Key Insight: A well-regulated, efficient financial system fuels sustained economic growth by mobilizing and allocating capital effectively.
Initially, India’s economy relied heavily on agriculture for employment and output. It formed the primary source of rural livelihood.
Post-independence reforms led to industrialization, building a base in manufacturing, engineering, and production sectors.
Today, services like IT, finance, telecom, and healthcare dominate, making India a globally recognized service economy.
Markets channel surplus savings from households into productive investments through banks, mutual funds, and corporates.
Markets ensure that financial instruments can be quickly bought or sold with minimal impact on price — encouraging participation.
Continuous price discovery helps in transparent decision-making and rational allocation of capital based on available data.
Includes Money Market (short term), Capital Market (long term), and supporting markets like Forex, Commodity, and Insurance.
Primary: Issuance of new securities. Secondary: Trading of existing securities among investors. Both ensure fund access and exit options.
Banks, brokers, mutual funds, depositories, insurance firms, pension funds, and retail investors drive market depth and stability.
Regulates monetary policy, issues currency, supervises banks, NBFCs, payment systems, and manages forex reserves.
Accept deposits, provide loans, support payments. Includes public, private, foreign, and regional rural banks.
Provide small savings accounts and digital payment services. No lending allowed.
Offer credit and deposit services to small/marginal customers and MSMEs.
Non-bank institutions that lend, lease, and invest — but can’t take demand deposits.
Specialized NBFCs for property financing — now regulated by RBI.
Online platforms for person-to-person lending — regulated by RBI.
Short-term funds market (T-bills, CP, CD, call money) used by banks and FIs.
Publishes reference rates for forex and interest benchmarks in India.
Store borrower credit histories (e.g. CIBIL, Equifax) for loan risk analysis.
Licensed by RBI to securely share client data with third parties (with consent).
Includes shares, bonds, derivatives, mutual funds, and government securities.
NSE, BSE offer transparent trading for equity, debt, and derivatives.
Ensure trade settlement and guarantee delivery of securities and funds.
NSDL and CDSL hold securities in demat form.
Intermediaries between investors and depositories.
Hold large volumes of institutional securities and handle settlements.
SEBI-registered agents who trade securities for clients on exchanges.
Debt: Bonds, NCDs. Derivatives: futures, options on equity/index/currency/commodity.
AMC-managed pooled funds; AIFs are alternative investment platforms.
SEBI-registered professionals giving fee-based advisory.
Centralized platforms to maintain verified investor KYC records.
Evaluate issuer’s financial health for bonds/NCDs (e.g., CRISIL, ICRA).
Provide corporate finance, mergers advisory, or manage funds/portfolios.
Registrar & Transfer Agents manage mutual fund investor records & services.