Distinguish between Money Market & Capital Market

 

Particulars	Money Market	Capital Market
1. Definition	Market where transactions of money and financial assets are accomplished for short time	Market where transactions of money and financial assets are occurred for a long period
2. Basic Role	Liquidity adjustment	Putting long-term capital to work
3. Lending & borrowing	Short-term (less or equal to 1 year)	Long-term (more than 1 year)
4. Credit Instruments	Call money, collateral loans, acceptances, bills of exchange	Capital market are stocks, shares, debentures, bonds,
5. Risk	Due to short-term period, the risk is small	Risk is more due to long-term period
6. Market regulation	Commercial banks are closely regulated	The institutions are not much regulated

Agricultural credit plays a very important role in economic development of the country with high GDP growth. Explain this mentioning the impact it keeps on the country’s overall GDP Or, Significance/ Impacts of Agricultural Credit in economic developments

 

Agricultural credit plays a vital role in economic development with positive GDP growth of a country. These types of finance may promote to development in agro-economic sector like agriculture, poultry, fishery, dairy, and livestock. The roles of agricultural finance are described below:

1. Agriculture finance assumes vital and significant importance in the agro-socio- economic development at macro and micro level as well as GDP growth.

2. It plays a catalytic role in strengthening the agro-business and augmenting the productivity of scarce resources.

3. Use of new technological inputs purchased through agro-finance helps to increase its productivity.

4. Agricultural finance can also reduce the regional economic imbalances and is equals to reduce the inter-agro asset and wealth variations.

5. It is like a lever with both forward and backward linkages to the economic development at micro and macro level.

6. As agriculture is still traditional and subsistence in nature, agricultural finance is needed to create the supporting infrastructure for adoption of new technology.

7. It promotes to carry out irrigation projects, rural electrification, installation of fertilizer and pesticide plants, execution of agro-promotional and poverty alleviation programs in the country.

 

 

define Portfolio Management ? Highlight the role and responsibilities of a branch manager in identifying a prospective borrower and processing his loan proposal

 Portfolio  Management  --  Portfolio  Management  provides  supports  to  the investor in a method of selecting the best available securities that will provide the expected rate of return in a scale of risk and also to reduce the risks. It is a strategic decision which is addressed by the top-level managers. The main objectives are to security of principal investment, consistency of returns, capital growth, marketability, liquidity, diversification of portfolio, favorable tax status, etc. These objectives results in a proper analytical approach towards the growth of the portfolio.

 

Role & responsibilities of a branch manager in identifying a prospective borrower and processing his loan proposal:

 

1. Marketing

2. Customer hunting     

3. Product offering to the proposed customer

4. Customer Analysis

5. Selecting

6. Risk Grading

               7. Processing Loan application