36592728 role of dfhi in money market

7/28/2019 36592728 Role of DFHI in Money Market

1/13

Role of DFHI in

Money Market

Presented By:

Manish Gupta, ShrutiKapoor, Rakesh, Sachin,

Rahul.


2/13

DFHI ( Discount And Finance House of India)

Why DFHI is formed ?

The Vaghul Committee had endorsed the

recommendations for banking commission in 1972 and

Chore committee in 1980 regarding setting up specialised

institutions as a autonomous financial Intermediary, fordeveloping the money market and provide liquidity to the

instruments.


3/13

DFHI ( Discount And Finance House of India)

It was incorporated on March, 1988 under The

Companies Act, 1956. According to Companies Act, DFHI

became the subsidiary of SBI.

DFHI commenced its operations on April, 1988.

As on 12 August, 2010, the SBI Bank has invested during

the quarter further amount of Rs.37.64 crore in SBI DFHI

Ltd. increasing their shareholding to 62.49%.


4/13

Resources of DFHI Ltd.

1. The paidup capital of Rs. 200 crores contributed jointly

by RBI, Public Sector Banks and all India Financial

Institutions in the proportion of 5:3:2.

2. The authorized capital of the company is Rs 250 crores.

3. Refinance facility of different types from the RBI against

the collateral of instruments it deals in.

4. Line of credit from banks on a consortium basis of Rs. 100

Crore from 28 public sector banks.


5/13

Objectives of DFHI in Money Market

The main objective of increasing the transaction in or

turnover of the money market assets.

To facilitate the smoothening of the short term liquidity

imbalance by developing an active money market and

integrating the various segment of money market.

Facilitate money market transaction of small and medium

sized institutions that are not regular participants in the

market.

To promote secondary market in short term moneymarket instruments i.e. to be an active trader in moneymarket instruments rather than a mere repository, andthereby, impart improved liquidity to short term moneymarket instruments.


6/13

Money Market Instruments in whichDFHI Deals

DFHI deals in the following instruments / products:

Treasury Bills

Government Securities

Certificates of Deposit

Commercial Papers

Call (overnight) Money, Notice money and Term Money

Interest rate swaps/Forward rate Agreements.


7/13

Roles of DFHI in Money Market

To discount, purchase & sale treasury bills, trade bills, bills

of exchange, commercial bills and commercial papers.

To play an important role as a lender, borrower or broker

in the Inter-Bank call Money Market.

To promote and support company funds, trusts and other

organization for development of short term money market.


8/13

Roles of DFHI Cont

To advise government, banks And financial institutions in

evolving schemes for growth and development of money

market.

It mobilizes funds/resources from Commercial or

Cooperative banks, FI and Corporate Entities which arepooled and lend the money market.

Help the corporate entities, banks and FI to raise shirt term

money and invest short term surplus.


9/13

Roles of DFHI Cont.

It stabilize the call and short term deposit rate through

larger turnover.

It extend repos, buy back facility to 14 days to banks and

FI In money market instruments.

Two regular quotes Bid and offer in money market

instruments provided by DHFI serve as a base to broaden

the secondary market and give an assured liquidity to the

instruments.


10/13

SBI DFHI Ltd. Offers:

SBI DFHI Invest - G-Sec., State Dev. Loans, T-Bills.

SBI DFHI Invest Plus Bank CDs, Corp. CPs.,

Corporate Bonds SBI DFHI Money- ICD

SBI DFHI TradeHigh yield G-Sec.


11/13

Who Can Deal With SBI DFHI Ltd.

Individuals

Corporate

Regional rural banks

Cooperative Banks

Provident Funds, Pension Funds, Gratuity Funds

Trusts

Insurance Companies

Mutual Funds

Banks


12/13

Conclusion

With own reference and support from RBI in

refinance facility and broad based money

instruments, DFHI is poised for continued

sustained growth and more effective role to fulfill

the basic objective of the money market i.e to

facilitate smoothening of short term liquidity.


13/13

Bibliography

www.sbidfhi.com

www.icai.org

www.investopedia.com

www.businessfinance.com

www.wikipedia.com
http://www.sbidfhi.com/http://www.icai.org/http://www.investopedia.com/http://www.businessfinanace.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.businessfinanace.com/http://www.investopedia.com/http://www.icai.org/http://www.sbidfhi.com/

36592728 role of dfhi in money market

Documents