Devendrakumar Rajendran - A Blog to Oracle Financials World

Corporate and Institutional banking- Covers range of services to corporate or commercial clients It can include followings, Receiving payment orders and execution on it - it can be towards supplier payments or employee payroll processing Payments can be initiated via following types- corporate cheques, real time gross settlement, auto clearing house,  book transfers, telex transfers/ or cross border transactions Collection services - direct debit authorization from customer accounts- it can be of home loan EMI collection, insurance premium collection, or lockbox services Trade finance - letter of credit issuance, bank guarantee application, documentary credit, working capital requirements Custody services- Banks acts as a custodian to manage clients assets based on written consents Securities services - FII investments, stocks, bonds, trading, and final settlement Loans, and Mortgages at special interest rates Circulating intra day and end of the

Gross domestic products (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. It is an aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production and services plus any taxes, and minus any subsidies on products not included in the value of their outputs Determining GDP Three ways 1. Production (output or value added) approach 2. Income approach 3. Speculated expenditure approach The most direct of the three is the production approach, sums outputs of every class of enterprise to arrive at the total. The expenditure approach works on principle that all of the product must be bought by somebody, therefor the value of total product must be equal to people's total expenditure in buying things The income approach works on the principle that incomes of productive factors must be equal to the value of their product,

Money became a commodity Money market became a component of financial market for assets involved in short term borrowing, lending, buying, and selling with original maturities of one year or less than that Money market has higher liquidity ratio Instruments Treasury bills commercial paper certificate of deposit bills of exchange bankers acceptances repurchase agreements asset backed securities Features Liquidity - carry out shorter maturity period Safety - strong credit rating Discounted price - issued at face value Objective Helps in lowering short term deficits helps central bank in regulating liquidity in the economy helps development of capital market, trade, and industry assists designing effective monetary policies facilitates in streamlining functioning of commercial banks

Capital markets are venues where savings and investments are channeled between the  suppliers who have capital and those who are in need of capital. Entities who have capital include retail and institutional investors while those who seek capital are businesses, governments, and people Capital markets are composed of primary and secondary markets. Primary market - stocks issued by a company to investor through initial public offering Secondary market - stocks are traded day by day through country regulated stock market The most common capital markets are stock and bond market. Suppliers of capital market Households Institutions serving - like pension funds, life insurance companies, non finance companies charitable foundations Users of funds motor vehicle purchasers non finance companies government financing infra companies Capital market sells- financials product Equities Debt securities Funds invested in stocks are for productive

to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in a country and generally to operate the currency and credit system of the country to its advantage; to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth Summary Issue of bank notes Keeping eye on reserves monetary policy framework price stability and inflation control objective of economy growth Central banks sets and controls - policy rates - repo, reverse rates, marginal standing facility rate, bank rate reserve ratio- CRR, and SLR exchange rates lending/deposit rates  - Base rate, MCLR overnight, savings deposit rate, term deposit rate market trends- money market, government securities market, capital market PAYMENT AND SETTLEMENT SYSTEMS Payment and settlement systems play an important role in improving overall econ

Trade finance deals with domestic and international trade transactions. Trade requires seller as well as a buyer. various intermediaries banks/financial institutions can facilitate these transactions by financing the trade Seller (Exporter) can request buyer (Importer) to prepay for the goods shipped. buyer may wish to reduce risk by asking seller to document the goods that have been shipped before prepayment Exporter will be required to present bill of loading and other certain documents about shipment importer may provide letter of credit to the exporters bank Exporter bank may make a loan (by advancing funds) to the exporter on the basis of contract Products and services Letter of credit  - promise given by a bank on behalf of buyer to the seller that if seller presents the complying documents to the buyers designated bank as specified by buyer in the purchase agreement then buyers bank will make payment to the seller Bank guarantee -it is an un