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Financial System in India and reforms

Financial System in India and reforms. The Indian Financial system. The Indian Financial System. Classification: Indian Financial system is broadly classified into two groups: Organized sector Unorganized sector. Organized Financial System.

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Financial System in India and reforms

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  1. Financial System in India and reforms

  2. The Indian Financial system

  3. The Indian Financial System Classification: Indian Financial system is broadly classified into two groups: Organized sector Unorganized sector

  4. Organized Financial System The Organized financial system is classified as follows: The Banking System The cooperative system Development banking System

  5. Banking System Public sector Banks a) State Bank its associates b) 20 nationalized Banks c) Regional rural Banks mainly sponsored by public sector Banks.

  6. 2. Private Sector Banks Old generation Private Banks New generation private Banks Foreign Banks in India Scheduled cooperative Banks Non Scheduled Banks.

  7. 3. Co operative Sector State Cooperative Banks Central Cooperative Banks Primary Agricultural credit Societies. Land Development Bank Urban Cooperative Banks Primary Agricultural Development Banks. Primary Land development Bank State land Development Banks

  8. 4. Development Banks Industrial Finance Corporation of India (IFCI). Industrial Development Bank of India (IDBI) Industrial credit and investment corporation of India (ICICI) Industrial Investment Bank of India ( IIBI) Small Industries Development Bank of India (SIDBI) NABARD Export Import Bank of India National Housing Bank.

  9. 5. Money Market Discount and Finance Housing of India. Securities Trading Corporation of India

  10. Financial Companies Financial companies are those companies who mobilize and channel savings into investment. They are only partly controlled by the Reserve Bank of India and partly by the registration of companies under the companies Act.

  11. Present Scenario Over the years, the structure of Financial Institution in India has developed and become broad band . Today there are more than 4,58,782 institution channalizing credit into various area of the economy. There is also tendency to convert development Banks into universal Banks handling both term and working capital Finance.

  12. Financial sector Reforms • Financial sector reforms were an integral part of the wide ranging economic reforms initiated in in India 1991. The financial sector at the time was characterized by extensive government control and financial repression and was dominated by public- sector institutions. Since the economic reforms were designed to create more competitive economy ,with larger role for the private sector and market forces, it was evident that parallel reforms in the financial sector would be needed to support the transition to a liberalized market oriented economy.This led to wide ranging reforms covering banking, the capital market insurance.

  13. The Broad thrust of what was attempted in each sub sector can be described as a shift towards financial liberalization and an increased role for the private sector, subject to prudential regulation by independent regulatory agencies.

  14. Major reforms in the Banking sector in India –1992-2002The majorsteps takenin reforming the Banking system can be summerized under five sub headings :• Liberalizing controls over Commercial Banks • Prudential norms • Strengthening Supervision•Encouraging competition • Legal framework

  15. Major reforms in capital Market 1992-2002 Establishment of SEBI as regulatory authority in 1992 Establishment of rules and regulations by SEBI Establishment of rules governing inside trading Establishment of National stock exchange 1994 Establishment of National Securities Clearing Corporation. National depositories Act 1996 Abandonment of Earlier system of 14 day trading cycle Introduction of index futures and index options Progressive increase in powers given to SEBI

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