FUFA Lec 1.ppt

7/21/2019 FUFA Lec 1.ppt

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Chapter 1:The Nature and Role of FSystem


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Agenda Introduction to Financial System

Components of Financial System

Financial Institutions

Financial Marets

Financial Instruments

Financial Ser!ices

"egulators

Functions of Financial System

#$uili%rium in Financial Marets

Financial system and #conomic &e!elopment

Financial &e!elopment : Some Concepts


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What is this Financial System is all about ?


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It is a Comple)* +ell integrated set of su%,systems* comprising o Marets*

Financial Institutions*

Instruments and

Ser!ices

Facilitates t-e transfer and allocation of funds* effecti!ely and effic

A financial system is concerned a%out Money

Credit/loan and

Finance


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oney Medium of e)c-ange or means of payment

Barter system

old Coins

Sil!er Coins

Brone Coins

3eat-er Coins

Paper Money

4-at is Plastic Money 5


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Credit or !oan Anyt-ing you %orro+ed

Pay somet-ing in return


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Components of a Financial System


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Financial "nstitutions

Business organiations t-at act as mo%ilisers and depositories of

Also pro!ide se!eral financial ser!ices

&eal in financial assets

9-ey may %e Specialied/ on,specialied

;rganied/


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Non #nancial $commercial $industrial "nstit

9-ey deal in non,financial instruments or assets

"eal estate *Mac-inery and #$uipment

Bot- -a!e t-eir o+n importance


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Financial "nstitutions % Classi#cation

Baning ?s. on Baning

Intermediary ?s. on intermediary

"egulatory


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Financial "nstitutions % &an'ing (s) Non &a

Sa!ings Account

;t-er &eposits


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&ra+ee


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Financial "nstitutions% "ntermediaries (s) N"ntermediaries


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Financial ar'ets

It is an arrangement for %uying and selling claims

ser!ices.


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Financial ar'ets * Classi#cation

"ural Marets

Money 3enders

Friends

o official reporting


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Regulators

4-y do +e need regulators5

9op ten Fines %y FSA

"etail %aning -as

incurred t-e ma)imum

num%er of fraud incidentsIndia Baning Fraud Sur!ey 2>12

, &elloitte


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Regulators


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Regulators * Different countries

India US UK

Central Ban "BI Federal"eser!e

Ban of#ngland

Capital Maret"egulator

S#BI S#C FinancialSer!ices

Aut-ority

Insurance I"&A AIC FinancialSer!ices

Aut-ority


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Financial "nstruments

Two types of Financial Instruments:

Financial Assets:

Claim to payment of a sum of money and/or a periodic paymIts value arises from a contractual relationsip and not dueem!odiment.

Financial Securities

Investment Instrument used for raisin" capital

#roperty tat is pled"ed as collateral for loan


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Financial "nstruments

Financial Securities can %e:

Primary,+-ic- are issued %y t-e ultimate in!estors directly to ultima

de%entures and s-ares.

Secondary, +-ic- are issued %y financial intermediaries to ultimate s

as %an deposits* insurance policies

h i i f # i l


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Characteristics of #nancial "nstruments

3i$uidity 9ransfera%ility Maturity Period

"ate of "eturn 9ransaction costs 9a) effects "is of default ?olatility of prices

Fi i l S i


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Financial Ser+ices

Many of t-e financial institutions* apartfrom dealing in financial assets* alsopro!ide financial ser!ices

9-ese are suc- ser!ices t-at -elp in%orro+ing* lending * in!esting*maing/ena%ling payments andsettlements* managing ris e)posures*etc.

In!estment Baning* 3easing* StocBroing* Credit rating* &epositoriesSer!ices* etc.

Fi i l S i


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Financial Ser+ices

$ ili! i i Fi i l & ' t


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$%uili!rium in Financial &ar'ets

$%uili!rium is determined assumin" a perfect compmar'et

Tools Used: D$&A(D ) SU##* for Funds

$%uili!rium is esta!lised wen:

Demand for Funds for Sort Term ) +on" Term Investment,

Supply of funds "enerated out of Savin"s and Credit Creation

Fi i l S t d $ i D l t


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Financial System and $conomic Development

EconomicDevelopment

CapitalFormation

Surplus SpendingUnits

Deficit SpendingUnits

Income-(Consumption

+Own Investment)

Income-(Consumption+ Investment)

Surplus or SavingDeficit or egative

Saving

Financial S!stem

Financial ,e+elopment : Ne- Concepts


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Financial ,e+elopment : Ne- Concepts

#fficiency

Inno!ation

Financial #ngineering

Financial "epression 3i%eraliation

&eregulation

Pri!atiation

Tan' *ou


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Tan' *ou



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Activity - : &ar'etin" "oals reaced


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Activity - : &ar'etin" "oals reaced

In t-e a%o!e 2 e)amples identify t-e follo+ing

4-at is t-at t-e companies +ere trying to ac-ie!e 5

3ist do+n your points and gi!e a suita%le -eading

C-oose your group leader and present your points

Be organied in your presentation as it carry@s mars

9ime allotted : 1> minutes

Di"ital &ar'etin" Applications


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Di"ital &ar'etin" Applications

oals of Companies trou" di"ital mar'etin"

An Ad!ertising medium

Customer direct response medium

Platform for sales and transactions 3ead generation met-od

&istri%ution c-annel

Customer ser!ice mec-anism

"elation %uilding medium

0at1s 0at 2


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0at s 0at 2 Internet Mareting #,Mareting &igital Mareting

Definitions

Internet &ar'etin" Ac-ie!ing mareting o%jecti!es t-roug- applying digital tec-nology suc- as internet. $3&ar'etin":

#,mareting or electronic mareting see for e)ample Mc&onald and 4ilson* 1=== and Sm2>>0 +-ic- can %e considered to -a!e a %roader scope since it refers todigital media sucand +ireless media* %ut also includes management of digital customer data and electronic relations-ip management systems e,C"M systems.

Di"ital &ar'etin" "ecogniing t-e strategic importance of digital tec-nologies and de!eloping a planned app"ecogniing t-e strategic importance of digital tec-nologies and de!eloping a planned app

migrate customers to online ser!ices t-roug- e,communications and traditional communicamigrate customers to online ser!ices t-roug- e,communications and traditional communica "etention is ac-ie!ed t-roug- impro!ing our customer no+ledge of t-eir profiles* %e-a!io"etention is ac-ie!ed t-roug- impro!ing our customer no+ledge of t-eir profiles* %e-a!io

dri!ers* t-en deli!ering integrated* targeted communications and online ser!ices t-at matcdri!ers* t-en deli!ering integrated* targeted communications and online ser!ices t-at matcneeds.needs.

&asic t-o concepts mar'eting


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&asic t-o concepts mar'eting

Customer Centric

An approach to marketing based on detailed knowledge obehavior within the target audience which seeks to fulll

individual needs and wants of customers.ulti channel mar'eting strategy

&efines -o+ different mareting c-annels s-ould integrate and su

ot-er in terms of t-eir proposition de!elopment and communicatio

t-eir relati!e merits for t-e customer and t-e company.


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&odule 4:$35usiness and $3Commerce



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Financial "nstitutions &an'ing (s) Non &a

Sa!ings Account

;t-er &eposits

Financial ar'ets


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Financial ar'ets


ser!ices.



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Financial ar'ets


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Financial ar'ets


ser!ices.

Regulators


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g


Dars-ad Me-ata

Satyam Fraud

#nron

Regulators


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g


Dars-ad Me-ata

Satyam Fraud

#nron

FUFA Lec 1.ppt

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