INDIAN FINANACIALSYSTEM

Existence of a well organised financial system

Promotes the well being and standard of living of people

Money and monetary assetsMobilize the saving Promotes Investment

Organised & Non-Organised Financial System

• Regulators• Financial Institutions• Financial Markets• Financial Services

• Money Lenders• Local Bankers• Traders• Landlords• Pawnbrokers• Chit Funds

Financial Markets

• Mechanism which allows people to trade• Affected by forces of supply and demand

Capital Market

• Facilitates the transfer of capitals• They provide liquidity• Measure the value of an asset

Stock Exchanges• Raising capital for businesses • Mobilizing savings for investments• Facilitates companies growth• Redistribution of wealth

• Market for short term money and financial assets• Subsection of fixed income market• Specializes in very short term debt securities• Also called as Cash Investment

FinancialRegulators

• SEBI• RBI• Ministry of finance

Reforms in the Financial System• Pre Reforms Period• Steps Taken• Objectives• Conclusion

Pre Reforms Period• Administered Interest rates• Industrial licensing and control• Dominant Public Sector• Limited competition• High capital output ratio

Steps Taken

• Liberalisation of various sectors in the economy• Reform of the public sector and tax system

Objectives• Reorientation of the economy• Macro Economic stability• To increase efficiency in the operations • To remove structural rigidities and inefficiencies• To attain a balance between the goal of financial

stability & integrated & efficient markets

• The financial system is fairly integrated, stable, efficient• Weaknesses need to be addressed • The reforms have been more capital centric in nature• Foreign capital flow and foreign exchange reserves have

increased but absorption of foreign capital is low.

That’s all folks!