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    Add as FriendIndian FInancial System

    by: deepa

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    2 : FORMAL AND INFORMAL FINANCIAL SECTOR Formal financial sector is characterized by the presence of an organized, institutional and regulated system. Informal financial sector is an unorganized ,non- institutional, and non- regulated system dealing with the traditional and rural spheres of the economy.
    3 : Components of the Formal Financial System Financial Institutions Financial Markets Financial Instruments Financial Services
    4 : Financial Institutions Banking Institutions: Participate in the economy's payment mechanism, deposit liabilities constitute a major part of national money supply. Non-Banking Institutions: LIC, SIDBI, IIBI, IFCI ( All India Financial Institutions), SFCs & SIDCs
    5 : Financial Markets Primary ( Direct) Market or New Issue Market: Dealing in the new financial claims or new securities. Secondary Market: Dealing in the securities already issued or existing or outstanding.
    6 : Financial Markets Money Markets: Highly liquid short term debt – instruments market including Call Money Market, Certificates of Deposits, Commercial Papers and Treasury Bills. Capital Markets: Market for Long-Term securities and provides risky capital in the form of equity.
    7 : Financial Instruments Primary Securities: Equity, Preference, Debt and Various combinations. Secondary Securities: Mutual Fund Units and Insurance Policies etc.
    8 : Financial Services Depositories Custodial Credit Rating Leasing Portfolio Management Underwriting etc.
    9 : Functions of the Financial system To link the savers & investors. To inspire the operators to monitor the performance of the investment. To achieve optimum allocation of risk bearing. It makes available price - related information. It helps in promoting the process of financial deepening and broadening

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