3.6 INDIAN FINANCIAL SYSTEM
OBJECTIVE
The objective is to provide students with basic theory and recent practices of financial system,its
intermediaries and the supportive financial services, both in Indian as well as global context
UNIT 1: INTRODUCTION TO FINANCIAL SYSTEM IN INDIA 8 Hrs
Overview of Financial System – Structure, Regulation & Functions – Financial Assets-Financial
Instruments- Financial Markets – Capital Market – Money Market – Interlink between capital
market and money market – Characteristics of Financial Market – Key elements of well-functioning
of Financial system- Economic indicators of financial development.
UNIT 2: BANKING INSTITUTIONS 10 Hrs
Commercial Banking – Meaning and functions, Types of Banks –Public, Private and foreign Banks,
Payments Bank, Small Finance Banks, Cooperative Banking System and RRB’s. Investment
Policy of Commercial Banks and Consolidation of Banks in India
UNIT 3: FINANCIAL INSTITUTIONS AND NBFCs 14 Hrs
Financial institutions -meaning definitions and features, Objective composition and functions of
All Indian Financial Institutions (AIFI’s)- IFC, SIDBI, NABARD, EXIM Bank and NHB. Nonbanking finance companies (NBFCs)-meaning, definition, characteristics, functions and types:
NBFC-D, NBFC-ND, NBFC-ND-SI. Difference between a bank and a financial institution
UNIT 4: FINANCIAL SERVICES 16 Hrs
Financial Services -Meaning, definition characteristics, types and importance. Types of Fund Based
Services and Fee Based Services. Factoring Services- meaning, types of factoring agreement.
Forfaiting, Lease Financing in India. Venture Capital- Meaning, stages of investment, types of VC,
Angel Investment-Meaning, features and importance, Recent trends of Angel Investment in India,
Crowd Funding -meaning, types. Mutual funds-meaning and types only
UNIT 5: GLOBAL FINANCIAL SYSTEMS 8 Hrs
US Federal system- Components, entities and functions, European Financial System-EU25-
features and Functions. International Monetary System, international stock market, international
foreign exchange market, international derivative markets-meaning and functions only. Currency
crises, current account deficit crises and Recent Trends in Global Financial Systems-information
highways in financial services
BUSINESS LAB ACTIVITIES
1. Develop E-content for the different components of Indian financial system
2. Develop E-content of recent consolidation of public sector banks in India
3. Develop E-content the success and failure of crowd funding in India
4. List out the leading Angle Investment Net works in India
5. Prepare document for the causes of foreign exchange risks and remedies for the same
BOOKS FOR REFERENCE
1. Meir Kohn: Financial Institutions and Markets, Tata Mc Graw Hill
2. R.M Srivastava / D. Nigam; Dynamics of Financial Markets & Institutions in India, Excel
Books.
3. L M Bhole: Financial Institutions and Markets, Tata Mc Graw Hill
4. Pilbeam, K. Financial Markets and Institutions, Macmillan.
5. Valdez, S. and P. Molyneux -An Introduction to Global Financial Markets- Palgrave
Macmillan.
6. Garden and Natarajan- Indian Banking-HPH
7. Shankaran-Banking-HPH
8. K Ramachandra et.,al., Indian Financial System HPH
