PRESENTATION ON

THE TOPIC OF
‘’FINANCIAL SYSTEM AND MARKETS,
CONCEPT, NATURE AND SCOPE OF
FINANCIAL SERVICES.’’
ABHAY
ROLL NO: 01
4TH SEMESTER MBA
FINANCIAL SYSTEM: DEFINITION
The term financial system is a set of inter-related
activities/services working together to achieve some pre-
determined purpose or goal. It includes different markets,
institutions, instruments, services and mechanisms which
influence the generation of savings, investment capital
formation and growth.
Christy has opined that the objective of the financial system
is to ‘’supply funds to various sectors and activities of the
economy in ways that promote the fullest possible utilization
of resources without the destabilizing consequence of price
level changes or unnecessary interference with individual
desires’’.
FINANCIAL INSTITUTIONS
Financial institutions are business organisations that
act as mobilisers and depositories of savings, and as
purveyors of credit or finance. They also provide
various financial services to the community.
CLASSIFICATION OF FINANCIAL INSTITUTIONS:
i) Banking and non-banking institutions
ii) Intermediaries and non-intermediaries
FINANCIAL MARKETS
Financial markets are the centres or arrangements that
provide facilities for buying and selling of financial
claims and services. The corporations, financial
institutions, individuals, and governments trade in
financial products on these markets either directly or
through brokers and dealers on organised exchanges
or off-exchanges.
CLASSIFICATION OF FINANCIAL MARKETS:
i) Primary and secondary markets
ii) Money and capital markets
FINANCIAL INSTRUMENTS AND SERVICES
The stage of development of the financial system can
often be judged from the diversity of financial
instruments that exist in the system. The general
characteristics of above claims can be by following two
points:
i) Financial asset
ii) Financial securities
CONCEPT OF FINANCIAL SYSTEM
The following five concepts are useful in judging the
efficiency of a financial system:
i) Information arbitrage efficiency
ii) Fundamental valuation efficiency
iii) Full insurance efficiency
iv) Functional or operational efficiency
v) Allocational efficiency
NATURE AND SCOPE OF FINANCIAL
SERVICES
The term financial services in a broad sense means
‘’mobilizing and allocating savings.’’ Thus it includes
all activities involved in the transformation of savings
into investment.
Financial services can also be called ‘financial
intermediation’. Financial intermediation is a process
which funds are mobilizing from a large number of
savers and make them available to all those who are in
need of it and particularly to corporate customers.
SCOPE OF FINANCIAL SERVICES
i) Traditional activities:
a) Fund based activities
b) Non-fund based activities

ii) Modern activities

THANKS………………