Evolution of Financial System

Financial System requires :Transfer of financial assets Financial market Rate of return Instruments Intermediaries Mobilisation of savings

Evolution:

Nationalization RBI in 1948 Imperial Bank was renamed as SBI in1956 245 LIC were brought under govt. control under LIC 14 major commercial banks in1969 GIC was reorganized

UTI

Starting of UTI It is the oldest and largest mutual fund. It was started in 1964. Development Banks Industrial Finance Corporation of India State Financial Corporation Industrial Credit And Investment Bank Industrial Development Bank of India

Agriculture Finance

Agricultural Refinance & Development Co. To provide refinance to banks to finance projects such as irrigation, hoticulture 1982 handed over to NABARD Foreign Banks The Export And Import Bank Main objective was to provide financial assistance to importers and exporters

Housing Finance

The National Housing Bank in 1988 Both at regional and rural levels Mutual Funds Provides investment avenues to small investors Both private and public sector banks are into it.

Venture Capital Institutions

In the form of equity participation IDBI ,IFCI started it Now private sector is into it Thrust is given to new and technological innovations.

Legislative Support

Various Acts were passed to protect the investors like Indian Companies Act Securities Exchange Board of India Negotiable Act The Banking Regulation Act

Role And Function of Financial System

Mobilisation of saving Size Transformation function Maturity function Risk transformation Promotes Investments Encourages Investments in Financial Assets Developing Backward Areas

Organisational Strusture Of Financial System

Organisied 1.Money Market 2. Capital Market Unorganisied:Money lenders Indigenous Bankers pvt.co. not under the control of RBI

Money market

Call market

Commercial Bill market

Treasury Bill market