In accordance with the requirements of the syllabus, the discussion in the edition has been divided into two sections. Each section contains three modules. The coverage, organisation and contents of these modules is as follows:

Module 1 on `Commercial Banking` discusses assets and liabilities of commercial banks, trade off between liquidity and profitability, Narasimham Committee Reports on Financial and Banking Sector Reforms, banking developments in India during the pre-nationalisation phase and post-nationalisation phase, deposit mobilization and bank lending trends, banking sector reforms, group-wise performance of the banking sector, and new technology in banking in India.

Module 2 on `Central Banking` discusses the general central banking and developmental functions of Reserve Bank of India, monetary policy of the Reserve Bank of India, control of currency and credit by the Reserve Bank of India, short-term liquidity management by the Reserve Bank of India, and issues pertaining to microfinance and self-help groups.

Module 3 on `Financial Markets` discusses the Indian money market and the Indian capital market in detail. The chapter on Indian money market discusses the unorganised and organised sectors of the Indian money market, features of the Indian money market, and money market reforms in India. The chapter on Indian capital market highlights the role of capital market in industrial growth, capital market reforms undertaken to strengthen the capital market in India, role of SEBI, mutual funds, and forward, future and commodity markets.

Module 4 on `Public Finance` starts with a discussion on meaning and canons of taxation, direct and indirect taxes, changing trends in tax and non-tax revenue in India, and tax policy in India. This is followed by a discussion related to various issues pertaining to public expenditure (like reasons for intensive and extensive expansion of government functions leading to an increase in public expenditure, trends in public expenditure in India etc.). The chapter on public expenditure is followed by the chapter on public debt which clearly distinguishes between various types of public debt, highlights the burden of internal and external public debt, and presents a detailed review of the debt obligations of the Central and State governments in India. The last chapter of this module (chapter 10) distinguishes between the concepts of deficits and presents a detailed and analytical discussion of the fiscal policy in India (including a discussion on FRBM Act.)

Module 5 on `International Trade and WTO` starts by highlighting the gains from international trade and then proceeds to discuss the various issues related to balance of payments (types of disequilibrium in balance of payments, causes of disequilibrium and measures to correct disequilibrium etc.) This is followed by a detailed discussion on the balance of payments situation in India with special focus on the period since 1991. The last chapter of this module is devoted to WTO and its impact on the Indian economy. We specifically point out how the entire negotiation process under WTO is highly tilted in favor of developed countries and against the developing countries.

Module 6 on `Exchange Rate Determination` explains the meaning of the rate of exchange and how rate of exchange is determined (in this context mint parity theory, the purchasing power parity theory and balance of payments theory are taken up for discussion). This is followed by a detailed discussion on foreign exchange market with special focus on the functions of this market. The last chapter of this module explains how Reserve Bank of India has intervened in the foreign exchange market to avoid volatile fluctuations in exchange rate (the policy followed by Reserve Bank in this regard is known as the policy of `managed floating`).

Contents -

Section – I
Module 1: COMMERCIAL BANKING
1. Commercial Banking
2. Narasimham Committee Reports on Financial and Banking Sector Reforms
3. Commercial Banking In india
Module 2: CENTRAL BANKING
4. The Reserve Bank of India
Module 3: FINANCIAL MARKETS
5. Indian Money Market
6. Capital Market in India
Section – II
Module 4: PUBLIC FINANCE
7. Tax and Non-Tax Sources of Public Revenue
8. Public Expenditure
9. Public Debt
10. Concepts of Deficits, Fiscal Imbalance and FRBM Act
Module 5: INTERNATIONAL TRADE AND WTO
11. Balance of Trade and Payments
12. India`s Balance of Payments Situation Since 1991
13. WTO and India
Module 6: EXCHANGE RATE DETERMINATION
14. Determination of Exchange Rate
15. Foreign Exchange Market – Concept and Functions
16. Reserve Bank`s Intervention and Exchange in India Rate Management