RTGS SYSTEM : - The acronym 'RTGS' stands for Real Time Gross Settlement. - RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a 'real time' and on 'gross' basis. - This is the fastest possible money transfer system through the banking channel. Settlement in 'real time' means paayment transaction is not subjected to any waiting period. -...

REVERSE REPO : - is the rate which is paid by RBI to banks on Deposit of funds with RBI. - A reduction in the repo rate will help banks to get maoney at a cheaper rate. When the repo rate increases borrowing borrowing from RBI becomes more expensive. - To borrow from RBI bank have to submit liquid bonds / Govt Bonds as collateral security, so this is a short term gap filling facility and bank...

REAL EFFECTIVE EXCHANGE RATE (REER) : - The multilateral trade weighted real effective exchange rate (REER) is a weighted average of real exchange rate in respect of basket of countries with which the country trades; the real exchange rate is obtained by deflating the nominal exchange rates with the relative price differential between the domestic and foreign countries. - Thus REER is the weigh...

PURCHASING POWER PARITY (PPP) : - This refers to a theory of exchange rate based on relative domestic and foreign prices and used as a valuable tool for assessing proper currency valuation and measuring relative competitiveness. - The basic proposition of PPP is that identical goods must sell at identical prices in a competitive market place. - Otherwise, there will be opportunities for arbitr...

PARTICIPATORY NOTES : - These are derivative instruments issued by registered Foreign Institutional Investors (FII) to their clients, who are not directly allowed to buy or sell in Indian markets. - Participatory notes are like contract notes and are issued by foreign institutional investors to their overses clients who may not be eligible to invest in Indian stock market. - Foreign institution...