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PRESENTATION MADE BY: UNDER GUIDANCE

Monika Rawat

Annie OFNitisha

Jasmeet DR. RENUKA SHARMA

Kritika


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INDIAN FINANCIAL SYSTEM


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INTRODUCTION

The term financial system is a set of inter-related

activities/services working together to achieve

some predetermined purpose or goal. It includesdifferent markets, the institutions, instruments,

services and mechanisms which influence the

generation of savings, investment capital

formation and growth.


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"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


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FINANCIAL SYSTEM

SAVINGFINANCE

INVESTMENT

CAPITAL FORMATIONECONOMIC GROWTH


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The Organisation of the Financial System in India

i) Organised sector

i) Unorganised sector.


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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.


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Unorganised Financial System

Relatively less controlled moneylenders,

indigenous bankers, lending

pawn brokers, landlords, traders etc.

This part of the financial system is notdirectly amenable to control by the Reserve

Bank of India (RBI).


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RBI

The Reserve Bank of India as the central bank of the country, is at the head of thisgroup. 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 Banksiv) 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


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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.


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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


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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 MarketIssue 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


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TH NKYOU

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