside India, is required to prepare a Balance Sheet and also a Profit and Loss Account relating to its branch in India also. We know that Form A of the Third Schedule deals with form of Balance Sheet and Form B of the Third Schedule deals with form of Profit and Loss Account.

It is interesting to note that a revised set of forms have been prescribed for Balance Sheet and Profit and Loss Account of the banking company and RBI has also issued guidelines to follow the revised forms with effect from 31st March 1992.

According to Sec. 30 of the Banking Regulation Act, the Balance Sheet and Profit and Loss Account should be prepared according to Sec. 29, and the same must be audited by a qualified person known as auditor. Every banking company must take previous permission from RBI before appointing, re­appointing or removing any auditor. RBI can also order special audit for public interest of depositors.

Moreover, every banking company must furnish their copies of accounts and Balance Sheet prepared according to Sec. 29 along with the auditor’s report to the RBI and also the Registers of companies within three months from the end of the accounting period.

Management Notes

Statutory obligation, Legal Procedure for establishment of NGO, Online & Offline, NGO Registration process, Documentation, Eligibility to start an NGO

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Different types of NGO Laws in India

The following laws would be applicable for NGO registration in India:

Trust: It is a public charitable institution registered under the Charity Commissioner’s office having jurisdiction over the state. Maharashtra has adopted the Bombay Public Trust Act, 1950, which has become a model for the various other states. The law that regulates trusts are the Indian Trusts Act, 1882.

Societies: According to the Societies Registration Act, 1860, states have adopted their version from the model Societies Act, 1860. A society is considered as an independent form of organization. It has broad membership, which elects a governing body periodically for managing the affairs of the society. The body is accountable to members. There are multiple types of societies that may be registered under the Act which includes:

  • Charitable societies;
  • Societies which are established for the promotion of science, literature, or fine arts, education; and
  • Public Art Museums, and galleries, and certain other types of museums.

Company: A Company has been described under the Companies Act, 2013. The Act permits “Section 8 companies” to be formed. According to the Act, Section 8 Companies are those which are formed for the purpose of art, religion, charity, and other useful objects. Internal governance of Section 8 Company is similar to that of a society. The members of the committee or governing council are elected by the members of the Charitable Company. A section 8 company can be dissolved. The registration process takes time and requires the memorandum of association and articles of association that has to be submitted with the ROC (registrar of companies).

Trade Union: According to the Trade Union Act, 1926, a Trade Union is defined as temporary or permanent combination formed to regulate and control the relations of employees and employers.

Multi-State Co-operative Societies: The Multi-State Co-operative Societies Act, 2002 has substituted the previous Act of 1984. The Act provides for the compliance of both primary and federal co-operatives.

Legal compliances of NGO

There are various legal compliances of the NGO are as follows:

  • Permanent Account Number (PAN): This is a unique alphanumeric combination issued to all the juristic entities- identifiable under the Income Tax Act, 1961. The PAN number is used as the national identification number.
  • Tax Deduction Number (TAN): It is the Tax Deduction and Collection Account Number. It is a ten digit alpha-numeric number required to be obtained by all the individuals who are responsible for deducting or collecting tax (TDS) at source. The TAN number is required to be quoted at the following places:
  1. A challan depositing the tax so deducted,
  2. A certificate issued against the tax deducted,
  3. All returns furnished in respect of the tax deducted at source, etc.

Legal Procedure for establishment of NGO, Online & Offline

Non-Governmental Organization (NGO) is an entity that works for charitable purposes. NGO is known as a not-for-profit making organization that works towards the promotion of arts, science, sports, education, research, social welfare, religion, charity, and more. NGOs in India are of various types which are registered under Trust Act, Society Registrations Act, or the Companies Act.

NGO is registered in the form of Section 8 Company under the Companies Act, 2013. Companies registered under this act are all not-for-profit and charitable trusts. The only difference between a trust or society and NGO is that the latter is registered under the Ministry of Corporate Affairs (MCA).

Before Applying for NGO Registration

Obtain Digital Signature Certificate (DSC)

Proposed directors are supposed to provide Digital Signatures, as the registration forms are to be digitally signed before filing the form online. Certifying agencies under the Government of India issue Digital Signature Certificate (DSC). Applicants need to obtain either Class 2 or Class 3 category of DSC. The fees for obtaining DSC vary and depend on the certifying agency.

Apply for Director Identification Number (DIN)

Applicants are required to apply for a DIN for the proposed directors of the company. Filling of application Form DIR-3 helps in the allotment of DIN. Scanned documents like self-attested copies of PAN, identity, and address proof of directors are to be submitted along with the application form. The application form can be submitted online on the Ministry of Corporate Affairs (MCA) portal. The documents are required to be attested by a practicing chartered accountant, company secretary, or cost accountant.

Steps to Register as an NGO

Step 1: The applicant needs to obtain a DSC of the proposed Directors of an NGO. After a DSC is obtained, file Form DIR-3 with the ROC to get a DIN.

Documents to attach for DIN application:

    Identity and Address Proofs: Passport, Voter’s ID card, Aadhar card, electricity bill, driving license, PAN card, house tax receipt, business address proof, society’s name, etc.

Step 2: After the approval of DIR-3, the respective ROC will allot a DIN to the proposed directors.

Step 3: Next the applicant needs to file Form INC-1 with the ROC to apply for a company name. Preference of 6 names can be applied from which one would be allotted by ROC, depending on the availability.

Step 4: After the approval from ROC, file Form INC-12 to apply for a license for an NGO

Documents to attach with INC-12:

  • Declaration, as per Form INC-14 (Declaration from CA)
  • Declaration, as per Form INC-15
  • Draft Article of Association (AOA) and Memorandum of Association (MOA) as per Form INC-13
  • Estimated Income & Expenditure for next 3 years

Step 5: After the Form’s approval, the NGO license will be issued in Form INC-16.

Step 6: After the applicant has obtained the NGO license, he/she needs to file SPICE Form 32 with ROC for incorporation. After the ROC has checked and verified the documents, it issues a Certificate of Incorporation with a unique Corporate Identification Number (CIN).

Eligibility to Start an NGO

  • Minimum 2 directors required if NGO is to be incorporated as a private limited company
  • Minimum of 3 directors required, in case of incorporation as a public limited company
  • The maximum number of members is 200, in the case of a private limited company
  • No member limit in case of a public limited company
  • No fee is charged if registering as an NGO

Forms Required for NGO Registration

  • DIR 12 Appointments of Directors
  • DIR 2 Consent of Directors
  • DIR 3 Application to ROC to get DIN
  • INC 1 Business name approval
  • INC 12 Applications for License
  • INC 13 Memorandum of Association
  • INC 14 Declaration from a practicing CA
  • INC 15 Declaration from each person making the application
  • INC 16 License to incorporate as NGO
  • INC 22 Situation of Registered Office
  • INC 7 Applications for Company’s Incorporation
  • INC 8 Declarations
  • INC 9 Affidavit from each director and subscriber
Management Notes

Trust and Society Registration Act

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Procedure for Registration of Trust under the Indian Trusts Act,1882

Decide the following:

a) Name of the trust

b) Address of the trust

c) Objects of the trust (Charitable or Religious)

d) One settlor of the trust

e) Two trustees of the trust (minimum)

f) Property of the trust: Movable or immovable property (normally a small amount of cash/cheque is given to be the initial property of the trust, in order to save on the stamp duty).

Prepare a Trust Deed on stamp paper of the requisite value. The rates of stamp duty varies from state to state. Kindly check the current rate of stamp duty applicable in your state.

Requirement for registration of Trust Deed with the Local Registrar under the Indian Trusts Act, 1882:

a) Trust Deed on stamp paper of requisite value.

b) One passport size photograph & copy of the proof of identity of the settlor.

c) One passport size photograph & copy of the proof of identity of each of the two trustees.

d) One passport size photograph & copy of the proof of identity of each of the two witnesses.

e) Signature of settlor on all the pages of the Trust Deed.

t) Witness by two persons on the Trust Deed.

Go to the local Registrar and submit the Trust Deed, along with one photocopy, for registration. The photocopy of the Deed should also contain the signature of settlor on all the pages. At the time of registration, the settlor and two witnesses are required to be personally present, along with their identity proof in the original.

The Registrar retains the photocopy and returns the original registered copy of the Trust Deed.

The Societies Registration Act, 1860

The Societies Registration Act, 1860 is legislation in India which allows the registration of entities generally involved in the benefit of society education, health, employment etc.

The British Indian Empire, with a wish to encourage such activities and to promote the formal organisation of groups of likeminded people, incorporated the Act 21 of 1860, in other words, The Societies Registration Act, 1860 (21 of 1860), which came into force on 21 May 1860. The Act continues until today and being an Act of Parliament, comes under the Right to Information Act, wherein the government is legally responsible to give any information requested by any citizen of India with respect to any society.

Closing of a Registered Society

A society is legally registered under the Societies Registration Act, 1860. The Indian Societies Registration Act of 1860 was enacted under the British Raj in India, but is largely still in force in India today. It provides for the registration of literary, scientific and charitable societies. Under the Act societies may be formed, by way of a memorandum of association, by any seven or more people associated for any literary, scientific or charitable purpose. The memorandum of association has to be filed with the Registrar of Societies. The memorandum has to contain the name of the society, its objects, and the names, addresses, and occupations of the members of the governing body, by whatever name it may be called, duly signed for consent by all the members forming the society.

Provisions under the Act

Under Section 13 of the Societies Registration Act, 1860; a number of provisions relating to dissolution of a society and adjustments of its affairs are stated. It is stated that Any number not less than three-fifths of the members of any society may decide and determine that it shall be dissolved, and consequently it shall be dissolved without any delay, or at the time then agreed upon by the members, and all necessary steps are to be taken for the disposal and settlement of the property of the society, its claims and liabilities, according to the rules of the said society applicable thereto, if any were made at the time of the registration of the society and if not, then as the governing body shall find a convenient expedient, provided that, in the incident of any dispute or disagreement arising among the said governing body or the members of the society, the adjustment of its affairs shall be referred to the principal Court of original civil jurisdiction of the district in which the chief building of the society is situated and the Court shall make such order in the matter as it shall deem required by law and practically apt. The assent is necessarily required provided that no society shall be dissolved unless three-fifths of the members shall have expressed a wish for such dissolution by their votes delivered in person, or by proxy, at a general meeting convened for the purpose. There is also a concept of Government consent. It is provided in the aforesaid statute that whenever any Government is a member of, or a sponsor or contributor to, or otherwise interested in any society registered under this Act, such society shall not be dissolved without the consent of the Government of the State where the society was registered. There are also several state amendments given under this section.

Purpose of Society Registration

A society registration can be done for the development of fine arts, science, or literature or else for the diffusion of purposeful knowledge or charitable purposes of political education. According to section 20 of the Society Act, 1860, a society registration can be done for the following purposes:

  • Promotion of fine arts.
  • Diffusion of political education.
  • Grant of charitable assistance.
  • Promotion of science and literature.
  • Creation of military orphan funds.
  • Maintenance or foundation of galleries or public museum.
  • Maintenance or foundation of reading rooms or libraries.
  • Promotion or diffusion or instruction of useful knowledge.
  • Collections of natural history.
  • Collections of mechanical and philosophical inventions, designs, or instruments.

Registration of a Society in India

A Society can be created by a minimum of 7 or more persons. Apart from persons from India, companies, foreigners, as well as other registered societies can also register for the Memorandum of association of the society.

Similar to Partnership firms, society can also be either unregistered or registered. But, only the registered societies will be able to withstand consigned properties and/or have an ensemble filed against or by the society.

Society registration is maintained by state governments. Thus, the application for society registration must be created to the specific authority of the state, where the registered office of the society is situated.

For Society registration, the establishing members must agree with the name of society first and then prepare for the Memorandum, followed by Rules & Regulations of the society.

Selection of a Name

When selecting a name for society registration, it is vital to understand that according to Society Act, 1860, an identical or similar name of a currently registered society will not be allowed. Moreover, the proposed name shall not suggest for any patronage of the state government or the government of India or fascinate the provisions of the Emblem & Names Act, 1950.

Memorandum of Association

The Memorandum of Association of the society along with Rules & Regulations of society must be signed by every establishing member, witness by Gazetted Officer, Notary Public, Chartered Accountant, Oath Commissioner, Advocate, Magistrate first-class or Chartered Accountant with their official stamping and complete address.

The memorandum must contain the name of the society, the object of the society. Also, it consists of details of members of the society registration along with their names, addresses, designations, and occupations. The following document has to be prepared, submitted and signed for the sake of registration:

  • Requesting society registration by providing covering letter, signed by all establishing members.
  • Duplicate copy of Memorandum of Association of society along with certified copy.
  • Duplicate copy of Rules & Regulations of society along with duplicate copy duly signed by all establishing members.
  • Address proof of registered office of society as well as no-objection certificate (NOC) issued by landlord.
  • Affidavit avowed by secretary or president of society declaring relationship among subscribers.
  • Few minutes of meeting regarding the society registration along with providing some essential documents.

Dissolution of Society by Court

As per the provisions of this act, on the application of the Registrar under section 13A or under section 24 or on an application made by not less than one- tenth of the members of a society registered under this Act, the Court of competent jurisdiction referred to in section 13 may make an order for the dissolution of the society on any of the following grounds, viz.

(a) That the society has contravened any provision of this Act or of any other law for the time being in force and it is just and equitable that the society should be dissolved

(b) That the number of the members of the society is reduced below seven;

(c) That the society has ceased to function for more than three years preceding the date of such application;

(d) That the society is unable to pay its debts or meet its liabilities; or

(e) That the registration of the society has been cancelled under section 12D on the ground that its activities or proposed activities have been or are or will be opposed to public policy.

It has to be noted that when an order for the dissolution of a society is made under sub-section (1) or sub-section (2), all necessary steps for the disposal and the settlement of the property of the society, its claims and liabilities and any other adjustment of its affairs take place in manner as the Court may direct.

Matters of profit upon dissolution

Under section 14 of the act, upon the dissolution of the society, no member is entitled to receive any profits. If upon the dissolution of a society registered under this Act there remains, after the satisfaction of all its debts and liabilities, any property whatsoever, the same will not be paid to or disseminated and distributed among the members of the said society or any of them, but is required by law to be given to some other society which is to be determined by the votes of not less than three-fifths of the members present individually or by proxy at the time of the dissolution, or, in default thereof, by such Court as aforesaid. It is important to note here that this clause does not to apply to the Joint-Stock Companies. Provided, however, that this clause shall not apply to any society which has been founded or established by the contributions of share-holders in the nature of a Joint-Stock Company

Management Notes

Impact of Globalization on Indian Businesses

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Globalization in Indian businesses refers to the integration of the Indian economy with the global market, allowing free flow of goods, services, capital, and technology. It has opened new opportunities for Indian companies to expand internationally, attract foreign investment, and adopt modern practices. While it boosts growth, competitiveness, and innovation, it also brings challenges like increased competition and the need for constant upskilling and modernization.

Positive Impact of Globalization on Indian Businesses:

  • Increased Foreign Investment

Globalization has significantly boosted foreign direct investment (FDI) in India. With economic liberalization in the 1990s, India opened its doors to multinational companies, leading to increased capital inflow. This investment helped build modern infrastructure, advanced technology, and create employment opportunities. Foreign companies established joint ventures, subsidiaries, and partnerships, providing Indian firms access to global markets and expertise. Sectors like IT, telecommunications, automobile, and pharmaceuticals saw tremendous growth. Overall, globalization has transformed India into an attractive investment destination, enhancing productivity, improving standards, and integrating Indian businesses more deeply with the global economy.

  • Access to Global Markets

One of the most notable benefits of globalization for Indian businesses is access to international markets. Indian companies can now export goods and services across the world, boosting revenue and reputation. The IT and software services sector, in particular, gained global recognition, with firms like TCS, Infosys, and Wipro serving clients worldwide. Market expansion beyond national borders reduced dependence on the domestic market and diversified risk. Additionally, globalization encouraged Indian businesses to meet global quality standards, improving overall product and service excellence. This international exposure has strengthened India’s position in the global business landscape.

  • Technology Transfer and Innovation

Globalization facilitated the transfer of advanced technologies from developed nations to India. Through collaborations, joint ventures, and foreign partnerships, Indian businesses gained access to modern machinery, processes, and knowledge systems. This exposure enhanced operational efficiency, innovation, and competitiveness. Industries such as manufacturing, pharmaceuticals, and agriculture adopted new techniques to improve productivity and reduce costs. Globalization also encouraged investment in research and development, helping businesses to innovate and cater to global consumer demands. As a result, Indian companies have become more technologically adept, fostering a culture of continuous improvement and global benchmarking.

  • Improved Quality Standards and Efficiency

With the entry of global players into the Indian market, local businesses were pushed to improve their quality standards to stay competitive. This competitive environment encouraged Indian firms to adopt international best practices in production, customer service, and management. Certification standards like ISO became common, ensuring consistency and excellence. Businesses streamlined operations, reduced wastage, and optimized resources to enhance efficiency. These improvements not only benefited customers with better products and services but also helped companies reduce costs and increase profitability. Thus, globalization led to a more disciplined, efficient, and quality-focused business environment in India.

  • Employment Generation and Skill Development

Globalization has played a vital role in generating employment in India, especially in sectors like IT, BPO, manufacturing, and retail. The rise of multinational companies and outsourcing opportunities created millions of jobs for skilled and semi-skilled workers. Additionally, globalization led to skill development through corporate training programs, exposure to international work cultures, and increased emphasis on English and technical skills. Youth across India, including those in smaller towns, benefited from these opportunities. As a result, the workforce became more competent and globally employable. This socio-economic upliftment has contributed to India’s emergence as a global talent hub.

Negative Impact of Globalization on Indian Businesses:

  • Increased Competition for Local Businesses

Globalization brought global brands and multinational corporations into India, intensifying competition for local businesses. Small and medium enterprises (SMEs), which often lack resources, technology, and global exposure, struggle to compete with well-established international players. These global firms offer better quality, branding, and pricing due to economies of scale. As a result, many local businesses have either shut down or suffered reduced market share and profitability. This tough competition has led to the decline of traditional industries, crafts, and indigenous products, affecting the livelihoods of many small business owners and workers dependent on them.

  • Threat to Domestic Industries

The liberalization of trade allowed an influx of cheap imported goods into the Indian market, especially from countries like China. These low-cost products often outprice locally manufactured items, harming domestic industries such as textiles, toys, electronics, and handicrafts. The imbalance in trade affects local production and can lead to shutdowns, job losses, and reduced investment in indigenous industries. Over-reliance on imports also makes the Indian economy vulnerable to external shocks. While consumers may benefit from cheaper goods, the long-term impact on domestic production capabilities and economic self-reliance is a serious concern.

  • Cultural Erosion and Consumerism

Globalization introduced Western lifestyles, values, and consumer behavior into Indian society. As global brands, media, and entertainment became widely accessible, there has been a gradual shift in cultural preferences and consumption patterns. Traditional Indian products, foods, attire, and values often take a backseat to global trends. This cultural erosion affects Indian businesses rooted in local traditions, including artisanal crafts, ayurvedic products, and ethnic fashion. Moreover, globalization promotes consumerism and materialism, leading to increased spending and a shift away from sustainable practices. It creates a homogenized culture, threatening India’s rich cultural and economic diversity.

  • Job Insecurity and Labor Exploitation

While globalization has created jobs, it has also led to job insecurity and labor exploitation. Many multinational companies operate in India to benefit from low labor costs, often offering temporary, contract-based, or low-paying jobs without proper social security. Workers, especially in unorganized sectors, face long hours, poor working conditions, and limited legal protection. Automation and outsourcing further threaten job stability in traditional industries. Additionally, globalization encourages a “hire-and-fire” model, affecting the mental and financial well-being of workers. This growing job insecurity undermines the long-term stability and inclusiveness of the Indian labor market.

  • Unequal Growth and Regional Imbalance

Globalization has led to uneven economic development in India. Urban centers like Bengaluru, Delhi, and Mumbai have become major beneficiaries of globalization, attracting investment and development. In contrast, rural and backward regions continue to lag behind, lacking infrastructure, opportunities, and access to global markets. This urban-rural divide has widened income inequality and led to large-scale migration to cities, putting pressure on urban resources. Small towns and villages often miss out on the benefits of globalization, resulting in social and economic disparities. Addressing these regional imbalances is essential for inclusive and sustainable growth.

Management Notes

Impact of changes in Technology on Business

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Technology has revolutionized the way companies conduct business by enabling small businesses to level the playing field with larger organizations. Small businesses use an array of tech everything from servers to mobile devices to develop competitive advantages in the economic marketplace. Small business owners should consider implementing technology in their planning process for streamlined integration and to make room for future expansion. This allows owners to create operations using the most effective technology available.

  • Impact on Operating Costs

Small business owners can use technology to reduce business costs. Basic enterprise software enables a firm to automate back office functions, such as record keeping, accounting and payroll. Mobile tech allows home offices and field reps to interact in real time. For example, field reps can use mobile apps to record their daily expenses as they incur them and have them sync automatically with accounting software back at the office.

  • Impact on Customer Outreach

Thanks to social media and the internet, reaching consumers is easier than ever. Using a do-it-yourself website tool and various social platforms, even the newest small business can post content that helps interested customers find them. Instead of paying third parties for advertising in print or electronic media, today’s businesses are in charge of their own customer outreach. The result is a reduced cost that levels the playing field between large corporations and startups.

  • Securing Sensitive Information

Business owners can also use technology to create secure environments for maintaining sensitive business or consumer information. Many types of business technology or software programs are user-friendly and allow business owners with only minor backgrounds in information technology to make the most of their tools and features.

  • Improved Communication Processes

Business technology helps small businesses improve their communication processes. Emails, texting, websites and apps, for example, facilitate improved communication with consumers. Using several types of information technology communication methods enable companies to saturate the economic market with their message. Companies may also receive more consumer feedback through these electronic communication methods.

Technology also improves inter-office communication as well. For example, social intranet software gives employees a centralizes portal to access and update internal documents and contracts and relay relevant data to other departments instantly. These methods also help companies reach consumers through mobile devices in a real-time format.

  • Increased Employee Productivity

Small businesses can increase their employees’ productivity through the use of technology. Computer programs and business software usually allow employees to process more information than manual methods. Business owners can also implement business technology to reduce the amount of human labor in business functions. This allows small businesses to avoid paying labor costs along with employee benefits.

Even fundamental business tech can have a major impact on employee performance. For example, by placing employee-performance appraisal information in an online framework, supervisors can easily create measurable goals for their employees to reach and sustain company objectives. Business owners may also choose to expand operations using technology rather than employees if the technology will provide better production output.

  • Broaden Customer Bases

Technology allows small businesses to reach new economic markets. Rather than just selling consumer goods or services in the local market, small businesses can reach regional, national and international markets. Retail websites are the most common way small businesses sell products in several different economic markets.

Websites represent a low-cost option that consumers can access 24/7 when needing to purchase goods or services. Small business owners can also use internet advertising to reach new markets and customers through carefully placed web banners or ads.

  • Collaboration and Outsourcing

Business technology allows companies to outsource business functions to other businesses in the national and international business environment. Outsourcing can help companies lower costs and focus on completing the business function they do best. Technical support and customer service are two common function companies outsource.

Small business owners may consider outsourcing some operations if they do not have the proper facilities or available manpower. Outsourcing technology also allows businesses to outsource function to the least expensive areas possible, including foreign countries.

Management Notes

Parties to Negotiable Instruments

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Negotiable instruments are financial documents that guarantee the payment of a specific amount of money, either on demand or at a set time. These instruments play a crucial role in the modern financial system by facilitating the transfer of funds and extending credit. The most common types of negotiable instruments include cheques, promissory notes, and bills of exchange. Each of these instruments involves various parties, whose roles and responsibilities are defined by the nature of the instrument itself.

  1. Drawer

The drawer is the person who creates or issues the negotiable instrument. In the context of a cheque, the drawer is the account holder who writes the cheque, instructing the bank to pay a specified amount to a third party.

  1. Drawee

The drawee is the party who is directed to pay the amount specified in the negotiable instrument. In the case of cheques, the drawee is the bank or financial institution where the drawer holds an account. For bills of exchange, the drawee is the person or entity who is requested to pay the bill.

  1. Payee

The payee is the person or entity to whom the payment is to be made. The payee is named on the instrument and has the right to receive the amount specified from the drawee, upon presentation of the instrument.

  1. Endorser

An endorser is someone who holds a negotiable instrument (originally payable to them or to bearer) and signs it over to another party, making that party the new payee. This action, known as endorsement, transfers the rights of the instrument to the endorsee.

  1. Endorsee

The endorsee is the person to whom a negotiable instrument is endorsed. The endorsee gains the right to receive the payment specified in the instrument from the drawee, subject to the terms of the endorsement.

  1. Bearer

In the case of a bearer instrument, the bearer is the person in possession of the negotiable instrument. Bearer instruments are payable to whoever holds them at the time of presentation for payment, not requiring endorsement for transfer.

  1. Holder

The holder of a negotiable instrument is the person in possession of it in due course. This means they possess the instrument either directly from its issuance or through an endorsement, intending to receive payment from the drawee.

  1. Holder in Due Course

A holder in due course is a special category of holder who has acquired the negotiable instrument under certain conditions, including taking it before it was overdue, in good faith, and without knowledge of any defect in title. Holders in due course have certain protections and can claim the amount of the instrument free from many defenses that could be raised against the original payee.

Management Notes

Approaches to the Study of Business Ethics

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Ethical means relating to morals, values, and principles that define what is right and wrong. It involves acting with integrity, honesty, fairness, and responsibility. Ethical behavior respects the rights of others, follows accepted standards, and promotes justice and trust in personal, professional, and social contexts.

Deontological Approach:

The deontological approach emphasizes moral duty over consequences. It holds that certain actions are inherently right or wrong, regardless of outcomes. For instance, lying or breaking a promise is considered unethical, even if it leads to a positive result.

This perspective has strong philosophical and religious roots. Scriptures like the Bhagavad Gita, Quran, and Guru Granth Sahib define moral absolutes, treating ethics as unchanging divine commandments. Similarly, philosopher Immanuel Kant argued that morality must be universal—actions should be judged based on whether they could become a universal law. For example, truthfulness is a principle everyone should follow unconditionally.

Deontology relies on intrinsic moral principles, such as those found in the Ten Commandments or Dharma, to determine right and wrong.

Teleological Approach (Consequentialism):

The teleological approach judges actions based on their outcomes. An act is ethical if it maximizes overall societal welfare, even if the means are questionable. For example, lying to save a life may be justified if it results in greater good.

Philosophers like John Stuart Mill and Jeremy Bentham supported utilitarianism, which measures morality by an action’s net benefit to society. An act is ethical if it creates more happiness than harm—not just for the individual, but for society as a whole.

For instance, breaking a contract may benefit one party but harm societal trust in business dealings. Thus, teleological ethics prioritizes collective well-being over rigid moral rules.

Emotive Approach:

Proposed by A.J. Ayer, the emotive approach argues that moral judgments are subjective expressions of personal emotions rather than universal truths. What one person considers ethical may differ based on feelings and perspectives.

For example, tax evasion may seem acceptable to an individual if they believe the system is unfair, even though society deems it unethical. Similarly, refusing military service may be seen as immoral by society but justified by personal anti-war beliefs.

An extension of this theory is virtue ethics, which focuses on personal integrity, character, and long-term ethical consistency rather than rigid rules. This allows individuals to rely on community standards without complex moral calculations.

Justice Approach:

The justice approach demands fairness, equality, and impartiality in ethical decisions. It opposes discrimination based on caste, gender, religion, or economic status, aligning with constitutional values like those in the Indian Constitution.

In organizations, this means uniform enforcement of rules—whether for a CEO or an entry-level employee. For example, harassment policies should apply equally to all, ensuring unbiased treatment.

This approach upholds the principle that ethical decisions must be free from favoritism, ensuring equitable treatment for all.

Moral-Rights Approach:

This approach emphasizes protecting fundamental human rights, such as those enshrined in the Indian Constitution and the U.N. Declaration of Human Rights. Ethical behavior must respect:

  • Right to safety (e.g., protection from hazardous products)

  • Right to truth (e.g., no fraudulent business practices)

  • Right to privacy (e.g., unauthorized data collection is unethical)

For instance, companies must ensure product safety and truthful advertising to uphold consumer rights. Violations, like privacy breaches, are considered morally unjustifiable.

Management Notes

Principles and Scope of Business Ethics

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Business ethics refers to the application of moral principles and standards to business behavior and decision-making. It involves evaluating what is right or wrong in the workplace, considering fairness, honesty, integrity, responsibility, and respect for stakeholders. Business ethics guides companies in maintaining transparency, building trust, and complying with laws while also considering social and environmental impacts. Ethical businesses strive not only for profit but also for long-term sustainability and positive contributions to society. In today’s globalized world, ethical conduct is essential for reputation, customer loyalty, employee satisfaction, and avoiding legal issues or public backlash.

Principles of Business Ethics:

  • Integrity

Integrity is the foundation of ethical business conduct. It refers to being honest, transparent, and consistent in actions and decisions, even when no one is watching. Businesses that operate with integrity build trust with employees, customers, investors, and the public. It involves fulfilling promises, avoiding deception, and being accountable for one’s actions. Integrity strengthens organizational culture, reduces corruption, and ensures that decisions are guided by truth and fairness rather than convenience or profit. Upholding integrity at all levels ensures long-term credibility and protects the organization from ethical lapses and reputational harm.

  • Accountability

Accountability means taking responsibility for one’s actions, decisions, and their consequences. In business, this applies to individuals, teams, and organizations as a whole. Ethical businesses acknowledge their mistakes, make efforts to correct them, and learn from them. Accountability encourages transparency, as it demands that actions be justifiable to stakeholders. It also promotes a culture of trust and responsibility where employees are motivated to act ethically. In the corporate context, accountability extends to financial reporting, compliance with laws, and delivering on promises made to customers, employees, shareholders, and the community.

  • Fairness

Fairness in business ethics means treating all stakeholders justly and without bias or favoritism. It involves offering equal opportunities, practicing non-discrimination, and promoting diversity and inclusion. Fair treatment extends to hiring, promotion, compensation, and customer service. Ethical companies also ensure fairness in competition and supplier relationships. By avoiding exploitation and upholding justice, businesses create an environment where employees and partners feel valued and respected. Fairness fosters loyalty, reduces internal conflicts, and enhances an organization’s reputation as an ethical and responsible player in the market.

  • Transparency

Transparency involves openly sharing relevant information with stakeholders and avoiding secrecy or deceit. Ethical businesses disclose information honestly in areas such as pricing, product quality, financial status, and business practices. Transparency builds trust, especially in a time when consumers and investors demand greater openness. It also supports informed decision-making, prevents misunderstandings, and holds the organization accountable. Transparent communication, both internally and externally, helps businesses avoid legal trouble, promotes ethical behavior, and reinforces the brand’s credibility. In governance, transparency in reporting and leadership decisions is key to public confidence.

  • Respect for Stakeholders

Respecting stakeholders means recognizing the rights, interests, and dignity of everyone affected by business decisions, including employees, customers, investors, suppliers, and the community. Ethical businesses actively listen to stakeholder concerns, treat people humanely, and foster positive relationships. This principle includes respecting labor rights, consumer rights, and environmental responsibilities. It discourages harmful practices such as exploitation, false advertising, and environmental degradation. Companies that respect their stakeholders often experience higher employee morale, customer satisfaction, and community support, which contributes to sustainable success and a positive corporate image.

  • Adherence to the Law

Obeying the law is a basic but critical ethical principle. Legal compliance ensures businesses operate within the rules set by governments, industry regulators, and international bodies. This includes labor laws, tax laws, environmental regulations, and consumer protection acts. Ethical businesses go beyond mere compliance by also following the spirit of the law—acting in a way that is just and responsible. Failing to adhere to laws can lead to penalties, lawsuits, and reputational damage. Upholding this principle maintains order, builds public trust, and protects stakeholders from unethical or illegal conduct.

Scope of Business Ethics:

  • Employee Ethics and Workplace Behavior

One major area within the scope of business ethics is employee behavior and internal workplace ethics. This includes issues like honesty, integrity, discipline, equal treatment, workplace safety, and fair compensation. Ethical organizations create policies to promote diversity, inclusion, and respect for employee rights. Ethical HR practices also discourage discrimination, harassment, and exploitation. Encouraging a culture of transparency, whistleblower protection, and accountability is essential. Employees are expected to follow codes of conduct, and management must model ethical leadership. Ensuring an ethical workplace boosts morale, productivity, and organizational loyalty.

  • Consumer Ethics and Customer Relations

Businesses have ethical responsibilities toward consumers, which fall under the scope of consumer ethics. This involves ensuring product safety, transparent pricing, honest advertising, and protection of customer data. Misleading advertisements, false claims, and defective products violate ethical principles. Ethical businesses provide accurate product information, fair return policies, and prompt customer service. They must avoid exploiting consumer trust and prioritize customer satisfaction. In today’s digital age, protecting consumer privacy and data security is a growing ethical obligation. Ethical customer relations help build trust, brand loyalty, and a strong corporate reputation.

  • Corporate Governance and Transparency

Corporate governance is a critical area within business ethics that deals with the responsibilities of directors, executives, and shareholders. Ethical governance ensures transparency, accountability, and fairness in decision-making. This includes proper disclosure of financial statements, ethical audit practices, and prevention of insider trading or fraud. Companies are expected to act in the best interest of all stakeholders—not just shareholders. Transparent governance fosters investor confidence and aligns the company’s objectives with ethical standards. Strong ethical governance prevents corruption, ensures compliance with regulations, and supports sustainable and long-term business success.

  • Environmental Ethics and Sustainability

Environmental concerns are now a significant part of the scope of business ethics. Companies have a responsibility to minimize environmental harm, reduce pollution, and promote sustainable practices. Ethical businesses strive to conserve resources, manage waste properly, and reduce their carbon footprint. Adopting green technologies, supporting renewable energy, and complying with environmental laws are ethical imperatives. Businesses are also expected to consider long-term ecological impacts in their strategies. Environmental ethics reflect a company’s commitment to future generations, corporate responsibility, and alignment with global sustainability goals like the UN Sustainable Development Goals (SDGs).

  • Ethics in Global Business and Social Responsibility

In a globalized economy, businesses operate across diverse cultures, legal systems, and ethical norms. The scope of business ethics includes respecting international labor standards, avoiding exploitation, and being culturally sensitive in global operations. Ethical companies reject practices like child labor, forced labor, and unethical sourcing. Corporate Social Responsibility (CSR) is also part of this scope, where businesses actively contribute to societal well-being through community development, education, and philanthropy. Upholding ethical standards globally enhances brand image and ensures compliance with international norms, while supporting social and economic development in various regions.

Management Notes

Intermediaries (Players) in the New Issue Market

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The new issue market / activity was regulated by the Controller of Capital Issues (CCI) under the provisions of the Capital Issues (Control) Act, 1947 and the exemption orders and rules made under it. With the repeal of the Act and the consequent abolition of the office of the CCI in 1992, the protection of the interest of the investors in securities market and promotion of the development and regulation of the market/ activity became the responsibility of the SEBI.

Merchant Bankers (Managers to the Issue):

SEBI regulations 1992 prescribes that all public issues should be managed by at least one merchant banker functioning as Lead manager or Managers to the Issue.

“Merchant banker means any person/institution who is engaged in the business of issue management either by making arrangements regarding selling, buying or subscribing to securities as manager, consultant, advisor or rendering corporate advisory services in relation to such issue management.” [Sec 2(cb) SEBI (Merchant Bankers) (Third Amendment) Regulations, 2006]

Depending on the size of the issue there can be more than one manager to the issue. If the size exceeds Rs. 400 crores there can be five or more managers as agreed by SEBI. These Managers to the issue assist the promoters in designing the capital structure, drafting the prospectus and application forms, listing of shares, appointment of registrars and other operators in the new issue, arrangement of long term loans- marketing of public issues etc. The lead manager prepares Draft Red Herring Prospectus (RHP) and is responsible for any irregularities in the same. The company should enter into a memorandum of understanding with the managers to the issue in the form prescribed by SEBI.

The lead merchant bankers appointed by the Issuer Company are referred to as the Book Running Lead Managers (BRLM) or Book Runners (If the issue is through book building process).

Underwriters

Underwriters: Another important intermediary in the new issue/ primary market is the underwriters to issue of capital who agree to take up securities which are not fully subscribed.

They make a commitment to get the issue subscribed either by others or by themselves. Though underwriting is not mandatory after April 1995, its organization is an important element of primary market. Underwriters are appointed by the issuing companies in consultation with the lead managers / merchant bankers to the issues.

Methods of Underwriting

An underwriting agreement may take any of the following forms:

  • Standing behind the Issue:

Under this method the underwriter guarantees the sale of a specified number of shares within a specified period. If the public do not subscribe to the specified amount of issue, the underwriter will buy the balance. It is also called full underwriting.

  • Outright Purchase:

In this method the underwriters purchases the entire issues at an agreed price and sell them to investors.

  • Consortium Method:

In mega issues several underwriters join together to underwrite. They form a consortium/syndicate for this purpose. It is also called syndicate underwriting.

  • Partial Underwriting:

The underwriter undertakes the guarantee for only a part of the issue offered to the public and his liability is limited to the extent of unsubscribed portion of the issue underwritten by him under this method.

  • Joint Underwriting:

The issuing company may enter into underwriting agreement with more than one underwriter in case of large issues. Each under-writer undertakes the guarantee for the issue of a certain portion of the whole issue offered to the public and shares the risk.

  • Firm Underwriting:

Under this method, the underwriter undertakes to buy or subscribe a certain number of shares irrespective of the subscription from the public. Underwriter will be liable for shares underwritten as well as that part of issue unsubscribed by the public.

  • Sub-Underwriting:

Under this method, the underwriter enters into agreement with some other underwriters to undertake guarantee for the issue of whole or part of the issue under-written by him.

Underwriting has the following advantages:

(i) Issuing company is assured of procuring the required funds from issue through underwriting.

(ii) Under writers supply expert advice and valuable information with regard to capital market conditions, general response of the investors etc. to the issuing company.

(iii) Underwriting helps promoters to retain control over the management of the company, because they distribute the issue over a large number of investors scattered in different part of the country.

(iv) Prestige of the underwriting agencies increases the goodwill of the issuing company.

(v) Prospective investors are also benefited through the service of underwriters as they provide essential information about the issuing companies and encourage them to save money is corporate securities.

Underwriters charge a commission for their service which is known as underwriting commission. The underwriters must be registered with SEBI. There are three SEBI registered underwriters now. E.g., Citicorp Capital Markets Ltd., State Bank of India etc.

Brokers to the Issue

Brokers are persons mainly concerned with the procurement of subscription to the issue from the prospective investors. The appointment of brokers is not compulsory and the companies are free to appoint any number of brokers. The managers to the issue and the official brokers organize the preliminary distribution of securities and procure direct subscription from as large or as wide a circle of investors as possible. A copy of the consent letter from all the brokers to the issue, should be filed with the prospectus to the ROC. The brokerage applicable to all types of public issue of industrial securities is fixed at 1.5%, whether the issue is underwritten or not. The listed companies are allowed to pay a brokerage on private placement of capital at a maximum rate of 0.5%. Brokerage is not allowed in respect of promoters’ quota including the amounts taken up by the directors, their friends and employees, and in respect of the rights issues taken by or renounced by the existing shareholders. Brokerage is not payable when the applications are made by the institutions/ bankers against their underwriting commitments or on the amounts devolving on them as underwriters consequent to the under subscription of the issues.

Registrars to the Issue (Registrar and Share Transfer (R&T) Agents):

R&T agent plays a significant role in a public issue along with the lead managers. Registrars are persons appointed in consultation with lead managers to assist the issue management functions. Their work relates to pre-issue management, management during the currency of issue, pre- allotment Work, allotment work and post allotment work.

It is their duty to collect the application forms from bankers to the issue, process them for allotment and issue certificate of allotment.

Major functions of registrars can be listed as follows:

(i) Design and draft the format of application form for the merchant banker or lead manager.

(ii) Collect application forms from banks.

(iii) Scrutinize application forms.

(iv) Finalize the allotment as per the basis approved by the stock exchange.

(v) Ensures that the corporate action for crediting of shares to the demat accounts of the applicants is done

(vi) Print refund orders and letters of allotment.

(vii) Submit all statements to the company for their final approval.

(viii) Help the company in getting the shares listed.

Bankers to an Issue

The bankers to an issue are engaged in activities such as acceptance of applications along with application money from the investor in respect of capital and refund of application money.

Registration: To carry on activity as a banker to issue, a person must obtain a certificate of registration from the SEBI. The applicant should be a scheduled bank. Every banker to an issue had to pay to the SEBI an annual free for Rs. 5 lakh and renewal fee or Rs. 2.5 lakh every three years from the fourth year from the date of initial registration. Non-payment of the prescribed fee may lead to the suspension of the registration certificate.

Syndicate Members:

The Book Running Lead Managers to the issue appoint the Syndicate Members, who enter the bids of investors in the book building system. Syndicate Members are commercial or investment banks registered with SEBI who also carry on the activity of underwriting in IPO.

They work as intermediaries for Issuer Company and the buyers of the IPO stocks. Investors submit their bids for IPO shares through Syndicate Members appointed by the Issuer Company. They are also known as ‘the Members of the Syndicate’. The Members of the Syndicate circulate copies of the Red Herring Prospectus along with the bid cum application form to potential investors. After receiving the bid for IPO Shares from an investor, Syndicate Member enters bidding detail into the electronic bidding system and generates a Transaction Registration Slip (TRS) for each price and demand option and gives the same to the bidder.

Bangalore University B.com Notes

Business Ethics Bangalore University B.com 2nd Semester NEP Notes

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Unit 1 Nature and Essence of Business Ethics {Book}
Meaning of Ethics, Scope & Importance of Ethics VIEW
Types of Ethics VIEW
Business Ethics Introduction, Meaning, Importance VIEW VIEW
Characteristics of Business Ethics VIEW
Factors Influencing Business Ethics VIEW
Principles & Scope of Business Ethics VIEW
Approaches to the study of Business Ethics VIEW
Arguments for and against Business Ethics VIEW
Unit 2 Personal & Professional Ethics {Book}
Personal Ethics Meaning VIEW
Principles of Personal Ethics, Importance VIEW
Emotional Honesty VIEW
Virtue of Humility VIEW
Karma Yoga concept VIEW
Professional Ethics Concept VIEW
Emergence of Professional Ethics VIEW
Need for Professional Ethics VIEW
Ethical Dilemmas in Profession: Healthcare, Education, Corporate, Social work VIEW
Reasons for the crisis of Professional Ethics (Nepotism, favoritism etc.) VIEW
Moral Entrepreneur VIEW
Unit 3 Business Ethics in Marketing & Finance {Book}
Meaning of Marketing, Need of Ethics in Marketing VIEW
Ethical dilemmas in Marketing VIEW
Unethical practices in Marketing VIEW
Ethical issues in Advertising, Promotions and Distribution VIEW
Common deceptive marketing practices VIEW
Role of Consumerism VIEW
Meaning of Finance, Ethics in Finance, Need of Ethics in Finance VIEW
Scope & Code of Ethics in Finance VIEW
Unethical practices in Finance VIEW
Creative Accounting Definition, Importance and Methods VIEW
Earnings Management & Accounting Fraud VIEW
Hostile takeovers in India VIEW
Case study: Kingfisher Airlines Scam, Satyam Scam. VIEW
Unit 4 {Book}
HRM Meaning, Definition, Need VIEW VIEW
HRM Types VIEW
Areas of HRM ethics VIEW
Ethical issues in HR, Unethical practices of HRM VIEW
Meaning & Importance of Workplace Ethics VIEW
Role of Management in inculcating workplace ethics VIEW
Factors shaping ethical behavior at work VIEW
Importance of Employee Code of Conduct VIEW
Ethical Leadership VIEW
IT – Ethical issues relating to Computer Applications VIEW
Information Security VIEW VIEW
Security Policies & Procedures, Information Protection VIEW VIEW
Ethical codes in Information Technology VIEW VIEW
Reducing threat to Information Systems VIEW
Objectives and Features of Cyber Laws in India VIEW VIEW
Objectives and Features of The Information Technology Act 2000 VIEW
Computer Crime VIEW VIEW
Computer Viruses Meaning, Types & Prevention VIEW
Ecological Ethics VIEW
Environment Protection and pollution control by businesses VIEW
VIEW VIEW
Unit 5 Corporate Governance & Corporate Social Responsibility {Book}
Corporate Culture Meaning, Characteristics, Importance VIEW
Positive and Negative impact of corporate culture in business VIEW
Role of CEOs in shaping Business culture VIEW VIEW
Corporate Governance Meaning, Scope, Principles, Benefits VIEW
Corporate Governance Characteristics VIEW
Corporate Governance Limitations VIEW
Corporate Governance Norms VIEW
Changes in Corporate Governance issues as per Companies Act 2013 VIEW
Various Committees on Corporate Governance VIEW
Board of Directors VIEW
Board of Directors Appointment & Duties VIEW VIEW
Cadbury Committee VIEW
Narasimhan Committee VIEW
Narayana Murthy Committee VIEW
Structure of Corporate Governance VIEW
CSR: Concept, Scope, Types, Various models VIEW
CSR Principles VIEW
CSR Strategies VIEW
Importance of CSR in contemporary society VIEW
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