ABM – Economic Reforms Part 1 CAIIB



Part 1 of ABM Unit 7 Economic Reforms of CAIIB. Advanced bank management is paper 1 of CAIIB. if you like this video please like and share this to get 4000+ prev year ques pack
visit https://iibf.info 1) The economic Reforms started in 1991. 2) Real Sector Policy measures mainly focused on the manufacturing sector in the early stages of reform process. 3) MRTP Act Monopolies and Restrictive Trade Practices Act, 1969 4) APMC Act (Agricultural Produce Market Committee Act ) 5) The primary objective of The APMC Act in each state of India requires all agricultural products to be sold only in government – regulated markets. This was amended and permitting the farmers to bypass the mandatory requirement of regulated market. 6) Essential Commodities Act, 1955 7) Financial Sector reforms have been arrived out in accordance with the recommendations made by basically three committees:
i. Narasimham Committee report on financial sector Reforms (1992)
ii. Narasimham Committee report on Banking sector Reforms (1998)
iii. S H Khan Report (1998) of the working group for harmonize the role and operations of Development Financial Institutions and Banks reforms in financial Sector 8) IRS- Interest Rate Swaps 9) FRA – Forward Rate Agreements 10) Collateralized Borrowings and Lending Obligation – CBLO 11) 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. 12) Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. 13) Who can issue Commercial Paper (CP)?
a. Highly rated corporate borrowers, primary dealers (PDs) and satellite dealers (SDs) and all-India financial institutions (FIs) 14) Futures and options represent two of the most common form of “Derivatives”. 15) Derivatives are financial instruments that derive their value from an ‘underlying’. The underlying can be a stock issued by a company, a currency, Gold etc. 16) The derivative instrument can be traded independently of the underlying asset. 17) The value of the derivative instrument changes according to the changes in the value of the underlying. 18) Derivatives are of two types –
i. Exchange traded and
ii. Over the counter. 19) Exchange traded derivatives, as the name signifies are traded through organized exchanges around the world. These instruments can be bought and sold through these exchanges, just like the stock market. 20) Some of the common exchange traded derivative instruments are futures and options. 21) Over the counter (popularly known as OTC) derivatives are not traded through the exchanges. They are not standardized and have varied features. 22) Some of the popular OTC instruments are forwards, swaps, swaptions etc. 23) Futures 24) A ‘Future’ is a contract to buy or sell the underlying asset for a specific price at a predetermined time. If you buy a futures contract, it means that you promise to pay the price of the asset at a specified time. If you sell a future, you effectively make a promise to transfer the asset to the buyer of the future at a specified price at a particular time. Every futures contract has the following features:
– Buyer – Seller – Price – Expiry 25) Some of the most popular assets on which futures contracts are available are equity stocks, indices, commodities and currency.

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