Ch. 9

• Important reforms introduced in the capital market

  • SEBI
  • NSE
  • SCREEN BASED TRADING SYSTEM (SBTS)
  • DEMAT ACCOUNT
  • Access to global funds
  • INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
• NSE


  The leading stock exchange in India, was established in 1992
• INVESTOR EDUCATION AND PROTECTION FUND (IEPF)


  Promotes investors' awareness and to protect the interest of the investors
• DEMAT ACCOUNT

  Facilitates easy purchase and sale of shares by the investors through the electronic method
• Access to global funds

  • American Depository Receipts (ADRS)
  • Global Depository Receipts (GDRs)
• SEBI


  Established in 1988 but given statutory powers in 1992 to protect the interest of the investors and promote the development of the securities market
• Capital market


  A market for long-term funds (both equity and debt) which are raised within and outside the country
• SCREEN BASED TRADING SYSTEM (SBTS)


  Computerised SBTS was introduced as a part of modernisation
• The percentage of deposits which scheduled banks have to maintain with RBI is called Cash Reserve Ratio (CRR). The CRR in August 2021 is 4%. RBI uses CRR as an instrument to control liquidity in the economy
• As a supreme banking authority, RBI has the power to influence the volume of credit created by commercial banks. It also monitors the purpose or use of credit. RBI controls credit in the economy through quantitative methods such as open market operations, bank rate, and variable reserve ratios like Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
• As per the Minimum Reserve System of 1957, RBI is required to maintain minimum gold and foreign exchange reserves of 200 crores. Out of this, at least 15 crores should be in gold and the remaining 85 crores should be in terms of foreign currency and government securities
• RBI acts as a banker, agent, and advisor to the Central and State Governments. On behalf of these governments, RBI accepts money, engages in the management of public debt, and makes payments
• RBI acts as a custodian of the country's foreign exchange reserves. RBI also engages in buying and selling the currencies of all members of the International Monetary Fund (IMF). It is responsible for maintaining the official exchange rate of the rupee as well as for ensuring its stability
• One rupee note and coins are issued by the Ministry of Finance
• RBI acts as a banker's bank. It controls the working of commercial banks in the country. It is mandatory for all scheduled banks to maintain a certain minimum cash reserves with the RBI against their demand deposits (savings deposits and current deposits) and time deposits (fixed deposits and recurring deposits). RBI also provides financial assistance to banks in the form of discounting eligible bills and loans and advances against approved securities