Economic growth and development of any country depends upon a well-knitfinancial system. Financial system comprises, a set of sub-systems of
financialinstitutions, financial markets, financial instruments and services
whichhelp in the formation of capital. Thus a financial system provides a mechanismby which savings are transformed into investments and it can be said thatfinancial system play an significant role in economic growth of the country bymobilizing surplus funds and utilizing them effectively for productive purpose.The financial system is characterized by the presence of integrated, organizedand regulated financial markets, and institutions that meet the short term andlong term financial needs of both the household and corporate sector. Bothfinancial markets and financial institutions play an important role in the financialsystem by rendering various financial services to the community. They operatein close combination with each other.