Meaning of Financial System | eStartIndia

The economic expansion of any country depends upon the existence of a well-ordered financial system. It helps in the creation of wealth by linking savings with investment. The financial system is an organized and regulated structure where an exchange of funds takes place between the lender and the borrower. It supplies the necessary financial inputs for the production of goods and services, in turn, promotes the well-being and standard of living of people in the country.

Definition of the Financial System:

According to Prasanna Chandra: the financial system consisting of a variety of institution, markets, and the instruments which are related in a systematic manner and provide the principal means by which savings are transformed into instruments.