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    savings in the household sector are mobilized

    directly in the form of units, premium, provident


    fund, and pension fund. These are the contractual
    forms of savings. Financial actively deals with
    the production, distribution & consumption of
    goods and services. The financial system will
    provide inputs to productive activity. Financial
    sector provides inputs in the form of cash credit
    & assets in financial for production activities.

    The function of a financial system is to establish


    a bridge between the savers and investors. It helps
    in mobilization of savings to materialize
    investment ideas into realities. It helps to
    increase the output towards the existing
    production frontier. The growth of the banking
    habit helps to activate saving and undertake fresh
    saving. The financial system encourages
    investment activity by reducing the cost of
    finance risk. It helps to make investment
    decisions regarding projects by sponsoring,
    encouraging, export project appraisal, feasibility
    studies, monitoring & execution of the projects.

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