Paper-III Financial Market Operations and Financial Management

Unit - 1

Introduction to financial market; Money Market - Instruments - Treasury bills, Certificate, Deposits, Commercial papers, primary and secondary market organization and working.
Capital Market : Primary and Secondary markets, New issue management public issue, right issue, private placement.

Unit - 2

(1) Stock Exchange :
    meaning, characteristics, function importance, management, membership.
(2) Functionaries an stock exchange :
    Brokers, sub brokers, market markets, jobbers, portfolio consultants, institutional investors and NRIs.
(3) Listing of securities :
     Procedure and legal requirements, types of transaction, types of speculative transactions, types of speculators, option or teji-mandi.  Major provisions of securities and contracts regulation Act.

Unit - 3

Meaning of financial management, scope, function of finance, role of financial manager.
Capital structure, features of good capital structures, factors affecting on capital structure, different types of capital structure, trading on equity with example.
Cost of capital, significance of cost of capital, calculating cost of debt, preference share, equity capital and retained earning (including example).

Unit - 4

Capital budgeting - meaning, importance, objectives, types, approaches to capital budgeting, decisions, techniques of capital budgeting - pay back method, average rate of return method, present value method (with examples)

Unit - 5

Working capital - concept, types of working capital, concept of operating cycle (with example) factors affecting working capital and sources of working capital.

Unit - 6

Dividend policies, factors affecting dividend decision, forms of dividend.

Reference Books :

1. Brealey and Myers, Corporate Finance - McGraw Hill.
2. Van Horne J.C. Financial Management & Policy, Prentice - Hall, India.
3. Chandra Prasanna, Financial Management - Theory & Practical, Tata McGraw Hill.
4. Machi Raju, Merchant Banking, Wiley Eastern Ltd.
5. Raghunathan V., Stock Exchange and Investment, Tata MacGraw Hill.
6. Chandratre K.R., Capital Issues, SEBI & Listing, Bharat Publishing.

Paper-III Financial Systems and Indian Economic Problem

Unit - 1 20%

(A) Money : Functions; Alternative measures to money supply in India - their different components; Meaning and
changing relative importance of each; High powered money - meaning and used; Sources of changes in high powered money.
(B) Finance : Role of in an economy; Kinds of finance; Financial system; Components; Financial intermediaries;
Markets and instrument, and their functions.   

Unit - 2 20%

Indian Banking System : Definition of bank; Commercial bank, importance and functions; structure of commercial
banking in India; Balance sheet of a bank; Meaning and importance of main liabilities and assets; Regional rural
banks; Co-operative banking in India.

Unit - 3 30%

(A) Process of Credit Creation by Banks : Credit Creation Process; Determination of money supply and total bank credit.
(B) Development Banks and Other Non-Banking Financial Institutions : Their main features; Unregulated credit markets in India, main feature.

Unit - 4 10%

The Reserve Bank of India : Functions; Instruments of monetary and credit control; Main features of monetary policy since independence.

Unit - 5 10%

Population Problem : Demographic Theory, Reasons of Population explosion in India, Population Policy. Effects of Population on Indian Economy.

Unit - 6 15%

Agricultural Economics : Nature and importance : Farm size, Productivity relations, Reasons of Lower Productivity
in India, Institutional and Technological changes in Agriculture, Land Reforms, Rural credit. Agricultural Marketing.

Unit - 7 15%

Industry : Industrial development during the Planning Period, Recent Industrial Policy, Growth and Problems of
small scale industries, Role of Public Sector enterprises in India's Industrialization.

Suggested Readings :

1. Chandler L.V. and Goldfeld S.M.: The Economics of Money and Banking; Harper and Row, New York.
2. Gupta S.B.: Monetary Planning of India; S.Chand, New Delhi.
3. Khan M.Y.: India Financial System - Theory and Practical; Tata MacGraw Hill, New Delhi.
4. Reserve Bank of India : Functions and Working.
5. Banking Commission: Report (s).
6. Reserve Bank of India : Bulletins.
7. Reserve Bank of India : Annual Report (s).
8. Report on Currency and Finance.
9. Sengupta A.K. and Agawal M.K. Money Market Operations in India; Skylark Publications, New Delhi.
10. Vinayakan N: Banking by 2000 A.D.; Kanishka Publishers, Delhi.
11. Panchmukhi V.R. Rajpuria K.M. and Tandor R: Money and Finance in Worked Economic Order; Indus Publishing
Co., New Delhi.
12. Khubchandani : Practice and Law of Banking; MacMillan India Ltd., New Delhi.
13. Hatler : Bank Investment and Funds Management; MacMillan India Ltd., New Delhi.
14. Merrill : Financial Planning in the Bank; MacMillan India Ltd., New Delhi.