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Submitted by:
Nitish Dipankar
JAMIA HAMDARD
NEW DELHI
Capital Market Reforms
TABLE OF CONTENTS
1) Acknowledgement
2) Executive Summary
3) Declaration
4) Bank Introduction
a) History
7) Research Methodology
a) Introduction
d) Recent Initiatives
9) Data Analysis
11) Annexure 1
12) Bibliography
ACKNOWLEDGEMENT
DECLARATION
I , student of Jamia Hamdard University, hereby declare that the project work entitled
“Capita Market Reforms” has been carried out under the guidance of my supervisor
Nitish Dipankar at Standard Chartered Bank, New Delhi.
The information provided in the study is authentic to the best of knowledge and the result
embodied in this study has not been submitted to any other University or Institute for the
ward of degree.
This project at Standard Chartered Bank was undertaken during the period of 6 Weeks
(May 22nd '09 to July 15th ’09) as part of my summer training.
The significant transformation of the Capital Market in India is clearly evident from the
changes that have occurred in the Stock market. The developments have facilitated
greater choice for investors, who have become more discerning and demanding.
Currently, the most important factor shaping the world is globalization. The
benefits of globalization have been well documented and are being increasingly
recognized. Integration of domestic markets with international financial markets has been
facilitated by tremendous advancement in information and communications technology.
But, such an environment has also meant that a problem in one country can sometimes
adversely impact one or more countries instantaneously, even if they are fundamentally
strong.
Research is a process through which we attempt to achieve systematically and with the
support of data the answer to a question, the resolution of a problem, or a greater
understanding of a phenomenon. This process, which is frequently called research
methodology, has eight distinct characteristics:
Objectives:
Objectives of a project tell us why project has been taken under study. It helps us to know
more about the topic that is being undertaken and helps us to explore future prospects of
that topic. Basically it tells what all have been studied while making the project.
Place of Study:
Standard Chartered Bank
New Friends Colony
New Delhi
Research Design:
Descriptive research is used in this project report in order to know about the responses to
various views related to Indian Capital Market. This is the most popular type of research
technique, generally used in survey research design and most useful in describing the
characteristics of respondents.
Questionnaire method
Direct Interaction with the respondents.
Sample size: 50
Standard Chartered Bank has deep roots and a long heritage in international banking. It
has an extensive history in some of the world's most dynamic and fast-growing markets,
such as Asia and the Middle East. No one has a better understanding of the wealth
services giant – has top credit ratings and a 150-year history in banking, with a long-term
commitment and financial investment in the Private Bank. The Standard Chartered
Private Bank offers a full range of customized wealth management products and services.
It is a London based bank, currently operational within over 70 nations with more than
1,700 branches and 73,000 strong workforce as of April 2009. Although the bank is
located in Britain, still a huge chunk of its revenues originate from the continents of Asia,
Standard Chartered Bank was formed as the merger of two banks viz. The Chartered
Bank of India, Australia & China and The Standard Bank of British South Africa. The
Despite its British base, it has few customers in the United Kingdom and 90% of its
profits come from Asia, Africa, and the Middle East. Because the bank's history is
entwined with the development of the British Empire its operations lie predominantly in
former British colonies, though over the past two decades it has expanded into countries
that have historically had little British influence. It aims to provide a safe regulatory
bridge between these developing economies.
It now focuses on consumer, corporate, and institutional banking, and on the provision of
treasury services—areas in which the Group had particular strength and expertise.
Standard Chartered is listed on the London Stock Exchange and the Hong Kong Stock
Exchange and is a constituent of the FTSE 100 Index. Its largest shareholder is Temasek
Hodings.
The name Standard Chartered comes from the two original banks from which it was
founded and which merged in 1969 — The Chartered Bank of India, Australia and China,
The Chartered Bank was founded by Scotsman James Wilson following the grant of a
Royal Charter by Queen Victoria in 1853, while The Standard Bank was founded in the
Cape Province of South Africa in 1862 by another Scotsman John Paterson. Both
companies were keen to capitalize on the huge expansion of trade and to earn the
handsome profits to be made from financing the movement of goods from Europe to the
In those early years, both banks prospered. Chartered opened its first branches in
Bombay, Calcutta and Shanghai in 1858, followed by Hong Kong and Singapore in 1859.
With the opening of the Suez Canal in 1869 and the extension of the telegraph to China
in 1871, Chartered was well placed to expand and develop its business.
prominent in financing the development of the diamond fields of Kimberley from 1867
and later extended its network further north to the new town of Johannesburg when gold
was discovered there in 1885. Half the output of the second largest gold field in the world
Both banks – at that time still quite separate companies – survived the First World War
and the Depression, but were directly affected by the wider conflict of the Second World
War in terms of loss of business and closure of branches. There were also longer term
effects for both banks as countries in Asia and Africa gained their independence in the
Each had acquired other small banks along the way and spread their networks further. In
1969, the banks decided to merge, and to counterbalance their existing network by
expanding in Europe and the United States, while continuing their expansion in their
traditional markets in Asia and Africa. All appeared to be going well, when in 1986
Lloyds Bank of the United Kingdom made a hostile takeover bid for the Group.
After having defeated the bid, Standard Chartered entered a period of change. It made
provisions against Third World debt exposure and loans to corporations and
entrepreneurs who could not meet their commitments. It also began a series of
divestments notably in the United States and South Africa, and entered into a number of
asset sales.
Listed on both the London Stock Exchange and the Hong Kong Stock
Exchange,Standard Chartered PLC is consistently ranked in the top 25 FTSE 100
companies by market capitalization. By combining its global capabilities with deep local
knowledge, the bank develops innovative products and services to meet the diverse and
ever-changing needs of individual, corporate and institutional customers in some of the
world's most exciting and dynamic markets.
Personal Banking
With global network of over 1,750 branches and outlets, it offers personal financial
solutions to meet the needs of more than 14 million customers across Asia, Africa and the
Middle East.
SME Banking
SME Banking division offers a wide range of products and services to help small and
medium-sized enterprises manage the demands of a growing business.
Wholesale Banking
Headquartered in Singapore and London, with on-the-ground expertise that spans the
global network, bank’s Wholesale Banking division provides corporate and institutional
clients with innovative solutions in trade finance, cash management, securities services,
foreign exchange and risk management, capital raising, and corporate finance.
Islamic Banking
Standard Chartered Saadiq's dedicated Islamic Banking team provides comprehensive
international banking services and a wide range of Shariah compliant financial products
that are based on Islamic values.
Private Banking
Standard Chartered bank’s Private Bank advisors and investment specialists provide
customised solutions to meet the unique needs and aspirations of high net worth clients.
Principles & Values:
At Standard Chartered success is built on teamwork, partnership and the diversity of its
people.At the heart of their values lie diversity and inclusion. They are a fundamental
part of bank’s culture, and constitute a long-term priority in its aim to become the world's
best international bank.
Today it gives employments to 75,000 people, representing 115 nationalities, and one
can find 60 nationalities among its 500 most senior leaders. Bank believes that this
diversity helps to fuel creativity and innovation, supporting the development of exciting
new products and services for our customers worldwide.
Trustworthy
International
Creative
Courageous
Approach
Participation
Focusing on attractive, growing markets where bank can leverage its relationships
and expertise
Competitive positioning
Combining global capability, deep local knowledge and creativity to outperform
its competitors
Management Discipline
Continuously improving the way it works, balancing the pursuit of growth with
firm control of costs and risks Commitment to stakeholders
Customers
Passionate about its customers' success, delighting them with the quality of our
service
People
Helping its people to grow, enabling individuals to make a difference and teams
to win
Communities
Trusted and caring, dedicated to making a difference
Investors
A distinctive investment delivering outstanding performance and superior returns
Regulators
Exemplary governance and ethics wherever bank is standing.
Personal Banking
Arrange of features are included for the customers ranging from accounts to insurances
and investments needs. Following are the personal services provided by the Standard
Chartered Bank:
Accounts
o Term Deposits
o Savings Accounts
o AxcessPlus Account
o Super Value Account
o Parivaar Account
o No Frills Account
o Aasaan Account
o 2-in-1 Account
o Depository Services
o Corporate Salary Account
o Current Accounts
o Business Plus Account
o Enhanced Business Plus Account
Credit Cards
o Choose your Credit Card
o Emirates Platinum Card
o FCNR Account
o Accounts for Returning Indians
o NRI Service Centers
Exclusive Banking
o Excel Banking
o Priority Banking
o Private Banking
Insurance & Investments
o General Insurance
o Life Insurance
o Investment Services
Private Banking
Standard Chartered Bank has been building partnerships with generations of clients since
it opened its first branches in Shanghai and Calcutta in 1853. It is one of the few financial
leaders that combine an extensive global reach with the in-depth, specialized knowledge
that comes from a history of being in local markets close to its clients. Today, as one of
the world’s leading international banks, it is dedicated to providing unsurpassed client
service and is uniquely situated to provide customized solutions to meet all wealth
management needs.
Standard Chartered Bank has deep roots and a long heritage in international banking. It
has an extensive history in some of the world's most dynamic and fast-growing markets,
such as Asia and the Middle East. No one has a better understanding of the wealth
management needs of clients across these markets.
SME Banking
With years of banking experience, Standard Chartered Bank is undoubtedly in a strong
position to help growing businesses sail through the complexities they may face. As an
international bank with offices in more than 50 countries, It provides the global reach and
international recognition that the company deserves.
SME Banking offers one of the widest range of banking products and services in the
market today. Managing a growing business demands most of existing time and energy.
Its relationship managers understand customers’ business requirement and help them
manage their business better.
Business Current Accounts
o International Trade Account
o International Trade Account - TEC
Forex Services
o Forex Services
Others
o Online tax payment
o Service charges & fees
o Schedule an appointment
o Raise a complaint
Commercial Banking
Standard Chartered has maintained a long local presence, since 1858, with particular
emphasis on relationship banking. Significant networks have been established with
vendors and financial-related organizations to enable it to offer its customers a
comprehensive range of flexible financial services, with special focus on transactional
banking products. Supported by state-of-the-art operations, Standard Chartered is pro-
active in improving every part of our services. Electronic Delivery system has been put in
place to ensure that transactions are handled speedily. It has its Cash Product Specialists
and dedicated Customer Service Centre’s to provide its customers with effective
Transaction banking
Principle finance
Financial markets
Corporate finance
With an extensive branch network and award-winning suite of electronic client access
channels it offers a full range of transaction banking solutions to help manage the
over 150 years, serving a discerning client base that comprises leading North American,
European and Asian institutions. We count among our clients the world's largest global
Standard Charterer’s Principal Finance business has a strong track record of creating
value through its investments. The group provides direct investment for growing
companies, invests in distressed and high yield assets and also provides advisory services
to companies in financial distress. The bank has dedicated a team focusing on making
Leading the way in Financial markets, Standard Chartered delivers award-winning and
innovative solutions to meet clients’ risk management, financing and investment needs
Bank’s presence in Asia, Africa and the Middle East and active support for the
development of it’s equity infrastructures makes it well placed to help you tap into the
comprehensive range of online solutions tailored to meet the electronic trading needs of
its clients.
and strong international perspective to provide customized solutions to meet its clients’
With teams specializing in Mergers & Acquisitions and Leveraged Finance, Standard
Chartered’s Corporate Advisory group has the expertise, experience and local knowledge
to deliver high quality advice and execution on strategic cross-border advisory and
Muslims have always shielded away from conventional banking, as it does not conform
There has always been a demand among Muslims for financial products and services that
conform to the Shariah (Islamic law). Based on this demand, a number of banks all over
the world have started offering products and services that are in compliance with Shariah.
With an estimated size of over USD 250 billion and a growth rate of 15%, Islamic
banking has now established itself as a serious business segment in the eyes of financial
Standard Chartered, with an aim to meet the unique needs of its customer, has setup an
Standard Chartered employs 38,000 people in 950 locations in more than 50 countries in
the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and
the Americas. Standard Chartered is one of the world’s most international banks, its
bank operating in Pakistan. With a presence of over 150 years in this industry, the bank is
able to fully leverage its capabilities and product expertise to provide tailor-made
Standard Chartered realizes that a segment of their customers wanted products that were
shariah compliant, and by introducing these Islamic financing options, they are fulfilling
their promise of being responsive to their customer needs. These products have been
A savings bank account is the most common operating account for individuals and others
for non-commercial transactions. A savings account helps people to put through day-to-
day banking transactions besides earning some return on the savings made. Banks usually
have ceilings on the total number of transactions permitted in a specific time period.
Banks also stipulate certain minimum balance to be maintained in savings accounts. The
Interest on the account is determined in accordance with directives of the Reserve Bank
of India. The current rate is 3.5% per annum. Interest is calculated on the Minimum
Credit Balance between the close of the business on the 10th and the last day of each
calendar month. Interest may be credited to the account on a quarterly or half yearly
basis.
Certain non-profit welfare organizations are also permitted to open Savings bank
Savings / Current accounts can become inactive if you do not make any debit
transactions for a continuous period. The duration of this period varies from bank to
bank.
Banks are required to know the true identity of the person wanting to open an
identification purpose
Banks have to obtain PAN numbers (issued by Income Tax Dept.) of the account
In the absence of PAN number, the customer should give a declaration in the
Standared Chartered Bank has a range of accounts with unique features to offer you
quick
and convenient banking facility. The range of accounts include- aXcess Plus account ,
Parivaar account, Super value account, 2-in-1 account, Corporate Salary account, No
Under aXcess Plus account, bank offers variety of channels to access your money such as
Free Unlimited Visa ATM transactions, International Debit Card, etc. Under Parivaar
account you can tap your family’s financial strength while maintaining your individual
identity.
The unique feature of this account is that you can maintain individual savings accounts
with the benefit of clubbing balances in grouped accounts. Super value account gives to a
host of free value added services such as Free Bill Pay, Free Inter Bank Funds Transfer,
etc. You can link your fixed deposits with a savings or current account under 2-in-1
salary payments. No Frills account is an account to offer basic banking facilities. Aasaan
Axcess plus:
FREE Unlimited Visa ATM transactions (Cash withdrawal and balance enquiry)
Super Value:
Free Payable at Par cheque book/ account statements / DDs Free Bill Pay.
o Globally valid debit card: Make purchases at over 12 million merchant outlets and
withdraw cash at over 810,000 ATMs worldwide using funds from your account
o Multicity Banking: Access your account even when you are out of town
o Enjoy extended Banking hours at all our branches, and Speed Cheque Clearing
o Phone banking: Available to you 365 days a year on a 24-hour basis in the metros
o Internet banking: Access and transact on your accounts through the Internet from
funds
o Full suite of complimentary banking services including credit cards, loan products
Parivaar:
Family can maintain individual savings accounts with the benefit of clubbing
Internet banking. Option of Systematic Investment Plan (SIP): A well known long
term wealth building tool that allows customers to invest a fixed amount of
money every month in specific mutual funds. This comes with a direct debit
facility and avoids the need to remember dates and write cheques every month.
Aasaan:
Free unlimited access to any SCB branch across the country for Customer-in-
person.
ATMs.
Nominal quarterly fee of Rs. 100 (reversed if the Average Balance in the quarter
is Rs 10,000 or more).
In 2000, Standard Chartered acquired Grindlays Bank from ANZ Bank, increasing its
presence in private banking and further expanding its operations in India and Pakistan.
Luxembourg and the subsidiary in Jersey, all of which it integrated into its own private
under the name Standard Chartered Grindlays Offshore Financial Services. In India,
the largest foreign bank in the country, despite Standard Chartered having cut some
branches and having reduced the staff from 5500 to 3500 people.
On 15 April 2005, the bank acquired Korea First Bank, beating HSBC in the bid. Since
Standard Chartered completed the integration of its Bangkok branch and Standard
Chartered Nakornthon Bank in October, renaming the new entity Standard Chartered
Bank(Thaiand). Standard Chartered also formed strategic alliances with Fleming Family
& Partners to expand private wealth management in Asia and the Middle East, and
acquired stakes in ACB Vietnam, Travelex, American Express Bank in Bangladesh and
On 9 August 2006 Standard Chartered announced that it had acquired an 81% and
shareholding in the Union Bank of Pakistan in a deal ultimately worth $511 million.
This deal represented the first acquisition by a foreign firm of a Pakistani bank and
the merged bank, Standard Chartered Bank (Pakistan), is now Pakistan's sixth largest
bank.
On 22 October, 2006 Standard Chartered announced that it has received tenders for more
than 51 per cent of the issued share capital of Hsinchu International Bank (“Hsinchu”),
established in 1948 in Hsinchu province in Taiwan. Standard Chartered, which had first
entered Taiwan in 1985, acquired majority ownership of the bank, Taiwan’s seventh
merged its existing three branches with Hsinchu's 83, and then delisted Hsinchu
International Bank, changing the bank's name to Standard Chartered Bank (Taiwan)
Limited). Prior to the merger, Hsinchu had suffered extensive losses on defaulted credit
card debt.
Singapore.
an Indian brokerage firm (UTI Securities) for $36 million in cash from Securities Trading
Corporation of India Ltd., with the option to raise its stake to 75 percent in 2008 and, if
both partners agree, to 100 percent by 2010. UTI Securities offers broking, wealth
On 29 February 2008, Standard Chartered PLC announced it has received all the required
approvals leading to the completion of its acquisition of American Express Bank Ltd
(AEB) from the American Express Company (AXP). The total cash consideration for the
Standard Chartered mutual fund is promoted by banking giant Standard Chartered and
exclusively focuses on debt schemes. The fund started as ANZ Grindlays Mutual Fund
and was later renamed as Standard Chartered Mutual Fund after the takeover of
nationalities. The bank has a strong brand presence in India and is well entrenched in
The sponsor of the fund is Standard Chartered Bank. The AMC of the fund is Standard
Chartered Asset Management Company Private Limited. The sponsor holds a 75 per cent
stake in the company and the balance is held by Atul Choksey of Apcotex. As of Aug
2006, the fund has assets of over Rs.15,551 crore under management.
A Mutual Fund is a pool of money that gives small investors access to a well-diversified
portfolio of equities, bonds, and other securities. Each shareholder participates in the gain
or loss of the fund. Shares are issued and can be redeemed as needed (in the case of an
open-ended fund). The fund's net asset value (NAV) is determined each day. Each mutual
fund portfolio is invested to match the objective stated in its investment agenda.
An equity fund is one that is invested mainly in company equity through the stock
exchange and is exposed to the risk of volatility associated with the equity market.
Although this fund is the riskiest within the genre of mutual funds, it is also known to
tenor. These funds are inherently linked to the general interest rate and are, therefore,
unlike the stock market, safe from drastic fluctuation. The capital value is more easily
sustainable while the returns are generally modest. However, active fund management
can yield returns which are higher than most fixed income avenues in the market and
therefore, it is an attractive investment avenue for investors with moderate risk appetites.
A Money Market Fund is one that invests in liquid, short-term avenues which offer
fixed returns over short periods. These funds are inherently linked to the general interest
rate and are, therefore, unlike the stock market, safe from drastic fluctuation. Underlying
Balance funds maintain a mix within equity and fixed income markets. The inclination
of this mix will be dictated by the fund’s strategic intent and mission statement. This fund
offers more maneuvering room to its fund managers as they have the option to switch
between market types i.e. fixed income avenues and capital markets. Effectively, the risk
associated to this category lies somewhere between that of equity funds and fixed income
funds and the returns also vacillate correspondingly between the ranges of the
two.
adviser and an asset management company with the SECP (formerly the Corporate Law
Authority) on February 27, 1995 and August 29, 1995 respectively. Last year its legal
SCB offers the following mutual funds from this fund house:
Unit Trust of Pakistan (UTP) is the first open-end mutual fund in Pakistan's
private sector. UTP follows a balanced investment strategy which means that it
switches its investments from fixed-income to equity & vice versa depending
upon the investment outlook. When the stock market appears volatile, the funds
normally switch portfolios to fixed-income & debt based instruments and reverts
Investment Strategy: UTP focuses on preserving the initial capital while providing
maximum diversification, along with liquidity, growth & consistent returns. In order to
achieve these, the fund invests in three types of high quality assets. These include:
Shares of companies which are either consistently dividend paying having growth
JS - Income Fund (JS - IF) is the second open-end mutual fund launched by
income securities through a single investment. The fund aims at achieving a high
rate of current income consistent with reasonable concern for safety of capital and
provides the investors with the convenience to join or leave the fund at their
discretion.
Investment Strategy: JS-IF will generally invest in assets that pay a fixed rupee amount,
e.g. investment grade debt securities, treasury bills, term finance certificates, bank
deposits and Government bonds. They are generally not affected by the volatility at the
2002 with the Central Depository Company as the Trustee and has been given a
5-
star rating by PACRA. The fund is intended for long term investors who seek
high returns with the peace of mind that their money is being managed according
Investment Strategy: UTP-ISF aims to grow investor’s capital in the long term in
Board (SAB) of this fund while ensuring liquidity. The fund investments are limited to
asset classes approved by the Shariah Advisory Board and all companies under
tremendous success of this unique fund, 3 more Capital Protected Funds were
deposit(s) or in other return-based fixed income instruments, and uses the remaining
funds to gain exposure into equity markets or any other investment instruments
permissible by SECP that the Management Company feels would be appropriate to
maximize return. The fund has a fixed tenor (e.g. 1 year or 3 years) which is the
minimum period of holding for capital protection to be in force.
Capital market reform enables the capital markets to embrace new ideas and techniques
affecting the capital market. Capital market liberalization is one such capital market
A capital market is a place that handles the buying and selling of the securities. This is
the ideal place where both the governments and companies can raise their funds. The
capital markets of all the countries have undergone a number of reforms in the history.
Economic theories are made and implemented to reform the functionalities of the capital
market. The prime objective behind all the policies and reforms was obviously to
foreign investments in the country. Packaged with both advantages and disadvantages,
the liberalization of the capital markets has always been controversial. In the 1980s and
1990s when the US Treasury and International Monetary Fund (IMF) tried to push
world-
wide capital-market liberalization, there had been enormous opposition. Economists were
countries and a large number of socialist countries have nodded their support to the
capital market reform and capital market globalization, the global capital market has
evolved in a new identity. The concept of capital market is not restricted to the share and
bond trading in the developed capitalist countries only but is equally influenced by the
other country in real time. Almost all the countries are now exposed to the inter-country
trades and inter-country investments. The use of internet and electronic media has added
some more feasibility to the practice. Exchange of information is fast and accurate with
internet. Another advantage of this system is that it brings the entire world in a single
place. The capital market is one of the industries that enjoy the maximum facility of the
internet service.
The public-sector debt instruments mainly comprise central and state government
securities, which account for about 65 percent of the country’s debt market, and public-
sector bonds issued by companies in the public sector. Other debt instruments in the
market are certificates of deposit and commercial paper in the short-dated sector, and
source of funding for the corporate sector as well as the government. The borrowing rate
of the government determines the risk-free rate in the market and is the benchmark
against which all other paper is priced. The size of the Indian debt market is estimated at
about Rs 4,172 billion, as of 31 March 1998 The development of the debt markets in
India has been constrained by the limited number and variety of instruments, lack of
liquidity, and dearth of investors. New debt instruments would add depth and volume to a
market that today comprises mostly government securities.The main instruments in the
Government of India securities (GOI securities), also called dated securities,are medium-
to long-term obligations of the government that are issued on its behalf by the central
bank, the Reserve Bank of India (RBI),and are registered in the holder’s name at the
Public Debt Office of the RBI. The RBI also acts as the depository and maintains
subsidiary general ledger accounts for banks and other select investors such as primary
dealers, financial institutions, mutual funds, insurance companies, and provident funds.
from the investments. Banks, nonbank finance companies (NBFCs),1 and housing
finance institutions (HFIs) are required to invest in government securities to satisfy their
Dated securities usually have a maturity period of two to ten years,and the issue size
1998, excluding securities issued by public-sector units which carried a central or state
auctions of GOI securities had yields ranging from 11.15 percent to 13.05 percent for
securities with a maturity of three to ten years. To boost the retail sector and give greater
liquidity to retail investors, the RBI in October 1997 allowed banks to buy GOI securities
and thensell them at prevailing market prices immediately after. Previously, there had to
be an interval of at least 30 days between the purchase and resale of the securities.
Treasury Bills
Treasury bills (T-bills) are short-term rupee-denominated obligations issued by the RBI
on behalf of the GOI. They are issued for maturityperiods of 14 days, 91 days, and 364
days. In addition, the RBI plans to introduce a 28-day T-bill. The typical auction size is
Rs 5 billion for the 91-day T-bill, and Rs 200 million to Rs 20 billion for the 364-day T-
with Rs 165 billion in March 1997.Investors in T-bills include banks, primary dealers,
insurance companies. The new monetary and credit policy for the first half of 1998–1999
allows FIIs to invest in T-bills. Nonresident Indians (NRIs) and overseas corporate
bodies
(OCBs) may similarly invest in Tbills,but cannot repatriate the profits. In the second half
of 1997–1998, the RBI announced plans to introduce a uniform price auction for 91-day
T-bills, to deal with the problem of “winner’s curse”3 and to broaden market
participation.
Sovereign Bonds
India has not yet issued sovereign bonds in the international market. The country’s
sovereign rating is based on the ratings assigned to bond and debenture issues of public-
sector Indian companies in the international market. Despite the country’s “low
been able to obtain funds abroad on better terms than what the sovereign ratings might
signify.
• The government would have less need to borrow in the domestic market.
• Corporations could use the bonds as a benchmark against which they could price their
issues.
The drawbacks could, however, outweigh the advantages. For the sovereign bonds to
gain credibility in the international market, the government will need to have a sizeable
presence in the market and not merely undertake a token borrowing. Its external debt
which India has set a ceiling. A foreign-currency bond may carry a lower nominal
interest rate than a rupee-denominated government security with the same maturity, but
the foreign-currency bond also entails an exchange-rate risk. Depending on the exchange
rate, the sovereign bond could turn out to be much more expensive for the government
total value of outstanding PSU bonds as of March 1998 was Rs 654 billion, including Rs
public-sector units in priority sectors to raise money in the markets at low rates, the
government has either guaranteed their bond offerings or made the interest on the bonds
concessional rates. PSU bonds have a maturity period of three to seven years and an issue
size of Rs 100 million to Rs 15 billion. The main investors in PSU bonds are banks, cash-
funds, mutual funds, NBFCs, HFIs, and a few individuals. Most PSU bonds are issued
through private placement, although public issues are gradually gaining in popularity.
Seven public-sector units raised Rs 29 billion through privately placed bonds in 1997–
1998; the year before, ten public-sector units raised Rs 33 billion through private
placement. In the second half of 1997–1998, the RBI announced that it would allow
Certificates of Deposit
banks and development finance institutions (DFIs). DFIs issue CDs with a maturity of
one to three years. In March 1998, outstanding CDs amounted to Rs 143 billion. To
attract more investors in the money market, the RBI, in October 1997, halved the
minimum amount that a single investor can invest in CDs, from Rs 1 million to Rs
500,000. The main investors in CDs are DFIs, cash-rich corporations, insurance
companies, mutual funds, NBFCs, HFIs, provident funds, and some individuals.FIIs are
not permitted to invest in CDs. NRIs may invest in CDs, but the investments are
nontransferable and nonrepatriable. Earlier, CDs had a mandatory initial holding period
Commercial Paper
Indian corporations finance part of their working capital requirements by issuing these
short-term negotiable promissory notes, which are denominated in rupees and are
commercial paper (CP), and must have the CP rated by at least one rating agency. The
maturity period of CP varies from 91 days to a year. The required minimum issue size is
Rs 2.5 million, but the actual size can vary substantially and averages between Rs 20
million and Rs 100 million. The outstanding amount of CP reached a historic high of Rs
52 billion in January 1998, but then dropped sharply to Rs 15 billion in March
through a public issue or more often through private placement, for their medium-term
working capital requirements or for project financing. The debentures are usually secured
with a first charge on assets of the issuing corporation. On the average, the maturity
period of debentures ranges from three to seven years. Bonds and debentures with a
maturity beyond 18 months must be rated. Outstanding bonds and debentures in March
1998 totaled an estimated Rs 432 billion. Banks, DFIs, insurance companies, FIIs, mutual
funds,NBFCs, and individuals are the main investors. FIIs can purchase only debentures
provide liquidity to bonds and debentures, although these tend to be illiquid in actual
practice and even those that are listed are hardly traded in the secondary market. Bonds
and debentures that are issued through private placement are often unlisted. Besides the
which are very popular with all classes of investors, especially individuals. A partly
convertible equity-linked debenture, as the name implies, is convertible only in part into
entirety into equity shares. The conversion price and period are usually specified in the
indenture. Conversion into equity is usually automatic, and call and put options are
normally not provided. The coupon rate paid on the debentures depends on their
convertibility. Fully convertible debentures carry the lowest coupon rate and
bonds, floating-rate bonds, staggered redemption bonds, bullet redemption bonds, and
other innovative instruments have been introduced to suit various investor profiles. Deep-
discount bonds, which are long-dated (20- to 25-year) bonds issued by DFIs and some
large corporations, have proved to be very popular among individual investors who can
about Rs 5,000. The bonds usually come with call and put options exercisable every five
India (SEBI) guidelines, and transfer a certain amount to the reserve each year out of
retained earnings. The reserve must be funded in equal amounts over the life of the
debenture so that when it matures at least 50 percent of its redemption value should be
covered by the balance in the DRR. The transfer to the DRR is only a book entry.
Although dividend-paying capacity is reduced (the reason for the unpopularity of the
measure), the corporation is not restricted in how it chooses to invest the DRR. The
GOI securities have generally been issued through auction in recent years, but have also
been issued at preset interest rates from time to time. Government securities do not
however, compels it to enter the market frequently. Auction details are announced a few
days before the issue date. Investors in the securities must quote the yield per year, and
bids up to the RBI cut-off yield are accepted. Every Friday, 91-day T-bills are auctioned
for an amount announced in advance by the RBI. Primary dealers and the RBI underwrite
the issue and take up whatever is left unsubscribed at the cut-off price decided at the
auction. The RBI has announced its intention to move over to uniform price auctions for
91-day T-bills. An auction in 364-day T-bills is held every other Wednesday. Unlike 91-
day T-bills and government securities, the amounts, until recently, were not announced in
In April 1998, however, the RBI decided to announce the amounts for competitive bids in
all Treasury bill auctions and to keep noncompetitive bids outside the purview of those
amounts. T-bill auctions are done in competitive French-style: those who bid at less than
or equal to the cut-off yield get allotments at their bid; higher bidders get pro rata
allocations. Successful bidders receive their allotments at their bid price and not at the
cut-off price. Corporate debentures are issued mostly through private placement and
therefore do not have to be rated. The mandates are given to merchant bankers, who are
in touch with potential investors. The terms and price of the bonds are fixed by
agreement
among the issuer, the merchant banker, and the potential investors. The rating the issuer
receives for its debt issuance affects the pricing of the issue.
Private Placement
Large quantities of PSU and corporate bonds have been issued through private
of investors in a private placement used to be unlimited but has recently been set at one
which public- and private-sector companies can raise funds. In 1997–1998, when the
market in new issues was generally subdued, banks, financial institutions, and public-
and
through private placement. The comparative figure for the previous year was Rs 150
billion, or 49.3 percent of the total funds raised. Privately placed bonds have emerged as
placements can be attributed largely to the lower issuance costs as well as the shorter
time required to make an issue, compared with a public issue. Also, private placements
can be tailored to the specific needs of large investors. From the issuer’s point of view,
the most important advantage of private placements is that, unlike public issues, they are
not strictly regulated. For example, an issuer of a privately placed bond does not have to
set up a DRR.
On the other hand, movements in the volatile short-term money market can affect
investor sentiment and pricing in the bond market, particularly private placements, which
has begun to be adopted to get around this problem. The increasing popularity of private
placements has made it necessary to deal with the matter of investor protection.
Particularly for retail private placement issues, it would be advisable to augment the
transparency in the issue documents. In developed markets, the regulatory authorities set
the parameters for private placements, including the maximum number of investors who
can participate and the criteria for identifying the investors who are qualified to receive
the private placement offer. With proper regulations and greater transparency, the private
placement market can become an integral and important part of the primary market.
The Securities and Exchange Board of India (SEBI), the watchdog of the Indian capital
markets, has recently announced that credit rating will eventually be mandatory for all
debt instruments. As of now, only publicly issued debt instruments with a maturity period
The three main rating agencies in India are the Credit Rating Information Services of
India Limited (CRISIL), Investment Information and Credit Rating (ICRA), and
Credit Analysis and Research Limited (CARE). These rating agencies are backed by the
CRISIL by the Industrial Credit and Information Services of India Limited (ICICI),
ICRA by the Industrial Finance Corporation of India (IFCI), and CARE by the
Industrial Development Bank of India (IDBI). Therefore, DFI issues must be rated by
two agencies, under SEBI regulations, for the sake of impartiality. The SEBI, however,
has not yet decided how conflicts in agency ratings should be resolved.
SEBI guidelines issued in March 1998 allow corporations with a net capitalization of
over Rs 1 billion for the last five years to set up a credit rating agency. International
credit-rating agencies that propose to rate Indian debt instruments, including those that
have entered into joint ventures with Indian credit-rating companies or hold an equity
stake in such companies, must register with the SEBI.Credit-rating agencies are regulated
more strictly to ensure that they function effectively, especially in view of the failure of
Besides the lack of variety in debt instruments, the dearth of investors has also deterred
the growth of the debt market. The main investors are commercial banks, insurance
companies, provident funds, specialized debt funds, NBFCs, HFIs, and some cash-rich
other debt instruments to comply with their SLR requirements. The lack of liquidity in
SLR Requirements
Banks, NBFCs, and HFIs are required to invest in government securities and other
approved debt instruments and securities to comply with the SLR requirements of the
RBI. The SLR, which is the minimum level of investment in approved securities,
computed daily, is a percentage of the outstanding net demand and time liabilities
(NDTL) of banks. For NBFCs and HFIs, SLR is a percentage of their outstanding public
deposits.SLR ratios are announced by the RBI together with the monetary and credit
policy. Typically, this is done twice a year, in April and October, although recently the
The SLR for commercial banks peaked at 38.5 percent of their outstanding NDTL in
1992–1993 but was gradually reduced until October 1997, when the RBI fixed it at 25
Investments in government securities have no risk weight unlike some other fixed-
income securities which carry a risk weight of 100 percent. Commercial banks in India
In the case of NBFCs and HFIs, the SLR applies only to public deposits and not to other
term liabilities (as is the case with commercial banks). The SLR for NBFCs was set at
12.5 percent on 1 April 1998, and will be raised to 15 percent on 1 April 1999. HFIs, on
the other hand, must maintain their SLR at 10 percent, divided equally between
government securities and bank deposits, versus the previous allocation of 25 percent for
Mark-to-the-market requirements are laid down by the RBI for commercial banks and
NBFCs, and by the National Housing Bank (NHB) for HFIs. In 1997–1998, commercial
portfolio of government securities, for which no provision for depreciation was required.
The remaining 60 percent of their investments were classified as current portfolio which
The RBI has, however, increased its mark-to-the-market requirements over the years. In
1998–1999, commercial banks have to mark to the market at least 70 percent of their
HFIs must take a different mark-to-the-market approach than the commercial banks.
They must classify their investments, both equity and debt, into a permanent portfolio
and a current portfolio, but the specific percentages are not prescribed. The classification
is made at the time of investment and approved by the board of directors of the company
or its authorized representative, taking into account the investment horizon planned by
the NBFC or HFI. If the institution intends to sell within the year, it should classify the
investment as current portfolio, but if it intends to hold on to the investment for a longer
period, it can classify the investment as permanent portfolio. All current investments
must be marked to the market; investments in the permanent portfolio, on the other hand,
portfolio must have provision for depreciation, since the acquisition cost of older
securities significantly exceeds current market prices. Most of the older commercial
banks have adopted the RBI’s mark-to the- market requirements, retaining a permanent
higher profits. But some newer private-sector banks have adopted the more transparent
TAX PROVISIONS
Except for tax-free bonds, which some public-sector units have been permitted to issue,
and unlike the dividend paid on equity and preference shares, which is tax-exempt to
The Income Tax Act requires the corporation that pays interest on bonds or debentures to
deduct the tax at source. The rate of the tax varies from 10 percent to 20 percent
TRADING SYSTEM
Because of the limited number of players, deals in the institutional debt market are
normally made directly between the parties concerned or through a broker. Banks rely on
the telecommunications network to broker deals and keep track of the market. With the
setting up of the whole-sale debt market under the National Stock Exchange (NSE) and
the requirement to report trades, the system of trading has become more transparent and
efficient.
Government securities and T-bills are dematerialized insofar as deals are made and
settled on a delivery-versus-payment basis through the subsidiary general ledger (SGL)
account at the RBI.
REPO MARKETS
Repos in GOI securities were banned in mid-1992, following the discovery of a huge
fraud in the securities market. Repos resumed on a limited scale between the RBI and
banks in December 1992, and interbank repos in some new issues of GOI securities were
later permitted to attract investors. Currently, repos are permitted in all GOI securities. In
the second half of 1997–1998, the RBI announced that it would allow repos in PSU
bonds as soon as the regulations relating to forward contracts are amended.
The passage of the Depositories Act by Parliament in August 1996 paved the way for the
establishment of several depositories, which are expected to improve the efficiency of the
capital market. The National Securities Depository Limited (NSDL), the first electronic
depository for equity and debt securities in India, began operations in October 1996. It is
sponsored jointly by IDBI, the Unit Trust of India (UTI), and the NSE. Dematerialization
of equity shares is fairly Straight forward since the central government, which imposes
stamp duty on the transfer of shares, charges a uniform rate of 0.50 percent of the market
value of the shares. Stamp duty on the transfer of bonds and debentures, on the other
hand, is a state government issue and is therefore subject to a variety of regimes. For this
The RBI used to pay a commission to primary dealers (PDs) based on their purchases
(including development) of government securities in the primary market. Since June
1997, the RBI has been paying them instead an underwriting fee based on the
underwriting amount offered by the PDs on a voluntary basis through competitive
bidding. Under this scheme, PDs offer to underwrite at least 50 percent of the issue
amount. Satellite dealers (SDs) form the second tier in the trading and distribution of
government securities. They have recently been allowed to underwrite government
securities issues, up to a maximum exposure of twice their net worth in each issue.
SDs and PDs are moreover allowed to sub underwrite their commitments.
Although 91-day T-bills are auctioned in a predetermined amount, the RBI participates in
the auctions and can control interest rates. Large noncompetitive bidders, such as state
governments and provident funds, also contribute to the distortion in the yield curve
when they make large bids without naming their price. To deal with this problem, the
RBI in April 1998 said that it would announce the amounts for competitive bids in all T-
bill auctions and keep noncompetitive bids beyond the purview of such amounts.
Also until April 1998, the borrowings of the central government under its Ways and
Means Advances (WMA) were linked to the 91-day T-bill rate. In 1997–1998 these
borrowings were 3 percentage points below the 91-day T-bill cut-off price, exerting
tremendous downward pressure on the 91-day T-bill rate. In April, the RBI announced
that henceforth the WMA would be linked instead to the bank rate.
The RBI participates as well in primary auctions of GOI securities and can determine the
cut-off yield. There is an implicit reluctance to allow the rate for the maximum maturity
(ten years) to exceed a stipulated interest rate. Rates for short-term maturities therefore
tend to be significantly higher than market. The small number of players in the market
results in lack of liquidity and pricing inefficiencies. Investors do not communicate yield
expectations among themselves.
Institutional Measures
❖ Primary Dealers (PD) were introduced as market makers in the government securities
market.
❖Market Stabilizations Scheme (MSS) has been introduced, which has expanded the
instruments available to the Reserve Bank for managing the surplus liquidity in the
system.
❖ 91-day Treasury bill was introduced for managing liquidity and benchmarking. Zero
Coupon Bonds, Floating Rate Bonds, Capital Indexed Bonds were issued and exchange
traded interest rate futures were introduced. OTC interest rate derivatives like IRS/FRAs
were introduced.
Enabling Measures
RECENT REFORMS
The Indian regulatory and supervisory framework of securities market in India has been
adequately strengthened through the legislative and administrative measures in the recent
past. The regulatory framework for securities market is consistent with the best
international benchmarks, such as, standards prescribed by International Organization of
Securities Commissions (IOSCO). Recent capital market reforms and an agenda for
reforms are given below.
Till 2001 India was the only sophisticated market having account period
settlement alongside the derivatives products. From middle of 2001 uniform
rolling settlement and same settlement cycles were prescribed creating a true spot
market.
After the legal framework for derivatives trading was provided by the amendment
of SCRA in 1999 derivatives trading started in a gradual manner with stock index
futures in June 2000. Later on options and single stock futures were introduced
in 2000-2001 and now India’s derivatives market turnover is more than the cash
market and India is one of the largest single stock futures markets in the world.
India’s risk management systems have always been very modern and effective.
The VaR based margining system was introduced in mid 2001 and the risk
management systems have withstood huge volatility experienced in May 2003
and May 2004. This included real time exposure monitoring, disablement of
broker terminals, VaR based margining etc.
India is one of the few countries to have started the screen based trading of
government securities in January 2003.
In June 2003 the interest rate futures contracts on the screen based trading
platform were introduced.
RBI has introduced the Real Time Gross Settlement system (RTGS) in 2004 on
experimental basis. RTGS will allow real delivery v/s. payment which is the
international norm recognized by BIS and IOSCO.
Recent initiatives
Out of the 23 erstwhile stock exchanges, 18 have since been corporatized and
demutualised in 2007-08. One stock exchange, i.e. Hyderabad Stock Exchange, failed to
demutualise by the due date and has therefore been de-recognized. Saurashtra Kutch
Stock exchange, Mangalore Stock exchange and Magadh Stock exchange have been de-
recognized for various irregularities/non compliances. As regards Coimbatore Stock
Exchange which had sought voluntary withdrawal of recognition, the matter is sub-
judice.
- The Securities Contracts (Regulation) Act, 1956 has been amended to include
securitized instruments within the ambit of "securities".
- The RBI Act has been amended to empower RBI to develop and regulate
- The limit of FII Investment in corporate debt has been increased from US$
0.5 billion to US$ 1.5 billion.
- The trade reporting platform for corporate bonds has been operationalised
since 1st January, 2007.
- The trading platforms for corporate bonds at the major exchanges has been
PAN has been made the sole identification number for all transactions in securities
market. This is an investor friendly measure as he does not have to maintain different
identification numbers for different kinds of transactions/different segments in financial
markets. Further, identification through PAN would help the authorities in enforcement
action.
SMEs in India have traditionally relied on debt financing from banks and non-bank
financial institutions. In order to develop the equity market for SMEs, SEBI has decided
to create a separate exchange for the SMEs. It has decided that, to begin with there
should be a single exchange for the SME sector for around 2-3 years to enable successful
development of the market for SMEs.
IPO grading
SEBI has fixed the aggregate ceiling for overseas investments at US $ 5 billion.
Within the overall limit of US $ 5 billion, mutual funds can make overseas
investments subject to a maximum of US $300 million per mutual fund. Further
different regulations that allow individuals and Indian mutual funds to invest in
overseas securities by permitting individuals to invest through Indian mutual funds
has been converged.
Mini derivative contract on Index (Sensex and Nifty) having a minimum contract
size of Rs. 1 lakh have been introduced. It has been found that globally overall
market liquidity and participation generally increases with introduction of mini
contracts. Since January 11, 2008 SEBI has also allowed trading on options
contracts on indices and stocks with a longer life/tenure of upto five years. These
contracts are expected to provide liquidity at the longer end of the market. Since
January 15, 2008 SEBI has permitted introduction of volatility index on futures and
Short selling
The Navaratna and Miniratna Public Sector Enterprises have been allowed to invest in
public sector mutual funds subject to the condition that they would not invest more than
30% of the available surplus funds in equity mutual funds and the Boards of PSEs would
decide the guidelines, procedures and management control systems for such investment
in consultation with their administrative Ministries.
SEBI has set up the Investor Protection and Education Fund (IPEF) with the purpose of
investor education and related activities. SEBI hascontributed a sum of Rs.10 crore
toward the initial corpus of the IPEF from the SEBI General Fund. In addition following
amounts will also be credited to the IPEF namely:
(i) Grants and donations given to IPEF by the Central Government, State
Governments or any institution approved by SEBI for the purpose of the
IPEF;
(ii) Interest or other income received out of the investments made from the IPEF;
and
(iii) Such other amount that SEBI may specify in the interests of the investors.
The line graph shows that young people are more aware of the capital market. The age
group of 20-30years has 20 positive answer, whereas it decrease to 06 in the age group of
30-40years,next it increases to 08 in age group of 40-50years.
Bar chart showing the number of respondents who are aware of the Capital market-
According To Salary:
18
16
14
12 9
Y
e 10 Yes
s
8
4
6
2
4
2
0
Below20,000 20,000-30,0000 30,000-40,000 40,000-50,000
Salary(Rs)
Salary group of Rs. 20,000-30,000 are more aware of the capital market, then comes the
Rs. 30,000-40,000 earners who show there interest in capital market. Rs. 40,000-50,000
have less interest here might be they take help of brokers if needed. Below Rs. 20,000
people are still having average knowledge of the same.
Pie Chart showing the percentage of people aware, not aware, and partly aware of the
Capital market:
16%
66%
66% of the respondents are aware of the Capital Market,18% of them are partly aware
and only 185 of the respondents are not aware of it. Thus it can be said that a prominent
number of population knows about Capital market.
Analysis for estimating the number of people responding in favor of both Disclosure
and pricing-According to Salary:
16
14
12
10 Both
8 5
6 3
4 1
2
0
Below20,000 20,000-30,000 30,000-40,000 40,000-50,000
Salary(Rs)
The Salary group of 20,000-30,000 says the maximum number of both option that means
according to them reforms took place in both Disclosure and pricing. 40,000-50,000
4 Disclosure
3
2 1 1
0
Below 20,000 20,000-30,000 30,000-40,000 40,000-50,000
Salary(Rs)
The comparatively below salary group of people have more interest and information
about capital market as they are supposed to be the major part of the population. In terms
of reforms they are in favor of disclosure also.
5 4
4.5
4 3
3.5
Pricing
3
2.5
2
1.5
1
0
0.5
0
Below 20,000 20,000-30,000 30,000-40,000 40,000-50,000
Salary(Rs)
Pricing is also favored by 20,000-30,000 salaried people, they are the main target of the
survey because large number of population is comprised of this group.
Pie Chart showing the percentage of responses of each of the three options:
26%
50%
24%
The survey says it should be in both the disclosure of terms and conditions and pricing
of debt and equities. The respondents’ answer in favor of both that is 50% is maximum.
14
12
10 7
8 Strongly Agree
6 3
4
2
0
20 -30 30 -40 40 -50
Age(Years)
Age group of 20-30 is rational and is strongly in favor of about sound market
Infrastructure for the flow of information and trade. Next in line is age group 40 -50 and
the last is 30 – 40 age group that gives minimum favors in regards to the same.
11
12
10
8 Agree
6 3
2
4
2
0
20 - 30 30 - 40 40 - 50
Age(Years)
Again 20-30 age group people agree to the fact that market infrastructure is
8
7
6
Disagree
5
4 2
3
2
1 0
0
20 - 30 30 - 40 40 - 50
Age(Years)
Age group of 20 – 30 Years is more aware of the fact that Market Infrastructure is
prerequisite for flow of information and trade or say younger generation is quite rational
about the view.
Pie chart showing the three different opinions of the respondents regarding the
Market Infrastructure:
11%
54%
35%
The survey shows that market infrastructure is one of the prerequisite of flow of
information and trade, as maximum number of respondent strongly agree to the fact.
2.5
2
Strongly Agree
1.5
0.5 0
0
Govt.Empl Business man Pvt.Empl
Occupati on
Only 3 of the Government employees and 3 of the private employees strongly agree to
the opinion on Nation Wide Market existing in India.
30
25
20
15 Agree
10
2 2
5
0
Govt.Empl Business man Pvt.Empl
Occupation
Only private employees are in favor of the thing that India has Nation Wide Capital
Market.
12%
22%
66%
Respondent have not strongly agreed to the fact, they just agree in large number that
means still there is greater need of Market integration in India or say a wide spread
market is to be there.
7 6
4 Stock mkt
3 2
2 1
0
Beow 20,000 20,000-30,000 30,000-40,000 40,000-50,000
Salary(Rs)
Higher income group people are more inclined to invest in stock market, as the graph
shows Income group of Rs.30,000-40,000 invest more in stock market however opinion
changes with further rise in income.
Preference in Investment:
32% 34%
34%
Equal number of people invest in Bank and both (Stock Market & Bank),i.e.34%, some
figure less that is 32% invest in Stock Market.
22
25
20
Yes
15
10
3
1
5
0
Govt.Empl Business man Pvt.Empl
Occupation
Private employees are largely in favor of free equity pricing, as compared to the
government employees. Businessmen do not prefer this option.
According to Salary:
16
14
12
10
Yes
8
6
4 1
2 0 0
0
Below 20,000 20,000-30,000 30,000-40,000 40,000-50,000
Salary
Income group of Rs. 20,000-30,000 are preferring the idea of free equity Pricing, rest of
Pie Chart showing percentage of different opinions regarding the free pricing of
equities:
22%
52%
26%
52% of the respondents voted for Free Equity pricing,22% are unknown or can’t give
According to occupation:
Regulation on brokers:
18
18
16
14
12
10 Agree
8 4
6
4
2 0
0
Govt.Empl Business man Pvt.Empl
Occupation
Private employees are more agreeing on the point as compared to the rest.
According to salary:
Regulations on brokers:
13
14
12
10
Agree
8 5
6 3
4 1
2
0
Below 20,000 20,000-30,000 30,000-40,000 40,000-50,000
Salary
Salary group of below Rs.20, 000 are showing positive response i.e. they believe in
regulation on brokers, same with the next two groups, Rs.40,000-50,000 group is less
interested in the same.
Regulation on Brokers:
22%
34%
44%
Number of respondents strongly agreeing on the view of disclosing all the terms and
conditions on Mutual funds before hand –According to occupation:
Disclosure :
13
14
12
10
Strongly Agree
Occupation
8
6 4
4 2
2 0 0 0
All the respondents strongly agree to the point that there should be disclosure of terms
and conditions of mutual funds. Since private employees are more in the population there
opinion is greater.
Number of respondents strongly agreeing on the view of disclosing all the terms and
conditions on Mutual funds before hand–According to salary:
Disclosure :
13
14
12
10 Agree
Salary
8
6
3 3
4
2 0 0 0 0
0
0
All the income group favor the fact, Rs.20,000-30,000 supports more also this group
exists more so as their opinion, other groups like below 20,000 & Rs.30,000-40,000 also
vote for the disclosure.
Pie Chart showing percentage of different opinions regarding the disclosure of all the
terms and conditions of Mutual funds before hand:
Disclosure:
38%
62%
The result shows that major number of respondents prefers the point of disclosure.
Bar chart showing the opinions regarding household’s share in mutual funds-
According to occupation:
Small number of government employees i.e.2 say the share is declining at 8%.Private
Bar chart showing the opinions regarding household’s share in mutual funds-
According to salary:
Salary
8%.Below 20,000 comes next in line. The rest have their opinions.
Pie Chart showing percentage of different opinions regarding house hold’s share in
Mutual funds:
2%
44%
54%
The survey shows that 54% of the respondents were unaware of the point, however it can
be judged as declining at 8% as large number of them i.e.44% have said so and only 2%
have different opinion.
10) Global effect is one of the leading factor that has greater impact on Stock
market?
Bar chart showing the number of respondents strongly agreeing to the fact that global
Private employees vent their positive response to a greater degree thus according to them
they strongly agree to the fact that global scenarios affect the functioning of the Stock
Market. Others have also the response but at less frequency.
Bar chart showing the number of respondents only agreeing to the fact that global
22
25
20
Agree
15
10 6
5
0
0
Govt.employee Business man Private employee
Government employees and private employees favor the point, business men are neutral
of the view.
Pie Chart showing percentage of different opinions regarding the fact that globa
scenario affects stock market :
44%
56%
56% of the respondents are in strongly supporting the view and 44% of them are just
agreeing with the concept, it means global scenario do effects.
Following are some of the point that has been found out by the analysis.
Annexure 1
QUESTIONNAIRE
Name:
40,000 to 50,000
Age- 20 to 30 30 to 40 40 to 50
10) Global effect is one of the leading factor that has greater impact on stock
Market……
BIBLIOGRAPHY
Internet
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