The document discusses reforms to India's financial sector that began in the early 1990s. It covers banking sector reforms, monetary policy reforms, and reforms to financial markets and the foreign exchange market. The reforms aimed to create an efficient, competitive financial sector by reducing regulations, introducing market forces, and improving regulatory standards and oversight. They occurred in two phases, with the initial phase in the early 1990s focused on operational flexibility and the second phase strengthening the system.
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
This slide gives an insight to the financial sector reforms of India which looks into banking reforms, monetary policy reforms and financial market. It is quick to learn and easy to understand with major points highlighted in regards of 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
This slide gives an insight to the financial sector reforms of India which looks into banking reforms, monetary policy reforms and financial market. It is quick to learn and easy to understand with major points highlighted in regards of reforms.
This PPT has been made with the help of all the information i could get freely through the internet. Hope it can help others as it helped me!
Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks and other securities.
One of the oldest forms of business financing, factoring is the cash-management tool of choice for many companies. Factoring is very common in certain industries, such as the clothing industry, where long receivables are part of the business cycle.
Mallam Sanusi Lamido Sanusi presentation on the 2012 policy dialogue by Malla...MMFNG
Towards Financial System Stability: Recent Policy Reforms in the Nigerian Banking Sector - Mallam Sanusi Lamido Sanusi
Aisha Muhammed-Oyebode - CEO, Murtala Muhammed Foundation
There was a man who made a living selling balloons at a fair. He had all colors of
balloons, including red, yellow, blue, and green. Whenever business was slow, he would
release a helium-filled balloon into the air and when the children saw it go up, they all
wanted to buy one. They would come up to him, buy a balloon, and his sales would go up
again. He continued this process all day. One day, he felt someone tugging at his jacket.
He turned around and saw a little boy who asked, "If you release a black balloon, would
that also fly?" Moved by the boy's concern, the man replied with empathy, "Son, it is not
the color of the balloon, it is what is inside that makes it go up."
The same thing applies to our lives. It is what is inside that counts. The thing inside of us
that makes us go up is our attitude.
Have you ever wondered why some individuals, organizations, or countries are more
successful than others?
It is not a secret. These people simply think and act more effectively. They have learned
how to do so by investing in the most valuable asset--people. I believe that the success
of an individual, organization or country, depends on the quality of their people.
I have spoken to executives in major corporations all over the world and asked one
question: "If you had a magic wand and there was one thing you would want changed,
that would give you a cutting edge in the marketplace resulting in increased productivity
and profits, what would that be?" The answer was unanimous. They all said that if people
had better attitudes, they'd be better team players, and it'd cut down waste, improve
loyalty and, in general, make their company a great place to work.
William James of Harvard University said, "The greatest discovery of my generation is
that human beings can alter their lives by altering their attitudes of mind."
Experience has shown that human resources is the most valuable asset of any business.
It is more valuable than capital or equipment. Unfortunately, it is also the most wasted.
People can be your biggest asset or your biggest liability.
TQP--TOTAL QUALITY PEOPLE
Having been exposed to a number of training programs, such as customer service,
selling skills, and strategic planning, I have come to the conclusion that all these are
great programs with one major challenge: None of them works unless they have the right
foundation, and the right foundation is TQP. What is TQP? TQP is Total Quality People--
people with character, integrity, good values, and a positive attitude.
Don't get me wrong. You do need all the other programs, but they will only work when
you have the right foundation, and the foundation is TQP. For example, some customer
service programs teach participants to say "please," and "thank-you," give smiles and
handshakes. But how long can a person keep on a fake smile if he does not have the
desire to serve? Besides, people can see through him. And if the smile is not sincere, it is
irritating. My point is, there has to be sub
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.
The Financial Sector Reforms in India
1. Presentation
Economic Environment of Business
The Financial Sector Reforms
Slow but steady …not to forget the socio economic needs …
1
The financial Sector Reforms
September 9, 2009
2. GROUP
• AJAY K. DHAMIJA N-1
• SNEHAL SONI N-47
2
The financial Sector Reforms
September 9, 2009
3. Coverage
•Introduction
•Major Contours of Reforms
•Banking sector Reforms
•Monitory Policy Reforms
•Financial Markets Reforms
•Forex Market Reforms
•Assesment
•Conclusions
3
The financial Sector Reforms
September 9, 2009
4. Introduction
• FIVE Principle
– Measured, gradual, cautious and steady sequencing of reforms
– Introduction of mutually reinforcing norms
– Development of an Efficient, Competitive and Stable financial
sector
– Development of Financial Institutions
– Introduction of complementary reforms across Monetary, Fiscal and
external sector
• Broad based reforms touching every sector
– Financial Sector
– Monetary and Fiscal Policy
– Capital Market
– Foreign Exchange Market
– Money and Government Securities Market
4
The financial Sector Reforms
September 9, 2009
5. In early 1990s Lion in jungle
• Financial Repression
vs
lion in cage
– Extensive Regulations
– Administered Interest rates
– Directed Credit Programmes
– Weak Banking Structure
– Lack of Proper Accounting & Risk management systems
– Lack of transparency in operations
5
The financial Sector Reforms
September 9, 2009
6. In early 1990s…
– Pre-emption of resources from the banking system by the
Pre-
government to finance its fiscal deficit
– Excessive structural and micro regulation that inhibited financial
innovation and increased transaction costs
– Relatively inadequate level of prudential regulation in the
financial sector
– Poorly developed debt and money markets
– Outdated (often primitive) technological and institutional
structures that made the capital markets and the rest of the
financial system highly inefficient.
6
The financial Sector Reforms
September 9, 2009
7. Resulting into …
• Government regulated the price at which firms could issue equity,
the rate of interest which they could offer on their bonds, and the
debt equity ratio that was permissible in different Industries
• Working capital management was even more constrained with
detailed regulations on how much inventory the firms could carry
or how much credit they could give to their customers.
• Working capital was financed almost entirely by banks at interest
rates laid down by the central bank
• Working capital finance was related more to the credit need of the
borrower than to creditworthiness
7
The financial Sector Reforms
September 9, 2009
8. … and …
• Volatility was not something that most finance managers worried
about or needed to.
– The exchange rate of the rupee changed predictably and almost
imperceptibly
– Administered interest rates were changed infrequently and the
changes too were usually quite small
• Financial genius consisted largely of finding one’s way through the
regulatory maze, exploiting loopholes wherever they existed and above
all cultivating relationships with those officials in the banks and
institutions who had some discretionary powers.
• Even an overnight cash surplus could be parked in the overdraft
account where it could earn (or rather save) interest at the firm’s
borrowing rate.
8
The financial Sector Reforms
September 9, 2009
9. At larger level …
• The balance of payments crisis that threatened the international
credibility of the country and pushed it to the brink of default
• The grave threat of insolvency confronting the banking system which
had for years concealed its problems with the help of defective
accounting policies.
• Hindered efficient allocation of resources
9
The financial Sector Reforms
September 9, 2009
10. Major Contours of Reforms
• Removal of existing financial repression
• Creation of an efficient, productive and profitable financial sector
• Enabling the process of price discovery by the market determination of
interest rates that improves allocative efficiency of resources
• Providing operational and functional autonomy to institutions
• Preparing the financial system for increasing international competition
• Opening the external sector in a a calibrated manner
• Promoting financial stability in the wake of domestic and external
shocks
10
The financial Sector Reforms
September 9, 2009
11. Two phased Reforms
• First Generation (Early 1990):- Ist Phase:
1990):-
– Creating an efficient, productive and profitable financial
sector to function with operational flexibility and
functional autonomy
• Second Generation (Mid 1990 …) :- IInd phase
:-
– Strengthening the financial system and introducing
structural improvements
11
The financial Sector Reforms
September 9, 2009
12. Major Sectors of Reforms
• Banking Sector
• Monetary Policy
• Financial Markets
• Forex Market
12
The financial Sector Reforms
September 9, 2009
13. Banking Sector Reforms
• Competition Enhancing Measures
• Measures Enhancing Role of Market Forces
• Prudential Measures
• Institutional and Legal Measures
• Supervisory Measures
• Technology Related Measures
13
The financial Sector Reforms
September 9, 2009
14. Banking Sector Reforms :
Competition Enhancing Measures
• Operational autonomy to Public Sector banks
• Reduction in public ownership of public sector banks
– Can raise capital from equity market up to 49% of paid up capital
• Transparent Norms related to entry, mergers /amalgamation and
governance issues for Indian private sector, foreign and joint-venture
joint-
banks, NBFC’s and insurance companies
• Permission for foreign investment in the financial sector in the form of
Foreign Direct Investment (FDI) as well as portfolio investment
• Permission to banks to diversify product portfolio and business
activities
14
The financial Sector Reforms
September 9, 2009
15. Banking Sector Reforms :
Measures Enhancing Role of Market Forces
• Sharp reduction in pre-emption through reserve requirement
pre-
• Market determined pricing for government securities
• Disbanding of administered interest rates
• Enhanced transparency and disclosure norms to facilitate market
discipline
• Introduction of pure inter-bank call money market and developing
inter-
markets for securitized assets
• Auction-based repos-reverse repos for short-term liquidity
Auction- repos- short-
management and Improved payments and settlement
mechanism
15
The financial Sector Reforms
September 9, 2009
16. Banking Sector Reforms :
Prudential Measures
• Introduction and phased implementation of international best practices
and norms related to:- CRAR, Income recognition, Provisioning and
Exposure
• Strengthen risk management :-
– Assignment of risk-weights to various asset classes
– Norms on connected lending, risk concentration
– Application of marked-to-market principle for investment portfolio and
limits on deployment of fund in sensitive activities
– 'Know Your Customer‘ norms
– 'Anti Money Laundering' guidelines
– Graded provisioning for NPA’s
– Capital charge for market risk
• Guidelines for ownership and governance, securitization and debt
restructuring mechanisms norms, etc
16
The financial Sector Reforms
September 9, 2009
17. Banking Sector Reforms :
Prudential Measures:- Roadmap for Basel II
Measures:-
• Implementing Basel II with effect from March 31, 2007
• Standardized Approach for credit risk and Basic Indicator
Approach for operational risk (First Phase)
• Migrate to the Internal Rating Based (IRB) Approach after
adequate skills are developed (Second Phase)
• Basel II will require more capital for banks in India
– Presently CRAR is over 12 per cent
– New and Innovative Funding options
Perpetual debt instruments and non-
non-
cumulative preference shares
Redeemable cumulative preference shares
and hybrid debt instruments
17
The financial Sector Reforms
September 9, 2009
18. Banking Sector Reforms :
Institutional and Legal Measures
• Setting up of Lok Adalats (people’s courts), debt recovery tribunals,
asset reconstruction companies, settlement advisory committees,
corporate debt restructuring mechanism, etc.
• Promulgation of Securitization and Reconstruction of Financial Assets
and Enforcement of Securities Interest (SARFAESI) Act, 2002 and its
subsequent amendment to ensure creditor rights
• Setting up of Credit Information Bureau of India Limited (CIBIL) for
information sharing on defaulters as also other borrowers
• Setting up of Clearing Corporation of India Limited (CCIL) to act as
central counter party for facilitating payments and settlement system
relating to fixed income securities and money market instruments
18
The financial Sector Reforms
September 9, 2009
19. Banking Sector Reforms :
Supervisory Measures
• Board for Financial Supervision as the apex supervisory authority for
Risk based supervision
• Introduction of CAMELS supervisory rating system
(i.e., capital adequacy, asset quality, management, earning,
liquidity and system and control).
• Consolidated supervision of financial conglomerates
• Recasting of the role of statutory auditors with increased internal
control through strengthening of internal audit
• Strengthening corporate governance
• Fit and proper tests for directors along-with enhanced due diligence on
important shareholders
19
The financial Sector Reforms
September 9, 2009
20. Banking Sector Reforms :
Technology Related Measures
• INFINET as the communication backbone for the financial
sector
• Negotiated Dealing System (NDS) for screen-based trading in
government securities
• Real Time Gross Settlement (RTGS) System
True test of the success of the banking
reforms would be the extent of NPA’s
20
The financial Sector Reforms
September 9, 2009
22. Monitory Policy Reforms :
Objectives
• Twin objectives of “Maintaining price stability” and “Ensuring
availability of adequate credit to productive sectors
• Use of broad money (M2) as an intermediate target has been de-
emphasized and a multiple indicator approach has been adopted
• Development of multiple instruments to transmit liquidity and interest
rate signals in the short-term in a flexible and bi-directional manner
• Increase of the inter-linkage between various segments of the financial
market including money, government security and forex markets
22
The financial Sector Reforms
September 9, 2009
23. Monitory Policy Reforms :
Instruments: Strategic Shift: From Direct to Indirect
• Open market operations (OMO) to deal with overall market liquidity
situation especially those emanating from capital flows
• Introduction of Market Stabilization Scheme (MSS) as an additional
instrument to deal with enduring capital inflows without affecting
short-term liquidity management role of LAF
• Introduction of Liquidity Adjustment Facility (LAF), which operates
through repo and reverse repo auctions Liquidity Adjustment Facility
( LAF )
– To nudge overnight interest rates within a specified corridor.
– TO de-emphasize targeting of bank reserves and focus increasingly on
interest rates.
– reducing the cash reserve ratio (CRR) without loss of monetary control.
23
The financial Sector Reforms
September 9, 2009
24. LAF + OMO + MSS => Flexibility
Transition from direct instruments of monetary control
such as administered interest rate, reserve requirement,
selective capital control) to indirect instruments like open
market operations, purchase and repurchase of
government securities
• Advantages
– Certain dead weight loss for the system was saved.
– Greater flexibility in determining both the quantum of adjustment
as well as the rates by responding to the needs of the system on
a daily basis.
– Modulation of the supply of funds on a daily basis to meet day-
to-day liquidity mismatches.
– demand for funds are affected through policy rate changes.
– Stabilization of short-term money market rates.
24
The financial Sector Reforms
September 9, 2009
25. Monitory Policy Reforms :
Developmental Measures
• Discontinuation of automatic monetization through an agreement
between the Government and the Reserve Bank
• Amendment of Securities Contracts Regulation Act (SCRA), to create
the regulatory framework
• Introduction of automated screen-based trading in government
securities through Negotiated Dealing System (NDS).
• Setting up of risk-free payments and system in government securities
through Clearing Corporation of India Limited (CCIL).
• Phased introduction of Real Time Gross Settlement (RTGS) System
• Deepening of inter-bank Repo market Deepening of government
securities market by making the interest rates on such securities
market related
25
The financial Sector Reforms
September 9, 2009
26. Monitory Policy Reforms :
Institutional Measures
• Setting up of Technical Advisory Committee on Monetary
Policy with outside experts to review macroeconomic and
monetary developments and advise the Reserve Bank on
the stance of monetary policy
• Creation of a separate Financial Market Department within
the RBI
• Development of appropriate trading, payments and
settlement systems along with technological infrastructure.
Success of monetary management such as interest rates, is contingent
upon the extent and speed with which changes in the central bank's
policy rate are transmitted to the spectrum of market interest rates
and exchange rate in the economy and onward to the real sector.
26
The financial Sector Reforms
September 9, 2009
27. Capital Market Reforms :
• Abolition of capital issues control and the introduction of free pricing of
equity issues (CCI)
• Securities and Exchange Board of India (SEBI) was set up as the apex
regulator of the Indian capital markets.
• Primary market regulations:
– Entry norms for capital issues were tightened
– Disclosure requirements were improved
– Regulations were framed and code of conduct laid down for
merchant bankers
– Underwriters, mutual funds, bankers to the issue and other
intermediaries
• Corporate governance regulations:
– Regulations were framed for insider trading
– Regulatory framework for take overs was revamped
27
The financial Sector Reforms
September 9, 2009
28. Capital Market Reforms
• Secondary market regulations:
– Capital adequacy and prudential regulations were introduced for brokers,
and other intermediaries
– Dematerialization of scrips was initiated with the creation of a legislative
framework and the setting up of the first depository
– Settlement period was reduced to one week
– Carry forward trading was banned
– Tentative moves were made towards a rolling settlement system.
28
The financial Sector Reforms
September 9, 2009
29. Reforms in Government Securities
Market
• Institutional Measures
• Increase in Instruments in the Government Securities
Market
• Enabling Measures
29
The financial Sector Reforms
September 9, 2009
30. Government Securities Market :
Institutional Measures
• Administered interest rates on government securities were replaced
by an auction system for price discovery
• Banks have been permitted to undertake primary dealer business while
primary dealers are being allowed to diversify their business
• Central Government would cease to raise resources on behalf of State
Governments . State Governments' capability in raising resources will
be market determined and based on their own financial health
• Effective April 1, 2006, RBI has withdrawn from participating in
primary market auctions of Government paper
– fully market based system in the G-sec market.
30
The financial Sector Reforms
September 9, 2009
31. Government Securities Market :
Increase in Instruments
• Market Stabilization Scheme (MSS) has been introduced, which has
expanded the instruments available to the Reserve Bank for managing
the enduring surplus liquidity in the system
– 91-day Treasury bill was introduced for benchmarking
– Zero Coupon Bonds, Floating Rate Bonds, Capital Indexed Bonds were
issued
– Exchange traded interest rate futures were introduced
– OTC interest rate derivatives like IRS/ FRAs were introduced
• Repo status has been granted to State Government securities in order
to improve secondary market
31
The financial Sector Reforms
September 9, 2009
32. Government Securities Market :
Enabling Measures
• Foreign Institutional Investors (FIIs) were allowed to invest in
government securities subject to certain limits with non-banks allowed
to participate in repo market
• Introduction of automated screen-based trading in government
securities through Negotiated Dealing System (NDS)
• Setting up of risk-free payments and settlement system in government
securities through Clearing Corporation of India Limited (CCIL)
• Phased introduction of Real Time Gross Settlement System (RTGS).
• Introduction of trading in government securities on stock exchanges
for promoting retailing and Non-banks participation
32
The financial Sector Reforms
September 9, 2009
33. Reforms in Foreign Exchange Market
• Exchange Rate Regime
• Finance Mobilization
• Institutional Framework
• Increase in Instruments in the Foreign Exchange Market
• Liberalization Measures
33
The financial Sector Reforms
September 9, 2009
34. Reforms in Foreign Exchange Market :
Exchange Rate Regime
• Evolution of exchange rate regime from a single-currency fixed-
exchange rate system to fixing the value of rupee against a basket of
currencies and further to market-determined floating exchange rate
regime
• Adoption of convertibility of rupee for current account transactions
with acceptance of Article VIII of the Articles of Agreement of the IMF
• De facto full capital account convertibility for non residents
• Calibrated liberalization of transactions undertaken for capital account
purposes in the case of residents
34
The financial Sector Reforms
September 9, 2009
35. Reforms in Foreign Exchange Market :
Finance Mobilization
• Indian companies were allowed to raise equity in international markets
subject to various restrictions.
• Indian companies were allowed to borrow in international markets
subject to a minimum maturity, a ceiling on the maximum interest
rate, and annual caps on aggregate external commercial borrowings
by all entities put together.
• Indian mutual funds were allowed to invest a small portion of their
assets abroad.
• Indian companies were given access to long dated forward contracts
and to cross currency options.
35
The financial Sector Reforms
September 9, 2009
36. Reforms in Foreign Exchange Market :
Institutional Framework
• Replacement of the earlier Foreign Exchange Regulation Act (FERA),
1973 by the market friendly Foreign Exchange Management Act, 1999
(FEMA)
• Delegation of considerable powers by RBI to Authorized Dealers to
release foreign exchange for a variety of purposes
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The financial Sector Reforms
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37. Reforms in Foreign Exchange Market :
Increase in Instruments
• Development of rupee-foreign currency swap market
• Introduction of additional hedging instruments, such as, foreign
currency-rupee options
• Permission to use innovative products like cross-currency options,
interest rate swaps (IRS) and currency swaps, caps/collars and forward
rate agreements (FRAs) in the international forex market.
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The financial Sector Reforms
September 9, 2009
38. Reforms in Foreign Exchange Market :
Liberalization Measures
• Authorized dealers permitted to initiate trading positions, borrow and
invest in overseas market subject to certain specifications and
ratification by respective Banks’ Boards
• Banks are also permitted to fix interest rates on non-resident deposits,
subject to certain specifications
• Use of derivative products for asset-liability management and fix
overnight open position limits and gap limits in the foreign exchange
market, subject to ratification by RBI
• Permission to various participants in the foreign exchange market,
including exporters, Indians investing abroad, FIIs, to avail forward
cover and enter into swap transactions without any limit subject to
genuine underlying exposure
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The financial Sector Reforms
September 9, 2009
39. Reforms in Foreign Exchange Market :
Liberalization Measures
• FII’s and NRI’s permitted to trade in exchange-traded derivative
contracts subject to certain conditions
• Foreign exchange earners permitted to maintain foreign currency
accounts
• Residents are permitted to open such accounts within the general limit
of US $ 200,000 per year
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The financial Sector Reforms
September 9, 2009
40. Financial Sector and Monetary
Policy Reforms : An assessment
Progress of Commercial Banking in India
1969 1980 1991 1995 2000 2005
1 2 3 4 5 6 7
1 Commercial Banks 73 154 272 284 298 288
2 No. of Bank Offices 8,262 34,594 60,570 64,234 67,868 68,339
Rural and semi
-urban bank offices 5,172 23,227 46,550 46,602 47,693 47491
3 Population per
Office (’000s) 64 16 14 15 15 16
4 Per capita
Deposit (Rs.) 88 738 2,368 4,242 8,542 16,699
5 Per capita Credit
(Rs.) 68 457 1,434 2,320 4,555 10,135
6 Priority Sector
Advances@ (%) 15 37 39 34 35 40
7 Deposits (% of
National Income) 16 36 48 48 54 65
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The financial Sector Reforms
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41. Financial Sector and Monetary
Policy Reforms : An Assessment
Distribution of Commercial Banks According to Risk-weighted
Capital Adequacy
Year <4% 4-9 % 9-10 % >10 % Total
1 2 3 4 5 6
1995-96 8 9 33 42 92
2000-01 3 2 11 84 100
2004-05 1 1 8 78 88
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The financial Sector Reforms
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43. Financial Sector and Monetary
Policy Reforms : An Assessment
Select Productivity Indicators of Scheduled Commercial Banks
(Rs. million at 1993-94 prices)
Year Business Profit per Business
per employee Employee per branch
1992 5.4 0.02 109.9
1996 6.0 0.01 119.6
2000 9.7 0.05 179.4
2005 17.3 0.13 267.0
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The financial Sector Reforms
September 9, 2009
44. Financial Sector and Monetary
Policy Reforms : An Assessment
Despite record high international crude oil prices, inflation remains low
and inflation expectations also remain stable.
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The financial Sector Reforms
September 9, 2009
45. Financial Sector and Monetary
Policy Reforms : An Assessment
Fresh issuances under the MSS were suspended between November 2005 and April 2006
due to tight liquidity. Redemptions of securities/Treasury Bills issued earlier – along with
active management of liquidity through repo/reverse repo operations under Liquidity
Adjustment Facility - provided liquidity to the market and imparted stability to financial
markets. With liquidity conditions improving, it was decided to again start issuing
securities under the MSS from May 2006 onwards.
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The financial Sector Reforms
September 9, 2009
46. Forex Reforms : An Assessment
Exchange rate exhibiting reasonable two-way movement
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The financial Sector Reforms
September 9, 2009
47. Financial Sector and Monetary
Policy Reforms : An Assessment
Credit Delivery increased from 30 per cent during 1999-00 to 41 per cent
during 2004-05 and further to 48 per cent during 2005-06.
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The financial Sector Reforms
September 9, 2009
48. Conclusion
• Financial system in India, through a measured,
gradual, cautious, and steady process, has
undergone substantial transformation
• Reasonably sophisticated, diverse and resilient
system through well-sequenced and coordinated
policy measures aimed at making the Indian financial
sector more competitive, efficient, and stable
• Effective monetary management has enabled price
stability while ensuring availability of credit to
support investment demand and growth in the
economy.
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The financial Sector Reforms
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49. Conclusion
• The multi-pronged approach towards managing
capital account in conjunction with prudential and
cautious approach to financial liberalisation has
ensured financial stability in contrast to the
experience of many developing and emerging
economies
• Monetary policy and financial sector reforms in India
had to be fine tuned to meet the challenges
emanating from all global and domestic shocks.
• Viewed in this light, the success in maintaining price
and financial stability is all the more creditworthy.
• The overall objective of maintaining price stability in
the context of economic growth and financial stability
will remain
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The financial Sector Reforms
September 9, 2009
50. Thank You
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The financial Sector Reforms
September 9, 2009