Month: May 2020

Most Debt Mutual Funds witness good inflows – of course except for credit category !

Asset under Management data as on 29th May’20 (last working day of the month) shows that most of the debt mutual fund schemes witnessed good growth on a month-on-month basis – as illustrated below. Category wise AUM for May’20 : Category NameAUM as on May end (Crs)% Change (m-o-m)Liquid Fund4,95,04522%Short Duration Fund94,8284%Corporate Bond Fund91,6576%Banking and PSU Fund89,37613%Overnight Fund86,6385%Low Duration Fund77,1573%Ultra Short Duration Fund72,4575%Money Market Fund63,95115%Floater Fund32,4313%Credit Risk Fund30,262-16%Medium Duration Fund19,878-8%Dynamic Bond Fund17,0661%Gilt Fund16,28419%Medium to Long Duration Fund9,9203%Long Duration Fund2,31418%Gilt Fund […]

Commercial Paper Market – Analysis

In our earlier article we had discussed the commercial paper product covering features, eligible issuer, investors, benefits and so on. The same can be accessed here. In this article we analyze the commercial paper market in India. Volumes : The monthly average issuance volume for the market over the past two years has been approximately INR 2 lakh crores. The commercial paper market touched a high of INR ~ 3 lakh crore issuances in August 2018 (just a month before […]

India’s foreign currency debt: To do or not to do, that is the question !

The announcement of the substantial increase in government borrowings has again brought forth the debate on Sovereign Foreign Currency Debt. The proponents have been giving various arguments in favour of the issuance including lower costs of borrowing, diversified investor base etc. Those arguing against such an issuance have been highlighting the risks associated with foreign currency denominated borrowings. In this article we have analysed both kind of arguments in detail. But let’s first understand what is meant by Foreign Currency […]

Partial Credit Guarantee Scheme (PCGS 2.0) : Hits and Misses

Finance Minister, Nirmala Sitharaman last week, as part of Covid Relief Atmanirbhar package had announced Partial Credit Guarantee Scheme 2.0 (PCGS 2.0) for Micro Finance Institutions (MFIs) and Non- Banking Financial Companies. The stated objective of the scheme is “to address temporary liquidity/cashflow mismatches of otherwise solvent NBFCs/HFCs/MFIs without having to resort to distress sale of their assets for meeting their commitments, and to enable availability of additional liquidity to them for on lending”. ISF in an article published on […]

What is Commercial Paper ?

What is Commercial Paper? – CP is essentially an unsecured money market instrument issued in the form of a promissory note . It was formally introduced in Indian market in 1990 with the stated intent to enable “highly rated corporate borrowers to diversify their sources of short-term borrowings and also provide an additional financial instrument to investors”. Reserve Bank of India Act, 1934 gives RBI the authority to regulate all the money market instruments in India. RBI over the past […]

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