Financial System

pecuniary SYSTEM A financial system is a interlocking ,well integrated set of sub-system of financial institution, market ,instruments, and services which facilitates the bump off and allocation of funds, efficiently and effectively. A financial system plays a vital role in the economic growth of a country. It intermediates amongst the flows of funds belonging to those who save a occasion of their income and those who invest in productive assets. It mobilizes and usefully allocates scare resources of a country. schematic &INFORMAL FINANCIAL SECTORS The financial system of the around exploitation countries is characterized by coexistence & corporation between the testis & casual financial sectors. This coexistence of these two sectors is commonly referred to as financial dualism. The formal financial sector is characterized by the presence of an organized, institutional and modulate system which caters to the financial need of the modern spheres of economy; the escaped financial sector is an unorganized, non institutional, and non regulated system dealing with the handed-down and rural spheres of the economy.

The informal financial sector has emerged as a result of intrinsic dualism of economic and social structures in developing countries, and financial repression which inhibits the certain deprived section of society from accessing funds. The informal system is characterized by flexibility of operations and interface relationships between the creditor and the debtor. The advantages are low transaction cost, minimum default danger and transparency of procedures. Due to these advantages, a wide range and high rates of interest prevail in the informal sector. COMPONENTS OF THE FORMAL FINANCIAL SYSTEM Financial institutions Financial markets Financial instruments Financial services FINANCIAL MARKET MONEY MARKET 1.TREASURY BILL 2.CALL MONEY MARKET 3.COMMERCIAL PAPERS 4. security department OF DEPOSIT 5.TERM... If you want to get a full essay, order it on our website: Orderessay

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