Being in the formal financial system

SUBMITTED BY – SANDEEP SINGH

STUDENT ID – A00119150

SUBMITTED TO – MD. HAFIZUL HASAN

Being in the formal financial system

Being in the formal financial system

The formal financial system consists of regulatory bodies and ministry of finance which

comprise of mainly four main systems:

Formal financial
system

Financial Financial Financial Financial

institution markets instrument services

Introduction

Financial system is implemented to access the finance where an enterprise or an individual take

services in terms of insurance, credit and debit payments including other risk management

services.

It consists of some financial units and local markets to interact, where the purpose is to mobilize

the money or funds for further investment which provide many facilities related to the

commercial activity including system of payment.

Further financial system contains three parts which include:

- Savers

- Financial institutions

- Investors

Financial institutions
Being in the formal financial system

Financial institutions are also known as banking firms which provide services to the business

operations on a broad range under the sector of financial services. Some major banks including

institutions and companies are:

- Central banks

- Commercial and retail banks

- Investment companies

- Loan associations

- Insurance

- Mortgage firms

Financial markets

The term financial marketing linked with marketplace where the system of trading securities

goes on which consists of stock market, market for derivates, bond and Forex. It is used to run

capitalist smoothly for the economic. it is efficiently a long run procedure. Where in short run the

there seem to be fluctuation in the actual prices or values which make uncertainty about the

investments.

Financial instruments

Financial instruments are kind of assets which can be seen as a trading or as a capital package. It

provides transfer of cash flow through different investors present in the world. There is some

kind of contract system between two parties and can be created and modified at any time. this

comprises of:

Financial instruments

Cash Derivatives Foreign exchange

Being in the formal financial system

Financial services

Financial services are kind of service related to economic which is provides by the industry of

finance whose main function is to manage the capital including the banks , union of credit card

companies, insurance and some other regulatory bodies. As the economy is built by segments

called sector which provide goods and services to individual and corporations. He financial

advisor manage all the assets and provide advice to the client for further processing and other

investment plans.

While using a financial system it is necessary to record all the documents which include financial

statement, cash flow, income statement , balance sheet and other important things because a

record for a business of this is compulsory and necessary to get away from the red light of

regulatory bodies. However, it is also important to keep regular checking on the accountability of

the business because once the balance is lifted than it creates problem for the firm.

In conclusion, it is necessary to check the financial reports regularly, and keep records well

maintained meanwhile, regular communication with the accountant is must because at the end

the health of business is totally depend on the person who is holding it.