Indian Financial System Case Study

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ELEMENTS OF FINANCIAL SERVICES: CES -1 SUBMITTED TO: MR. ANUJ KUMAR SUBMITTED BY: Parul Mahajan BBA-V(D) 0151BBA231 Briefly explain the changes happened in Indian financial system after 1991? Also, describe the impact on financial service. The economic scene in the 1991 period has seen a sea change the end result being that economy has made enormous progress in diverse fields. There has been a quantitative expansion as well as diversification of economic activities. The experiences of the 1980s have led to the conclusion that to obtain all the benefits of greater reliance on voluntary, market-based decision making India needs efficient financial systems. The financial system is possibly…show more content…
It includes different markets, the institutions, instruments, services and mechanisms which influence the generation of savings, investment, capital formation and growth. According to Robinson, the primary function of the system is “to provide a link between savings and investment for the creation of new wealth and to permit portfolio adjustment in the composition of the exciting wealth.” Following were some of the changes that happened in Indian financial system after…show more content…
The employment potential of the SSIs and MSIs is also a pointer to the government to take adequate steps to ensure a smooth start of these units. Among them, the timely and adequate availability of credit is crucial one, and the development banks have a major role to ensure the same. As the banks are generally unwilling to extend credit facilities at the initial stage of an industrial unit, the major portion of the financial systems of the development banks are availed by the new unit or new generation entrepreneur at liberal terms hitherto, the social objectives acted as the backdrop of the major policies of the development banks and hence the profit earning motives was treated secondary. This has adversely affected the financial health of the development banks as there is always an inherent risk of failure lies in financing the new units/ new generation entrepreneur. The reform process has suggested for the restructuring of the development banks and making them abide by the prudential norms but the same is difficult to achieve as the social objective and the prudential banking cannot go hand in hand. The measures initiated by the government of India under the reform process are meant to increase the operational efficiency of each of the constituent of the financial sector. The liberalization

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