Indian financial system institution and market Prof. Padmavati Patil

1. Mrs. Padmavati Patil

2. Introduction:
The economic development of any country dependence
on the effective and efficient financial system. It encourages
both savings and investment and also creates links between
savers and investors and also facilitates the expansion of
financial markets and aids in financial deepening and
broadening

3. What is financial system?
Financial System has two major components
 Surplus
 Deficit
Surplus :
Individuals, Instutions, Organizations, Government
who have money more than what they need at that period.
Deficit:
Individuals, Instutions, Organizations, Government
Who are running short of fund.

4. D
Efficient
Effective
Good financial system have two dimension
 Efficient
 Effective

5. Requirements to make a financial system
efficient and effective
1. Financial Instutions
2. Financial Instruments
3. Financial Market

6. Financial System
The financial system comprises of variety of
intermediaries, market and instruments. It provide
transformed into investments.
Financial system implies a set of complex and
closely connected of interlined institutions, agents,
practices, markets, transactions, claims and liabilities in the
economy.

7. Indian Financial System
I) Formal (Organized) II) Informal (Unorganized)
1. Financial Instutions 1. Money lenders
2. Financial Instruments 2. Local Bankers
3. Financial Market 3. Traders
4. Financial Services 4. Landlords

9. Financial Institutions
Meaning of Financial Institutions
Financial institutions are business organization's the
act as mobilisers and depositories of savings, and as
transmitters of credit or finance.
Definition
A financial institution is an institution Which
collects funds from the public and places them in financial
assets, such as deposits, loans, and bonds, rather then
tangible property.

10. Based on different character financial Institutions are
classified in to a different categories
Financial Institutions
Regulatory Intermediaries Non-Intermediaries
Banking Non-Banking
RBI
SEBI
IRDA
NABARD
IFC
PFRDA

11. Financial Market
Financial market are the centers or arrangements that
provided facilities for buying and selling of financial claims
and services.
Any market place where buyer and seller participate
in the trade of financial securities, commodities and other
fungible items of value at low transaction cost and at prices
that reflects supply and demand.
Securities include stock and commodities include
precious metals or agricultural goods.

12. Classification of Financial Market

13. Indicators of Financial Development
 Finance Ratio
 Financial Inter-relation Ratio
 New Issue Ratio
 Intermediation Ratio
 The Ratio of Money to National Income
 The proportion of current account deficit which is
financial by market related flows

14.  Developed Financial sector is fully integrated
 Transaction cost and Information cost
 Predominance of private Banking
 Good management
 Developed financial structure
 Openness of the Economy
 Effective and Quick enforcement
 Well-Developed secondary markets
 Indirect Techniques of Monetary Policy

15. Role of Indian Financial System
 Provision of Liquidity
 Transformation of the Risk Characteristic of assets.
 Saving Investment Relationship
 Growth of Capital Market
 Foreign Exchange market
 Government Securities
 Infrastructure and Growth

16.  Development of Trade
Employment growth is boosted by Financial System
Venture Capital
Financial system ensures balanced growth
Fiscal Discipline and Control on economy
Financial System help in balanced reginal development
Attracting Foreign trade
Economic Integration

17. Thank you