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Financial Services(MBA-2F07)
UNIT-I
Introduction
Introduction to Financial Services
Course Coordinator: Dr. Saboohi Nasim
FMS&R, AMU
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Unit –I (Syllaus)
• Introduction to Financial System and Financial
Markets, Instruments
• Evolution of Indian Financial System
• nanc a erv ces: concepts, eatures,constituents and types
• Regulatory Framework for Financial
Services(NF!"
• Stock E#c$anges of India% SEI
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• ase I* Indian Financial Syste+ (IFS) on
te eve o, lannin (U. to /1/)
• ase II* IFS in te ost Inde.endence
eriod (/1/-late /0s)
3AS!S IN T3! !"#$UTI#N #F
IN%IAN FINAN&IA$ S'ST!M
• ase III* Financial Sector 4e,or+s since
early /0s56$#BA$ FINAN&IA$ &4ISIS
ITS IMA&T #N IN%IAN
!N#M'8FINAN&IA$
S!&T#4
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3AS! - I
Indian Financial Syste+ (IFS) on te eve o,
annin U. to /1/
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!volution o, various constituents o, te Financial
Syste+
• &urrency Money Su..ly
3AS! - I
Indian Financial Syste+ (IFS) on te eve o, lannin(U. to /1/)
• an n ector• S+all Savins
• Insurance Funds
• Stoc9 Mar9et
• ulic %e.osits
• 6overn+ent Securities Treasury Bills
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&urrency Money Su..ly• Indian currency not standardi:ed e,ore
Inde.endence• Till /;--- silver standard (,or
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&urrency Money Su..ly (&ontd?)• roress o, Moneti:ation
•&olume of currency in circulation
')* '+*
Rs ''cr Rs ''++ !r
• o a oney upp y
'+./ '+*/ '+/0
Rs 1/ cr Rs 10/1 cr Rs '.. cr
• &urrency constituted a +a@or .ortion o, +oney
su..ly (increased from /12 in '+./ to 3) 2 in
'+/1"
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Ban9in Sector
• Indienous Ban9ers
%o+inated te an9in sector till //0
5
till /
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Ban9in Sector (contd?)
• Structure 6rot o, Modern Ban9s
Foundation o, +odern an9in it te
estalis+ent o, ; .residency an9s»Ban9 o, Benal (/0
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• 4a.id .roress in te DModern Ban9in
Syste+E in early 20t century
/2/- I+.erial Ban9 o, IndiaG ,or+ed y tea+ala+ation o, te tree .residency an9sH
,unctioned as te uasi central an9s
Ban9in Sector (contd?)
/;1- 4BI as estalised
• By /10 Indian Ban9in Syste+G co+.rised o,
RBI IBI Co-operativeBanks
ExchangeBanks
Indian Jointstock Banks
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Ban9in Sector (&ontd?5)
• Feature o, Indian Ban9in Syste+
3i deree o, concentration in te an9inusiness (to. 7 an9s IBI accounted ,or +ost
S+aller an9s ere res.onsile ,or .rovidin
an9in ,acilities to te +asses (28;rd o, .laces
on te an9in +a. o, India)%e.osits- +ainstay o, all an9sH IBI invested
+ore in ovt5 securities tan te class A/ an9s
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Ban9in Sector (&ontd?5)
• Feature o, Indian Ban9in Syste+?5&redit8 de.osit ratio as lo in eneral
&as 8credit overdra,t ,olloed y loan.o.ular ,or+s
o, an9 credit
Ban9s invested +ore in sort ter+ ovt5 securities5
Bill Financin and &all +oney +ar9et not develo.ed
Sectoral distriution o, advances (/C)*
&o++erce (C
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Ban9in Sector (&ontd?5)
• 6a.s in Ban9in Services
$ac9 o, su..ly o, lon-ter+ ,unds to allindustrial units ( industrial an9s set u. in
$ac9 o, su..ly o, any ,or+ o, ca.ital to s+all
scale units
$ac9 o, su..ly o, ,unds to te aricultural sector(&oo.erative an9s set u. in //
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S+all Savins• #ldest +ediu+ ,or co++unity savins
• 6ovt5 run savins an9- attaced it
.res ency an s str ct treasur es osto,,ice savins an9 (#SB)
• By /< – #SB- +ono.oli:ed te s+all
savin usinessH variety in savin sce+es
introduced only since //15
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Stoc9 Mar9et
• First Stoc9 !=cane estalised in Bo+ay in /7
• "olu+e o, ,unds raised increased sini,icantly in
,irst al, o, 20t century
• &a.ital raised .ri+arily trou issuance o,
ordinary sares
• %eentures not .o.ular e,ore /
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ulic %e.osits
• Kide s.read .ractice o, usin .ulic
de.ositsG y %e.osit &o+.anies in ,inancin
o, ,i=ed assets (cause o, serious concern ,orte +onetary autorities?)
• e.os s accoun e or o o a,undin o, Bo+ay A+edaad Mills-
/;05
• Interest rates on de.osits ere less tan te
averae lendin rates o, co++on an9s
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Insurance Funds
• $i,e Insurance usiness ean it teenact+ent o, $i,e Insurance &o+.anies Act-
//2G
•arr e y var ous n an o5s ore n o5srovident Societies ost Telera. %e.t5
/2 /10
• No5 o, $i,e insurance &o5s 70 2CC
No5 o, Non $i,e insurance &o5s /2 /7C
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6ovt5 Securities Treasury Bills
• Mar9et ,or 6overn+ent Securities e=.anded
.eno+enally
• A+ount o, ross issue o, suc securities increased
,ro+ 4s 2 cr /0 to 4s5 ;2 cr /C
• Treasury Bills ,irst issued in India in //7H used to
induce in,lo o, ,orein ,unds
• 4BI- discounted te Treasury Bills
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3AS! - II
IFS in te ost Inde.endence eriod (/1/-late /0s)
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FINANCIAL REFORMS DURING PHASE II
• !volved in res.onse to te
i+.eratives o, .lanned econo+ic
develo.+ent
• %istriution o, resources y te
Financial Syste+ to e alined itte .riorities o, F's–
6overn+ental &ontrolG
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ELEMENTS OF FINANCIAL REFORMS
FINAN&IA$ 4!F#4MS %U4IN6 3AS! II
PublicPublicOwnership ofOwnership of
FinancialFinancial
InstitutionsInstitutions
FortificationFortificationofof
InstitutionalInstitutionalStructureStructure
ProtectionProtectiontoto
InvestorsInvestors
ParticipationParticipationof Financialof Financial
Institutions inInstitutions inCorporateCorporate
ManagementManagement
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(A) ulic #nersi. o, Financial(A) ulic #nersi. o, Financial
InstitutionsInstitutionsProgressive transfer of important constituents ofIFS from private ownership to public control
NATIONALIZATION
Adopted
NEWINSTITUTIONS
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Nationali:ation Ti+eline
1948 1956 1969 19721972 1980
Markedthe
beginning
Landmark in the historyof public control
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Ne Institutions• Battery o, ne institutions estalised in te
.ulic sector
• Kide rane o, s.ecial .ur.ose ,inancial institutions ?
estalised at national reional and state levels
• &reation o, an invest+ent trust orani:ation in te
.ulic sector-UTI –,inancial innovation
Entire industrial financin s!stem "o#ned, controlledand led b! the o$t.
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(B)Forti,ication o, Institutional StructureForti,ication o, Institutional Structure
DevelopmentBanks
LIC
Strengthening oinstit!tional
str!"t!re
#$I
Commer"ialBanks
Changes in structure& policies
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Fortification of Develo!ent "an#$
Massi$e ro#th in number & functions %erformed /C-Industrial Finance &or.oration o, India (IF&I)
mared the beinnin of de$elo%ment banin in 'ndia
Filled the a% in lon term 'ndustrial financin
/1/-State Finance &or.oration (SF&)
E(cessi$e control & caution Failed to deli$er
/1C- National Industrial %evelo.+ent&or.oration (NI%&)
Shift from finance to de$elo%ment
Ended u% as a financin aenc!
Functionin as consultanc! orani)ation %resentl!
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Fortification of Develo!ent "an#$%&&
/11-Industrial &redit Invest+ent &or.oration o,India (I&I&I)
re%resent the di$ersification of de$elo%ment banin in 'ndia
*ioneer in man! functions +under#ritin of issues of ca%italchanneli)ation of %ri$ate currenc! loans to %ri$ate sector-.
/1-4e,inance &or.oration o, India(4&I)
/o %ro$ide refinance facilities to bans e(tendin term loansto SMEs+e. SFCs
Mered #ith 'D0' later in 1234
/
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Fortification of Develo!ent "an#$%&
/7/-Industrial 4econstruction &or.oration o,India (I4&I)
Estbd. For the rehabilitation of sic units 7ointl! set u% b!'D0' & 8'C " renamed as 'R0' in 1294
Con$erted into a full fleded %ublic financial institution &renamed as 'nd. 'n$estment 0an of 'ndia +''0' in 1225
Tecnical &onsultancy #rani:ation(T)
Di$ersification of de$elo%ment banin in 'ndia oint %artnershi% of 'D0', 'FC' & 'C'C'
/- S+all Industries %evelo.+ent Ban9 o, India(SI%BI)
'nstitutional inno$ation
De$elo%ment of small industries
;arieated structure of de$elo%ment bans6%ro$idin finance to the industr! in di$erse forms
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Fortification of Life In$'rance Cororation
Ste. toards ,orti,yin industrial ,inancin –delierate conscious e,,ort to re-+ould te ,inancial syste+
A+ala+ation o, 2C1 li,e insurance co+.anies to ,or+$I&-trans,er o, i+.ortant savins ,ro+ .rivate to .ulic
&oncentration o, ue investile resources (lon ter+)used in
Underritin o, cor.orate issues artici.ation in .urcase o, securities
%irect lendin to te industry
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Fortification of Unit Tr'$t of In(ia )UTI*
&ul+ination o, a lon overdue need o, te ca.ital+ar9et
Introduced ne ,or+ o, ,inancial asset-unitsce+es –to suit di,,erent class o, investors
6overn+ent Su..ort-initial ca.ital contriuted yvarious ,inancial institutionsH ta= e=e+.tione=tended?5
!+ered as te +ost do+inant uyer o, teindustrial securities in India ($I& releated to te
second .osition)
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Fortification of Co!!ercial "an#$
4ede,inin te structure .olicies o, te e=istinco++ercial an9s
Te ortodo= ,unctions o, de.osit an9in and su..ly o, sort-ter+ ,unds roadened?
&o++ittee /1C) reco++ended .artici.ation o, an9s inunderritin o, issue o, ca.ital
!ntry o, an9s in +ercant an9in activitiesH.artici.ation o, co++ercial an9s in lon ter+ ,inancininstitutionali:ed y te creation o, susidiaries li9e SBI&a.ital M9t5 NB &a.ital M9t5?5
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(&) rotection to Investors(&) rotection to Investors
1
Industrial securities as a form of saving not popular before1951, due to “general distrust of public of privatebusinesses” (corporate fraud & abuses were rampant)
Extensive and drastic legal reforms introduced, focusingon …..
%emo&elingthe legal '
a&ministrative
aspe"t o"ompanies
$ightening othe listing
re(!irements
o Sto"k
Control oCapital iss!es' in&!strial
li"ensing
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Significant 4egislative reforms
197)*oreign +,"hange
%eg!lation -"t
1969
1956
1947
onopo es es r " ve
$ra&e /ra"ti"es -"t
•Se"!rities Contra"t %eg!lation -"t
Capital Iss!es Control -"t
•Companies -"t
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Caital I$$'e$ Control Act +,-.otent tool in te ands o, te overn+ent to
.revent invest+ent in non-essential activities(introduced t$roug$ t$e 5efence of India Rules in
'+*."
4eulated te ca.ital structure o, co+.aniesH
ti+in o, issues scrutini:ed te reorani:ation(MA)H .ricin o, issues?etc
I+.le+ented tru D&ontroller o, &a.italE- Ministryo, Finance
4e.ealed in May /2
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Sec'ritie$ Contract Re/'lation Act +,01 To .revent undesirale transactions in securities y
reulatin te usiness o, dealin terein
6overn+ent e+.oered to .rovide8itdra reconition tostoc9 e=canes H only reconi:ed S! can ,unction
4e,or+s in stoc9 e=cane tradin +etods .ractices
rovisions ,or listin o, securities on te S!
Act en,orced y te D%irectorate o, S!E- Ministry o,
Finance
%eleation o, .oers to S!BI in /CH A+end+ents to teAct in /<
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T2e Co!anie$ Act +,01
I+.ortant ste. in te develo.+ent o, cor.orate enter.rises in India
Most i+.ortant .iece o, leislation tate+.oers te &entral 6overn+ent to
,unctionin and indin u. o, co+.anies
Ad+inistered y te &entral 6overn+enttrou te Ministry o, &or.orate A,,airs andte #,,ices o, 4eistrar o, &o+.anies
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T2e Co!anie$ Act +,01Underlyin o@ective- .rotection o, investorsG- eavin
an interated .attern o, relationsi. eteen .ro+otersinvestors +anae+ent5 For e55
• %ue reconition o, te leiti+ate interest o, sareolders and
creditors
• A ,air and true disclosure o, te a,,airs o, co+.anies in teir
annual ulised alance seet and ro,it and loss accounts5
• ro.er standard o, accountin and auditin5• 4econition o, te rits o, sareolders to receive
reasonale in,or+ation
I+.ortant canes in Dcontent o, .ros.ectusEH Dallot+ento, saresEH Dca.ital structure o, co5EH Dter+s conditions,or estalis+ent o, co5E etc ??in te suse>uent
a+end+ents in 2000 200/ 2002 and 200
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Mono.olies 4estrictive Trade ractices Act /
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Mono.olies 4estrictive Trade ractices Act /
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Mono.olies 4estrictive Trade ractices Act /uestioned and as tus een re.ealed5
een enacted instead ,or .rotectin andenancin co+.etition in te econo+y5
Te Un,air trade .ractices .art as een si,ted
under te &onsu+er rotection Act /
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Forei/n E3c2an/e Re/'lation Act +,.4• To reulate te ,orein e=cane +ar9et
• 4eulated ,orein invest+ents – it te ai+ o, dilutin
e>uity oldin in ,orein co+.anies- to instill con,idence
a+on te investin .ulic
• F!4A .rovisions i+.osed restrictions on locally
incor.orated co+.anies it ,orein e>uity oldin in
e=cess o, C0 .er cent (9non as F!4A co+.anies)
• rovisions rela=ed later in te caned conte=t o, /0s5
F!4A as re.laced y F!MA (/)
(%) artici.ation o, Financial Institutions
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(%) artici.ation o, Financial Institutions
in &or.orate Manae+entShift towards participation of financialinstitutions in the management of the assisted
concerns
‘ ’
making an impact on the ‘corporate powerstructure’
Large shareholding & voting rights leading
to Board representation Control over Board composition,appointment of CEOs……etc
Powerful role as loan provider/
(%) artici.ation o, Financial Institutions
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(%) artici.ation o, Financial Institutions
in &or.orate Manae+ent?GOI conscious policy for PFI to control the
company financed by them(Dutta Committee, 1969)
PFIs switching of investment was difficultdue to large size of holdings
Thrust on “Development Banking” thanmere ‘Financing’
ReasonsReasons
%e,iciencies in te Financial 4e,or+s
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%e,iciencies in te Financial 4e,or+s
o, ase II
Weakness in theWeakness in the
InstitutionalInstitutionalStructureStructure
Deficiency in theDeficiency in the
Form ofForm ofFinancingFinancing
Problems ofProblems ofSmall & newSmall & newEnterprisesEnterprises
Lack of
InstitutionalArrangementin New Issue
Market
WEAKNESSESWEAKNESSES
K 9 i t I tit ti lK 9 i t I tit ti l
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Kea9ness in te InstitutionalKea9ness in te Institutional
StructureStructure• IFS eavily do+inated y %evelo.+ent Finance
Institutes• &reated as arti,icial li+sG in te syste+ to
• Not ca.ale o, +oili:in ,unds-.layed li+ited role
as distriutors
• &ould not ro it te re>uire+ents o, teindustrial sector
%e,iciency in te For+ o,%e,iciency in te For+ o,
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yy
FinancinFinancin• %FIs e=tended ,unds in te ,or+ o, loans
• $ed to te .re-.onderence o, det in te,inancial structure o, industrial enter.rises
-
ratio
• Serious .role+s in recoveryH a,,ected te
,inancial viaility o, te %FIs te+selves
• Urent need to interate te+ it te
ulti+ate .ool o, savers
role+s o, S+all Nerole+s o, S+all Ne
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role+s o, S+all Nerole+s o, S+all Ne
!nter.rises!nter.rises• Unale to +eet te ,inance needs o, tis sector
• S+all enter.rises did not ,all into te invest+ent
.ort o o o t e to o+ nat n nvest n
institutions o, tat ti+e-$I& UTI
• SI%BI-S+all Industries %evelo.+ent Ban9 o, India,or+ed in /- i cost o, ca.ital
$ac9 o, Institutional Arrane+ent$ac9 o, Institutional Arrane+ent
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$ac9 o, Institutional Arrane+ent$ac9 o, Institutional Arrane+ent
in Ne Issue Mar9etin Ne Issue Mar9et
• UnderritinG as te only
su..ort o,,ered y te Institutions
• 4e>uired an interated uni,ied
co+.reensive service .rovider-DMercant an9inE
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3AS! - III
Financial Sector 4e,or+s since early /0s
ase III* ost /0s !volution o,
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Indian Financial Syste+
Profound Transformation
Planned
Free Market
Major Economic Policy Changes•Delicensing of industries•Trade liberalization•Currency reforms•privatization
•Disinvestments…..etc
EconomicDevelopment
-State controlled FS
Economics•Liberalization•Deregulation•Globalization
Fi i l 4 , d i III
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Financial 4e,or+s durin ase-III
InvestorProtection
IntegrationIntegrationof the Financialof the FinancialStructure with theStructure with the
Savings poolSavings pool
Privatizationof
FinancialInstitutions
Re-Organizationof
InstitutionalStructure
rivati:ation o, Financial Institutions
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rivati:ation o, Financial Institutions
State +ono.oly on ,inancial institutions dis+antled in.ased +anner
– %FIs converted into .ulic co+.any (I%BI IF&I?5)
– rivate MFs set u. under S!BI uidelines
– rivate an9s ca+e into e=istence- 4BI uidelines
– Insurance 4eulatory Autority I4A (I4%A Act-/)-
alloed .rivate insurance co+.anies to o.erate
4evolutionary canes in IFS- accelerated durin
2000s
4e-orani:ation o, Institutional Structures
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4e orani:ation o, Institutional Structures
I+.ortant canes in te roles structure .olicies o, ,inancial institutions and +ar9ets
DFIsDFIs MutualMutual
ChangesChangesAcrossAcross
CommercialBanks
NBFCsNBFCs
SecuritiesSecuritiesMarketMarket
MoneyMoneyMarketMarket
e-oran :a on o
% l Fi i l I i i (%FI )
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%evelo.+ent Financial Institutions (%FIs)
Neer ,or+s o, ,inancin - direct
,inancin lease ,inancin underritin
loans ,or or9in ca.ital?55
6roin ,ocus on non-,und ased
,inancial services- .ro@ect counselin
.ort,olio +t5 trusteesi. +ercantan9in?55
e-oran :a on o
% l t Fi i l I tit ti (%FI )
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%evelo.+ent Financial Institutions (%FIs)&anes in te .attern o, ,inancin o, %FIs
$esser de.endence on overn+ent 4BI?5
Funds sourced ,ro+ ca.ital +ar9et- issue o, stoc9s onds
etc55
6ovt5 uaranteed onds only ,or SI%BI NABA4% N3B?55
anes n t e ty.e o oran :at ons nst tut ons
s.onsored y %FIs
%FIs ne role in /0s* To su..le+entG ca.ital
+ar9et and not sustituteG it (/0s)
F#&US S#NS#4!% #46ANIATI#N
%evelo.+ent Finance T M%I IFM4?5
&a.ital +ar9et develo.+entorientation &4ISI$ I&4A &A4! NS! #&T!I ?
e-oran :a on o
& i l B 9
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&o++ercial Ban9s
Ma@or trans,or+ation in structure
.olicies and accountin nor+s and
standards?55
rudential Ban9in Nor+s introduced
(Narsina+ &o++ittee //)- inco+e
reconition asset classi,ication ca.italade>uacy nor+s?5
e-oran :a on o
& i l B 9
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&o++ercial Ban9sI+.ortant .olicy initiatives to increase te
.ro,itaility o, te an9s
4eduction in S$4 &44 Invest+ent li+it in sares 8deentures increased
,ro+ /51J to 1J
$easin Factorin 38 usiness u.to /0J o, totaladvances
&losure o, un.ro,itale rances +erers o, an9s55
6reater o.erational ,le=iility dereulation o, interest rates?5
4e-orani:ation o,
NBF& (N B 9i Fi & )
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NBF&s (Non-Ban9in Finance &os)!+ered as a sini,icant ele+ent o, IFSH roadened
te rane o, ,inancial services
Fund ased NBF&s--- e>ui.+ent leasin Bill%iscountin 3ire urcase ,inancin "&F?5
---
ort,olio Mt5 MA advisory?55
Increase in nu+er de.osits and innovation in
,unctionin o, NBF&s in recent years5
4eulatory ,ra+eor9 evolved (Oanna
&o++ittee /
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4e+ar9ale rot in MF industry
&o+.rises o, do+estic MFs y UTI an9
susidiaries insurance orani:ationsH .rivatesectors it ,orein collaorations ?5
eteroeneous cateory o, investors?
Increase in nu+er o, sce+es and ,unds
+anaed y te MF co+.anies
4eulatory ,ra+eor9 laid don y S!BI
4e-orani:ation o, Securities Mar9et
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!+ered ,ro+ a +arinal institution(+id 0s) to a
sini,icant +ecanis+ o, IFS today?
Trans,or+ation in securities +ar9et re,lected in Increase in >uantu+ o, ,unds raised and nu+er o,
investors in te ri+ar +ar9et
Increase in nu+er o, stoc9 e=canes and listedstoc9s
S.eedy rise in +ar9et ca.itali:ation and volu+e o,
trade !ntry o, so.isticated investors li9e FIIs MFs
4e-orani:ation o, Securities Mar9et
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%evelo.+ents in ri+ary Mar9et
!ntry o, +ar9et s.ecialists
Issue .rocedure activities re,or+s – S!BI nor+s
%evelo.+ents in Secondary Mar9et
4iorous nor+s ,or inter+ediaries introduced y S!BI
Screen ased tradin syste+- ,ro+ o.en outcry syste+ to
auto+ated syste+
%e+ateriali:ation o, securities- NS%$ and &%S$
4eduction in tradin cycle (,ro+ TP1 to TP2)
%erivative tradin (Lune 2000)
&or.orati:ation and %e+utuali:ation o, S!( Lune 200/)
4e-orani:ation o, Money Mar9et
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y
&aracteristics o, +oney +ar9et till /0s
Narro ase- li+ited no5 o, .artici.ants
aucity o, Instru+ents (only / days T-Bills inter- an9
de.osits and loans ?5)
3ily reulated interest rates
ost /0 re,or+s in Money Mar9et !+erence o, S.eciali:ed institutions- ri+ary %ealers
Introduction o, ne instru+ents (& &% 4e.o?5)
Trend toards interation o, ,ore= and +oney +ar9et
Measures ,or Increased rotection to
Investors
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Investors
Add Your Title
INTEGRATEDINTEGRATED
CHANGESCHANGESIN THEIN THE
FINANCIALFINANCIAL
MARKETMARKET
INADEQUACYINADEQUACYOF THE OLDOF THE OLDLEGISLATIVELEGISLATIVEFRAMEWORKFRAMEWORK
REGULATORYREGULATORYFRAMEWORKFRAMEWORK
REQUIREDREQUIRED
Measures ,or Increased rotection to
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Investors
LEGISLATIONLEGISLATIONSEBI ACT1992ACT1996
S!BI( Securities !=cane Board o, India)
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• !stalised on A.ril /2 /2 in accordance it
te .rovisions o, te Securities and !=cane
Board o, India Act /2
• Initially (/) estalised as an ad+inistrative
statutory autono+ous ody• Basic #@ective
?55to .rotect te interests o, investors in
securities and to .ro+ote te develo.+ent o,
and to reulate te securities +ar9et ?G
S!BI( Securities !=cane Board o, India) ?5
l d d
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• Its reulatory @urisdiction e=tends over cor.orates in te
issuance o, ca.ital and trans,er o, securities in addition
to all inter+ediaries and .ersons associated it
securities +ar9et5
• It can conduct en>uiries audits and ins.ection o, all
concerned and ad@udicate o,,ences under te Act5
• It as .oers to reister and reulate all +ar9et
inter+ediaries and also to .enali:e te+ in case o,
violations o, te .rovisions o, te Act 4ules and
4eulations +ade tere under5
SE0' has full autonom! and authorit! to reulate and
de$elo% an orderl! securities maret.
%e.ositories Act /<
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•It .rovides ,or te estalis+ent o, de.ositories insecurities it te o@ective o, ensurin ,ree
trans,eraility o, securities it s.eed accuracy
and security• (a) +a9in securities o, .ulic li+ited
co+.an es ree y rans era e su ec o
certain e=ce.tionsH
• () de+ateriali:in te securities in te
de.ository +odeH and• (c) .rovidin ,or +aintenance o, onersi.
records in a oo9 entry ,or+5
%e.ositories Act /<
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•Te Act envisaes trans,er o, onersi. o, securities electronically y oo9 entry itout
+a9in te securities +ove ,ro+ .erson to .erson5
• Te Act as +ade te securities o, all .ulic li+ited
E
rit to use discretion in e,,ectin te trans,er o,securities
• To %e.ositories» NS%$-National Securities %e.ository $td (/
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