INTRODUCTION

A financial system plays a vital role in the economic growth and development of a country. It is a means of the fund transfer between to those who save a part of there income and those who invest in the productive assets. A financial system consists of four components financial markets, Financial Institution, Financial Instruments and Financial services which facilitate the transfer and allocation and funds, efficiently and effectively. (The Indian Financial System, Bharti V Phatak, Second Edition, Pearson Education) Reserve Bank of India regulates all the Financial Institutions and Money market. It affects the policies of the financial institutions and controls the circulation of money. Reserve Bank of India plays many roles as follows Supervision of Financial Institutions It formulates implements and monitors the financial policies of India. It maintains the price stability and ensures adequate flow of credit to productive sectors RBI issues currency and coins and exchanges or destroys the currency and coins that are not in circulation RBI provides loan to the central and the state governments whenever they are in need so it acts as merchant banker ( www.rbi.com)

OBJECTIVES OF STUDY

To the effects of RBI on inflation How to RBI policies affect the Financial Market

REVIEW OF LITERATURE

There are many research have been done in this field. Singh, Ajit (1997), Financial Liberalization, Stock Markets and Economic Development, The Economic Journal, vol. 107 (May), p. 771-82. Singh, Ajit and B. A. Weisse (1988), Emerging stock markets, portfolio Capital Flows and Long Term Economic Growth; Micro and Macro economic perspective world development vol.26, no.4 (April),pp.607-22. Reserve Bank of India, Report on Currency and Finance 1999-2000 and 200001.Demirguc Kunt A. and R. Levine (1999), Bank-based and Market-based Financial system Evidence From Firm Level Data, World Bank Policy Research Working paper No. 2432. Levine, Ross (1991), Stock Markets, Banks and Economic Growth, The World Bank Policy Research Working paper No. 1582, March 1996.

RATIONALE OF STUDY

I have done this project because my area of interest towards the Indian Financial System. In this study I analyzed that how to fund transfer from Surplus units to Deficit units and how to RBI affects the financial markets so the investor and other person whose want to deal in the financial market should be aware about the changes policy of RBI.

RESEARCH METHODOLOGY
a) PRIMARY DATA Interview Questionnaire

a) SECONDARY DATA Books Journals Internet Magazines

b) TYPE OF RESEARCH CONCEPTUAL RESEARCH

C) SAMPLING SIZE Data will be collected from primary data of 50 customers along with secondary data.

REFERENCES

Books:The Indian Financial system, Bharti V. Phatak, Second Edition, Pearson education

Web:www.google.co.in www.rbi.com