COMMERCIAL BANKING

Facilitator: Prof. Satish Kumar

• The proper management of money is
called finance
• “Managing or the Science of
managing money matters”
• Finance refers to funds or monetary
resources needed by individuals,
business houses and the government
 Financial System in India
• Financial Markets

• Financial Institutions

• Financial Instruments

• Financial Services
 Financial Markets
• Money Market
– Lenders
– Borrowers
• Capital Market
– Primary capital Market
– Secondary capital Market
Government Securities Market
Foreign Exchange Market
 Financial Institutions
• Monetary Institutions: central bank,
commercial banks, and cooperative
banks
• Non Monetary Institutions: savings
banks, development banks, Unit
Trust
• Intermediaries – Banks
• Non intermediaries- IDBI, IFC,
NABARD
 Financial Instruments
• Money market instruments- treasury
bills, bills of exchange or trade bills
etc.
• Capital Market Instruments –
ordinary shares , preference shares
etc.
 Financial Services
• Financial services include all
activities connected with the
transformation of savings into
investment
- fund or asset based financial
services
- lease fianancing
- housing finance
- bills discounting
 Banking – Origin and
Evolution
• Bank word derived from Italian word
Banco

• Banck for joint stock fund

• Banca – accumulation of either stock
or money
• Bancus or banque – bench (Jews ) -
Bankrupt
Evolution of Banking
Institutions