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Discount and finance house of INDIA limited

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  1. 1. Discount and finance house of India Limited Jayoti vidyapeeth womens university, Jaipur, raJasthan Submitted by- Shreya sankrityayan JV-b/10/1687 MBA(FM) Final year
  2. 2. introduCtion • DFHI was set up in March 1988 by Reserve Bank of India jointly with public sector banks and all India Financial Institutions to develop the money market and to provide liquidity to money market instruments.
  3. 3. Content List 1. History of DHFI 2. Objectives of DHFI 3. CS Account 4. Money market instruments of DHFI 5. Roles of DHFI 6. Who can deal with DHFI 7. Conclusion 8. References
  4. 4. history oF dhFi • DFHI was incorporated on March 8, 1988 under the Companies Act, 1956 with an authorised share capital of Rs.100 crore subscribed by the RBI (Rs.51 crore), Public Sector Banks (Rs.33 crore) and All-India Financial Institutions (Rs.16 crore).
  5. 5. OBJECTIVES OF DHFI 1. To even out the liquidity imbalances in the banking system. 2. To promote secondary market in short term money market instruments. 3. to integrate markets at regional centres with the main market at Mumbai, through its network. 4. Provide safe and risk-free short-term investment avenues to institutions. 5. Provide greater liquidity to money market instruments. 6. Facilitate money market transactions for small and medium sized institutions who are not regular participants in the market.
  6. 6. OBJECTIVES OF DHFI CONT… 7. DFHI provides the 'Constituent SGL' Account facility which enables even those entities which otherwise do not have an SGL Account facility with the RBI to reap the full benefits of investing in government securities.
  7. 7. CONSTITUENT SGL ACCOUNT • DFHI has opened a 'Constituent SGL' account with the RBI. According to the procedure laid down by RBI, customers of DFHI can open Constituent SGL Accounts with DFHI. Their holdings in T-Bills and dated government securities are transacted through this account
  8. 8. MONEY MARKETS INSTRUMENTS OF DHFI DFHI deals in the following instruments/products: • Treasury Bills • Dated Government Securities • Certificates of Deposit • Commercial Papers • Call (overnight) Money
  9. 9. ROLES OF DHFI 1. To discount , purchase and sale treasury bills, trade bill, bills of exchange, commercial bills and commercial papers. 2. To play an important role as a lender, borrower or broker in the Inter- Bank call money market. 3. To promote and support company funds, trusts and other organization for development of short term money market.
  10. 10. ROLES OF DHFI CONT… 4. To advise government, banks and financial institutions in evolving schemes for growth and development of money market. 5. It mobilizes funds/resources from commercial or cooperative banks ,FI and corporate entities which are pooled and lend the money market. 6. Help the corporate entities, banks and FI to raise short term money and invest short term surplus.
  11. 11. ROLES OF DHFI CONT… 7. It stabilize the call and short term deposit rate through larger turnover. 8. It extends repos, buy back facility to 14 days to banks money market instruments. 9. Two regular quotes- Bid and offer in money market instruments provided by DHFI serve as a base to broaden the secondary market and give an assure liquidity to the instruments.
  12. 12. WHO CAN DEAL WITH DHFI 1. Individuals 2. Corporate 3. Regional rural banks 4. Cooperative banks 5. Provident funds, Pension funds, Gratuity funds 6. Trusts 7. Insurance Companies. 8. Mutual funds 9. Banks
  13. 13. CONCLUSION • DHFI can achieve sustained growth and more effective role to fulfill the basic objective of the money market or by making the smooth facilities for short term liquidity.
  14. 14. REFERENCES • • •