Macro Economy Of FrancePRESENTED BY:
107140592003 GUNJAN OJHA107140592044 KAJAL ODEDARA107140592032 HEMANGI RATHOD107140592052 REENU NADAR107140592050 NEHALI THAKKAR107140592059 JINAL SHAH
Economy of French Republic
France is in the midst of transition from a well to-do modern economy .
The government has partially or fully privatized many large companies,
banks, and insurers, and has ceded stakes in such leading firms as Air
France, France Telecom, Renault, and Thales.
It maintains a strong presence in some sectors, particularly power, public
transport, and defense industries.
France is the most visited country in the world and maintains the third
largest income in the world from tourism With at least 75 million foreign
tourists per year.
France has weathered the global economic crisis better than most other
big European Union economies.
Economy Of France
France's real GDP contracted 2.5% in 2009.
It recovered somewhat in 2010, while the unemployment rate
increased from 7.4% in 2008 to 9.5% in 2010.
The government budget deficit rose sharply from 3.4% of GDP
in 2008 to 6.9% of GDP in 2010, while France's public debt
rose from 68% of GDP to 82% over the same period.
Paris is terminating stimulus measures, eliminating tax
credits, and freezing most government spending to bring the
budget deficit under the 3% euro-zone ceiling by 2013.
Study of GDP Growth Of France
There is a minimum employment wage in France that is regulated
by the French Government.
These minimum wages are called ― SalarieMinimum de
Croissance (or SMIC for short), and are set at around 8.86 Euros
per hour of labor.
Moreover the wages are paid at least once every 30 days, mostly
at the end of each month, and payment is made through either
check or deposit into the employee‘s bank account.
In Comparison to INDIA, France has a better way of calculating the
wages to be given to the employees with respect to their work.
Opportunities in France
European union
The crises was preceded by long period of rapid credit growth ,low-risk
premiums,
The ongoing recession is thus likely to leave deep and long-lasting
traces on economic performance
The financial crisis has had a pervasive impact on there al economy of
the EU.
Slow down is widely perceived to require an adjustment of fiscal
positions towards close to balance the economy .
The unemployment rate is forecast to increase to close to 11% in the
EU by 2010.
Financial crises
The emerging economies in Asia–in particular China–and oil
exporters are disposed to assume their role as US creditor owing
to their large national saving surpluses.
The French have been experiencing difficulties in paying for their
loans and debts.
The financial crisis offers no job opportunities for them
They are now getting into too many debts because they cannot
find money to pay these transactions because of this crisis
Moreover, financial institutions are also closing down.
Effect of Global Crises on France
Creating two state agencies that will provide funds to sectors
where they are needed-
One entity has issued up to $480 billion in guarantees on inter-
bank lending issued before December 31, 2009, and was valid for
five years.
Other entity will use a $60 billion fund to recapitalize struggling
companies by allowing the government to buy stakes in the firms.
President Sarkozy announced that the French government would
take a tougher stance toward French banks that seek state aid. Up
to that point, France had injected $15 billion in the French banking
system
France Efforts in reducing crises
The Indian banking system has had no direct exposure to the sub-
prime mortgage assets or to the failed institutions. In fact, our
banks continue to remain safe and healthy.
External demand, as measured by merchandize exports, accounts
for less than 15 per cent of our GDP.
The Indian corporate sector's access to external funding has
markedly increased in the last five years. In the five-year period
2003-08, the share of investment in India's GDP rose by 11
percentage points.
Economic crises faced by India
The big risk is a possible repeat of what happened in 1996:
Projects that are halfway to completion, or companies that are
stuck with cash flow issues on businesses that are yet to reach
break-even, will run out of cash.
One danger meanwhile is of a dip in the employment market.
There is already anecdotal evidence of this in the IT and financial
sectors, and reports of quiet downsizing in many other fields as
companies cut costs.
Significant drop in new hiring --and that will change the
complexion of the job market.
Cont…..
India has taken an array of monetary and fiscal measures, in quick
succession, to contain inflationary pressures.
The Reserve Bank had, within four weeks in October, lowered
reservations and reduced a key interest rate to provide some 250,000
crores of liquidity for banks to finance businesses and consumers
The confidence and strength to the Indian economy is its sound
financial sector with its well-regulated and well-capitalized banking
system.
RBI projects that the annual rate of inflation would be down to 7
percent by March 2009.
Even at 7.5 percent, India will remain these fastest growing economy
The Prime-Minister has set-up a high powered group chaired by him to
closely monitor the evolving macro-economic
Measure to control the economic crises in India
If we see in this manner a lot of decisions which are taken up by
the French government are ought to be learned and applied in
India
The political relations positively are used by French government
for the progress and growth of the economy
The French economy is well managed and some positive and right
decisions has took it to the greater heights and apart from
developed country
India’s success is also remarkable being a fastest growing
developing country but need to adopt some more good policies
from French economy.
Conclusion
SEM --IV
Banking Industry Of France
French banking industry is constantly opening its business world wide.
Payments via debit card can be made in one payment at the end of
each month rather than immediately.
Pin-code needs to be used with each over-the-counter card transaction.
These measures successfully cut down on credit card debt and fraud
problems in France & other countries also.
French mortgage is a very attractive option to many investors,
normally offer 100% mortgage finance to foreigners, with interest
rates capped at 4%.
Fixed rate mortgages are available for long terms only of between
10 and 20 years maximum term for a French mortgage is 20 years
or up to the age of 70 ,which ever is sooner.
Introduction
Online banking is a highly popular option and it is widely used,
however quality can vary greatly and most banks make a monthly
charge for the use of online services
BNP Paribas is one of the main banks of Europe and France, the
product of the merger between Banqu National de Paris and
Paribas
BNP Paribas is divided into three individual business units
Retail banking,
Corporate and investment banking
Investment solutions,
Which is where you will find real estate services
Cont….
1. Money markets history The French Fungible Treasury bond rates trend is positive. After a downfall of 2.50% in summer2010, it then sky rocketed
between late 2010 and early 2011, reaching 3.80% for instance in mid-April 2011.
2.)Short-term rates (for variable and capped rates) Short term Interest rates in money markets reflect the price at
which banks lend money to one another over short periods. These rates serve as the reference for variable rate loans. Banks
add a margin of between 0, 60% and 1,50%, to the short rate term.
3.)Long-term rates(for fixed rates) Thisrateisthereferenceusedbybankstosettheinterestrateappliedfo
r15yearsfixedratemortgages. Ratesappliedfortheotherloantermsarecalculatedbyaddingorsubtr
actingapproximately0.15%forevery5yearphaseaboveorbelowa15yearsterm.
French Money Market
Subsidiary-BNP Paribas IndiaSolutionsPrivateLtd. Subsidiary-BNP Paribas Mutual Fund Subsidiary-BNP Paribas Investment Services Private Ltd. Subsidiary- Arval India Private Limited Subsidiary- Segece India Pvt. Ltd Joint venture –SBI Life Insurance Co. Ltd Joint venture –Geojit BNP Paribas Financial Services Ltd Joint venture-BNP Paribas Real Estate & Infrastructure Advisory
Services Private Limited Joint venture- Sundaram BNP Paribas Home Finance Ltd Joint venture - SREI Equipment Finance Pvt. Ltd Joint Venture – BNP Paribas Securities India Joint Venture-BNP Paribas Sundaram Global Securities Operations
Pvt. Ltd
BNP –PARIBAS investment in India
BNP Paribas India Solutions Private Limited (BNPPISPL),
incorporated in 2005, is a subsidiary of BNP Paribas S.A.
BNP PISPL aims to provide info-centre, data- warehousing, IT and
back-office processing services, with major focus on capital
markets information technologies as well as regional –
organization -and- methods.
1)Jointventure-SBILifeInsuranceCoLtd
BNP PISPL provides the bank's business lines and functions a
competitive and efficient platform to cope with the ever growing
operational and informal on technology requirements.
-SBI owns 74% of the total capital and BNPParibas Cardiff there
maintaing 26%.
BNP PAIBAS as India Solutions ltd.
Sundaram BNP Paribas Mutual Fund has been set up as a Trust
under the Indian Trust Act, 1882.
It has over 7000 crores (USD1.55billion) as Assets under
Management (AUM) as on November 13, 2006.
It has eleven equity, thirteen debt and one-hybrid products
catering to various categories of investors.
It has been allotted CPR1 ranking by CRISIL for three consecutive
quarter sending December 2005, March 2006 – and –June - 2006.
SUNDARAM BNP PARIBAS ASSET MANAGEMENT
Geojit BNP Paribas Financial Services is one of the leading retail
stock brokers in India, with a strong presence in the Gulf
countries. Listed on the National Stock Exchange (NSE)and on the
Bombay Stock Exchange (BSE)
BNP Paribas Securities India Private Limited is the company's joint-
venture with BNP Paribas for institutional brokerage.
Sundaram Home Finance Limited was incorporated on July2, 1999,
under the Companies Act 1956 and Union de Credit pourle
Batiment (UCB) a wholly-owned subsidiary of BNP Paribas, France
Geojit BNP-Paribas
It had entered into an agreement on 9th May 2007, regarding a
strategic partnership in housing finance in India whereby UCB will
acquire a 49.9% stake in Sundaram Home Finance Limited, a
subsidiary of Sundaram Finance Limited.
Consequent to the completion of the regulatory approvals, the
name of the Company has been changed to Sundaram BNP
Paribas Home Finance Limited effective 28th November 2007.
Cont…
State Bank of India Paris which is in France offers the full range of
International Banking products and services.
They are capable of handling customer„s international
transactions with speed, efficiency and a professional touch.
Following is an indicative list of products and services offered in
the International Banking area.
1) PRODUCTS OFFERED (DOMESTIC/CROSS BORDER)
2) SERVICES OFFERED
a) Collection of Bills
b) Advising
c)Confirmation of L/Cs
d) Negotiation/Reimbursement/Discounting of Bills drawn under
L/Cs
SBI’S presence in France
Credits and Loans
Credits and Loan State Bank of India, Paris offers both fund-based
and non fund based facilities to business and industry to take care
of their long term and short term requirements.
A)Product
Buyer’s Credit/Supplier’s Credit
Bank Guarantees
B)Direct lending
Revolving Loans/Lines of Credit
Overdrafts/Loans against cash collaterals
Financing of International Trade
Cont….
SBI, Paris offers both fund – based and non fund based facilities to
business and industry to take care of their long term and short term
requirements.
The branch caters to the business interest of French exporters and our
charges are very competitive for India -related-business.
Products offered
Letter of Credits/Stand by Letter of Credit
Services-offered
1.Speedy collection of Export Proceed
2.Free assistance in compilation of Documents
3.Supplier’s Credit / Buyer’s Credit
Deposits:They accept Fixed Deposits for a minimum amount of EUR 3.0
and for USD and Pounds 5.0. The minimum period is 3months.
Trade Finance
State Bank of India Paris is a member of Deposit Insurance
Corporation.
Saving Bank and Term Deposits are eligible for deposit insurance
from the Deposit Insurance Corporation, subjected ways to
maximum coverage limitations as out lined in their brochure
"Protecting Your Deposits” and provided they are in Euro, are
payable in France
Insurance
Type of Deposit: Term Deposit, Callable at the discretion of the Bank
Currency of Deposit : Euro as well as US Dollar
Deposit Amount : The minimum amount of Deposits hall be
USD/Euro 10,000.00
Period of Deposit :One year but callable at par at the discretion of
the Bank on each interest reset payment date, which is three
months.
Issue Price: 100%
Maturity Payment : 100% with interest.
Rate of Interest : 3 months LIBOR plus 10BP .(For Amounts higher
than USD/Euro 100,000.00 a further plus rate is available).
Premature payment: Not allowed, however, Dem and Loan upto 75%
of the principal amount can be given to the account holder.
SBI special deposit plus scheme
SBI is the largest commercial bank in the country and has reach all
over India.
It contributes highest economy development of the company through
various capital market instruments.
BNP Paribas having existence in 80 countries is one of the most
widespread banking network.
As India is a developing nation French banks are eager to enter
Indian market for the business purposes.
The various joint ventures and business in one other country gives a
global platform for our nation’s banking industry.
France , which has been leading efforts to curb financial crisis, has
proposed a package of measures estimated to cost over $500 billion.
Conclusion