Based on the provided information, answer the following question: (f) What are the different types of Investment where surplus balance can be invested ?
CS Professional · Banking - Law & Practice · PYQS · June 2024
Based on the provided information, answer the following question: (f) What are the different types of Investment where surplus balance can be invested ?
Answer & Explanation:
Surplus balances of banks and financial institutions can be invested in various types of instruments and assets based on their risk appetite, liquidity needs, and regulatory constraints: Government Securities: Securities issued by the Government, such as Treasury Bills (T-Bills), Government Bonds, and State Development Loans (SDLs). Corporate Bonds: Debt securities issued by corporations to raise capital. Certificate of Deposits (CDs): Time deposits issued by banks and financial institutions with fixed maturities and interest rates. Money Market Instruments: Short-term financial instruments like Commercial Papers (CPs), Treasury Bills (T-Bills), and Repurchase Agreements (Repos). Equity Shares: Ownership shares in publicly traded companies. Mutual Funds: Investment vehicles that pool money from investors to invest in diversified portfolios of securities. Real Estate: Direct investment in physical properties such as land, residential, commercial, or industrial properties. Bank Deposits: Deposits placed with other banks or financial institutions, including term deposits and savings deposits.
Topics: International Trade Settlement
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