Scheduled Banks in India :

Scheduled Banks in India :

Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. As on 30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918 branches.The scheduled commercial banks in India comprise of State bank of India and its associates (8), nationalised banks (19), foreign banks (45), private sector banks (32), co-operative banks and regional rural banks."Scheduled banks in India" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank"The following are the Scheduled Banks in India: State Bank of India, Union Bank of India ,United Bank of India ,UCO Bank ,Vijaya Bank. ING Vysya Bank Ltd ,Axis Bank Ltd ,Indusind Bank Ltd ,ICICI Bank Ltd.Treasury Bills :T-bills are short-term securities that mature in one year or less from their issue date. They are issued with three-month, six-month and one-year maturities. T-bills are purchased for a price that is less than their par (face) value; when they mature, the government pays the holder the full par value. Effectively, your interest is the difference between the purchase price of the security and what you get at maturity. For example, if you bought a 90-day T-bill at $9,800 and held it until maturity, you would earn $200 on your investment. This differs from coupon bonds, which pay interest semi-annually.

Treasury bills (as well as notes and bonds) are issued through a competitive bidding process at auctions. If you want to buy a T-bill, you submit a bid that is prepared either non-competitively or competitively. In non-competitive bidding, you'll receive the full amount of the security you want at the return determined at the auction. With competitive bidding, you have to specify the return that you would like to receive. If the return you specify is too high, you might not receive any securities, or just a portion of what you bid for. The only downside to T-bills is that you won't get a great return because Treasuries are exceptionally safe.Contra assets in bank balance sheet;A contra asset is a negative asset account that is designed to offset the balance in the asset account with which it is paired. The purpose of a contra asset account is to store a reserve that reduces the balance in the paired account. By stating this information separately in a contra asset account, a user of financial information can see the extent to which a paired asset should be reduced. The natural balance in a contra asset account is a credit balance, as opposed to the natural debit balance in all other asset accounts. There is no reason for there to ever be a debit balance in a contra asset account; thus, a debit balance probably indicates an incorrect accounting entry. When a contra asset transaction is created, the offset is a charge to the income statement, which reduces profits. The proper size of a contra asset account can be the subject of considerable discussion between a company controller and the company's auditors. example, the accumulated depreciation account is a contra asset account, and it is paired with the fixed assets account. When combined, the two accounts show the net book value of a company's fixed assets. Note: It is customary to have one accumulated depreciation account and multiple fixed asset accounts with which it is linked. Examples of other contra assets are: accumulated depletion, Reserve for obsolete inventoryMarket segments of money market in India are:Call Money Market,Treasury Bills Market,Commercial Bills Market,Inter-Bank Participation Certificates,Certificates of Deposits (CDs), Commercial Papers (CPs)Call money is short-term finance repayable on demand, with a maturity period of one to fifteen days, used for inter-bank transactions. The money that is lent for one day in this market is known as "call money" and, if it exceeds one day, is referred to as "notice money." Commercial banks have to maintain a minimum cash balance known as the cash reserve ratio. The Reserve Bank of India changes the cash ratio from time to time, which, in turn, affects the amount of funds available to be given as loans by commercial banks.Call money is a method by which banks lend to each other to be able to maintain the cash reserve ratio. The interest rate paid on call money is known as the call rate. It is a highly volatile rate that varies from day to day and sometimes even from hour to hour. There is an inverse relationship between call rates and other short-term money market instruments such as certificates of deposit and commercial paper. A rise in call money rates makes other sources of finance, such as commercial paper and certificates of deposit, cheaper in comparison for banks to raise funds from these sources.Currency deposits- CDs are negotiable money market instrument issued in demat form or as a Usance Promissory Notes. CDs issued by banks should not have the maturity less than seven days and not more than one year. Financial Institutions are allowed to issue CDs for a period between 1 year and up to 3 years.

CDs are like bank term deposits but unlike traditional time deposits these are freely negotiable and are often referred to as Negotiable Certificates of Deposit. CDs normally give a higher return than Bank term deposit. CDs are rated by approved rating agencies (e.g. CARE, ICRA, CRISIL)