Financial system by Harpreet aKa Chris
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Transcript of Financial system by Harpreet aKa Chris
Financial SystemHarpreet Singh aKa Chris
Definition
Financial system is system that allow transfer money between savers and borrowers
Financial system is most important institution and functional vehicle for economic transformation. finance is a bridge between present and future whether and mobilization of saving or effective and equitable allocation for investment .
Definition
Supply funds to various sector and
activities of economy in way promote
fullest possible utilization of resource
without unnecessary interference with
individuals desire.
Provide link between saving and
investment.
Feature of financial system
Provide ideal linkage between savers
and investor and also encourage
saving and investment .
Mobilization of saving or effective and
equitable allocation for investment.
COMPONENTS OF FINANCIAL
SYSTEM
Financial Institutions
Financial Markets
Financial Instruments
Financial Service
Financial Institutions
Financial institutions are
intermediaries and mobilize saving
and facilities of allocation fund in
efficient manner.
Financial Institutions can be classify
banking and non-banking institutions.
Financial Market
Financial market in India are money
and capital market.
First market is short-term securities.
Money market is market which deal
with financial asset and securities
which have maturity period up to one
year.
Second market is long-term securities
which have maturity up to one year
and more.
Financial Instrument
Financial instruments also called
financial securities. It can be classify
into :-
1. Primary Securities
2. Secondary Securities
Primary Securities
These securities directly issued by
ultimate investor to ultimate savers
for example :- Shares and Debenture
directly issued to public
Secondary Securities
These securities issued intermediaries
to ultimate savers.
1. Short-term securities (1 year)
2. Medium-term securities (1to 4 year)
3. Long-term securities (more than 5
year)