Indian financial

system,Source of
finance,ADR,GDR

Presented by:-
Anshul Garg
Angila Sharma
Aman yadev
Devang Singh
Indian financial System

The Indian Financial System is one of the most

important aspects of the economic development of
our country. This system manages the flow of
funds between the people (household savings) of
the country and the ones who may invest it wisely
(investors/businessmen) for the betterment of both
the parties.
Components of Indian Financial System

There are four main components of the Indian

Financial System. This includes:

•Financial Institutions
•Financial Assets
•Financial Services
•Financial Markets
Sources of finance

Sources of finance for business are equity, debt,

debentures, retained earnings, term loans,
working capital loans, letter of credit, euro issue,
venture funding, etc. These sources of funds are
used in different situations.
Sources of finance on the basis of time
period
Long-Term Sources
These are the sources of finance that fulfill the financial requirements
of the business for a longer period which is more than 5 years.
Medium-Term Sources
These are the sources that are required for a period of more than one
year but less than five years.

Short-Term Sources
These are the funds that are required for less than a year.
Sources of Finance on the Basis of Sources of
Generation
Internal Sources
Internal sources of finance are those funds that are within
an organization. Basically, these sources fulfill the short
and limited needs of a business.
External Sources
These refer to those sources which involve raising funds
outside of an organization. It is useful when a large
amount of money is needed.
Sources of finance on the basis of Ownership

Owner’s fund
These are those funds that are raised by the
owner of the business. It can be raised by the sole
person or the partners or by the shareholders.
External Sources
These refer to those sources which involve raising
funds outside of an organization. It is useful when
a large amount of money is needed.
American depository receipt

ADR (American Depository Receipt) is a negotiable

financial instrument which is issued by a US bank
representing securities of a foreign company listed
on the US stock market. The domestic investors
invest in the companies outside their country
where the dividend is paid to the ADR holders in US
Dollars.
Global depositary receipt

GDR (Global Depository Receipt) is a negotiable

financial instrument that is issued by a foreign
bank other than the US representing securities of a
foreign company listed in any country’s stock
market other than the US. The domestic investors
invest in the companies outside their country
where the dividend is paid to the GDR holders in
Euro or GBP.