[This article explains what is a Derivative- History of Derivatives – The size of the Derivatives Market – Underlying Assets – Exchange Traded and Over-the-Counter Markets – Participants in the Derivatives Market, – Functions of Derivatives – Types of Derivatives – Forward Contracts– Futures – Options ] Definition: Derivative securities are those whose value depends…
A tradable form of loan is normally termed as a Debt Instrument. They are obligations of the issuer of such instrument as regards certain future cash flow representing Interest & Principal, which the issuer would pay to the legal owner of the Instrument. Debt Instruments are of various types. The distinctive types of the Debt…
Treasury bills or T-bills, are money market instruments issued by the Government of India. They are primarily short-term borrowing tools and are presently issued in three tenors, namely, 91 days, 182 days,s and 364 days. Funds collected through such tools are typically used to meet short-term requirements of the government and, hence, to reduce the…
On Thursday, February 8, 2024, the RBI Governor Shaktikanta Das in his Statement of development regulatory policy, announced, sets out various developmental and regulatory policy measures relating to (i) Financial Markets; (ii) Regulations; and (iii) Payment Systems and Fintech. Key Fact Statement (KFS): In the recent past RBI has announced several measures to foster greater…
In the Statement of Development Regulatory Policy announced on Thursday, the Governor of RBI sets out various developmental and regulatory policy measures relating to Payment Systems and Fintech. Aadhaar Enabled Payment System: In 2023, more than 37 crore users undertook Aadhaar Enabled Payment System (AePS) transactions, which points to the important role played by AePS…
Corporate bonds are debt securities issued by private and public corporations. Companies issue corporate bonds to raise money for a variety of purposes, such as building a new plant, purchasing equipment, or growing the business. An investor who buys a corporate bond is effectively lending money to the company in return for a series of…
The Monetary Policy Committee (MPC) met on the 6th, 7th, and 8th February 2024 and decided to keep the policy repo rate at 6.50 percent and other key policy rates also remained unchanged for the 6th straight time. RBI also left the policy stance unchanged with a focus on the withdrawal of accommodation. Withdrawal of…
Fixed-income securities are investments where the cash flows are according to a predetermined amount of interest, paid on a fixed schedule. The following are the different types of fixed-income securities Getting the targeted amount at the exact time is a possibility of an investment in a fixed-income product. Fixed interest rate securities are those in…
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:…