Page 16 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 1: Indian Financial System

Notes

Task Find out the latest issue in secondary market and check the following:

 Underwriter
 Lead bank
 Investment banker

Self Assessment

Fill in the blanks:
6. ………………….are a long-term promissory notes with maturities ranging from 5 to 30
years.
7. …………………………..is created only when the investment of an economic unit in real
assets exceeds its savings, and it finances this excess by borrowing or issuing equity
securities.
8. ………………………….represent an important short-term financial instrument that arises
out of commercial transactions.
9. …………………………….is the unsecured promissory notes with a fixed maturity, usually,
between seven days and three months, issued in bearer form and on a discount basis.

10. ………………………are usually bought by institutions not requiring high liquidity of
their financial assets.
11. The commercial banking sector comprises of public sector banks, private banks and
………………….
12. RBI also regulates foreign exchange under the …………………………….Act.
13. ………………………………………………… is the regulatory authority in the insurance
sector under the Insurance Development and Regulatory Authority Act, 1999.
14. ………………………is one whose value depends on particular physical properties, such as
buildings, land, machinery, etc.
15. Deposits are sums of money placed with a financial institution, for ……………to a customer's
account.
1.5 Summary

 The financial system is the system that allows the transfer of money between savers and
borrowers. It is a set of complex and closely interconnected financial institutions, markets,
instruments, services, practices, and transactions.
 India has a financial system that is regulated by independent regulators in the sectors of
banking, insurance, capital markets, competition and various services sectors.

 In a number of sectors Government plays the role of regulator.
 RBI is regulator for financial and banking system, formulates monetary policy and
prescribes exchange control norms.

 The commercial banking sector comprises of public sector banks, private banks and foreign
banks.

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