Indian Financial System and Financial Services

Charu 2107 Isha 2112 Neha 2121 Rajeev 2136 Sandeep 2145 Tajinder 2156

Financial System
An institutional framework existing in the a country to enable financial transactions.

Flow of Funds

Seekers of funds (Business Firms & Government)

Flow of Financial services

Suppliers of Funds

Indian Financial System

Organized Sector

Non-organized Sector

1. Financial Instruments 2. Financial Institutions 3. Financial Markets 4. Regulators

1. Money Lenders 2. Landlords

3. Local Bankers
4. Traders

Financial System includes:

Loans
Deposits

Financial Assets/Instruments

Equities Bonds

Indian Financial Institution

Banking Institution
Commercial Banks Cooperative banks

Non-Banking Institution

Mutual funds

Organized Financial Institution

Unorganized Financial Institution

Public sector banks

Private sector banks

Regional rural banks

Foreign banks

Indian Financial Market

Long-term, Governed by SEBI Short-term, Governed by RBI

Capital Market

Money Market

Primary Market

Secondary Market

Money Market
The money market is a mechanism that deals with the lending and borrowing of short term funds (less than one year) A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The Indian money market consists of diverse submarkets, each dealing in a particular type of shortterm credit.

Call money

Commercial bills
Instruments of Indian Money Market Treasury bills Commercial papers Certificate of deposit Repo instruments

Capital Market
The capital market is a market for financial assets which have a long or indefinite maturity. It is an institutional arrangement to borrow and lend money for a longer period of time. These institutions play the role of lenders in the capital market. Business units and corporate are the borrowers in the capital market.

Capital Market

Equity Primary market Secondary market Private equity No Listing

Debt

Primary market

Secondary market Private Placement Listing Optional

Public issue Listing compulsory

Public issue Listing compulsory

Financial Services
Financial services refer to services provided by the finance industry. The finance industry encompasses 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, stock brokerages, investment funds and some government sponsored enterprises.

Indian Financial Services

Fund Based

Fee Based

1. Leasing 2. Hire Purchase 3. Factoring

1. Merchant Banking 2. Credit Rating 3. Mergers

Features of Financial Services

Customer-Specific Intangibility Concomitant Tendency to Perish People based services Market Dynamics