PRESENTATION

ON
FINANCIAL INSTITUTION
& MARKET

DEBT
MARKET

PRESENTED BY:
Sudhir jha
Ashish Gupta
Gour Sunder Paul
Rahul Mahajan

Abhishek Srivastava
Vibhaw Sinha

Features of Government Securities

Issued

at face value

No

default risk as the securities carry sovereign

guarantee.
Ample

liquidity as the investor can sell the security

in the secondary market
Interest

payment on a half yearly basis on face

value
No

tax deducted at source

Can

be held in Demat form.

Rate

of interest and tenor of the security is fixed

at the time of issuance and is not subject to
change (unless intrinsic to the security like FRBs
- Floating Rate Bonds).

Redeemed
Maturity

at face value on maturity

ranges from of 2-30 years.

Securities

qualify as SLR (Statutory Liquidity

Ratio) investments (unless otherwise stated).

Features of Bond Instruments

Higher Risky
2. High Rate of Return
3. Taxable Bonds issued by
corporations or government are
usually taxable Bonds issued by
state governments or municipalities
are usually exempt from tax.
4. Maturity
5. INTEREST RATES
1.

FEATURES OF CERTIFICATE OF
BONDS
1. Certificate of deposits is
considered as risk-less because
default risk in them is almost
negligible and hence its safe bet
for investors.
2. Certificate of deposits is
highly liquid and marketable and
hence investors can buy or sell it
whenever they desire to do so.
3. They are transferable from
one party to another which
cannot be done with term
deposits and hence it is an
added advantage for investors
who are willing to invest in it.

FEATURES OF
COMMERCIAL PAPERS
1. It is a negotiable
instrument.
2. It is an unsecured
instrument as it is not
backed by any assets of
the company.
3. It can be sold by the
issuing company,
directly to the investors

TO BE CONTINUED:

PARTICIPANTS & PRODUCTS IN DEBT MARKET

Issuer

Instrument Maturit
y

Investors

Central
Government

Dated Securities 2-20 Years

RBI,Banks,Insurance Co., PFs,

MFs, PDs,

Central
Government

T-Bills

State
Government

Dated Securities 5-10 Years

Banks,Insurance Co.,PFs.

PSUs

Bonds

5-10 Years

Banks,Insurance Co., PFs, MFs,

PDs,Individuals, Corporates

Corporates

Debentures

1-12 Years

Banks, Mutual Funds,

Corporates,Individuals

Corporates,
PDs

Commercial
paper

3 months to
1 Year

Banks, Mutual Funds, FI s,

Corporates,Individuals

Banks

Certificates of
Deposit

3 months to
1 Year

Banks, Corporates

91/364 days RBI,Banks,Insurance Co., PFs,

MFs, PDs,Individuals

PRIMARY ISSUANCE PROCESS

ISSUE THROUGH AUCTION

UE OF SECURITIES WITH PRE ANNOUNCED COUPON RA

ISSUE OF SECURITIES THROGH TAP SALE

ISSUE IN CONVERSION OF T BILLS

ISSUANCE PROCESS OF T BILLS

STATE GOVERNMENT SECURITIES

Market Segment

Primary market

Secondary market

PRIMARY MARKET
It is that market in which shares, debentures and
other securities are sold for the first time for
collecting long term capital.
This market is concerned with new issues.
Therefore the primary market is also called new
issue market.
In this market, the flow of funds is from savers to
borrowers. Hence, it helps directing in the capital
formation of the country

Secondary Market
Segments
Secondary market
NSE

BSE

NSE deal with debt market

BSE deal with debt market

Wholesale debt market

Retail debt market