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    Capital Markets: Sessions 1: The Financial System in India

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    K Lele
    The financial system in India includes various organized and unorganized sectors that work together to generate savings, investment capital, and economic growth. The organized sector includes banking, cooperative systems, development banking, money markets, and financial institutions. The capital market, which is important for long-term capital formation and economic development, consists of the industrial securities market, government securities market, and long-term loan markets. The money market deals with short-term financial assets and securities with maturities of up to one year. The foreign exchange market facilitates international trade by allowing currency conversion and money transfers between countries.

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    Capital Markets: Sessions 1: The Financial System in India

    Uploaded by

    K Lele
    22 views11 pages
    The financial system in India includes various organized and unorganized sectors that work together to generate savings, investment capital, and economic growth. The organized sector includes banking, cooperative systems, development banking, money markets, and financial institutions. The capital market, which is important for long-term capital formation and economic development, consists of the industrial securities market, government securities market, and long-term loan markets. The money market deals with short-term financial assets and securities with maturities of up to one year. The foreign exchange market facilitates international trade by allowing currency conversion and money transfers between countries.

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    Captial markets introduction

    Original Title

    Capital Markets

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    The financial system in India includes various organized and unorganized sectors that work together to generate savings, investment capital, and economic growth. The organized sector includes banking, cooperative systems, development banking, money markets, and financial institutions. The capital market, which is important for long-term capital formation and economic development, consists of the industrial securities market, government securities market, and long-term loan markets. The money market deals with short-term financial assets and securities with maturities of up to one year. The foreign exchange market facilitates international trade by allowing currency conversion and money transfers between countries.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    22 views11 pages

    Capital Markets: Sessions 1: The Financial System in India

    Uploaded by

    K Lele
    The financial system in India includes various organized and unorganized sectors that work together to generate savings, investment capital, and economic growth. The organized sector includes banking, cooperative systems, development banking, money markets, and financial institutions. The capital market, which is important for long-term capital formation and economic development, consists of the industrial securities market, government securities market, and long-term loan markets. The money market deals with short-term financial assets and securities with maturities of up to one year. The foreign exchange market facilitates international trade by allowing currency conversion and money transfers between countries.

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    of 11

    Capital Markets

    Sessions 1: The Financial System in India


    Introduction to Financial System

    The term financial system is a set of inter-related activities/services working together to achieve
    some predetermined purpose or goal. It includes different markets, the institutions,
    instruments, services and mechanisms which influence the generation of savings, investment
    capital formation and growth.

    “Supply funds to various sectors and activities of the economy in ways that promote the
    fullest possible utilization of resources without the destabilizing consequence of price
    level changes or unnecessary interference with individual desires."

    Slide 2
    Slide 3
    Composition of Financial System in India
    Organised Sector
    1. Banking system
    2. Cooperative system
    3. Development Banking system
    i. Public sector
    ii. Private sector
    4. Money markets and
    5. Financial companies/institutions

    Unorganised Sector
    Comprises of relatively less controlled moneylenders, indigenous bankers, lending pawn
    brokers, landlords, traders etc.

    Slide 4
    Capital Market
    1. Industrial Securities Market
    i. Primary Market
    ii. Secondary Market

    2. Government Securities Market

    3. Long-term Loan Market


    1. Term-loan Market
    2. Mortgage Market
    3. Financial Guarantees Market

    Slide 5
    Importance of Capital Market
    The capital market is the place where the medium-term and long-term financial needs of
    business and other undertakings are met by financial institutions which supply medium and
    long-term resources to borrowers.

    1. Important source of economy’s savings


    2. Facilitates capital formation
    3. Provides and avenue for investors to invest in financial assets
    4. Facilitates increase in production and productivity
    5. Serves as an important source of technologies upgradation

    Slide 6
    Money Market
    Money market is a market for dealing with financial assets and securities which have a maturity
    period of up to one year. In other words, it is a market for purely short-term funds.

    1. Call money market


    2. Commercial bills market
    3. Treasury bill market
    4. Short-term loan market

    Slide 7
    Foreign Exchange Market
    Foreign exchange market is a system of converting one nations currency into another, and
    transferring money from one country to another.

    1. Transfers purchasing power from one country to another


    2. Provides adequate credit facility for the promotion of foreign trade
    3. To cover foreign exchange risks by providing hedging facilities

    Slide 8
    Financial Instruments
    1. Primary or direct securities
    2. Secondary or indirect securities
    i. Short term
    ii. Medium term
    iii. Long term

    Features
    1. Easily Transferable
    2. They have a ready market for trading
    3. Posses liquidity
    4. They carry an uncertainty with regards to payment

    Slide 9
    Weaknesses of Indian Financial System
    1. Lack of co-ordination between different institutions
    2. Monopolistic market structure
    3. Dominance of development banks in industrial financing
    4. Inactive and erratic capital market

    Slide 10
    Thank You

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