INDIAN FINANCIAL

SYSTEM

PRESENTED BY:-
VINDHYA GOEL
INTRODUCTION:
 Economic growth and development of any country
depends upon a well defined financial system.

 Financial system play a significant role in economic

growth of the country by mobilizing surplus funds and
utilizing them effectively for productive purpose.
FINANCIAL SYSTEM

FLOW OF FUNDS
SEEKERS OF FUNDS FLOW OF FINANCIAL SUPPLERS OF FUNDS
(MAINLY BUSINESS SERVICES (MAINLY HOUSEHOLDS)
FIRMS & GOVT.)
FUNCTION OF FINCIAL SYSTEM
 Saving Function

 Liquidity Function

 Payment Function

 Risk Function
 COMPONENTS OF INDIAN
FINANCIAL SYSTEM

Financial Financial Financial Financial

Institutions Markets Instruments Services
FINANCIAL INSTITUTION
 Financial institutions are the intermediaries who
facilitates smooth functioning of the financial system
by making investors and borrowers meet.
 They mobilize savings of the surplus units and
allocate them in productive activities promising a
better rate of return.
 act as financial intermediaries because they act as
middlemen between savers and borrowers.
TYPES OF FINANCIAL INSTITUTION

 Banking Institution

 Non Banking Institution

FINANCIAL MARKETS
Financial market is a mechanism Capital
that allows people to easily buy market

and sell (trade) financial

Insurance Commodity
securities (such as stocks and market market
Financial
bonds),commodities (such as market

precious metals or agricultural

goods) at low transaction costs.
Derivative Money
market market
TYPES OF FINANCIAL MARKETS
 Capital markets consist of:
Stock markets-which provide financing through the issue of shares.
Bond markets- which provide financing through the issue of bonds.

 Commodity markets - which facilitate the trading of commodities.

 Money markets - which provide short term debt financing and
investment.
 Derivatives markets - which provide instruments for the management
of financial risk.
 Insurance markets - which facilitate the redistribution of various risks.
CAPITAL MARKET

 Deals in long term instruments and sources of funds.

 Functioning as an institutional mechanism to channelize funds

from those who save to those who needed for productive
purpose.
 STRUCTURE OF
CAPITAL MARKETS

PRIMARY SECONDARY
MARKETS MARKETS
MONEY MARKET
 Deals in short term instruments and sources of funds

 Money market is the global financial market for short-term

borrowing and lending. It provides short-term liquidity
funding for the global financial system.
 The money market is where short-term obligations such as
commercial paper and bankers' acceptances are bought and
sold.
FINANCIAL INSTRUMENTS

 Defined as a market for short term money and financial assets

which are near substitute of money.

 It is represented by financial assets which can be converted

into money with minimum transaction cost.
FINANCIAL SERVICES

 Financial services refer to services provided by the finance

industry.

 The finance industry covers a broad range of organizations

that deal with the management of money. Among these
organizations are banks, credit card companies, insurance
companies, consumer finance companies, investment funds
and some government sponsored enterprises.
THANKYOU...