The instruments of capital market include marketable and
The financial system’s most important
feature is the central bank.
Central bank takes deposits from different banks and in specific cases from
outside governments which deposit their foreign trade and gold reserves for
protection. The central bank contributes
the foreign trade reserves of the nation while trying to keep up the savings
The country’s commercial bank needs to keep a certain percentage with the
central bank of their deposits. The cash reserve requirements shift every now
and then, relying on the necessities.
b) The central bank acts as a lender of
last resort –
Ans : The central bank acts as a
lender of last resort as it offers money to the part banks in order to improve
their cash reserve position by rediscounting the first class charges if there
is an emergency in the banks.
Member banks can add to their money assets the advances on short term approved
securities at a short period of time.
This benefit of transforming the assets into cash helps the member bank to keep
money and credit framework economy, liquidity.
Central bank accepts all the responsibility of demands for adjustment of
commercial banks as it acts as a lender of last resort.
4. Distinguish between Money Market and
1. The market
which are for short term basis i.e less than one year are known as money
1. The market
which are for long term basis i.e for more than one year are known as capital
instruments of money market include call money market, commercial bills and
papers, banker’s acceptance, repurchase agreement, treasury bill.
instruments of capital market include marketable and non marketable.
3. They do not
consists of secondary market.
3. They include
4. The nature of
money market is informal.
4. The nature of
capital market is formal.
5. The risk in
money market is relatively low.
5. The risk in
capital market is comparatively high.
6. The aim is to
satisfy the businesses short term credit needs.
6. The aim of
capital market is to satisfy the
businesses long term credit needs
5. A report on :
Central Bank Of Oman (CBO)
The Central Bank of Oman commenced its business from April 1st, 1974.
The maintenance of the internal and external estimation of the national money
is in the hands of The Central Bank of Oman.
The central bank is Oman’s only coordinated controller of financial services
To maintain the financial development for the benefit of the country, It
focused in giving money and financial stability.
A the banks and non banking financial
associations in Oman are managed and controlled by Central bank.
Board meetings –
Central Bank holds board meetings every year twice or thrice to discuss about
the Oman’s economic and financial position in local and worldwide advancements.
In the board meetings, the most recent developments and advancements are
discussed and also suggestions are taken up for financial sector as well as
banking sector of Oman. To adopt the latest technologies it assures constant
The Board takes important decisions in meetings regarding to the issues of
financial and administrative matters in Central Bank of Oman.
Annual Report –
The annual report of Central Bank comes out every year with each details. As
the annual report of 2016 included the evaluation of the general macroeconomics
of Oman and also the main parts of the economy and also the evaluation of the
close term economy.
Payment Systems of Central Bank of
Payment systems are the framework that is used to settle the exchanges related
to money through the exchange of
monetary value and in order to make such a trade possible it includes the
establishments, individuals, rules, regulations, procedures, tools, etc.
The Central Bank of Oman maintains a well organized payment system :
– They maintain the system of financial by reducing the risk in credit
– For carrying an effective and efficient monetary drive, central bank provides
a stage for the operations related to money strategies.
– Central bank of Oman has an immense of systematic value and their orderly and
systematic working is of great importance for the economic and financial
Treasury Bills –
Treasury bills are the bills of the Government of Sultanate of Oman’s
instruments that are of short term to finance their everyday intermittent
Central bank of Oman is a fiscal agent of the government.
Therefore, the Government has appointed the Central Bank of Oman officially to
accept the role on behalf of the treasury bills as a paying and receiving agent
and Manager of issue.
The maturity period to issue the treasury bills cannot exceed more than one
year and therefore the period can only be of 91 days or 182 and 364 days.
Banks are given assistance to profitably invest their surplus assets by the
treasury bills that are exceedingly secured instruments.
Functions Of Central Bank Of Oman –
The functions of the central bank of Oman consist of :
Central bank acts as a Banker to the government
Credit and investment functions
Clearing house functions.
Certificate of Deposits-
Certificates of deposit is a financial deposit tool issued by the central bank
in short term to the authorized banks, when the central bank thinks it is