Lot of discussion is going on these days on the issue of ‘Participatory Note’ (P Notes) used in financial sector/money market. What is Participatory Note ?
[Pick up the correct statement(s)]
1. It is nothing but another name of the banking operation by which banks exchange Indian Rupees into US Dollars without depositing a single rupee in the account of
the party who are NRIs. The entire operation is carried out by the banks solely on the basis of the credit and goodwill of the NRI party.
2. It is an offshore derivative instrument used by overseas buyers/investors who buy shares of Indian companies listed in Indian Stock Exchange anonymously.
3. It is nothing but a type of undertaking given to the banks that they should continue investing money in stock markets on behalf of the NRIs and in case the market crashes NRI’s will make the losses good without delay.