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    The document summarizes key aspects of India's financial system. It describes how a financial system plays a vital role in economic growth by intermediating funds between savers and investors. It then outlines the main components and functions of India's financial system, including formal institutions like banks, mutual funds, and insurance organizations as well as informal institutions. It also discusses key elements like financial intermediaries, markets, instruments, and regulatory bodies that make up India's financial system and help allocate resources efficiently.

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    Afm Presentation

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    Vipin Gupta
    35 views11 pages
    The document summarizes key aspects of India's financial system. It describes how a financial system plays a vital role in economic growth by intermediating funds between savers and investors. It then outlines the main components and functions of India's financial system, including formal institutions like banks, mutual funds, and insurance organizations as well as informal institutions. It also discusses key elements like financial intermediaries, markets, instruments, and regulatory bodies that make up India's financial system and help allocate resources efficiently.

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    The document summarizes key aspects of India's financial system. It describes how a financial system plays a vital role in economic growth by intermediating funds between savers and investors. It then outlines the main components and functions of India's financial system, including formal institutions like banks, mutual funds, and insurance organizations as well as informal institutions. It also discusses key elements like financial intermediaries, markets, instruments, and regulatory bodies that make up India's financial system and help allocate resources efficiently.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    35 views11 pages

    Afm Presentation

    Uploaded by

    Vipin Gupta
    The document summarizes key aspects of India's financial system. It describes how a financial system plays a vital role in economic growth by intermediating funds between savers and investors. It then outlines the main components and functions of India's financial system, including formal institutions like banks, mutual funds, and insurance organizations as well as informal institutions. It also discusses key elements like financial intermediaries, markets, instruments, and regulatory bodies that make up India's financial system and help allocate resources efficiently.

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    Financial System

    A financial systems plays a vital role in the economic growth of a country. It intermediates with the flow of funds between those who save a part of their income to those who invest in productive assets.

    It mobilizes & usefully allocates scare resources of a country.

    Functions
    Facilitates capital formation by providing a link between savers & Investors a market for creation and exchange of financial assets

    helps in efficient allocation of resources in the economy by:

    facilitating price discovery

    reducing the cost of the transactions

    Providing liquidity

    Mobilization of funds

    Indian Financial System


    Formal
    Commercial Bank NBFCs Mutual Funds Insurance Organizations

    Informal
    Individual Money lenders Funds or Associations Local Brokers Chit fund companies

    Components of Financial System


    Financial Intermediaries Banks NBFCs, Includes Development financial institutions & State level financial institutions Mutual Funds Insurance Organizations Financial Markets Money markets (Short term) Capital Markets (long term) Main Participants FIIs Mutual Funds Individuals Corporates Insurance Cos Financial Instruments Primary securities (Direct) Eg. Debentures, equity shares,etc Secondary Securities (Indirect) Eg. Bank deposits, Insurance policies,etc Financial Services
    Merchant Banking, Credit rating, etc. Bridges the gap between the knowledge on the part of investors & increasing sophistication of financial instruments & Markets

    Ministry Of Finance RBI Commercial Banks Capital Markets Primary Markets Secondary Markets SEBI Mutual Funds IRDA Insurance Companies

    PDs, DFIs, SIDCs


    NBFCs Money Market

    Ministry Of Consumer Affairs & Agriculture

    FMC Commodity Exchanges

    Money Market
    The Money market is a market for financial assets that are close substitutes for money.

    It is a market for overnight to short term funds & instruments having a maturity period of one or less than one year.
    It is an over the counter market for short term instruments for working capital needs. Main Players RBI &Banks Characteristics Not a single market but a collection of markets

    PDs, NBFCs, PSUs & PFs Corporates & OCBs


    Individuals & NRIs

    Wholesale market of short term debt instruments


    Principal feature is honor where creditworthiness of the participants is important

    Money Market Instruments


    Commercial Paper. Call Money market. Inter-bank term money. Money market mutual funds. Repo. Treasury Bills. Commercial Bills. Inter-corporate Deposits. Certificate of Deposit.

    Capital Market
    It is a market for long term funds which are used for financing fixed investment.

    It has 2 segments Primary market (New issue market) & Secondary market (Stock Exchange).
    Main Players Banks PDs, NBFCs, PSUs, & PFs Corporates & FIIs Individuals & NRIs Insurance Cos. & Mutual Funds

    Regulatory Framework
    Company Law Regulation Issue of share Prospectus Rights Issue Debentures Allotment of shares Shares Certificates Securities Contracts (Regulation) Act Object Recognition of stock exchange Penalties Securities Contracts (Regulation) Rules Recognition of stock exchange Membership Qualification

    SEBI
    Establishment.

    Power & Functions.


    Penalties. SAT. SEBI Intermediaries Regulations 2008. SEBI Public Offer & listing of securitized Debt Instruments regulation 2008 Act. SEBI Buy Back of securities by listed companies Regulation 1998.

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