Vol. 5, Issue 11, Part B (2019)

Abstract
The strategic role of the financial system is to channel funds from surplus units to deficit units. The financial system comprising the set of institutions, markets and instruments facilitates capital formation and accelerates the pace of economic development. The gap between gross capital formation and gross domestic savings in India necessitates the need for augmenting the growth rate of voluntary domestic savings. So, the working of different financial intermediaries for mobilizing savings from various income categories will have to be widened and strengthened. It is in this context that one has to appreciate the role of the Non-Banking Financial Intermediaries in supplementing the functions of the Banking Institutions. The Non-Banking Financial Intermediaries' ability to purvey funds depends to a large extent on the resources they can mobilize. Miscellaneous Non-Banking Companies or Chit Funds being a category of Non-Banking Financial Intermediaries, contribute significantly to the value of financial markets in India.