financial system of india(ma)

8/14/2019 Financial System of India(Ma)

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Name Roll no

Shraddha Shetty 31

Hania Usmani 32

Malti Varma 33

Pravin Yadav 34

Harshala Zure 35

Tejasvi Hedge 36

GROUP MEMBERS


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Financial system of any country consists of financial markets, financial intermediation andfinancial instruments or financial products.

We will discuss the meaning of finance andIndian financial system and focus on thefinancial markets, financial intermediaries andfinancial instruments.


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The term finance in our simpleunderstanding it is perceived as equivalentto Money.

But finance exactly is not money , it is thesource of providing funds for a particularactivity .

Finance represents the resource by wayfunds needed for a particular activity.


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The economic development of a nation is reflected by theprogress of the various economic units.

While performing their activities these units will be placedin a surplus/deficit/balanced budgetary situations.

Financial system functions as a intermediary and facilitatesthe flow of funds from the area of surplus to the area of deficit.


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It can be defined as a market in which financialassets are created or transferred.

Financial assets or instruments a claim to thepayment of the sum of money sometime infuture or periodic payment in the form of interest or dividend.


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Money market

Capital market

Forex market

Credit market

Types of markets


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This services was offered by banks,brokers & dealers.

But as the financial system widenedalong with development in financialmarket now also offered by investment

bankers, underwriters,depositors,custodians,mutual funds,financial advertisors ,financialconsultant and others.


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INTERMEDIARY MARKET ROLE

Stock Exchange Capital Market Secondary Marketto securities

Investment Bankers Capital Market,Credit Market

Corporate advisoryservices, Issue of

securities

Underwriters Capital Market ,Money Market

Subscribe tounsubscribed

portion of securities

Registrars,Depositories,Custodians.

Capital Market Issue securities tothe investors on

behalf of the

company & handleshare transferactivity

Primary Dealers,Satellite Dealers

Money Market Market making ingovt securities

Forex Dealers Forex Market Ensure exchange ink currencies


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Money Market Instruments

It can be defined as a market for short-termmoney & financial assets that are nearersubstitutes for money

The term short-term means generally aperiod up to one year & near substitutes tomoney is used to denote any financial assetwhich can be quickly converted into moneywith minimum transaction cost


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Important money market instruments

Call /Notice-Money Market

Inter Bank Term Money

Treasury Bills

Certificate of Deposits

Commercial Paper


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The capital market generally consists of thefollowing long term period i.e. ,more than one

year period.

Equity segment:

Equity sharesPreference sharesConvertible preference sharesNon- Convertible preference shares


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Debt Segment:

Debentures

Zero coupon bonds

Deep discount bonds


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They have both the features of equityand debentures.

This kind of instrument is called hybridinstrument

Examples:

Convertible debentures

Warrants etc


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Indian money market is regulated by RBI &SEBI.

Capital market consists of Primary &secondary Market.

All IPOs come under the primary marketand all the secondary market transactionsdeals in secondary market.


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Secondary market refers to a market wheresecurities are traded after being initiallyoffered to the public in the primary market/or listed on the Stock Exchange.

Secondary market comprises of equitymarkets & debt markets.

In the secondary market transactions BSE& NSE plays an important role in exchangeof capital market instruments.


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financial system of india(ma)

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