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The economic Reforms started in 1991.
IRS- Interest Rate Swaps
FRA - Forward Rate Agreements
Collateralized Borrowings and Lending Obligation – CBLO
CDs (Certificate of Deposits) are short-term borrowings in the form of Usance Promissory Notes having a maturity of not less than 15 days up to a maximum of one year.
Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. Who can issue Commercial Paper (CP)? a. Highly rated corporate borrowers, primary dealers (PDs) and satellite dealers (SDs) and all-India financial institutions (FIs)
Futures and options represent two of the most common form of "Derivatives".
Derivatives are of two types –
i. Exchange traded and
ii. Over the counter.
A 'Future' is a contract to buy or sell the underlying asset for a specific price at a predetermined time.
Options contracts are instruments that give the holder of the instrument the right to buy or sell the underlying asset at a predetermined price.
An option can be a 'call' option or a 'put' option.
Cheque Truncation System(CTS)has been introduced in cheque clearing July 08 in New Delhi.
G Sec is market auction related instruments and they are paid by Ways and Means Advances, automatic monetization.
Foreign investment is of two kinds – (i) Foreign Direct Investment (FDI) and (ii) Foreign Portfolio Investment.
ECB is Defined as to include commercial loans availed from non-resident lenders with minimum average maturity of 3 years
Poverty is measured by Gini Coefficient, a standard measure of Income/Expenditure in equality
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Tools of Monetary policy:
i. Bank Rate
ii. Cash Reserve Ratio
iii. Statutory Liquidity Ratio
iv. Market Stabilization Scheme
v. Repo Rate
vi. Reverse Repo Rate
vii. Open Market Operations
Fiscal Policy :
Fiscal Policy is the use of government spending and revenue collection the economy.
Fiscal Policy refers to the overall effect of the budget outcome on economic activity.
FRMB Act : Fiscal Responsibility and Budget Management Act – 2003
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