INDIAN FINANCIAL SYSTEM
CIA 1.2
ARTICLE REVIEW
Submitted By:
Saloni Jain – 1820343
Table of Contents
SL. NO. TOPIC PAGE NO.
1. Article 1 1-2
2. Article 2 3-4
3. Article 3 5-6
4. Article 4 7-8
5. References 9
A Study On Recent Development Of Indian Financial System
Journal – International Conference On Science, Technology, Management.
Volume - 17
Issue No. – 978-93-86171
Page Number – 228-234
Data Methodology
The data is conceptual in nature. The data is based on secondary information which is taken
from various regulatory reports and releases.
Objectives
The main objective of the study is to discover the recent developments in the Indian
Financial System.
This paper also explains the components and features of the financial system.
It also observes the objectives and functions of the Reserve Bank Of India.
Summary
T. Sanjeev Kumar through this paper introduces the financial system, functions of Reserve
Bank Of India and the development in the Indian Financial System. A financial system is a
system that facilitates the allocation of funds from the investors to the borrowers. It is a link
between the savers in the economy to the borrowers. Financial System in India include
financial Institutions, Non-Banking Financial Institutions, Financial Markets, Primary
Markets, Secondary Markets. Financial Institutions are intermediaries of financial markets.
They mainly include banking institutions such as Public Banks, Commercial Bank, Central
Banks, Cooperative Banks, State-Managed Land Development Banks. Non-Banking
Financial institutions provide services of investment, brokerage, and risk-sharing. They
include Finance and loan companies, insurance companies, mutual funds, commodity traders.
Financial market is an institutional arrangement where financial securities and derivatives are
traded at transaction costs. Primary Markets is a place where investors purchase securities
directly from the issuer and in the secondary market already issued securities are traded.
Primary Markets are for fresh issue of new securities in the market.
The paper discusses the role of financial system in the economy. It has a significant play in
the development of the economy. It is a bridge between a saver and borrower. Financial
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System stimulates the rate and magnitude of savings through various financial instruments
and effective mobilization of services. It helps the corporate investors to make appropriate
financial decisions through various expert services. It also protects and controls the financial
system by various regulations by RBI, SEBI. The financial system is controlled by market
forces but to effective utilization of resources and to protect the interest of the investors and
issuers, the market has to be regulated through policies and regulations. Reserve Bank Of
India is the governing body and the regulatory body of the Indian Financial System.
The staggering and the unorganized financial system was picked up through various reforms
since 2016. The government decision to withdraw the legal tender status for Rs. 500 and Rs.
1000 notes, to curb down the flow of black money. The government made a decision to form
a Monitory Policy Committee consisting of 6 members ( 3 members from RBI and 3
members from central government ) to fix the repo rate that controls inflation. The
government than combined all the indirect taxes into one single uniform tax known as Goods
and Services Tax. The government than revolutionized the insolvency laws by changing
centuries old regulations and adopting Insolvency and Bankruptcy Code, 2016. The
government than modernized the payment system in India by laying out Procedure for
Acceptance of Electronic Payments and Receipts.
This paper thus provides a glimpse of the entire Indian Financial System and the recent
developments in the system.
Conclusion
A Financial System can lead to economic development as it is platform to the lenders and the
borrowers. The profit of this transaction lead to capital accumulation and thus economic
development. The Indian Financial System under past decades has seen various reforms
which has revolutionized the entire Indian Financial System.
References
T. Sanjeev kumar, T. S. (2017, October 14). A Study On Recent Development Of Indian
Financial System. International Conference On Science, Technology, Management.6(7).
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An Overview of Financial Services in India
Journal – International Research Journal of Commerce, Art and Science.
Volume - 6
Issue – 7
Page Number – 180-188
Data Methodology
The data used for this paper is secondary. The information is derived from various regulatory
frameworks.
Objectives
This paper discusses the overview of the financial services in the Indian Financial
System.
This paper discusses the importance of financial services in the development of the
Financial Markets.
The paper studies the scope of Financial services in the Indian Financial System and
the recent developments.
Summary
Pravesh Kumar through this paper discusses the role and impact of financial services in the
Indian economy. The financial services has come to picture after liberalization in 1990,
before than the financial sector was dominated by commercial banks. The paper than
provides for the introduction to the financial services. Financial services are products and
services offered by intermediaries like banks, insurance companies, merchant banks, leasing
companies, venture capital firms, mutual funds etc. that are involved in mobilization of funds
from a large number of savers to corporate customers. These financial intermediaries
facilitates the smooth operation of the financial market and lead to economic development.
The financial market are characterized in the following manner in this paper : Intangibility,
Perishability, Variability, Labor Intensive, Information Based. This characterized also depicts
the challenges faced by financial services as they are heterogeneous and perishable in nature.
The study than discusses the importance of financial services in the Indian markets. Final
Intermediaries channelizes the funds of the savers into productive investment, and also
provides services to corporate customers. Financial Services also contributes employment
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opportunities and thus also contribute to GNP of the company in the form of income to
factors.
Financial Services has a wide scope in the Indian Markets. This paper discusses the scope of
the services into fund based and non-fund based.
Lease financing is a fund- based service which means where an asset is leased or rented for
consumption purposes. Hire purchase is similar to lease financing but in this case the money
is paid in installments and at the end of full payment, the ownership of the product is
transferred. Bill Discounting is a popular type of financial service where the debtor provides
a discounting promissory note of paying the debt on a specified date but the holder can
discount the bill through a bank before the specified time period. Venture capital is an
innovation in the Indian Financial services where the venture capitalist provides funds to new
businesses. Factoring is also a new type of financial service where a company sells its
account receivables in need of immediate cash. Housing, Insurance and mutual funds
services are also some fund-based series in the Indian sector.
Non-Fund based services are merchant banks, credit rating agencies, stock brokers, custodial
services and loan syndication. Merchant Banks are involved in arranging funds rather than
lending it. They act as an intermediary between savers and borrowers. Credit Rating agencies
provide an expert rating or advice of the credit worthiness of an issuer. Loan Syndication is
where many banks provide funds for a single loan.
Though the financial services in the Indian market is diverse it has to face various challenges.
The major challenges are lack of qualifies personnel, lack of awareness among investors, lack
of transparency, lack of efficient risk management system in the financial system.
Conclusion
Financial Services in India is crucial for the economic development of the nation. Financial
Services is one of the largest industries in the world. This sector can overcome the problem of
unemployment in the Indian economy. Though India has a developed and emerging financial
service sector but if more attention is paid to this sector it can lead to the development of the
financial market as it is the regulator of the financial markets and thus lead to economic
development in the country.
References
Pravesh Kumar (2015). An Overview of Financial Services in India. International Research
Journal of Commerce, Art and Science.7(2).
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Indian Capital Market : An Overview
Journal – Anusandhanika
Volume- 7
Issue- 2
Page Number- 133-138
Data Methodology
The data used for this paper is secondary. The information is derived from various regulatory
frameworks.
Objectives
The paper presents an introduction to capital markets in India.
The paper also discusses the conceptual framework of capital markets in India.
The paper also presents the challenges and the recent trends in the capital markets.
Summary
The Indian Capital Market article talks about how the capital market plays a very important
role where transactions in long-term securities are made. Transactions of securities in this
market include the shares and debentures. The capital market encourages people to invest
their small savings in productive activities. This research paper talks about the conceptual
framework of capital market. It is the financial market for the buying and selling of the long
term debt or equity backed securities. The capital market can be of two types: Primary market
and Secondary market. The importance of capital market cannot be underemphasized for a
developing economy which needs important amount of capital for the development of strong
infrastructure. The trend in the capital market in India includes the performance of Primary
market, performance of Fills, performance of Secondary market. This research article on
capital market also talks about the issues and challenges faced by the Indian capital market.
There is significantly high competition in a capital market. Stability is needed for the
financial markets to safeguard mechanism to be established. Capital market instruments used
for market trade include stocks and bonds, treasury bills, foreign exchange, fixed deposits,
debentures, etc. Capital market plays a significant role in mobilizing resources and diverting
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them in productive channels. It facilitates and encourages the procedure of economic growth
in the country. Functions of capital market include linking between savers and investors.
Thus, if a country wants constant growth, the country has to develop its financial market.
Therefore, India needs to develop its capital market. Steps are continuously been taken to
create deep and innovative market in India to develop the bond market which is highly
underdeveloped because of policies constraint. The equity market in India is also being
developed and regular steps are taken. The development of capital market will also provide
access to the foreign capital for domestic industry. Thus, capital market plays a very
important role in the overall development of an economy.
Conclusion
Indian has a positive correlation between the capital markets and the economic development
of the country. Despite the fact India needs innovations in the capital markets of the country,
which will add to the existing technology and also decrease the cost of capital and the risk
exposure of the market instruments.
References
Rajshree Kaushik (July 2015). Indian Capital Market : An Overview. Anusandhanika7(2)
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Dynamics and Regulatory system of Indian Financial Markets
Journal – Journal of Financial Regulation and Compliance
Volume - 15
Issue - 3
Page Number- 275- 301
Data Methodology
The data used for this paper is secondary. The information is derived from various regulatory
frameworks.
Objectives
This paper aims to trace the evolution of Indian financial market structure and regulation.
The paper also suggests a holistic regulatory model.
Summary
This research article talks about the dynamics and regulatory system of Indian financial
markets. The main objective of this article is to find out the evolution of Indian financial
market structure and regulation and to suggest a consolidated and holistic regulatory model.
This paper talks about the recent developments in the financial sector that has led to an
appreciation of the limitations of the present segmental approach to financial regulation and
favours adopting a holistic supervisory approach to financial regulation and supervision,
irrespective of its structural design. The financial system enables lenders and borrowers to
exchange funds. India has a financial system that is controlled by independent regulators in
the sectors of insurance, banking, capital markets and various services sectors. The evolution
of Indian financial markets and the regulatory system, considering the vast network of
banking institutions, insurance companies and stock exchanges and their regulatory agencies,
can be said to have occurred mainly over the latter half of the last century. This research
article talks about the analytical frame of dialectic dynamics, the dialectic dynamics of Indian
financial system and also proposes a comprehensive, consolidated and holistic integrated
regulatory model for Indian financial sector. The analytical frame of dialectic dynamics’
features includes existence of distinct interest groups, role of regulatory agencies, clash of
group-interests, presence of external sector, simultaneity of dialectic phases or elements and
dual aspects of avoidance behaviour.
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Thus, the Indian financial system has completed one full circle in the dialectic process and is
now passing through the last phase of the second cycle. Most features of the financial
regulatory system that are observed around us are the result of constant interest-conflicts in
the past. Identification and analysis of the current critical issues that lie at the heart of
interest-conflicts as well as their solution by policy-reconciliation constitute essential
elements in the dialectic process, which is and endless hide-and-seek game.
Conclusion
A dialectic approach to seeking resolution of the problem may be regarded as a practical way
of approaching the problem. The financial sector and its necessary infrastructure develop
over a pretty long period. Most attributes of the financial regulatory system that we observe
are a result of persistent interest-conflicts in the past.
Reference
A.K. Sharma. Dynamics and Regulatory system of Indian Financial Markets. Journal of
Financial Regulation and Compliance.15(3).
8
References
https://www.academia.edu/19738454/AN_OVERVIEW_OF_FINANCIAL_SERVICES_IN_
INDIAN_CONTEXT
http://data.conferenceworld.in/ICSTM9/31.pdf
https://www.emerald.com/insight/content/doi/10.1108/13581980710762282/full/html
http://anusandhanika.co.in/beta/Volume%20VII%20Number%20II.pdf
