Click Here and Like The Page

Introduction to Bank and Financial System.

What is Bank?
Introduction to Bank.
A bank is an institution which deals with money and credit.  It accepts deposits from the public, makes the funds available to those who need them, and helps in the remittance of money from one place to another.  In fact, a modern bank performs such a variety of functions, that it is difficult to give a precise and general definition of the bank.

What is Financial system and How Financial system helps in Economy growth?
The economic development of any country depends on the proportion of national income saved and invested.  If a large proportion of national income is saved and invested, the rate of economic growth tends to be high.

There is an need of institution to mobilise savings from different people and sectors of the country, and make those savings available for productive investment. This task is performed by the financial system of the country.

 Financial Markets, financial institutions and financial instruments form the structure of the financial system.

Structure of Financial Markets

Money Market
  • Call Money market
  • Treasury Bill market
  • Commercial Bill market
  • Commercial Paper and Certificates of Deposit.
 Capital Market
  • Primary Market (New Shares, Bonds and securities)
  • Secondary Market (Stock Exchanges, Sale/Purchase of old securities)
Financial Institutions/ Financial Intermediates.

Money Market Intermediaries
  • Apex Bank
  • Public Sector Banks
  • Private Sector Banks
  • Foreign Banks
  • Cooperative Banks
Capital Market Intermediaries
  • Development Banks
  • Investment Banks
  • Agricultural Financial Institutions
  • Exim Bank(Export Import Banks)
  • Non-Bank Financial Companies 
A healthy and efficient financial market can significantly contribute to accelerate growth in several ways. The bulk of the savings in the economy comes from the household sector.  Thus, the financial markets offers a variety of assets to savers of various income groups, of risk, liquidity and return, performing the vital function of inter mediation.

What are Functions of Commercial Banks?


Post a Comment

What do you have to say about the article. Give your opinion.