Tuesday, August 2, 2016

What is meant by the financial system in India?

The financial system in India comprises of the folllowing:
Financial markets
Financial assets
Financial intermediaries

Financial markets:
The financial market can be divided into two categories namely; money market and capital market

The following are the called as the money market instruments:
Call money, notice money, term money, Held till maturity, Yield to maturity, Coupon rate and treasury bills

Similarly, the following are called as the capital market instruments:
Government or gilt edged securities;
Corporate securities namely; shares, debentures, public deposits and loans from various institutions

Financial assets:
The following are termed as financial assets
Bills, treasury bills, promissory notes, hundies or bill of exchanges, certificate of deposits and commercial paper

Financial intermediaries:
Reserve Bank of India, Insurance Regulatory and Development Authority and Securities and Exchange Board of India are termed as the financial intermediaries

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