INTRODUCTION TO FINANCIAL SYSTEM IN INDIA.pptx

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1. INTRODUCTION TO FINANCIAL SYSTEM IN INDIA Prof. Kenneth Wilson

2. What Is a Financial System? A financial system is a set of institutions, such as banks, insurance companies, and stock exchanges, that permit the exchange of funds. Financial systems exist on firm, regional, and global levels. Borrowers, lenders, and investors exchange current funds to finance projects, either for consumption or productive investments, and to pursue a return on their financial assets. The financial system also includes sets of rules and practices that borrowers and lenders use to decide which projects get financed, who finances projects, and terms of financial deals.

3. Objectives of the financial system  To create a structured payment system To give money the time value as it deserves To reduce risks and compensate for the same through offering products and services To enable the most efficient economic resource allocation  To maintain market stability in the economic sector

4. The Functions and Importance of a Financial System Facilitating Payments Transfer of Resources Risk Management Managing Information Efficient Middleman Pooling of Resources

5. Financial Systems and Economic Development Interest Rates Stabilization Aids Trade and Commerce Aids International Trade Aids in Attracting Capital Aids Infrastructure Development Help in Employment Creation