SEBI SHARE MARKET - NI Flashcards
Money Market duration
Less than 1 year or 1 year
Capital market duration
More than 1 year
Future market ?
Parties contract today to buy/ sell something at sepcific price on a future date.
Features of short term debt instrument
Tenure less than 1 year
Sold at discount and repurchased at face value
Traded at money Market
Negotiable and transferable in Nature
Called NEAR MONEY as they are highly liquid assets
What all is traded at money Market
Govt - T- Bill, CMB, WMA
Firm - C- Paper , Pro- notes
FI: CoD , Call Money, Notice , Repo
What all is traded at Capital Market
Govt : G- Sec , Sovereign Bonds
Firm: Share, Bond/Debenture
Can state government issues treasury bill ?
No
Full form of CMB ( short term debt instrument)
Cash Management Bills
What is ways and means advances
When government faces short term mismatch in income and expenditure RBI lends money on short term (3 months ) not counted in fiscal deficit figure
During Atmanirbhar Bharat ,covid times RBI increased nthe Ways and means advances limits by 60% than before to help the union and State governments.
What is the loan interest rate of ways and means advances?
If upto limited amount borrowed - repo rate
More than it borrowed - The. Repo + 2%
Consolidated sinking fund was started in
1999
What is consolidated sinking fund
Annually state government has to contribute money equal to 1-3% of its outstanding Market loans to this fund kept with RBI.
It is outside consolidated fund of the state and public account of the state
What is the purpose of Consolidated sinking Fund
Repayment redemption of loans taken by state government only
Short term debt instrument for company
Bill of exchange ,hundi , commercial papers , promissory notes
Short term debt instrument of banks/Nbfc
Merchant to bank
Certificate of deposit
Commercial bill.
What is call money and Notice money
Call money is the interest rate when financial intermediaries borrow for one day among themselves.
Notice money is same but duration is 2-14 days
What is bill discounting in short term debt .
MSME pledges his unpaid invoice to a factor ( bank/ NBFC) to avail loans.
In bill discounting MSME seller collects money from Buyer and delivers it to the factor
What is factoring in short term debt
In this the factor or lender directly collects the money or unpaid invoices from Buyer.
What are the features of Factoring regulation Amendment Act 2011
Banks of all types of NBFCs allowed to give loans now
RBI given more powers to regulate this buisness.
More legal clarity about TReDS system
Need to Register the invoice Pledge factoring loan transaction bon a Central registry set up under the SARFAESI ACT.
What is TReDS platform
Trade Receivables Electronic Discounting System online Platform connect the factors with the borrowers
Eg M1 exchange , RXIL and A. TReDS
They have to register with RBI
RXIL is owned by
SIDBI, NSE, STATE BANK, ICICI , YES BANK
