Tag: indian structured finance

Mutual Funds deployed whopping one lakh crore in T-Bills

Mutual fund exposure to Treasury Bills increased to INR 1.82 lakh Cr in May’20 registering month-on-month increase of more than rupees one lakh crore ( the exposure to T-Bills in April was 0.816 lakh cr). Treasury bills or T-bills are short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day. Treasury bills are zero coupon securities and pay no interest. Instead, they are issued at […]

A brief history of India’s Foreign Reserves

India’s foreign exchange reserves crossed half a trillion dollars during the first week of June. In an otherwise negative economic environment, country’s healthy forex reserves act as strong mitigants for potential macro-economic risks. India now ranks fifth in the list of countries with highest foreign exchange reserves behind China, Japan, Switzerland and Russia. CountryForeign Exchange Reserves in India (million USD)China3,101,692Japan1,378,239Switzerland848,398Russia565,200India501,703 Half a trillion figure, though not a destination in itself, is nonetheless a good milestone to cross in India’s journey […]

Behavioural Biases in Investing

Let’s do a thought experiment: There is a runaway trolley barrelling down the railway tracks. Ahead, on the tracks, there are five people tied up and unable to move. The trolley is headed straight for them. You are standing some distance off in the train yard, next to a lever. If you pull this lever, the trolley will switch to a different set of tracks. However, you notice that there is one person on the side track. You have two […]

Nudge Theory at work

Richard Thaler (Nobel Prize Laureate) and Cass Sunstein in their book “Nudge: Improving Decisions About Health, Wealth, and Happiness” define nudge as any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. Essentially a nudge is a change in an individual’s environment making it more likely that the person will make a particular choice or behave in a particular way. Further, to count as a mere […]

Shoe Leather Cost, Covid & Yes Bank!

People normally want to park most of their liquidity in an interest bearing savings account with a bank (or park in liquid funds) and minimise the actual cash they keep with themselves. This is because while the nominal value of cash remains constant, the real value of the same reduces with time due to inflation. However, some amount of cash one needs, to carry on day to day activities – to pay to vegetable vendor, for grocery store next door […]

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