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What are NBFCs? NBFCs stand for Non-Banking Financial Companies. These are financial institutions that offer various financial services similar to banks, but they do not hold a banking license. They play a crucial role in the Indian economy by providing credit...

Non-Banking Financial Companies (NBFCs) play a multifaceted role in the Indian financial system. Their functions extend beyond simply providing loans and encompass a wide range of financial services. Here's a breakdown of their key functions: 1. Credit and Fin...

Non-bank financial intermediaries (NBFIs) play a crucial role in the financial system by providing a wide range of financial services to individuals and businesses. They act as intermediaries between savers and borrowers, facilitating the flow of funds in the ...

The Indian financial system is characterized by a diverse and complex institutional structure, comprising various institutions and regulatory bodies that work together to facilitate the flow of funds and promote economic growth. Key Components: Regulatory Bo...

Introduction Non-Banking Financial Companies (NBFCs) in India exhibit a diverse range of asset-liability structures, depending on their size, specialization, and business model. Understanding these structures is crucial for assessing their risk profile, liquid...

Fund-based financial services involve the direct lending of funds by financial institutions to individuals or businesses. These services cater to various financial needs, such as purchasing assets, funding projects, or managing working capital. Key Fund-Based ...

Leasing is a contractual agreement where one party (the lessor) grants another party (the lessee) the right to use an asset for a specified period in exchange for periodic payments (lease payments). It's a popular form of financing that allows businesses and i...

Hire purchase is a method of financing the acquisition of assets where the buyer (hirer) takes possession of the asset immediately but pays for it in installments over a specified period. Ownership of the asset is transferred to the buyer only after the final ...

Consumer credit refers to the type of credit extended to individuals for personal, family, or household purposes. It enables consumers to purchase goods and services or borrow money for various needs, with the expectation of repaying the borrowed amount plus i...

Bill discounting is a short-term financing option where a business sells its accounts receivable (invoices) to a financial institution (typically a bank or NBFC) at a discount. This allows the business to obtain immediate cash flow, improving its working capit...

Factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third party (called a factor) at a discount. This provides the business with immediate cash flow, improving its working capital and liquidity. Factoring is a ty...

The capital market is a vital part of the financial system, focused on providing long-term funding. Here's a breakdown of its meaning: Long-term financing: Unlike the money market, which deals with short-term debt, the capital market facilitates the trading of...

Primary vs. Secondary Markets: Primary Market: This is where new securities are issued for the first time. Companies or governments raise capital by selling stocks or bonds directly to investors. Examples include Initial Public Offerings (IPOs) and the issuanc...

Mobilization of Savings: The capital market channels savings from individuals, households, and institutions into productive investments.   It provides a platform where these savings can be invested in various financial instruments like stocks and bonds, facili...

Primary Capital Market: Function: This is where new securities are created and issued for the first time.   Companies and governments raise capital by selling stocks and bonds directly to investors.   Key Activities: Initial Public Offerings (IPOs): When a pri...

Bombay Stock Exchange (BSE): Historical Significance: The BSE is Asia's oldest stock exchange, established in 1875. This gives it a rich history and a long-standing presence in the Indian financial market.   Key Features: It's known for its benchmark index, th...

Shares (Equities):   Definition: Shares represent ownership in a company. When you buy shares, you become a shareholder, entitling you to a portion of the company's profits and assets.   Key Features: Potential for capital appreciation (increase in share value...

Core Function: The long-term loan market facilitates the provision of funds for periods exceeding one year. This is in contrast to the money market, which handles short-term debt.   It enables corporations, governments, and other entities to finance significan...

The derivatives market is a segment of the financial market where financial instruments known as "derivatives" are traded. Here's a concise definition:   A derivatives market is a marketplace where contracts derive their value from an underlying asset, group o...

Definition: The government securities market, also known as the gilt-edged market, is a marketplace where debt instruments issued by a government are bought and sold.   These securities represent loans made to the government, and they are considered among the ...