Pherwani Committee recommended to establish National Stock Exchange (NSE) in India in the year 1991. Thus NSE is formed in 1992 by the IDBI under the authorization of Government of India to encourage stock exchange reform through system modernization and competition.
The trading started in mid-1994 only. Trading of treasury bills, equity shares, bonds and government securities are done via NSE. NSE India is holding 3rd position since last four years in terms of total number of trading per calendar year.
The two new references rates of the National Stock Exchanges were MIBOR (Mumbai Inter Bank Offer Rate) and MIBID (Mumbai Inter Bank Bid Rate) and were launched on June 15, 1998. Both MIBOR and MIBID work back to back. MIBOR represents the lending rate for loans whereas the rate for receipts is termed as MIBID.
The organization was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993. The Capital Market (Equities) segment set about operation in November 1994 and operations in Derivatives segment commenced in June 2000.
Introduction of internet trading, Exchange traded funds (ETF), stock derivatives and the first volatility index - IndiaVIX in April 2008, by NSE saw the rapid growth of Indian capital market in the recent years.
Currency derivatives came into existence with the launch of Currency Futures in USD INR by NSE in August 2008. Interest Rate Futures was also introduced in India by NSE on 31st August 2009.
The index which shows trading trend in a day in NSE is Nifty.