MADURAI KAMARAJ UNIVERSITY

Two Year / Three Year M.B.A. - (DLP) Examinations of

November– 2012 (to be held in February 2013)
For Tamil Nadu and Other States Candidates of DDE
(Common to all candidates)
(CALENDAR / ACADEMIC YEAR (SEMESTER / NON SEMESTER) MAIN AND
SUPPLEMENTARY EXAMINATIONS)
TIME TABLE

2 p.m. to 5p.m

19.022013 RDBMS-Relational Database D25 / 100

( Tuesday ) Management System M32

20.02.2013 Entrepreneurship and D26 / 100

(Wednesday Management of Small Business M33 / A33
)

Group 2 : Finance Area

21.02.2013 Management of Financial D2D / 100

( Thursday ) Institutions M3D
22.02.2013 International Trade Finance and D2E / 100
( Friday ) Documentation M3E

23.02.2013 Investment and Portfolio D2F/ 100

( Saturday ) Management M3F
 INTER OFFICE MEMO BEML LTD
Regional Office
AMH/ GEN / __________ / 2013 Feb 21 HYDERABAD

TO : MHD

Thru : MH

SUB : Cancellation of DD – TMC Siruguppa

Ref : Return of Original Counter foil of Pay in slip

For purchasing DD - TMC Sirugapa

:
Pl find enclosed the the original counterfoil of the pay in slip issued towards
purchase of DD in favour of TMC MURUGAPPA for Rs41,250 ( Rupees
Fortyone Thousand Two Hundred and Fifty Only )

We request you to kindly cancel the DD and deposit the recovered amount in
ROH SBI A/c No 10287201150 of Old MLA Qtrs branch to avoid audit
objections

This office order is for strict compliance please

-----------
AMH
Special drawing rights
From Wikipedia, the free encyclopedia

Special drawing rights (SDRs) are supplementary foreign exchange

reserve assets defined and maintained by the International Monetary
Fund (IMF). Not a currency, SDRs instead represent a claim to currency
held by IMF member countries for which they may be exchanged. [1] As
they can only be exchanged for euros, Japanese yen, pounds sterling,
or US dollars,[imf 1] SDRs may actually represent a potential claim on IMF
member countries' nongold foreign exchange reserve assets, which are
usually held in those currencies. While they may appear to have a far
more important part to play, or, perhaps, an important future role, being
the unit of account for the IMF has long been the main function of the
SDR.[Williamson 1]
Created in 1969 to supplement a shortfall of preferred foreign exchange
reserve assets, namely gold and the US dollar, the value of a SDR is
defined by a weighted currency basket of four major currencies: the US
dollar, the euro, the British pound, and the Japanese yen. [1] SDRs are
denoted with the ISO 4217 currency code XDR.[2]
SDRs are allocated to countries by the IMF.[1] Private parties do not hold
or use them.[Williamson 2] As of March 2011, the amount of SDRs in
existence is around XDR 238.3 billion, but this figure is expected to rise
to XDR 476.8 billion by 2013.[3]
Contents
[hide]

1 Name
2 History
o 2.1 Alternative to US dollar
o 2.2 Use by developing countries
3 Value definition
4 Interest rate
5 Allocations
 6 Exchange
7 Other uses
8 See also
9 References

10 External links
[edit]Name
The SDR was purposefully given an innocuous name free of
connotations due to controversy, as disagreements broke out over the
nature of this new reserve asset during its creation. Some wanted it to
function like money and others, credit.[Williamson 3] While the name would
offend neither side of this debate, it can be argued that prior to 1981 the
SDR was a debt security and so a form of credit. Member countries
receiving SDR allocations were required by the reconstitution provision
of the SDR articles to hold a prescribed number of SDRs. If a state used
any of its allotment, it was expected to rebuild its SDR holdings. As the
reconstitution provisions were abrogated in 1981, the SDR now functions
less like credit than previously.[Williamson 4] Countries are still expected to
maintain their SDR holdings at a certain level, but penalties for holding
fewer than the allocated amount are now less onerous. [1]
The name may actually derive from an early proposal for IMF "reserve
drawing rights".[pamphlet 1] The word "reserve" was later replaced with
"special" because the idea that the IMF was creating a foreign exchange
reserve asset was contentious.[4]
[edit]History
Special drawing rights were created by the IMF in 1969 and were
intended to be an asset held in foreign exchange reserves under
theBretton Woods system of fixed exchange rates.[1] After the collapse of
that system in the early 1970s the SDR has taken on a far less important
role.[5] Acting as the unit of account for the IMF has been its primary
purpose[Williamson 1] since 1972.[Williamson 5]
The IMF itself calls the current role of the SDR "insignificant". [imf
2]
Developed countries, who hold the greatest number of SDRs, are
unlikely to use them for any purpose.[Williamson 3] The only actual users of
SDRs may be those developing countries that see them as "a rather
cheap line of credit".[6]
One reason SDRs may not see much use as foreign exchange reserve
assets is that they must be exchanged into a currency before use. [Williamson
2]
This is due in part to the fact private parties do not hold SDRs: [Williamson
2]
they are only used and held by IMF member countries, the IMF itself,
and a select few organizations licensed to do so by the IMF. [7] Basic
functions of foreign exchange reserves, such as market intervention and
liquidity provision, as well as some less prosaic ones, such as
maintaining export competitiveness via favorable exchange rates, cannot
be accomplished directly using SDRs.[imf 1] This fact has led the IMF to
label the SDR as an "imperfect reserve asset".[imf 3]
Another reason they may see little use is that the number of SDRs in
existence is relatively few. As of January 2011, SDRs represented less
than 4% of global foreign exchange reserve assets. [imf 4] To function well
a foreign exchange reserve asset must have sufficient liquidity, but
SDRs, due to their small number, may be perceived to be an illiquid
asset. The IMF says, "expanding the volume of official SDRs is a
prerequisite for them to play a more meaningful role as a substitute
reserve asset".[imf 4]
[edit]Alternative to US dollar
The SDR comes to prominence when the US dollar is weak or otherwise
unsuitable to be a foreign exchange reserve asset. This usually
manifests itself as an allocation of SDRs to IMF member countries.
Distrust of the US dollar is not the only stated reason allocations have
been made, however.
One of its first roles was to alleviate an expected shortfall of US
dollars c. 1970.[Williamson 5] At this time, the US had a conservative
monetary policy[Williamson 5] and did not want to increase the total amount of
US dollars in existence.[citation needed] If the US had continued down this
path, the dollar would have become a less attractive foreign exchange
reserve asset: it would not have had the necessary liquidity to serve this
function. Soon after SDR allocations began, the US reversed its former
policy and provided sufficient liquidity.[Williamson 5] In the process a potential
role for the SDR was removed. During this first round of allocations, 9.3
billion SDRs were distributed to IMF member countries.
The SDR resurfaced in 1978 when many countries were wary of taking
on more foreign exchange reserve assets denominated in US dollars.
This suspicion of the dollar precipitated an allocation of 12 billion SDRs
over a period of four years.[Williamson 4]
Concomitant with the financial crisis of 2007–2010, the third round of
SDR allocations occurred in the years 2009[1] and 2011.[8] The IMF
recognized the financial crisis as the cause for distributing the large
majority of these third-round allotments, but some allocations were
couched as distributing SDRs to countries that had never received
any[1] and others as a re-balancing of IMF quotas, which determine how
many SDRs a country is alloted, to better represent the economic
strength of emerging markets.[8] In total, 203.4 billion SDRs were
allocated in this round.
During this time China, a country with large holdings of US dollar foreign
exchange reserves,[9] voiced its displeasure at the current international
monetary system promoting measures that would allow the SDR to "fully
satisfy the member countries' demand for a reserve currency". [10] These
comments, made by a chairman of the People's Bank of China, Zhou
Xiaochuan, drew media attention,[11]and the IMF showed some support
for China's stance. It produced a paper exploring ways the substance
and function of the SDR could be increased. [imf 2] China has also
suggested the creation of a substitution account to allow exchange of
US dollars into SDRs.[Williamson 3] When substitution was proposed before,
in 1978, the US appeared reluctant to allow such a mechanism to
become operational.[Williamson 4] It is likely just as reluctant today.
[edit]Use by developing countries
In 2001, the UN suggested allocating SDRs to developing countries for
use by them as cost-free alternatives to building foreign exchange
reserves though borrowing or running current account surpluses.[12] In
2009, a SDR allocation was made to countries that had joined the IMF
after the 1979–1981 round of allocations was complete (and so had
never been allocated any).[1] First proposed in 1997,[13] many of the
beneficiaries of this 2009 allocation were developing countries. [notes 1]

1. ^ Countries that joined the IMF post-1981 include: Albania

(1991),[14] Angola (1989),[15] Antigua and Barbuda (1982),
[16]
Armenia (1992),[17] Azerbaijan (1992),[18] Belarus (1992),
[19]
Belize (1982),[20] Bosnia and Herzegovina (1992),[21] Brunei
Darussalam (1995),[22] Bulgaria (1990),[23] Croatia (1992),[24] Czech
 Republic (1993),[25] Eritrea (1994),[26] Estonia (1992),[25] Georgia
(1992),[27]Hungary (1982),[25] Kazakhstan (1992),[28] Kiribati (1986),
[29]
Kosovo (2009),[30] Kyrgyz Republic (1992),[31] Latvia (1992),
[25]
Lithuania (1992),[25] Macedonia (1992),[32] Marshall Islands
(1992),[29] Micronesia (1993),[29] Moldova (1992),[33] Mongolia
(1991),[34]Montenegro (2007),[35] Mozambique (1984),[36] Namibia
(1990),[37] Palau (1997),[29] Poland (1986),[25] Russia (1992),[38] San
Marino (1992),[39] Serbia (1992),[40] St. Kitts and Nevis (1984),
[16]
Tajikistan (1993),[41] Timor-Leste (2002),[42] Tonga (1985),
[29]
Turkmenistan (1992),[43] Tuvalu (2010–as Tuvalu joined after the
2009 special allocation, it may not have received SDRs),
[29]
Ukraine (1992),[44]Uzbekistan (1992),[45] and Yemen (1990).[46]

[edit]Value definition
The value of the SDR is determined by the value of several currencies
important to the world’s trading and financial systems. [1] Initially its value
was fixed, so that 1 SDR = 1 US dollar,[Williamson 3] but this was abandoned
in favor of a currency basket after the 1973 collapse of the Bretton
Woods system of fixed exchange rates.[Williamson 5] Composed of the US
dollar, the euro, the British pound and the Japanese yen,[1] the basket of
currencies used to value the SDR is "weighted" meaning that the more
important currencies have a larger impact on its value. Currently, the
value of one SDR is equal to the sum of 0.423 euros, 12.1 yen, 0.111
pounds, and 0.66 US Dollars.[47]
This basket is re-evaluated every five years,[1] and the currencies
included as well as the weights given to them can then change. A
currency's importance is currently measured by the degree to which it is
used as a foreign exchange reserve asset and the amount of exports
sold in that currency.[1]
Current valuation
Due to fluctuating exchange rates, the relative value of each currency
varies continuously and so does the value of the SDR. The IMF fixes the
value of one SDR in terms of US dollars daily. The latest US dollar
valuation of the SDR is published on the IMF web site. [48]

Value of 1 SDR (XDR 1)[note 1]

    
Period  US$  JPY  GBP
DEM FRF

1981– 0.540 0.460 0.740 34.0 0.0710

1985[49] (42%) (19%) (13%) (13%) (13%)

1986– 0.452 0.527 1.020 33.4 0.0893

1990[49] (42%) (19%) (12%) (15%) (12%)

1991– 0.572 0.453 0.800 31.8 0.0812

1995[49] (40%) (21%) (11%) (17%) (11%)

1996– 0.582 0.446 0.813 27.2 0.1050

1998[49] (39%) (21%) (11%) (18%) (11%)

Period  US$  EUR  JPY  GBP

0.2280 0.1239
(21%) (11%)
1999– 0.5820 27.2 0.1050
2000[49] (39%) (18%) (11%)
= 0.3519 (32%)
[50]

2001– 0.5770 21.0 0.0984

0.4260 (31%)
2005[49] (44%) (14%) (11%)

2006– 0.6320 18.4 0.0903

0.4100 (34%)
2010[49] (44%) (11%) (11%)

2011–
0.6600 12.1000 0.1110
2015[47][note 0.4230 (37.4%)
2] (41.9%) (9.4%) (11.3%)
 1. ^ relative compositions expressed in per cent are rounded.
2. ^ The basket of currencies that values the SDR could be re-
evaluated sooner than 2015 if the IMF decides that the current
basket no longer reflects "the relative importance of currencies in
the world’s trading and financial systems".[1]

[edit]Interest rate
Special drawing rights carry a weekly determined interest rate, but no
party pays interest if an IMF member country maintains the amount of
SDRs allocated to it. Based on "a weighted average of representative
interest rates on short-term debt in the money markets of the SDR
basket currencies", interest is paid by an IMF member country if it holds
less SDRs than it was allocated, and interest is paid to a member
country if it holds more SDRs than the amount it was allocated. [1]
[edit]Allocations
Special drawing rights are allocated to member countries by the IMF. A
country's IMF quota, the maximum amount of financial resources that it
is obligated to contribute to the fund, determines its allotment of SDRs.
[1]
Any new allocations must be voted on in the SDR Department of the
IMF and pass with an 85% majority.[imf 3] All IMF member countries are
represented in the SDR Department,[7]but this is not a one country, one
vote system.[citation needed] Voting power is determined by a member
country's IMF quota.[51] For example, the US has 16.7% of the vote as of
March 2, 2011.[52]
Allocations are not made on a regular basis and have only occurred on several occasions. The
first round took place due to a situation that was soon reversed, the possibility of an
insufficient amount of US dollars because of US reluctance to run the deficit necessary to
supply future demand. Extraordinary circumstances have, likewise, led to the other SDR
allocation events.

Date Amount

XDR 9.3
1970–1972[Williamson 5]
billion[1]

1979–1981[1] XDR 12.1

 billion[1]

XDR 161.2
August 28, 2009[1]
billion[1]

XDR 21.4
September 9, 2009[sa 1]
billion[1]

Sometime after March XDR 20.8

3, 2011[sa 2] billion[8]

1. ^ A special allocation of SDRs became effective August 10,

2009 and was issued on September 9, 2009, to countries that
joined the IMF after 1981 and so had never been allocated any. [1]
2. ^ This allocation was made under the 2008 Quota and Voice
Reforms to 54 countries with "dynamic economies" that were
under-represented in the previous quota system. Date of
allocation may vary from country to country, as allocation will occur
"for those members that have consented to their increases once
quota subscriptions are paid".[8]

[edit]Exchange
In order to use its SDRs, a country must find a willing party to buy them.
[Williamson 4]
The IMF acts as an intermediary in this voluntary exchange; it
also has the authority under the designation mechanism to ask member
countries with strong foreign exchange reservesto purchase SDRs from
those with weak reserves.[1] The maximum obligation any country has
under this mechanism is currency equal to twice the amount of its SDR
allocation.[imf 1] As of 2011, SDRs may only be exchanged for euros,
Japanese yen, UK pounds, or US dollars.[imf 1] The IMF says exchanging
SDRs can take "several days".[imf 5]
It is not, however, the IMF that pays out foreign currency in exchange for
SDRs: the claim to currency that SDRs represent is not a claim on the
IMF.[1]
[edit]Other uses
Unit of account
Some international organizations use the SDR as a unit of account.
[53]
The IMF says using the SDR in this way "help[s] cope with exchange
rate volatility".[imf 3] As of 2001, organizations that use the SDR as a unit
of account, besides the IMF itself, include: African Development
Bank, Arab Monetary Fund, Asian Development Bank, Bank for
International Settlements,[imf 6] Common Fund for Commodities, East
African Development Bank, Economic Community of West African
States, International Center for Settlement of Investment
Disputes, International Fund for Agricultural Development, and Islamic
Development Bank.[pamphlet 2] It is not only international organizations that
use the SDR in this way. JETRO uses SDRs to price foreign aid.[54] In
addition, charges, liabilities, and fees prescribed by some international
treaties are denominated in SDRs.[55]
Use in international law
In some international treaties and agreements, SDRs are used to value
penalties, charges or prices. For example, the Convention on Limitation
of Liability for Maritime Claims caps personal liability for damages to
ships at XDR 330,000.[56] The Montreal Convention and other treaties
also use SDRs in this way.[57]
Currency peg
The IMF says, "the SDR may not be any country’s optimal basket",[imf
6]
but a few countries do peg their currencies to the SDR. One possible
benefit to nations with SDR pegs is that they may be perceived to be
more transparent.[imf 6] As of 2000, the number of countries that did so
was four.[58] This is a substantial decrease from 1983, when 14 countries
had SDR pegs.[53] As of 2007[59] and 2010,[60] Syria pegs its pound to the
SDR.

(Lerms)
Liberalized Exchange Rate Management System (Lerms)
 In view of the continuing pace of liberalization policy, the
Liberalized Exchange Rate Management System (LERMS) has
assumed a special significance in the arena of international
financial management. Already the rupee has been made fully
convertible on current account. The main objective of the
Government is to move the rupee finally into the era of full
convertibility to boost exports. The Government in this
connection issued memorandum of LERMS. The basic
features of LERMS can be stated as follows:
 The exchange rate of the rupee will be determined purely
on the basis of market forces of demand and supply. It may,
therefore, also could be described as “market determination
exchange rate system”.
 All receipts whether on current or capital account and of
the balance of payments and whether on government or
private account will be converted entirely at the market rate of
exchange.
 NRIs will be permitted to maintain the Residents Foreign
Currency Account (RFCA) to which the entire foreign exchange
brought in by them will be credited. Moreover, those Indians
who get receipts from abroad now can have the benefit of
getting the entire foreign currency credit to them at the market
rate.
 Exporters and the recipients of inward remittances are
required to surrender the foreign currency received by them to
the authorized dealers in foreign currency. However, they are
allowed to maintain 15% of the receipts, in foreign currency
account with an authorized dealer.
 There is no obligation on the authorize dealers to sell any
portion of their foreign currency receipts direct to the Reserve
Bank as was the case so far. They can sell the receipts in the
Indian Market either to other authorized dealers or for any
permissible transactions.
 Foreign currency remittances abroad are subject to the
exchange control regulations, Of Course, it does not mean that
 the Reserve Bank of India's permission would be required in
every case.
 The intervention currency of the Reserve Bank continues
to be US Dollar. It may at its discretion buy and sell US dollars
from/to various authorized dealers.