PRESENTATION MADE BY: UNDER GUIDANCE Monika Rawat Annie OF Nitisha Jasmeet DR. RENUKA SHARMA Kritika

INDIAN FINANCIAL SYSTEM

INTRODUCTION

The term financial system is a set of inter-related activities/services working together to achieve some predetermined purpose or goal. It includes different markets, the institutions, instruments, services and mechanisms which influence the generation of savings, investment capital formation and growth.

"supply funds to various sectors and activities of the economy in ways that promote the fullest possible utilization of resources without the destabilizing consequence of price level changes or unnecessary interference with individual desires."

OBJECTIVE OF FINANCIAL SYSTEM

FINANCIAL SYSTEM

SAVINGFINANCEINVESTMENT CAPITAL FORMATIONECONOMIC GROWTH

The Organisation of the Financial System in India

i) Organised sector

ii) Unorganised sector.

ORGANISED SECTOR

•COMPRISES OF BANKS,FINANCIAL AND INVESTMENT INSTITUTIONS•SHORT TERM FUNDS ARE MAINLY PROVIDED BY COMMERCIAL AND CO-OPERATIVE BANKS

The organised financial system comprises the following sub-systems: 1. Banking system 2. Cooperative system 3. Development Banking system

(i) Public sector (ii) Private sector 4.Money markets 5. Financial companies/institutions.

Unorganised Financial System

Relatively less controlled moneylenders, indigenous bankers, lendingpawn brokers, landlords, traders etc. This part of the financial system is not directly amenable to control by the Reserve Bank of India (RBI).

RBI The Reserve Bank of India as the central bank of the country, is at the head of this group. Commercial banks themselves may be divided into two groups, the scheduled and the non scheduled. A. Public Sector Banks i) State Bank of India State Bank Group ii) Associate Bank iii) 14 Nationalized Banks (1969) Nationalized Banks iv) 6 Nationalized Banks (1980) v) Regional Rural Banks Mainly sponsored by Public Sector Bank B. Private Sector Banks i) Other Private Banks; ii) New sophisticated Private Banks; iii) Cooperative Banks included in the second schedule; iv) Foreign banks in India, representative offices, and v) One non-scheduled banks

Cooperative Sector

The cooperative banking sector has been developed in the country to supplant the village moneylender, the predominant source of rural finance, as the terms on which he made finance available have generally been usurious and detrimental to the development of Indian agriculture

Central Co-operative Banks These are the federations of primary credit societies in a district. These banks finance member societies within the limits of the borrowing capacity of societies. They also conduct all the business of a joint-stock bank.

MONEY MARKET-SHORT TERM-FIANCIAL ASSESTS THAT ARE NEAR SUBSTITUTE MONEY-GOLD etc

CAPITAL MARKET-LONG TERM PERIOD-FINANCIAL INSTRUMENTS EG EQUITY SHARES PREFERENCE SHARES

Intermediary Market Role

Stock Exchange Capital Market Secondary Market to securities

Investment Bankers Capital Market, Credit Market Corporate advisory services, Issue of securities

Underwriters Capital Market, Money Market Subscribe to unsubscribed portion of securities

Registrars, Depositories, Custodians Capital Market Issue securities to the investors on behalf of the company and handle share transfer activity

Primary Dealers Satellite Dealers Money Market Market making in government securities

Forex Dealers Forex Market Ensure exchange ink currencies

THANK YOU