STRIP is an acronym that is commonly used to denote ‘Separate Trading of Registered Interest and Principal of securities’. This is a complex-sounding term however, in reality, the meaning is quite simple. STRIPS are the securities created by way of separating the cash flows associated with a regular G-Sec i.e. each semi-annual coupon payment and…
The Fixed Income Money Market and Derivatives Association of India (FIMMDA), is an association of Scheduled Commercial Banks, Public Financial Institutions, Primary Dealers, and Insurance Companies. It is a voluntary market body for the Fixed Income, Money, and Derivatives Markets, incorporated as a company under section 25 of the Companies Act 1956. Functions of FIMMDA:…
Market integration and price transmission, in the case of a large producing and consuming country like India; depend on the geographical dispersion or concentration of production. A shared online market platform for agriculture commodities: While consumers are spread throughout the country, the production and marketed surplus is less spread out, particularly for agricultural commodities. If…
Merchant bankers are called by different names across the world. In the USA they are called Investment bankers and in the UK they are called ‘accepting and issuing houses’. In India, National Grindlays Bank initiated merchant banking services in 1969. Then Citibank joined the financial service in 1970. The State Bank of India was the…
Market integration is defined as the unification of different markets into one, allowing for the free movement of goods and services. This process is facilitated by reducing barriers, such as tariffs or quotas, between countries. There are several types of market integration, including: Horizontal Integration: Horizontal integration happens when two or more companies having the…
The financial markets and their roles include the stock market, the bond market, forex, commodities, and the real estate market, among others. Financial markets can also be broken down into capital markets, money markets, primary vs. secondary markets, and listed vs. OTC markets, etc. Market participants: Heterogeneity is a word that signifies diversity. Heterogeneous market…
The Reserve Bank of India today cautioned members of the public against fraud in the name of KYC updation. The modus operandi of such frauds, the RBI said, usually involves customers receiving unsolicited communications, including phone calls, SMS (short messaging service), and emails, through which victims are manipulated into revealing personal information, account details, or…
The dictionary meaning of contagion is the spreading of a particular disease by someone touching another person who is already affected by the disease. Similarly, in financial parlance contagion effect is defined as the spread of an economic crisis from one region to another. The financial markets and their roles include the stock market, the…
In the interim budget 2024, the Finance Minister Mrs.Nirmala Sitharaman today announced the estimates of the government’s expenditure, revenue, fiscal deficit, financial performance, and projections for the upcoming months. Both interim budget and vote on account are interchangeably used. An interim budget contains both the revenue and expenditure details for the period until the new…
On Wednesday, the Reserve Bank of India directed Paytm Payments Bank to stop onboarding of new customers with immediate effect.The above supervisory action was warranted by the banking regulator given the Comprehensive System Audit report and subsequent compliance validation report of the external auditors that revealed persistent non-compliance and continued material supervisory concerns in the…