THE FINANCIAL SYSTEM<br />PAUL HONGKUNG T. A.<br />MBA (Marketing)<br />Christ University<br />Bangalore<br />
26-05-2009<br />Text 100, Bangalore<br />
CONTENT<br />Financial Institution<br />Non Banking Financial Institutions<br />Non Banking Financial Companies<br />India...
FINANCIAL INSTITUTION<br />An institution that collects funds and invests them in financial assets. <br />1. Deposit-takin...
FINANCIAL INSTITUTION<br />Intermediary of the capital and debt markets<br />Transfer funds from investors to companies<br...
COMMERCIAL BANK<br />Commonly referred to as simply a &quot;bank“<br />Provides checking accounts, savings accounts, and m...
COMMERCIAL BANK<br />It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings ...
26-05-2009<br />Text 100, Bangalore<br />
INVESTMENT BANK<br />It is a financial institution that raises capital, trades in securities and manages corporate M & A<b...
UNIVERSAL BANK<br />Financial services companies engaged in commercial and retail lending<br />Diversified and engage in m...
NON BANKING FINANCIAL INSTITUTIONS<br />Mobilise the public savings for rendering other financial services including inves...
Risk pooling
Contractual savings
Market Brokering</li></ul>26-05-2009<br />Text 100, Bangalore<br />
NON BANKING FINANCIAL INSTITUTIONS<br />Development finance institutions (DFIs) [Government-owned]<br />Providers of long-...
NON BANKING FINANCIAL COMPANIES<br />    Provide banking services without meeting legal defination of a bank<br />3 broad ...
DIFFERENCE BETWEEN NBFC AND BANKS<br />An NBFC cannot accept demand deposits<br />It is not a part of the payment and sett...
NON BANKING FINANCIAL COMPANIES<br />Asset Finance Company (AFC) (equipment leasing company, hire-purchase company<br />In...
INDIAN FINANCIAL SYSTEM<br />The financial system is concerned about <br />   money, credit and finance<br />26-05-2009<br...
FINANCIAL MARKET<br />The market in which financial assets are created or transferred<br />A financial transaction involve...
FINANCIAL MARKET<br />26-05-2009<br />Text 100, Bangalore<br />
FINANCIAL INSTRUMENTS<br />Market for short-term money and financial assets that are near substitutes for money<br />Any f...
FINANCIAL INSTRUMENTS<br />26-05-2009<br />Text 100, Bangalore<br />
FINANCIAL INTERMEDIARY<br />Transfer funds from the lender to the borrower<br />Transfer funds from investors to companies...
FINANCIAL INTERMEDIARY<br /><ul><li>Investment bankers
Underwriters
Stock exchanges
Portfolio managers
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Finance

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Finance

  1. 1. THE FINANCIAL SYSTEM<br />PAUL HONGKUNG T. A.<br />MBA (Marketing)<br />Christ University<br />Bangalore<br />
  2. 2. 26-05-2009<br />Text 100, Bangalore<br />
  3. 3. CONTENT<br />Financial Institution<br />Non Banking Financial Institutions<br />Non Banking Financial Companies<br />Indian Banking System<br />Banking Titbits<br />26-05-2009<br />Text 100, Bangalore<br />
  4. 4. FINANCIAL INSTITUTION<br />An institution that collects funds and invests them in financial assets. <br />1. Deposit-taking institutions that accept and manage deposits and make loans (banks, credit unions, trust companies, and mortgage loan companies)<br />2. Insurance companies and pension funds<br />3. Brokers, underwriters and investment funds.<br />26-05-2009<br />Text 100, Bangalore<br />
  5. 5. FINANCIAL INSTITUTION<br />Intermediary of the capital and debt markets<br />Transfer funds from investors to companies<br />Facilitate the flow of money through the economy<br />Eg. EXIM, IDBI, IIBI, SIDBI and UTI<br />26-05-2009<br />Text 100, Bangalore<br />
  6. 6. COMMERCIAL BANK<br />Commonly referred to as simply a &quot;bank“<br />Provides checking accounts, savings accounts, and money market accounts and that accepts time deposits<br />Deal with deposits and loans from corporations<br />26-05-2009<br />Text 100, Bangalore<br />
  7. 7. COMMERCIAL BANK<br />It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings deposits, and time deposits<br />It makes loans to businesses and consumers. <br />It also buys corporate bonds and government bonds <br />Its primary liabilities are deposits and primary assets are loans and bonds<br />26-05-2009<br />Text 100, Bangalore<br />
  8. 8. 26-05-2009<br />Text 100, Bangalore<br />
  9. 9. INVESTMENT BANK<br />It is a financial institution that raises capital, trades in securities and manages corporate M & A<br />Raise money through issuing and selling securities in the capital markets and insuring bonds<br />Provide advice on transactions such as M & A <br />26-05-2009<br />Text 100, Bangalore<br />
  10. 10. UNIVERSAL BANK<br />Financial services companies engaged in commercial and retail lending<br />Diversified and engage in multiple activities<br />Both banking and insurance <br />Eg. Barclays, Citigroup, Deutsche Bankand HSBC<br />26-05-2009<br />Text 100, Bangalore<br />
  11. 11. NON BANKING FINANCIAL INSTITUTIONS<br />Mobilise the public savings for rendering other financial services including investment<br />Also called investment institutions<br /><ul><li>Investment
  12. 12. Risk pooling
  13. 13. Contractual savings
  14. 14. Market Brokering</li></ul>26-05-2009<br />Text 100, Bangalore<br />
  15. 15. NON BANKING FINANCIAL INSTITUTIONS<br />Development finance institutions (DFIs) [Government-owned]<br />Providers of long-term project loans.<br />Insurance companies, <br />Non Banking Financial Companies (NBFCs) <br />Primary dealers (PDs) <br />Capital market intermediaries (MFs)<br />26-05-2009<br />Text 100, Bangalore<br />
  16. 16. NON BANKING FINANCIAL COMPANIES<br /> Provide banking services without meeting legal defination of a bank<br />3 broad categories<br />NBFCs accepting public deposit <br />NBFCs not accepting/holding public deposit<br /> Core investment company with 90% of their total assets as investments in the securities of their group/holding/subsidiary company<br />26-05-2009<br />Text 100, Bangalore<br />
  17. 17. DIFFERENCE BETWEEN NBFC AND BANKS<br />An NBFC cannot accept demand deposits<br />It is not a part of the payment and settlement system and as such cannot issue cheques to its customers<br />Deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of banks<br />Deposit Insurance and Credit Guarantee Corporation<br />26-05-2009<br />Text 100, Bangalore<br />
  18. 18. NON BANKING FINANCIAL COMPANIES<br />Asset Finance Company (AFC) (equipment leasing company, hire-purchase company<br />Investment Company (IC)<br />Loan Company (LC) [VC, House Finance]<br />26-05-2009<br />Text 100, Bangalore<br />
  19. 19. INDIAN FINANCIAL SYSTEM<br />The financial system is concerned about <br /> money, credit and finance<br />26-05-2009<br />Text 100, Bangalore<br />
  20. 20. FINANCIAL MARKET<br />The market in which financial assets are created or transferred<br />A financial transaction involves creation <br /> or transfer of a financial asset<br />A claim to the payment of a sum of <br /> money in the future in the form of <br /> interest or dividend<br />26-05-2009<br />Text 100, Bangalore<br />
  21. 21. FINANCIAL MARKET<br />26-05-2009<br />Text 100, Bangalore<br />
  22. 22. FINANCIAL INSTRUMENTS<br />Market for short-term money and financial assets that are near substitutes for money<br />Any financial asset which can be quickly converted into money with minimum transaction cost<br />26-05-2009<br />Text 100, Bangalore<br />
  23. 23. FINANCIAL INSTRUMENTS<br />26-05-2009<br />Text 100, Bangalore<br />
  24. 24. FINANCIAL INTERMEDIARY<br />Transfer funds from the lender to the borrower<br />Transfer funds from investors to companies<br />Intermediary of the capital and debt markets<br />Facilitate the flow of money through the economy<br />26-05-2009<br />Text 100, Bangalore<br />
  25. 25. FINANCIAL INTERMEDIARY<br /><ul><li>Investment bankers
  26. 26. Underwriters
  27. 27. Stock exchanges
  28. 28. Portfolio managers
  29. 29. Mutual funds
  30. 30. Banks
  31. 31. Dealers</li></ul>26-05-2009<br />Text 100, Bangalore<br />
  32. 32. INDIAN FINANCIAL SYSTEM<br />Money market regulated by RBI <br />Capital market regulated by SEBI<br /><ul><li>Primary market (IPOs)
  33. 33. Secondary market (equity and debt market)</li></ul>26-05-2009<br />Text 100, Bangalore<br />
  34. 34. BANKING TITBITS<br />Banking in India originated in the late 18th century<br />The oldest bank in existence in India, SBI traces its origins back to June 1806<br />In 1935, RBI formally took over responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. <br />After India&apos;s independence in 1947, the Reserve Bank was nationalized and given broader powers<br />26-05-2009<br />Text 100, Bangalore<br />
  35. 35. BANKING TITBITS<br />India has 77 scheduled commercial banks <br />26 public sector banks (GoI holding a stake)<br />22 private banks (may be publicly listed and traded on stock exchanges) <br />29 foreign banks<br />Source: RBI<br />26-05-2009<br />Text 100, Bangalore<br />
  36. 36. BANKING TITBITS<br />The first chartered bank of the US was the First Bank of the United States, formed in 1791<br />Flatbush National Bank of Brooklyn, New York was the first bank to issue a credit card in 1946<br />The term &quot;bank teller&quot; originated in the wake of the 1929 stock market crash, when banks began hiring low-paid workers to &quot;tell&quot; throngs of frantic depositors that their money was gone.<br />Source: Bargaineering<br />26-05-2009<br />Text 100, Bangalore<br />
  37. 37. 26-05-2009<br />Text 100, Bangalore<br />
  38. 38. THANK YOU<br />26-05-2009<br />Text 100, Bangalore<br />

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