Chakravarthy committiee
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The S. Chakravarty Committee was formed in 1985 under the chairmanship of Prof. Sukhamoy Chakravarty to review India's monetary system and enable price stability. The committee submitted its report in April 1985 with two major recommendations: 1) requiring public and private sector entities to include penal interest clauses of 2% above bank rates for delayed payments, and 2) classifying credit limits under three heads (cash credit I for government supplies, cash credit II for special circumstances, and normal working capital limit) with different applicable interest rates.
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Chakravarthy commitee ppt
The Sukhamoy Chakravarty committee was formed in 1985 under the chairmanship of Professor Sukhamoy Chakravarty to review India's monetary system and improve monetary regulation in order to enable price stability. The committee found issues with the monetary system during 1970-1980, including increased credit from the RBI to the government and increased statutory liquidity ratio for banks. The committee submitted its report in April 1985 with recommendations, including interest rates on government securities and bank deposit rates.
Narasimham Committee
The Narasimham Committee was formed in 1991 and 1998 to reform India's financial system. The 1991 report recommended reducing statutory liquidity and cash reserve ratios, phasing out directed credit programs, deregulating interest rates, restructuring banks, and establishing an asset recovery tribunal. The 1998 report recommended strengthening banks' capital adequacy, narrowing weak banks' scopes, reviewing banking laws, and increasing bank autonomy and privatization. Both reports aimed to modernize and stabilize India's banking system.
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an analysis about the Indian banking system and the analysis of two major banking sector reforms; Narasimham committee (1 and 2) on banking sector reforms
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This presentation has two parts RBI & Monetary Policy.
It covers in detail the RBI, its history, preamble, organization structure, objectives, its functions in detail, its subsidiaries and all its publications with their links.
In the second part it covers Monetary Policy from Indian perspective. It starts with definition, Policy process followed in India, Goals, Framework. It covers the instruments of Monetary Policy in detail. It covers the future framework envisaged by RBI. In the last leg it covers the Contractionary & Expansionary monetary policy with their execution challenges.
Regulators
The document summarizes the key financial regulators in India:
- The Reserve Bank of India (RBI) acts as the central bank and regulates monetary policy, banking, and foreign exchange. It oversees banks and ensures financial stability.
- The Securities and Exchange Board of India (SEBI) regulates securities markets to protect investors and ensure orderly development. It registers and regulates stock exchanges, intermediaries, and collective investment schemes.
- The Insurance Regulatory and Development Authority (IRDA) was established in 1999 to regulate insurance companies and promote growth in the insurance sector while protecting policyholders. It issues registrations and regulates pricing, investments, and dispute resolution in insurance.
Money market & its instruments
The document discusses the money market in India. It defines the money market and notes that it deals in short-term financial instruments that can be easily converted to cash. Some key aspects of the Indian money market discussed include the various sub-markets (e.g. call money market), instruments (e.g. treasury bills), participants (e.g. commercial banks), and the role of the money market in providing short-term funds and allowing central bank control of liquidity.
Structure of Indian Banking System
The document summarizes the structure of the banking system in India. It outlines the different types of banks: scheduled banks and non-scheduled banks. It also discusses cooperative banks, including central cooperative banks, state cooperative banks, and district central cooperative banks. The document then covers commercial banks such as public sector banks, regional rural banks, private sector banks, and foreign banks. It provides brief descriptions of each type of bank and their roles within the Indian banking system.
M Narasinhan committee on banking sector reforms
The document discusses the M. Narasimhan Committee, which was formed in 1991 and 1998 to study issues in India's banking system and recommend reforms. The 1991 committee recommended reducing high statutory reserve requirements to free up bank resources, restructuring banks, and establishing an asset reconstruction fund. The 1998 committee focused on strengthening banks' capital adequacy, allowing private sector competition, and reforming banking laws and regulations. Both committees' recommendations helped modernize India's banking system.
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Chakravarthy commitee ppt
The Sukhamoy Chakravarty committee was formed in 1985 under the chairmanship of Professor Sukhamoy Chakravarty to review India's monetary system and improve monetary regulation in order to enable price stability. The committee found issues with the monetary system during 1970-1980, including increased credit from the RBI to the government and increased statutory liquidity ratio for banks. The committee submitted its report in April 1985 with recommendations, including interest rates on government securities and bank deposit rates.
Narasimham Committee
The Narasimham Committee was formed in 1991 and 1998 to reform India's financial system. The 1991 report recommended reducing statutory liquidity and cash reserve ratios, phasing out directed credit programs, deregulating interest rates, restructuring banks, and establishing an asset recovery tribunal. The 1998 report recommended strengthening banks' capital adequacy, narrowing weak banks' scopes, reviewing banking laws, and increasing bank autonomy and privatization. Both reports aimed to modernize and stabilize India's banking system.
Indian Banking sector reforms
an analysis about the Indian banking system and the analysis of two major banking sector reforms; Narasimham committee (1 and 2) on banking sector reforms
Reserve Bank of India & Indian Monetary Policy
This presentation has two parts RBI & Monetary Policy.
It covers in detail the RBI, its history, preamble, organization structure, objectives, its functions in detail, its subsidiaries and all its publications with their links.
In the second part it covers Monetary Policy from Indian perspective. It starts with definition, Policy process followed in India, Goals, Framework. It covers the instruments of Monetary Policy in detail. It covers the future framework envisaged by RBI. In the last leg it covers the Contractionary & Expansionary monetary policy with their execution challenges.
Regulators
The document summarizes the key financial regulators in India:
- The Reserve Bank of India (RBI) acts as the central bank and regulates monetary policy, banking, and foreign exchange. It oversees banks and ensures financial stability.
- The Securities and Exchange Board of India (SEBI) regulates securities markets to protect investors and ensure orderly development. It registers and regulates stock exchanges, intermediaries, and collective investment schemes.
- The Insurance Regulatory and Development Authority (IRDA) was established in 1999 to regulate insurance companies and promote growth in the insurance sector while protecting policyholders. It issues registrations and regulates pricing, investments, and dispute resolution in insurance.
Money market & its instruments
The document discusses the money market in India. It defines the money market and notes that it deals in short-term financial instruments that can be easily converted to cash. Some key aspects of the Indian money market discussed include the various sub-markets (e.g. call money market), instruments (e.g. treasury bills), participants (e.g. commercial banks), and the role of the money market in providing short-term funds and allowing central bank control of liquidity.
Structure of Indian Banking System
The document summarizes the structure of the banking system in India. It outlines the different types of banks: scheduled banks and non-scheduled banks. It also discusses cooperative banks, including central cooperative banks, state cooperative banks, and district central cooperative banks. The document then covers commercial banks such as public sector banks, regional rural banks, private sector banks, and foreign banks. It provides brief descriptions of each type of bank and their roles within the Indian banking system.
M Narasinhan committee on banking sector reforms
The document discusses the M. Narasimhan Committee, which was formed in 1991 and 1998 to study issues in India's banking system and recommend reforms. The 1991 committee recommended reducing high statutory reserve requirements to free up bank resources, restructuring banks, and establishing an asset reconstruction fund. The 1998 committee focused on strengthening banks' capital adequacy, allowing private sector competition, and reforming banking laws and regulations. Both committees' recommendations helped modernize India's banking system.
Reserve bank
The Reserve Bank of India is the central bank of India established in 1935. It was initially privately owned but was nationalized in 1949. The RBI regulates monetary policy and the country's banking system to promote economic growth and stability. It controls credit and money supply through various tools like open market operations, bank rates, and reserve requirements. The RBI also acts as a bank, lender, and manager of foreign exchange for India.
Narsimha committee report on financial reforms
The Narasimham Committee was formed in 1991 and 1998 to examine aspects of financial system reforms in India. The 1991 committee recommended reducing CRR and SLR, phasing out directed credit, interest rate deregulation, and restructuring banks. The 1998 committee focused on strengthening banks through mergers and raising capital adequacy ratios. Both committees significantly impacted Indian banking sector reforms.
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The financial system serves as an intermediary between savers and investors, facilitating the exchange of goods and services as well as the transfer of resources. It is composed of financial assets, markets, and intermediaries. Financial assets are used to transfer funds from lenders to borrowers and represent claims on future income. Primary assets are issued directly to investors, while secondary assets are issued by intermediaries. Financial markets allow for the creation and exchange of assets. Money markets facilitate short-term lending while capital markets handle long-term funds. Financial intermediaries mobilize savings and allocate funds from surplus to deficit units. Regulatory bodies like RBI, SEBI, IDBI, and NABARD oversee the financial system to ensure
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narsimha committe report
The document discusses the Narasimham Committee reports from 1991 and 1998 and their recommendations regarding the banking sector in India. Some of the key recommendations included establishing asset reconstruction companies to take bad debts off banks' balance sheets, increasing banks' capital adequacy ratios, reducing statutory liquidity ratios over time, and granting more autonomy to public sector banks. The document also provides details on two of the early asset reconstruction companies established in India - ARCIL and ACE - including their ownership structures.
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2. It describes different types of banking systems used around the world such as branch banking, unit banking, and corresponding banking.
3. It provides an overview of the largest banks in the world by total assets, with the top 5 being in China.
4. It outlines the main sources of funds for banks such as deposits, borrowed funds, and long-term sources. It also discusses the main uses of funds such as loans, investments, and cash.
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The document provides an overview of the Indian banking system. It discusses the history and evolution of banking in India from the establishment of the first bank in 1786 to the current system. It describes the key components of the current banking system including the Reserve Bank of India (RBI), scheduled commercial banks, cooperative banks, and tools used by RBI to regulate the system like cash reserve ratio, repo rate, and statutory liquidity ratio. The banking system has transitioned India to a strong economy with robust banking.
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This document provides an overview of the Indian money market, including its meaning, key features, instruments, and recent developments. It discusses the structure and components of the Indian money market, such as the call money market, commercial bills market, acceptance market, and treasury bill market. It also outlines some features and deficiencies of the Indian money market, such as the existence of unorganized sectors, absence of integration, and limited instruments. Recent developments that have helped strengthen the Indian money market are also summarized, such as the integration of organized and unorganized sectors, introduction of new instruments, and establishment of organizations to support the market.
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It then contrasts central banks with commercial banks, noting that central banks do not aim to generate profits but rather control the banking system and support economic policy. Central banks are generally government organizations. The document proceeds to outline various functions of central banks, including acting as a bank of last resort, managing foreign exchange reserves, implementing monetary policy, and using various tools like bank rates, open market operations, and cash reserve ratios to influence
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This document provides an overview of the Reserve Bank of India (RBI), including its history, functions, monetary policy tools, and credit controls. It establishes that the RBI was established in 1935 and nationalized in 1949. It acts as the central bank, banker to the government, lender of last resort, and controller of money supply and credit in India through various monetary policy tools like bank rate, cash reserve ratio, and open market operations.
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Monetary policy involves central banks controlling the supply of money and interest rates to influence economic activity like prices and employment. It works through expanding or contracting investment and consumption spending. The objectives of monetary policy in India are to achieve rapid economic growth, price stability, exchange rate stability, balance of payments equilibrium, full employment, and an equal distribution of income. Some tools used in monetary policy include adjusting the bank rate, conducting open market operations, and varying reserve requirements to influence the money supply and credit conditions. Both quantitative and qualitative tools are used to target monetary policy objectives.
monetary policy
The document discusses monetary policy, defining it as actions by authorities to influence money supply, interest rates, and money availability to achieve objectives. It outlines the elements of monetary policy as regulating money supply, banking systems, and interest rates. The objectives are listed as regulating money supply, price stability, economic growth, and others. Types of monetary policy controls discussed include quantitative tools like bank rates, cash reserve ratios, and qualitative tools like moral persuasion and credit monitoring. Limitations and ways to improve monetary policy are also presented.
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The Reserve Bank of India (RBI) is the central bank of India that controls the country's monetary policy and the rupee. RBI was established in 1935 and plays an important role in the government's development strategies. As India's monetary authority, RBI supervises the financial system, issues currency, manages foreign exchange reserves, acts as a bank and debt manager to the government, and performs developmental functions through research and data sharing. RBI uses various monetary policy tools like open market operations, bank rates, cash reserve ratios, and liquidity ratios to regulate money supply and achieve objectives like low inflation and economic growth.
Banking sector reforms in india after 1991
The Narasimhan Committee made several recommendations in 1991 to reform India's banking sector as part of broader economic reforms. These included establishing a tiered banking structure, reducing statutory reserves, achieving an 8% capital adequacy ratio, and abolishing branch licensing. In response, the government lowered statutory reserves, implemented prudential norms, capital adequacy requirements, interest rate deregulation, debt recovery laws, and allowed new private banks to increase competition in the sector.
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The document discusses various topics related to commercial banking including:
1. It defines what a bank is and its key functions of accepting deposits and lending funds.
2. It describes different types of banking systems used around the world such as branch banking, unit banking, and corresponding banking.
3. It provides an overview of the largest banks in the world by total assets, with the top 5 being in China.
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The document provides an overview of the Indian banking system. It discusses the history and evolution of banking in India from the establishment of the first bank in 1786 to the current system. It describes the key components of the current banking system including the Reserve Bank of India (RBI), scheduled commercial banks, cooperative banks, and tools used by RBI to regulate the system like cash reserve ratio, repo rate, and statutory liquidity ratio. The banking system has transitioned India to a strong economy with robust banking.
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Monetary policy of RBI
The document summarizes the Reserve Bank of India's monetary policy tools and objectives. It discusses both quantitative and qualitative monetary policy tools used by RBI, including open market operations, bank rate, cash reserve ratio, and moral suasion. The objectives of monetary policy are outlined as price stability and achieving maximum output and employment. The document also provides an overview of how monetary policy can be used for countercyclical purposes to address inflation or recession.
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This document provides an overview of the Indian money market, including its meaning, key features, instruments, and recent developments. It discusses the structure and components of the Indian money market, such as the call money market, commercial bills market, acceptance market, and treasury bill market. It also outlines some features and deficiencies of the Indian money market, such as the existence of unorganized sectors, absence of integration, and limited instruments. Recent developments that have helped strengthen the Indian money market are also summarized, such as the integration of organized and unorganized sectors, introduction of new instruments, and establishment of organizations to support the market.
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It then contrasts central banks with commercial banks, noting that central banks do not aim to generate profits but rather control the banking system and support economic policy. Central banks are generally government organizations. The document proceeds to outline various functions of central banks, including acting as a bank of last resort, managing foreign exchange reserves, implementing monetary policy, and using various tools like bank rates, open market operations, and cash reserve ratios to influence
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This document provides an overview of the Reserve Bank of India (RBI), including its history, functions, monetary policy tools, and credit controls. It establishes that the RBI was established in 1935 and nationalized in 1949. It acts as the central bank, banker to the government, lender of last resort, and controller of money supply and credit in India through various monetary policy tools like bank rate, cash reserve ratio, and open market operations.
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Chapter 21Capital FormationLearning Objectives.docx
Chapter 21
Capital Formation
Learning Objectives
1. Explain the differences between debt and
equity financing and the sources of each.
2.Explain the factors that influence the
desirability of alternative sources of
financing.
3.Explain what an investment banker does.
4.List the major bond rating agencies and
explain their role in the debt market.
5.List some of the pros and cons of retiring
debt early.
Two Key Questions
These questions will inform our discussion
of capital formation in the healthcare
industry:
1. How much capital is needed?
2. What sources of capital financing are
available?
1. How much capital is needed?
2. What sources of capital are available?
Two Key Questions, cont.
Distribution in Hospitals
How is the financing structure changing?
Courtesy of Cleverley & Associates
Three Ways to Generate
New Equity Capital
1. Profit retention: using net income to increase
equity (topic discussed extensively in GRIE
discussions)
2. Contributions: using philanthropic gifts to
increase equity
3. Sale of equity interests: using the issuance
of new ownership interest to increase equity
Contributions/Philanthropy
Giving USA 2016: The Annual Report on Philanthropy for the Year 2015. Researched and written by Indiana University Lilly Fami ly School of
Philanthropy.
Contributions/Philanthrop,
cont.
Giving USA 2016: The Annual Report on Philanthropy for the Year 2015. Researched
and written by Indiana University Lilly Family School of Philanthropy.
Contributions/Philanthrop,
cont.
• KEYS TO SUCCESS
1. Case statement: Defines why you need money
2. Designated development officer: Does not need to
be full-time; incentives should relate to giving
expectations
3. Trustee and medical staff involvement: People give
to people, not to organizations
4. Prospect lists: Know who in the community are prime
prospects for giving
5. Programs for giving: Variety of methods and means
to encourage giving
6. Goals: Define realistic targets for long-range planning
Issuance of Equity
• Taxable firms have relied heavily on equity
issuance to raise capital for years
• Interest in not-for-profit firms has been
generated by raising capital through using
restructured organizations and taxable
entities to raise capital
(Example of not-for-profit organizational structure on
next slide)
Issuance of Equity, cont.
FIGURE 21-1 A Parent Holding Company
Long-Term Debt
Financing
• KEY CHARACTERISTICS
1. Cost
2. Control
3. Risk
4. Availability
5. Adequacy
Long-Term Debt
Financing, cont.
KEY CHARACTERISTICS
1. Cost
• Interest rates are the most important
characteristic that affects the cost of alternative
debt financing.
Key term: coupon rate: fixed return of a long-term
debt instrument
Key term: basis point: 1/100th of 1%
• Issuance costs are simply those expenditures
that are essential to consummate the financing
• Reserve requireme ...
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Chakravarthy committiee
- 1. CHAKRAVARTHY COMMITTIEE BY: SHEREEN SHAHANA S3 MBA
- 2. • S. Chakravarty Committee was formed in 1985 under the chairmanship of Prof. Sukhamoy Chakravarty. • The committee was set up to review the working of monetary system of India • Its goal was to improve monetary regulation, a feat that was hoped would enable price stability. • The committee submitted its report in April , 1985
- 3. Recommendations by committee: • The committee made two major recommendations in regard to the working capital finance: 1. Penal interest for delayed payments 2. Classification of credit limit under three different heads.
- 4. Penal interest for delayed payments • Committee has suggested that the government must insist that all public sector units, large private sector units and government departments must include penal interest payment clause • In their contracts for payments delayed beyond a specific period • Penal interest may be fixed at 2 per cent higher than the minimum lending rate of the supplier’s bank
- 5. Classification of credit limit under three different heads • The total credit limit to be sanctioned to a borrower should be considered under three different heads: 1. Cash credit I to include supplies to government 2. Cash credit II to cover special circumstances 3. Normal working capital limit to cover the balance credit facilities
- 6. • The interest proposed for three heads are also different. • Basic lending rate of the bank should be charged to Cash Credit II, and the Normal Working Capital, limit may charge as below: a. For cash credit portion: maximum prevailing lending rate of the bank b. For bill finance portion:2 % below the basic lending rate of the bank c. For loan portion:rate may vary between minimum & maximum lending rate of the bank