Wednesday, 27 November 2019

Unit 14: Financial Regulations


                                        Unit 14: Financial Regulations    

The SEBI Act was enacted to establish the SEBI to protect the interests of investors and develop and regulate securities market.

The SEBI has been vested with vast powers by the   Indian Financial System   SCR Act as well as by the SEBI Act to regulate the activities of primary and securities markets and their various players.

The SEBI has also been charged with the responsibility of developing the securities market in India.

The SEBI has taken several measures to improve the functioning of the stock exchanges, modernize their infrastructure and create incredible investment climate.

It has also taken measures to increase integration of the country's market with global securities market.

However, the SEBI has not been found effective in monitoring the operations of the exchanges and the brokers.

This suggests a strong need to develop robust monitoring system by the SEBI.
RBI is also known as the bank of last resort.

It is empowered with the responsibility of regulator, advisor and monitor of the monetary system of the country.

RBI is the Central Bank of India and controls the entire money issue, circulation and control by its monetary policies and lending policies by periodical updates or corrections to discipline the economy.

It acts as an advisor to the Government of India and states Governments, implements Forex polices; it works in tandem with the  
of India in promoting trade and as the account holder of foreign currency transactions and the Balance of Payment (BOP).

Bank rate: Bank rate is the standard rate of discount charged by the Central Bank of the country to eligible parties.

It is the minimum official rate at which the Central Bank rediscounts first class bills of exchange from the discount houses and commercial banks.

CRR: Cash Reserve Ratio.

Instruments of Credit Control: The operation of credit control is through various instruments of policy.

These instruments are classified in to quantitative or general controls and qualitative or selective controls.

Open market operations: OMO are an important instrument of monetary policy and refer to the purchases and sales by the Central Bank of government securities, treasury bills, gold, foreign exchange etc.

in India.

SLR: Statutory Liquidity Ratio.

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