2. Introduction
The financial system is the system that enables lenders
and borrowers to exchange funds. The financial system
basically a broader regional system that encompasses all
financial institution, borrowers and lenders within the
global economy. It is a process and procedures used by
an organization’s management to exercise financial control
and accountability. These measures include recording,
verification and timely reporting of transaction that
affect revenues, expenditures, assets and liabilities.
3. STRUCTURE OF INDIAN FINANCIAL SYSTEM
The basic structure of Indian financial system is derive into four
components which are;
Financial services
Financial markets
Financial instruments'
Financial institutions
4. FUNCTION OF FINANCIAL SYSTEM
The function of financial system are broadly classified into:
Saving function
Liquidity function
Payment function
Risk function
Policy function
5. CLASSIFICATION OF FINANCIAL MARKET
The Indian financial system are classified the financial
market into:
1) Money market
2) capital market
Capital market: Capital market are classified into;
Primary markets and
Secondary markets
6. FINANCIAL MARKET
Financial market is a mechanism that allows people to
indulged themselves in the buying and selling i.e., trade of
financial securities ( stocks and bonds), commodities
(precious metals) at price that reflect the market’s
effectiveness.
7. Primary market: In the primary market, company can raise its
capital through issue of shares and debentures by means of
Public issue
Rights issue
Bonus issue
Private placement
Secondary market: The secondary market imparts liquidity to
the long term securities held by them by providing an auction
market for these securities. The secondary market operates
through medium of stock exchanges which regulate the trading
activities in this market and ensures a measure of safety and
fair dealing the investors
8. GOVERNMENT SECURITEIS MARKET
Types of Government securities
Stock certificate
Promissory notes
Bearer bonds
9. FOREIGN EXCHANGE MARKET
The fact resulted in the development of a
market which deals specially in currencies, called
he foreign exchange market. It is a network of
banks, brokers, and dealers spread across the
various financial centres of he world.
The main players in the foreign exchange market are large
commercial banks, FOREX brokers, large corporation and
the central banks.
