Critically evaluate the Indian financial system.

The Indian financial system consists of variety of institutions, markets and instruments that are closely related with each other. It provides the principal means by which savings are turned into investments. Given its role in the allocation of resources, the efficient functioning of the financial system is of crucial importance in a developing economy, like India.

The financial institutions/financial intermediaries, as they are called, comprise commercial banks, insurance companies, mutual funds, non-banking financial companies, development financial institutions etc. The financial markets comprise of capital market and money market, whereas financial instruments are demand deposits, short-term debt, intermediate term debt, long-term debt and equity, bonds etc.

Broadly the important functions of financial system can be described as under: - 

i) It enab1,es the pooling of funds for setting up large-scale enterprises. 

ii) It provides a way for managing uncertainty and controlling risks. 

iii) It provides a mechanism for spatial and temporal transfer of resources. 

iv) It generates information that helps in coordinating decentralized decision-making. 

v) It provides a payment system for exchange of goods and services. 

vi) It helps in dealing with information gap by handling sensitive information discreetly  

Subscribe on YouTube - NotesWorld

For PDF copy of Solved Assignment

Any University Assignment Solution

WhatsApp - 9113311883 (Paid)