Globalisation and Indian Financial Market in English

Examine the efforts made by the government during the recent past years to globalise the Indian Finance Market.

Contents

Efforts made by the Government of India to activise the Financial Market or Globalisation and Indian Financial Market

India has adopted the liberal policy. Due to liberalisation some steps have been taken globalisation. Following are the aspects of globalisation of financial markets:

1. Indian entrepreneurs want capital from foreign investors.

2. Foreign investors make analysis of investment opportunities to invest their money.

Although Indians have great opportunity to make large investment but they are facing tough competition with foreign concerns. To face the competition sucessfully, working effeciency should be improved.

In the modern economic circumstances size and structure of Indian financial market is changing. Following steps have been taken in this respect:

1. Establishment of New Institutions: Following new institutions have been established:

(i)National Stock Exchange (NSE): National Stock Exchange was established in November, 1992 with the capital of Rs. 25 crore. Its main office is situated in Mumbai.

National Stock Exchange has established the National Clearing Corporation (NCC).

All the members of National Stock Exchange are connected with control room of the NSE. They make dealing through telecom satellite.

(ii) Over the Counter Exchange of India (OTCEI): Over the Counter Exchange of India was established on 28th November, 1992.

(iii) Establishment of Securities Trading Corporation of India (STCI): It was established by the Reserve Bank of India on 27th June, 1994.

It was established to provide an active market to government securities and public sector bonds.

(iv) Stock Holding Corporation of India Ltd. (SHCIL): Stock Holding Corporation of India Ltd. has started his functioning in August, 1988. It was established by IDBI, IIBI, LIC, GIC, UTI, ICICI.

(v) The National Securities Depository Ltd. (NSDL): This is the first depository of the country. It was established on 8th November, 1996. It is helpful in making paperless trading. NSDL was established by Industrial Development Bank of India (IDBI), National Stock Exchange (NSE) and Unit Trust of India (UTI).

(vi) Central Depositary Services India Ltd. (CDSL): It was promoted by State Bank of India, Bank of Baroda, Bank of India, HDFC Bank and Bombay Stock Exchange. It started his functioning in February, 1998.

(vii) Other Efforts: These are as under :

Establishment of Discount and Finance House of India Ltd. (DFHIL)
Encouragement to mutual funds
Permission to foreign institution investors

2. Introduction of New Financial Instruments: To strengthen the financial markets and for the purpose of globalisation many new financial instruments have been introduced.

3.Changes in Framework: Changes were made in administrative and regulatory framework. Securities and Exchange Board of India (SEBI) was established on april12, 1988. on 30th january, 1992 it acquired statutory recognition.