Question

assume you are the director of the financial market department of a central Bank and you are tasked by the Bank to formulate a capital market development plan for the execution over the next three years with the following three objectives: creation of investment opportunities, broadening of investment base , and improving access,efficiency & transparency?

Answer 1

If I am assigned with the task for capital market Development plan which will be focused at creation of the investment opportunities along with broadening of the investment and improving access, efficiency and transparency, I would be looking to incorporate following practices-

A. A proper structure of credit mechanism has to be followed which will be based upon providing loans to the the desired borrowers who have better creditworthiness.

B. There should also be the proper check on quality of the management of the company when issuance of the loan.

C. Adequate public disclosure norms should be followed by the banks in order to protect the interest of the stakeholders

D. Continuous improvement into the asset quality and following up with the rules and regulation of the banking act in order to to increase the reputation and charge a premium.

E.continuous support to the micro lending industry so that there could be a credit boom in the economy.

F. Adoption of the best industry benchmarks and gaining of the leadership in the industry in order to increase the competitiveness of the bank