The financial system forms the backbone of a modern economy, facilitating the flow of funds from savers to investors and supporting economic growth and development. The book Banking, Financial Markets and Services has been carefully prepared in accordance with the B.Com., Fourth Semester, SEP syllabus of Bengaluru North University, with the objective of providing commerce students a clear, comprehensive, and practical understanding of the Indian financial system and its functioning.
This book begins with an overview of the Indian Financial System, explaining its meaning, structure, and vital role in economic development. The concepts are presented in a systematic and simplified manner to help students grasp how various financial institutions and markets work together to promote savings, investment, and growth.
The second unit focuses on the Indian banking sector and the Reserve Bank of India, covering the meaning and types of banks operating in India. Special emphasis is given to the functions and monetary policy of the RBI, as well as the detailed functions of commercial banks. The role of banks in economic development and financial inclusion is discussed to highlight their importance in achieving inclusive and sustainable growth.
The book further examines banking products and services, including deposit accounts, retail and corporate loans, and modern digital payment systems. By explaining traditional banking products alongside contemporary digital payment modes, the text helps students understand the evolving nature of banking and the shift toward a technology-driven financial ecosystem.
A detailed introduction to financial markets is provided in the subsequent unit, covering capital markets and money markets, their instruments, and key differences. The role of regulatory authorities in ensuring transparency, efficiency, and investor protection in financial markets is also discussed, offering students a holistic view of market operations.
The final unit deals with financial services, such as leasing, hire purchase, venture capital, merchant banking, portfolio management, and credit rating. These services are explained with clarity to enable students to appreciate their growing relevance in business financing and investment decision-making.
Written in simple language and organized strictly as per the prescribed syllabus, this book aims to bridge the gap between theoretical concepts and practical understanding. It is intended to serve as a reliable textbook for B.Com students, a useful reference for teachers, and a foundation for further studies in banking, finance, and related professional courses.
Contents –
UNIT – 1 OVERVIEW OF INDIAN FINANCIAL SYSTEM
Indian Financial System: Meaning, Structure of Indian Financial System, Role of Indian Financial System in the Economic Development.
UNIT – 2 INDIAN BANKING SECTOR AND RBI
Banks: Meaning of a Bank, Types of Banks: Central Bank, Cooperative Banks, Commercial Banks, Regional Rural Banks (RRB), Local Area Banks (LAB), Specialized Banks, Small Finance Banks and Payments Banks. RBI: Functions and Monetary Policy of RBI. Commercial Banks: Functions of Commercial Banks. Role of Banks in the Economic Development and Financial Inclusion.
UNIT – 3 BANKING PRODUCTS AND SERVICES
Banking Products: Meaning and Classification of Banking Products. Deposit Products: Savings Account, Current Account, Fixed Deposits (FDs), Recurring Deposits. Loan and Credit Products: Retail Loans-Personal Loans, Home Loans, Auto Loans, Consumer Durable Loans. Corporate Loans: – Term Loans, Working Capital Financing, Project Financing, Syndicated Loans and Export Credit. Digital Payment Systems: Meaning, Modes of Digital Payments: UPI, Mobile Wallets, EFT, NEFT, RTGS, IMPS, Advantages and Disadvantages of Digital Payment System.
UNIT – 4 FINANCIAL MARKETS
Introduction: Meaning, Functions, Classification of Financial Markets. Capital Market: Meaning and Features of Capital Market, Capital Market Instruments – Equity shares, Preference Shares, Debentures and Hybrid Instruments. Money Market: Meaning and Features of Money Market, Money Market Instruments – T-Bills, Commercial Paper, Certificates of Deposit, Call Money and Notice Money; Money Market Vs Capital Market; Role of SEBI in the Indian Capital Market.
UNIT – 5 FINANCIAL SERVICES
Meaning and Types of Financial Services; Leasing: Meaning, Types – Operating Lease and Financial Lease, Advantages; Hire Purchase: Meaning, Features, Differences between Leasing and Hire Purchase; Venture Capital: Meaning, Features, Stages of Venture Capital Funding; Merchant Banking: Meaning, Features and Services offered. Portfolio Management Services: Meaning, Types – Discretionary and Non-Discretionary Service. Credit Rating: Meaning, Agencies Involved – CRISIL, ICRA, Importance of Credit Rating.
