Your SlideShare is downloading. ×
0
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Retail banking
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Retail banking

3,615

Published on

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
3,615
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
277
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • , and certain specified entities are allowed to access to Call/Notice money market only as lenders can purchase the treasury bills, CPs and CDs
  • Money Market consists of a number of sub-markets which collectively constitute the money market. They are, Call Money Market Commercial bills market or discount market Acceptance market Treasury bill market
  • I :- ORGANISED STRUCTURE 1. Reserve bank of India. 2. DFHI (discount and finance house of India).3. Commercial banks i. Public sector banks SBI with 7 subsidiaries Cooperative banks 20 nationalized banks ii. Private banks Indian Banks Foreign banks4. Development bank IDBI, IFCI, ICICI, NABARD, LIC, GIC, UTI etc.
  • . UNORGANISED SECTOR 1. Indigenous banks 2 Money lenders 3. Chits 4. NidhisIII. CO-OPERATIVE SECTOR 1. State cooperative i. central cooperative banks Primary Agri credit societies Primary urban banks 2. State Land development banks Central land development banks Primary land development banks
  • In India till 1986, only a few instrument were available
  • Transcript

    • 1. MONEY MARKET INSTRUMENTS<br />
    • 2. MONEY MARKET<br />Money market means market where money or its equivalent can be traded, Synonym of liquidity<br />It is a wholesale market of short term debt instrument ,Short term maturities i.e. one or less than one year are traded<br />It is not a single homogeneous market, it comprises of several submarket like call money market, acceptance & bill market<br />The component of Money Market are the commercial banks, acceptance houses & NBFC.<br />Hence, money market is a market where short term obligations such as Treasury bills, Call/notice money, Certificate of Deposits, Commercial papers and Repos are bought and sold<br />
    • 3. MONEY MARKET<br />
    • 4. CHARACTERISTICS OF MONEY MARKET INSTRUMENTS<br />Short-term borrowing and lending<br />Low credit risk<br />High liquidity<br />High volume of lending and borrowing<br />
    • 5. Players in Money Market<br />
    • 6. Composition of Money Market<br />
    • 7. Structure of Indian Money Market <br />
    • 8. Continued…..<br />
    • 9. Money market Instruments<br />Treasury Bills<br />Repurchase Agreements<br />Repo<br />Reverse Repo<br />Commercial Papers<br />Certificate of Deposits<br />Banker’s Acceptance<br />
    • 10. TREASURY BILLS<br />T-Bills are issued by GOI against their short term borrowing requirements with maturities ranging between 14 to 364 days. <br />3 types of T-Bills issued through auctions <br />91-day (Auctioned every week on Wednesdays)<br />182-day and 364-day (Auctioned alternate Wednesdays)<br />No treasury bills issued by State Governments<br />T-bills are purchased for a price that is less than their par value; when they mature, the government pays the holder the full par value<br />Types of Bills: on tap bills, ad hoc bills, auctioned T- bills<br />Available both in primary market as well as secondary market<br />Treasury bills are available for a minimum amount of Rs.25,000 and in multiples of Rs. 25,000. Treasury bills are issued at a discount and are redeemed at par <br />T-bills are considered to be the safest investments<br />They are exempt from state and local taxes<br />
    • 11. REPURCHASE AGREEMENTS<br />REPO - the buyer purchases the securities with an agreement to resell the same to the seller on an agreed date at a predetermined price<br />REVERSE REPO - when viewed from the perspective of the buyer of the securities<br />The Repo/Reverse Repo transaction can only be done at Mumbai between parties approved by RBI and in securities as approved by RBI (Treasury Bills, Central/State Govt securities)<br /><ul><li>Repos are safe collateral for loans</li></ul>It is a transaction in which two parties agree to sell and repurchase the same security<br />Used for overnight borrowing and used by those who deal in government securities<br />
    • 12. COMMERCIAL PAPERS<br />It is a short term unsecured loan issued by a corporation typically financing day to day operation; In the form of a promissory note<br />Usually issued with fixed maturity between 1 to 270 days<br />Very safe investment and Yield higher returns as compared to T-Bills<br />Issued by corporates to impart flexibility in raising working capital resources at market determined rates<br />Only company with high credit rating issues CPs<br />Commercial Papers are actively traded in the secondary market<br />Who can issue Commercial Paper (CP) Highly rated corporate borrowers, primary dealers (PDs) and satellite dealers (SDs) and all-India financial institutions (FIs)<br />
    • 13. Certificate of Deposit<br />CD is a promissory note issued by a bank in form of a certificate entitling the bearer to receive interest <br />Time deposit with a bank<br />Also referred to as Negotiable Certificate of Deposits<br />Funds can not withdrawn before maturity without paying a penalty<br />CDs have specific maturity date, interest rate and it can be issued in any denomination<br />Ranges from three months to five years and restricts the holders to withdraw funds on demand<br />Main advantage of CD is their safety<br />The returns on certificate of deposits are higher than T-Bills because it assumes higher level of risk<br />
    • 14. Call Money Market<br />The call money market is an integral part of the Indian Money Market<br />Day-to-day surplus funds (mostly of banks) are traded<br />The loans are of short-term duration varying from 1 to 14 days<br />The money that is lent for one day in this market is known as "Call Money", and if it exceeds one day (but less than 15 days) it is referred to as "Notice Money". <br />
    • 15. Collateralized Borrowing and Lending Obligation (CBLO)<br />It is a money market instrument as approved by RBI, is a product developed by CCIL. CBLO is a discounted instrument available in electronic book entry form for the maturity period ranging from one day to ninety Days (can be made available up to one year as per RBI guidelines). In order to enable the market participants to borrow and lend funds, CCIL provides the Dealing System through:<br />- Indian Financial Network (INFINET), a closed user group to the Members of the Negotiated Dealing System (NDS) who maintain Current account with RBI.<br />- Internet gateway for other entities who do not maintain Current account with RBI.<br />What is CBLO?CBLO is explained as under: • An obligation by the borrower to return the money borrowed, at a specified future date; • An authority to the lender to receive money lent, at a specified future date with an option/privilege to transfer the authority to another person for value received; • An underlying charge on securities held in custody (with CCIL) for the amount borrowed/lent. <br />
    • 16. THANK YOU !!<br />

    ×