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    Avinash Kumar
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    The Indian financial system consists of various components and players that facilitate the flow of funds between savers and borrowers. It includes commercial banks, non-banking financial companies, insurance companies, stock exchanges, and other intermediaries that operate various financial markets for money, capital, and other financial assets and services. The system allows for maturity, risk, and size transformation of liabilities and assets. However, it also faces some weaknesses like a lack of coordination between institutions and erratic capital markets.

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    The Indian financial system consists of various components and players that facilitate the flow of funds between savers and borrowers. It includes commercial banks, non-banking financial companies, insurance companies, stock exchanges, and other intermediaries that operate various financial markets for money, capital, and other financial assets and services. The system allows for maturity, risk, and size transformation of liabilities and assets. However, it also faces some weaknesses like a lack of coordination between institutions and erratic capital markets.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    11 views14 pages

    Indian Financial System

    Uploaded by

    Avinash Kumar
    The Indian financial system consists of various components and players that facilitate the flow of funds between savers and borrowers. It includes commercial banks, non-banking financial companies, insurance companies, stock exchanges, and other intermediaries that operate various financial markets for money, capital, and other financial assets and services. The system allows for maturity, risk, and size transformation of liabilities and assets. However, it also faces some weaknesses like a lack of coordination between institutions and erratic capital markets.

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    of 14

    Session 1

    Indian Financial System

    Agenda for Discussion


    Structure

    Components
    Players Participants Intermediaries Recent Phenomena Opportunities Weaknesses

    Multi Faceted Growth


    Products Traded: Equities, Bonds, Futures

    and options and other derivatives product The amount raised from the market, number of stock exchanges and other intermediaries, the number of listed stocks, market capitalisation,trading volume and turnover of stock exchanges, and investor population The profiles of investors, issuers and intermediaries.

    Broad Constituent of Capital Markets


    Fund Raisers: Corporations, Govts

    Fund Providers: Entities that invest


    Intermediaries: Service providers Organizations: Exchanges, Depositories Market Regulator: SEBI, RBI, DCA

    Indian Financial System


    MOF

    RBI Commercial Banks PSBs PrSBs COPR RRBs, FBs

    SEBI PDs

    Financial Institutions

    NBFCs HP Leasing

    MFs

    VCs

    Capital Market

    Terms Finance ICICI IDBI IFCI

    Sectoral EXIM PFC NABARD

    SEs Stocking FIIs Investors Custodians Merchant banks

    Investment Corporation LIC GIC UTI

    State level SEC SIDC

    Components of Indian Financial System


    FIs Financial Market Financial Instrument Financial Services

    Money Call Money T-bill C-papers

    Capital Primary Secondary Derivatives

    Fund based

    Fee Based

    Leasing H.P

    Marchant Banking Credit-Rating Mergers

    Banking

    Non- Banking

    Factoring

    Commercial
    PSB

    Cooperative Term Short Term Medium Term Un-organised Financial Institution Long Term Type Primary Securities Secondary Securities Innovative Securities

    PrSB
    RRBs Foreign banks

    Organised Financial Institution

    Financial Markets
    Financial Markets

    Capital Markets

    Money Market

    Primary Markets

    Secondary Markets

    Primary Markets

    Secondary Markets

    Finacial Systems
    Financial Assets
    Marketable Assets Non-Marketable assets

    shares

    Govt securities

    Bank deposits

    L.I.C Schemes

    Bonds

    debentures

    PF

    PO Certuificates

    M.F units

    The Financial Ecosystem


    Financial Firms

    Transaction Oriented

    Infrastructure

    Fund Based

    Defined Benefit

    Banks Insurance Companies Defined Contribution:


    Pension Funds Mutual Funds Private Equity Funds Hedge Funds

    Securities Firms Primary Dealers Investments Banks Merchant Bankers NBFCs

    Exchanges Clearing Corporations Depositories

    Chrasterstics of Financial Assets


    They differ from each other in respect of their investment chracteristics.
    Liquidity Marketability Transaction costs Risk of default Maturity period Tax status

    Volatility of prices
    The rate of return

    Function of Financial systems


    Liability-Assets transformation functions

    Size transformation function


    Risk transformation function Maturity transformation functions

    Classification of Financial Markets


    On the Basis of Nature of Claim
    Debt Market Equity Market

    On the Basis of Maturity of Claim


    Money market Capital Market

    Classification of Financial Markets


    On the Basis of Nature of Claim
    Debt Market Equity Market

    On the Basis of Maturity of Claim


    Money market Capital Market

    Weaknesses of Indian Financial System


    Lack of Coordination between different financial

    institutions.
    Erratic Capital markets Imprudent Financial Practice Monopolistic market structures.

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