...INDIAN FINANCIAL SYSTEM The economic development of a nation is reflected by the progress of the various economic units, broadly classified into corporate sector, government and household sector. A financial system or financial sector functions as an intermediary and facilitates the flow of funds from the areas of surplus to the deficit. It is a composition of various institutions, markets, regulations and laws, practices, money manager analyst, transactions and claims and liabilities. function of the financial system is the mobilisation of savings, their distribution for industrial investment and stimulating capital formation to accelerate the process of economic growth The features of a financial system are as follows 1. Financial system provides an ideal linkage between depositors and investors, thus encouraging both savings and investments. 2. Financial system facilitates expansion of financial markets over space and time. 3. Financial system promotes efficient allocation of financial resources for socially desirable and economically productive purposes. 4. Financial system influences both the quality and the pace of economic development. The Indian Financial system (financial markets) is broadly divided under two heads: (i) Indian Money Market (ii) Indian Capital Market The Indian money market is the market in which short-term funds are borrowed and lent. The money market does not deal in cash, or money but in bills of exchange, grade bills and treasury...
Words: 1577 - Pages: 7
...Abstract The paper talks about the primary market, FDIs, capital makets, banking sector and infrastructure financing as well. With all these elements in the India Financial market, it happens to be one of the oldest across the globe and is definitely the fastest growing and best among all the financial markets of the emerging economies. The history of Indian capital markets spans back 200 years, around the end of the 18th century. It was at this time that India was under the rule of the East India Company. The capital market of India initially developed around Mumbai; with around 200 to 250 securities brokers participating in active trade during the second half of the 19th century. The journey of Indian financial markets has been of many shades over the last decade. We have seen a lot of progress, but also significant pauses. Many twists and as many turns. Awe inspiring growth punctuated by its gasping lack of inclusiveness. Presumably, these are the teenage pangs of a free economy which is jostling for its rightful place in the Globe. The fastest free market economy is now face to face with the challenges and opportunities to opt for either slow and steady or fast and furious growth, in the next decade. Financial market You are fully aware that business units have to raise short-term as well as long-term funds to meet their working and fixed capital requirements from time to time. This necessitates not only the ready availability of such funds but also a transmission...
Words: 2535 - Pages: 11
...Indian Financial Code Summary The Indian financial system is suffering from the problems of lack of financial inclusion, growth of unregulated shadow market, slow pace of innovation and the challenges of financial integration. It is felt that the present code of the financial sector need to be reviewed and altered, while keeping in mind the present needs of the economy. This is because most of the laws are very old, there are overlaps and inconsistencies, and there is lack of clarity in terms of regulations due to the presence of a number of regulators. It is also argued that the laws in India are traditionally evolved on a problem by problem basis. With the advent of the New Economic Policy in 1991, substantial economic liberalisation took place in India. Between 1991 and 2002, progress was made in four areas. Firstly, capital controls were substantially reduced to give Indian Firms access to foreign market. Also, a new pension system was evolved and the monopolies of the public sector in the insurance field were broken up. This led to the formation of the new Insurance regulator, Insurance regulator and Development Agency. Additionally, significant increase in the equity market as a mechanism to raise finance by firms led to the formation of the financial market regulator SEBI. Also infrastructure institutions, National stock exchange and National Security Depository were also set up. Although, these moves were taken up in the right direction but they were considered to be...
Words: 1972 - Pages: 8
...INDIAN FINANCIAL SYSTEM 1. The Financial System – Nature, Evolution and Structure 1.1 The Nature of Financial System What is a Financial System? A system is generally defined as an ordered, organized and comprehensive assemblage of facts, principles or components relating to a particular field and working for a specified purpose. A Financial System aims at proper redistribution of surplus financial resources for the equitable growth of an economy. “Financial System is a set of complex and closely inter-mixed financial institutions, markets, instruments, services, practices, procedures and so on.” An economy's financial system exists to organize the settlement of payments, to raise and allocate finance, and to manage the risks associated with financing and exchange. A developed financial system is one that has a secure and efficient payment system, security markets and financial intermediaries that arrange financing, and derivative markets and financial institutions that provide access to risk management instruments. It does so by transfer of various economic units. Goldsmith, R.W., The Flow of Capital funds in the war Economy, New York, Columbia, 1965, p.28 – designated various economic units into three categories; (i) Savings-surplus units> those units whose savings are in excess of investments, (ii) Economic Units> in whose case the investments exceed their savings referred to as savings-deficit units and (iii) Neutral Units> in whose case savings are equal...
Words: 1107 - Pages: 5
...International Financial Reporting Standards (IFRS) in Indian context Introduction Convergence with IFRS has gained momentum in recent years all over the World. 110+ countries including European Union, Australia, China, New Zealand, and Russia currently require or permit the use of IFRS. Apart from India, countries like Japan, Sri Lanka, Canada and Korea have also committed to adopt IFRS from 2011. United States of America has announced its intention to adopt IFRS from 2014 and it also permits foreign private filers in the U.S. Stock Exchanges to file IFRS complied Financial Statement, without requiring the presentation of reconciliation statement. In this scenario of globalisation, India cannot insulate itself from the developments taking place worldwide. In India, so far as the ICAI is concerned, its aim has always been to comply with the IFRS to the extent possible with the objective to formulate sound financial reporting standards. The ICAI, being a member of the International Federation of Accountants (IFAC), considers the IFRS and tries to integrate them, to the extent possible, in the light of the laws, customs, practices and business environment prevailing in India. The Preface to the Statements of Accounting Standards, issued by the ICAI, categorically recognises the same. Now, as the world globalizes, it has become imperative for India also to make a formal strategy for convergence with IFRS with the objective to harmonize with globally accepted accounting standards...
Words: 1824 - Pages: 8
...KEY PERFORMANCE INDICATORS OF RRB- AS ON 31 MARCH 2011 (`. Lakh) Sr. No. No. of District Branches Covered 5 8 5 3 5 2 16 25 2 8 11 1 18 3 2 14 12 7 7 7 16 11 1 13 11 15 9 7 2 9 3 8 1 7 8 3 8 3 10 3 20 1 2 16 5 12 9 6 8 5 2 6 5 2 15 2 5 11 6 3 13 3 6 6 5 15 15 4 11 7 4 14 8 2 3 7 14 7 4 9 11 4 3 620 6 553 385 105 226 144 22 362 46 164 421 68 884 112 90 266 134 145 167 186 229 125 33 111 176 221 188 215 53 451 139 368 30 185 235 80 223 43 214 100 348 63 27 329 96 182 27 58 62 8 104 183 174 81 333 25 53 178 30 58 275 84 213 218 220 110 203 113 507 309 139 673 361 63 212 380 310 203 61 142 552 216 119 16001 Owned Fund Share Capital Share Capital Deposit Reserves 9 41901.43 79740.98 7630.19 19854.46 11428.33 0.00 7363.67 0.00 81.29 14666.05 0.00 216.39 3229.06 5708.90 4788.64 8068.68 9295.81 5978.88 49686.30 24108.28 5526.90 1364.24 0.00 6596.73 0.00 0.00 12696.33 1119.41 68710.61 14062.72 47826.93 2294.10 18113.96 22774.65 0.00 1935.41 0.00 12069.93 4084.08 4417.76 3724.24 3782.40 2322.68 2688.19 54.48 10.37 5722.25 620.89 0.00 0.00 5.55 182.50 2190.41 11.31 45.47 8754.05 33395.91 2547.49 40.19 1458.83 2057.68 10565.88 8331.02 15380.22 8479.22 14982.73 57.97 50543.92 50162.48 3574.11 30824.21 34812.29 0.00 46663.78 42612.16 15985.05 25717.52 4915.93 5241.47 0.00 752.01 0.00 956557.96 Total Owned Fund Borrowings Deposit Investments Name of RRB State Sponsor Bank Loan Loan Recovery issued Net Profit Loss Net NPA % (As on % during the June 2010) (After Tax) Amount period ...
Words: 3493 - Pages: 14
...1) Online auctions: We believe it’s high time that we embrace the technology and make a transition to internet auctions. Develop an online platform through which growers can sell their products and buyers can purchase them. Both of them will be charged a 0.1 % of transaction amount. This will not only bring in additional revenue but also make the whole process of buying and selling a lot easier. These are the financials involved. We estimate that online portal will cost us around $3 million. With the revenue that we will generate from it, cost of portal will be covered in 341 days. 2) Service Customization As per the recent trend, many clients don’t want full range of auction services. Hence sometimes they bypass auctions and directly contact growers. Taking this into account, we have decided to offer clients what they want. Auctioneers will offer services in the form of bundles. Clients can customize their bundles as per their needs. 3. Situational Analysis 3.1. SWOT Analysis Strengths: * Rich heritage ( Considered America’s original motorcycle company) * Strong brand equity because of snowmobiles and off-road vehicles * Strong supply chain and distribution channel of parent company (Polaris): Polaris' marketing activities are designed to promote and communicate directly with consumers as well as to assist the selling and marketing efforts of its dealers and distributors. The company provides and advertises discount or rebate programs...
Words: 2164 - Pages: 9
...A Brief History of Indian Motorcycle America's love for the motorcycle began in 1900 with bicycle racer George M. Hendee and engineering wizard Carl Oscar Hedstrom. In 1901, the partners unveiled their first creation, the 1901 Single. The trade name chosen for their innovative machine would signify "a wholly American product in pioneering tradition". The name was Indian. 1910-1919 By 1911, Indian riders hold every American speed and distance record. In 1914, over 3,000 employees work on a 7-mile long assembly line in Indian's 1-million square foot Springfield, Massachusetts plant. Racing activities are suspended in 1916 as the company supplies the war effort with 41,000 machines. 1920-1929 In 1923 the company is renamed Indian Motocycle Company, dropping the "r" in "motorcycle". It's a decade of growth for the Indian model line, starting with the revolutionary 1920 Scout and followed by the 95-mph Chief, the even more powerful Big Chief, the lightweight Prince, the awesome 4-cylinder Four. The 1928 101 Scout becomes the machine of choice for "wall of death" stunt riders. 1930-1939 The Art Deco era hits the Indians adorned in a full range of Duco colors, two-tone designs, pinstriping, and decals. Two new lightweight models debut in 1932, the Motoplane and the Pony Scout. "Iron Man" Ed Kretz, aboard a Sport Scout, laps the entire field in his win at the 1937 inaugural Daytona 200. With the onset of World War II in 1939, the focus again shifts to providing the...
Words: 478 - Pages: 2
...mangers and policy makers of motorbike industry,helping them to analyzing the factors which are affecting while driving their industry to different countries of the world. Throughout the last few year,the acronym PESTLE has been suffering a numbers of changes,but it seem to be the most important factor which is helpful for decision-makers of royal-Enfield to analysis the current situation of the that country where industry expands.There are six factors which are influencing PESTLE analysis. Political factors include areas such as taxation policy, law labor of law,transportation problems and stable political environment. Furthermore, governments have great influence proposal that limit number of motorcycles being sold in the country because Indian currency changes everyday with the comparison of UK pounds.The changes of currency means the changes of price of products and demand of product like royal Enfield are also changes which means recession are enter into the market so UK government take some steps to solved the this problem.Royal Enfield sales would affect by this issue.Furthermore UK consumers pay higher pre-tax prices for Motorbikes than anyone else in the Europe.Government is keen to attract foreign firms to invest in UK. Economical factors include economical stability,rate of interest,currency rate[market Recerch report{2013}] . These are factors which puts impacts on the operation of business and accrucul decisions. This is because the rate of interest and the currency...
Words: 619 - Pages: 3
...Financial System is a system that allows the transfer of money between savers and borrowers. It helps in transferring of surplus amount of money from the savers to the borrowers who need money, which helps savers to earn on their investments, and this similarly helps the borrowers to fulfill the need of the money. A financial system helps promotes the wellbeing and also helps in improving the living standards of people. Lets start with the Capital Market in India first. Capital Market is a market in which individuals and institutions trade financial securities. The securities are sold off and bought in capital market for raising the funds (Investopedia, 2013). Capital Market includes both primary and secondary market. Capital market helps in proper channelization of funds and helps raising long- term funds. This kind of market is a continuous market and provides variety of services. The market where new securities are bought and sold for the first time is known as Primary Market. Types of issue in Primary Market may be through public offer (where shares are offered to general public), bonus issue, Follow- on public offers, private placement (intermediaries sell shares to selected clients at higher price), right offer (shares are offered to existing shareholders) etc. It helps in providing additional capital to issuer companies. Secondary Capital Market is a market where existing securities are bought and sold. Secondary market offers liquidity, which encourages even those investors...
Words: 2509 - Pages: 11
...India. The history of the RBI is closely aligned with the economic and financial history of India. Most central banks around the world were established around the beginning of the twentieth century. The Bank was established on the basis of the Hilton Young Commission. It began its operations by taking over from the Government the functions so far being performed by the Controller of Currency and from the Imperial Bank of India, the management of Government accounts and public debt. After independence, RBI gradually strengthened its institution-building capabilities and evolved in terms of functions from central banking to that of development. There have been several attempts at reorganisation, restructuring and creation of specialised institutions to cater to emerging needs. The Preamble of the RBI describes its basic functions like this: '...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.' The vision states that the RBI '...aims to be a leading central bank with credible, transparent, proactive and contemporaneous policies and seeks to be a catalyst for the emergence of a globally competitive financial system that helps deliver a high quality of life to the people in the country.' The mission states that 'RBI seeks to develop a sound and efficient financial system with monetary stability...
Words: 6979 - Pages: 28
...‘PAYMENT BANKS; A GAME CHANGER IN THE INDIAN FINANCIAL SECTOR AND A RACE WITH SMALL AND MEDIUM PUBLIC SECTOR BANKS’ Authors: Ajai vishnu, Adith Venugopal, Gokul Ajayakumar Abstract This is for the first time in the history of India's banking sector that RBI is giving out differentiated licences for specific activities. It has given in-principle’ licence to 11 entities to start Payment banks business. RBI is expected to come out with a second set of such licences — for small finance banks — and 10 micro lenders were given in-principle approval to set up small banks to advance loans primarily to the unbanked, small businesses and farmers, micro and small industries and unorganized sector entities which do not have access to finance from the larger banks. The idea behind the payment bank is further financial inclusion by providing small savings accounts used by payments and remittance to migrant workforce, low income households, small businesses, at lowest costs. The payment banks, as the concept is more advanced and visionary, moreover having less risks in activities, will lead to rising competitive intensity (higher savings interest rates and service standards) in the banking system, particularly for PSU banks in non-urban centres. It could be uneconomical for traditional banks to open branches in every village but the mobile phones coverage is a promising low-cost platform for quickly taking basic banking services to every rural citizen. The impact on private sector banks...
Words: 2063 - Pages: 9
...annualized 1999–2008 growth rate for Tamilnadu (9.9), Gujarat (9.6%), Haryana (9.1%), or Delhi (8.9%) were significantly higher than for Bihar (5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (6.5%). India is the tenth-largest economy in the world and the third largest by purchasing power parity adjusted exchange rates (PPP). On per capita basis, it ranks 140th in the world or 129th by PPP. The economic growth has been driven by the expansion of services that have been growing consistently faster than other sectors. It is argued that the pattern of Indian development has been a specific one and that the country may be able to skip the intermediate industrialization-led phase in the transformation of its economic structure. Serious concerns have been raised about the jobless nature of the economic growth. Favorable macroeconomic performance has been a necessary but not sufficient condition for the significant reduction of poverty amongst the Indian population. The rate of poverty decline has not been higher in the post-reform...
Words: 1710 - Pages: 7
...Financial turnaround of the Indian Railways: Good Luck or Good Management? Abstract We analyse the factors that led to the turnaround of the Indian Railways from a low performing organisation to a high performing one. Literature on public sector turnaround provides the theoretical underpinnings. Enterprise turnaround is often ascribed to managerial leadership; we found that environmental factors (good luck) contributed in a substantial way to the success of Indian Railways. The implication of our study is that an organisation’s turnaround success needs to be put in a wider context. D. Gupta & M. Sathye Financial Turnaround of the Indian Railways ASARC WP 2007/13 3 On 15 April 2006, the Washington Times carried a lead story on the turnaround of the Indian Railways (IR) — a departmental organisation run by the Government of India (GOI). It stated ‘…few now doubt that Mr. Yadav (Minister for Railways) has presided over an impressive business turnaround ….more importantly, he’s taken the world’s largest employer — a government giant of 1.5 million employees — and boosted revenues by 15.5 percent without raising fares’ (Nelson, 2006:1). Pai Panandiker states ‘Indian Railways has turned around and made an estimated profit of $2.5 billion in 2005-2006. What is important, however, is that, unlike previous ministers, Mr. Yadav has looked upon Railways as a commercial enterprise and not a social welfare institution. [He] is a hard taskmaster and will ensure his subordinates ...
Words: 20854 - Pages: 84
...The Indian Rupee Crisis Economics Essay-1 In this paper we are going to examine the cause and the impact of rupee depreciation on the Indian economy. Since last few months Indian rupee came under great stress as overseas investors are paring their exposure to Asia’s third-largest economy amid international uncertainty and mounting worries over the domestic economy. In 2009 – 2010 the exchange rate was hovering around the 43 – 45 rupees per US Dollar level. And now it is around 55 – 56 levels, the main reasons to examine are increase in import bill, higher inflation, fiscal mismanagement and all resulting in higher cost of borrowing. The rupee has lost more than 15% of its value this year, making it one of the worst performing currencies in Asia. This paper reviews the probable reasons for this depreciation of the rupee and the outlook for the same. It also reflects on the policy options to help prevent the depreciation of the Rupee. This paper will firstly discuss about the economy of currency to give an overview of the problem and the factors related to it. Afterwards it will be examining the causes of the Indian rupee depreciation with respect to the Indian economy and the global economy. And after that it will analyse the impact of the same on trade and business. Finally, recommending the policy actions in response of the falling currency. II. LITERATURE REVIEW: These papers include the work which have been used as a basis or reference for formulating the policies regarding...
Words: 3340 - Pages: 14
