Assignment

submitted to : Sir
chand Gul
By:Rauf Ahmed &
Shariq haider
Topic Name : Security
collateral & Insurance
Class :bs Third year
Agribusiness (crop)
Subject: Agriculture
Finance

Bail security

Collateral definition;

The bank is credited as collateral or guarantee of the loan. If the borrower fails to repay the loan, the
lender can sell the security to repay the loan. Security is the last line of defense to repay a loan. I.e.
insurance against emergencies. If not repaid on schedule, the security will claim the borrower's special
property (s) by taking the bank. The important task of a bank is to invest funds for its customers through
loans and advances and the strength of the bank depends on the quality of its loans and advances. In the
old days, when a banker knew his customers personally and intimately and had full confidence in the
integrity and honesty of the customer, they would allow loans and advances without security. Today the
situation is very different.

Banks with a large number of offices over a wide area cannot allow loans and advances without
determining security in one form or another. Although banks now feel that the borrower needs more
money than they can afford, security is one of the most important factors in determining whether a
banker is willing to lend money. Security is obtained as a means of final protection to be retrieved. I.e.
insurance against emergencies. By taking security, the bank receives a claim on the borrower’s property

Not repaid as planned. Important categories of protection covered are: (i) Goods and Goods (ii) Fixed
Deposit Receipt (ii) Real Estate (iv) Machines (v) Gold and Gold Jewelery (vi) Title of Goods (vii) Book
Loans (viii) Bills etc.

Collateral type

Bank security can be classified into two broad categories: (a) primary security and (b) collateral security.

Basic securities are securities or assets created with the financial assistance of a bank. For example, the
capital machinery purchased by the bank's economy is a form of primary security, the primary security
of which is credited by the borrower and thus provides the principal cover for the loan. Primary
protection may be personal security or fraud protection. Personal protection means personal guarantee
against debt, while interpersonal security means security, which is as clear as land, buildings, machinery.
Collateral security on the other hand means that finance is not available. Collateral security is security
secured by the borrower himself or a third party to obtain the loan. If the value of the primary security
does not match the loan amount, it is an additional security that the lender will need for such securities.
For example, in addition to the above case, if the borrower also mortgages his residence, this is

Considered collateral security. Collateral security can be direct or indirect.

Can be used as collateral for personal loan

The collateral security that the borrower receives from himself to obtain the loan is called direct
collateral security, while the security provided as collateral security belongs to a third party called
indirect collateral security.

Basic security

Personal Security: When making a personal advance, the borrower personally agrees to execute the
promissory note, exchange and mortgage deed or to accept or accept the loan agreement bill, in making
personal agreements the banker has the right to act personally against the borrower in case of default
or non-fulfillment of the terms of the agreement.

Non-personal security: Security of securities is provided when the borrower's clear assets are charged by
a high fiduciary / pledge / pledge, e.g., goods and commodities, fixed assets, book liabilities and bills
receivable by default, the bank is entitled to proceed directly or settlement of impersonal protection and
Through court intervention to realize arrears. Non-personal security can take the form of specific
protection or continuous protection, only specific security covers certain debts and the borrower's other
liability to the bank. If

Continuous security for progress on cash loans or overdraft accounts, a memorandum levied on the
property stated in many words that it will be determined to cover all debts to continue or from the
future borrower to the final balance. And regardless of whether the account can sometimes go into
credit.

Collateral for the loan

Direct collateral security is the direct collateral security obtained from the borrower to secure his
account directly. The advance, as opposed to the hiatus of stock-in-trade, which is considered a weak
security, is reinforced by the mortgage, much like the title deeds of the borrower's home property.

Indirect collateral security (guarantee) means protection given by a third party to secure a customer
account. Guarantee is indirect collateral because it is given by one person to obtain another person's ted
loan.

Collateral properties
There are a few features that make for good clear security. Some important features-

(A) Easy detection of market value (b) Stability of value (d) Storage capacity (e) Low labor and
monitoring (f) Transport capacity (g) Stability (h) Title identification (h)) Easy transfer title ( i) Uncertainty
liability (j) Lack of yield

Security value

The value of the securities, the value of the securities to the banker, the upfront price or the withdrawal
limit is determined on the basis of a lower fixed margin. There are many ways to price securities
depending on the type of security. Can be evaluated based on market value, invoice value or controlled
value. Some general safety features are assessed as follows:

Government. Securities, shares and debentures

There is no difficulty in determining the price of these securities, because the quotation of the market
given in the newspapers, while the price of a particular share suffers from wide fluctuations, the banker
should determine the price slightly lower than the market price and should have a high margin.

Seasonal objects

Accept current market price or controlled prices, which is low. Higher margins are required when market
volatility is widespread. This category includes hemp, rice, wheat, oilseeds, etc. In such cases, ready-
made goods in factories. Such goods are usually valued based on the price of the goods and the
manufacturer receives no discount on the bulk of the product he sells.

Finished goods with dealers

In such cases, whichever is less than the wholesale market price or invoice value is accepted. The invoice
must be original and prepared by the manufacturer.

Process in stock
Validation and evaluation of stock is difficult in this process. Imposing restrictions on maximum
borrowing and emphasizing higher margins than raw materials or finished goods is generally against
stock-in-process.

Real estate

The valuation of fixed assets such as land and home property depends on a number of factors, including
its location, tenure of the land (whether freehold or leasehold), taxes and rent laws. The value for the
purpose of a bank advance is not the cost of constructing the building or the current price of the land
beneath it, but the value under the forced sale. Government. Securities, shares and debentures

There is no difficulty in determining the price of these securities, because the quotation of the market
given in the newspapers, while the price of a particular share suffers from wide fluctuations, the banker
should determine the price slightly lower than the market price and should have a high margin.

Seasonal objects

Accept current market price or controlled prices, which is low. Higher margins are required when market
volatility is widespread. This category includes hemp, rice, wheat, oilseeds, etc. In such cases, ready-
made goods in factories. Such goods are usually valued based on the price of the goods and the
manufacturer receives no discount on the bulk of the product he sells.

Finished goods with dealers

In such cases, whichever is less than the wholesale market price or invoice value will be accepted. The
invoice must be original and prepared by the manufacturer.

Process in stock

Validation and evaluation of stock is difficult in this process. Imposing restrictions on maximum
borrowing and emphasizing higher margins than raw materials or finished goods is generally against
stock-in-process.

Real estate
The valuation of fixed assets such as land and home property depends on a number of factors, including
its location, tenure of the land (whether freehold or leasehold), taxes and rent laws. The price for the
purpose of the bank advance is not the current cost of constructing the building or the current price of
the land below it, but the value under the forced sale

The insurance industry in Pakistan is very small compared to its peers in the region. Insurance entry and
density are very modest compared to other countries. However, over the last 5 years the situation has
improved and the insurance industry, especially life insurance, has achieved tremendous growth. This
increase is attributed to a change in the perception of life insurance, which is now considered a security
for a prosperous future in the event of some unfortunate event.

Life insurance greatly affects the social and economic fabric of a country. Due to its nature, life insurance
is different from all other types of insurance. In the last few years, the sector has grown by 30-35% in
Pakistan. Increased competition between customer requirements and players has led to many product
and functional innovations. Although the industry faces the challenges of uncertain economic
conditions, it has also benefited from changes in the regulatory environment.

The reason for the impressive growth over the past few years is the aggressive expansion of distribution
channels, especially Bankurus, which is now an important part of the business of many private sector
players. Bancassurance has boosted the insurance industry in Pakistan in terms of market growth as the
bank is able to reach millions of customers.

Recently, SBP has allowed traditional companies to open takful window operations, which will develop
the insurance sector as companies with their expanding distribution channels can enter the market for
religious reasons. Takaful now gives this target market a chance to reach the value proposition of
insurance. Its goal is to target the market segment that provides traditional insurance against Islamic
principles.

The main drivers for insurance growth in a country are usually macroeconomic factors, regulatory
factors and the population of a country. In Pakistan, insurance coverage is less than 1%, which is much
lower than in India and Bangladesh. However, there is a significant potential for the whole area as there
is a heavily unmarked market. Insurance companies can take advantage of this opportunity with
innovative products to meet customer needs. Life insurance in Pakistan offers tremendous growth.
There is also space for new players in the traditional and taqful areas. Currently, there are nine life
insurance companies in the life insurance industry, two of which are family taking operators and one is
state-owned insurance. There are currently 41 non-life insurance companies operating in the market,
including three general body operators and one state-owned insurer. Multinational players are not
interested in this category due to political instability and security issues.
The main challenge facing the insurance industry is the shortage of quality human resources. Insurance
companies need to invest in developing the capabilities and skills of their employees along with
technical capabilities to innovate new products. In addition, the ethics and practice of good business are
also important.

Customer service is another area that is very important. Customers ’needs are evolving and they seek
value and distinction as a reward for their loyalty and long-term relationship. Insurance companies have
to adapt to various operational, regulatory and financial requirements, which makes it more complex
and expensive. When insurance companies offer an exceptional customer experience, it eventually turns
into profits. Therefore, insurance companies need continuous development and innovation in this area.

The insurance sector is undergoing many changes around the world, creating new challenges and
opportunities for both insurance companies and regulators. Therefore, insurance companies need to be
institutionalized and operationalized

And operational restructuring to achieve overall capacity by avoiding financial losses and uncertainties.

Players in the insurance market should be provided with life insurance with all its benefits and
advantages. The good education and understanding that arises from the proper and quality transfer of
knowledge represents the driving force that is most beneficial to the economy itself and especially to
the insurance industry. Challenges

The insurance industry has always faced many challenges in emerging markets. Most of the challenges
regarding jurisdiction are different. Some of the major challenges facing the insurance industry in
Pakistan are:

Awareness

Skilled human resources

Clean rates

Customer access

Political pressure

Economic change

Halal and Haram Conflict

Challenging Customer Behavior

Regular growth

Product development

Per capita income

Technological advances

Opportunity

Low penetration and density indicate that there are many opportunities for expansion in the insurance
industry. In most cases the chances of an insurance company are as follows:

Social network

Awareness program

Innovation

Use of e-commerce

Flexibility of resources

Plan to save children

Deteriorating health, education and rail / road infrastructure

Terrorist activities

There are both challenges and opportunities in emerging markets. Customer demand and the use of
electronic media are very important factors in setting long-term goals for any insurance company.
Insurance companies with innovative team work and professional human capital can be very successful
if other factors such as financial and political pressure do not affect the big picture. For insurers and
investors in emerging markets, a huge business opportunity based on future middle class potential
customers and innovative solutions. As margins are low in emerging markets, operational efficiency is
important. Operative Excellence is crucial for insurers and investors to emerge from developed markets.

The China-Pakistan Economic Corridor (CPEC) offers new opportunities for the local insurance industry,
especially the non-life sector. Pakistan is expected to achieve sustainable growth in almost all sectors of
the insurance industry with growth outpacing growth in the takful segment. Insurance industry activities
and investment returns are subject to market volatility and macroeconomic factors. The insurance
industry faces financial losses due to negative changes in the capital markets.
The biggest risk facing the insurance industry is concentration risk. The two companies dominate the
private insurance segment, while others are holding market leaders. In addition to the six life insurance
companies, including the state-owned State Life Insurance Corporation (SLIC) in Pakistan, two family
takaful companies also operate in the sector. Although the market share of takaful operators is very
small, due to a large lack of awareness about Sharia-compliant products and services, traditional life
insurers hope that the opening of takaful windows will contribute to the growth of this segment.

Better incomes and awareness of middle-class families have also increased the demand for life
insurance. In addition, life insurance is now seen by consumers as another investment vehicle that leads
to greater public benefit and participation. With a significant proportion of the premiums invested in the
self-management funds of life insurance companies, consumers will be able to reap great returns on
their investment.

The current distribution speed is expected to continue in the future as more distribution routes are
being explored. In addition to back-end operations, the use of information technology tools to reach
customers for sales services has also increased.

Challenges affecting the global insurance industry in 2015 and beyond:

5 challenges facing the modern insurance industry:

Ride sharing policies. ...

Climate change. ...

Artificial intelligence. ...

Cyber insurance. ...

ACA problems. ...

New population.