Different components of the financial system and their functions Financial markets - primary and secondary markets; OTC and exchange markets; and equity and debt markets.

1. PhD (Management)
NET(Management)
MMS(Finance)
NSE’s Certified Market Professional
GDCA
Catch me at:
ingleyogeshh@gmail.com
9820273565
Dr. Yogesh

2. FMI WM FR
Indian financial system (IFS) Introduction to Wealth
Management
Introduction to Financial
Regulations
The Role of the Central Bank –
RBI
Need and expectations of clients Reserve Bank of India (RBI)
Stock Exchanges of the Country Investment planning Securities and Exchange Board of
India (SEBI
Secondary Markets and Primary
Markets.
Wealth creating asset classes SEBI Regulations pertaining to
Capital Market
Emerging Markets and Products Alternate assets Insurance Regulatory and
Development Authority (IRDA)
Competition Commission of India
Derivatives Portfolio modelling Foreign Exchange Management
and Regulations
Intermediaries Insurance Planning Prevention of Money Laundering
Fixed income securities Retirement Planning Regulatory framework for
International Funds
Foreign Exchange Markets Estate planning Foreign Direct Investment
Regulations:
Regulatory framework related to
Credit Rating Agencies

3. Career opportunities in Financial
Markets
 Regulators
 Banks
 Insurance firms
 Credit rating agencies
 BPO
 KPO
 Depositories
 Clearing agencies
 Broking firms
 Etc.,

4. FINANCIAL SYSTEM

5. FINANCIAL SYSTEM
Channelizes resources from the surplus to deficit sectors.

6. Regulators
1. Ministry of Finance
2. Reserve Bank of India
3. Securities and Exchange Board of India
4. Pension Fund Regulatory and Development
Authority
5. Insurance Regulatory Development Authority of
India
6. Ministry of Corporate Affairs
Source:
https://dea.gov.in/business/financial-
regulators#Hlk144619709

7. https://www.finmin.nic.in/

8. Ministry of Finance
Departments
1. Department of Economic Affairs
2. Department of Expenditure
3. Department of Revenue
4. Department of Investment and Public Asset
Management
5. Department of Financial Services

9. Subhash Chandra Garg is the current
secretary
Union Budget (including Railway Budget)
Macroeconomic policies, including issues relating to;
 Fiscal policy and public finance
 Inflation
 Public debt management
 Functioning of Capital Market including Stock exchanges
It looks at ways and means to raise finance through;
 Taxation,
 Market borrowings and mobilization of small savings
 Multilateral and bilateral Official Development Assistance
 Sovereign borrowings abroad
 Foreign investments and monitoring foreign exchange
resources including balance of payments
 Production of bank notes and coins of various
denominations,

10. Department of Expenditure
Ajay Narayan Jha is the current secretary
 Pre-sanction appraisal of major schemes/projects
 Implementation of the recommendations of the
Finance and Central Pay Commissions
 Preparation of Central Government Accounts
 Coordinating matters concerning the Ministry of
Finance including Parliament-related work of the
Ministry.
 The Department has under its administrative control
the National Institute of Financial Management (NIFM),
Faridabad.
 Business is carried out through its Establishment
Division, Plan Finance I and II Divisions, Finance

11. Department of Revenue
Dr. Hasmukh Adhia is the current
secretary
 Matters relating to all the Direct taxes through
Central Board of Direct Taxes (CBDT)
 Indirect Union Taxes (Customs and Central
Excise duties and other Indirect taxes ) through
the Central Board of Indirect Taxes & Customs
(CBIC)

12. Department of Investment and Public Asset
Management
Neeraj Kumar Gupta is the current secretary
 Proper management of Centre's investments in
equity including its disinvestment in central public
sector undertakings

13. https://www.rbi.org.in/

14. Monetary Policy14

15. Monetary Policy15

16. https://www.sebi.gov.in/

17. Functions of SEBI
 Regulatory functions
 Developmental functions
 Protective functions.

18. http://www.mca.gov.in/

19. Ministry of Corporate Affairs
 MCA regulates corporate affairs in India through
the Companies Act, 1956, 2013 , Competition Act,
2002 administration of Partnership Act, 1932, the
Companies (Donations to National Funds) Act,
1951 and Societies Registration Act, 1980 and
other allied Acts, Bills and Rules.
 It exercises supervision over the three
professional bodies, namely, Institute of
Chartered Accountants of India(ICAI), Institute of
Company Secretaries of India(ICSI) and the
Institute of Cost Accountants of India (ICAI)

20. https://www.irdai.gov.in

21. IRDA
As per Section 14 of the IRDAI Act, 1999,[1] and
include:
 Issuing, renewing, modifying, withdrawing,
suspending or cancelling registrations
 Protecting policyholder interests
 Specifying qualifications, the code of conduct and
training for intermediaries and agents
 Regulating rates, advantages, terms and
conditions which may be offered by insurers not
covered by the Tariff Advisory Committee under
section 64U of the Insurance Act, 1938 (4 of
1938)

22. http://www.pfrda.org.in/

23. PFRDA
 Ii is regulating NPS, subscribed by employees of
Govt. of India, State Governments and by
employees of private institutions/organizations &
unorganized sectors.
 The PFRDA is ensuring the orderly growth and
development of pension market.

24. BANKS
Source:
https://www.rbi.org.in/commonman/English/Scripts/BanksInIndia.aspx
BANK GROUP NO. OF BANKS
SBI 01
NATIONALISED BANKS 20
PRIVATE SECTOR BANKS 26
FOREIGN BANKS 43
REGIONAL RURAL BANKS 56
STATE CO OPERATIVE BANKS 31

25. NON BANKS
INSURANCE
Source:
http://financialservices.gov.in/insurance-divisions/List-of-Insurance-Companies
INSURANCE GROUP NO. OF PUBLIC
INSURANCE
COMPANY
NO. OF PRIVATE
INSURANCE
COMPANY
Life Insurance
Companies
01 23
General Insurance
Companies
06 18
Health Insurance
Companies
00 06
Reinsurance Companies 01 01

26. CREDIT RATING AGENCIES: 07
CLEARING CORPORATIONS: 05
DEPOSITORIES: 02
Source: https://www.sebi.gov.in/

27. REGULATORS
INSTITUTIONS
BANKS
NON BANKS
MARKETS
CAPITAL
MONEY
COMMODITY
INSTRUMENTS
SHORT TERM
MEDIUM TERM
LONG TERM
SERVICES
FINANCIAL
SYSTEM

28. FINANCIAL MARKET

29. Functions of financial markets
 It provides facilities for interaction between the
investors and the borrowers
 It provides pricing information resulting from the
interaction between buyers and sellers in the
market when they trade the financial assets
 It provides security to dealings in financial assets
 It ensures liquidity by providing a mechanism for
an investor to sell the financial assets.
 It ensures low cost of transactions and
information

30. FINANCIAL
MARKET
CAPITAL
MARKET
MONEY
MARKET

31. Capital Market:
 Medium and long-term funds
 All long-term borrowings from banks and financial
institutions, borrowings from foreign markets and
raising of capital by issue various securities such as
shares debentures, bonds, etc.
 It consists of two different segments namely primary
and secondary market.

32. CAPITAL
MARKET
PRIMARY
MARKET
SECONDARY
MARKET

33. Primary Market:
 fresh issue of shares and debentures.
 It is usually done through private placement to
friends, relatives and financial institutions or by
making public issue.
 Intermediaries such as underwriters, brokers, etc.
who form an integral part of the primary market.

34. Secondary Market:
 The secondary market known as stock market
 It is an organised market where shares, and
debentures are traded regularly with high degree of
transparency and security.
 In fact, an active secondary market facilitates the
growth of primary market as the investors in the
primary market are assured of a continuous market
for liquidity of their holdings.
 The major players in the primary market are
merchant bankers, mutual funds, financial
institutions, and the individual investors; and in the
secondary market you have all these and the
stockbrokers who are members of the stock
exchange who facilitate the trading.

35. Money market?
 To meet the short-term requirement of funds
 Lower interest rate on short term funds than bank
loan rates
 Higher return in short term funds than parking
funds under reverse repo
 To retain business relationships with stronger
corporates
 It helps to meet funding requirements relatively
quickly for better-rated corporates
 Money market instruments should not be used as
a permanent source of capital

36. Money market instruments
Call money market instruments (1 to 3 days)
Notice money market instruments (4 to 15 days)
Money market instruments (up to 1 year)
 Treasury Bills
 Commercial Papers
 Certificate of deposits
 Bills of exchanges

37. Call Money:
 Banks
 Daily basis
 One day to a fortnight.
 Call rate

38. Treasury Bill:
 Secured instrument issued in the form of promissory
note
 Issued by the RBI
 It can be transfer of or get it discounted from RBI.
 Issued at a price less than their face value; and
redeemed at face value.
 So the difference between the issue price and the
face value of the treasury bill represents the interest
on the investment.
 Up to 364 days
 Banks, Financial institutions and corporations
normally play major role in the Treasury bill market.

39. Commercial Paper:
 Working capital requirements
 Unsecured instrument issued in the form of
promissory note.
 For period ranging from 15 days to one year.
 Blue Chip companies are the major player of
commercial paper market

40. Certificate of Deposit:
 Issued by Commercial Banks and Special
Financial Institutions (SFIs), which are freely
transferable from one party to another.
 The maturity period of CDs ranges from 91 days
to one year.
 These can be issued to individuals, co-
operatives and companies

41. Trade Bill:
 This trade bill can be discounted with a bank
before its maturity.
 On maturity the bank gets the payment from the
drawee i.e., the buyer of goods.
 When trade bills are accepted by Commercial
Banks it is known as Commercial Bills.
 So trade bill is an instrument, which enables the
drawer of the bill to get funds for short period to
meet the working capital needs.

42. POINTS PRIMARY MARKET SECONDARY MARKET
Function fresh issue of securities existing long-term securities
Participants financial institutions,
mutual funds,
underwriters and
individual investor
financial institutions, mutual
funds, underwriters, individual
investor
and stockbrokers
Listing
Requirement
approved for the
purpose
no such requirement
Determination
of prices
management with due
compliance with SEBI
forces of demand and supply of
the marke

43. POINTS CAPITAL MARKET MONEY MARKET
Term long-term funds short-term funds
Instruments shares, debentures,
bonds and government
securities
treasury bills, commercial
paper, trade bills, deposit
certificates, etc.
Participants stockbrokers,
underwriters, mutual
funds, financial
institutions, and
individual investors.
Reserve Bank of India,
commercial banks, non-banking
financial companies, etc.,
Regulator Securities Exchange
Board of India (SEBI).
Reserve Bank of India

44. SEBI

45. Stock exchange
The term commonly used for a secondary market
 Shares, debentures and bonds, government
securities can be bought and sold on a regular
basis
 The Securities Contract (Regulation) Act has
defined stock exchange as an “ association,
organisation or body of individuals, whether
incorporated or not, established for the purpose
of assisting, regulating and controlling business of
buying, selling and dealing in securities”.

46. Two types of operations:
 Investment transactions
 Speculation transactions

47. List of Stock Exchanges
Sr. No. Name Valid Upto
1 BSE Ltd. PERMANENT
2 Calcutta Stock Exchange Ltd. PERMANENT
3 Metropolitan Stock Exchange of India Ltd. 15-Sep-18
4 National Stock Exchange of India Ltd. PERMANENT
5 India International Exchange (India INX) Dec 28, 2018
6 Magadh Stock Exchange Ltd. PERMANENT
7 NSE IFSC Ltd. May 28, 2019

48. List of Commodity Derivative Exchanges
Sr. No. Name Valid Upto
1
Ace Derivatives and Commodity Exchange
Limited PERMANENT
2 Indian Commodity Exchange Limited PERMANENT
3 Multi Commodity Exchange of India Ltd. PERMANENT
4
National Commodity & Derivatives Exchange
Ltd. PERMANENT
5
National Multi Commodity Exchange of India
Limited. PERMANENT

49. The main characteristics of a stock exchange are:
 It is an organized market.
 It provides a place where existing and approved
securities can be bought and sold easily.
 In a stock exchange, transactions take place
between its members or their authorized agents.
 All transactions are regulated by rules and by laws of
the concerned stock exchange.
 It makes complete information available to public in
regard to prices and volume of transactions taking
place every day.

50. Functions of stock exchange:
 Provides ready and continuous market
 Provides information about prices and sales
 Provides safety to dealings and investment
 . Helps in mobilization of savings and capital
formation
 Barometer of economic and business conditions
 Better Allocation of funds

51. Advantages of stock exchanges:
To the Companies:
 Better goodwill and credit-standing than other
companies because they are supposed to be
financially sound.
 The market for their securities is enlarged
 Value of their securities increases and their bargaining
power in collective ventures, mergers, etc. is
enhanced.
 The companies have the convenience to decide upon
the size, price and timing of the issue.

52.  To the Investors:
 buying and selling the securities at will and at an
opportune time.
 Assured safety and free from any anxiety about the
delivery and payment problems.
 Availability of regular information on prices of
securities
 Banks prefer them as collateral on account of their
liquidity and convenient valuation.

53. To the Society:
 Lucrative avenues of investment and the liquidity leads
to increased capital formation in the country.
 Support to new issue market.
 To increase in the rate of industrial growth.
 The changing economic health.
 Government borrowing is highly facilitated

54. Limitations of stock exchange:
 excessive speculation, leads to wide fluctuations in
prices and various malpractices by the vested
interests.
 Security prices may fluctuate due to unpredictable
political, social and economic factors etc.

55. Stock exchanges in India
 The first organized stock exchange in India was started in
1875 in Mumbai known as Bombay Stock Exchange
(BSE).
 It was followed by Ahmedabad Stock Exchange in 1894
and Kolkata Stock Exchange in 1908
 The number of stock exchanges in India went up to 7 by
1939 and it increased to 21 by 1945 on account of heavy
speculation activity during Second World War
 A number of unorganized stock exchanges also
functioned in the country without any formal set-up and
were known as kerb market
 The Security Contracts (Regulation) Act was passed in
1956 for recognition and regulation of Stock Exchanges in
India

56. There are two leading stock exchanges in India which help
us trade are:
 National Stock Exchange: National Stock Exchange
incorporated in the year 1992 provides trading in the
equity as well as debt market. Maximum volumes take
place on NSE and hence enjoy leadership position in the
country today.
 NSE operates on the 'National Exchange for Automated
Trading' (NEAT) system.
 Bombay Stock Exchange: BSE on the other hand was
set up in the year 1875 and is the oldest stock exchange
in Asia. It has evolved in to its present status as the
premier stock exchange.
 BSE operates on the “BSE‟s Online Trading‟ (BOLT)

57. Regulation of stock exchanges
 The Securities Contracts (Regulation) Act was passed which
provided for recognition of stock exchanges by the central
Government.
 It has also the provision of framing of proper bylaws by every
stock exchange for regulation and control of their functioning
subject to the approval by the Government.
 All stock exchanges are required submit information relating
to its affairs as required by the Government from time to time.
 The Government was given wide powers relating to listing of
securities, make or amend bylaws, withdraw recognition to, or
supersede the governing bodies of stock exchange in
extraordinary/abnormal situations.
 Under the Act, the Government promulgated the Securities
Regulations (Rules) 1957, which provided inter alia for the
procedures to be followed for recognition of the stock
exchanges, submission of periodical returns and annual
returns by recognised stock exchanges, inquiry into the affairs

58. Derivatives
Derivative is a contract that derives its value from
the value of an underlying.
 Forwards
 Futures
 Options
 Swaps

59. Assignment:1
Prepare list of following institutions:
1. Nationalized Banks
2. Private Banks
3. Foreign Banks
4. Regional Rural Banks
5. Cooperative Banks
6. Regulators
7. Insurance Firms
8. Mutual Fund Agencies
9. Credit Rating Agencies
10. Broking Firms

60. Assignment:2
 List of Depositories
 List of Clearing Corporations
 List of Sub brokers (Any 10)

61. Presentation:1
Visit below websites and prepare presentations on
it.
 RBI
 SEBI
 IRDA
 PFRDA
 SBI
 NSE
 BSE
 MOF

62. Help yourself
References
 https://www.rbi.org.in/commonman
 http://www.sebi.gov.in/sebiweb/
 http://finmin.nic.in/
 http://www.nseindia.com/education/content/modul
e_ncfm.htm

63. Help yourself