A financial system (within the scope of finance) is a system that allows the exchange of funds between lenders, investors, and borrowers. Financial systems operate at national and global levels. They consist of complex, closely related services, markets, and institutions intended to provide an efficient and regular linkage between investors and depositors.
Money, credit, and finance are used as medium of exchange in financial systems. They serve as a medium of known value for which goods and services can be exchanged as an alternative to bartering. A modern financial system may include banks (public sector or private sector), financial markets, financial instruments, and financial services. Financial systems allow funds to be allocated, invested, or moved between economic sectors. They enable individuals and companies to share the associated risks.
here are some of the important questions for your exam
- Give the meaning of the financial system and briefly explain its components.
- What is stock exchange? Discuss the features and advantages of stock exchange.
- Explain the meaning, features and types of mutual funds.
- What the meaning and primary functions of commercial banks.
- Differentiate between Money Market and Capital Market.
- Define Commercial Bank. Also discuss the functions of a Commercial Bank.
- Explain the functions of Reserve Bank of lndia.
- Explain in detail the different types of financial services.
- State the role of financial markets.
- What are the objectives of EXIM Banks
- Distinguish between Primary Market and Secondary Market.
- What are the promotional functions of RBI ?
- What are the indicators of liquidity of a commercial bank ?
Briefly explain any six functions of the financial system.
Discuss any three distinctions between capital market and money market.
Bring out any three distinctions between Banking Companies and Non-Banking Financial Companies.
Explain any three credit control measures of RBl.
Give the meaning of liquidity and explain the types of liquidity with reference to a commercial bank.