Financial Institutions¶
Non-individuals/organizations that
- Intermediary
- acts as mobilizers
- depositors of savings
-
dealers of credit/finance
-
Non-Intermediary
- Monitor
- Coordinate
- Protect rights
- Intervene (if required)
Types¶
| Type | Regulated by | Primary Function | Secondary Function | India | US | ||
|---|---|---|---|---|---|---|---|
| Intermediary | Banking | Financial institution licensed to accept deposits & provide loans | Central Bank | Accept deposits Lending loans | Agency function General utility services | ||
| Non-Banking | Cannot accept ‘loans’ | Forgot | |||||
| Non-Intermediary | Banking Regulators | RBI | |||||
| Insurance Regulators | IRTA | ||||||
| Securities Regulators | SAVEE? SEBI | SEC (Security Exchange Committee) |
Universal bank that is involved in banking & non-banking activities
Types of Banks¶
| Type | Owners | Goal | Size | |
|---|---|---|---|---|
| Commercial | Private | Profit | Large | |
| Cooperative | Community (Owners = Customers) | Non-Profit | Small | |
| Regional Rural | Government (Finance Ministry) | Non-Profit Provide financing in communities where not available | Small | |
| Investment | Fixed Income Equity IBD Corporate Finance Asset Management Wealth Management |
Non-Banking Institutions¶
| Purpose | ||
|---|---|---|
| Non-Banking Financial Companies | Bajaj Finance Ltd Mahindra Finance Services Muthoot Finance Cholamandalam | |
| Development Financial Institutions | IFCI: Industrial Finance Corporation of India ICICI: Industrial Credit and Investment Corporation of India IDBI IRCI SIDBI HDFC | |
| Insurance Companies | Protection against contingent/uncertain loss | LIC ICICI Prudential Life Insurance Company General Insurance Company The New India Assurance Company |
| Mutual Funds | Pool funds of any amount invested by Asset Management Company with Custodians to inspect | UTI SBI Mutual Fund Axis Bank Mutual Fund |
| Index Funds | Pooled investments that passively aim to replicate the returns of market indexes |
Number of issues shares controls who can invest
- Stability: Decrease number of shares to increase share price, and exclude retail investors
- High Returns: Increase number of shares to decrease share price, and include retail investors