Bba education financial stuff padahi BBA FM II.pdf

Education padahi stuff bba management

1. FINANCIAL
MANAGEMENT II
BBA-401
BY: Dr. Anupam Jain
Associate Professor-ABS
Amity University, Jaipur.

2. Module I:
Introduction to
Financial
Environment and
Indian Financial
System

3. Financial Environment
The financial environment comprises the institutions, markets,
instruments, services, and mechanisms that facilitate the
mobilization, allocation, and utilization of financial resources. It is
the framework within which individuals, businesses, and
governments interact to fulfill their financial needs.

4. Components of Financial Environment
•Financial Institutions: Banks, non-banking financial companies (NBFCs), insurance
companies, and mutual funds.
•Financial Markets: Money market, capital market, forex market, and commodity market.
•Financial Instruments: Shares, bonds, debentures, derivatives, and treasury bills.
•Regulators: Institutions like the Reserve Bank of India (RBI), Securities and Exchange
Board of India (SEBI), and Insurance Regulatory and Development Authority of India
(IRDAI).
•Participants: Retail investors, institutional investors, corporations, and the government.

5. Importance of Financial Environment
•Facilitates Savings and Investments: Provides a platform for channeling
savings into productive investments.
•Economic Stability: Promotes balanced economic growth and
development.
•Supports Government Policy: Enables implementation of fiscal and
monetary policies.
•Encourages Entrepreneurship: Offers funding options for new business
ventures.

6. Role of Financial Environment
•Efficient Resource Allocation: Ensures that funds are allocated
to productive sectors.
•Wealth Maximization: Helps investors maximize returns.
•Risk Management: Provides instruments to hedge against
financial risks.
•Liquidity Provision: Ensures availability of funds when required.

7. Indian Financial System
Meaning:
The Indian Financial System refers to the network of institutions, markets,
instruments, and services that facilitate the flow of funds between savers and
investors in the Indian economy.
Structure of the Indian Financial System
•Formal Sector: Includes regulated institutions like banks and stock exchanges.
•Informal Sector: Comprises moneylenders, chit funds, and indigenous banking.

8. Components of the Indian Financial System
1.Financial Institutions
oBanking Institutions: Public sector banks, private
sector banks, foreign banks.
oNon-Banking Financial Companies (NBFCs):
HDFC, Bajaj Finance.
oDevelopment Banks: NABARD, SIDBI.
2.Financial Markets
oMoney Market: Short-term funds (e.g., call
money, treasury bills).
oCapital Market: Long-term securities (e.g.,
equity, debt).
3.Financial Instruments
oDebt Instruments: Bonds, debentures.
oEquity Instruments: Shares.
oHybrid Instruments: Convertible bonds.
4.Financial Services
oCredit Rating: CRISIL, ICRA.
oFund Management: Asset management
companies.

9. Importance of Indian Financial System
•Economic Growth: Mobilizes savings for investment.
•Financial Inclusion: Brings unbanked individuals into the formal
economy.
•Stability: Ensures a robust mechanism for economic resilience.

10. Role of Indian Financial System
•Mobilization of Savings: Encourages savings among individuals.
•Credit Distribution: Ensures fair distribution of credit to all sectors.
•Support for Infrastructure Development: Funds large-scale
infrastructure projects.
•Facilitates Trade and Commerce: Provides working capital and
trade finance solutions.

11. Recent Banking Structure in India