Anu SahiAssistant ProfessorSchool of Management StudiesAPJIMTCJaladhar

Finance is the study of how and under what terms savings (money) are allocated between lenders and borrowers.Finance is distinct from economics in that it addresses not only how resources are allocated but also under what terms and through what channelsFinancial contracts or securities occur whenever funds are transferred from issuer to buyer.

Gurley (1950), Shaw(1960) and Goldsmith (1969) discussed stages in evolution of financial system on the basis of per capita income.Per capita Income Development of Financial System

Low per capital Income Low level of development Less financial Intermediation

High per capita Income High Level of development- More financial Intermediation

More per capita Income- More Chances of Market based Financial System

Less Per capital Income- More Chances of Bank Based Financial System

Merchant BankingDepositoryLeasingFactoringVenture CapitalCredit RatingMutual FundsPlastic Money

RBISEBIIRDA

*