The document discusses the structure of a financial system. A financial system consists of savers (individuals), intermediaries, markets, and investors (users of savings). Financial institutions collect resources by accepting deposits and lending to businesses. The main components of a financial system are commercial banks, cooperative banks, organized financial institutions, and unorganized financial institutions. Financial markets allow for the buying and selling of financial claims and services, and include money markets, bond markets, stock markets, and derivative markets. Financial instruments used to raise capital include shares, warrants, debentures and bonds. Financial services include leasing, hire purchase, factoring, merchant banking, credit rating, mergers, and fund-based and fee-based services.

1. STRUCTURE OF FINANCIAL
SYSTEM
STRUCTURE OF FINANCIAL
SYSTEM
By
Sundilla Sagar

2. FINANCIAL SYSTEM
A financial system may be defined as a set of
instutions,instruments and markets which promotes
savings and channels them to their most efficient use.
It consists of individual (savers), Intermediaries,
markets and users of savings (investors).

3. Financial Institutions
They are Business organizations dealing in
financial resources
They collect resources by accepting deposits from
individuals and institutions and lend them to trade,
industry and others
Components of Financial system
1.
Commercial
Banks
Cooperative
Banks
Organised
Financial
Institutions
Unorganised
Financial
Institutions

4. Financial Markets
2.
Financial markets are the centers or arrangements
that provide facilities for buying and selling of
financial claims and services
Financial markets exist wherever financial
transactions take place
 Call money
market
 Treasury bills
 Commercial bills
 Primary Market
 Secondary
market
 Derivative Market

5. Which are used for raising resources for corporate
activities that are used for raising capital through
the capital market are known as ‘ Capital market
Instruments’.
Example: Preference shares, Equity shares,
warrants, debentures and bonds.
Financial Instruments
3.

6.  Leasing
 Hire Purchase
 Factoring
Fee Based
 Merchant
Banking
 Credit Rating
 Mergers
Fund based
Financial Services
4.
The development of a sophisticated and matured
financial system in the country, especially after the
early nineties, led to the emergence of a new
sector.
It objective is to intermediate and facilitate
financial transactions of individuals and
institutional investors.

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