Indian Financial System an Overview

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Objectives of Study
 Structure of Financial System
 Financial system & Economic Development

In finance, the financial system is the
system that allows the transfer of money
between savers and borrowers. It comprises a
set of complex and closely interconnected
financial institutions, markets, instruments,
services, practices, and transactions.

 Financial system are crucial to the allocation
of resources in a modern economy
 They channel household savings to the corporate
sector and allocate investment funds among

These functions are common to the financial
systems of most developed economies. Yet the
form of these financial systems varies widely .

Purpose of Financial System
 Financial system helps, to form your
organization’s planning and action plans
 Financial systems also help you track and manage
the resources required to successfully complete
your work
 These tips provide basic practices you will need to
build financial sustainability in your organization

Why financial system is important ?
Financial system and capacity help the
organization to make sound decisions based on
cash flow and available resources
 Most governments require that registered,
charitable organizations create accounts that
track income and expenses

 Funders require reports that demonstrate
that grants were used for intended purposes
 Monitoring funds, or comparing actual income
and expenses versus budgeted amounts, helps
managers ensure that the necessary funds are in
place to complete an activity

 Establishing financial controls and clear
accounting procedures help ensure that
funds are used for intended purposes
 Transparency, clear planning and realistic
projections contributes to the credibility of
the organization

In other words, financial system may be
said to be made up of all those channels
through which savings become available for
investment .