Scribd Logo
Upload

Welcome to Scribd!

  • 19K views

    Characteristic Features of Financial Instruments

    Uploaded by

    manoranjanpatra
    This document classifies and describes India's financial markets and system. It outlines the organized and unorganized financial markets, including the capital market, money market, and foreign exchange market. It also discusses the development of India's financial system through the nationalization of banks and establishment of development institutions. The document notes both the strengths and weaknesses of India's financial system.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    Characteristic Features of Financial Instruments

    Uploaded by

    manoranjanpatra
    19K views17 pages
    This document classifies and describes India's financial markets and system. It outlines the organized and unorganized financial markets, including the capital market, money market, and foreign exchange market. It also discusses the development of India's financial system through the nationalization of banks and establishment of development institutions. The document notes both the strengths and weaknesses of India's financial system.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document classifies and describes India's financial markets and system. It outlines the organized and unorganized financial markets, including the capital market, money market, and foreign exchange market. It also discusses the development of India's financial system through the nationalization of banks and establishment of development institutions. The document notes both the strengths and weaknesses of India's financial system.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    19K views17 pages

    Characteristic Features of Financial Instruments

    Uploaded by

    manoranjanpatra
    This document classifies and describes India's financial markets and system. It outlines the organized and unorganized financial markets, including the capital market, money market, and foreign exchange market. It also discusses the development of India's financial system through the nationalization of banks and establishment of development institutions. The document notes both the strengths and weaknesses of India's financial system.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 17

    Classification of Financial Market

    Classification of Financial
    Markets
     Organised markets
     Unorganised markets – money lenders,
    indigenous bankers, etc.,
    Organised markets
     Capital market
     Money market
    Capital market
     Industrial securities market
    1.primary market
    2.secondary market
     Govt securities market
     Long term loans market
    1.term loan market
    2.market for mortgages
    3.market for financial guarantees
    Importance of capital market
     Important source for the productive use of the
    economy’s savings
     Provides incentives to saving and facilitates capital
    formation
     Provides an avenue for investors
     Facilitates increase in production and productivity in
    the economy
     Induce economic growth
     Expert intermediaries
     Imp source of technological upgradation
    Money market
     Call money market
     Commercial bill market
     Treasury bill market
     Short term loan market
    Foreign exchange market
     Transfer purchasing power from one
    country to another
     Provides adequate credit facilities
     Covers foreign exchange risk
    Financial Rates of Return
     Peculiar feature is int. rates do not reflect the
    free market forces
     Achieves the following
    1.enable govt. to borrow comparatively
    cheaply
    2.ensure stability
    3.support certain sectors through
    professional lending rates
    4.mobilise substantial savings
    Recent trends
     Int rates on govt deposits freed
     Int rates on TB’s determined by auctions
     Coupon rates on govt loans revised upwards
     Int rates on debentures are allowed to be fixed
    by companies
     Max rates of int payable on bank deposits(fixed)
    are freed for deposits of above one year
    Financial Instruments
     Primary securities
     Secondary securities
     Short term securities
     Medium term securities
     Long term securities
    Characteristics of financial
    instruments
     Easy transferability
     Ready market
     Possess liquidity
     Possess security value
     Enjoy tax status
     Carry risk
     Facilitate futures trading
     Less handling costs
     Risk and return proportionate
     Maturity period variations
    Development of financial system
     Nationalisation of financial institutions
     1935 RBI established as a private inst.,
    nationalised in 1948
     1956 SBI nationalised previously known as
    imperial bank of India
     1956 245 insurance companies merged and
    formed LIC
     1969 14 major commercial banks nationalised
    and 6 in 1980 and GIC re-organised
    Starting of UTI
    Est. 1964
    1994 schemes approved by SEBI
    Est. UTI Bank
    UTI Investor service
    UTI Security Exchange LTD
    Establishment of development banks
    1948 IFCI, 1951 SFC, 1955 ICICI (Pvt. Sec)
    1958 RCI 1964, on 1st July IDBI,1971 IDBI, LIC jointly
    set up IRCI renamed as IRBI in 1997, now a ltd co. IIBI
    SIDBI(2-4-1990)
    Institutions for financing agriculture
    1963 ARDC
    1982 July NABARD

    Institution for foreign trade


    1.01.1982 EXIM Bank
    Institutionfor housing finance
    1988 NHB

    SCHIL est. in 1987

    Mutual Fund Industry

    Venture capital institutions

    1986 IDBI started VC financing

    IFCI started a subsidiary Risk Capital


    and Technical Finance Corporation
    ICICI and UTI jointly set up Technical
    Development Information Corporation of
    India Ltd
    Contd…………….
     Credit rating agencies
     CRISIL
     CARE
     DCR
     Multiplicity of financial instruments
     Legislative support
    Weakness of Indian Financial
    System
     Lack of coordination between financial inst
     Monopolistic market structures
     Dominance of development banks in
    industrial financing
     Inactive and erratic capital market
     Imprudent financial practice

    You might also like