49381592 Indian Financial System Ppt

8/9/2019 49381592 Indian Financial System Ppt

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INDIAN FINANCIAL SYSTEM


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IFS and its Functions

• System that allows the transfer of money

etween sa!ers and orrowers

• It channels household sa!in"s to the

cor#orate sector

• Allows $asset % liaility& transformation

• It hel#s in ris' transformation y di!ersification


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Structure of (an'in" in India


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Commercial an's

)ulic sector an's are those where "o!ernment

holdin"s are more than *+, while nationali-ed an'sare those an's which were nationali-ed on .uly /01

/0203 Thus all nationali-ed an's are #ulic sector

an's3

so one can say #ulic sector an'4Nationali-ed

an'5 S(I 5 S(I associates 5 ID(I Thus in total 67

)S(8s are there3

• As on Decemer 9/st 1 )ulic sector an's recorded a

rise of 6:3/, when com#are to /230, in the last year3


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)ri!ate sector (an's

• )ri!ate sector an's are those an's in which

ma;ority of sta'e is held y #ri!ate indi!iduals and noty "o!ernment

• The first #ri!ate an' in India was Induslnd (an'

• ID(I ran's the /+th lar"est de!elo#ment an' in the

world as #ri!ate an's in India

• As on Decemer 9/st 1 )ri!ate sector an's recorded

a rise of 6


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Forei"n (an'

• (an's from other countries which ha!e ranches in

a country3• Citi (an' o#ened its ranch in India in /0+6

• The forei"n an's ha!e rou"ht forth someinno!ations and chan"es in the an'in" industry of

the country3 The an'in" industry is now more

com#etiti!e and customer friendly than efore3

• As on Decemer 9/st 1 Forei"n an's recorded a

rise of /03


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=e"ional rural an'

• The an's #ro!ide credit to the wea'er sections of

the rural areas1 #articularly the small and mar"inalfarmers and small entre#reneurs

• ==(8s was set u# y the "o!ernment of India on

>ctoer 61 /07*• The total authori-ed ca#ital was earlier fi?ed at =s3

/ crore which is now raised to =s3 * crore

• The ==(8s are under control of NA(A=D which is

in char"e of layin" down #olicies for the ==(8s


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Funds flow from commercial an'

STRONG DEMANDCREDIT FLOW FROM SCHEDULED COMMERCIAL BANKS (RS CRORE)

Item Outstanding ason

March 26, 2010

As on March 2,200!

As on March 26,2010

Amount "er cent Amount "er cent

Public Sector

B!"# $%&'&%* &$*&+, -+.' *&/-&%% $/.-

Forei0! B!"# -&'&%++ 1-/&$, 1,.- -&/%/ -'.,

Pri2te B!"# +&,'&$$ /-&/$/ ,./ -&*-&+-, $,.$

All Sc3e4ule4

Co66ercilB!"#7

%&+&$- &++&'-/ -., %&,&+/- $/./

78 I!clu4i!0 Re0io!l RurlB!"#

Source8RBI


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Ca#ital mar'et


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@ilt Ed"ed Mar'et And Ty#es

• This mar'et refers to the mar'et for "o!ernment

securities which are $of the est uality&3• Credile instrument used y "o!ernment for

meetin" its financial reuirement3

• Ty#esB%I3 Dated Securities with a fi? maturity date3

II3ero cou#on onds

III3)artly #aid stoc'

I3Treasury (ills


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Industrial security mar'et

• An initial public offering IPO1 referred to sim#ly

as an Gofferin"G or GflotationG1 is when a com#anycalled the issuer issues common stoc' or shares to

the #ulic for the first time3

• India8s lar"est I)> is from Coal India Ltd which

raised u#to =s3/*+++ crore

• A stock exchange is an entity that #ro!ides

Gtradin"G facilities for stoc' ro'ers and traders totrade stoc's1 onds1 and other securities3


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=ecent chan"es y SE(I

• In!estment limit in I)> is increased from / la'h to

6 la'h

• SE(I decides I)>8s should e listed with in /6

days

• SE(I introduced s#ot deli!ery system for

deri!ati!es from A#ril /st 6+//

• )re o#en mar'et introduced y SE(I


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De!elo#ment financial Institutions

• It was de!elo#ed y $The Narasimham

committee&in /00/

• These institutions #ro!ide a crucial role in #ro!idin"

credit in the form of hi"her ris' loans1 euity#ositions and ris' "uarantee instruments to #ri!ate

sector in!estments in de!elo#in" countries


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Merchant an's

• Merchant an'ers assist cor#orate in raisin"

ca#ital3

• They assist in issue of Shares1 syndicatin" loans1

#ulic issue of deentures3 They do not #ro!idefunds3

• They only assist3 They also acti!ely arran"e

wor'in" ca#ital1 a##raisal )ro;ects scrutini-e H#ersuade mer"er #ro#osals

M h t ' l d


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Merchant an'ers as lead mana"ers

Sl.no Size of the issue Maximum numberof lead managers

/ Less than *+ crores 6

6 *+ /++ crores 9

9 /++ 6++ crores :

: 6++ :++ crores *

* Ao!e :++ crores * or more as#rescried y SE(I

M t l F d


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Mutual Funds

• A mutual fund is a #rofessionally mana"ed ty#e

of collecti!e in!estment scheme that #ools moneyfrom many in!estors and in!ests ty#ically in

in!estment securities3

• Ty#es of mutual Funds

I3 >#en % ended schemes

II3Close ended schemes

( ' J M t l F d


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(an' !Js Mutual Fund

particulars BANS M!"!A# $!N%S

=eturns Low (etter

Administrati!eE?#enses

Ki"h Low

=is' Low Moderate

In!estment >#tions Less More

uality of assets Not trans#arent Trans#arent

Interest calculation Minimum alanceetween /+th H 9+th ofe!ery year

E!eryday

L fi i d hi h


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Lease financin" and hire #urchase

• #easing is a #rocess y which a firm can otain the

use of a certain fi?ed assets for which it must #ay aseries of contractual1 #eriodic1 ta? deductile

#ayments3

• A hire%#urchase contract allows the uyer to hire the

"oods for a monthly rent3

• A hire #urchase is termed an installment plan3

t it l Fi i


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enture ca#ital Financin"

• enture ca#ital is ris' financin" a!ailale in the

form of euity• A !enture ca#italist also #ro!ides mana"ement

su##ort and acts as a #artner and ad!isor to the

entre#reneur

• Methods of !enture financin"

I3 Euity Contriute :0, of the total euity ca#ital

II3Conditional loan Amount re#ayale in form of

royalty1 No interest char"ed

III3 Income notes Char"es oth interest and royalty

on sales


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TKAN Y>

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49381592 Indian Financial System Ppt

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