Money and Financial System

Financial System of any country consists of financial markets, financial intermediation and financial instruments or financial products. This paper discusses the meaning of finance and Indian Financial System and focus on the financial markets, financial intermediaries and financial instruments. The brief review on various money market instruments are also covered in this study. The term finance in our simple understanding it is perceived as equivalent to Money. We read about Money and banking in Economics, about Monetary Theory and Practice and about Public Finance. But finance exactly is not money; it is the source of providing funds for a particular activity. Thus public finance does not mean the money with the Government, but it refers to sources of raising revenue for the activities and functions of a Government. Here some of the definitions of the word finance, both as a source and as an activity i.e. as a noun and a verb.