Horti-Business Management (2+0)

Financial institutions in India

• The financial institutions in India are divided in two categories. The first type refers to the regulatory institutions and the second type refers to the intermediaries.
Regulatory bodies

• The regulators are assigned with the job of governing all the divisions of the Indian financial system. These regulatory institutions are responsible for maintaining the transparency and the national interest in the operations of the institutions under their supervision.
• The regulatory bodies of the financial institutions in India are as follows:
• Reserve Bank of India (RBI)
• Securities and Exchange Board of India (SEBI)
• Central Board of Direct Taxes (CBDT)
• Central Board of Excise & Customs
Intermediaries

• Apart from the Regulatory bodies, there are the Intermediaries that include the banking and non-banking financial institutions.
Banks
Nationalized commercial banks

• A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits
• Commercial bank is the term used for a normal bank to distinguish it from an investment bank or retail bank.
• Commercial banking can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking).
• Example – State Bank of India, Indian Overseas Bank, etc.
Private banks

• Private Banks are banks that are not incorporated. A private bank is owned by either an individual or a general partner(s) with limited partner(s). In any such case, the creditors can look to both the "entirety of the bank's assets" as well as the entirety of the sole-proprietor's/general-partners' assets.
• "Private Banks" and "private banking" can also refer to non-government owned banks in general, in contrast to government-owned (or nationalized) banks, which were prevalent in communist, socialist and some social democratic states in the 20th century. Private Banks as a form of organization should also not be confused with "Private Banks" that offer financial services to high net worth individuals and others.
• Example – Axis bank, ICICI bank, etc.
Foreign banks

• Foreign Banks in India always brought an explanation about the prompt services to customers. After the set up foreign banks in India, the banking sector in India also become competitive and accurative.
• Example – HSBC, Standard Chartered Bank, etc.
Non-bank financial companies (NBFCs)

• Non-bank financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e., one that does not hold a banking license. Operations are, regardless of this, still exercised under bank regulation.
• For regulatory purposes, NBFCs have been classified into 3 categories:
• those accepting public deposits,
• those not accepting public deposits but engaged in financial business and
• Core investment companies with 90 per cent of their total assets as investments in the securities of their group/ holding/subsidiary companies.
• Example-Sakthi Finance Ltd., Shriram City Union Finance Ltd., etc.