The bank plays an important role in the growth of the economy of a nation. Bank is a financial institution, which offers the service of deposit and lending of funds. In other words, a bank is an institution that accepts idle resources from the person who has a surplus of funds and makes those funds available to borrowers who have deficits. It looks after the financial troubles of its consumer, so banks act as financial intermediaries between depositors who supply the capital and the borrowers who demand it.
In the 90s, the whole banking structure had developed and brought major changes. New entrepreneurs, financial institutions/banks also emerged in the decade. Market Center was shifting from mass banking to class banking. Foreign banks brought …show more content…
Finance is a mix of art and science as it describes the study, creation, and management of money, banking, credit, assets & liabilities and investment. System on the other hand means a mechanism, which regulates a set of things working together as a part of that mechanism.
By adding finance and system together, we find that the financial system is a system in which all financial activities are organized into a set mechanism. This mechanism majorly works for reducing the shortage of funds by allocation of the funds in an appropriate manner. Financial System is the conglomeration of various financial institutions, financial markets, instruments and services, which are engaged in establishing and managing a proper channel of funds from surplus to the deficit.
A bank is a good example of the financial intermediary, as the bank receives deposits and provides funds in the form of an advance. The Indian financial system is mainly classified into two financial systems, namely, the formal/organized financial system and the informal/unorganized financial …show more content…
Structure of a financial system is as follows:
1. Industrial Finance
Industrial finance is necessary for the development of economy because the industries are the basis of development. All industries, whether small, medium or large scale, are not capable of meeting their requirements because of lack of capital. They require an ample amount of funds for running the business. Industries have a number of sources of finance from which it can get funds viz. loans from bank, issue of share and debentures etc.
2. Agricultural Finance
Agricultural finance provides finance facility for conducting agricultural and related activities. Farmers require money for a number of purposes like buying seeds, fertilizers, etc. Loan facility is also available to fulfill the needs of long-term projects or production activities. For the smooth working of agricultural operations, it is important that the finance is provided in proper amounts, at the proper time and at an appropriate rate of interest. Various Financial Institutions provide agriculture loans like Cooperative Credit Societies, Land Development Banks and Commercial
In the 90s, the whole banking structure had developed and brought major changes. New entrepreneurs, financial institutions/banks also emerged in the decade. Market Center was shifting from mass banking to class banking. Foreign banks brought …show more content…
Finance is a mix of art and science as it describes the study, creation, and management of money, banking, credit, assets & liabilities and investment. System on the other hand means a mechanism, which regulates a set of things working together as a part of that mechanism.
By adding finance and system together, we find that the financial system is a system in which all financial activities are organized into a set mechanism. This mechanism majorly works for reducing the shortage of funds by allocation of the funds in an appropriate manner. Financial System is the conglomeration of various financial institutions, financial markets, instruments and services, which are engaged in establishing and managing a proper channel of funds from surplus to the deficit.
A bank is a good example of the financial intermediary, as the bank receives deposits and provides funds in the form of an advance. The Indian financial system is mainly classified into two financial systems, namely, the formal/organized financial system and the informal/unorganized financial …show more content…
Structure of a financial system is as follows:
1. Industrial Finance
Industrial finance is necessary for the development of economy because the industries are the basis of development. All industries, whether small, medium or large scale, are not capable of meeting their requirements because of lack of capital. They require an ample amount of funds for running the business. Industries have a number of sources of finance from which it can get funds viz. loans from bank, issue of share and debentures etc.
2. Agricultural Finance
Agricultural finance provides finance facility for conducting agricultural and related activities. Farmers require money for a number of purposes like buying seeds, fertilizers, etc. Loan facility is also available to fulfill the needs of long-term projects or production activities. For the smooth working of agricultural operations, it is important that the finance is provided in proper amounts, at the proper time and at an appropriate rate of interest. Various Financial Institutions provide agriculture loans like Cooperative Credit Societies, Land Development Banks and Commercial