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FIM-P11
PGDM 2011-13: Term-I

FINANCIAL INSTITUTION AND MARKET (1.5 credit)
(Faculty: Prof. Asit Ranjan Mohanty)
Email: Asit.Mohanty@ximb.ac.in

COURSE OUTLINE

1. Introduction

Welcome to the course. Financial Institutions and Markets (FIM) will provide a foundation for the understanding of Finance Structure of the economy, and also it will provide key inputs at the beginning of their managerial inputs. This course will provide students with an understanding of the mechanisms of various financial markets

2. Course Objective

This course will enable participants to understand:

· The Financial Intermediation process and inter relationship between financial intermediation and financial markets
· The regulatory and policy framework within which intermediaries, Markets and Participants evolve and operate
· The complexities arising from globalization and innovative financial Products
· Policy and Regulatory Changes in the financial system for emerging economies like India.
· This course will deal with financial market instruments and to some extent certain aspects associated with pricing of these instruments. The focus of this course will be to view the financial systems from regulatory and policy perspective in both in Indian and International context so that the students can get a broader perspective in Financial Institution and Market.

3. Pedagogy · Comparative studies of financial markets and intermediaries in the developed and emerging economies
· Regulatory structure across markets and attendant pros and cons
· Bank crashes and meltdown of financial markets : causes and lessons , debate on policy and regulatory context of recent US finanancial meltdown 4. Readings Materials, Prescribed Text Book and Reference Book :
o PPT slides: Slides of each sessions will be mailed / uploaded in AIS to the students o INDIA’S FINANCIAL MARKETS: AN INSIDER GUIDE TO HOW THE MARKETS WORK by Ajaya Shah & Susan Thomas o Financial Markets and Institutions : A modern Perspective by Saunders and Cornett (TMH) o Financial Institutions and Markets by F S Mishkin, and S G Eakins (Addision) o Financial Markets and Institutions by Jeff Madura ( Thompson) o Financial Institutions and Markets, by L. M. Bhole (TMH) o Indian Financial System - M.Y.Khan (TMH) o Indian Financial Markets by Ajay Shah, Susan Thomas and Michael Gorham- ( Elsevier) References:
§ Report on Trend and Progress of Banking in India
( Latest Issue)
§ Report on Currency and Finance- Reserve Bank of India
§ Annual Report- Reserve Bank of India

Financial Website :
v Business Standard : www.business-standard.com
v The Live Mint : www.livemint.com
v www.bis.org: The Bank for International Settlements (BIS) is an international o rganisation which fosters international monetary and financial cooperation and serves as a bank for central banks.
v www.rbi.org.in/Scripts/financialmarketswatch.:Reserve bank of India..Financial Market Watch
v http://www.fimmda.org/ : Fixed Income Money Market and Derivatives Association of India
v http://www.ccilindia.com/OMHome.aspx : Clearing Corporation of India Ltd.
v www.amfiindia.com : Association of Mutual Funds in India

5. Evaluation Pattern
Components
Weights (%)
Two Quizzes
20%
Case Study Presentation
20%
Mid Tem
25%
End Term
35%

In case study, it will be a group presentation wherein in each group will consist of 10 students. Format:
· Table of contents
· Bibliography
· Analysis of the recent history, the size, structure and core business of the institution
· Market analysis (general trend, competitors, external influences)
· Diagnosis of current problems and future prospects
· Conclusion

6. Class Participation (CP)

Class-participation is an integral component of the learning process. CP includes the attendance & discipline in the classroom. The weight from -20% to +10% will be given depending upon the above criteria. The weight assigned in the CP will be reflected in the overall rating of the Term Paper.


7. Session – Wise Schedule

Module 1 : An Overview of Indian Financial System ( 2 sessions)
Session 1 &2:

Ø Categories of Financial Institutions
Ø Saving and Investment in the National Income Accounts
Ø The Market For Loan able Funds & Equilibrium Rate of Interest, Fisher effect, Term Structure of Interest Rate & Yield curve
Ø Asymmetry of Information, Moral Hazard and Adverse Selection
Ø The Nature and role of Financial Institutions
Ø Types and classification of Financial Markets

Module 2 : Financial Markets ( 2 sessions)
· Session 2 to 4: Ø Sources and components of Money supply, Money Multiplier & Reserve Money
Ø Concepts related to Money Market, Day Count Convention, Call Money, T-Bills, Types of Auction and CBLO , Cash Flow in Repo & Reverse Repo Transaction in both the legs
Ø Role of Discount Houses & Discount of Commercial Bills, CP & its Cash Flow, CD& its Cash Flow& its Cash Flow



Ø Pricing of Bond
Ø Yield on Debt securities
Ø Quantification of Risk Ø Concept of Different types of Yield and their direction if price changes, Types of G-Sec
Ø Importance of G Sec (Gilt edged) as a Policy Tool
Ø Auctioning system( Price based & yield based) and Types of bidding s of G- Sec, When Issued Market Ø Primary Equity Market as significant provider of Capital & Transformation of Indian Capital Market, Types of order, Economics of Right Issues
Ø Margin Trading, Price of Margin call
Ø Secondary Equity Market Operation
Ø Stock Market Index, Construction of Value Index, Price Index, Unweighted Index
Ø Valuation of stock: Single Period Model, Multi Period Model, Infinite Period Model PE Multiple, P/BV Ratio, Price/Sales Ratio
Ø Pricing of IPO
Ø Book Building Process
Ø Concept and Evolution of mutual funds
Ø Structure of Mutual Fund
Ø Various types of mutual fund products
Ø Performance Indicators

Module 3: Financial Institutions (4 sessions)
· Banking Institutions
Ø Banking Products & Balance Sheet Analysis
Ø Ratio Analysis, Liquidity and Mitigation Process
Ø Solvency Issues and Mitigation Process
· Mutual Funds
Ø Regulations of mutual fund Industry
Ø Trends in mutual fund Industry
· Insurance and the Pension Sector · Non-Banking Financial Institutions


Special session :
· Securitization : A Primer
· Indian payment system
· Sub Prime Crisis and its aftermath
· Private Equity Market
8. Code of Ethics
For individual quizzes/End term, it is unethical to seek any direct help from others, whether or not you finally make use of the help. Discussions among individuals either in class-room or in the examination hall are completely forbidden. Those who will be identified disturbing in the class will be asked to leave the class immediately. The Case Study should be totally in the group/individual’s own style and language, and should reflect group/individual understanding. Any form of copying from one another or from any outside source is forbidden. Any unfair means while writing the term Paper will be easily identified, and the respective group will be penalized in terms of lower score. No one is allowed to come to the class after the scheduled start time.

9. Feedback
I would also request you to give me continuous feedback. I would be in my office room to take up your doubts and feed back. You may form a “focus group” (consisting of 6-7 students from the class with diverse backgrounds including the CR) that continuously interacts with the other students and informs me about their problems, if any, with the course.

10. Contact Details
The scope of the course outline is not exhaustive to cover FINANCIAL INSTITUTION AND MARKET. Nevertheless care has been taken to ensure that none of the important concepts remain untouched. By the time you complete the course, you would realize that how the FIM course is a never ending process…….but you will get good basic foundation.

Wish all of you enjoyable learning and the best of everything.
Created By: Debasis Mohanty on 06/20/2011 at 10:51 AM
Category: PGP-I Doctype: Document

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