The document discusses the key components of a financial system. It defines a financial system as the process by which money flows between investors, lenders and borrowers through financial institutions, markets, instruments and services. It identifies the main functions of a financial system as providing payment and settlement systems, and mobilizing and allocating funds. The major components are financial institutions like banks, non-banking institutions, and financial markets including money markets, capital markets, and hybrid instruments. Financial services include banking, insurance, foreign exchange, and investment services.

1. Submitted By……
 KAPIL KUMAR TANTI
Submitted To……
Dr. Harpreet Kaur

2. 'Financial System'
 A financial system is the system that covers
financial transactions and the exchange of money
between investors, lender and borrowers.
 The Financial system is the process by which
money flows server to user.
 Financial system is a set of complex & closely
connected with financial institution, financial market,
financial instruments, & financial services

3. Functions of Financial system
It provide payment and settlement system.
It act as mobilize and allocate system.
It provide investor education.
It provide low cost transaction.

4. Component of financial system
financial system is consist of
Financial institution
Financial Market
Financial instruments
Financial services & so on.

5. Financial Institutions
Banking
Institutions
Commercial
Bank
Private
Bank
Public
Bank
Co-
operative
Bank
Regional
Rural Bank
Foreign
Bank
Non
Banking
Institutions

6. Financial institution
A financial institution is a company
engaged in the business of dealing with
monetary transactions, such as deposits,
loans, investments and currency
exchange.

7. It consist of two type
1.1. Banking Institution:- Which is include commercial
bank, Co-operative Bank(Cosmos Bank Repko Bank,
Sarawati Bank etc.), Regional Rural Bank(Uttar Bihar Gramin
Bank, AP Gramin Bank, Gramin Bank of Aryavart), & Foreign
Bank(Bank of America, Abu Dhabi commercial Bank, DBS
Bank, HSBC etc..).
Private Bank:-Axis Bank Bandhan Bank Catholic
Syrian Bank City Union Bank DCB Bank Dhanlaxmi
Bank Federal Bank HDFC Bank ICICI Bank IDFC Bank
IndusInd Bank etc.
Public Bank:-State Bank of Hyderabad State
Bank of India State Bank of Mysore State Bank of
Patiala State Bank of Travancore Syndicate Bank
etc.

8. 2. Non Banking Institution
Which include Development
financial institution such as
Development Bank , Investment
institution like :-LIC, GIC, UTI.

9. Financial Market
Money
Market
Capital
Market
Primary
Market
Secondary
Market

10. Financial Market
It is a center that provide facilities for buying and
selling of financial claims/Securities.
In other word we can say that :
It is a place that allow people to easily buy and
sell to financial security.
MONEY market + Capital Market = Financial
Market

11. Financial Market these are two types:
Money Market:-The money market is
where financial instruments with high
liquidity and very short maturities are
traded. It is used by participants as a
means for borrowing and lending in the
short term, with maturities that usually
range from overnight to just under a year.

12. Capital Market:-
Capital markets are markets for buying and
selling equity and debt instruments for long term.
 Primary Market:-A primary market issues new
securities on an exchange for companies,
governments and other groups to
obtain financing through debt-based or equity-based
securities.
 Secondary Market;-The secondary market is where
investors buy and sell securities they already own.

13. Money Market Instruments.
Capital Market Instruments.
Hybrid Instruments.

14. Money Market Instruments
 The Money Market can be define as a market for short-term money
and financial assets that are near substitute for money.
 The terms short-term means generally a period up to one year or
substitutes to money is used to denote any financial asset which
can be quickly convert into money with minimum transaction cost.
 Instruments
1. Call/ Notice money
2. Treasury bill
3. Certificate deposit
4. Term money
5. Commercial paper

15. Capital Market Instruments
 The capital market instruments generally consist of the following long term
period i.e. more then one year period, financial instruments; in the equity
segment Equity shares, preference share, convertible preference share,
non convertible preference share etc. and in the debt segment debenture,
zero coupon bounds, deep discount bonds etc.
 Instruments
1. Equity securities
 Equity shares
 Preference shares
1. Debts securities
 Debentures
 Bond

16. Hybrid instruments
Hybrid instruments have both the future
of equity and debenture. This kind of
instruments is called a hybrid
instruments. Example are convertible
debenture, warrant etc…

18. Types of financial services
Banking
services
Insurance of checkbooks
Provide personal loans, commercial loans.
ATM’s
Foreign
Exchange
services
Currency Exchange
Foreign Currency Banking
Wire Transfer
Investment
services
Assets management
Hedge Fund Management
Insurance Insurance Brokerage
Reinsurence