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    Structure of Financial System

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    Regina Lintua
    The document summarizes the structure of the financial system including financial institutions, markets, instruments, and services. It describes how financial institutions such as banks mobilize savings and provide lending. It also outlines the different types of financial markets based on factors like maturity of claims, seasoning of securities, and structure. Financial instruments are used to raise capital and money. Financial services facilitate transactions for individuals and institutions.

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    Structure of Financial System

    Uploaded by

    Regina Lintua
    101 views14 pages
    The document summarizes the structure of the financial system including financial institutions, markets, instruments, and services. It describes how financial institutions such as banks mobilize savings and provide lending. It also outlines the different types of financial markets based on factors like maturity of claims, seasoning of securities, and structure. Financial instruments are used to raise capital and money. Financial services facilitate transactions for individuals and institutions.

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    Fm 31 report

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    The document summarizes the structure of the financial system including financial institutions, markets, instruments, and services. It describes how financial institutions such as banks mobilize savings and provide lending. It also outlines the different types of financial markets based on factors like maturity of claims, seasoning of securities, and structure. Financial instruments are used to raise capital and money. Financial services facilitate transactions for individuals and institutions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    101 views14 pages

    Structure of Financial System

    Uploaded by

    Regina Lintua
    The document summarizes the structure of the financial system including financial institutions, markets, instruments, and services. It describes how financial institutions such as banks mobilize savings and provide lending. It also outlines the different types of financial markets based on factors like maturity of claims, seasoning of securities, and structure. Financial instruments are used to raise capital and money. Financial services facilitate transactions for individuals and institutions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    STRUCTURE OF

    FINANCIAL SYSTEM
    Financial Institutions Financial Markets Financial Instruments Financial
    Services

    Banking Non banking Money Market Capital Market Term Type Fund based
    Fee based

    Commercial Cooperative - Call money market - short term - leasing

    banks banks - treasurey bills - medium term - hire purchase


    - commercial bills - long term - factoring
    Public sector - primary market - merchant
    banking

    Private sector - secondary market - primary securities - credit


    rating
    RRBs - derivative market - secondary securities -
    mergers
    Foreign banks - innovative instruments

    organized financial Unorganized financial institutions


    FINANCIAL INSTITUTIONS

    • They are business organizations


    dealing in financial resources.

    • They collect resources by accepting


    deposits from individuals and
    institutions and lend them to trade,
    CLASSIFIED FINANCIAL INSTITUTIONS
    INTO TWO:

    1. Banking Financial Institutions

    • Banking institutions mobilize the


    savings of the people.

    • They provide a mechanism for smooth


    exchange of goods and services.
    2. NON-BANKING FINANCIAL
    INSTITUTIONS

    •The non-banking financial


    institutions also mobilize
    financial resources directly
    or indirectly from people.
    FINANCIAL MARKETS

    ● are the centres of


    arrangements that provide
    facilities for buying and
    selling of financial claims
    and services.
    CLASSIFICATION ON THE BASIS OF
    THE TYPE OF FINANCIAL CLAIM:

    1. Debt market
    - is the financial market for fixed
    claims like debt instruments
    2. Equity market
    - is the financial market for
    residual claims i.e., equity
    CLASSIFICATION ON THE BASIS
    OF MATURITY OF CLAIMS:
    1.Money markets
    ● a market where short term funds are borrowed and
    lend.
    ● it deals in short term monetary assets with a
    maturity period of one year
    or less.
    2. Capitals market
    ● this market deals in a long term claims, securities
    and stocks with a maturity period of more than year.
    CLASSIFICATION ON THE BASIS OF
    SEASONING OF CLAIM
    1. Primary markets
    - are those markets which deal in the new securities.
    - they are also known as a new issue markets.

    2. Secondary markets
    - are those markets which deal in existing securities
    - consists of stock exchanges
    CLASSIFICATION ON THE BASIS OF
    STRUCTURE OR ARRANGEMENT
    1. Organized markets
    - these are financial markets in which financial
    transactions take place within the well established
    exchanges or in the systematic and orderly structure

    2. Unorganized markets
    - these are financial markets in which financial
    transactions take place outside the well established
    exchange or without systematic and orderly structure
    or arrangements.
    CLASSIFICATION ON THE BASIS
    OF TIMING OF DELIVERY:
    1.Cash/spot market
    - this is the market where the buying and
    selling of commodities happens
    2. Forward/future market
    - this is the market where participants buy
    and sell stocks/commodities, contracts and the
    delivery of commodities or securities occurs at
    pre-determined time in future.
    OTHER TYPES OF FINANCIAL
    MARKET:
    1.Foreign exchange market
    - is a simply defined as a market in
    which one country’s currency is traded
    for another country’s currency.
    2. Derivatives market
    - are most modern financial
    instruments in hedging risk.
    - a common place where such
    FINANCIAL INSTRUMENTS

    • Which are used for raising resources for


    corporate activities.
    • That are used for raising capital through
    the capital market.
    • That are used for raising and supplying
    money in short period not exceeding one
    year through various securities .
    FINANCIAL SERVICES
    • The development of a sophisticated and
    matured financial system in the country,
    especially after the new early nineties,
    led to the emergence of a new sector
    • Its objective is to facilitate financial
    transactions of individuals and
    institutional investors.

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