ROLE OF FINANCIAL SYSTEM :

A financial system consists of a structure in an economy, which mobilizes the capital from various surplus sources (investors) and distributes them to the needy segment of the economy. The financial system comprises of various intermediaries who play crucial roles in sourcing out the funds from one segment (surplus segment) and deploying such funds to another segment (needy segment). Some of the intermediaries are banks, financial institutions, mutual funds, etc.

Broadly financial market can be classified as under:

The promoters of a business can raise the funds for investing in business, through many ways like borrowing from banks and financial institutions, invest their own money and also raise funds by inviting public to invest in the form of shares, debentures etc.