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INDIAN FINANCIAL SYSTEM

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Q

What is the Indian Financial System primarily composed of?

A

The Indian Financial System consists of financial institutions, financial markets, financial instruments, and financial services that facilitate the flow of funds from savers to investors.

Q

What is the full form of NBFC as defined under the RBI Act, 1934?

A

Non-Banking Financial Company regulated by Reserve Bank of India.

Q

Which apex regulatory body oversees the Indian Financial System at the macro level?

A

The Reserve Bank of India (RBI) serves as the apex regulatory body overseeing monetary policy, banking supervision, and overall stability of the Indian Financial System.

Q

Which section of the RBI Act defines a Non-Banking Financial Company?

A

Section 45-I(f) of the RBI Act, 1934 defines NBFC.

Q

What are the two broad segments of the Indian financial market?

A

The Indian financial market is broadly divided into the Money Market (for short-term funds up to one year) and the Capital Market (for long-term funds beyond one year).

Q

What is the meaning of the term 'financial system' in an economy?

A

A network of institutions, markets, and instruments mobilising savings and investments.

Q

What is the role of NBFCs in the Indian Financial System?

A

NBFCs (Non-Banking Financial Companies) play a crucial supplementary role by providing credit and financial services to segments not fully served by banks, including retail lending, infrastructure finance, and microfinance.

Q

What are the four main components of the Indian Financial System?

A

Financial institutions, financial markets, financial instruments, and financial services.

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