Business Studies, asked by naeemofficial7857, 1 year ago

Nature of business scale of operation growth prospects and technology upgradation are factors affecting what

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Answered by hirithu
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Banks were considered as a backbone to the financial system and play an

important role in economic development of a nation. They act as intermediaries

in channelizing funds from surplus units to deficit units to the fully utilization of the

funds. An efficient banking system of nations has significant positive externalities

which increase the efficiency of economic transaction in general. There is a

major shift in banking system in the policy atmosphere after the introduction of

financial sector reform in 1992; these reforms impact the working of commercial

banks. As one of the objectives of financial sector reform was to improve the

efficiency of banking system in India economy^

The financial system's contributes to the economy depends upon the

quantity and quality of its service and efficiency with which it provides

them^.Financial System of any country consists of financial markets, financial

intermediation and financial instruments or financial products. The term "finance"

in our simple understanding it is perceived as equivalent to 'Money'. The word

"system", in the term "financial system", implies a set of complex and closely

connected or interlined institutions, agents, practices, markets, transactions,

claims, and liabilities in the economy. The financial system is concerned about

money, credit, and finance-the three terms are intimately related yet are

somewhat different from each other. Indian financial system consists of financial

market, financial instruments, and financial intermediation.

A Financial Market 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. It consist of market for government securities,

corporate securities, foreign exchange, derivates, short term finance or money

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