Financial Markets & Institutions

Course ID
FC 303
Level
Undergraduate
Program
BBA (FIA)
Semester
Third
Credits
6.0
Paper Type
Core Course
Method
Lecture & Tutorial

Unique Paper Code: 61011303

To provide an understanding of the essential elements of the financial environment in which the business firm operates. To acquaint students with the techniques of financial management and their applications for business decision making.

Learning Outcomes:

At the end of the course, students should be able to:

  • Financial architecture of an economy and its key players.
  • The fabrication of Indian Financial markets.
  • The process of Money movement both in intermediates and disintermediated environment.
  • Functioning of different players in the financial market including Regulators like RBI and SEBI.

Course Contents

Unit I
Unit II
Unit III
Unit IV

Unit I (2 weeks)

Structure of Indian Financial System: An overview of the Indian financial system, financial sector reforms: context, need and objectives; major reforms in the last decade; competition; deregulation; capital requirements; issues in financial reforms and restructuring; future agenda of reforms; Regulation of Banks, NBFCs & FIs: Salient provisions of banking regulation act and RBI Act; Role of RBI as a central banker; Products offered by Banks and FIs: Retail banking and corporate banking products. Universal Banking: need, importance, trends and RBI guidelines, Core banking solution (CBS); RTGS and internet banking, NBFCs and its types; comparison between Banks and NBFCs

References:

Pathak, B. on Indian Financial System (4th ed.) Pearson Publication [Chapter 1,13,24]

RBI Guidelines on Universal Banking

Unit II (3 weeks)

Introduction to Financial Markets in India: Role and Importance of Financial Markets, Financial Markets: Money Market; Capital Market; Factors affecting Financial Markets, Linkages Between Economy and Financial Markets, Integration of Indian Financial Markets with Global Financial Markets, Primary & secondary market, Currency Market, Debt Market- role and functions of these markets. Primary Market for Corporate Securities in India: Issue of Corporate Securities: Public Issue through Prospectus, Green shoe option, Offer for sale, Private Placement, Rights Issue, OnLine IPO, Book Building of Shares, Disinvestment of PSU, Employees Stock Options, Preferential Issue of Shares, Venture Capital, Private Equity, Performance of Primary Market in India, Corporate Listings: Listing and Delisting of Corporate Stocks.

References:

Khan, M.Y on Financial Services (8th ed.) Mc Graw Hill Education [Chapter 7]

National Stock Exchange on listing of Securities: https://www.nseindia.com/corporates/content/eligibility_criteria.htm

Pathak, B. on Indian Financial System (4th ed.) Pearson Publication [Chapter 6,7]

SEBI guidelines on delisting of securities: https://www.sebi.gov.in/legal/regulations/jun-2009/sebi-delisting- of-equity-shares-regulations-2009-last-amended-on-november-14-2018-_34625.html

Unit III (3 weeks)

Secondary Market in India: Introduction to Stock Markets, Regional and Modern Stock Exchanges, International Stock Exchanges, Demutualization of exchanges, Comparison between NSE and BSE, Raising of funds in International Markets: ADRs and GDRs, FCCB and Euro Issues; Indian Stock Indices and their construction, maintenance, adjustment for corporate actions (rights, bonus and stock split;) on index with numerical, free float vs. full float methodology, Classification of Securities to be included in the Index, Bulls and Bears in Stock Markets, Factors influencing the movement of stock markets, indicators of maturity of stock markets, Major Instruments traded in stock markets: Equity Shares, Debentures, Myths attached to Investing in Stock Markets. Trading of securities on a stock exchange; Selection of broker, capital and margin requirements of a broker, MTM and VAR Margins, kinds of brokers, opening of an account to trade in securities, DEMAT System, placing an order for purchase/sale of shares, margin trading and margin adjustment, contract note and settlement of contracts, Algorithmic trading, Settlement mechanism at BSE & NSE

References:

Bombay Stock Exchange on Adjustment for Corporate Actions :

https://www.bseindia.com/markets/MarketInfo/DispNoticesNCirculars.aspx?noticeno=20190325-45 Bombay Stock Exchange on Compulsory Rolling Settlement:

https://www.bseindia.com/static/markets/equity/EQReports/tra_Settlement.aspx

National Stock Exchange and Bombay Stock Exchange FAQs on margins as applicable for transactions on Cash and Derivatives segments:

https://www.nseindia.com/content/assist/asst_Margins_faq.pdf

NIFM, Department of Economic Affairs on A Study on Algorithmic Trading/High Frequency Trading in the Indian Capital Market

https://dea.gov.in/sites/default/files/NIFM%20Report%20on%20Algo%20trading.pdf [Page 1-13]

Pathak, B. on Indian Financial System (4th ed.) Pearson Publication [Chapter 6,8]

Saunders,  Anthony  &  Cornett,  Marcia  Millon on   Financial  Markets  and  Institutions  (3rd Ed.). Tata McGraw Hill [chapter 9]

Unit IV (3 weeks)

Money Markets & Debt Markets in India: Money Market: Meaning, role and participants in money markets, Segments of money markets, Call Money Markets, Repos and reverse Repo concepts, Treasury Bill Markets, Market for Commercial Paper, Commercial Bills and Certificate of Deposit. Role of STCI and DFHI in money market, Debt Market: Introduction and meaning, Market for Government/Debt Securities in India, Secondary market for government/debt securities, Over- subscription and devolvement of Government Securities, Government securities issued by State Governments, Municipal Bonds, Corporate Bonds vs. Government Bonds

References:

Pathak, B. on Indian Financial System (4th ed.) Pearson Publication [Chapter 10]

Saunders, Anthony & Cornett, Marcia Millon on Financial Markets and Institutions (3rd Ed.). Tata McGraw Hill [chapter 5,6]

Additional Information

Text Books


Saunders, Anthony & Cornett, Marcia Millon (2007). Financial Markets and Institutions (3rd Ed.). Tata McGraw Hill
Jeff Madura, Financial Institutions and Markets, Cengage Learning EMEA, 2008
Meir G. Kohn (Latest ed) Financial Institutions and Markets, Oxford University Press, 2004

Teaching Learning Process

Class room lecture, Case study discussion, Numerical Problem solving, Class presentation on the assigned topic by students individually or in group, Workshop, Tutorials, Role play

Assessment Methods

Internal evaluation of 25% marks
a. Attendance 5% marks
b. Two internal evaluations by the teacher with 10% marks each out of which one must be a class test and other may be another test or home assignment or presentation. Faculty may take more than two assignments and (or) tests but total will be only 20% marks.
End term University Exam of 75% marks

Keywords

Indian Financial System, Money Market, Core banking solution, Margin trading, Algorithmic trading

Disclaimer: Details on this page are subject to change as per University of Delhi guidelines. For latest update in this regard please refer to the University of Delhi website here.

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