Securities, Debentures, Derivatives, Mortgage, Nonperforming Asset

Security

A financial instrument that represents: an ownership position in a publicly-traded corporation (stock), a creditor relationship with governmental body or a corporation (bond), or rights to ownership as represented by an option. A security is a fungible, negotiable financial instrument that represents some type of financial value. The company or entity that issues the security is known as the issuer. 

Debenture

A type of debt instrument that is not secured by physical assets or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital. Like other types of bonds, debentures are documented in an indenture. 

Derivative

A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage. 

Mortgage

A debt instrument that is secured by the collateral of specified real estate property and that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large purchases of real estate without paying the entire value of the purchase up front.

Mortgages are also known as "liens against property" or "claims on property." 

Nonperforming Asset

A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments.

Foreign direct investment limits in various sectors of India

0% FDI is permitted in

Agriculture (except Tea)
Housing and real estate [except NRI]
Lottery, Gambling

26% FDI is permitted in

Defence
Insurance
Newspaper and media
Petroleum refining

49% FDI is permitted in

Banking
Cable network
DTH
Infrastructure investment
Telecom

74% FDI is permitted in

Atomic minerals
Science Magazines /Journals
Petro marketing
Coal and Lignite mines
Telecom

100% FDI is permitted in

Single Brand Retail
Advertizement
Airports
Cold-storage
BPO/Call centres
E-commerce
Energy (except atomic)
export trading house
Films
Hotel, tourism
Metro train
Mines (gold, silver)
Petroleum exploration
Pharmaceuticals
Pollution control
Postal service
Roads, highways, ports.
Township
Wholesale trading

Types of Economic Agreements

Trade agreements are broadly classified in to five types.

Preferential Trade Agreements (PTAs)

regional agreement in which members of the PTA impose a preferential tariff or lower customs duty on the products originating from the member countries.

Free Trade Agreements (FTAs)

FTA is a special case of PTA where all tariff and non-tariff barriers are abolished and free access is allowed to the products of member countries. In both PTA and FTA, each member is free to maintain different most-favoured-nation (MFN) barriers on non-members. Rules of Origin between the members of FTA is agreed to ensure that genuine products of the FTA partners alone are given duty-free access

 Customs Unions (CUs)

A Customs Union moves beyond a free trade area by establishing a common external tariff on all trade between, members and non-members. Customs Unions typically contain mechanisms to redistribute tariff revenue among members.

Common Markets (CMs)

A Common Market deepens a customs union by providing free flow of factors of production such as labour and capital in addition to the flow of outputs.

Economic Unions (EUs)

In an Economic and Monetary Union, members share a common currency and macro-economic policies (Example European Union).

Constitutional Reforms in British India

Regulating Act, 1773

• End of Dual govt.

• Governor of Bengal to be the Governor – General of British territories of India.

• Establishment of Supreme Court in Calcutta. 

Pitts Act of 1784

• gave the British Government a measure of control over the company’s affairs.

• company became a subordinate department of the State. 

Act of 1786

• Governor General given the power to over-ride the Council and was made the Commander-in-chief also.  

Charter Act of 1793

• Company given monopoly of trade for 20 more years.

• laid the foundation of govt. by written laws, interpreted by courts. 

Charter Act of 1813

• Company deprived of its trade monopoly in India except in tea and trade with China.

Charter Act of 1833

• End of Company’s monopoly even in tea and trade with China.

• Company was asked to close its business at the earliest.

• Governor General of Bengal to be Governor General of India

• (1st Governor General of India was Lord William Bentinck). 

Charter Act of 1853

• The Act renewed the powers of the Company and allowed it to retain the possession of Indian territories in trust of the British crown.

• Recruitment to Civil Services was based on open annual competition examination (excluding Indians).

Government of India Act, 1858

• Rule of Company in India ended and that of the Crown began.
• A post of Secretary of State (a member of the British cabinet) for India created.
  • He was to exercise the powers of the Crown.
  • Secretary of State governed India through the Governor General.
• Governor General received the title of Viceroy. He represented Secretary of State and was assisted by an Executive Council, which consisted of high officials of the Govt.

Indian Council Act, 1861

• The Executive Council was now to be called Central Legislative Council. 

Indian Council Act, 1892

• Indians found their way in the Provincial Legislative Councils. 

Indian Council Act, 1909 or Morley-Minto Act

• It envisaged a separate electorate for Muslims. 
  

Government of India Act, 1919 Or Montague-Chelmsford Reforms

• Dyarchy system introduced in the provinces.
• The Provincial subjects of administration were to be divided into 2 categories:

1. Transferred
   1. administrated by the Governor with the aid of ministers responsible to the Legislative Council
2. Reserved
   1. The Governor and the Executive Council were to administer the reserved subjects without any responsibility to the legislature.

• Indian legislature became bicameral for the first time, it actually happened after 1935 Act.

 Government of India Act, 1935

• Provided for the establishment of All-India Federation consisting of
  • British Provinces
  • Princely States.
• The joining of Princely States was voluntary and as a result the federation did not come into existence.
• Dyarchy was introduced at the Centre (Eg, Department of Foreign Affairs and Defence were reserved for the Governor General).
• Provincial autonomy replaced Dyarchy in provinces. They were granted separate legal identidy.