BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Discount and Finance House of India Limited was set up by RBI in____
A
1988
B
1989
C
1987
D
1990
Explanation: 

Detailed explanation-1: -The Discount and Finance House of India (DFHI) is a money market institution incorporated in March 1988 and it commenced operation in April 1988. The prime objective of DFHI is to facilitate smoothening of the short-term liquidity imbalances by developing an active secondary market for the money market instruments.

Detailed explanation-2: -First, in order to impart liquidity to money market instruments and help the development of secondary market in such instruments, the Discount and Finance House of India (DFHI) was set up as a money market institution jointly by the Reserve Bank of India, public sector banks and financial institutions in 1988.

Detailed explanation-3: -4.47 Certificates of Deposit (CD), introduced in June 1989, are essentially securitised short-term time deposits issued by banks during periods of tight liquidity, at relatively high interest rates (in comparison with term deposits).

Detailed explanation-4: -However, it was the New Bill Market Scheme (NBMS) introduced by the Reserve Bank of India in November 1970 that provided some impetus to the development of Bill Market.

There is 1 question to complete.