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