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Reflecting the emerging economic and financial environment in the post-liberalization era, the role/ job of financial managers in India has become more important, complex and demanding, The key challenges are, intern in the areas specified below: (a) financial structure, (b) foreign exchange management, (c) treasury operations, (d) investor communication, (e) management control and (0 investment planning. The main elements of the changed economic and financial environment, inter alia, are the following:

• Considerable relaxation in industrial licensing framework in terms of the modifications in the Industries Development (Regulations) Act;
• Abolition of the Monopolies and Restrictive and Trade Practices Act and its replacement by the Competition Act;
• Repeal of Foreign Exchange Regulation Act (FERA) and enactment of a liberalized Foreign Exchange Management Act (FEMA);

• Abolition of Capital Issues (Control) Act and the setting-up of the Securities and Exchange Board of India (SEBI) under the SEBI. Act for the regulation and development of the securities market and the protection of investors;
• Enactment! of the Insurance Regulatory and Development Authority (IRDA) Act and the setting-up of the IRDA for the regulation of the insurance sector and the consequent dismantling of the monopoly of UC and GIC and its subsidiaries;
• Emergence of the capital market at the center-stage of the financing system and the disappearance of the erstwhile development/public financial/term lending ~institutions from the Indian financial scene;
• Emergence of a’ highly articulate and. sophisticated money market;’
• Globalization,. convertibility of rupee, liberalized foreign resentments in India, Indian foreign investment abroad;
• Market-determined interest rate, emergence of highly innovative financial instruments:

• Growth of mutual funds; credit rating, other financial services;
• Rigorous prudential, credit risk management framework for banks and financial institutions;
• Access 10 Euro-issues, American Depository Receipts (ADRs);
• Privatization/disinvestment of public sector undertakings.

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