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Inflation, Money & Banking System - Coggle Diagram
Inflation, Money & Banking System
Government securities (G-Secs)
tradable instrument listed on exchange in
Secondary market
issued by CG or SG
To meet fiscal expenditure
RBI issues T-Bills and Bonds
Behalf of Govt
raise money by offering Fixed return on Investment
virtually risk-free investments
guaranteed by govt
two-types of sec
maturities less than 1 year - T-Bills
govt intends to repay within a year
do not carry interest component
short-term capital gain
Tax as per slab rate
More than one year - Bonds
govt intends to repay over many years
Cash Management Bills (CMBs)
Generic character of T-Bills
issued for maturities less than 91 days
Participatory Notes (P-Notes)
Financial Instruments
required by Foreign Investors
to Invest in Indian Securities
without register with the SEBI
Currency Swap (CS)
obtain foreign currency
loans at better interest rate
than borrowing directly in foreign market
transaction btw two parties
exchange principles and
interest in different currencies
D/F
India signed $75 billion
bilateral currency swap agreement with Japan
flexibility to use in reserve any time
maintain
Balance of Payments
and Short-term liquidity
India don't have CS line with US
RBI
agreed to $400 million CS to Sri Lanka
revised framework on CS for 2019-22
for arrangement for SAARC countries
further Financial stability and economic co-op