‘Options’ in security market/Forex market
Option is an agreement between two parties offering to buy or sell a security (a stock, bond, commodity or other instruments) from or to the other party at a specified price within a specific time period. In option contracts, there is no obligation on the part of buyer or seller to buy or sell the…
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What is merchant banking?
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…
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What are the roles of ‘SEBI’ as a capital market regulator?
Updated till December 1, 2023. The Securities and Exchange Board of India (SEBI) was established as the regulator for the Stock and Security market in India under the Securities and Exchange Board of India Act 1992. The main object of SEBI is to protect the interests of investors in securities and promote the development of…
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RRBs are allowed to issue PDI
The Reserve Bank of India vide. Circular No. DOR.RRB.No.21/31.01.001/2019-20 dated November 1, 2019, permitted RRBs (Regional Rural Banks) to issue Perpetual Debt Instruments (PDI) eligible for inclusion as Tier 1 capital so as to maintain prescribed CRAR. The Perpetual Debt Instruments (PDI) is issued by way of bonds or debentures in Indian Rupees only. The…
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What is Basis Point Value?
In the financial market many investors prefer for investments in bond portfolio which can provide them the decent yields with a lower level of volatility than equities. Further, the bonds issued by corporates offer with a higher income than the money market funds or bank instruments. However, the volatility in interest rate in the financial…
Who are Primary Dealers (PDs)?
We are aware that the Reserve Bank of India issues Government securities on behalf of the Government. Primary Dealers are the licensed dealers who deal in buying and selling these Government securities. There are two types of primary dealers, viz. Standalone Primary Dealers and Bank Primary Dealers. Standalone Primary Dealers: Most of these PDs are…
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