Financial Awareness and its Impact on Investment Decisions by Individual- Professionals in NCR Region

Abstract

A well functioning financial sector facilitates efficient intermediation of financial resources in economy. More efficient the financial sector for generating financial resources, greater is its contribution to the economic growth. Post liberalization, there was spurt in economic activity and decisions were taken to boost the economic growth. Demand for regulated capital markets was realized for industrial and infrastructural growth. Apart from raising requisite funds from the foreign markets, the need of raising funds from domestic sources was also tapped. In order to raise long term capital requirements from Institutional investors as well as from retail investors, Governments recognized the need for providing appropriate atmosphere, a regulated market, new investment opportunities and diversified financial products. In 1992, to regulate the capital markets the Controller of Capital issues (CCI) was replaced Securities Exchange Board of India (SEBI) with the objective of protecting investors investing in capital markets. Well regulated capital market was needed to encourage investment by large pool of household sector.

Therefore, this study aims to examine the level of financial awareness among the retail investors and comparing it with their perceived level of financial literacy. This retail investor sample includes the Individual-Professionals of Delhi-NCR Region and further study elaborates the impact of financial awareness on the investment portfolio selected by them and their borrowing behavior.