What is Capital Market
Capital market is a market for long term debt and equity shares. It helps to generate bulk fund for government and industries. The institutions in capital market are NBFCs. SEBI, insurance companies, venture capital funds, chit funds all come under NBFCs.Read More »
What is Money Market ?
Money market is for short term funds with maturity ranging from overnight to 1 year, whereas, capital markets are for long term funds with maturity more than an year. The main objective of central bank is to align money market rates with the key policy rates. RBI governs money market. The entities permitted to participate both as lender/borrower in money market are scheduled commercial banks(except RRBs), Cooperative banks other than land development banks and primary dealers.Read More »
A depository receipt is a negotiable financial instrument issued by a bank to represent a foreign company’s publicly traded securities. Depository receipts let U.S. investors, for example, purchase shares in Indian companies in a more convenient and less expensive manner than purchasing stocks in foreign markets. Depository receipts that are listed and traded in the United States are American depository receipts (ADRs). European banks issue European depository receipts (EDRs), and other banks issue global depository receipts (GDRs).Read More »
In my previous post we have discussed about Retail banking, its products and importance. Its time to discuss about wholesale banking.
It refers to doing banking business with industrial and business entities like corporates, PSUs and MNCs. The major advantage in wholesale banking is that a client can have easy and one-place access to all his finances and their details. This makes internal stock transfers, fund transfers, allocations and distributions simpler.Read More »
Retail banking, also known as consumer banking, is the typical mass-market banking in which individual customers use local branches of larger commercial banks. Banking services which are regarded as retail include provision of savings and transactional accounts, mortgages, personal loans, house loans, vehicle loabs, debit cards, and credit cards.Read More »
Liquidity Adjustment Facility
A liquidity adjustment facility (LAF) is a tool used in monetary policy that allows banks to borrow money through repurchase agreements. It is a short term credit control measure. All banks and NBFC can avail LAF. Minimum Rs. 5 Crore. It has 2 instruments a) Repo Rate b) Reverse Repor RateRead More »
Monetary policy is the process by which the monetary authority of a country, typically the central bank (RBI), controls either the cost of very short-term borrowing or the monetary base, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.Read More »