Financial System in India Financial System represents a closely held financial institutions, financial services and financial instruments or claims

Financial System Financial Services Financial; institutions Financial instrument Financial Market Regulatory Others Intermediaries Non-Banking Banking

The government has established a number of financial institutions all over the country to provide finance to business organisations

They provide both owned capital and loan capital for long and medium term requirements and supplement the traditional financial agencies like commercial banks.

Main Financial Institutions, Operating in India

1. Financial institutions provide long term finance, which are not provided by commercial banks Merits of financial Institutions

2. Many of these institutions provide financial, managerial and technical advice and consultancy to business firms Merits of financial Institutions

3. Obtaining loan from financial institutions increases the goodwill of the borrowing company in the capital market Merits of financial Institutions

4. As repayment of loan can be made in easy installments, it does not prove to be much of a burden on the business Merits of financial Institutions

Limitations of financial Institutions 1. Time consuming and expensive procedure for grant of loans 2. Restrictions imposed on the power of the companies by institutions 3. Have their nominees on the Board of Directors of the borrowing Company and make limit the companies power