Discount and finance house of India Limited

Jayoti vidyapeeth womens university, Jaipur, Rajasthan

Submitted by-

Shreya sankrityayan JV-b/10/1687

MBA(FM) Final year

INTRODUCTION• DFHI was set up in March 1988 by Reserve Bank of

India jointly with public sector banks and all India

Financial Institutions to develop the money market

and to provide liquidity to money market instruments.

CONTENT LIST1. History of DHFI

2. Objectives of DHFI

3. CS Account

4. Money market instruments of DHFI

5. Roles of DHFI

6. Who can deal with DHFI

7. Conclusion

8. References

HISTORY OF DHFI• DFHI was incorporated on March 8, 1988 under the

Companies Act, 1956 with an authorised share capital of

Rs.100 crore subscribed by the RBI (Rs.51 crore), Public

Sector Banks (Rs.33 crore) and All-India Financial Institutions

(Rs.16 crore).

OBJECTIVES OF DHFI1. To even out the liquidity imbalances in the banking system.

2. To promote secondary market in short term money market

instruments.

3. to integrate markets at regional centres with the main market at

Mumbai, through its network.

4. Provide safe and risk-free short-term investment avenues to

institutions.

5. Provide greater liquidity to money market instruments.

6. Facilitate money market transactions for small and medium sized

institutions who are not regular participants in the market.

OBJECTIVES OF DHFI CONT…

7. DFHI provides the 'Constituent SGL' Account facility which

enables even those entities which otherwise do not have an

SGL Account facility with the RBI to reap the full benefits of

investing in government securities.

CONSTITUENT SGL ACCOUNT

• DFHI has opened a 'Constituent SGL' account with the RBI.

According to the procedure laid down by RBI, customers of

DFHI can open Constituent SGL Accounts with DFHI. Their

holdings in T-Bills and dated government securities are

transacted through this account

MONEY MARKETS INSTRUMENTS OF DHFI

DFHI deals in the following instruments/products:

• Treasury Bills

• Dated Government Securities

• Certificates of Deposit

• Commercial Papers

• Call (overnight) Money

ROLES OF DHFI

1. To discount , purchase and sale treasury bills, trade bill, bills

of exchange, commercial bills and commercial papers.

2. To play an important role as a lender, borrower or broker in

the Inter- Bank call money market.

3. To promote and support company funds, trusts and other

organization for development of short term money market.

ROLES OF DHFI CONT…4. To advise government, banks and financial institutions in

evolving schemes for growth and development of money

market.

5. It mobilizes funds/resources from commercial or cooperative

banks ,FI and corporate entities which are pooled and lend

the money market.

6. Help the corporate entities, banks and FI to raise short term

money and invest short term surplus.

ROLES OF DHFI CONT…

7. It stabilize the call and short term deposit rate through larger

turnover.

8. It extends repos, buy back facility to 14 days to banks money

market instruments.

9. Two regular quotes- Bid and offer in money market

instruments provided by DHFI serve as a base to broaden the

secondary market and give an assure liquidity to the

instruments.

WHO CAN DEAL WITH DHFI1. Individuals

2. Corporate

3. Regional rural banks

4. Cooperative banks

5. Provident funds, Pension funds, Gratuity funds

6. Trusts

7. Insurance Companies.

8. Mutual funds

9. Banks

CONCLUSION• DHFI can achieve sustained growth and more effective role to

fulfill the basic objective of the money market or by making

the smooth facilities for short term liquidity.

REFERENCES • https://en.wikipedia.org/wiki/Money_market_in_India

• http://www.sbidfhi.co.in

• http://kannanpersonal.com/learning/finance/dfhi.html