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32 Corporate Finance BRILLIANT’S

(b) Derivative instruments: Financial instru- (b) S>o[ado{Q>d B§ñQ¯>_|Q²>g… \$m`Z|{e`b B§ñQ¯>_|Q²>g Omo CZH$m
ments which derive their value from some _yë` {H$gr AÝ` \$m`Z|{e`b B§ñQ¯>_|Q> `m d¡[aE~b
other financial instrument or variable are
go àmßV H$aVo h¢ do S>o[ado{Q>d B§ñQ¯>_|Q²>g h¢Ÿ&
derivative instruments.
(iii) Classification on the basis of type (iii) àH$ma Ho$ AmYma na dJuH$aU
(a) Primary instruments: Instruments that are (a) àm`_ar B§ñQ¯>_|Q²>g… B§ñQ¯>_|Q²>g Omo AëQ>r_oQ> BÝdoñQ>g©
directly issued by the ultimate investors Ûmam grYo hr AëQ>r_oQ> godg© H$mo Bí`y {H$`o OmVo h¢
to the ultimate savers are called primary CÝh| àm`_ar B§ñQ¯>_|Q²>g H$hm OmVm h¡Ÿ& CXmhaU…
instruments. Example: Shares and deben- eo`g© VWm {S>~oÝMg© OZVm H$mo grYo hr Bí`y {H$`o
tures directly issued to the public. OmVo h¢Ÿ&
(b) Secondary instruments: Instruments that (b) goH§$S>ar B§ñQ¯>_|Q²>g… B§ñQ¯>_|Q²>g Omo \$m`Z|{e`b
are issued by the financial intermediaries B§Q>a_r{S>`arO Ûmam AëQ>r_oQ> godg© H$mo Bí`y {H$`o
to the ultimate savers are secondary in- OmVo h¢ do goH§$S>ar B§ñQ¯>_|Q²>g h¢Ÿ& CXmhaU… UTI VWm
struments. Example: UTI and mutual
funds issue securities in the form of units å`wMwAb \$ÊS²>g OZVm H$mo `y{ZQ²>g Ho$ ê$n _|
to the public. NPP {gŠ`y[aQ>rO Bí`y H$aVo h¢Ÿ&
4. Financial services: The development of 4. \$m`Z|{e`b g{d©gog… AmYw{ZH$ VWm n[anŠd
sophisticated and matured financial system led \$m`Z|{e`b {gñQ>_ H$m {dH$mg \$m`Z|{e`b g{d©g goŠQ>a
to emergence of financial service sector. Its ob- H$s CËn{Îm H$m H$maU hþAm h¡Ÿ& BgH$m CÔoí` ì`{º$`m| VWm
jective is to intermediate and facilitate finan- B§ñQ>rQ²>`yeZb BÝdoñQ>g© Ho$ \$m`Z|{e`b Q´>m§OoŠeÝg H$s
cial transactions of individuals and institu- _Ü`ñWVm H$aZm VWm gw{dYmOZH$ ~ZmZm h¡Ÿ& \$m`Z|{e`b
tional investors. Financial services include all
g{d©gog ~MV H$mo {Zdoe _| n[ad{V©V H$aZo go gå~§{YV
activities connected with the transformation
of savings into investment. Important finan- g^r J{V{d{Y`m| H$mo g{å_{bV H$aVr h¢Ÿ& _hËdnyU©
cial services include lease financing, hire pur- \$m`Z|{e`b g{d©gog _| brO \$m`Z|{g§J, hm`a nM}g,
chase, installment payment systems, merchant B§ñQ>m°b_|Q> no_|Q> {gñQ>åg, _M}ÝQ> ~¢qH$J, \¡$ŠQ>[a¨J,
banking, factoring, forfeiting etc. \$moa\o$qQ>J Am{X gpå_{bV h¢Ÿ&
Characteristics of Indian B§{S>`Z \$m`Z|{e`b {gñQ>_ H$s
Financial System
Characteristics of {deofVmE§
Indian Financial
1. Short-term and Long-term 1. Aënmd{Y VWm XrKm©d{Y godmE§…
System
Services: In Indian financial B§{S>`Z \$m`Z|{e`b {gñQ>_ _§o
system, commercial banks have 1. Short-term and Long- ì`mdgm{`H$ ~¢Šg Zo d{Hª$J H¡${nQ>b VWm
provided working capital and term Services
trade finance, Factoring 2. Provide Investment Q´>oS> \$m`Z|g àXmZ {H$`o h¢& \¡$ŠQ>[a¨J
companies are specialized in Instruments H§$nZrO B§doQ>arO VWm [agrdo~ëg H$s
financing inventories and 3. Financial Services \$m`Z|qgJ _| {deofk h¢ VWm S>odbn_|Q>
receivables, and Development 4. Provide Maximum Fi-
banks and leasing companies nancial Convenience ~¢Šg VWm brqOJ H§$nZrO XrKm©d{Y
provide long-term investment 5. Encourage savings B§doñQ>_|Q> \$m`Z|gog àXmZ H$aVr h¢&
finances. 6. Strong Link