Correspondent banking is the relationship between two banks which have mutual accounts with each other. Functions handled by Correspondent Banking: A. Account Services Clearing House Functions Collections Payments Overdrafts and Loan Facility Investment Services B. Account Services LC Guarrantees
1. Derivatives are the instruments to the exposure for neutralize or alter to acceptable levels, the uncertainty profile of the exposure. E.g: Forward contracts, options, swaps, forward rate agreements. 2. Risks in Foreign Exchange:- a. Exchange Risk- It is due to movement in exchange rates. The dealer is expected to cover the transactions immediately.The Exchange Risk… Continue reading Mod A: Ch2 -Basics of Forex Derivatives
Major Participants in Forex Markets: Central Banks- managing reserves and using currency markets to smoothen out the value of home currency Commercial Banks- Offering exchange of currencies to their retail clients Investment Banks- Moving funds from one country to another using exchange markets Forex Brokers- Acting as middlemen between other participants. Corporations- Moving funds between… Continue reading Mod A: Ch1 -Exchange Rates and Forex Business
1) Unique features of Indian Economy: a. India’s growth is driven by domestic demand – both consumption and investment. b. Twin Deficit – Fiscal & Current Account c. Supply constrained economy
1) Net Tax Revenue = Gross Tax Revenue (-) NCCD transferred to the National Calamity Contingency fund (-) States’ share 2) Total Revenue Receipts = Net Tax Revenue + Total Non- Tax revenue 3) Capital Receipts = Non- debt receipts + Debt Receipts 4) Total Receipts = Total Revenue eceipts + Capital Receipts+ Drawdown of… Continue reading Mod A Ch 10: Union Budget
1) Gross Domestic Product (GDP): It is the total market value of all the final goods and services produced within the territorial boundary of a country, using domestic resources, during a given period of time, usually 1 year. 2) Gross national Income at Market Price = GDP at Market Price + Taxes less subsidies on… Continue reading Mod A Ch 9: GDP Concepts
1) Monetary Policy is the process by which the Government, Central Bank controls i. The money supply ii. Availability of money and iii. Cost of money or rate of interest In order to attain a set of objective oriented towards the growth and stability of the economy. 2) Monetary policy is referred to as either… Continue reading Mod A Ch 8: Monetary and Fiscal Policy
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 APMC Act (Agricultural Produce Market Committee Act ) 5) The primary objective of The APMC Act in each state of… Continue reading Mod A Ch 7: Economic Reforms
Business Cycle refers to the fluctuations in production or economic activity. Boom: – During the Boom phase production capacity is fully utilized and also products fetch an above normal price which gives higher profit. – In Boom period, consumption will be decreased as prices are going up. – The Demand is more or… Continue reading Mod A Ch 5: Business Cycles
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