Constituents of Indian Financial System Structure
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One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What BEST distinguishes an organised financial sector from an unorganised one in the Indian context?
Organised sector institutions are regulated, supervised, and follow standardised rules, whereas unorganised sector lenders such as moneylenders operate outside regulatory oversight.
What is the money market defined as in the Indian financial system?
A market for short-term funds with maturity up to one year.
Which entities are considered part of the unorganised financial sector in India?
Moneylenders and indigenous bankers form the unorganised sector because they operate outside formal regulatory supervision.
Which year was Commercial Paper (CP) introduced in India?
Commercial Paper was introduced in India in 1989.
What primary function does the Indian financial system perform in the economy?
The financial system mobilises savings from surplus units and channelises them to deficit units, facilitating capital formation and economic growth.
Who are the major investors in Commercial Paper (CP) in India?
Banks are the major investors in Commercial Paper in India.
How do banks, NBFCs, and stock exchanges differ from moneylenders in terms of regulation?
Banks, NBFCs, and stock exchanges are part of the organised sector and are subject to formal regulation and supervision, while moneylenders are not regulated.
What is the primary purpose of Inter-Bank Participatory Certificates (IBPCs)?
IBPCs help banks comply with priority sector lending targets.
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