PRESENTATION MADE BY: Monika Rawat Annie Nitisha Jasmeet Kritika

UNDER GUIDANCE
OF DR. RENUKA SHARMA

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.

OBJECTIVE OF FINANCIAL SYSTEM

"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."

FINANCIAL SYSTEM SAVING FINANCE INVESTMENT CAPITAL FORMATION ECONOMIC GROWTH

The Organisation of the Financial System in India

i) Organised sector

i) Unorganised sector.

ORGANISED SECTOR
COMPRISES OF BANKS,FINANCIAL AND INVESTMENT INSTITUTIONS SHORT TERM FUNDS ARE MAINLY PROVIDED BY COMMERCIAL AND COOPERATIVE 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, lending pawn 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