Glimpse of Indian Financial System

The top priority project undergoing in Creative Museum Designers, National Council of Science Museums, is to design a gallery for Reserve bank of India. I am holding a part of this huge project. There are so many sections to develop like coin in different ages in India; chronological development of money; dynamics of Indian financial system; safe storage of money – as gold; history of RBI; logo of RBI; monetary authority and regulatory authority.       

The Indian Financial System is inherently strong, functionally diverse and displays efficiency and flexibility, is critical to our national objectives of creating a market driven, productive and competitive economy. At the time of Independence in 1947, there was no strong financial institutional mechanism in the country. There was absence of issuing institutions and non-participation of intermediary financial institutions. The market grows with successive increment of demand and to protect the whole, number of regulation came and the banks were liberalized. An investment cycle shows how the money flows from a surplus unit to deficit unit through intermediaries. The financial intermediaries convert the investments into loan and vice-versa to mobilize the cycle. Risk and maturity have to calculate in converting investment to loan and loan to investment. Maturity of a product can be considered when its rate of value increase falls below a desired level. It’s very typical to calculate including all the parameters. Customers are satisfied under supervision of Reserve Bankof India (RBI); Securities and Exchange Board of India(SEBI); Ministry of Finance (MoF); Forward Markets Commission (FMC); Pension Fund Regulatory &Development Authority (PFRDA). So the regulation is an attempt to control or influence private behavior in the desired direction by imposing costs on or proscribing undesirable behavior, where ‘public interest theory’ and ‘capture theory’ are applied.  

The capital market and money market plays a prior role in India. Debt capital, equity capital, foreign exchange, government securities, corporate debt etc. are the segments of market.

The main feature of RBI is monetary and financial stability in the country. The helping hands of RBI are several types of banks, developmental financial institutions, non-banking financial companies, insurance companies and mutual funds.

The exploration of the dynamics of Indian financial system is very interesting. The whole project is undergoing under supervision of Mr. Subrata Sen, Managing Director, Creative Museum Designers, National Council of Science Museums, Kolkata.