Sbi India Forex Rates
Software, Robots and Training Resources
Financial Markets
Financial Markets in India is mainly about --
of a market) of money
b) Debt Market
C) Market Forex
D) Capital Markets
Money Market-compliance with short-term requirement of the borrower and provides liquidity or money in cash to lenders.
Major Players in the money market of the Indians are --
- Reserve Bank of India (RBI)
- SBI DFHI Ltd (merger of Discount and Finance House in India and SBI Gilts in 2004)
- Commercial Banks, Cooperative Banks and Primary Dealers are allowed to borrow and lend.
- Specified All India Financial Institutions, Mutual Funds and certain specified entities are allowed access the call money market as lenders only notice
- Individuals, corporations, partnerships, corporations, trusts and institutions can purchase bonds, PC and CD.
Some of the main products in money markets --
1) Certificate of Deposit
2) Paper Commercial
Tresury Bills 3)
4) Bills of exchange
Money market mutual funds 5)
6) Notes
Certificate of Deposit
- CDs are negotiable money market instrument issued in Demat form or Usance notes.
- CDs issued by banks should not have the maturity less than seven days and not more than a year. Financial institutions are allowed to issue CDs for a period between 1 year and up to 3 years.
- CDs are like bank term deposits, but unlike traditional time deposits these are freely negotiable and is often referred to as certificates of deposit negotiable.
- CDs normally give higher returns on Bank term deposit.
- CDs are classified by authorized agencies (eg CARE, ICRA, CRISIL and Fitch), that significantly improve marketing in the secondary market, depending on demand. DFHI SBI is an active player in the secondary market for CDs.
CD Features - All scheduled banks (excluding RRBs and cooperative banks) are eligible to issue CDs.
- Can be issued to individuals, corporations, trusts, funds and associations.
- NRIs can also subscribe to CDs, but not only repatriable basis. In the market CD side can not be imputed to another NRI.
- They are issued at a discount rate set freely by the issuer and the market and investors.
- CDs issued in physical form are freely transferable by endorsement and delivery. Transfer procedure Demattê CDs is similar to that of any other value Demat.
- For CDs no lock in period
- CDs are issued in denominations of Rs.1 Lac and in multiples of Rs. 1 LAC thereafter.
- Coupon Rate discount / CD is determined by the issuing bank / FI
- The loans can not be granted against CDs and Banks / FIs can not buy back its own CD before maturity
- SBI DFHI Limited, participates in both the primary and secondary markets of the CD.
- Investors can buy CDs through Invest DFHI scheme of SBI SBI DFHI Plus Ltd.
About the Author
Gajanan Bochare is a Production Engineer and Management Graduate. He is currently working as a Management Consultant with Mott MacDonald in India and based at Hyderabad. He is associated with various management institutes as a Guest lecturer & has keen interest in research for Industry.
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