1. Financial Markets
and
Institutions
Jadhav Aditya Mohan
Financial Management-I
IBS, Hyd - B

2. Financial System
Seekers of
Funds (mainly
business firms and
government)
Flow of Funds
(Savings)
Suppliers of
Funds (Mainly
Households)
Flow of Financial
Services
Incomes, and Financial
Claims
Functions of Financial System
Savings Function
Liquidity Function
Payment Function
Risk Function
Information Function

3. Money Markets
Call Money Market
Treasury Bills
Commercial Paper
Certificate of deposit
MMMFs
Capital Markets
Primary Markets Secondary Markets
Public Issue
Rights Issue
Bonus Issue
Private Placement
Bought-out Deals
Trading Systems
Depositories
Clearing mechanism
Carry Forward System
Settlement Procedure
Financial Markets

4. Types
Central Govt. Securities
State Govt. Securities
Securities Guaranteed by
Central Govt.
Securities Guaranteed by
State Govt.
RBI Treasury Bills
Forms
Stock Certificates
Promissory Notes
Bearer Bonds
Treasury Bills
NSC
Deposit Certificates
Annuity Certificates
PPF
Capital Investment
NDC
Government Securities
Primary Markets Secondary Markets

5. Bond Market
Yankee Bonds
Samurai Bonds
Bulldog Bonds
Shibosai Bonds
Equity Market
Foreign Equity Euro Equity
ADR
IDR
GDR
International Capital Markets
Foreign Bonds Euro Bonds
Eurodollar
Euroyen
Europound

6. Forex Markets
Characteristics:
Telephonic Market
Geographic Location
Exchange rate
Types of Quotes:
Direct Quote
Indirect Quote
Two Way Quote
Players in Forex Markets
‡ Exporters
‡ Importers
‡ Commercial Banks
‡ Brokers
‡ Central Banks
‡ Authorized Dealers
‡ Authorized Money Changers

7. Derivatives Market
Types
Forwards
Futures
Options
Swaps
Players:
Hedgers
Speculators
Arbitrageurs

8. Financial Institutions
IDBI
IFCI
ICICI
IIBI
EXIM Bank
SFCs
SIDCs
Investment Institutions
LIC
GIC
UTI
Other Mutual
Funds

9. Non-Scheduled Banks Scheduled Banks
Commercial Banks State Cooperative Banks
Reserve Bank of India
Functions: Currency Issue; Banker’s Bank; Banker to Government;
Credit Control ; Creation of Money
Indian Banks Foreign Banks
Public Sector Private Sector
Other Nationalized BanksSBI & Subsidiaries Regional Rural Banks

10. Financial Sector Reforms
Privatization of Banks
IRDA Established to regulate the Insurance Sector
(both Life Insurance & General Insurance)
Non Banking Financial Companies (NBFCs)
Investment Trusts/
Companies
Nidhis
Merchant Banks
Hire Purchase Finance
Companies
Lease Finance Companies
Housing Finance Companies
National Housing Bank
Venture Capital Funding
Companies

11. THANK YOU