Comprehensive Report on Financial Markets and Services, ISBM Bangalore

This report, prepared for the International School of Business & Media (ISBM) Bangalore's PGDM program, delves into the intricacies of Indian Financial Markets and Services. The course, designed for the Fourth Trimester of the 2021-23 batch, covers a wide array of topics, including the financial system's components, money and capital markets, primary and secondary markets, derivatives, debt markets, financial institutions, mutual funds, and financial services. The curriculum explores the functioning of various financial instruments, institutional setups, and regulatory bodies like RBI and SEBI, with a focus on their impact on business enterprises. The report examines the structure of financial markets, their functions, and key instruments, such as treasury bills, commercial papers, and various market scams. It also addresses primary and secondary market operations, including IPOs, trading mechanisms, and risk management. Furthermore, the report analyzes financial institutions like banks and NBFCs, along with mutual funds and financial services such as investment banking and credit rating. The evaluation includes individual live projects, presentations, class participation, MCQs, assignments, and an end-term examination. The course aims to equip students with the ability to make informed financial decisions and understand the Indian financial system's role in economic growth.

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International School of Business & Med ia, Bangalore
PGDM Batch 2021 - 23
Fourth Tr i mester ' 2022
Course: Financial Markets and Serv ices
Faculty: Dr. Sandeep Banerjee
[e-mail]
BRIEF COURSE OUTLINE
The eco-system of banks and financial markets has deepened in size, sophistication, and
complexity. Meanwhile, they have also been the subject of abuse, failures, and economic
distress in several countries, with a ‘contagion effect’ on the rest of the World . The increase
in international trade or increased cross-border flow of goods and services made way for
‘exchange rates’ between currencies in cross-currency transactions. Thus, one can say that
both the markets and the institutions of banking and finance sectors have evolved over the
years. The financial system comprises of financial institutions, financial markets,
financial instruments, financial products, and services. A thorough understanding of all
these components will equip a finance manager to make better and informed decisions.
Hence, the course on " Indi an Financial Markets and Servi ces " expected to orient the
learner all the external forces influencing financial and strategic decisions of a business
enterprise.
PROGRAM OBJECTIVES
1. Apply knowledge of management theories and practices to solve business problems.
2. Foster Analytical and critical thinking abilities for data based decision making.
3. Ability to develop Value-based Leadership ability.
4. Ability to understand, analyse and communicate global, economic, legal, and ethical
aspects of business.
5. Ability to lead themselves and others in the achievement of organisational goals,
contributing effectively to a team environment.
COURSE OBJECTIVES
1. To provide an insight into the functioning of Indian financial system.
2. To make students understand the various components of the financial system, the
inter-relationship among different components and the impact on business
enterprise.

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COURSE OUTCOMES
After the completing the course, Students would be able to:
CO 1- Students will be able to recall the basic framework of Indian Capital Markets and
its functions.
CO 2- Students will be able to elaborate various products and services in financial
markets.
CO 3- Students will be able to enumerate the various institutional set-ups in India and
their value offerings and apply rationally.
CO 4- Students will be able to critically analyse the financial viability of financial
products and services.
CO 5- Students will be able to evaluate various financial products in Indian Financial
Market and distinguish their relative merits and demerits.
CO 6- Students will be able to construct appropriate financial assets for the prospective
investors.
CO PO Mapping
CO<>PO PO 1 PO 2 PO 3 PO 4 PO 5
CO 1 H H M H H
CO 2 H H M H H
CO 3 H H M H H
CO 4 H H M H H
CO 5 M H L M H
CO 6 H H L H H

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Topic: 1 - The Financial System: An Introduct i on
Sessions: 1, 2, 3
Pre-session www.rbi.org.in : Read database on Indian economy. Understand about the
trends in Savings and Investment; Household sector financial savingsReading
Classroom
Introduction to Financial System, Components of the formal financial system,
Functions of the financial system, Key factors of a well-functioning financial
system, The financial system and economy, Types of economic units,
Relationship between financial system and economic growth, Reforms in the
financial system, RBI and its interest rate mechanism, Key regulating
agencies in Financial System of India : SEBI, IRDRAI, PFRDA
Session
Blooms learning Level 1, 2, 3
level
Conceptual
Cause and Effect model: OLS regression to analyse the trend pattern considering
Savings and Investment in India.
Exercises/
Application
Exercises/
Case Study
Learning Understand the Indian financial system and its significant role in Indian
economyOutcome
Topic: 2 - Financial Markets: Money Market
Sessions: 4, 5
Pre-session www.rbi.org.in 1) Understand the concept of Money supply and classification
and T-billsReading
Classroom
Financial Markets: An Overview, Functions of Money market, Benefits of
efficient money markets, Money market instruments: Call Money Market,
Treasury Bills Market, REPO Market, CBLO Market, Commercial Paper Market,
Market for Certificate of Deposits, Bankers’ Acceptance, Pricing Money Market
Instruments
Session
Blooms learning Level 1 and 2
level
Conceptual
Discussions through conceptual exercises
Comparison of Indian Financial System and structure with United States
Financial System and structure.
Exercises/
Application
Exercises/
Case Study
Learning Deep understanding about the Indian Money markets and the instruments
Outcome

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Topic 3 - Financial Markets: Introduction to Capital Market
Session: 6
Pre-session Basic understanding about Indian Capital markets
Reading
Classroom Introduction to Primary and Secondary market, Functions of capital market,
Reforms in capital market, SEBI and its functions, role of fintech
companies in capital markets
Session
Blooms learning Level 1, 2, 3 and 4
level
Conceptual
Capital Market Scams:
1. Harshad Mehta Scam
2. Sahara Scam , 2009
Exercises/
Application
Exercises/
Case Study
Learning Understand the functions of capital markets in mobilising the resources
Outcome
Topic 4 - Financial Markets: The Primary Market
Session: 7, 8, 9
Pre-session
Reading
Basic knowledge about Initial Public Offering (IPOs) and other forms of raising
capital from the institutions and retail investors. www.bseindia.com,
www.nseindia.com
Classroom
Session
The Primary market: Free pricing mechanism, Primary issues and its forms,
Process of Book building, Green shoe option, Institutional placement
programme, Resources mobilization form international markets, New financial
instruments
Blooms learning
level Level 1, 2, 3 and 4
Conceptual
Exercises/
Application
Exercises/
Case Study
Examination of recent public issues:
1. LIC IPO
2. GO AIRLINES
3. ADANI WILMAR
Learning
Outcome
Learner would have understood the new mechanism of price discovery in public
issues and post risk mitigation strategies, Assimilating new avenues for
prospective investment

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Topic 5 - Financial Markets: The Secondary Market, Derivatives and Debt Market
Session: 10, 11, 12, 13
Pre-session Basic understanding about the trading mechanism in stock exchanges.
www.bseindia.com, www.nseindia.com. Role of Depository participants (DPs)Reading
Classroom
Functions of secondary market, Development of stock market in India, Listing
of securities, Risk management, Trading arrangements, Bulk, Block and
Negotiated deals, Rolling settlement, Bombay Stock Exchange (BSE), National
Stock Exchange (NSE), Regional stock exchanges. Introduction to derivatives
market: Forwards and Futures, Options, Introduction to Debt market: Link
between Money market and Debt market, Private corporate Debt market, PSU
Bond market and Government securities market, OCTEI and Forex Market
Session
Blooms learning Level 1, 2, 3 and 4
level
Conceptual
Discussion through live trading terminal,
Case study of ITC, HUL & RIL shares and its trends
Exercises/
Application
Exercises/
Case Study
Learning Learner would have learnt about trading in cash segment and other avenues
available for risk mitigationOutcome
Topic 6 - Financial Inst i tut i ons
Session: 14, 15
Pre-session Basic understanding about Banking and Non-Banking Financial Institutions in
IndiaReading
Classroom
Development of Financial institutions, Industrial Finance corporation of India
Limited (IFCI), Small Industries Development Bank of India (SIDBI), EXIM
Bank, National Bank for Agriculture and Rural Development, Banking and
Non-Banking Institutions: Functions of Bank, Scheduled commercial banks:
Public sector banks, Nationalised banks and Private sector banks, Reforms in the
banking sector, The Basel Accord , Non-Banking financial companies, Fintech
Companies.
Session
Blooms learning Level 1, 2
level
Conceptual
Discussion about BCBS and BA-I, BA-II and BA-III, Fintech Companies,
Case Study on Merger of public sector banks.
Exercises/
Application
Exercises/
Case Study
Learning Learner would have understood about the functions of Banking and Non-
Banking financial institutions in India and framework of BCBSOutcome

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Topic 7 - Mutual Funds
Session: 16, 17
Pre-session www.amfiindia.com
Reading
Classroom
Introduction to Mutual funds, Benefits of investing in Mutual funds, History of
Mutual funds in India, Mutual fund organisation, Role of intermediaries in the
Indian mutual fund industry, Classifications of mutual fund schemes, Role of
Association of Mutual Funds in India (AMFI), Risk and Return in mutual
funds, Evaluation of mutual fund schemes (Reward to volatility ratio, reward
to risk ratio, Predictive ability model: Jensen's Alpha)
Session
Blooms learning Level 1, 2, 3, 4 and 5
level
Conceptual
Fact sheet analysis and Live project
Case study of SBI Mutual Fund Schemes & HDFC Mutual Fund Schemes
Exercises/
Application
Exercises/
Case Study
Learning Learner would have understood the art of minimizing the risk exposure
through mutual fund investments and evaluating the mutual fund's
performance through various risk-adjusted ratios
Outcome
Topic 8 - Financial Serv ices
Session: 18, 19, 20
Pre-session Basic understanding about the role of financial services rendering institutions.
www.crisil.com, www.icra.in, www.fitchratings.com.Reading
Classroom Investment Banking, SEBI Regulations, Pre and Post issue obligations,
Depositories (NSDL and CDSL) and Custodians, Credit rating, Factoring,
Leasing, Financial Inclusion and Microfinance in India; Start up financing
avenues in India, Venture Capital Firms, Financing for MSMEs in India
Session
Blooms learning Level 1, 2, 3, 4, 5 and 6
level
Conceptual
Numerical cases on Leasing
Case study of Financial inclusion status in India.
Exercises/
Application
Exercises/
Case Study
Learning
Understanding the role merchant bankers, Significance of rating of financial
securities and role of rating agencies, Financial tools to facilitate the business
operations, Significance of financial inclusion for the holistic rural
development
Outcome

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EVALUATION WEIGHTAGE
1. Individual Live Project: 30 Marks
2. Presentation: 5 Marks
3. Class Participation and Quiz: 5 Marks
4. MCQs: 10 Marks
5. Assignments: 20 Marks
6. End Term: 30 Marks
RECOMMENDED BOOKS
1. Indian Financial System - Bharati B Pathak
2. Indian Financial System - M Y Khan
3. Financial Markets and Services - Gordon & Natranjan
4. Financial Institutions and Markets - L M Bhole