Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
   CALL MONEY   NOTICE MONEY   TREASURY BILLS   REPOS   COMMERCIAL PAPER   CERTIFICATE OF DEPOSITS
   Call money market is an inter-bank market   Day to day surplus funds are either borrowed by or    lent to banks   Ma...
   Commonly referred to as T-Bills   Represent obligations of the GOI   Tenor: 14-days, 90-days, 182-days, 364-days   ...
FUNDS                              SECURITY             A                                            B     1)   Requires s...
   Unsecured short-term instrument   Issued by large corporates   Sold at a discount and redeemed at par   Interest ra...
   Short-term, transferable instrument   Issued by banks and financial institutions   Generally risk-free   CDs carry ...
   GILT EDGED SECURITIES (G-Secs)   PSU BONDS   CORPORATE BONDS/DEBENTURES
Fixed income instruments
Fixed income instruments
Upcoming SlideShare
Loading in …5
×

Fixed income instruments

584 views

Published on

  • Be the first to comment

  • Be the first to like this

Fixed income instruments

  1. 1.  CALL MONEY NOTICE MONEY TREASURY BILLS REPOS COMMERCIAL PAPER CERTIFICATE OF DEPOSITS
  2. 2.  Call money market is an inter-bank market Day to day surplus funds are either borrowed by or lent to banks Maturity of loans is 1 day to 14 days Repayable on demand at the option of either lender or borrower, i.e. on call Notice Money – Money lent for a period exceeding I day Liquidity is very high
  3. 3.  Commonly referred to as T-Bills Represent obligations of the GOI Tenor: 14-days, 90-days, 182-days, 364-days Do not carry an explicit coupon rate Sold at a discount and redeemed at par Have no credit risk Have negligible price risk Banks and Primary Dealers (PDs) are main holders – as part of their SLR requirements
  4. 4. FUNDS SECURITY A B 1) Requires short term 1) Wants to make a shortfunds investment2) Does the Repo 2) Does the Reverse Repo3) Sells securities 3)Buys securities4) Simultaneously agrees to 4)Difference between sale pricerepurchase the securities at a and repurchase price representslater date at a slightly higher interest income to Bprice.5) Difference between saleprice and repurchase pricerepresents interest cost to A
  5. 5.  Unsecured short-term instrument Issued by large corporates Sold at a discount and redeemed at par Interest rate will depend on overall short-term money market rates and credit standing of the issuer Individual investors can invest in CPs. Banks cannot accept CPs Usually has a maturity period of 90 – 180 days
  6. 6.  Short-term, transferable instrument Issued by banks and financial institutions Generally risk-free CDs carry an interest rate Banks, financial institutions, corporates and MFs are primary investors in CPs. Usually has a maturity period of 3 months to 1 year
  7. 7.  GILT EDGED SECURITIES (G-Secs) PSU BONDS CORPORATE BONDS/DEBENTURES

×