1. 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
2. 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.
3. Content List
1. 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
4. 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).
5. OBJECTIVES OF DHFI
1. 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.
6. 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.
7. 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
8. 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
9. 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.
10. 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.
11. 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.
13. 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.
