Financial Intermediation is a systematic channel within the financial system to ensure the transfer of financial assets to the ultimate investor in order to garner the requisite amount. Financial intermediation in the organized sector is conducted by a wide range of institutions functioning under the overall surveillance of the Reserve Bank of India. In the initial stages, the role of the intermediary was mostly related to ensure transfer of funds from the lender to the borrower. This service was offered by banks, FIs, brokers, and dealers. However, as the financial system widened along with the developments taking place in the financial markets, the scope of its operations also widened.
Some of the important intermediaries operating in the financial markets include; investment bankers, underwriters, stock exchanges, registrars, depositories, custodians, portfolio managers, mutual funds, financial advertisers financial consultants, primary dealers, satellite dealers, self regulatory organizations, etc. Though the markets are different, there may be a few intermediaries offering their services in more than one market e.g. underwriter. However, the services offered by them vary from one market to another.
|Stock Exchange||Capital Market||Secondary Market to securities|
|Investment Bankers||Capital Market, Credit Market||Corporate advisory services, Issue of securities|
|Underwriters||Capital Market, Money Market||Subscribe to unsubscribed portion of securities|
|Registrars, Depositories, Custodians||Capital Market||Issue securities to the investors on behalf of the company and handle share transfer activity|
|Primary Dealers Satellite Dealers||Money Market||Market making in government securities|
|Forex Dealers||Forex Market||Ensure exchange ink currencies|