Saturday, December 30, 2017

Trading Procedure at Stock Exchanges

Leave a Comment
Trading Procedure at Stock Exchanges

Securities can be traded at a stock exchange only if it is listed at that stock exchange or any of the other stock exchanges. Listing is a procedure by which, the issuing company has to enter into an agreement, called the listing agreement, with a stock exchange and has to abide by the clauses of the listing agreement regarding disclosure of information, payment of listing fees redressal of investor’s grievance etc.

finance
[Post Image Courtesy of Stuart Miles at FreeDigitalPhotos.net]

Once listed, the security can be traded at other stock exchanges too. The sale and purchase (transaction) of securities at the stock exchange can be done only through registered share brokers. An investor desiring to enter into a transaction has to place an order with one of the share brokers. In the ‘outcry’ system where the brokers used to shout, the deals are confirmed in few hours but in the screen-based system, the deals are confirmed immediately. The investor then gives the delivery of the securities in case of sale, or makes the payment in case of purchase of security, to the stock broker.

The stock broker in turn makes the payment for the securities sold or delivers the security certificate purchased on the completion of settlement programme of the stock exchange. Generally, it takes 15 to 20 days for completion of the transaction. The National Stock Exchange and the Over The Counter Exchange of India (OTCEI) have been operating since their inception at the national level through satellite-linked computer based system. To be in tune with the NSE, the stock exchanges at Mumbai, Delhi, Ahmedebad, and Calcutta, have already converted their operations from the ‘outcry’ system to the computerised one. The transactions at these stock exchanges now take place through computer based online screen system.

Read More

Friday, December 29, 2017

Functions Of Securities And Exchange Board Of India (SEBI)

Leave a Comment
Functions Of Securities And Exchange Board Of India (SEBI)

1. The SEBI Act armed SEBI with statutory powers.

2. It has entrusted SEBI with the responsibility of dealing with various matters relating to the capital market.

finance
[Post Image Courtesy of PatPitChaya at FreeDigitalPhotos.net]

SEBI’s principle tasks are to:

1. regulate the business in stock exchanges and any other securities market.

2. register and regulate the working of capital market intermediaries (brokers, merchant bankers, portfolio mangers and so on).

3. register and regulate the working of mutual funds.

4. promote and regulate self-regulatory organizations.

5. prohibit fraudulent and unfair trade practices in securities markets.

6. promote investors’ education and training of intermediaries of securities markets.

7. prohibit insider trading in securities.

8. regulate substantial acquisition of shares and take-over of companies.

9. perform such other functions as may be prescribed.

Read More

Thursday, December 28, 2017

Securities And Exchange Board Of India (SEBI)

Leave a Comment
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

In 1988, SEBI was created by an administrative feat of the Ministry of Finance. Since then SEBI has gradually been granted more and more powers. With the repeal of the Capital Issues Control Act and the enactment of the SEBI Act in 1992, the regulation of the primary market has become the preserve of SEBI. Further, the Ministry of Finance has transferred a number of powers under the Securities Contracts (Regulation) Act 1956 also to SEBI.

finance
[Post Image Courtesy of Mapichai at FreeDigitalPhotos.net]

Before the establishment of the SEBI, the principal legislations governing the securities markets in India were the Capital Issues Control Act 1956 (governing the primary market) and the Securities Contract (Regulation) Act 1956 (governing the secondary market). The regulatory powers were vested with the Controller of Capital Issues (for the primary market) and the Stock Exchange Division (for the secondary market) in the Ministry of Finance, Government of India.

Read More

Wednesday, December 27, 2017

Group A and Group B Shares In India Stock Exchange

Leave a Comment
Group A and Group B Shares In India Stock Exchange

The listed shares are divided into two categories: Group A shares (also referred to as cleared securities or specified shares) and Group B shares (also referred to as non-cleared securities or non-specified shares).

finance
[Post Image Courtesy of CoolDesign at FreeDigitalPhotos.net]

For Group A shares, the facility for carrying forward a transaction from one account period to another is available; for Group B shares, it is not. Group A shares basically represent large, well-established companies that have a broad investor base and are very actively traded.

Since transactions in these shares can be carried forward, these shares attract a lot of speculative trading.

This seems to be the reason why these shares, other things being equal, tend to command higher price-earning multiples. This is clear from the fact that whenever a share is moved from Group B to Group A, its market price rises; likewise, when a share is shifted from group A to Group B market price declines.

The Mumbai Stock Exchange employs several criteria for shifting stocks from the non-specified list to the specified list. The key ones are that the company must have an equity base of Rs. 10 crore, a market capitalization of Rs. 25–30 crore, a public holding of 35 to 40 percent, a shareholding population of 15,000 to 20,000 a dividend paying status and a good growth potential.

Read More

Tuesday, December 26, 2017

What Is Private Placement Definition And Meaning

Leave a Comment
What Is Private Placement Definition And Meaning

In a private placement, funds are raised in the primary market by issuing securities privately to some investors without resorting to underwriting (insurance against risk by a guarantor). The investors in this case may by financial institutions, commercial banks, other companies, shareholders of promoting companies, and friends and associates of the promoters.

finance
[Post Image Courtesy of JSCreationzs at FreeDigitalPhotos.net]
Read More

Monday, December 25, 2017

What Is Right Issue Definition And Meaning

Leave a Comment
What Is Right Issue Definition And Meaning

A right issue involves selling securities in the primary market by issuing rights to the existing shareholders. When a company issues additional equity capital, it has to be offered in the first instance to the existing shareholders on a pro rata (proportional) basis. This is required under Section 81 of the Companies Act 1956. The shareholders however, may by a special resolution forfeit this right, partially or fully, to enable a company to issue additional capital to the public.

finance
[Post Image Courtesy of Pansa at FreeDigitalPhotos.net]
Read More

Sunday, December 24, 2017

What Is Public Issue Definition And Meaning

Leave a Comment
What Is Public Issue Definition And Meaning

By far the most important mode of issuing securities, a public issue involves sale of securities to the public at large. A company making a public issue informs the public about it through statutory announcements in the newspapers, makes application forms available through stock brokers and others and keeps the subscription open for a period of three to seven days. If the issue is over-subscribed, the pattern of allotment is decided in consultation with the stock exchange where the issue is proposed to be listed.

finance
[Post Image Courtesy of SuperTrooper at FreeDigitalPhotos.net]

After the allotment pattern is finalized the company mails the allotment advice/letter alongwith refund order, if any. This is supposed to be done within 10 weeks of the closure of subscription. If the full amount is not asked for at the time of allotment, the balance is called in one or two calls later. The letter of allotment is exchangeable for share certificates (or debenture certificates, as the case may be), after it is duly stamped by the bank where the balance payment is made.

Of course, if the allottee wants he can sell the letter of allotment itself by transmitting it alongwith a transfer deed. If the allottee fails to pay to call money as and when called by the company, the shares are liable to be forfeited. In such a case, the allottee is not eligible for any refund of the amounts already paid. While a new company set up by promoters without a track record is required to issue its shares at par, other companies are allowed to make a public issue at a premium.

Read More

Saturday, December 23, 2017

Methods of Raising Capital

Leave a Comment
Methods of Raising Capital

(1). Shares:

Otherwise known as ‘ordinary shares’ these are shares in the issued capital of company which are held on terms that make the holder a ‘member’ of the company, entitled to vote at annual meetings and elect directors, and to participate through dividends in the profits of the company. The holders of the ordinary shares carry the residual risk of the business: they rank after debenture holders and preference shareholders for the payment of dividends and they are liable for losses, although this liability is limited to the value of the share and to the limit of guarantee given by them.

finance
[Post Image Courtesy of Grafics Mouse at FreeDigitalPhotos.net]

(2). Debentures:

Fixed-interest securities issued by limited companies in return for long-term loans. The term is sometimes also used to refer to any title on a secured interest–bearing loan. Debentures are dated for redemption (i.e. repayment of their nominal value by the borrower to the holder), debentures are usually secured. Debenture interest must be paid whether the company makes a profit or not. In the event of non-payment debenture holders can force liquidation and rank ahead of all shareholders in their claims on the company’s assets. The interest which debentures bear depends partly on long-term rates of interest prevailing at the time and partly on the type of debenture, but will in any case, because of the lower risk involved is less than borne by preference shares. Debenture shares are most appropriate for financing companies whose profits are stable and which have substantial fixed assets, such property companies.

(3). Convertible debentures:

These carry an option at a fixed future date to convert the stock into ordinary shares at a fixed price. This option is compensated for by a lower rate of interest than an ordinary debenture, but convertible debentures are attractive since they offer the investor, without sacrificing his security, the prospect of purchasing equity shares cheaply in the future. For this reason, convertible debentures are issued at a time when it is difficult to raise capital either by equity or fixed interest securities. There are three ways in which a company may raise capital in the primary market.

Read More

Friday, December 22, 2017

List Of 24 Stock Exchange Institutions Operating In India

Leave a Comment
List Of 24 Stock Exchange Institutions Operating In India:

The Approved Stock Exchanges in India as follows:

finance
[Post Image Courtesy of Punsayaporn at FreeDigitalPhotos.net]

1. Meerut Stock Exchange, Meerut (UP)

2. UP Stock Exchange, Kanpur (UP)

3. Mumbai Stock Exchange, Mumbai (Maharashtra)

4. Over the Counter Exchange of India, Mumbai (Maharashtra)

5. National Stock Exchange, Mumbai (Maharashtra)

6. Pune Stock Exchange, Pune (Maharashtra)

7. Ahmedabad Stock Exchange, Ahmedabad (Gujarat)

8. Sourashtra Stock Exchange, Rajkot (Gujarat)

9. Vadodara Stock Exchange, Vadodara (Gujarat)

10. Bangalore Stock Exchange, Bangalore(Karnataka)

11. Canara Stock Exchange, Mangalore (Karnataka)

12. Bhubaneshwar Stock Exchange, Bhubaneshwar (Orissa)

13. Calcutta Stock Exchange, Calcutta (West Bengal)

14. Delhi Stock Exchange, Delhi.

15. Guwahati Stock Exchange, Guwahati (Assam)

16. Hyderabad Stock Exchange, Hyderabad (Andhra Pradesh)

17. Jaipur Stock Exchange, Jaipur (Rajasthan)

18. Ludhiana Stock Exchange, Ludhiana (Punjab)

19. Chennai Stock Exchange, Chennai (Tamil Nadu)

20. Coimbatore Stock Exchange, Coimbatore (Tamil Nadu)

21. MP Stock Exchange, Indore (Madhya Pradesh)

22. Magadh Stock Exchange, Patna (Bihar)

23. Capital Stock Exchange, Kerala Ltd. Tiruvananthapuram (Kerala)

24. Cochin Stock Exchange, Cochin (Kerala)

Secondary market in India got a boost when Over The Counter Exchange of India (OTCEI) and National Stock Exchange (NSE) were established. It may be noted that NSE and OTCEI have been established by the all India Financial Institution, while other stock exchanges are in the form of associations.

Read More

Thursday, December 21, 2017

What Is Secondary Market Definition And Meaning

Leave a Comment
What Is Secondary Market Definition And Meaning

The secondary market refers to the network system for the subsequent sale and purchase of securities. An investor can apply and get allotted, a specified number of securities by the issuing company in the primary market. However, once allotted, the securities can thereafter be sold and purchased in the secondary market only.

A security emerges in the primary market, but its subsequent movement takes place in the secondary market. Secondary market is represented by stock exchanges in the capital market. Stock exchanges provide an organized market place for investors to trade in securities.

finance
[Post Image Courtesy of Alex_Ugalek at FreeDigitalPhotos.net]

A stock exchange permits the prices of the securities to be determined by the market forces. The bidding process flows from demand and supply, underlying each security. This means that the specific price of a security is determined, more or less, in the manner of an auction. Stock exchange provides a market in which the members (share brokers) and investors participate to ensure liquidity to the latter. At present, there are 22 stock exchanges operating in India.

Read More

Wednesday, December 20, 2017

What Is Primary Market Definition And Meaning

Leave a Comment
What Is Primary Market Definition And Meaning

The primary market refers to the set up by which the industry raises funds by issuing different types of securities. These securities are issued directly to the investors, both individual and institutions. The primary market discharges the important function of transfer of savings, especially of the individual, Government and public sector undertakings.

finance
[Post Image Courtesy of StockImages at FreeDigitalPhotos.net]

In the primary market, the new issues of securities are presented in the form of Public issues, Right issues and Private Placements. Its efficient operation is made possible by the financial intermediaries and financial institutions, who arrange long-term financial transactions for the clients. Issues of the securities in the primary market may be made through any of the following medium:

(i) Prospectus

(ii) Offer for sale

(iii) Private placement

The securities offered to the public through prospectus are directly subscribed by the investor. The issuing companies widely publicise the offer through various media. The Securities Exchange Board of India (SEBI) has classified various issues in three groups i.e., New issues, Right issues and Preferential issues.

The SEBI has issued various guidelines regarding proper disclosure for investor’s protection. These guidelines are required to be duly observed by the companies making issue of capital. The guidelines issued by the SEBI broadly cover the requirements regarding issue of capital by the companies. The guidelines are applicable to all the companies after the repeal of Controller of Capital Issues (CCI ) Act 1947.

The boom in the primary capital market, that started in the mid-eighties and accelerated thereafter, started slowing down by 1995. There are several reasons for this slowing down of resource mobilization in the primary market. In particular, the low return on new issues, some resulting in stock market fiasco, seems to have shattered the confidence of the investors.

Read More

Tuesday, December 19, 2017

The Share Market In India

Leave a Comment
The Share Market In India:

India has a well developed share market system, which is one of the best in the developing world. It has one of the oldest stock markets in Asia. The first stock exchange was established in 1875 in Bombay (Mumbai), when the stock brokers against at their plight following the severe depression in securities, decided to form an association to protect the character and interest of native share and stock brokers.

finance
[Post Image Courtesy of JK1991 at FreeDigitalPhotos.net]

India has the second largest share holding population with around 1.5 crore shareholders; next only to the United States of America which has about 5 crore shareholders. India is significantly ahead of countries like Japan, United Kingdom and France in this regard, the Indian figure may look impressive, but it constitutes only 1.5 percent of the total population.

The country also has a large number of debenture holders, whose figure stands at around 50 lakhs (5 million). Here, it is important to note that most of the debenture holders are prospective shareholders as they are waiting for the conversion of their debentures into equity shares. The enhanced interest in capital market is a result of increasing industrialization, growing awareness among people and globalization of the capital market.

Indian capital market can be divided into primary market (new issues market) and secondary market.

Read More

Monday, December 18, 2017

Mumbai Inter-Bank Offer Rate (MIBOR) and Mumbai Inter-Bank Bid Rate (MIBID)

Leave a Comment
Mumbai Inter-Bank Offer Rate (MIBOR) and Mumbai Inter-Bank Bid Rate (MIBID):

On June 15, 1998 National Stock Exchange launched two new Reference Rates for the loans of Inter-Bank Call Money Market. These rates are Mumbai Inter-Bank Offer Rate (MIBOR) and Mumbai Inter-Bank Bid Rate (MIBID).

MIBOR will be the indicator of Landing Rate for loans which MIBID will be the landing rate of receipts.

finance
[Post Image Courtesy of iosphere at FreeDigitalPhotos.net]
Read More

Sunday, December 17, 2017

The Secondary capital Market In India

Leave a Comment
The Secondary capital Market In India:

The secondary capital market, on the other hand, is the market for old or already issued securities. It is composed of Industry Security Market or the stock exchange in where industrial securities are bought and sold, and the Gilt-edged Market where the government and semi-government, securities are traded.

finance
[Post Image Courtesy of Sumetho at FreeDigitalPhotos.net]
Read More

Saturday, December 16, 2017

The Primary Capital Market In India

Leave a Comment
The Primary Capital Market In India:

The primary capital market refers to the new issues market, which relates to the issue of shares, preference shares and debentures of non-government public limited companies, and also to the raising of fresh capital by Government companies, and also to the raising of fresh capital by Government companies and the issue of public sector bonds.

finance
[Post Image Courtesy of Suphakit73 at FreeDigitalPhotos.net]
Read More

Friday, December 15, 2017

The Industrial Securities Market In India

Leave a Comment
The Industrial Securities Market In India:

The industrial securities market is the market for equities and debentures of companies of the corporate sector. This market further classified into the following:

finance
[Post Image Courtesy of Nalinratphi at FreeDigitalPhotos.net]

(a) New Issues Markets; for raising fresh capital in the form of shares and debentures.

(b) Old Issues Market; for buying and selling shares and debentures of existing companies this market is commonly known as the stock market or stock exchange.

Both markets are equally important, but often the new issues market will be facilitated only when there are abundant facilities for transfer of existing securities. The capital market is also classified into Primary Capital Market and Secondary Capital Market.

Read More

Thursday, December 14, 2017

The Gilt-Edged Market In India

Leave a Comment
The Gilt-Edged Market In India:

The Gilt-edged market is the market for Government and semi-government securities, which carry fixed interest rates and backed by RBI. The securities traded in this market are stable in value and are much sought after by banks and other institutions.

finance
[Post Image Courtesy of FrameAngel at FreeDigitalPhotos.net]
Read More

Wednesday, December 13, 2017

Classification Of Capital Market In India

Leave a Comment
Classification Of Capital Market In India:

The capital market in India can be classified into

finance
[Post Image Courtesy of Hokmesso at FreeDigitalPhotos.net]

• Gilt-edged Market on Government and Semi-government Securities;

• Industrial Securities Market;

• Development Financial Institutions (DFI), and

• Non-banking Financial Companies (NBFC)

The Industrial Securities Market comprises of the New Issues Market, Old Issues Market and the Stock Exchange.

The Development Financal Institutions comprises of the IFCI, ICICI, SFCs, IDBI, IIBI and the Unit Trust Of India (UTI).

The financial intermediaries consists of merchant banks, mutual funds, leasing companies, venture capital and other companies.

Read More

Tuesday, December 12, 2017

Capital Markets

Leave a Comment
Capital Market

Capital market may be defined as on organised mechanism for effective and efficient transfer of money-capital or financial recourses from the individuals or institutional savers to industrialist. The development of a effective capital market depends upon the availability of savings, well organised financial system and the entrepreneurship quantities of its people.

finance
[Post Image Courtesy of Punsayaporn at FreeDigitalPhotos.net]

Capital market is a market for long-term funds, just as the money market is the market for short-term funds. It refers to all the facilities and the institutional arrangements for borrowing and lending term funds (medium-term and long-term funds). It does not deal in capital for purpose of investment.

The demand for long-term money capital comes predominantly from private sector manufacturing industries and agriculture and from the government largely for the purpose of economic development. As the central and state governments investment are not only on economic overheads as transport, irrigation and power development but also on basic industries and some times, even consumer goods industries, they require substantial sums from the capital market. The supply of funds for the capital market comes largely from individual savers, corporate savings, banks, insurance companies, specialized financing agencies and government.

Among institutions, we may refer to the following:

1. Commercial banks are important investors, but are largely interested in government securities and, to a small extent, debentures of companies.

2. LIC and GIC are growing importance in the Indian capital market, though their major interest is still in government securities.

3. Provident funds constitute a major medium of savings but their investments are mostly in government securities.

4. Special institutions set up since Independence, viz. the IFCI, ICICI, IDBI, UTI etc., all these aim at providing long-term capital to the private sector.

Read More

Monday, December 11, 2017

Financial Markets

Leave a Comment
FINANCIAL MARKETS

Financial market deals in financial securities or instruments and financial services. It may be variously classified as primary and secondary, money markets and capital markets, organised and unorganised markets official and parallel markets, and foreign and domestic markets. Financial market provides money and capital supply to the industrial concern as well as promote the savings and investments habits of the public. In simple sense, financial market is a market which deals with various financial instruments (share, debenture, bonds, treasury bills, commercial bills etc.) and financial services (merchant banking, underwriting etc).

Financial markets may be divided into two major classifications:

finance
[Post Image Courtesy of Stuart Miles at FreeDigitalPhotos.net]

A. Capital market

B. Money market

Capital Market In India:

The capital market in India is made up of the primary market and the money market. The money market is made up of the stock market and the debt market. Also, the stock market comprises of the Over-The-Counter Exchange Of India (OTCEI), the Regional Stock Exchange (RSE) and the National Stock Exchange (NSE).

Money Market In India:

The money market in India is made up of the primary market and the secondary market.

The Primary market consists of the call-money market and the treasury bill market while the secondary market is made up of the commercial bills market and the short term loans market.

Read More

Sunday, December 10, 2017

Non-Banking Non-Financial Institutions

Leave a Comment
NON-BANKING NON-FINANCIAL INSTITUTIONS

Non-banking non–financial institutions are providing fee based services to the public, such as merchant banking, underwriting, counseling, etc. These institutions will not lending any financial assistance to public but they will provide financial services.

The main fee based services that falls under the Non-Banking Non-Financial Insitutions are as follows:

finance
[Post Image Courtesy of LekkyJustDoIt at FreeDigitalPhotos.net]

(1). Merchant Banking

(2). Underwriting

(3). Credit Rating

(4). Consultancy

(5). Project Preparation

Read More

Saturday, December 9, 2017

Non-banking Finance Companies (NBFC)

Leave a Comment
Non-banking Finance Companies (NBFC)

The categories of NBFCs and the nature of their main activities currently being followed by the RBI, which are very similar to the ones discussed by the Shah Working Group, are as follows:

1. Equipment leasing company (ELC) means any company which is carrying on as its principal business, the activity of leasing of equipment or the financing of such activity.

2. Hire-purchase finance company (HPFC) means any company which is carrying on as its principal business, hire-purchase transactions or the financing of such transactions.

3. Housing finance company (HFC) means any company which is carrying on as its principal business, the financing of the acquisition or construction of houses including the acquisition or development of plots of land in connection therewith.

4. Investment company (IC) means any company which is carrying on as its principal business, the acquisition of securities.

finance
[Post Image Courtesy of Posterize at FreeDigitalPhotos.net]

5. Loan company (LC) means any company which is carrying on as its principal business, the providing of finance whether by making loans or advances, or otherwise for any activity other than its own. This category does not include an equipment leasing company or a hire-purchase finance company or a housing finance company.

6. Mutual benefit financial company (MBFC) means any company which is notified by the Central Government under Section 620A of the Companies Act 1956 (1 of 1956).

7. Miscellaneous non-banking company (MNBC) means a company carrying on all or any of the following types of business :

(a) Managing, conducting or supervising as a promoter, foreman or agent of any transaction or arrangement by which the company enters into an agreement with a specified number of subscribers that every one of them shall subscribe a certain sum in installment over a definite period and that every one of such subscribers shall in his turn, as determines by lot or by auction or by tender or in such other manner as may be provided for in the agreement be entitled to the prize amount.

(b) Conducting any other form of chit or kuri which is different from the type of business referred to above. Undertaking or carrying on or engaging in or executing any other business similar to the business referred to above.

8. Residuary non-banking company (RNBC) means a company which receives any deposit under any scheme or arrangement, by whatever name called, in one lump sum or in installments by way of contributions or subscriptions or by sale of units or certificates or other instruments, or in any other manner and which according to the definitions contained in the Non-Banking Financial Companies (Reserve Bank) Directions, 1977 or as the case may be, the Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 1977 is not an insurance company or a company belonging to one to seven at the previous page.

Read More

Friday, December 8, 2017

Financial Services In A Financial System

Leave a Comment
Financial Services In A Financial System

Financial Services are the another and unavoidable component of the financial system of the country. Normally financial services are provided by the non-banking financial companies and later it is called as non-banking financial service companies. Financial services are divided into two major categories such as:

Fund Based Financial Services

Fund based financial services such as leasing, venture capital, hire purchasing, insurance and mutual funds etc. Because, these services are related to the funds transfer from one place to another place and one person to another person.

finance
[Post Image Courtesy of Adamr at FreeDigitalPhotos.net]

Fee Based Financial Services

Fee based financial services such as merchant banking, underwriting, project counseling, credit rating etc., because, these services such as merchant banking, underwriting, project counseling, credit rating etc., because, these services are not related to any funds transfer activities.

Read More

Thursday, December 7, 2017

Venture Capital Funds (VCFs)

Leave a Comment
Venture Capital Funds (VCFs)

The Union Budget for 1999–2000 stressed the need for higher investment in venture capital activity (investment in economic activities where risk is high and there is considerable innovation involved e.g. in the knowledge based enterprises). As it is difficult to access capital market to raise funds for technology development/demonstration, especially for small and medium industries, VCF has a major role to play in this area.

finance
[Post Image Courtesy of StockDevil at FreeDigitalPhotos.net]

The National Venture Fund for Software and IT industry (NVFSIT) launched in the current financial year merits mention in this context. The Small Industry Development Bank of India (SIDBI) Venture Capital Ltd. (SVCL) manages NVFSIT, which is a wholly owned subsidiary of SIDBI. In the backdrop of these developments, SEBI initiated a process of interaction with industry participants and experts to identify the various issues and key areas for the development of the VCF industry in India.

Read More

Wednesday, December 6, 2017

Role of Life Insurance Corporation (LIC) In India

Leave a Comment
Role of Life Insurance Corporation (LIC) In India:

The activities of the LIC can be broadly classified into two categories. First, it mobilizes long-term contractual savings. Its policy-holders view the LIC as a trustee of their funds, a source of emergency fund to guard against any financial misfortune and a way to accumulates funds by the time of retirement from work. As an agency it is designed to the inculcation of savings for the sake of rainy days.

During the last forty years of its operations, there has been concentration of colossal funds in hands of this monolithic state owned corporation. The resources thus obtained by the LIC from policy-holders are invested in diverse ways for different purposes. Basically LIC is an investment institution. It is a big investor of funds in government marketable securities.

Since April, 1975 the amended Section 27A of the Insurance Act, 1938 the LIC is required to invest to not less than 50% of its accruals of premium income in government marketable securities. Of this not less than 25% in central government securities. Besides it has to give loans to approved authorities like electricity boards or state government for socially oriented schemes like electricity, housing, water supply etc. These loans and investments should not exceed 87.5 percent of accretion to the controlled fund of the LIC.

finance
[Post Image Courtesy of Kromkrathog at FreeDigitalPhotos.net]

The remaining 12.5 percent can be made to the private sector directly in the form of purchase of shares and debentures. Besides it grants loans to the private corporate sector and finances projects by subscribing shares and debentures of private industries. Its contribution to financing of industries in the private corporate sector is also indirect. The investment in the share capital and bonds of IFCI, SFCs, UTI and IDBI flow back to private sector in the form of direct loans. The LIC is also engaged in underwriting new issues.

The LIC plays an important role in the securities market in India. It purchases even when the market is dull (bearish) and prices are low in order to reap the benefit of future price appreciation. Nor does it usually sell shares from its stock when the market is at higher prices.

Although Income Tax concessions provide incentive to higher income groups through LIC policies, the insuring public does not get the real value of its long-term savings because of chronic inflation. Barring risk coverage, the rate of return offered by LIC is much lower compared to other savings media. It is true LIC has grown at a fast speed yet it can grow at a faster rate if it can make the message of life insurance more attractive by its operational efficiency and innovative attitude.

Read More

Tuesday, December 5, 2017

Life Insurance Corporation (LIC) Of India

Leave a Comment
LIFE INSURANCE CORPORATION OF INDIA

The Life Insurance Corporation of India (LIC) was set up in the year 1956 by nationalizing 245 insurance companies. The Primary objective of nationalization was to protect the interest of policy-holders against misuses and embezzlement of funds by private insurance companies.

finance
[Post Image Courtesy of Vichaya Kaitying-Angsulee at FreeDigitalPhotos.net]

Secondly, the object of nationalization was to direct investment of funds in government securities, leaving a meager part for the private sector.

What marks and distinguishes the LIC from other long-term financial institutions is this that it discharges the two fold function of mobilization of long-term savings and their effective channelisation as well. The other agencies are suppliers of fund obtained from government and the Reserve Bank of India.

Read More

Monday, December 4, 2017

Private Sector General Insurance Corporation in India

Leave a Comment
Private Sector General Insurance Corporation in India

Some of the Private Sector General Insurance Corporation in India are as follows:

finance
[Post Image Courtesy of Stuart Miles at FreeDigitalPhotos.net]

• CH NBH Assn General Insurance Corporation.

• ICICI Lombard General Insurance Corporation.

• Bajaj Allianz General Insurance Corporation.

• AIG General Insurance Corporation.

• IFFCO Tokio General Insurance Corporation.

• Royal Sundaram General Insurance Corporation.

• Reliance General Insurance Corporation.

Read More

Sunday, December 3, 2017

Private Sector Life Insurance Corporation In India

Leave a Comment
Private Sector Life Insurance Corporation In India:

Some of the Private Sector Life Insurance Corporation operating in India are as follows:

finance
[Post Image Courtesy of Sakhorn38 at FreeDigitalPhotos.net]

• ICICI Prudential Life Insurance Corporation Limited.

• ING Vysya Life Insurance Corporation Limited.

• HDFC Standard Life Insurance Corporation Limited.

• Birla Sun Life Insurance Corporation Limited.

• SBI Life Insurance Corporation Limited.

• Om Kotak Life Insurance Corporation Limited.

• Met Life Insurance Corporation Limited.

• Allianz Bajaj Life Insurance Corporation Limited.

• Max New Yark Life Insurance Corporation Limited.

• Tata AIG Life Insurance Corporation Limited.

• AMP Sanmar Life Insurance Corporation Limited.

Read More

Saturday, December 2, 2017

Insurance Sector In India

Leave a Comment
INSURANCE SECTOR IN INDIA
Insurance is one of the fund based financial services which provides risk coverage facilities to the human beings. Realising the vast potential in Indian market, foreign insurance companies started entering into India and even banking organisations (SBI, ICICI, etc.) also showed much interest in insurance business, this is being attributed to global technology and conversions of services as a result of which Indian Insurance market registered highest growth in the Asian region even though Indian’s share of global insurance premium is less 0.5% (1998) than that of US 24.2 percent and Japan 21 percent.

The private players from India and abroad are well aware that only 25 percent of the insurable population have been covered by insurance by existing companies which includes that Indian insurance market has potential enough to exploit. In this process IRDA has so for granted registration for 12 private life insurance companies and 9 general insurance. If the existing public sector insurance companies are included, there are currently 14 insurance companies in the life side and 13 companies in general insurance business.

finance
[Post Image Courtesy of Dfrsce at FreeDigitalPhotos.net]


Insurance sectors in India has been classified into Public Sector Insurance and Private Sector Insurance.

The Public sector Insurance consists of the Life Insurance and General Insurance.

The Life Insurance consists of the Life Insurance Corporation Of India (LIC) and the Postal Life Insurance while the General Insurance consists of the National Insurance, New India Assurance Corporation, Oriental Fire And General Insurance Corporation and the United India Insurance Corporation.

Also, the Private Sector Insurance in India consists of the Life Insurance and the General Insurance.

Read More

Friday, December 1, 2017

Specialized Financial Institutions In India

Leave a Comment
SPECIALIZED FINANCIAL INSTITUTIONS

The following are the specialized financial institutions established by government to provide financial and non–financial assistance to various industrial sectors in India.

finance
[Post Image Courtesy of Tiger11th at FreeDigitalPhotos.net]

• Shipping Credit and Investment Corporation of India (SCICI), 1986.

• Infrastructure Leasing and Financial Service Limited (IL and FS), 1988.

• Technology Development and Information Company of India Limited (TDICI),
1988.

• Risk Capital and Technology Finance Corporation Limited (RCTFC), 1988.

• Tourism Finance Corporation of India (TFCI), 1989.

• Small Industries Development Bank of India (SIDBI), 1989.

• Infrastructure Development Finance Company (IDFC), 1997.

Read More

Google+ Badge

Copyright (c) 2015-2017, The BusinessParrot. All Rights Reserved. Powered by Blogger.

Recent Comments

Followers

Blog Archive

Follow by Email

[about]

[Latest News][6]

Affiliate Marketing Guides
Agriculture Business Ideas
Amazon Online Store Tips
Banking & Finance Tips
Blogging & Webmaster Guides
Bulk SMS Short Code Guides
Computer & IT Business Ideas
Education Business Ideas
Entrepreneurship Tips & Freebies
Facebook Autopilot & Tips
Fashion & Decoration Ideas
Financial Calculators
Fiverr Income Guides
Free SMS Text Messages
Google Adsense Tips
Health Business Opportunities
Inspirational Poems & Literature
Insurance & Risk Management
Job Search Tips
Mobile Phone Tips & Business
Motivational Quotes & Tips
Oil & Gas Business Ideas
Online Business Guides
Online Importation Business Guides
Small Scale Business Ideas
Social Media Income Guides
Start-Up Business Ideas
Transportation & Haulage Ideas
Web & Graphic Designing Ideas
Work-At-Home Business Ideas