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Discount & Finance House of India

DFHI (Discount & Finance House of India) was incorporated in 1988 as a specialized financial intermediary to develop the money market and provide liquidity. It was authorized with Rs. 100 crore capital from RBI, public sector banks, and financial institutions. In 2004 it amalgamated with SBI Gilts Ltd. to form SBI DHFI Ltd. as a subsidiary of SBI. Its objectives include evening liquidity imbalances, promoting the secondary market for short-term instruments, and providing investment avenues and liquidity to various institutions. It plays a role in discounting, purchasing and selling various money market instruments and participates in the inter-bank call money market.

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104 views7 pages

Discount & Finance House of India

DFHI (Discount & Finance House of India) was incorporated in 1988 as a specialized financial intermediary to develop the money market and provide liquidity. It was authorized with Rs. 100 crore capital from RBI, public sector banks, and financial institutions. In 2004 it amalgamated with SBI Gilts Ltd. to form SBI DHFI Ltd. as a subsidiary of SBI. Its objectives include evening liquidity imbalances, promoting the secondary market for short-term instruments, and providing investment avenues and liquidity to various institutions. It plays a role in discounting, purchasing and selling various money market instruments and participates in the inter-bank call money market.

Uploaded by

Phani Teja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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DFHI

Discount & Finance House of India


Introduction
• The Vaghul Committee had endorsed the
recommendations for banking commission in
1972 and Chore committee in 1980 regarding
setting up specialised institutions as a
autonomous financial Intermediary, for
developing the money market and provide
liquidity to the instruments.
• Incorporated on March 8, 1988 under the
Companies Act, 1956.
Capital Structure
• Authorised Share Capital – Rs. 100 crore
• Subscribed by
– RBI  51 crore
– Public Sector banks  33 crore
– All India Financial Institutions  16 crore
• In2004, Amalgamated with SBI Gilts Ltd. and formed a
new company SBI DHFI Ltd. as a subsidiary (69.04%
holding) of SBI
• Authorised Share Capital (Present) – Rs. 300 crore
• Paid up Share Capital – Rs. 190 crore
Objectives of DFHI
• To even out the liquidity imbalances in the banking system.
• To promote secondary market in short term money market
instruments.
• Provide safe and risk-free short-term investment avenues
to institutions.
• Provide greater liquidity to money market instruments.
• Facilitate money market transactions for small and medium
sized institutions who are not regular participants in the
market.
• To provide the 'Constituent SGL' Account facility which
enable entities to reap benefits of investing in G-Secs
Role of DFHI
• To discount , purchase and sale of T-bills, trade bill, bills of
exchange, commercial bills and commercial papers.
• To play an important role as a lender, borrower or broker in
the Inter- Bank call money market.
• To promote and support company funds, trusts and other
organization for development of short term money market.
• To advise government, banks and FI’s in evolving schemes
for growth and development of money market.
• It mobilizes funds/resources from commercial or
cooperative banks ,FI and corporate entities which are
pooled and lend the money market.
Role of DFHI (contd..)
• Help the corporate entities, banks and FI to raise short
term money and invest short term surplus.
• It stabilize the call and short term deposit rate through
larger turnover.
• It extends repos, buy back facility to 14 days to banks
and FI in money market instruments.
• 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 assured
liquidity to the instruments
Thank You

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