A financial system is a network of financial institutions, financial markets, financial instruments and financial services to facilitate the transfer

of funds. The system consists of savers, intermediaries, instruments and the ultimate user of funds. The level of economic growth largely depends upon and is facilitated by the state of financial system prevailing in the economy. Efficient financial system and sustainable economic growth are corollary. The financial system mobilises the savings and channelizes them into the productive activity and thus influences the pace of economic development. Economic growth is hampered for want of effective financial system. Broadly speaking, financial system deals with three interrelated and interdependent variables, i.e., money, credit and finance. The functions of financial system can be enumerated as follows:

Financial system works as an effective conduit for optimum allocation of financial resources in an economy. It helps in establishing a link between the savers and the investors. Financial system allows asset-liability transformation. Banks create claims (liabilities) against themselves when they accept deposits from customers but also create assets when they provide loans to clients.

Economic resources (i.e., funds) are transferred from one party to another through financial system. The financial system ensures the efficient functioning of the payment mechanism in an economy. All transactions between the buyers and sellers of goods and services are effected smoothly because of financial system.

Financial system helps in risk transformation by diversification, as in case of mutual funds. Financial system enhances liquidity of financial claims. Financial system helps price discovery of financial assets resulting from the interaction of buyers and sellers. For example, the prices of securities are determined by demand and supply forces in the capital market.

Financial system helps reducing the cost of transactions.

Functions performed by a financial system are :

Saving function: Public saving find their way into the hands of those in production through the financial system. Financial claims are issued in the money and capital

markets which promise future income flows. The funds with the producers result in production of goods and services thereby increasing society living standards.

Liquidity function: The financial markets provide the investor with the opportunity to liquidate investments like stocks bonds debentures whenever they need the fund. Payment function: The financial system offers a very convenient mode for payment of goods and services. Cheque system, credit card system etc are the easiest methods of payments. The cost and time of transactions are drastically reduced.

Risk function: The financial markets provide protection against life, health and income risks. These are accomplished through the sale of life and health insurance and property insurance policies. The financial markets provide immense opportunities for the investor to hedge himself against or reduce the possible risks involved in various investments.

Policy function: The government intervenes in the financial system to influence macroeconomic variables like interest rates or inflation so if country needs more money government would cut rate of interest through various financial instruments and if inflation is high and too much money is there in the system then government would increase rate of interest.

Functions of Financial System

Financial system in todays world is perhaps the most important system among all the systems as all the economics of the world have become interlinked it has become a very complex system. The financial system in it includes all whether its banks or stock market or financial institutions. Lets see some of the important functions which are performed by the financial system

1. The first and foremost function which financial system perform is the channelization the savings of individuals and making it available for various borrowers which are the companies which take loan in order to increase the production of goods and services, which in turn increases the overall growth of the economy.

2. It is with the help of financial system that one can make payment whenever and wherever he or she wants with the help of checks, credit card and debit card. In the absence of financial system one has to take cash wherever he or she goes which would have been impossible.

3. Financial system also provide an individual various options when it comes to protecting against various risks like risk arising from accidents, health related, etc through various life insurance options.

4. Financial system also makes sure that one can liquidate his or her savings whenever he or she wants it and therefore individuals can have both the things, which involve return on investments as well as comfort that they can liquidate their investments whenever they want.

5. All transactions whether they involve individual buying house or a big company coming with an initial public offer they are effected smoothly because of financial system.

Corporate and Social Responsibility (CSR) Our aim is to play an active part in the creation of a prosperous society. Ever since the founding of Toyota Motor Corporation in 1937, the company has endeavoured to play an active role in the creation of a prosperous society. Toyota seeks to grow in symbiosis with its stakeholders, including customers, employees, shareholders, business partners and society at large.

Toyota Fund of Europe (TFfE) Engaging with the community. The Toyota Fund for Europe provides seed funding and gives direction to social contributions within the company. Funded projects include: Eco Driving training in Belgium, Iceland, Norway, Spain and the United Kingdom Reforestation activities by Toyota Spain Pan-European road safety courses for young people

Reliances contributions to the community are in the area of health, education,infrastructure development (drinking water, improving village infrastructure,construction of schools etc.), environment (effluent treatment, tree plantation,treatment of hazardous waste), relief and assistance in the event of a naturaldisaster, and miscellaneous activities such as contribution to other socialdevelopment organizations etc. The Companys CSR teams at all manufacturingdivisions interact with the neighbouring community on regular basis.