MSL310 Financial Institutions and Markets

Course Related Information

Semester 2, Academic Year 2023-2024

Course Coordinator: Dr Neeru Chaudhry
Email: [email protected]
Location: Room 608 (6th floor), Vishwkarma Bhawan
All announcements will be made on Moodle
Prerequisites for this Course
NONE
Open to third, fourth, and final year B.Tech and dual degree students
MSL310
Programme Elective for a Minor in
• Business Management
• Entrepreneurship
Check Course of Study applicable to you
Confirm with Academic Section for any clarification
Lectures
Slot U: Friday 6:15pm – 9:15pm (LH108)
January: 5, 12, 19, 20 (Saturday)
February: 2, 9, 16
March: 4 (Monday), 12 (Tuesday), 15, 22
April: 5, 12, 19
Course Objectives
Introduction to the financial institutions and markets
Course Objectives
Overview of the financial system
Regulatory framework
How different financial markets work
• Debt, equity, derivative, foreign exchange
Securities issued by corporates and government
• Capital and money market
• How to value these securities
• How to assess and manage the risk associated with different securities
Understand the role played by financial institutions
• Commercial banks, investment banks, insurance companies, and other
non-banking financial institutions
Recommended Textbook/References
Kidwell, D. S., Blackwell, D. W., Whidbee, D. A., and Peterson, R. L.
(2005). Financial institutions, markets, and money. 9th edition. John
Wiley and Sons
National Stock Exchange (2019). Indian Securities Market, A Review
(ISMR). Volume 21. National Stock Exchange of India Ltd, Mumbai
• https://www.nseindia.com/resources/publications-indian-securities-ismr
Securities Exchange Board of India (SEBI) (2023). Handbook of
Statistics 2022. SEBI, Mumbai
• https://www.sebi.gov.in/reports-and-statistics/publications/may-
2021/handbook-of-statistics-2020_50238.html
RBI’s Functions and Working
• https://m.rbi.org.in/scripts/OccasionalPublications.aspx?head=RBI%27s%
20Functions%20and%20Working
Why this course?
“The relationship between economy and stock market
The general belief that "finance" is a crucial component of economic
growth has been reinforced by the growing significance of financial
markets around the world. As a result, the focus has continued to be
on stock market expansion and economic growth.

The stock market, as a key economic pillar, has a significant impact

on the development of business and industry, which has a significant
impact on the overall health of the nation's economy.”
Source:
https://economictimes.indiatimes.com/markets/stocks/news/the-relationship-between-economy-stock-
market/articleshow/96878611.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Why this course?

Source: https://economictimes.indiatimes.com/news/india/financial-literacy-should-be-taught-at-school-level-says-fm-nirmala-sitharaman/articleshow/106385539.cms
Why this course?

https://economictimes.indiatimes.com/markets/stocks/live-blog/bse-sensex-today-live-nifty-stock-
market-updates-10-january-2023/liveblog/96868147.cms
Why this course?

Source: https://www.thehindu.com/business/Economy/rbi-set-for-fourth-straight-rate-hike-to-
quell-inflation-say-experts/article65934484.ece

Source: https://www.businesstoday.in/industry/banks/story/rbi-governor-das-announces-hike-in-interest-
rate-by-40-bps-to-440-332268-2022-05-04
Why this course?

“The finance ministry on Tuesday said top 50 wilful defaulters

including Gitanjali Gems Limited, Era Infra Engineering Limited, REI
Agro Limited, and ABG Shipyard Limited owe Rs 87,295 crore to
banks and financial institutions. Of this, top 10 wilful defaulters owe
Rs 40,825 crore to schedule commercial banks (SCBs), Minister of
State for Finance Bhagwat Karad said in a written reply in Rajya
Sabha.”

Source: https://economictimes.indiatimes.com/markets/stocks/news/india-prepared-for-us-rate-hike-spillovers-shaktikanta-das/articleshow/89579590.cms?from=mdr
Why this course?

Source: https://www.hindustantimes.com/business-news/npa-
crisis-the-rise-and-fall-of-bhushan-steel-in-the-great-indian-
Source: https://economictimes.indiatimes.com/markets/bonds/amtek- debt-trap/story-GHrvRRFIBsMLXKJzbqvaFN.html
auto-defaults-on-rs-800-crore-bond-
payment/articleshow/49053448.cms

Source: https://economictimes.indiatimes.com/markets/stocks/news/10-companies-default-
on-bond-interest-payments/articleshow/56699160.cms?from=mdr
Why this course?

Source: https://economictimes.indiatimes.com/markets/stocks/news/india-prepared-for-us-rate-
hike-spillovers-shaktikanta-das/articleshow/89579590.cms?from=mdr
Why this course?
Reading newspapers
Investing (for example, equities, mutual funds, term deposits)
Salary offers (shares/options)
Pensions
Start-ups
Corporate jobs
CFA?
Lectures Outline: Tentative
Topic Name Pre-Readings (Textbook)
1 Overview of the Financial Chapter 1
System
2 Global Financial Crisis
3 Regulatory Framework Chapters 2, 3, and 12
4 Debt Securities and Markets Chapters 7 and 8
5 Equity Market Chapter 9
6 Derivatives Chapter 10
7 Foreign Exchange Markets Chapter 11
8 Deposit Taking Institutions Chapter 13
9 Other Financial Institutions Chapters 14, 16, and 17
10 International Banking Chapter 15
11 FinTech
12 Review
Assessment
Component Marks (percent)
1 Minor Test 1 20
2 Major Test 40
3 Weekly Quizzes (Moodle, in-class) 20
4 Group Assignment (not more than 5 Students) 20
Total 100

Please check timetable website for updated information on Minor and Major
tests (https://timetable.iitd.ac.in/)
Special Consideration
Please inform in advance
Submit necessary documents
Re-minor, Re-major
Weekly Quizzes
Quizzes will be on Moodle
30-40 minutes
Please ensure that your laptop can run for one hour
Group Assignment
Five Students
Students will form groups on their own
• Withdraw, audit
To get good marks, apply the theoretical concepts learnt in the class
Group Assignment
(1) Any topic of your choice related to Indian financial markets
OR
(2) Replicate any journal paper using Indian data
• Journal of Finance
• Journal of Financial Economics
• Review of Financial Studies
• Journal of Financial and Quantitative Analysis
• Journal of Corporate Finance
• Journal of Banking and Finance
• Journal of Financial Intermediation
• Journal of Financial Markets
• Review of Asset Pricing Studies
• Review of Corporate Finance Studies
• Review of Finance
Group Assignment
Part A
Weightage: 5 percent
Submission: 2nd February, hard copy, in-class
Document should include following
• Group details (cover page)
• Topic
• Background
• Data
• Methodology
• References
Group Assignment
Part B
Weightage: 10 percent
Submission: 7th March, on Moodle
Document should include following
• Group details (cover page)
• Topic
• Background
• Data
• Methodology
• Results
• References
Group Assignment
Part C
Presentations on 12th March (during class time 6:15-9:15pm)
Weightage: 5 percent
6 minutes presentation followed by 2 minutes of questions and
answers
On MS Team to assigned Teaching Assistant
Students should attend all presentations in their slot
Details will be uploaded on Moodle later
Group Assignment
Some useful sources:
• https://www.mca.gov.in/content/mca/global/en/home.html
• https://finmin.nic.in/
• https://financialservices.gov.in
• https://www.rbi.org.in/
• https://www.bseindia.com/
• https://www.nseindia.com/
• https://www.sebi.gov.in/
• https://www.pfrda.org.in/
• https://www.irdai.gov.in/
• https://databank.worldbank.org/home.aspx
• https://www.imf.org/en/Home
• https://www.adb.org/

Prowess dx database
https://prowessdx.cmie.com/
Username: offcampus, Password: Library@123
Queries/doubts
Office Hours
Course Coordinator: Dr Neeru Chaudhry
Email: [email protected]
Thursday: 10am-11am
Location: Room 608 (6th floor), Vishwkarma Bhawan
Office Hours: Teaching Assistants
Location: PhD Room, 3rd Floor, Vishwkarma Bhawan
Deepanshi Arora ([email protected]): Monday 3-4pm
Priya Dhawan ([email protected]): Tuesday 3-4pm
Nihar Singh ([email protected]): Wednesday 3-4pm
Rabia Bashri ([email protected]): Thursday 3-4pm
Savita ([email protected]): Friday 3-4pm
Attendance
Refer to Course of Study: Section 3.16 (page 16)
https://home.iitd.ac.in/uploads/IITD-Courses-of-Study-2021-22_(08-
09-2021).pdf
Mandatory for students to attend all classes
“If a student’s attendance is less than 75%, the student will be
awarded one grade less than the actual grade that he/she has
earned. For example, a student who has got an A grade but has
attendance less than 75% will be awarded an A (-) grade”
Schedule activities such as job interviews, committee meetings etc
keeping your class timings in mind
Grading
Refer to Course of study
https://home.iitd.ac.in/uploads/IITD-Courses-of-Study-2021-22_(08-
09-2021).pdf
Minimum marks for grade A: 80
Minimum pass marks (grade D): 30
Audit Policy
https://home.iitd.ac.in/uploads/IITD-Courses-of-Study-2021-22_(08-
09-2021).pdf
“A student cannot get NP for an audit course if his/her attendance is
less than 75%”
At least 30 percent marks in all assessments (Minor and Major Tests,
Quizzes, and Assignment)
At least 30 percent marks in aggregate
Audit Policy
At least 30 percent marks in each of the assessment as well as
aggregate