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FROM: GAGGAN GANESH ANJU.D ADITI.A. Role of Financial Institution in India . Definition of Financial Institution.
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FROM: GAGGAN GANESH ANJU.D ADITI.A Role of Financial Institution in India..
Definition of Financial Institution • An organization, which may be either for-profit or non-profit, that takes money from clients and places it in any of a variety of investment vehicles for the benefit of both the client and the organization. • Institution which collects funds from the public and places them in financial assets, such as deposits, loans, and bonds, rather than tangible property.
Financial Institution in India • The Financial Institutions in India mainly comprises of the Central Bank which is better known as the Reserve Bank of India, the commercial banks, the credit rating agencies, the securities and exchange board of India, insurance companies and the specialized financial institutions in India.
Components of Indian Financial Institution. • Central Bank of India • Commercial Banks in India • Foreign Banks in India • Financial Authorities in India • Insurance Companies in India • Venture Capital Firms in India • Specialized Financial Institutions in India • Credit Rating Agencies in India • Mutual Fund Companies in India
Central Bank Of India • The Reserve Bank of India plays the role of the central bank of India. The bank was established in 1935 as a private bank. After independence of the country, Reserve Bank (RBI) was nationalized and since then, it has been owned by the government of the country. The bank was established in Calcutta (Kolkata), but was shifted to the business capital Mumbai in 1937.
Functions of the Reserve Bank of India (central bank of India) As the apex bank of the country, the Reserve Bank of India plays the most significant role in the financial system of the country. It has been assigned with a number of functions and these are as follows: • Regulating and supervising the financial system of India • Issuer of Indian Currency • Monetary Authority of the country • Foreign Exchange Regulator
Commercial Banks in India: • The commercial banks in India are categorized into foreign banks, private banks and the public sector banks. The commercial banks indulge in varied activities such as acceptance of deposits, acting as trustees, offering loans for the different purposes and are even allowed to collect taxes on behalf of the institutions and central government.
List of Commercial Banks in India • Foreign Banks: • ABN Amro Bank • Abu Dhabi Commercial Bank • American Express Banking Corporation • Other Scheduled Commercial Banks: • Axis Bank • HDFC Bank • ICICI Bank SBI & Associates: • State Bank of India • State Bank of Indore • State Bank of Mysore Nationalised Banks: • Corporation Bank • Syndicate Bank • Union Bank of India
Insurance Companies in India • There was a time when Life Insurance Corporation of India ruled the insurance market. But the insurance market facet is changing rapidly as a number of foreign insurance companies making their foray into the Indian insurance market. • The Insurance Regulatory and Development Authority of India (IRDA) have set strict regulations for the insurance companies to be operational in the country.
Contd…… • The Life Insurance Corporation of India (LIC) still remains far ahead from any other insurance companies in the market. It is fully owned by the Government of India. ICICI Prudential Life Insurance is the second largest player in the insurance market followed by Bajaj Allianz Life Insurance Company Limited. • The only public sector life insurance company in India is Life Insurance Corporation of India
List of Private Insurance Companies In India.. • Bajaj Allianz Life • ICICI Prudential Life Insurance • Tata AIG Life • HDFC Standard Life • SBI Life Insurance • Birla Sunlife • Kotak Mahindra Old Mutual Life Insurance • Reliance Life Insurance Company Limited • Aviva Life Insurance • Metlife India Life Insurance • Max Newyork Life Insurance • ING Vysya Life Insurance • Sahara Life Insurance - Now they are not into business • Bharti AXA Life Insurance Co Ltd.
Specialized Financial Institutions in India • 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
Contd….. • With the help of these financial institutions, the government takes up projects and tasks in order to enhance the overall economic scenario of the country • Some of the major financial institutions of India such as the Industrial Finance Corporation of India, Industrial Development Bank of India, ICICI and Export Import Bank of India are the specialized financial institutions in India that work both in the state level and central level.
Apart from these top-listed financial institutions, there are other financial institutions also that offer specialized financial services to its clients. • These financial institutions are generally devoted to serve some specific domains such as: small and medium scale industries, sick-industries, housing, agriculture, railways, shipping, power, roads and others.
List OF Specialized Financial Institution • Industrial Finance Corporation of India • Export Import Bank of India • Industrial Development Bank of India • Industrial Credit and Investment Corporation of India • Export Credit Guarantee Corporation of India Ltd.
Mutual Funds • It is a professionally managed kind of collective investment plan that pools funds from various investors, investing it in bonds, stocks or other assets. The combined holdings of the bonds, stocks and other assets are termed as portfolio. Each investor holds shares, which forms a portion of the holdings. • Mutual funds may invest in various kinds of securities: cash instruments, stocks, or bonds. There are various sub-categories as well.
