Role of Financial System in India

Dr. Mahesh V. Shinde; Dr. Dipak D. Shinde

Role of Financial System in India

Author(s)	Dr. Mahesh V. Shinde, Dr. Dipak D. Shinde
Country	India
Abstract	The Financial System plays a vital role in the economic development and raising the standard of living of people of a country. It helps to promote the development of weaker section of the society through rural development banks and co-operative societies. The economic development of any country depends upon the existence of a well-organized financial system. It is the financial system which supplies the necessary financial inputs for the production of goods and services which in turn promote the well-being and standard of living of the people of a country. Thus, the ‘financial system’ is a broader term which brings under its fold the financial markets and the financial institutions which support the system. The major assets traded in the financial system are money and monetary assets. The responsibility of the financial system is to mobilize the savings in the form of money and monetary assets and invest them to productive ventures. An efficient functioning of the financial system facilitates the free flow of funds to more productive activities and thus promotes investment. Thus, the financial system provides the intermediation between savers and investors and promotes faster economic development. Therefore it is essential to study the role of Indian financial system in economic development of a country. This study basically depends upon secondary sources i.e. books, journals, reports, study materials, newspapers, internet etc. It was concluded that the financial system is of crucial significance for overall development of a country. The financial system is important for capital formation. The adequate capital formation is indispensable to a speedy economic development is universally recognized. The main function of financial system is the collection of saving and their distribution for industrial investment, thereby stimulating the capital formation and, to that extent, accelerating the process of economic growth. However, certain refinements are needed to bring the Indian markets on par with the major international markets.
Keywords	Financial system, role, development.
Published In	Volume 2, Issue 6, November-December 2020
Published On	2020-11-11
Cite This	Role of Financial System in India - Dr. Mahesh V. Shinde, Dr. Dipak D. Shinde - IJFMR Volume 2, Issue 6, November-December 2020.

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Role of Financial System in India

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