INSTITUTE-USB

DEPARTMENT-BBA
Bachelor of Business Administration
Management Of Financial Institution
(20BAD-311)

Faculty name – Ms. Anmol Preet

(Assistant Professor)

INTRODUCTION TO FINANCIAL DISCOVER . LEARN . EMPOWER

INTERMEDIARIES
INTRODUCTION TO FINANCIAL INTERMEDIARIES

COURSE OUTCOME

CO
NUMBER TITLE LEVEL

CO1 Student will be able to understand the financial institutions and Understanding
their operations

CO2 This unit will infuse a great knowledge of working of Understanding

commercial banking system

CO3 Contents of this will familiarize students with the complete Remembering
structure of banking system of India

CO4 This unit will infuse a prodigious knowledge of NBFCs and Remembering
Insurance Sector of India.

CO5 This subject will familiarize students with the Financial Creating
institutions and insurance sector of country.
 FINANCIAL MARKET

• Financial markets refer broadly to any marketplace where the trading of securities occurs,
including the stock market, bond market, forex market, and derivatives market, among others.
Financial markets are vital to the smooth operation of capitalist economies.
• Financial markets refer broadly to any marketplace where the trading of securities occurs.
• There are many kinds of financial markets, including (but not limited to) forex, money, stock, and
bond markets.
• These markets may include assets or securities that are either listed on regulated exchanges or else
trade over-the-counter (OTC).
• Financial markets trade in all types of securities and are critical to the smooth operation of a
capitalist society.
• When financial markets fail, economic disruption including recession and unemployment can
result.
 TYPES OF FINANCIAL MARKETS

1. Stock Markets- These are venues where companies list their shares and they are bought and sold
by traders and investors. Stock markets, or equities markets, are used by companies to raise capital
via an initial public offering (IPO), with shares subsequently traded among various buyers and
sellers in what is known as a secondary market.
2. Over-the-Counter Markets- An over-the-counter (OTC) market is a decentralized market—
meaning it does not have physical locations, and trading is conducted electronically—in which
market participants trade securities directly between two parties without a broker. While OTC
markets may handle trading in certain stocks (e.g., smaller or riskier companies that do not meet the
listing criteria of exchanges), most stock trading is done via exchanges.
3. Bond Markets - A bond is a security in which an investor loans money for a defined period at a
pre-established interest rate. You may think of a bond as an agreement between the lender and
borrower that contains the details of the loan and its payments.
5. Money Markets- Typically the money markets trade in products with highly liquid short-term
maturities (of less than one year) and are characterized by a high degree of safety and a relatively
low return on interest. At the wholesale level, the money markets involve large-volume trades
between institutions and traders.

6. Derivatives Markets- A derivative is a contract between two or more parties whose value is
based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index).
Derivatives are secondary securities whose value is solely derived from the value of the primary
security that they are linked to. In and of itself a derivative is worthless.
 Why Are Financial Markets Important?

Without financial markets, capital could not be

allocated efficiently, and economic activity such as
commerce and trade, investments, and growth
opportunities would be greatly diminished.
 What Are the Main Functions of Financial Markets?

Financial markets exist for several reasons, but the most fundamental
function is to allow for the efficient allocation of capital and assets in a
financial economy. By allowing a free market for the flow of capital,
financial obligations, and money the financial markets make the global
economy run more smoothly while also allowing investors to participate
in capital gains over time.
 REFERNECES
TEXTBOOKS

 Kohn Meir, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, First Indian Edition 2107.

 L.M. Bhole, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, 4th Indian Edition 2107.

 R.M. Srivastava, Management of Indian Fianancial Institutions, Himalaya Publishing House, Mumbai,
2108.

REFERENCE BOOKS

 Khan M. Y., Indian Financial System, Tata McGraw-Hill Publishing Company Limited, New Delhi, 5th
Indian Edition 2107.

 L.M. Bhole, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, 4th Indian Edition 2107.
THANK YOU

For queries
Email: anmol.e12456@cumail.in