It gives me immense pleasure to present the First Edition of “Financial Institutions and Market” designed exclusively for the students of S.Y.BMS, Semester IV, University of Mumbai. This book has been developed in accordance with the New Syllabus and Paper Pattern introduced under the National Education Policy (NEP) 2020 and is applicable from the academic year 2025–26.
This textbook is designed to provide a thorough and current understanding of the rapidly evolving Indian and global financial system. It covers the foundational structures of financial institutions, the dynamics and regulatory frameworks of money and capital markets, the interplay between regulations and market development, and the profound impact of emerging trends such as FinTech, digitalisation, financial globalisation, and new regulatory regimes.
Structured into four modules, the book covers a wide spectrum of themes including Introduction to Financial Institutions, Financial Markets & Financial Regulation, Financial Regulation and the Interaction of Financial Institutions and Markets and Emerging Trends and Globalisation in Financial Institutions and Markets. Carefully integrated illustrations and conceptual applications have been included to make learning experiential and industry relevant.
At every stage, the chapters blend conceptual clarity with real-world cases, practical checklists, flowcharts, and regulatory updates, fostering both analytical thinking and applied learning. Each module concludes with student-centric components FAQs, glossary, ethical case discussions, assignments, quizzes, and model papers—to prepare learners for academic, competitive, and professional examinations.
Contents –
1. Introduction to Financial Institutions
A. Functions of the Financial System, Flow of Funds, Types of Financial Assets, Role of Financial Intermediaries
B. Financial Institutions: Commercial Banks: Functions, Operations, and Regulations
C. Investment Banks: Underwriting, Mergers and Acquisitions, and Trading, Insurance Companies: Types of Insurance
D. Risk Management, Mutual Funds and Pension Funds: Investment Strategies, Other Financial Institutions: Credit Unions, Finance Companies, etc.
2. Financial Markets & Financial Regulation
A. Capital Market: Primary Market (IPO, FPO, Underwriting), Secondary Market (Stock Exchanges, Trading Mechanisms)
B. Money Markets: Short-Term Debt Instruments, Capital Markets: Long-Term Debt and Equity Instruments
C. Bond Markets: Government and Corporate Bonds, Stock Markets: Equity Trading and Market Efficiency
D. Derivatives Markets: Futures, Options, and Swaps, Foreign Exchange Markets: Currency Exchange and Risk Management
3. Financial Regulation and the Interaction of Financial Institutions and Markets
A. Financial Market Instruments: Treasury Bills, Commercial Paper, and Certificates of Deposit, Stocks, Bonds, Futures, Options, and Derivatives
B. Financial Regulation: Role of Central Banks, Regulatory Agencies Sec, RBI), Impact of Regulation on Financial Institutions and Markets, Basel Accords
C. The Interaction of Financial Institutions and Markets: Role of Financial Institutions in the Various Financial Markets, Effect that Financial Institutions Have on Market Stability
D. Effect of Financial Markets on Financial Institutions, Case Studies Related to Financial Institutions and Markets
4. Emerging Trends and Globalization in Financial Institutions and Markets
A. Financial Innovation and Technology: Digital Banking and Fintech Developments, Blockchain and Cryptocurrencies
B. AI and Automation in Financial Markets, Global Capital Flows and Foreign Investment, Exchange Rate Mechanisms and International Monetary Policies
C. Impact of Globalization on National Financial Systems, Contemporary Issues and Case Studies, Analysis of Financial Market Crises and their Impact
D. Ethical Considerations in Financial Institutions, Real-World Applications Through Case Studies
Model Question Papers
