Chapter 17
* The author is indebted to Ms Reshama Deshmukh, Mr R. Dwarakanathan, his colleague and his banker-friend, Mr. C. Radhakrishnan for the inputs provided by them for writing this chapter.
* Badla is an Indian equivalent of the carry-forward system. Badla trading involves buying stocks with borrowed funds, in which the stock exchange acts as an intermediary. The interest rate is determined by the demand for the stock in question. The Badla trader can borrow for a maximum period of 70 days, after which he or she has to repay the financier through the Exchange. Badla system was devised by the Bombay Stock Exchange as a means of solving the permanent problem of lack of liquidity in the secondary market that deals with buying and selling ...
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