Under Section 24 and Section 56 of the Banking Regulation Act, 1949, every Scheduled Commercial Banks (Including Regional Rural Banks), Local Area Banks, Small Finance Banks and Payments Banks in India are required to maintain in the form of cash, or gold or unencumbered investment in any of the following instruments (“SLR securities”)], namely:- (i)…
IntroductionInternational equity and debt products offer investors opportunities to diversify their portfolios and gain exposure to global financial markets. These investment vehicles, however, operate within complex regulatory frameworks designed to protect investors and ensure transparency and compliance. This article outlines the key features of international equity and debt products and the regulatory environment governing them,…
External Commercial Borrowings (ECBs) refer to loans raised by eligible Indian entities from recognized non-resident entities. These borrowings are governed under the Foreign Exchange Management Act (FEMA), 1999, and regulated by the Reserve Bank of India (RBI). ECBs serve as a significant source of foreign capital for Indian businesses and are primarily utilized for infrastructure…
Domestic markets, also referred to as home or internal markets, operate within the geographical boundaries of a single country. In contrast, global markets encompass cross-border trade and marketing activities involving multiple countries. Businesses operating in domestic markets tailor their strategies to local customer preferences, while those in global markets must adapt to diverse cultural, economic,…
The securities market is a financial marketplace where securities are issued, traded, and transferred among investors. It serves as a conduit for channeling funds from entities with surplus capital (savers) to those with a productive need for funds (issuers), thereby facilitating capital formation and economic growth. Structure of the Securities Market The securities market comprises…
Depository Receipts (DRs) are financial instruments that facilitate cross-border investment by allowing investors to trade in the shares of foreign companies through certificates issued by a domestic depository. These instruments serve as an effective mechanism for foreign companies to raise capital in specific markets while providing local investors with access to global equities. Definition and…
Stock Exchange: A stock exchange is an organized and regulated financial market where securities (bonds, derivatives, shares) are bought and sold on behalf of the investors at prices governed by the demand and supply for the specific stock. The Stock exchanges provide clearing house facilities for netting payments and securities delivery. The Clearinghouse guarantees all…
The money market is a critical segment of the financial system where short-term debt instruments are traded. These instruments typically have maturities of up to one year and are considered low-risk investments offering high safety and liquidity. The money market plays a vital role in helping governments, corporations, and financial institutions manage their short-term funding…
In India, over 90% of treasury operations in the foreign exchange (forex) market occur between banks. These inter-bank foreign currency transactions serve two primary purposes: Understanding the Exchange Rate The exchange rate is the price at which one currency is exchanged for another. It functions similarly to product pricing in a market. For example, just…
The money market instrument is a marketplace for trading in short-term debt investments considered low-risk investments with high safety. It is primarily used by governments and corporations to keep their cash flow steady, and for investors to make a modest profit. The money market ensures a balance between the demand for short-term funds and their…