- INDIAN FINANCIAL SYSTEM : It is a system in which people , financial institutions,banks , companies ,and the government demand for fund and same is supplied to them.
- There are two parts of Indian financial system first demand side and second supply side . The representatives of demand side can be individual investors , Industrial and business companies , government etc. and the representative of supply side will be banks, financial institutions , mutual fund and insurance companies.
- The Indian financial system ., which refers to the borrowing and lending of funds or the demand for and supply of funds of all individuals , institutions , companies , and of the government consist of two parts , the Indian money market and Indian capital market .
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Indian money market
The Indian money market is the market in which short term funds are borrowed and lent.
The financial system is commonly classified into ;
- Industrial finance
- Agricultural finance
- Development finance
- Government finance
- Devaluation
it means lowering the official value of the local money in term of foreign currency or gold.
balance of payments
it means a systematic record of all the economic transaction between one country and the rest of the world in a given period .
balance of trade
it is the difference between the value of goods exported and the value of goods imported per annum.
- EXIM policy 2000-01 introduced special economic Zones Scheme ( SEZ )
Fiscal policy is the policy relating to public revenue and public expenditure and allied matters.
Usually , the indian money market is classified into organized sector and unorganized sector .
The unorganized sector consist of indigenous bankers including the non banking financial companies . besides , these two , these are many sub-market in the indian money market .
The highest financial institution is organized sector is Reserve Bank Of India and addition to this banks of public sector , foreign banks and other financial institutions are also part of organized sector.
- The Reserve Bank Of India regulates and controls the money of the country.
The RBI is the supreme monetary and banking authority in the country and has the responsibility to control the banking system in the country . it keeps the reserve of all commercial banks and hence is known as the Reserve Bank .its financial is 1 july - 30 june.
The Indian Capital Market
The Indian capital market in the market for long- term capital; it refers to all the facilities and institutional arrangements for borrowing and lending term funds - medium term and long term funds.
- The capital market in India includes
- Government securities
- industrial securities
Development financial institutions like IFCI, IDBI , ICICI ,SFCs , IIBI , UTI ETC
- Financial Intermediaries like merchant banks.
- Individuals who invest directly on their own in securities are also supplier of fund to capital market . the trend in the capital market is basically affected by two important factors .
- operations of the institutional investors in the market
- the excellent results flowing in from the corporate sector .
- The capital market in India includes
- Government securities
- industrial securities
Development financial institutions like IFCI, IDBI , ICICI ,SFCs , IIBI , UTI ETC
- Financial Intermediaries like merchant banks.
- Individuals who invest directly on their own in securities are also supplier of fund to capital market . the trend in the capital market is basically affected by two important factors .
- operations of the institutional investors in the market
- the excellent results flowing in from the corporate sector .
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