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August 30, 2013

Major Financial Institutions of India - Short Notes

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Financial institution is an establishment that focuses on dealing with financial transactions, such as investments, loans and deposits etc. In simple words we can say that the financial institution is an institution which provides financial services for its clients or members. Most financial institutions are regulated by the government. Almost all money related transactions, from depositing money to taking out loans and exchange currencies must be done through financial institutions. Almost all  financial institutions are regulated by the government. When it comes to india, The RBI (Reserve Bank of India) takes care of these financial institutions in most of the cases. Some of the financial institutions of India are RBI, Credit Rating Agencies, Commercial Banks, SEBI, Specialized Financial Institutions and Insurance Companies.

Now lets have a look at Indian Financial Institutions in Detail

Reserve Bank of India (RBI)

As we have discussed a number of times in this blog, RBI is the central bank of India, which was established in 1st April 1935 accordance with the provisions of the Reserve Bank of India Act, 1934. All of us know that it issues currency notes. Apart from this, It acts as the regulatory authority with regard to the functioning of the various commercial bank and the other financial institutions in India. It also formulates different rates and policies for the overall improvement of the banking sector.

Commercial Banks

Both public and private sector banks comes under this category. The commercial Banks are usually categorized into Scheduled Commercial Banks and Unscheduled Commercial Banks. So, we can divide commercial banks as under,
  • Scheduled Commercial Banks : Those banks who have been listed under the Second Schedule of the Reserve Bank of India Act, 1934.
    • Public Sector Banks : Those banks in which majority of stake is held by the government. All nationalized banks (for which IBPS conducts common exam) and SBI comes under this category.
    • Private Sector Banks : Those banks in which majority of stake is held by private indivisuals. Axis Bank, ICICI Bank, HDFC Bank etc., comes under this category.
  • Non scheduled commercial banks : The Banks which are not included in the Second Schedule of RBI Act 1934.

Credit Rating Agencies :

The main aim of Credit Rating Agencies is to assess the condition of the financial sector and to find out avenues for more improvement. CIBIL, Credit Environment India, CRISIL, SME Rating Agency of India, ICRA Ltd, High Mark Credit Information Services, Equifax and Experian are the examples of the Credit Rating Agencies of India.

Some of the services offered by Credit Rating Agencies are,
  • Operation Up gradation
  • Training to Employees
  • Scrutinize New Projects and find out the weak sections in it
  • Rate different sectors.

SEBI

The SEBI (Securities and Exchange Board of India) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act, 1992.

Specialized Financial Institutions

Specialized Financial Institutions in India make an important segment amongst all the financial institutions in India. The Indian financial institutions are governed under the regulations of both the state and central governments.
The governments on the other hand use them in structuring the planning and development of the country. The main target of Specialized Financial Institutions is to provide assistance to the different sectors and thereby cause overall development of the Indian economy.
Some of the Specialized Financial Institutions of India are
  • Export-Import Bank Of India : It is the premier export finance institution of the country, established in 1982 under the Export-Import Bank of India Act 1981.
  • Small Industries Development Bank of India : It is an independent financial institution aimed to aid the growth and development of micro, small and medium-scale enterprises (MSME) in India. Set up on April 2, 1990
  • National Housing Bank : It is a state owned bank and regulation authority in India, created on July 8, 1988[2] under section 6 of the National Housing Bank Act (1987).
  • Board for Industrial & Financial Reconstruction : It is an agency of the government of India, part of the Department of Financial Services of the Ministry of Finance. It was established in 1987.

Insurance Companies

Insurance companies are the companies of rick management. They provide us the equitable transfer of the risk of a loss, from one entity to another in exchange for payment.

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18 comments:

  1. Thank u very much for ur support

    ReplyDelete
  2. IDBI bank is a govt bank, please rectify the error.

    ReplyDelete
    Replies
    1. Yes, IDBI BANK COMES UNDER OTHER COMMERCIAL BANK, WHICH IS COMES UNDER PUS BANK,

      Delete
    2. IDBI is semi government bank please rectify the erroe

      Delete
  3. very helpful.. thaks alot.. a good one..:) :)

    ReplyDelete
  4. thank u very much (anoop)

    ReplyDelete
  5. I have been relying only this site for many exams. Keep it up :) :)

    ReplyDelete
  6. u r doing a great job...
    info.was really helpful..

    ReplyDelete
  7. Sister Thanks for this information. Its really helps people like us searching for a bank Job.
    Thanks very much....

    ReplyDelete
  8. Sir/madam,
    Please upload study material for IBPS SO for Finance.

    thank you.
    Shubham

    ReplyDelete
  9. plz upload updated list of imp national and international organisations head and head quaters as early as
    possible

    ReplyDelete

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