Explained: Financial Markets and functions of Financial Market
A financial market is a marketplace that provides an avenue for the sale and purchase of assets such as bonds, stocks, foreign exchange, and derivatives. Stock market: The stock market trades shares of ownership of public companies. (To know more read: Stock exchange) Bond market/debt market: The bond market offers companies and the government opportunities…
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The Informal (unorganized) financial enterprises
The organised sector mainly includes banks, Non-Banking Financial Companies (NBFCs), and Nidhi companies, where the first two are governed by the Reserve Bank of India (RBI) and the Ministry of Corporate Affairs is responsible for the regulation of Nidhi Companies. The informal financial sector comprises partnership firms, sole proprietary concerns, individuals, and institutions like Local…
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Explained: NBFCs in India and RBI guidelines for NBFCs
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956. The companies predominantly engaged in financial activity are only getting registered with RBI as NBFCs. In other words, when a company’s financial assets out of the total assets are more than 50 percent and the company’s gross income from financial assets…
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What is reserve money?
Reserve money is the most important form of money supply that functions as the monetary base of an economy. It is also called high-powered money, base money, and central bank money. Reserve money includes all of the currency (currency notes, coin, and e₹) in circulation, in addition to the banks’ deposits with the central bank,…
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The concept of deficit expenditure of a government
There are three types of budgets in government budgets. They are known as Balanced Budget, Surplus Budget, and Deficit Budget. Balanced budget: When the expenditure planned by the government in the budget proposal is assumed to be balanced with the anticipated receipt for a fiscal year. It is called a balanced budget. Surplus budget: –…
What is a Union Budget?
[This article explains the meaning of Receipt budget, Non-debt receipt, capital budget, capital expenditure, department of expenditure, etc.] A Union budget is the annual spending plan of the Government based on the estimated income and expense of a nation for the next financial year. The objective of the Government Budget is a blueprint for stimulating…
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