Page 77 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes 5. Managing SLR/Non-SLR investment portfolio for profit maximization
6. Managing investments in capital markets
7. Optimisation of interest costs through repos in case of sudden shortages.

4.5 Specific Procedural Guidelines for Dealing in Some Products

Government Securities

1. While bidding for government securities in primary market, opinion from fellow banks,
Primary Dealers is sought.
2. In case of secondary market acquisitions, the market movement in the scrip under
consideration is looked into and also likely future price movements.
3. If deal is through broker, the broker empanelment, broker exposure, brokerage are also
verified.

4. Since substitution of a counter-party is not permitted, the credit worthiness of the counter
party is required to be gone into.
5. Needed authority for investment is required to be obtained.

6. Deal slips-for transactions put through should indicate critical particulars like-price,
particulars of securities, date and time of deal, whether sale or purchase, value date,
broker's name and brokerage, counter party and whether physical or SGL delivery - are
acquired to be incorporated.
7. Back office obtains the confirmation from the counter party.

Shares

1. Deals are done only through approved brokers/NSE members.
2. Deal slip includes details of date and time, name of the share, quantity, purchase or sale,
net rate and time of deal.
3. Settlement and delivery of shares transacted takes place as per practice of the concerned
stock exchange.
4. Shares identified for investment are:
(i) from companies with sound track record, promoted by professionals and/or reputed
group of businessmen;
(ii) project is reliable and economic viability;
(iii) market perception of the industry;
(iv) product marketability;

(v) existence or otherwise of an underwriting;
(vi) price movements for last 52 weeks in case applicable.

Debentures

1. Availability and quality of rating
2. Past record regarding interest payments

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