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BANKING
FINANCIAL
SERVICES
MANAGEMENT
FINANCIAL SYSTEM
It can be defined as the market in which
financial assets are created or transferred
as against a real transaction that involves
exchange of money for real goods or
services, a financial transaction involves
creation or transfer of a financial asset.
Financial asset or instrument
represents a claim to the payment of a sum
of money in the future or a periodic payment
in the form of interest or dividend.
ELEMENTS OF INDIAN FINANCIAL
SYSTEM
Indian
financial
system
Commercial Non-Banking
Banks Non- Banking
Co-operative financial
Financial
Banks intermediaries
Companies
Public Private
sector sector Foreign
Banks
Co-operative Co-operative Chit funds
State Co- urban banks land
SBI and its operative development
subsidiaries banks banks Nidhi
Companies
Hire purchase
finance co.'s
Factoring
co.'s
FINANCIAL MARKETS
Financial
markets
Foreign Govt.
Capital Money
exchange Securities
market market
market market
Co-operative Money
banks Changers
R.R.B Importers
&
exporters
NABARD
Foreign
banks
FINANCIAL INSTRUMENTS
Financial
Instruments
Promissory Bill of
Cheque
note exchange
Place Purpose Time Payee Document
Forei Usan Deman Against
ce bill d bill acceptanc Against
gn
Inlan bill Order e Payment
Accomm Bearer
d bill Trade
odation
bill
bill
FINANCIAL SERVICES
Factoring
Leasing
HP financing
Credit card
Merchant banking
Book building
Asset liability
Financial services management
housing finance
Portfolio finance
Underwriting
Credit rating
Mutual fund
Transfer of funds
Issue of draft/ letter of credit
Periodic payments
Locker facility
Collection of Cheque
Project report
Other agency services
Other utility services
Cash management services
NATURE AND
FUNCTIONS OF
CENTRAL BANK
Disclosure of information
prohibited
RESERVE BANK OF INDIA ACT, 1934
(CONTD.,)
Ch. IV - General Ch. V – Penalties
Provisions
Failure of persons to
Contribution by Central Govt. to produce books,
the reserve fund
accounts, documents,
etc.,
Contribution to National rural
credit fund
In case of contravenes
Application of surplus profits
of provision
Important Definitions
Negotiable Promissory Note, Bill of Exchange, Cheque, Sec 6
Instrument, Sec 4 Sec 5 •“ A cheque is a bill
Sec 13(1) •“ A Promissory Note •“ A bill of exchange of exchange drawn
is an instrument in is an instrument in upon a specified
•“A negotiable
writing (not being a writing containing banker and payable
instrument means a
bank note an unconditional on demand
Promissory note,
Bill of Exchange or containing an undertaking signed
Cheque payable unconditional by the maker, to pay
either to order or to undertaking signed a certain some of
bearer” by the maker, to pay money only to, or to
a certain some of order of a certain
money only to, or to person or to the
order of a certain bearer”
person or to the
bearer”
NEGOTIABLE INSTRUMENTS ACT, 1881
(CONTD.,)
Common Characteristics
of Negotiable Instruments
Negotiability
Money
Title
Notice
Presumptions
NEGOTIABLE INSTRUMENTS ACT, 1881
(CONTD.,)
Parties to Negotiable
Instruments
Promissory Note: a) Maker b)
Payee
Ambiguous instrument
Bearer/ order instrument
Inland/ Foreign instrument
Demand/ sight and Usance bills
Fictitious bills
Clean and documentary bills
Escrow bill
Bills in sets
Hundis
Khokha
NEGOTIABLE INSTRUMENTS ACT, 1881
(CONTD.,)
Payment in Dishonour of
Endorsement Crossing of
due course, Negotiable
Sec 15 cheque
Sec 10 Instruments
The payment
This is the A direction to
must be
signature of the drawee
made Dishonoured
the banker not to
according to by non
maker/holder pay the
apparent acceptance/
made with money over
tenor of the
the object of the counter,
instrument
negotiating/ should pay Dishonoured
in god faith
transferring, only through by non-
to the
not as a specified payment
possessor of
maker of the banker or his
the
instrument. agent.
instrument.
BANKING REGULATIONS ACT, 1949
•Penalties
•Application of fines
•Cognizance of offences
•Special provisions for banking
Part IV: companies
Miscellaneous •Restriction on acceptance of deposits
•Change of name by a banking
company
•Certain claims for compensation
barred
BANKING REGULATIONS ACT, 1949
(CONTD.,)
Part V:
Application • Act to apply to Co-operative
societies for modification
of the Act • Power to exempt
to Co- • Restriction on loans &
advances
operative
Banks