22.32 ndian onom
and enhancing the efficiency of Government
mArginAl stAnDing fAcility (msf) schemes has been suggested by a Planning
Operationalised on the lines of the existing Commission Working Group in the context of
Liquidity Adjustment Facility (LAF – Repo) in the Eleventh Five Year Plan. The Smart Card
May 2011 under which all Scheduled Commercial (i.e., MASCs) has been recognised to be useful in
Banks can avail overnight funds, up to one per implementation of various Central government
cent of their Net Demand and Time Liabilities schemes like, PDS, Indira Awas Yojana and
(NDTL) outstanding at the end of the second National Rural Employment Guarantee Scheme
preceding fortnight. The facility is availed at an (NREGS).
interest which is 100 basis points above the LAF Based on a web-enabled information system
repo rate, or as decided by the Reserve Bank from the Smart Cards will be based on unique ID,
time to time. sharing ID, multi-application and access control.
The whole system will consist of front, middle,
mArginAl utility and back end. The electronic card will be the
The increase in satisfaction/utility a consumer ‘front’ end of the system which will be the point
derives from the use/consumption of one of delivery where the smart cards will be read and
additional unit of a product in a particular time used. The office at ‘middle’ will be responsible for
period–it goes on decreasing, i.e., the diminishing changing and updating the card periodically (i.e.,
marginal utility. monthly, quarterly, annually) depending on the
type of information and requirement and transfer
mArket cApitAlisAtion information from the front end to the back end
and vice versa. The office at ‘back’ end will contain
A term of security market which shows the
the computerised records, guidelines, accounts
market value of a company’s share—calculated by
and management information systems. The
multiplying the current price of its share to the
complete digitisation of records will be required
total number of shares issued by the company.
by this system.
mArket mAker
mArshAll plAn
An intermediary (may be an individual or a
firm) in the secondary market who buys and sells A programme of international aid named after
securities/shares simultaneously quoting two- General George Marshall (a US Secretary of State)
way rates. For example, on the over the counter under which North America contributed around
Stock Exchange of India (OTCEI) only ‘market 1 per cent of its GDP in total (between 1948–
markers’ are allowed to operate. The Discount and 52) to western Europe to rebuild the economies
Finance House of India (SBI DFHI) is the chief ravaged in Second World War.
market maker in the ‘money market’ of India.
A market maker plays a very vital role menu cost
by providing sustainability to liquidity in the
secondary market. The cost a firm bears in changing the prices of
its product—it includes retraining the sales staff,
mAscs reprinting of the new price list, labelling of goods,
and informing the customers about the price
The Multi-Application Smart Cards (MASCs) change. Higher menu costs discourage the firms
system to facilitate simplification of procedures going for frequent price changes.