1. Presented By:
Abhishek Agrawal 151301
Ajay Agarwal 151302
Akhil Nayak 151303
Amit Mukherjee 151304
Submitted to:
Prof Deepak Danak
2. Components of Indian Financial
Informal Formal
Financial
Institutions
Banking NBFC
Financial
Markets
Money
Market
Capital
Market
Financial
Instruments
Based On
Term
Based on
Types
Financial
Services
3. Financial institutions mobilize the savings of savers and give credit or finance
to the investors.
On the basis of the nature of activities, financial institutions may be classified as:
I. Regulatory and promotional institution
II. Banking institutions
III. NBFC
5. • It is the place where financial assets are created or transferred. Financial
markets catch the attention of investors and make it possible for companies
to finance their operations and attain growth. Without financial markets,
borrowers would have problems to find lenders.
• The key functions are:
• 1. Assist in creation and allocation of credit and liquidity.
2. Serve as intermediaries for mobilization of savings.
3. Help achieve balanced economic growth.
4. Offer financial convenience.
6. Money Market
oHandles short-term financial
assets (less than a year)
o make it possible for businesses
to gain access to funds on a
short term basis
oMajor participant are: RBI and
Commercial Banks
Capital Market
ofinancial assets that have maturity
period of more than a year
oallow businesses to gain long-term
funding to aid expansion
ofocus on financing of fixed
investments
omain participants are mutual
funds, insurance organizations,
foreign institutional investors,
corporate and individuals.
7. Primary/New Issue Market
A market for fresh capital. It
provides the channel for sale of
new securities, not previously
available.
It does not have any organizational
setup
IPO(Initial Public Offering)
Secondary/stock Market
A market for old/existing securities
A place where buyers and sellers
of securities can enter into
transactions to purchase and sell
shares, bonds, debentures etc.
Has physical existence
Example – BSE,NSE
9. International Accounting Standards IAS 32 and 39 define a financial instrument
as "any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity".
Financial instruments are tradable assets of any kind. They can be cash,
evidence of an ownership interest in an entity, or a contractual right to receive
or deliver cash or another financial instrument.
10. Based on the types:
Cash instruments — Instruments whose value is determined directly by
the markets. They can be securities, which are readily transferable, and
instruments such as loans and deposits, where both borrower and lender have
to agree on a transfer.
Derivative instruments — Instruments which derive their value from the value
and characteristics of one or more underlying entities such as an asset, index, or
interest rate. They can be exchange-traded derivatives and over-the-counter
(OTC) derivatives.
11. • Financial services are the economic services provided by the finance
industry.
• It deals in a broad range of services provided by various financial
institutions
Types of Services:
• Banking Services
• Foreign Exchange Services
• Investment Services
• Insurance Services
13. Lender – Savers
Household
Business farm
Govt.
Foreigners
FUND
Financial
Market FUND
Borrower – Spenders
Business Farm
Govt.
Foreigners
Financial
Intermediaries
FUND
14. I. The Indian Financial System: Markets, Institutions and Services By Bharati V. Pathak
(Publisher Pearson Education)
I. https://www.rbi.org.in/scripts/bs_nbfclist.aspx Visiting Date 25-Oct-2015
I. http://www.investopedia.com/terms/r/reinsurance.asp Visiting Date 27-Oct-2015
