Page 6 - DCOM304_INDIAN_FINANCIAL_SYSTEM
P. 6

Rupesh Roshan Singh, Lovely Professional University
                                                                                     Unit 1: Indian Financial System




                           Unit 1: Indian Financial System                                      Notes


             CONTENTS
             Objectives
             Introduction

             1.1  Components/Key Elements of Indian Financial System
             1.2  Functions of Financial System
                 1.2.1   Linking Surplus and Deficit Spending Units

                 1.2.2   Providing Payment System
                 1.2.3   Managing Risks
                 1.2.4   Price Information
             1.3  Nature and Role of Financial System
             1.4  Nature and Role of Financial Instruments

             1.5  Summary
             1.6  Keywords
             1.7  Review Questions

             1.8  Further Readings

          Objectives

          After studying this unit, you should be able to:
              Learn the concept of Indian financial system;

              Explain the key elements related to Indian financial system;
              Discuss the nature and functions of Indian financial system;
              Understand role of financial system and financial instruments;
              Understand components of Indian financial system.

          Introduction


          The financial system or the financial sector of any country consists of (a) specialized and non-
          specialised financial institutions (b) organized and unorganized financial markets and (c) financial
          instruments and services which facilitate transfer of funds. Procedures and practices adopted in
          the markets and financial interrelationships are also parts of the system. The financial system is
          concerned about money, credit, and finance-the terms intimately related, somewhat different
          from each other. Money refers to the returned medium of exchange or means of payment. Credit
          or loan is a sum of money to be returned normally with interest; it refers to a debt of economic
          unit. Finance is monetary resources comprising debt and ownership funds of the state, company
          or person. Figure 1.1 shows a typical structure of financial system in any economy.








                                           LOVELY PROFESSIONAL UNIVERSITY                                    1
   1   2   3   4   5   6   7   8   9   10   11