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Financial Institutions and Financial Markets in India : Functioning and Reforms
By Niti Bhasin

First Published : 2010
ISBN : 9788177082371
Pages : 624
Binding : Hardbound
Size : 7 x 9
Price : US$ 129
ABOUT THE BOOK

Finance is the linchpin of any development strategy. The financial system promotes savings by providing a wide variety of financial assets to the general public. Savings collected from the household sector are pooled together and allocated to various sectors of the economy for raising production levels. If the allocation of credit is judicious and socially equitable, it can help achieve the twin objectives of growth and social justice.

The present book explains and examines at length the changes which have swept India’s financial sector since Independence in 1947, with focus on post-1991 period. The book is organized into 6 parts.

Part I begins with the role of financial system in economic development. It traces the evolution of India’s financial system since Independence, explains its present structure and describes the role of Reserve Bank of India (RBI) in providing stability to it.

Part II traces the evolution and the present status of various financial institutions (intermediaries) in India. The areas covered include: commercial banks, regional rural banks (RRBs), urban co-operative banks (UCBs), rural co-operative credit institutions, development finance institutions (DFIs), non-banking financial companies (NBFCs), mutual funds and insurance organisations.

Part III is devoted to financial markets in India. It focuses on the reforms measures introduced in money market, government securities market, capital market, corporate debt market and foreign exchange market. It also dwells on payment systems, clearing and settlement infrastructure. Integration of financial markets is also discussed. 

Part IV deals with financial instruments, particularly the emergence of derivative instruments in India.

Part V contains 2 Appendices. Appendix 1 explains at length the techniques and risk management associated with internet banking. Appendix 2 relates to current global financial crisis, its impact on India and policy response by government agencies.

Part VI contains glossary of money, banking and finance, bibliography and index.

The book is designed to interest a cross-section of readers, viz. teachers and students of economics, commerce, law, public administration, business management, chartered accountancy and company secretaryship. It will also serve the needs of legislators, business executives, entrepreneurs and investors, and others interested in financial sector developments in India.


CONTENTS
     
Part I: INDIA’S FINANCIAL SYSTEM: EVOLUTION AND PRESENT STRUCTURE
 
1. Financial System and Economic Development
1.1 Meaning and Importance of Financial System
1.2 Emerging Financial Paradigm
1.2.2 From Financial Volatility to Financial Stability
1.2.3 Role of the Government in Financial Development
1.3 Determinants of Access to Financial Services
1.4 Regulation and Supervision of Financial System
 
2. Post-Independence Developments in the Financial System
2.1 State Domination of the Financial Sector (1947-1990)
2.1.1 Nationalisation of Imperial Bank of India (1955)
2.1.2 Nationalisation of Life Insurance Business (1956)
2.1.3 Nationalisation of Commercial Banks (1969 and 1980)
2.1.4 Nationalisation of General Insurance Business (1973)
2.2 Rethinking on State Domination of Financial Sector
2.3 From Financial Repression to Financial Liberalisation (1991 onward)
2.4 India’s Approach to Financial Sector Reforms
2.4.1 Lessons from East Asian Crisis
2.5 Strategy of Financial Sector Reforms
2.5.1 Developing and Strengthening Financial Infrastructure
2.5.2 Financial Regulation and Supervision
2.5.3 Financial Openness
2.6 International Security Standards
2.7 Migration to Basel II Norms
2.8 Accounting and Auditing Standards
2.8.1 Marking-to-market
2.9 Technological Solutions for Financial Services
2.10 Legal Reforms for Strengthening Financial Sector
2.10.1 Recent Acts Enacted by the Parliament
2.10.2 Bills Introduced in the Parliament
2.10.3 Bills under Consideration of the Government
2.11 Committee on Financial Sector Reforms, 2008
2.12 Committee on Financial Sector Assessment (CFSA), 2009
2.13 Global Financial Crisis and India’s Financial Sector
2.14 Achievements of Financial Sector Reforms and Areas of Concern
2.15 Summing Up
 
3. Financial Inclusion Efforts in India
3.1 Financial Exclusion and Financial Inclusion Defined
3.2 Advantages of Financial Inclusion
3.3 Strategy for Building an Inclusive Financial Sector
3.4 Recent Measures for Financial Inclusion
3.4.1 No Frills Account
3.4.2 General Credit Card (GCC)
3.4.3 Business Facilitator and Business Correspondent (BC) Models
3.4.4 Passbook Facility
3.4.5 Simplified KYC Procedure
3.4.6 Credit Counselling and Financial Education
3.5 Recommendations of the Committee on Financial Inclusion
3.6 Conclusion
 
4. Reserve Bank of India (RBI) and the Financial System
4.1 Changing Role of RBI in the Financial Sector
4.2 RBI’s Consultative Process in Policy Formulation
4.2.1 Web-based Communication
4.2.2 Resource Management Discussions
4.2.3 Standing Technical Advisory Committees
4.3 Financial Sector Technology Vision Document
4.4 Global Financial Crisis and the RBI
 
PART II: FINANCIAL INSTITUTIONS IN INDIA
 
Section A: Financial Institutions in India: An Introduction

5. Classification, Regulation and Supervision of Financial Institutions in India
5.1 Classification of Financial Institutions in India
5.2 Regulation and Supervision of Financial Institutions in India
 
Section B: Commercial Banks in India
 
6. Commercial Banks in India: An Introduction
6.1 Meaning and Role of Commercial Banks
6.2 Functions of a Commercial Bank
6.3 Balance Sheet of a Commercial Bank
6.3.1 Liabilities of a Bank
6.3.2 Assets of a Bank
6.4 Legal Framework for Banking Sector in India
6.4.1 Laws Related to Banking Operations
6.4.2 Laws Relating to Debt Recovery and Enforcement of Security
6.4.3 Laws Relating to Payment Systems
6.4.4 Competition Act, 2002: Implications for the Banking Sector
6.4.5 Other Laws
6.4.6 Bills Awaiting Parliamentary Approval
6.5 Classification of Commercial Banks in India
6.5.1 Scheduled and Non-scheduled Banks
6.5.2 Indian and Foreign Banks
6.5.3 Public Sector and Private Sector Banks
6.6 Ownership and Governance of Commercial Banks in India
6.6.1 Public Sector Banks
6.6.2 Private Sector Banks
6.6.3 Foreign Banks in India
6.7 Deposit Insurance System
 
7. Pre-Independence History of Commercial Banks
7.1 Presidency Banks
7.2 Paper Currency Act, 1861
7.3 Banking Crisis, 1913
7.4 Reserve Bank of India Act, 1934
7.5 Indian Companies (Amendment) Act, 1936
7.6 Bank Failures and Remedial Measures
7.7 Regulation and Supervision
 
8. Post-Independence Developments in Commercial Banking
8.1 Phase I: Early Years of Independence (1947-69)
8.2 Phase II: From Nationalisation of Banks till Initiation of Banking Sector Reforms (1969-91)
8.3 Phase III: Banking Sector Reforms since 1991
8.3.1 Backdrop of Banking Sector Reforms
8.3.2 Objectives of Banking Sector Reforms
8.3.3 Contents of Banking Sector Reforms
8.4 Challenges for Banking Sector
8.5 Summing Up
 
9. Credit Allocation Policies of Commercial Banks
9.1 Credit Market Reforms
9.2 Flow of Credit to Agriculture and Allied Activities
9.2.1 Advisory Committee on the Flow of Credit to Agriculture and Related Activities from the Banking System (Chairman: V.S. Vyas), 2004
9.2.2 Agricultural Debt Waiver and Debt Relief Scheme, 2008
9.3 Credit Flow to Micro, Small, and Medium Enterprises (MSMEs)
9.3.1 Working Group on Flow of Credit to the Small and Medium Enterprises (SMEs), 2004
9.3.2 Group to Review Guidelines on Credit Flow to SME Sector, 2005
9.3.3 Policy Package for Credit to Small and Medium Enterprises
9.3.4 Working Group on Credit Delivery to the Micro and Small Enterprises Sector, 2008
9.3.5 Working Group to Review the Credit Guarantee Scheme of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), 2010
9.4 Credit to Export Sector
9.4.1 Working Group to Review Export Credit, 2005
9.5 Expert Group on Credit-Deposit Ratio, 2005
 
10. Prudential Regulatory Framework and Supervision of Commercial Banks
10.1 Need for Regulation and Supervision
10.2 Regulatory and Supervisory Policy during the 1950s
10.3 Regulatory and Supervisory Policy during the 1960s
10.4 Nationalisation of Banks and Shift in Regulatory Focus (1970s)
10.5 Regulatory and Supervisory Policy during the 1980s
10.6 Post-liberalisation Period (1991 onwards)
10.7 On-site Supervision
10.7.1 Working Group to Review the System of On-site Supervision over Banks, 1995
10.8 Off-site Monitoring and Surveillance
10.9 Modernisation of Banking Regulation and Supervision
10.10 Risk Based Supervision (RBS)
10.11 Supervision of Financial Conglomerates
10.11.1 Working Group on Financial Conglomerates, 2004
10.12 Board for Financial Supervision
10.13 Monitoring of Frauds
10.14 Income Recognition, Asset Classification and Provisioning
10.14.1 Provisions against Standard Assets
10.15 Securitisation Guidelines
10.16 Investment of Banks in Non-SLR Securities
10.17 Valuation of Instruments/Assets
10.18 Use of Credit Rating Agencies by Banks
10.19 Payment of Dividends
10.20 Mergers and Amalgamation of Banks
10.21 Exposure Norms
10.22 Investment Norms
10.23 Capital Adequacy Norms
10.24 Transparency and Disclosures
10.25 Securitisation of Standard Assets
10.26 Anti-money Laundering Guidelines
10.27 Credit Information Bureau of India Ltd. (CIBIL)
10.28 Outsourcing by Banks
10.29 Compliance Function
10.29.1 Consequences of Non-compliance
10.30 Summing Up
 
11. Migration to Basel Norms by Commercial Banks
11.1 Introduction
11.2 Basel I Norms
11.2.1 Main Elements of Basel II Norms
11.3 Implementation of Basel Norms in India
11.3.1 Migration to Advanced Approaches: Challenges
 
12. Management of Non-performing Assets (NPAs) by Commercial Banks
12.1 Securitisation, Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002
12.2 Corporate Debt Restructuring
12.3 Debt Recovery Tribunals
12.4 Lok Adalats (Peoples Courts)
 
13. Customer Services by Commercial Banks
13.1 Committee on Procedures and Performance Audit of Public Services (CPPAPS)
13.2 Collection and Processing of Cheques
13.3 Grievances Redressal Mechanism
13.4 Settlement of Claims of Deceased Depositors
13.5 Door-step Banking
13.6 Banking Codes and Standards Board of India
13.7 Remittance Facility to NRIs/PIOs
13.8 Shifting of Branches/Offices in Public Interest
13.8.1 Service Branches/Regional Collection Centres
13.9 Technological Channels for the Delivery of Financial Services
13.9.1 National Electronic Fund Transfer (NEFT)
13.9.2 ATM Networks
13.9.3 Credit Cards
13.9.4 Satellite Banking
 
14. Foreign Banks in India
14.1 Role of Foreign Banks
14.2 Advantages and Disadvantages of Foreign Banks
14.3 Road Map for Foreign Banks in India
14.3.1 Phase I: March 2005 to March 2009
14.3.2 Phase II: April 2009 onward
 
15. Summing up
 
Section C: Regional Rural Banks (RRBs) and Co-operative Banks

16. Regional Rural Banks (RRBs)
16.1 Nature and Objectives of RRBs
16.2 Amalgamation of RRBS
16.3 Autonomy for RRBs
16.4 RRBs as Vehicles of Financial Inclusion
16.5 Factors Influencing the Performance of RRBs
16.5.1 Area of Operation and Clientele Base
16.5.2 Capital Base and Organisational Structure
16.5.3 Loan Delinquencies
16.5.4 Cost Structure and Poor Financial Management Skills
16.5.5 Staff Structure
16.5.6 Dependence on Sponsor Banks
16.6 Restructuring of RRBs
16.7 Manpower Challenges of RRBs
16.8 Computerisation in RRBs
16.8.1 Working Group on Technology Upgradation of Regional Rural Banks, August 2008
16.9 Summing Up
 
17. Urban Co-operative Banks (UCBs)
17.1 Importance of UCBs
17.2 Vision Document and Medium-Term Framework (MTF) for UCBs
17.3 Regulation and Supervision of UCBs: Strengthening Measures
17.3.1 Memorandum of Understanding (MoU) with the State Governments
17.3.2 Licensing of New Banks/Branches
17.3.3 Income Recognition, Asset Classification and Provisioning Norms
17.3.4 Exposure Norms
17.3.5 Off-site Surveillance
17.3.6 Know Your Customer (KYC) Guidelines
17.3.7 Priority Sector Lending
17.3.8 Disclosure Norms
17.4 Mergers/Amalgamations of UCBs
17.5 Relaxation of Investment Portfolios of UCBs
17.6 Restructuring of Scheduled UCBs with Negative Net Worth
17.7 Problem of Dual Control in Co-operative Banking
17.7.1 Impairment in Governance and Management
17.8 Summing Up
 
18. Rural Co-operative Credit Institutions
18.1 Classification of Rural Co-operatives
18.1.1 Short-term Rural Co-operatives
18.1.2 Long-term Rural Co-operatives
18.2 Importance of Rural Co-operatives
18.3 History of Rural Co-operatives
18.4 Primary Agricultural Credit Societies (PACS)
18.5 Regulatory Framework and Supervision
18.5.1 Asset Classification for State Government Guaranteed Advances
18.5.2 Additional Provisioning Requirement for NPAs
18.5.3 Prudential Guidelines on Agricultural Advances
18.5.4 Inspections
18.6 Problem of Triangular Regulation of Rural Co-operatives
18.7 Task Force on Revival of Rural Co-operative Credit Institutions, 2005
18.8 Self-help Group (SHG)-Bank Linkage Programme for Micro Credit
18.8.1 Regional Spread
18.8.2 Graduation of Mature SHGs into Micro-enterprises
18.8.3 Microfinance and the Government
18.8.4 Microfinance and the RBI
18.9 Kisan Credit Cards
18.10 NABARD and the Co-operative Sector
18.10.1 Resources of NABARD
18.10.2 Rural Infrastructure Development Fund (RIDF)
18.10.3 Credit Extended by NABARD
18.10.4 Interest Rates charged by NABARD
18.11 Summing up
 
Section D: Other Financial Institutions

19. Development Finance Institutions (DFIs)
19.1 Introduction
19.2 All-India Financial Institutions (AIFIs)
19.2.1 All-India Development Banks
19.2.2 Specialised Financial Institutions
19.2.3 Investment Institutions
19.2.4 Refinance Institutions
19.3 State Level Institutions
19.3.1 State Financial Corporations (SFCs)
19.3.2 State Industrial Development Corporations (SIDCs)
19.4 Working Group for Harmonising the Role and Operations of Development Finance Institutions and Banks, 1998
19.5 Development Finance Institutions (DFIs): The Changed Scenario
19.6 Regulation and Supervision of Financial Institutions
19.7 Recent Policy Initiatives Regarding DFIs
19.8 Summing Up
 
20. Non-banking Financial Companies (NBFCs)
20.1 Classification of NBFCs
20.2 Importance of NBFCs
20.3 Regulation and Supervision of NBFCs
20.3.1 Early History
20.3.2 Bhabatosh Datta Study Group, 1971
20.3.3 James Raj Study Group, 1974
20.3.4 Chakravarty Committee, 1985
20.3.5 Narasimham Committee, 1991
20.3.6 Working Group on Financial Companies, 1992
20.3.7 Monitoring of NBFCs by Board for Financial Supervision (BFS)
20.3.8 P.R. Khanna Committee, 1995
20.4 Reserve Bank of India (Amendment) Act, 1997
20.5 Task Force on Non-banking Finance Companies, 1998
20.6 Committee for Redesigning Balance Sheet Format for NBFCs, 1999
20.7 Supervisory Framework for NBFCs
20.7.1 On-site Inspection
20.7.2 Off-site Surveillance System
20.7.3 External Auditing
20.8 Regulations over NBFCs Accepting Public Deposits
20.8.1 Regulations over NBFCs not Accepting Public Deposits
20.8.2 Regulations over Core Investment Companies
20.9 Residual Non-banking Companies (RNBCs)
20.10 Mutual Benefit Financial Companies
20.10.1 Expert Committee on Nidhis
20.11 Miscellaneous Non-Banking Companies (MNBCs): Chit Fund Companies
20.12 Guidelines for Mergers/Amalgamations
20.13 NBFCs in Insurance Business
20.14 Know Your Customer (KYC) Guidelines and Anti-Money Laundering Standards
20.15 Summary of Policy Initiatives Regarding NBFCs in Recent Years
20.16 Regulation and Supervision of NBFCs in Selected Countries
20.16.1 France
20.16.2 Singapore
20.16.3 Australia
20.16.4 Indonesia
20.16.5 Hong Kong
20.16.6 Malaysia
20.16.7 Thailand
20.17 Summing Up
 
21. Mutual Funds
21.1 Legal and Regulatory Framework
21.2 History of Mutual Funds
21.2.1 Bifurcation of UTI
21.3 Features of Mutual Fund Industry in India
21.4 Problems of Mutual Funds
21.4.1 Competition with Government Schemes
21.4.2 Competition from Insurance
21.4.3 Volatility of Mutual Fund Performance
21.4.4 Tax System Encourages Short-term Objectives
21.5 Mutual Funds and the Stock Market
21.6 Summing Up
 
22. Insurance Organisations
22.1 Nationalisation of Insurance Business in India after Independence
22.2 Weaknesses of Insurance Industry Prior to Reforms of Late 1990s
22.2.1 Low Productivity
22.2.2 Lack of Information Technology
22.2.3 Limited Availability of Insurance Products
22.2.4 Poor Quality of Insurance Services
22.3 Committee on Reforms in Insurance Sector, 1994
22.4 Indian Insurance Business: From State Monopoly to Competition
22.5 Regulations and Controls
22.6 Post-liberalisation Developments in Insurance Business
22.6.1 Changes in the Nature and Structure of Products
22.6.2 Broad-based Marketing of Insurance Products
22.6.3 Rising Service Levels
22.6.4 Increased Penetration in the Rural and Social Sectors
22.6.5 Investment in Infrastructure and Social Sectors
22.6.6 Health Insurance
22.6.7 Micro Insurance
22.6.8 Deposit Insurance System in India
22.7 FDI in the Insurance Sector
22.8 Summing Up
 
PART III: FINANCIAL MARKETS IN INDIA
 
23. Financial Markets: An Introduction
23.1 Importance of Financial Markets
23.2 Regulation and Supervision of Financial Markets in India
23.3 Financial Markets and Monetary Policy of the RBI
23.4 Financial Market Reforms in India
23.5 Summing Up
 
24. Money Market
24.1 Meaning and Functions of Money Market
24.2 Reserve Bank of India (RBI) and the Money Market
24.3 Evolution of Money Market in India
24.3.1 Pre-Independence Period
24.3.2 Post-Independence Period
24.4 Developments in the Money Market since 1991
24.5 Components-wise Analysis of Money Market in India
24.5.1 Call/Notice Money Market
24.5.2 Commercial Paper (CP)
24.5.3 Certificates of Deposit (CDs)
24.5.4 Repos
24.5.5 Collateralised Borrowing and Lending Obligation (CBLO)
24.6 Report of the Technical Group on Money Market
24.6.1 Follow-up Action
24.7 Areas of Concern
24.8 Summing Up
 
25. Government Securities Market
25.1 Meaning of Securities and Government Securities
25.2 Importance of Government Securities Market
25.3 Government Securities Market: Legal Framework and Role of the RBI
25.4 Mandated Investments in Government Securities: Categories of Investors
25.5 Evolution of Government Securities Market
25.5.1 Pre-reforms Period
25.6 Post-1991 Measures to Promote Government Securities Market
25.7 Fiscal Responsibility and Budget Management (FRBM) Act, 2003
25.8 Technical Group on Central Government Securities Market, 2005
25.9 Measures to Strengthen Primary Market
25.9.1 Issuance Procedures
25.9.2 Widening of Investor Base
25.9.3 Gilt Funds
25.9.4 Foreign Institutional Investors
25.9.5 Retail Investors
25.10 Measures to Strengthen Secondary Market
25.10.1 Sale of Auctioned Stock
25.10.2 Primary Dealer System
25.11 Diversification of Instruments
25.12 Transparency
25.13 Technological Infrastructure for Government Securities Market
25.13.1 Trading Infrastructure
25.13.2 Negotiated Dealing System (NDS)
25.13.3 Clearing Corporation of India Ltd. (CCIL)
25.13.4 Settlement Cycle
25.13.5 When Issued (WI) Market
25.14 Separation of Debt Management from Monetary Management
25.15 Summing Up
 
26. Capital Market
26.1 Meaning and Importance of Capital market
26.2 Capital Market in the Pre-reforms (i.e. Pre-1991) Period
26.3 Establishment of Securities and Exchange Board of India (SEBI)
26.4 Capital Market Reforms since 1991
26.5 Modernisation of Stock Exchanges
26.5.1 Stock Market
26.5.2 Trading Infrastructure in Stock Exchanges
26.5.3 Corporatisation and Demutualisation of Stock Exchanges
26.6 Depository System, Dematerialisation (Demat) and Rematerialisation
26.6.1 Depository System
26.6.2 Dematerialisation (Demat)
26.6.3 Rematerialisation
26.7 Introduction of Free Pricing
26.8 Strengthening of Disclosure Norms
26.9 Transparency and Efficiency
26.10 Shortening of Settlement Cycle
26.11 Growth of Service Providers
26.12 Protection of Investors
26.13 Portfolio Investment Flows: Global and Indian Experiences
26.14 Summing Up
 
27. Corporate Debt Market
27.1 Significance of the Corporate Debt Market
27.2 Lessons from East Asian Crisis
27.3 Corporate Debt Market in India
27.3.1 Emergence of Private Placement Market
27.4 Reasons for Slow Growth of Corporate Debt Market
27.5 High Level Expert Committee on Corporate Debt and Securitisation
27.5.1 Corporate Debt Market:
27.5.2 Securitised Debt Market
27.6 Development of Corporate Bond Market in Select Countries
27.6.1 South Korea
27.6.2 Malaysia
27.6.3 Singapore
27.6.4 Australia
27.6.5 Thailand
27.7 Summing Up
 
28. Foreign Exchange Market
28.1 Pre-Independence Period
28.2 Post-Independence Period
28.2.1 Foreign Exchange Regulation Act (FERA), 1947
28.2.2 Par Value System of Exchange Rate (1947-71)
28.2.3 Sterling Area Arrangement
28.2.4 Single Currency Peg
28.2.5 Basket Peg
28.2.6 Foreign Exchange Regulation Act (FERA), 1973
28.2.7 Introduction of Intra-day Trading in Foreign Exchange
28.2.8 Amendments to Reserve Bank of India Act, 1934
28.2.9 Foreign Exchange Crisis and Rethinking
28.3 Post-reforms Period (1991 onward)
28.3.1 Downward Adjustment of Rupee Rate
28.3.2 Introduction of Liberalised Exchange Rate Management System (LERMS)
28.3.3 Introduction of Current Account Convertibility
28.3.4 Expert Group on Foreign Exchange Markets
28.3.5 Foreign Exchange Management Act (FEMA), 1999
28.3.6 Capital Account Convertibility (CAC)
28.3.7 Technical Group on Foreign Exchange Market, 2005
28.4 Present Structure of Foreign Exchange Market
28.4.1 Market Segments
28.4.2 Market Players
28.5 Sources of Supply and Demand of Foreign Exchange
28.5.1 Derivative Market Instruments
28.6 Foreign Exchange Exposure Norms of Commercial Banks
28.6.1 Positions and Gaps
28.6.2 Investments in Overseas Markets
28.6.3 Overseas Foreign Currency Borrowings
28.6.4 Gold Transactions
28.6.5 Vostro Accounts
28.7 Foreign Exchange Reserves
28.7.1 Motives for Holding Foreign Exchange Reserves
28.7.2 High Level Committee on Balance of Payments, 1993
28.7.3 India’s Foreign Exchange Reserves
28.8 Summing Up
 
29. Payment Systems, Clearing and Settlement Infrastructure
29.1 Importance of a Sound Payment and Settlement System
29.2 Segments of Payment System
29.3 Large Value Payment Systems
29.3.1 Real Time Gross Settlement (RTGS) System
29.3.2 High Value Clearing
29.4 Retail Payment Systems
29.4.1 Paper-based Systems (Cheques)
29.4.2 Electronic Retail Payment Instruments
29.4.3 Deficiencies in Retail Payment Systems
29.5 Reforms Pertaining to Clearing and Settlement
29.6 Central Counterparties
29.6.1 Clearing Corporation of India Limited (CCIL)
29.6.2 National Securities Clearing Corporation Ltd (NSCCL)
29.7 Government Securities Settlement System
29.8 Role of RBI in Payment and Settlement System
29.8.1 Vision Document for Payment Systems, 2005-08
29.8.2 Board for Regulation and Supervision of Payment and Settlement Systems (BPSS)
29.9 Summing Up
 
30. Integration of Financial Markets
30.1 Integration of Financial Markets: Conceptual Framework
30.1.1 Meaning
30.1.2 Heterogeneous Nature of Financial Markets
30.1.3 Dimensions of Financial Market Integration
30.1.4 Measures of Financial Integration
30.1.5 Benefits and Risks of Financial Integration
30.2 Need for Integration of Domestic Financial Markets
30.3 Measures Taken for Integration of Financial Markets in India
30.3.1 Free Pricing
30.3.2 Widening Participation
30.3.3 New Instruments
30.3.4 Institutional Measures
30.3.5 Technology, Payment and Settlement Infrastructure
30.4 Segment-wise Integration
30.4.1 Integration of the Government Securities Market
30.4.2 Integration of the Credit Market
30.4.3 Integration of the Foreign Exchange Market
30.4.4 Stock Market Integration
30.5 Regional Financial Integration (Asia)
30.5.1 SEANZA and SEACEN
30.5.2 Asian Clearing Union (ACU)
30.5.3 EMEAP
30.5.4 SAARCFINANCE
30.5.5 ASEAN+3
30.5.6 Chiang Mai Initiative
30.6 International Financial Integration
30.7 Summing Up
 
PART IV: FINANCIAL INSTRUMENTS
 
31. Principal Direct Financial Instruments of the Capital Market
31.1 Ordinary Shares
31.2 Preference Shares
31.3 Debentures
 
32. Derivative Instruments
32.1 Emergence of Complex Financial Products
32.2 What are Derivatives?
32.3 Variants of Derivative Contracts
32.3.1 Forwards/Forward Contracts
32.3.2 Futures/Future Contracts
32.3.3 Difference between Forward and Future Contracts
32.3.4 Options/Option Contracts
32.3.5 Difference between Futures and Options
32.4 Economic Role of Derivatives
32.5 Derivative Instruments in India
32.6 Credit Derivatives
32.6.1 Forms of Credit Derivatives
32.6.2 Significance of Credit Derivatives
32.6.3 Benefits of Credit Derivatives
32.6.4 Risks Involved in Credit Derivatives
32.6.5 Credit Derivatives and Sub-prime Crisis of 2007
32.7 Credit Derivatives in India
32.8 Asset Securitisation
32.8.1 Advantages of Securitisation
32.8.2 Pitfalls of Securitisation
 
PART V: APPENDICES
 
Appendix 1: Internet Banking: Techniques and Risk Management
Appendix 2: Global Financial Crisis: Impact on India and Policy Response

PART VI: GLOSSARY, BIBLIOGRAPHY AND INDEX
 
Glossary of Money, Banking and Finance
 
Bibliography
 
Index

ABOUT THE AUTHOR
     

Dr. (Mrs.) Niti Bhasin is presently Assistant Professor in the Department of Commerce, Delhi School of Economics (DSE), University of Delhi. She did her B.Com. (Hons.) and M.Com. from University of Delhi. Thereafter, she obtained her M.Phil. and Ph.D. degrees from the Department of Commerce, Delhi School of Economics, University of Delhi. She has so far written 8 books including, Foreign Investment in India, 1947-48 to 2007-08 and Banking Developments in India, 1947 to 2007. She has contributed articles on finance-related topics in national and international journals of repute including Foreign Trade Review (New Delhi) and Tax National (Malaysia). She also taught for about 4 years at Shri Ram College of Commerce (SRCC), University of Delhi. Her areas of specialisation include international business, foreign investment, finance and taxation.


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