MALLA REDDY COLLEGE OF
ENGINEERING & TECHNOLOGY
(Autonomous Institution – UGC, Govt.of India)
(Affiliated to JNTUH, Hyderabad, Approved by AICTE –Accredited by NBA & NAAC-“A” Grade-ISO 9001:2015 Certified)
FINANCIAL INSTITUTIONS,MARKETS &
SERVICES
B.Tech – I Year – II Semester
DEPARTMENT OF HUMANITIES AND SCIENCES
, PREFACE
Economic growth and development of a country depends upon a well knit financial system. A financial
system comprises, a set of sub-systems of financial institutions, financial markets, financial instruments
and financial services which help in formation of capital by transforming the savings of the individuals
into investments. Financial system is said to play a significant role in the economic growth of a country
by mobilizing the surplus funds lying idle with the small savers and channelizing them into productive
avenues which would overall increase the economic growth of the country. The existence of an
efficient financial system facilitates economic activities and growth. In other words, financial markets,
financial institutions and financial instruments are the prime movers of economic growth. Obviously
financial system of a country diverts flow of funds towards more productive uses and it helps increase
in the national output. It explains the role of financial system on economic development.
Various conceptual issues related to risk and return, the role of regulatory bodies like RBI, SEBI ,
mechanism of commercial banking, innovations in banking, operations of insurance companies and
mutual funds are discussed elaborately. It also describes the importance of small savings, provident
funds, pension funds. structure, Growth and current issues like innovations, competition and challenges
of LIC, GIC, NBFC towards market led economy. The course provides a comprehensive overview and
systematic evaluation of the mainstream markets of various financial instruments such as call money,
bond, stock, derivatives and exchange rate. It allows understanding the risk and returns of capital
market, Money market products and investment patterns of IPO’s and related issues. And also their
listing and settlement procedures for quality decisions of investment. Capital market is a significant
segment of financial system playing a crucial role in the economic development of any country with the
help of financial institutions, instruments, services and regulatory bodies.
The level and growth of savings, investments and capital formation in an economy are essential for
economic growth in the country that depends upon a sound capital market which facilitates the
mobilization of finance from surplus sectors to deficit sectors. This subject gives an overview of
Money markets, availability and the new instruments feature. It allows understanding range of various
financial avenues available in Asset and Fund based financial services like Hire purchase, leasing,
Venture Capital, Factoring and credit rating, stock broking agencies and this awareness help to
understand the revenues for Investment and career settlement.
Learning Outcome:
1. The students will get enormous knowledge on Financial Institutions, Securities Markets, and Financial
Services.
2. It allows clear understandings of Banking and Non-Banking Financial
Institutions operations.
3. Adequate knowledge to indulgence in Investments of financial products and
services.
4. Comprehend various policy reforms that impact Financial Markets and
Investments.
5. Availability of various Fund based and Fee based financial services to get
more exposure.
,COURSE OBJECTIVES
1. To expose students towards a clear understanding of Financial Markets in India, their operations and
relevant development.
2. To lay foundation and equip them with the knowledge of Financial Services, related institutions and
their functions.
3. To provide awareness of operations of Financial Markets, Regulators and Shareholders
4. To allow them to understand Banking and Non-Banking Institutions operations and their services.
5. To Provide knowledge in Innovations and technologies of Financial
Instruments, Financial Services and Investment Banking.
Unit-I: Introduction
Financial SystemandEconomic Development - Indicators of Financial Development - Concepts related
to Financial Markets, Institutions and Services Regulatory & Promotional Institutions: Functions&
Roles of RBI, IRDA, SEBI.
Unit II. Commercial Banks
Functions of Commercial Banks. Performance and Competition of Public and Private Sector banks-
NPA’sNon-Banking Financial Institutions- Structure and Functions LIC - GIC &Mutual Funds.
Unit-III: Financial and Securities Markets
Structure and Functions of Call Money Market. Government Securities Market: T-bills Market -
Commercial Bills Market. Securities Market: Organization and Structure - Listing - Trading and
Settlement.
Unit-IV: Asset/Fund Based Financial Services
Lease Finance - Hire Purchase Finance- Bills Discounting - Housing Finance - Venture Capital
Financing. Fee-based Advisory Services: Stock Broking - Credit Rating Agencies.
Unit-V: Investment Banking
Introduction, Functions and activities, underwriting, bankers to an issue, debenture trustees,
portfolio managers.
REFERENCES:
L. M. Bhole, Financial Institutions and Markets, TMH.
Gordon and Natarajan, 11th edition, Financial Markets and Services, Himalaya Publications.
Justin Paul and Padmalatha Suresh: Management of Banking and Financial Services, Pearson.
Gomez, Financial Markets, Institutions and Financial Services, PHI.
R M Srivatsava:Dynamics of Financial Markets & Institutions in India, Excel.
, Unit-I: Introduction
Financial System and Economic Development - Indicators of Financial Development - Concepts related
to Financial Markets, Institutions and Services
Regulatory & Promotional Institutions: Functions& Roles of RBI, IRDA, SEBI.
Indian Financial System:-
The financial system of any country consists of several ingredients. It includes financial institutions,
markets, financial instruments, services, transactions, agents, claims and liabilities in the economy. An
efficient financial system not only encourages savings and investments, it also efficiently allocates
resources in different investment avenues and thus accelerates the rate of economic development..
Thus the financial system mainly stands on three factors -Money ,Credit ,Finance
Objectives
1. Accelerating the growth of economic development.
2. Encouraging rapid industrialization
3. Acting as an agent to various economic factors such as industry, agricultural Sector, Government etc.
4. Accelerating Rural Development
5. Providing necessary financial support to industry
6. Financing Housing and Small Scale Industries
7. Development of Backward areas, Infrastructure and livelihood
8. Imposing price control in need
FUNCTIONS
1. Allocates resources
2. Mobilizes savings
3.Facilitates distributing, Trading, Hedging, Diversifying, pooling, and reducing Risks.
4. Facilitates exchange of goods and services
5. Enables economic units to exercise their time preferences
6. Enhances liquidity of financial claims through securities trading
7. Facilitate better Portfolio management.
DEPARTMENT OF HUMANITIES & SCIENCES @MRCET (EAMCET CODE:MLRD) Page 1
ENGINEERING & TECHNOLOGY
(Autonomous Institution – UGC, Govt.of India)
(Affiliated to JNTUH, Hyderabad, Approved by AICTE –Accredited by NBA & NAAC-“A” Grade-ISO 9001:2015 Certified)
FINANCIAL INSTITUTIONS,MARKETS &
SERVICES
B.Tech – I Year – II Semester
DEPARTMENT OF HUMANITIES AND SCIENCES
, PREFACE
Economic growth and development of a country depends upon a well knit financial system. A financial
system comprises, a set of sub-systems of financial institutions, financial markets, financial instruments
and financial services which help in formation of capital by transforming the savings of the individuals
into investments. Financial system is said to play a significant role in the economic growth of a country
by mobilizing the surplus funds lying idle with the small savers and channelizing them into productive
avenues which would overall increase the economic growth of the country. The existence of an
efficient financial system facilitates economic activities and growth. In other words, financial markets,
financial institutions and financial instruments are the prime movers of economic growth. Obviously
financial system of a country diverts flow of funds towards more productive uses and it helps increase
in the national output. It explains the role of financial system on economic development.
Various conceptual issues related to risk and return, the role of regulatory bodies like RBI, SEBI ,
mechanism of commercial banking, innovations in banking, operations of insurance companies and
mutual funds are discussed elaborately. It also describes the importance of small savings, provident
funds, pension funds. structure, Growth and current issues like innovations, competition and challenges
of LIC, GIC, NBFC towards market led economy. The course provides a comprehensive overview and
systematic evaluation of the mainstream markets of various financial instruments such as call money,
bond, stock, derivatives and exchange rate. It allows understanding the risk and returns of capital
market, Money market products and investment patterns of IPO’s and related issues. And also their
listing and settlement procedures for quality decisions of investment. Capital market is a significant
segment of financial system playing a crucial role in the economic development of any country with the
help of financial institutions, instruments, services and regulatory bodies.
The level and growth of savings, investments and capital formation in an economy are essential for
economic growth in the country that depends upon a sound capital market which facilitates the
mobilization of finance from surplus sectors to deficit sectors. This subject gives an overview of
Money markets, availability and the new instruments feature. It allows understanding range of various
financial avenues available in Asset and Fund based financial services like Hire purchase, leasing,
Venture Capital, Factoring and credit rating, stock broking agencies and this awareness help to
understand the revenues for Investment and career settlement.
Learning Outcome:
1. The students will get enormous knowledge on Financial Institutions, Securities Markets, and Financial
Services.
2. It allows clear understandings of Banking and Non-Banking Financial
Institutions operations.
3. Adequate knowledge to indulgence in Investments of financial products and
services.
4. Comprehend various policy reforms that impact Financial Markets and
Investments.
5. Availability of various Fund based and Fee based financial services to get
more exposure.
,COURSE OBJECTIVES
1. To expose students towards a clear understanding of Financial Markets in India, their operations and
relevant development.
2. To lay foundation and equip them with the knowledge of Financial Services, related institutions and
their functions.
3. To provide awareness of operations of Financial Markets, Regulators and Shareholders
4. To allow them to understand Banking and Non-Banking Institutions operations and their services.
5. To Provide knowledge in Innovations and technologies of Financial
Instruments, Financial Services and Investment Banking.
Unit-I: Introduction
Financial SystemandEconomic Development - Indicators of Financial Development - Concepts related
to Financial Markets, Institutions and Services Regulatory & Promotional Institutions: Functions&
Roles of RBI, IRDA, SEBI.
Unit II. Commercial Banks
Functions of Commercial Banks. Performance and Competition of Public and Private Sector banks-
NPA’sNon-Banking Financial Institutions- Structure and Functions LIC - GIC &Mutual Funds.
Unit-III: Financial and Securities Markets
Structure and Functions of Call Money Market. Government Securities Market: T-bills Market -
Commercial Bills Market. Securities Market: Organization and Structure - Listing - Trading and
Settlement.
Unit-IV: Asset/Fund Based Financial Services
Lease Finance - Hire Purchase Finance- Bills Discounting - Housing Finance - Venture Capital
Financing. Fee-based Advisory Services: Stock Broking - Credit Rating Agencies.
Unit-V: Investment Banking
Introduction, Functions and activities, underwriting, bankers to an issue, debenture trustees,
portfolio managers.
REFERENCES:
L. M. Bhole, Financial Institutions and Markets, TMH.
Gordon and Natarajan, 11th edition, Financial Markets and Services, Himalaya Publications.
Justin Paul and Padmalatha Suresh: Management of Banking and Financial Services, Pearson.
Gomez, Financial Markets, Institutions and Financial Services, PHI.
R M Srivatsava:Dynamics of Financial Markets & Institutions in India, Excel.
, Unit-I: Introduction
Financial System and Economic Development - Indicators of Financial Development - Concepts related
to Financial Markets, Institutions and Services
Regulatory & Promotional Institutions: Functions& Roles of RBI, IRDA, SEBI.
Indian Financial System:-
The financial system of any country consists of several ingredients. It includes financial institutions,
markets, financial instruments, services, transactions, agents, claims and liabilities in the economy. An
efficient financial system not only encourages savings and investments, it also efficiently allocates
resources in different investment avenues and thus accelerates the rate of economic development..
Thus the financial system mainly stands on three factors -Money ,Credit ,Finance
Objectives
1. Accelerating the growth of economic development.
2. Encouraging rapid industrialization
3. Acting as an agent to various economic factors such as industry, agricultural Sector, Government etc.
4. Accelerating Rural Development
5. Providing necessary financial support to industry
6. Financing Housing and Small Scale Industries
7. Development of Backward areas, Infrastructure and livelihood
8. Imposing price control in need
FUNCTIONS
1. Allocates resources
2. Mobilizes savings
3.Facilitates distributing, Trading, Hedging, Diversifying, pooling, and reducing Risks.
4. Facilitates exchange of goods and services
5. Enables economic units to exercise their time preferences
6. Enhances liquidity of financial claims through securities trading
7. Facilitate better Portfolio management.
DEPARTMENT OF HUMANITIES & SCIENCES @MRCET (EAMCET CODE:MLRD) Page 1
