Anu Sahi

Assistant Professor
School of Management Studies
APJIMTC
Jaladhar

Finance is the study of how and under what terms

savings (money) are allocated between lenders and
borrowers.
Finance is distinct from economics in that it
addresses not only how resources are allocated but
also under what terms and through what channels
Financial contracts or securities occur whenever
funds are transferred from issuer to buyer.

Gurley (1950), Shaw(1960) and Goldsmith (1969)

discussed stages in evolution of financial system
on the basis of per capita income.
Per capita Income
Development of
Financial System

Low per capital Income

Low level of
development
Less financial Intermediation

High per capita Income

High Level of
developmentMore financial Intermediation

More per capita Income- More Chances of

Market based Financial System

Less Per capital Income- More Chances of

Bank Based Financial System

Merchant Banking
Depository
Leasing
Factoring
Venture Capital
Credit Rating
Mutual Funds
Plastic Money

RBI
SEBI
IRDA