FIM
FIM
FIM
AND MARKET
• Submitted by - Group 10
1. Ankit Kumar Mishra
2. Ashok Kumar Verma
3. Nikunj Kumar Singh
4. Vivek Kumar Pandey
5. Vivek Kumar Sharma
Submitted to-
Dr. Shudhanshu Pandiya
FINANCIAL SYSTEM
• A financial system is a network of financial institutions, financial markets, financial instruments and financial services to facilitate the transfer of
funds.
ROLE OF FINANCIAL SYSTEM
Pooling Fund
Capital Formation
Provides Liquidity
Better Decisions
FINANCIAL MARKET
• A financial market is a market is a market in which people trade financial securities and derivative such as futures and options at low transaction
costs. Securities include stock and bonds and precious metals
INDIAN FINANCIAL SYSTEM - AN OVERVIEW
1. Before Independent
3. After 1990s
INDIAN FINANCIAL SYSTEM – AN OVERVIEW
3. No Regulatory Bodies
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AFTER INDEPENDENT TO TILL 1990s
• Moneylenders ruled till 1951. No worth-while Banks at that time. Industries depended upon their own money. 1951 onwards 5 years
PLAN commenced.
•1st 5 year PLAN in 1951 – Planned Economic Process. As part of Alignment of Financial Systems – Priorities laid down by Govt. –
Policies.
• MAIN Elements of Financial Organizations
Protection to Investors
CONT…
• Nationalization-
• RBI - 1949
• SBI - 1956 (take-over of Imperial Bank of India)
• LIC - 1956 (Merges of over 250 Life Insurance Companies)
• BANKS - 1969 (14 major banks with Deposits of over Rs. 50 Crore nationalized)
• INSURANCE - 1972 (General Insurance Corp. GIC by New India, Oriental, united and National.
POST 1990
INDUSTRIES
• Rise & Growth of Service Sector industries. Reliance & Dependence on technology.
• E-mail & mobile made sea-change in communication, data collection etc. Computerization – a catch phrase and inevitable need of an hour.
• Dependent on Capital Market rather than only Debts dependency. Scalability of operations through globally competitive size.
• Broad basing of Board. Professional Management.
• NBSCs
• NBFC under RBI governance to finance retail assets and mobilize
small/medium sized savings.
• Very large NBFCs are emerging (Shri Ram Transport Finance, Birla, Tata Finance, Sundaram Finance, Reliance Finance, DLF, Religare etc.
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POST 1990
Commercial Bank
M u t u a l Funds
C a p i t a l Market
Secondary Market
M o n e y Market
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MEANING OF MONEY MARKET
• A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is
used by participants as a means for borrowing and lending in the short term, from several days to just under a year.
FUNCTIONS OF MONEY MARKET
• Economic development – Money market assures supply of funds; financing is done through discounting of the trade bills, commercial banks,
acceptance houses and brokers.
• TREASURY BILLS
• CERTIFICATES OF DEPOSITS
• COMMERCIAL BILLS
• TRADE BILLS
CAPITAL MARKET
Capital market is a markets where buyers and sellers engage in trade of financial securities like bonds, stocks etc. the buying/selling is
undertaken by participants such as individuals and institutions.
• The market where investment instruments like bonds, equities and mortgages are traded is known as the capital market.
• The capital market offers both long term and overnight funds.
CONT…
• The different types of financial instruments that are traded in the capital markets are:
• equity instruments
• insurance instruments,
• PRIMARY MARKET
• SECONDARY MARKET
ROLE OF SEBI IN THE CAPITAL MARKET