Overview of Financial System Banking, Non-Banking, Financial Market Commerce YouTube Lecture Handouts

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Title: Overview of Financial System

Overview of Indian Financial System: Banking, Non-Banking, Financial Market (Organized, Unorganized)

Finance

  • Financial Institutions
  • Investors/Businessman
  • Savers
  • Economic Development
  • Expansion of FM
  • Capital Formation
  • Allocation of Funds
  • Creates Liquidity
  • Mobilization of Funds
  • Diversification of Risk
  • Linkage B/W S I F
  • Payment Mechanism
  • Provision of Information

Overview of Indian Financial System

  • Ministry of Finance (govt. of India)
    • Financial Institutions
    • Financial
    • Markets
    • Financial Assets/Instruments
    • Financial Services

Financial Institutions

Financial Institutions
Financial Market

Financial Assets/Instruments

Capital Market Instruments

  • Long Term Credit Instruments
  • Equity Shares, Debenture, Preference Shares, Bonds

Money Market Instruments

  • Short Term Assets Purchase and Sale of Bills
  • Commercial Papers, Certificate of Deposit, Treasury Bills, General Bills, Repurchase Agreements, Claims, Asset, Securities.
  • Call Money, Notice Money, Commodity Brokers and Exchange, Term Money
Money Market Instruments

Financial Service

Fund Based

  • Lease
  • Bill discounting
  • Consumer credit
  • Hire purchase
  • Factoring

Lease

Contract in which one party agrees to rent property owned by another party for specified period.

Bill Discounting

The bank buys the bill before it is due and credits the value of the bill to the customer՚s account after a discount charge.

Hire Purchase

Buying goods gradually that belongs to you in installments and ownership is transferred until all installments are paid.

Fee Based

  • Merchant banking
  • Debt restructuring
  • Stock broking
  • Issues management
  • Credit rating
  • Insurance
  • Wealth management
  • Professional advisory

Factoring

Selling the invoices to the factoring company (Financial Institution) against fees to provide immediate cash.

Debt Restructuring

Direct negotiations between a company and its creditors to reduce its delinquent debts to restore liquidity.

Issue Management

An important function for merchant bankers and lead managers where the management of securities of the corporate sector is offered to the public on a regular basis and existing shareholders on a right basis.

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