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115-468: Axis Bank Limited , formerly known as UTI Bank (1993–2007), is an Indian multinational banking and financial services company headquartered in Mumbai , Maharashtra . It is India's third largest private sector bank by assets and fourth largest by market capitalisation. It sells financial services to large and mid-size companies, SMEs and retail businesses. As of 30 June 2016, 30.81% shares are owned by

230-450: A " qualifying special purpose entity " or " qSPE ". Because of these structural issues, the originator typically needs the help of an investment bank (the arranger ) in setting up the structure of the transaction. To be able to buy the assets from the originator, the issuer SPV issues tradable securities to fund the purchase. Investors purchase the securities, either through a private offering (targeting institutional investors ) or on

345-766: A basis in a national ethos , being ultimate without a specific nationhood, and that this lack of an ethos appears in their ways of operating as they enter into contracts with countries that have low human rights or environmental standards . In the world economy facilitated by multinational corporations, capital will increasingly be able to play workers, communities, and nations off against one another as they demand tax, regulation and wage concessions while threatening to move. In other words, increased mobility of multinational corporations benefits capital while workers and communities lose. Some negative outcomes generated by multinational corporations include increased inequality , unemployment , and wage stagnation . Raymond Vernon presents

460-432: A block of business (thereby locking in a degree of profits), the company has effectively freed up its balance to go out and write more profitable business. Off balance sheet : Derivatives of many types have in the past been referred to as " off-balance-sheet ". This term implies that the use of derivatives has no balance sheet impact. While there are differences among the various accounting standards internationally, there

575-825: A branch in the Dubai International Financial Centre and branches in Hong Kong . On 30 July 2007, UTI Bank changed its name to Axis Bank. In 2009, Shikha Sharma was appointed as the MD and CEO of Axis Bank. In 2013, Axis Bank's subsidiary, Axis Bank UK commenced banking operations. The Indian government intends to sell a 20.7% stake in Axis Bank in February 2014 for 57 billion rupees, equivalent to 925 million dollars. On 1 January 2019, Amitabh Chaudhry took over as MD and CEO. In year 2021,

690-427: A company would have three options to raise new capital: a loan , bond issue , or issuance of stock . However, stock offerings dilute the ownership and control of the company, while loan or bond financing is often prohibitively expensive due to the credit rating of the company and the associated rise in interest rates. The consistently revenue-generating part of the company may have a much higher credit rating than

805-689: A corporate office in Mumbai . The bank was promoted jointly by the Administrator of the Unit Trust of India (UTI), Life Insurance Corporation of India (LIC), General Insurance Corporation, National Insurance Company, The New India Assurance Company , The Oriental Insurance Corporation and United India Insurance Company . The first branch was inaugurated on 2 April 1994 in Ahmedabad by Manmohan Singh , then finance minister of India. In 2001 UTI Bank agreed to merge with Global Trust Bank , but

920-508: A corporation invests in a country in which it is not domiciled, it is called foreign direct investment (FDI). Countries may place restrictions on direct investment; for example, China has historically required partnerships with local firms or special approval for certain types of investments by foreigners, although some of these restrictions were eased in 2019. Similarly, the United States Committee on Foreign Investment in

1035-429: A free market system where there is little government interference. As a result, international wealth is maximized with free exchange of goods and services. To many economic liberals, multinational corporations are the vanguard of the liberal order. They are the embodiment par excellence of the liberal ideal of an interdependent world economy. They have taken the integration of national economies beyond trade and money to

1150-431: A high cost. Securitization allows such banks and finance companies to create a self-funded asset book. Lower capital requirements : Some firms, due to legal, regulatory , or other reasons, have a limit or range that their leverage is allowed to be. By securitizing some of their assets, which qualifies as a sale for accounting purposes, these firms will be able to remove assets from their balance sheets while maintaining

1265-490: A higher rate of return (on a risk-adjusted basis) Opportunity to invest in a specific pool of high quality assets : Due to the stringent requirements for corporations (for example) to attain high ratings, there is a dearth of highly rated entities that exist. Securitizations, however, allow for the creation of large quantities of AAA, AA or A rated bonds, and risk averse institutional investors, or investors that are required to invest in only highly rated assets, have access to

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1380-421: A lower risk, while the lower-credit quality subordinated classes receive a lower credit rating, signifying a higher risk. The most junior class (often called the equity class ) is the most exposed to payment risk. In some cases, this is a special type of instrument which is retained by the originator as a potential profit flow. In some cases the equity class receives no coupon (either fixed or floating), but only

1495-490: A million troops to help, and by February 1991, Iraqi forces were expelled from Kuwait. Due to the oil boycott from Kuwait and Iran, oil prices rose and quickly recovered. Saudi Arabia once again led OPEC, and thanks to assistance in defending Kuwait, new relations emerged between the USA and OPEC. Operation "Desert Storm" brought mutual dependence among the main oil producers. OPEC continued to influence global oil prices but recognized

1610-601: A number of Axis Bank employees were arrested for facilitating money laundering activities. Some media outlets highlighted the disproportionate number of cases involving the bank, and claimed that the bank's aggressive performance targets and internal culture fostered such activities and that the blame does not lie solely in the hands of arrested employees. An innovation hub located in Bengaluru has an in-house innovation team and an accelerator program, primarily working on artificial intelligence . With this launch, Axis Bank became

1725-437: A revolving period, an accumulation period, and an amortization period. All three of these periods are based on historical experience of the receivables. During the revolving period, principal payments received on the credit card balances are used to purchase additional receivables. During the accumulation period, these payments are accumulated in a separate account. During the amortization period, new payments are passed through to

1840-553: A scheme and the following companies became direct subsidiaries of Axis Capital: Axis Securities Ltd., Axis Finance Ltd. and Axis Securities Europe Ltd. later became direct subsidiaries of the bank in line with the RBI directives. In 2024, Axis Capital was barred from taking on any new debt assignments by SEBI, the Indian securities regulator, on account of irregularities it found in the non-convertible debentures (NCDs) issue of Sojo Infotel,

1955-434: A security. Additional protection can help a security achieve a higher rating, lower protection can help create new securities with differently desired risks, and these differential protections can make the securities more attractive. In addition to subordination, credit may be enhanced through: A servicer collects payments and monitors the assets that are the crux of the structured financial deal. The servicer can often be

2070-648: A senior and subordinate tranche. There are other benefits to an issuance trust: they provide more flexibility in issuing senior/subordinate securities, can increase demand because pension funds are eligible to invest in investment-grade securities issued by them, and they can significantly reduce the cost of issuing securities. Because of these issues, issuance trusts are now the dominant structure used by major issuers of credit card-backed securities. Grantor trusts are typically used in automobile-backed securities and REMICs (Real Estate Mortgage Investment Conduits). Grantor trusts are very similar to pass-through trusts used in

2185-554: A tech consultancy. Some commentators saw larger implications for Axis Bank including potentially higher non-performing assets hidden from the balance sheet. Axis Securities Ltd.was incorporated in India on 21 July 2006. The sales and securities business, including the retail broking business of Axis Capital Ltd, was merged with ASL on 25 May 2013. ASL is a wholly owned subsidiary of the bank and offers retail asset products, credit cards and retail brokerage services. Axis Private Equity Ltd.

2300-509: Is a "true sale" that takes place between the Originator (the parent company) and the SPE. This sale has to be for the market value of the underlying assets for the "true sale" to stick and thus this sale is reflected on the parent company's balance sheet, which will boost earnings for that quarter by the amount of the sale. While not illegal in any respect, this does distort the true earnings of

2415-575: Is a general trend towards the requirement to record derivatives at fair value on the balance sheet. There is also a generally accepted principle that, where derivatives are being used as a hedge against underlying assets or liabilities, accounting adjustments are required to ensure that the gain/loss on the hedged instrument is recognized in the income statement on a similar basis as the underlying assets and liabilities. Certain credit derivatives products, particularly Credit Default Swaps, now have more or less universally accepted market standard documentation. In

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2530-817: Is a participant in RBI's NEFT enabled participating banks list. Transaction banking : Axis Bank provides products and services related to transaction banking to customers in areas of current accounts, cash management services, capital market services, trade, foreign exchange and derivatives, cross-border trade and correspondent banking services, and tax collections on behalf of the Government and various State Governments in India. Investment banking and trustee services : The bank provides investment banking and trusteeship services through its owned subsidiaries. Axis Capital Limited provides investment banking services relating to equity capital markets, institutional stock brokering besides M&A advisory. Axis Trustee Services Limited

2645-412: Is a true sale, a financing, a partial sale, or a part-sale and part-financing. In a true sale, the originator is allowed to remove the transferred assets from its balance sheet: in a financing, the assets are considered to remain the property of the originator. Under US accounting standards, the originator achieves a sale by being at arm's length from the issuer, in which case the issuer is classified as

2760-422: Is a well-known example. A controlled amortization structure can give investors a more predictable repayment schedule, even though the underlying assets may be nonamortising. After a predetermined "revolving period", during which only interest payments are made, these securitizations attempt to return principal to investors in a series of defined periodic payments, usually within a year. An early amortization event

2875-580: Is an online, paperless Aadhaar card-based process for fulfilling KYC requirements to start investing in mutual funds without the submission of any documents. Axis Bank partnered with Visa Inc. to launch the 'eKYC' facility, and was the first organization in India to introduce biometrics -based KYC. Axis Capital Ltd. was incorporated in India as a wholly owned subsidiary of the bank on 6 December 2005 and received its certificate of commencement of business on 2 May 2006. Certain businesses of M/s. Enam Securities Pvt. Ltd. were merged with Axis Capital Ltd. as part of

2990-421: Is engaged in trusteeship activities, acting as a debenture trustee and as a trustee to various securitization trusts. The bank offers corporate banking, trade finance, treasury and risk management through the branches at Singapore, Hong Kong, DIFC, Shanghai and Colombo, and as also retail liability products from its branches at Hong Kong and Colombo . The representative office at Dhaka was inaugurated during

3105-455: Is generally a senior ("A") class of securities and one or more junior subordinated ("B", "C", etc.) classes that function as protective layers for the "A" class. The senior classes have first claim on the cash that the SPV receives, and the more junior classes only start receiving repayment after the more senior classes have been repaid. Because of the cascading effect between classes, this arrangement

3220-481: Is kept in a reserve account up to a specified level and then after that, all income is returned to the seller. Owner trusts allow credit risk to be mitigated by over-collateralization by using excess reserves and excess finance income to prepay securities before principal, which leaves more collateral for the other classes. Reduces funding costs : Through securitization, a company rated BB but with AAA worthy cash flow would be able to borrow at possibly AAA rates. This

3335-410: Is often handled through international arbitration . The actions of multinational corporations are strongly supported by economic liberalism and free market system in a globalized international society. According to the economic realist view, individuals act in rational ways to maximize their self-interest and therefore, when individuals act rationally, markets are created and they function best in

3450-430: Is often referred to as a cash flow waterfall . If the underlying asset pool becomes insufficient to make payments on the securities (e.g. when loans default within a portfolio of loan claims), the loss is absorbed first by the subordinated tranches, and the upper-level tranches remain unaffected until the losses exceed the entire amount of the subordinated tranches. The senior securities might be AAA or AA rated, signifying

3565-493: Is that payments on the receivables can shrink the pool balance and under-collateralize total investor interest. To prevent this, often there is a required minimum seller's interest, and if there was a decrease then an early amortization event would occur. In 2000, Citibank introduced a new structure for credit card-backed securities, called an issuance trust, which does not have limitations that master trusts sometimes do, that requires each issued series of securities to have both

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3680-453: Is the hard bullet , which guarantees that the principal will be paid on the scheduled maturity date. Hard bullet structures are less common for two reasons: investors are comfortable with soft bullet structures, and they are reluctant to accept the lower yields of hard bullet securities in exchange for a guarantee. Securitizations are often structured as a sequential pay bond , paid off in a sequential manner based on maturity. This means that

3795-462: Is the number one reason to securitize a cash flow and can have tremendous impacts on borrowing costs. The difference between BB debt and AAA debt can be multiple hundreds of basis points . For example, Moody's downgraded Ford Motor Credit's rating in January 2002, but senior automobile backed securities, issued by Ford Motor Credit in January 2002 and April 2002, continue to be rated AAA because of

3910-413: Is the risk of the debt being retired early. On the other hand, bullet or slug structures return the principal to investors in a single payment. The most common bullet structure is called the soft bullet , meaning that the final bullet payment is not guaranteed to be paid on the scheduled maturity date; however, the majority of these securitizations are paid on time. The second type of bullet structure

4025-865: Is usually a large corporation incorporated in one country that produces or sells goods or services in various countries. Two common characteristics shared by MNCs are their large size and centrally controlled worldwide activities. MNCs may gain from their global presence in a variety of ways. First of all, MNCs can benefit from the economy of scale by spreading R&D expenditures and advertising costs over their global sales, pooling global purchasing power over suppliers, and utilizing their technological and managerial experience globally with minimal additional costs. Furthermore, MNCs can use their global presence to take advantage of underpriced labor services available in certain developing countries and gain access to special R&D capabilities residing in advanced foreign countries. The problem of moral and legal constraints upon

4140-399: Is usually accumulated to some extent in a reserve or spread account, and any further excess is returned to the seller. Bond rating agencies publish ratings of asset-backed securities based on the performance of the collateral pool, the credit enhancements and the probability of default . When the issuer is structured as a trust, the trustee is a vital part of the deal as the gate-keeper of

4255-541: Is usually essential in securitizations, especially if it is an atypical securitization. Size limitations : Securitizations often require large scale structuring, and thus may not be cost-efficient for small and medium transactions. Risks : Since securitization is a structured transaction, it may include par structures as well as credit enhancements that are subject to risks of impairment, such as prepayment, as well as credit loss, especially for structures where there are some retained strips. Opportunity to potentially earn

4370-665: The Reserve Bank of India (RBI) withheld approval and the merger did not take place. In 2004, the RBI put Global Trust under moratorium and supervised its merger with Oriental Bank of Commerce . The following year, UTI bank was listed on the London Stock Exchange . In the year 2006, UTI Bank opened its first overseas branch in Singapore . The same year it opened an office in Shanghai , China . In 2007, it opened

4485-644: The Swedish Africa Company founded in 1649 and the Hudson's Bay Company founded in 1670. These early corporations engaged in international trade and exploration and set up trading posts. The Dutch government took over the VOC in 1799, and during the 19th century, other governments increasingly took over private companies, most notably in British India. During the process of decolonization ,

4600-425: The credit quality of securitized debt is non- stationary due to changes in volatility that are time- and structure-dependent. If the transaction is properly structured and the pool performs as expected, the credit risk of all tranches of structured debt improves; if improperly structured, the affected tranches may experience dramatic credit deterioration and loss. Securitization has evolved from its beginnings in

4715-729: The history of colonialism . The first multi-national corporations were founded to set up colonial "factories" or port cities. The two main examples were the British East India Company founded in 1600 and the Dutch East India Company (VOC) founded in 1602. In addition to carrying on trade between Great Britain and its colonies, the British East India Company became a quasi-government in its own right, with local government officials and its own army in India. Other examples include

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4830-550: The " coupon " (rate) at the time of issuance, in a fashion similar to corporate bonds and T-Bills. Floating rate securities may be backed by both amortizing and non-amortizing assets in the floating market. In contrast to fixed rate securities, the rates on "floaters" will periodically adjust up or down according to a designated index such as a U.S. Treasury rate, or, more typically, the London Interbank Offered Rate (LIBOR). The floating rate usually reflects

4945-671: The "earning power" of the assets. Locking in profits : For a given block of business, the total profits have not yet emerged and thus remain uncertain. Once the block has been securitized, the level of profits has now been locked in for that company, thus the risk of profit not emerging, or the benefit of super-profits, has now been passed on. Transfer risks ( credit , liquidity , prepayment , reinvestment, asset concentration): Securitization makes it possible to transfer risks from an entity that does not want to bear it, to one that does. Two good examples of this are catastrophe bonds and Entertainment Securitizations. Similarly, by securitizing

5060-611: The Bank had reduced its stake in Yes Bank from 2.39 per cent to 1.96 per cent. As of 31 March 2024, the bank had a network of 5,377 branches and extension counters, 16,026 ATMs and cash recyclers. Axis Bank has the largest ATM network among private banks in India. It even operates an ATM at one of the world's highest sites at Thegu, Sikkim at a height of 4,023 meters (13,200 ft) above sea level. The bank has nine international offices with branches at Singapore , Hong Kong, Dubai (at

5175-686: The DIFC), Shanghai, Colombo and representative offices at Dhaka, Dubai, Sharjah and Abu Dhabi, which focus on corporate lending, trade finance, syndication, investment banking and liability businesses. In addition to the above, the bank has a presence in UK with its wholly owned subsidiary Axis Bank UK Limited. The bank offers lending services to individuals and small businesses, along with liability products, card services, Internet banking, automated teller machines (ATM) services, depository, financial advisory services, and Non-resident Indian (NRI) services. Axis bank

5290-551: The English language. Senior officials, although mostly still Swedish, all learned English and all major internal documents were in English, the lingua franca of multinational corporations. After the war, the number of businesses having at least one foreign country operation rose drastically from a few thousand to 78,411 in 2007. Meanwhile, 74% of parent companies are located in economically advanced countries. Developing and former communist countries such as China, India, and Brazil are

5405-663: The European colonial charter companies were disbanded, with the final colonial corporation, the Mozambique Company , dissolving in 1972. Mining of gold, silver, copper, and oil was a major activity early on and remains so today. International mining companies became prominent in Britain in the 19th century, such as the Rio Tinto company founded in 1873, which started with the purchase of sulfur and copper mines from

5520-575: The International Energy Agency (IEA), enabling states to coordinate policy, gather data, and monitor global oil reserves. In the 1970s, OPEC gradually nationalized the Seven Sisters. The Kingdom of Saudi Arabia, as the only largest world oil producer, could leverage this. However, Saudi Arabia opted for the correct approach and maintained consistent oil prices throughout the 1970s. In 1979, the "second oil shock" came from

5635-574: The Netherlands has become a popular choice, as its company laws have fewer requirements for meetings, compensation, and audit committees, and Great Britain had advantages due to laws on withholding dividends and a double-taxation treaty with the United States. Corporations can legally engage in tax avoidance through their choice of jurisdiction but must be careful to avoid illegal tax evasion . Corporations that are broadly active across

5750-558: The OLI framework. The other theoretical dimension of the role of multinational corporations concerns the relationship between the globalization of economic engagement and the culture of national and local responses. This has a history of self-conscious cultural management going back at least to the 60s. For example: Ernest Dichter, architect, of Exxon's international campaign, writing in the Harvard Business Review in 1963,

5865-586: The Spanish government. Rio Tinto, now based in London and Melbourne , Australia, has made many acquisitions and expanded globally to mine aluminum , iron ore , copper , uranium , and diamonds . European mines in South Africa began opening in the late 19th century, producing gold and other minerals for the world market, jobs for locals, and business and profits for companies. Cecil Rhodes (1853–1902)

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5980-464: The Third World colonies. That changed dramatically after 1945 as investors turned to industrialized countries and invested in manufacturing (especially high-tech electronics, chemicals, drugs, and vehicles) as well as trade. Sweden's leading manufacturing concern was SKF , a leading maker of bearings for machinery. In order to expand its international business, it decided in 1966 it needed to use

6095-636: The U.S. applies its corporate taxation "extraterritorially", which has motivated tax inversions to change the home state. By 2019, most OECD nations, with the notable exception of the U.S., had moved to territorial tax in which only revenue inside the border was taxed; however, these nations typically scrutinize foreign income with controlled foreign corporation (CFC) rules to avoid base erosion and profit shifting . In practice, even under an extraterritorial system, taxes may be deferred until remittance, with possible repatriation tax holidays , and subject to foreign tax credits . Countries generally cannot tax

6210-541: The United States sanctions against Iran ; European companies faced with the possibility of losing access to the U.S. market by trading with Iran. International investment agreements also facilitate direct investment between two countries, such as the North American Free Trade Agreement and most favored nation status. Raymond Vernon reported in 1977 that of the largest multinationals focused on manufacturing, 250 were headquartered in

6325-506: The United States scrutinizes foreign investments. In addition, corporations may be prohibited from various business transactions by international sanctions or domestic laws. For example, Chinese domestic corporations or citizens have limitations on their ability to make foreign investments outside China, in part to reduce capital outflow . Countries can impose extraterritorial sanctions on foreign corporations even for doing business with other foreign corporations, which occurred in 2019 with

6440-614: The United States as the largest consumer and guarantor of the existing oil security order. Since the Iraq War, OPEC has had only a minor influence on oil prices, but it has expanded to 11 members, accounting for about 40 percent of total global oil production, although this is a decline from nearly 50 percent in 1974. Oil has practically become a common commodity, leading to much more volatile prices. Most OPEC members are wealthy, and most remain dependent on oil revenues, which has serious consequences, such as when OPEC members were pressured by

6555-461: The United States from 2010. The USA became the leading oil producer, creating tension with OPEC. In 2014, Saudi Arabia increased production to push new American producers out of the market, leading to lower prices. OPEC then reduced production in 2016 to raise prices, further worsening relations with the United States. By 2012, only 7% of the world's known oil reserves were in countries that allowed private international companies free rein; 65% were in

6670-477: The United States on the global oil market. In 1959, companies lowered the price of oil due to a surplus in the market. This reduction dealt a significant blow to the finances of producers. Saudi oil minister Abdullah Tariki and Venezuela’s Juan Perez Alfonso entered into a secret agreement (the Mahdi Pact), promising that if the price of oil was lowered a second time, they would take collective action against

6785-696: The United States turned to foreign oil sources, which had a significant impact on the recovery of the West after World War II. Most of the world's oil was found in Latin America and the Middle East, particularly in the Arab states of the Persian Gulf. This increase in non-American production was enabled by multinational corporations known as the 'Seven Sisters'. The "Seven Sisters" was a common term for

6900-629: The United States, 115 in Western Europe, 70 in Japan, and 20 in the rest of the world. The multinationals in banking numbered 20 headquartered in the United States, 13 in Europe, nine in Japan and three in Canada. Today multinationals can select from a variety of jurisdictions for various subsidiaries, but the ultimate parent company can select a single legal domicile ; The Economist suggests that

7015-456: The West to the post-colonial South and invest either in foreign expenditures or ostentatious economic development projects. After 1974, most of the money from OPEC members ceased as payments for goods and services or investments in Western industry. In February 1974, the first Washington Energy Conference was convened. The most significant contribution of this conference was the establishment of

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7130-410: The assets that are being held in the issuer. Even though the trustee is part of the SPV, which is typically wholly owned by the Originator, the trustee has a fiduciary duty to protect the assets and those who own the assets, typically the investors. Unlike corporate bonds, most securitizations are amortized , meaning that the principal amount borrowed is paid back gradually over the specified term of

7245-469: The behavior of multinational corporations, given that they are effectively "stateless" actors, is one of several urgent global socioeconomic problems that has emerged during the late twentieth century. Potentially, the best concept for analyzing society's governance limitations over modern corporations is the concept of "stateless corporations". Coined at least as early as 1991 in Business Week ,

7360-558: The book has been securitized, the cash would be available for immediate spending or investment. This also creates a reinvestment book which may well be at better rates. May reduce portfolio quality : If the AAA risks, for example, are being securitized out, this would leave a materially worse quality of residual risk. Costs : Securitizations are expensive due to management and system costs, legal fees , underwriting fees, rating fees and ongoing administration. An allowance for unforeseen costs

7475-471: The case of Credit Default Swaps, this documentation has been formulated by the International Swaps and Derivatives Association (ISDA) who have for a long time provided documentation on how to treat such derivatives on balance sheets. Earnings : Securitization makes it possible to record an earnings bounce without any real addition to the firm. When a securitization takes place, there often

7590-742: The collapse of the Shah's regime in Iran. Iran became a regional power due to oil money and American weapons. The Shah eventually abdicated and fled the country. This prompted a strike by thousands of Iranian oil workers, significantly reducing oil production in Iran. Saudi Arabia tried to cope with the crisis by increasing production, but oil prices still soared, leading to the "second oil shock." Saudi Arabia significantly reduced oil production, losing most of its revenues. In 1986, Riyadh changed course, and oil production in Saudi Arabia sharply increased, flooding

7705-654: The companies. This occurred in 1960. Prior to the 1973 oil crisis , the Seven Sisters controlled around 85 percent of the world's petroleum reserves . In the 1970s, most countries with large reserves nationalized their reserves that had been owned by major oil companies. Since then, industry dominance has shifted to the OPEC cartel and state-owned oil and gas companies, such as Saudi Aramco , Gazprom (Russia), China National Petroleum Corporation , National Iranian Oil Company , PDVSA (Venezuela), Petrobras (Brazil), and Petronas (Malaysia). A unilateral increase in oil prices

7820-438: The company as a whole. For instance, a leasing company may have provided $ 10m nominal value of leases, and it will receive a cash flow over the next five years from these. It cannot demand early repayment on the leases and so cannot get its money back early if required. If it could sell the rights to the cash flows from the leases to someone else, it could transform that income stream into a lump sum today (in effect, receiving today

7935-510: The conception was theoretically clarified in 1993: that an empirical strategy for defining a stateless corporation is with analytical tools at the intersection between demographic analysis and transportation research. This intersection is known as logistics management , and it describes the importance of rapidly increasing global mobility of resources. In a long history of analysis of multinational corporations, we are some quarter-century into an era of stateless corporations—corporations that meet

8050-643: The creation of a "world customer". The idea of a global corporate village entailed the management and reconstitution of parochial attachments to one's nation. It involved not a denial of the naturalness of national attachments, but an internationalization of the way a nation defines itself. "Multinational enterprise" (MNE) is the term used by international economist and similarly defined with the multinational corporation (MNC) as an enterprise that controls and manages production establishments, known as plants located in at least two countries. The multinational enterprise (MNE) will engage in foreign direct investment (FDI) as

8165-604: The current financial year. Axis Banks's equity shares are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE). The company's global depository receipts (GDRs) are listed on the London Stock Exchange . The Bonds issued by the bank under the MTN program are listed on the Singapore Stock Exchange . An Indian online magazine conducted a sting operation which

8280-678: The debate from a neo-liberal perspective in Storm over the Multinationals (1977). Securitization Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities , which may be described as bonds , pass-through securities , or collateralized debt obligations (CDOs). Investors are repaid from

8395-734: The earlier days of securitization. An originator pools together loans and sells them to a grantor trust, which issues classes of securities backed by these loans. Principal and interest received on the loans, after expenses are taken into account, are passed through to the holders of the securities on a pro-rata basis. In an owner trust, there is more flexibility in allocating principal and interest received to different classes of issued securities. In an owner trust, both interest and principal due to subordinate securities can be used to pay senior securities. Due to this, owner trusts can tailor maturity, risk and return profiles of issued securities to investor needs. Usually, any income remaining after expenses

8510-481: The firm makes direct investments in host country plants for equity ownership and managerial control to avoid some transaction costs . Sanjaya Lall in 1974 proposed a spectrum of scholarly analysis of multinational corporations, from the political right to the left. He put the business school how-to-do-it writers at the extreme right, followed by the liberal laissez-faire economists, and the neoliberals (they remain right of center but do allow for occasional mistakes of

8625-503: The first Indian bank to introduce a dedicated innovation lab in the country. Asha home loans targets first-time home buyers in the lower-income segment. The product offers loans from ₹ 100,000 (US$ 1,200)– ₹ 1.5 million (US$ 18,000) in small towns (population less than 1 million) and up to ₹ 2.8 million (US$ 34,000) in larger towns (population over 1 million), to customers with family incomes of ₹ 8,000 (US$ 96)– ₹ 10,000 (US$ 120) per month and above. eKYC (electronic know your customer )

8740-403: The first tranche, which may have a one-year average life, will receive all principal payments until it is retired; then the second tranche begins to receive principal, and so forth. Pro rata bond structures pay each tranche a proportionate share of principal throughout the life of the security. Some originators (e.g. of mortgages) have prioritised loan volume over credit quality, disregarding

8855-401: The flexibility to handle different securities at different times. In a typical master trust transaction, an originator of credit card receivables transfers a pool of those receivables to the trust and then the trust issues securities backed by these receivables. Often there will be many tranched securities issued by the trust all based on one set of receivables. After this transaction, typically

8970-416: The hands of state-owned companies that operated in one country and sold oil to multinationals such as BP, Shell, ExxonMobil and Chevron. Down through the 1930s, about 80% of the international investments by multinational corporations were concentrated in the primary sector, especially mining (especially oil) and agriculture (rubber, tobacco, sugar, palm oil , coffee, cocoa, and tropical fruits). Most went to

9085-415: The internationalization of production. For the first time in history, production, marketing, and investment are being organized on a global scale rather than in terms of isolated national economies. International business is also a specialist field of academic research. Economic theories of the multinational corporation include internalization theory and the eclectic paradigm . The latter is also known as

9200-435: The investors. A second risk is that the total investor interests and the seller's interest are limited to receivables generated by the credit cards, but the seller (originator) owns the accounts. This can cause issues with how the seller controls the terms and conditions of the accounts. Typically to solve this, there is language written into the securitization to protect the investors and potential receivables. A third risk

9315-403: The issuance of securities. Many issuers are typically "orphaned" . In the case of certain assets, such as credit card debt, where the portfolio is made up of a constantly changing pool of receivables, a trust in favor of the SPV may be declared in place of traditional transfer by assignment (see the outline of the master trust structure below). Accounting standards govern when such a transfer

9430-460: The largest recipients. However, 70% of foreign direct investment went into developed countries in the form of stocks and cash flows. The rise in the number of multinational companies could be due to a stable political environment that encourages cooperation, advances in technology that enable management of faraway regions, and favorable organizational development that encourages business expansion into other countries. A multinational corporation (MNC)

9545-576: The late 18th century to an estimated outstanding of $ 10.24 trillion in the United States and $ 2.25 trillion in Europe as of the 2nd quarter of 2008. In 2007, ABS issuance amounted to $ 3.455 trillion in the US and $ 652 billion in Europe. WBS (Whole Business Securitization) arrangements first appeared in the United Kingdom in the 1990s, and became common in various Commonwealth legal systems where senior creditors of an insolvent business effectively gain

9660-474: The laws and regulations of both their domicile and the additional jurisdictions where they are engaged in business. In some cases, the jurisdiction can help to avoid burdensome laws, but regulatory statutes often target the "enterprise" with statutory language around "control". As of 1992 , the United States and most OECD countries have the donot legal authority to tax a domiciled parent corporation on its worldwide revenue, including subsidiaries. As of 2019 ,

9775-495: The loan, rather than in one lump sum at the maturity of the loan. Fully amortizing securitizations are generally collateralised by fully amortizing assets, such as home equity loans , auto loans, and student loans . Prepayment uncertainty is an important concern with fully amortizing ABS. The possible rate of prepayment varies widely with the type of underlying asset pool, so many prepayment models have been developed to try to define common prepayment activity. The PSA prepayment model

9890-463: The long-term risk of the assets they have created in their enthusiasm to profit from the fees associated with origination and securitization. Other originators, aware of the reputational harm and added expense if risky loans are subject to repurchase requests or improperly originated loans lead to litigation, have paid more attention to credit quality. A master trust is a type of SPV particularly suited to handle revolving credit card balances, and has

10005-434: The market with cheap oil. This caused a worldwide drop in oil prices, hence the "third oil shock" or "counter-shock." However, this shock represented something much bigger—the end of OPEC's dominance and its control over oil prices. Iraqi President Saddam Hussein decided to attack Kuwait. The invasion sparked a crisis in the Middle East, prompting Saudi Arabia to request assistance from the United States. The United States sent

10120-480: The marketplace such as externalities). Moving to the left side of the line are nationalists, who prioritize national interests over corporate profits, then the "dependencia" school in Latin America that focuses on the evils of imperialism, and on the far left the Marxists. The range is so broad that scholarly consensus is hard to discern. Anti-corporate advocates criticize multinational corporations for being without

10235-442: The movement in the index plus an additional fixed margin to cover the added risk. Unlike conventional corporate bonds which are unsecured, securities created in a securitization are " credit enhanced ", meaning their credit quality is increased above that of the originator's unsecured debt or underlying asset pool. This increases the likelihood that the investors will receive the cash flows to which they are entitled, and thus enables

10350-399: The open market. The performance of the securities is then directly linked to the performance of the assets. Credit rating agencies rate the securities which are issued to provide an external perspective on the liabilities being created and help the investor make a more informed decision. In transactions with static assets, a depositor will assemble the underlying collateral, help structure

10465-484: The originator would continue to service the receivables, in this case the credit cards. There are various risks involved with master trusts specifically. One risk is that timing of cash flows promised to investors might be different from timing of payments on the receivables. For example, credit card-backed securities can have maturities of up to 10 years, but credit card-backed receivables usually pay off much more quickly. To solve this issue these securities typically have

10580-500: The originator, because the servicer needs very similar expertise to the originator and would want to ensure that loan repayments are paid to the Special Purpose Vehicle. The servicer can significantly affect the cash flows to the investors because it controls the collection policy, which influences the proceeds collected, the charge-offs and the recoveries on the loans. Any income remaining after payments and expenses

10695-474: The parent company. Admissibility : Future cashflows may not get full credit in a company's accounts (life insurance companies, for example, may not always get full credit for future surpluses in their regulatory balance sheet), and a securitization effectively turns an admissible future surplus flow into an admissible immediate cash asset. Liquidity : Future cashflows may simply be balance sheet items which currently are not available for spending, whereas once

10810-404: The present value of a future cash flow). Where the originator is a bank or other organization that must meet capital adequacy requirements, the structure is usually more complex because a separate company is set up to buy the assets. A suitably large portfolio of assets is "pooled" and transferred to a " special purpose vehicle " or " SPV " (the issuer ), a tax-exempt company or trust formed for

10925-560: The price collapse in 1998–1999. The United States still maintains close relations with Saudi Arabia. In 2003, U.S. forces invaded Iraq with the aim of removing the dictatorship and gaining access to Iraqi oil reserves, giving the United States greater strategic importance from 2000 to 2008. During this period, there was a constant shortage of oil, but its consumption continued to rise, maintaining high prices and leading to concerns about "peak oil". From 2005 to 2012, there were advances in oil and gas extraction, leading to increased production in

11040-458: The principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS). The granularity of pools of securitized assets can mitigate the credit risk of individual borrowers. Unlike general corporate debt ,

11155-455: The promoters and the promoter group ( United India Insurance Company Limited , Oriental Insurance Company Limited , National Insurance Company Limited , New India Assurance Company Ltd , GIC , LIC and UTI ). The remaining 69.19% shares are owned by mutual funds, FIIs , banks, insurance companies, corporate bodies and individual investors. The bank was founded on 3 December 1993 as UTI Bank , opening its registered office in Ahmedabad and

11270-611: The realities of the needs of source materials on a worldwide basis and to produce and customize products for individual countries. One of the first multinational business organizations, the East India Company , was established in 1601. After the East India Company came the Dutch East India Company , founded on March 20, 1603, which would become the largest company in the world for nearly 200 years. The main characteristics of multinational companies are: When

11385-422: The residual cash flow (if any) after all the other classes have been paid. There may also be a special class which absorbs early repayments in the underlying assets. This is often the case where the underlying assets are mortgages which, in essence, are repaid whenever the properties are sold. Since any early repayments are passed on to this class, it means the other investors have a more predictable cash flow. If

11500-419: The right to control the company. The originator initially owns the assets engaged in the deal. This is typically a company looking to either raise capital, restructure debt or otherwise adjust its finances (but also includes businesses established specifically to generate marketable debt (consumer or otherwise) for the purpose of subsequent securitization). Under traditional corporate finance concepts, such

11615-413: The securities and work with the financial markets to sell the securities to investors. The depositor has taken on added significance under Regulation AB . The depositor typically owns 100% of the beneficial interest in the issuing entity and is usually the parent or a wholly owned subsidiary of the parent which initiates the transaction. In transactions with managed (traded) assets, asset managers assemble

11730-444: The securities to have a higher credit rating than the originator. Some securitizations use external credit enhancement provided by third parties, such as surety bonds and parental guarantees (although this may introduce a conflict of interest). The issued securities are often split into tranches , or categorized into varying degrees of subordination . Each tranche has a different level of credit protection or risk exposure: there

11845-462: The seven multinational companies that dominated the global petroleum industry from the mid-1940s to the mid-1970s. The nationalization of the Iranian oil industry in 1951 by Iranian Prime Minister Mohammad Mosaddegh and the subsequent boycott of Iranian oil by all companies had dramatic consequences for Iran and the international oil market. Iran was unable to sell any of its oil. In August 1953,

11960-439: The specific purpose of funding the assets. Once the assets are transferred to the issuer, there is normally no recourse to the originator. The issuer is " bankruptcy remote", meaning that if the originator goes into bankruptcy, the assets of the issuer will not be distributed to the creditors of the originator. In order to achieve this, the governing documents of the issuer restrict its activities to only those necessary to complete

12075-403: The strength of the underlying collateral and other credit enhancements. Reduces asset-liability mismatch : "Depending on the structure chosen, securitization can offer perfect matched funding by eliminating funding exposure in terms of both duration and pricing basis." Essentially, in most banks and finance companies, the liability book or the funding is from borrowings. This often comes at

12190-459: The then-prime minister was overthrown by a pro-American dictatorship led by the Shah, and in October 1954, the Iranian industry was denationalized. Worldwide oil consumption increased rapidly between 1949 and 1970, a period known as the 'golden age of oil'. This increase in consumption was caused not only by the growth of production by multinational oil companies but also by the strong influence of

12305-537: The underlying assets are mortgages or loans, there are usually two separate "waterfalls" because the principal and interest receipts can be easily allocated and matched. But if the assets are income-based transactions such as rental deals one cannot categorise the revenue so easily between income and principal repayment. In this case all the revenue is used to pay the cash flows due on the bonds as those cash flows become due. Credit enhancements affect credit risk by providing more or less protection for promised cash flows for

12420-441: The underlying collateral, help structure the securities and work with the financial markets in order to sell the securities to investors. Some deals may include a third-party guarantor which provides guarantees or partial guarantees for the assets, the principal and the interest payments, for a fee. The securities can be issued with either a fixed interest rate or a floating rate under currency pegging system. Fixed rate ABS set

12535-573: The world without a concentration in one area have been called stateless or "transnational" (although "transnational corporation" is also used synonymously with "multinational corporation" ), but as of 1992, a corporation must be legally domiciled in a particular country and engage in other countries through foreign direct investment and the creation of foreign subsidiaries. Geographic diversification can be measured across various domains, including ownership and control, workforce, sales, and regulation and taxation. Multinational corporations may be subject to

12650-503: The worldwide revenue of a foreign subsidiary, and taxation is complicated by transfer pricing arrangements with parent corporations. For small corporations, registering a foreign subsidiary can be expensive and complex, involving fees, signatures, and forms; a professional employer organization (PEO) is sometimes advertised as a cheaper and simpler alternative, but not all jurisdictions have laws accepting these types of arrangements. Disputes between corporations in different nations

12765-448: Was fully aware that the means to overcoming cultural resistance depended on an "understanding" of the countries in which a corporation operated. He observed that companies with "foresight to capitalize on international opportunities" must recognize that " cultural anthropology will be an important tool for competitive marketing". However, the projected outcome of this was not the assimilation of international firms into national cultures, but

12880-564: Was incorporated in India as a wholly owned subsidiary of the bank on 3 October 2006 and received its certificate of commencement on 4 December 2006. APE manages investments, venture capital funds and offshore funds. Axis Mutual Fund is a subsidiary of Axis Bank established in 2009 with in headquarters in Mumbai . Multinational corporation Most of the current largest and most influential companies are publicly traded multinational corporations, including Forbes Global 2000 companies. The history of multinational corporations began with

12995-546: Was labeled as "the largest nonviolent transfer of wealth in human history." The OPEC sought immediate discussions regarding participation in national oil industries. Companies were not inclined to object as the price hike benefited both them and OPEC members. In 1980, the Seven Sisters were entirely displaced and replaced by national oil companies (NOCs). The rise in oil prices burdened developing countries with balance of payments deficits, leading to an energy crisis. OPEC members had to abandon their plan of redistributing wealth from

13110-501: Was one of the few businessmen in the era who became Prime Minister (of South Africa 1890–1896). His mining enterprises included the British South Africa Company and De Beers . The latter company practically controlled the global diamond market from its base in southern Africa. In 1945, the United States was the world's largest oil producer. However, their reserves were declining due to high demand. Therefore,

13225-436: Was publicised along with 2013 videos evidence showing a wide range of violations and money-laundering schemes by top officials at a number of Indian banks, including Axis Bank. Consequently, penalties of ₹ 50 million (US$ 600,000) on Axis Bank, ₹ 45 million (US$ 540,000) on HDFC Bank , and ₹ 10 million (US$ 120,000) on ICICI Bank were imposed by the Reserve Bank of India . Following the 2016 Indian Banknote Demonetisation,

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