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CA-Foundation - BCK Notes - RL - 13
CA-Foundation - BCK Notes - RL - 13
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Table of Contents
Business Environment 10
Business Organisation 18
Introduction to BCK
BCK stands for Business & Commercial Knowledge. It contains infinite knowledge about the field
of business and commerce. It includes wide range of business activities comprising of manufacturing,
trading, services etc.
Business and commercial knowledge is huge in scope and coverage; derives its ideas from various
methods like market, law, economics etc.; and is constantly developing and growing.
BCK is immensely important for a Chartered accountant as it helps him in understanding theories and
concepts of various business operations and different shades of a company. It assists a Chartered
accountant in every field of his work may it be practice or audit or consultancy.
Economic activities are mainly focused and directed towards making a living and paying for basic
necessities of life. All economic activities are performed by an individual because of his self-
interest or expectation of some economic benefit or consideration. The reach and range of each
and every economic activity is always related to time, money and material resource. Real motive of
each & every economic activity is to earn or gain something.
An economic activity performed without the expectation of any economic benefit or
consideration can be termed as Non-Economic activity. These activities are focused and related
to various grounds like love, affection, passion, charity etc. Main motive of any non-economic activity
is social or psychological concern towards any living being.
Example: - If a person plays a musical instrument just because it is his hobby or he likes it, then
such an activity can be characterized as non –economic activity. On the other hand, when the
same person plays musical instrument in a concert or event for a consideration, then such activity
will be classified as economic activity.
• Economic activities are income generating and always imparts a person with
monetary or non-monetary consideration. Various factors of production like land,
labour, capital and entrepreneurship earns economic benefit or return for their
factor services in the form of rent, wages, interest and profit respectively according
to their contribution to production.
Example: - Earning salary income from job or profit by doing business.
• Consumption is an economic activity and relates to demand side. Buyer spends his
money in buying goods and services which are ultimately being consumed by him.
• Savings refers to that part of income which is left after spending money for
consumption activities. Savings leads to investment and investment leads to
creation of wealth. A part of income saved by a person is invested by him through
various channels like making fixed deposits in banks, investing in mutual funds,
buying shares from stock market etc. Any investment made by a person grows and
accumulates and thereby creates wealth for that person.
Business may be defined as an economic entity who is engaged in the process of economic
activities comprising of buying, producing, trading or selling of goods and services so as to earn
income or profit. The term ‘Business’ can also be classified as set of activities which are part of any
industry, trade or organization primarily focused towards derivation of profit. In business process or
activities, sellers are those persons who sell and trade their goods and services in the market (e.g.
manufacturers, suppliers, wholesalers, retailers, distributors, service provider etc.) and buyers are
referred to those persons who buys goods or services from the market.
Entity wise example of few categories of businesses are: - Industry -Hotel Industry; Company -
Tata Motors; Retail business - any retail shop or retail store; Service business – a restaurant or a
CA firm etc.
➢ Small Businesses: - Larger than micro business entity but still smaller in size
with limited business operations.
E.g. A wholesaler of goods.
➢ Medium Businesses: -
Average in size with several business activities.
E.g. Distributor of goods.
➢ Large Businesses: -
Enormous in size and have massive range and types of business activities.
E.g. manufacturing entity like Reliance Industries, Tata Group etc.
Ownership of a business refers to collection of rights which a business owner possess. Business
ownership occurs by investment of capital. Profits of a business are being enjoyed by the owner.
Similarly losses are also borne by the owner of the business. Ownership of business can also be
transferred in certain types of businesses.
Various forms and types of businesses with respect to ownership are discussed below:-
• Partnership Business :-
✓ In a partnership business, two or more partners come together for doing business
under a ‘Partnership Agreement’ or ‘Partnership Deed’.
✓ Business can be carried on by some partners (also called as active partners) or may
be carried out by all the partners of a partnership firm.
✓ Pooling of funds for doing business becomes easier due to the presence of multiple
partners.
✓ Risk and reward is divided amongst all the partners equally or as per partnership
agreement. Minor partners are entitled only to the profits of the firm.
✓ Liability of partners are joint, several and unlimited.
✓ Partnership ends as soon as the agreement is cancelled or when a partner leaves
the partnership firm.
✓ Mutual agency is an essential feature of a partnership firm according to which every
partner works in common interest and in the interest of the firm.
Introduction
In this constant changing business environment, survival of any business depends mainly on
two factors namely-
Business environment comprises of factors that effects the functioning of any business-like
external forces, decisions, strategies and any other impacting factors within or outside an
organisation.
-Businesses function within a relevant environment and find their way through it. A
successful business has to identify, appraise, and respond to various opportunities and
threats in its environment.
-Business function as a part of broader environment. The inputs and resources obtained
through the environment are converted to output and products. This input-output
exchange activity is deemed to be a continuous process.
Environmental Scanning
Internal Environment:-
Internal environment comprises of elements which influence businesses and are present
within the organisation itself. Example: - Organisation’s management, Employees,
Culture etc.
External Environment:-
SWOT Analysis
a. Customers:-
A customer is an individual or business that purchases the goods or services
produced by a business. The organisation cannot survive without customers.
b. Competitors:-
Any person, business entity, organisation or industry which competes with any other
business and is a rival to them is called a competitor. Competition may be direct or
indirect and it shapes businesses.
c. Organisations:-
An organisation is a group of individuals working together to achieve one or more
objectives.
Following elements effects organisations activities: -
▪ Owners: - a person who owns business and enjoy rights and benefits associated and
derived from it is called owner of that business.
▪ Employees: - They are the persons who work in an organisation collectively towards
achieving organisations goal & objectives.
d. Markets:-
Analysis of market trends & scenarios, price sensitivity, technological and cost
structure should be studied deeply by an organisation.
e. Suppliers:-
Suppliers provide goods or services that are needed by an organisation for its
operation and functioning.
f. Intermediaries: -
Persons such as broker, agents etc. are termed as intermediaries and they
significantly influence the business of an organisation.
a. Demographic Environment:-
Demographic environment have great impact on the business of an organisation
and comprises of factors such as age profile, sex ratio, education etc.
b. Economic Environment: -
Economic environment determines the strength & size of the market.
▪ 1. Economic Systems: -
❖ Capitalism: - A capitalist economy is an economy where the laws
of demand and supply operate freely.
❖ Socialism: - Socialism is an economy where means of production
and resources are owned ,controlled and regulated by the state
directly
❖ Mixed Economy: - A mixed economy comprises of characteristics
of both Capitalism & Socialism economy. In this type of economy
control vests in the hands of both private players as well as the
government.
c. Political-Legal Environment: -
Political & legal environments focus on the possibility for a company to easily
enter or not in a country. It relates to political & legal barriers which a business
face in a given country.
d. Socio-Cultural Environment:-
Socio-Cultural Environment consists of factors related to human relationship
and the impact of social attitudes and cultural values which effects the
operations of the organisation. Some important factors which influence socio-
cultural environment are Social Concerns, Social attitudes & values, Role of
women & Children in society, educational levels etc.
e. Technological Environment: -
It consists of methods and technology used in the production of goods or
services. Technological changes & advancement have a huge impact on the
business of an organisation.
Technological change, technological innovation, Research & Development etc.
are some of the major factors of technological Environment.
PESTLE Analysis
It is a very simple & quick tool and is mainly used for the study and analysis of macro
environmental factors. It helps management of an organisation in strategic decision-
making function.
PESTLE is an acronym for: -
P- Political
E- Economic
S- Socio-Cultural
T- Technological
L- Legal
E- Environmental
Particulars
Company Adani Ports and Special Economic Zone Ltd (APSEZ)
Incorporation Year 1998
Ownership Group Adani Group
Founder Gautambhai Shantilal Adani
Headquarter Ahmedabad ,Gujarat, India
Chairman & Managing Director Gautambhai Shantilal Adani
Chief Executive Officer(CEO) Karan Gautambhai Adani
Chief Financial Officer(CFO) Deepak Maheshwari
Business news India’s first port operator to achieve this milestone
and 5th in world
Ranking on Forbes World list 1706th Largest Public corporations List
2019 276th Best employer’s List
Key Businesses - Composite network of ports & terminals -
- Industrial land business
- Logistics business
- Dredging and Reclamation solutions
Company Philosophy Adani Ports, India’s largest port company, displays
courage to constantly charter into unexplored waters
and have made “Thinking Big. Doing Better” a natural
philosophy. Be it resources, logistics, energy or agri,
the company takes pride in whatever they do and
sincerely believes that they are doing their part in
nation building and touching the lives of millions of
people positively.
Vision: - To be a world class leader in businesses that
enrich lives and contribute to nation in building
infrastructure through sustainable value creation.
Product Logistics
Seamless multi-modal logistics solutions are provided right to and from the customers’
premises. Inland Container Depots help ports expand their hinterland connectivity while
private rakes and strategic alliances help in seamless pan-India cargo movement.
Product Paints
Asian Paints manufactures wide range of paints for Decorative and Industrial use.
Particulars
Company Axis Bank Limited
Industry Banking, Financial services
Incorporation Year 1993
Founders Founded jointly by Specified Undertaking of Unit Trust
of India (SUUTI), Life Insurance Corporation of India
(LIC), General Insurance Corporation of India (GIC),
National Insurance Company Ltd, The New India
Assurance Company Ltd, The Oriental Insurance
Company Ltd and United India Insurance Company Ltd
Headquarter Mumbai , Maharashtra, India
Chairman Sanjiv Misra
Managing Director & CEO Amitabh Chaudhry
Chief Financial Officer(CFO) Jairam Sridharan
Business news Announced the opening of its Qualified Institutions
Placement (QIP) to raise funds for Rs. 12500 Crores
Ranking on Forbes World list 741st Public Corporations List
2019 283rd Best Employer’s List
Key Businesses - Corporate Banking -
- Retail Banking
- International Banking
Particulars
Company Bharti Airtel Limited
Industry Telecommunications
Incorporation Year 1995
Ownership Group Bharti Group
Founder Sunil Bharti Mittal
Headquarter New Delhi, India
Chairman Sunil Bharti Mittal
Managing Director & CEO Gopal Vittal
Chief Financial Officer(CFO) Badal Bagri
Business News “Enterprise Data Service Provider of the year” “
Enterprise Telecom Service provider of the year” in
17th edition of the Frost & Sullivan ICT Awards
Ranking on Forbes World list 852nd Largest Public Corporations List
2019
Key Businesses - Wireless Services
- Homes Services
- Airtel Business
- Digital TV Services
- Payments Bank
- Tower Infrastructure
-
Company Philosophy Values: - Alive, Inclusive, Respectful.
Objectives: - Its objectives are to grow market share,
grow revenue and drive down cost.
Vision: - Company’s vision is to enrich the lives of
customers. Their obsession is to win customers for life
through an exceptional experience.
Company’s Website www.airtel.in
Businesses Refineries
• Mumbai Refinery
• Kochi Refineries
• Bina Refinery
• Numaligarh Refinery
Particulars
Company Cipla Limited
Industry Pharmaceuticals
Incorporation Year 1935
Founder Dr. Khwaja Abdul Hamied
Headquarter Mumbai, Maharashtra, India
Chairman & CEO Y K Hamied
Managing Director & Global CEO Umang Vohra
Global CFO Kedar Upadhye
Business News The 82 year old chairman has been made Honorary
Fellow of the Prestigious body, comprising of many of
the world’s most eminent scientist in the 2019 list of
new fellows of the UK’s Royal society
Business News
Ranking on Forbes World list
2019
Company Philosophy Slogan: - Caring for Life.
Objectives: - Cipla is a global pharmaceutical firm
that consistently ‘Cares for Life’ and delivers on its
commitment to all their stakeholders- patients,
regulators, customers, partners, employees, investors
and community.
Particulars
Company Coal India Limited
Industry Mining
Incorporation Year 1975
Ownership Group Government Of India
IPO Year 2010
Headquarter Kolkata, West Bengal, India
Chairman Anil Kumar Jha
Managing Director & CEO Anil Kumar Jha
Chief Financial Officer(CFO) Mr. S. Sarkar
Business News “CSR Winner Award for Rural Development and
Infrastructure” at 6th CSR Impact Awards 2018-19
Ranking on Forbes World list 583rd Largest Public Corporations List
2019
Product Biologics
They have four products in the market and an industry-leading pipeline spanning
oncology, nephrology and auto-immune diseases.
Particulars
Company ICICI Bank Limited
Industry Banking, Financial Services
Incorporation Year 1994
Ownership Group ICICI group
Headquarter Mumbai, Maharashtra, India
Chairman Girish Chandra Chaturvedi
Managing Director & CEO Sandeep Bakhshi
Chief Financial Officer(CFO) Rakesh Jha
Business News Biggest winner at IBA Banking Technology Awards 2018
Awarded by the Ministry of Skill Development and
Entrepreneurship
Issued 2 million FASTag
The building of the ICICI Rural Self Employment
Training Institute , provides free of cost vocational
training and has been awarded ‘Net Zero Energy-
Platinum’ by Indian Green Building Council
Launched ‘InstaBIZ’ in July
Ranking on Forbes World list 400th Largest Public Corporations List
2019
Key Businesses - Retail banking
- Corporate banking
- Investment banking
- Mortgage loans
- Private banking
Businesses Refineries
• Barauni Refinery
• Bongaigaon Refinery
• CPCL, Chennai
• CPCL, Narimanam
• Digboi Refinery
• Guwahati Refinery
• Haldia Refinery
• Koyali Refinery
• Mathura Refinery
• Panipat Refinery
• Paradip Refinery
Particulars
Company ITC Limited
Incorporation Year 1910
Headquarter Kolkata ,West Bengal, India
Chairman Yogesh Chander Deveshwar
Managing Director & CEO Sanjiv Puri
Chief Financial Officer (CFO) Rajiv Tandon
Business News Ears the Highest Global Recognition for Water
Stewardship
The only company to be water positive , covering
10.87 Lakh acres benefiting over 3.20 Lakh people in
15 states
Launched world’s most expensive chocolate priced at
Rs. 4.3 lakh/ Kg under its brand Fabelle
Ranking on Forbes World list 806th Largest Public Corporations List
2019 117th Best Employer’s List
• Personal care products include perfumes, hair care and skincare categories. Major
brands are Fiama Di Wills, Vivel, Essenza Di Wills, Superia and Engage.
• Safety Matches and Agarbattis- major brands include Ship, i Kno and Aim brands of
safety matches and the Mangaldeep brand of agarbattis (Incense Sticks).
• Cigarettes, Cigars- major brands include Gold Flake, Navy Cut etc.
Business Hotels
Luxury hotels & welcome hotels: - ITC's Hotels division (under brands including
WelcomHotel) is India's second-largest hotel chain with over 90 hotels throughout India.
ITC is also the exclusive franchisee in India of two brands owned by Sheraton International
Inc.
Brands in the hospitality sector owned and operated by its subsidiaries include Fortune
Park Hotels and WelcomHeritage Hotels.
Particulars
Company Larsen & Toubro Limited (L&T)
Incorporation Year 1938
Ownership Group L&T group
Headquarter Mumbai ,Maharashtra, India
Founder Henning Holck-Larsen, Søren Kristian Toubro
Group Chairman A M Naik
Managing Director & CEO S N Subrahmanyan
Chief Financial Officer (CFO) R Shankar Raman
Business News Inaugurated Phase 1 Metro express in Oct’19 in African
island nation of Mauritius by PM Shri Narendra Modi
and Pravind Kumar Jugnauth , PM of Mauritius
Secured the prestigious project of Engineering,
Procurement and Constructions of Green field Navi
Mumbai International Airport in Sept’2019
Ranking on Forbes World list 438th Largest Public Corporations List
2019 29th Best Employer’s List
Key Businesses - Construction
- Hydrocarbon Engineering
- Power
- Metallurgical & material handling
- Heavy Engineering
- Defence
- Shipbuilding
- Electrical & Automation
Business Construction
L&T Construction is among the world’s Top 30 contractors. The business encompasses
multiple business - Buildings & Factories, Transport Infrastructure, Heavy Civil
Infrastructure, Smart World & Communication, Water & Renewable Energy and Power
Transmission & Distribution.
Business Power
L&T provides integrated concept - to - commissioning solutions for supercritical thermal
power plants. They also offer comprehensive services for gas-based power plants.
Business Defence
L&T provides indigenous, design-to-delivery solutions across the defence spectrum – from
surveillance to strike capabilities, and mobility platforms essential to enhance their
Business Shipbuilding
L&T’s shipbuilding arm offers total solutions – from concept to design for new builds as
well as repair and retrofit – for warships.
Company LTI
A subsidiary of L&T, LTI is a global IT services and solutions provider with presence in 23
countries. With twenty-two delivery centres and a diversified work force worldwide, the
business is expanding into new geographies even as it consolidates its client facing
organization in North America and Europe.
Particulars
Company NTPC Ltd.
Industry Electric Utility
Incorporation Year 1975
Ownership Group Government Of India
Headquarter New Delhi, India
Chairman & Managing Director Gurdeep Singh
Chief Executive Officer (CEO) Gurdeep Singh
CFO Anil Kumar Gautam
Business News A term loan agreement for Rs. 5,000 crores signed
with SBI on 6th Dec’19
Awarded “Gold Peacock Award for Sustainability’
2019”
For FY – 18-19 paid dividend of Rs. 2,473 crore, 25% of
paid-up equity share capital
Ranking on Forbes World list 492nd Largest Public Corporations List
2019 288th Best Employer’s List
Key Businesses - Electricity generation and distribution
- natural gas exploration,
- production, transportation and distribution
Company Philosophy Vision: - To be the world’s leading power company,
energizing India’s growth.
Particulars
Company Oil & Natural Gas Corporation Limited
Industry Oil & Gas
Incorporation Year 1956
Ownership Group Government Of India
Headquarter Dehradun, Uttarakhand, India
Chairman & Managing Director Shashi Shanker
Chief Executive Officer (CEO) Shashi Shanker
CFO Subhash Kumar
Business News ‘Maharatana of the year (Non-manufacturing)’ in Dalal
Street’s Roll of Honour
“India Pride Award”
“Golden Peacock Award for Risk Management”
Global Energy Award 2019 for CSR – Diversified
program
Ranking on Forbes World list 220th Largest Public Corporations List
2019
Key Businesses - Oil exploration
- Development & production of crude oil
- Production of natural gas
Company Relicord
Nature Blood Banking Business
Key Areas: It provides cord blood banking service which is owned by Reliance Life
Sciences.
Company LYF
Nature Device making business
Key Areas: it is a 4G-enabled VoLTE device brand from Reliance Retail.
Company Network 18
Nature Media Business
Key Areas: It has interests in television, digital platforms, publication, mobile apps, and
films. It also operates two joint ventures, namely Viacom 18 and History TV18. It also
owns the Colors TV brand.
Particulars
Company State Bank of India
Industry Banking, Financial services
Incorporation Year 1806
Business Steel
‘Tata Steel’ came into being in 1907 and holds the distinction of being Asia’s first
integrated steel company.
Business Automotive
Tata Motors, the group's flagship automotive company, manufactures and markets
automobiles for every need and segment.
Major companies are:-
• Tata Motors
• Jaguar Land Rover
• Tata Autocomp Systems
Business Infrastructure
Major companies are :-
• Tata Power
• Tata Projects
• Tata Housing
• Tata Consulting Engineers
• Tata Realty & Infrastructure
Company Subsidiaries
• Western India Products Limited
• Wipro Consumer Care & Lighting
• Wipro Infrastructure Engineering
• Wipro GE Medical Systems
Particulars
Company Deutsche Bank AG
Industry Banking, Financial services
Incorporation Year 1870
Headquarter Frankfurt, Germany
Chairman Paul Achleitner
Chief Executive Officer(CEO) Christian Sewing
Chief Financial Officer(CFO) Frank Kuhuke
Business News ‘Best Banking Performer, Germany’ by Global Brands
Magazine Award
Reported 32 % increase in Net income from its Branch
operations
Ranking on Forbes World list 2019 547th Largest Public Corporations List
Company Philosophy Vision: - Deutsche is clear: “we are here to perform - in
business and beyond. We do this with a unique mix of passion
and precision. This measured approach gives us the
confidence to enable agile minds to look beyond the obvious,
gaining advantage for everyone we work with.”
Mission: - Through their economic success and competitive
international presence, they create value for their
shareholders, their clients, their employees and society at
large while up holding stringent environmental and social
norms to support a sustainable future.
• Investment Banking
• Card Products:- Consumer Cards, Card acceptance outside the United States, Card
design, ExpressPay, Small Business services ( also known as American Express
OPEN), Commercial Cards, Non-proprietary cards and Merchant account.
• Business needs
▪ Business operations
▪ Collaboration
▪ Commerce
▪ Content management
▪ Customer service and CRM
▪ Finance
▪ Human resources
▪ Marketing and sales
▪ Supply chain management
• Services
▪ Business Consulting
▪ Business Resiliency Services
▪ Cloud services
▪ Digital workspace services
▪ Network Services
▪ IBM Services Platform with Watson
▪ Techology support services
Before 1991 Indian economy was a closed economy. There were a lot of restrictions from
government in doing trade or business in areas like imports, foreign direct investment etc.
Private sectors players were having a very limited role in economy. Public sectors companies
dominated our Indian economy. Government controlled and regulated everything.
But post 1991, lot of reforms and measures were introduced by the government for the
revival, growth and development of businesses. Indian economy was now an open economy.
Introduction of new government policies brought a beneficial change in the business
environment of the country and Indian economy as a whole began to move forward towards
the verge of revival.
• Liberalization: -
Liberalization refers to relaxation and easing of economic policies by the
government so as to make process and path of doing business easier and smoother.
Example: - Simplification of taxes, abolishment of Licence Raj and Inspector Raj etc.
• Privatization: -
Privatization refers to transfer of ownership, property or business from public sector
(i.e. government) to private sector.
Example: - Videsh Sanchar Nigam Limited (VSNL), once a fully owned government
company, was eventually taken over by a private player named Tata Telecom.
Meaning of Policies.
Policies can be defined as a plan or course of action that are primarily used for making
decisions , framing laws, setting guidelines and rules for a business organisation.
In India elections are conducted and the majority vote winning political party forms the
government. This government possess and holds the power to take decisions and frame
policies.
Example: - In India BJP government won the elections in 2014 and after coming into
power it framed various policies like LPG connection for all, bank accounts for all
(commonly known as Pradhan Mantri Jan Dhan Yojna) etc.
Some classic examples of public policies framed and implemented in India in relation to
political, social, cultural & religious factors are: -
• Public policies are always goal oriented and are framed by the government to provide
benefits to large number of people and to attain a certain defined objective.
Example: - Implementation of GST (Goods & Services Tax) as a single indirect tax
structure in order to remove complexity in compliance of various indirect taxes like
excise duty, service tax, sales tax ,VAT etc. ; Introduction of Companies Act 2013
thereby scrapping earlier Companies Act 1956 in order to update and simplify
Companies Law.
✓ Problem Identification
✓ Policy Formulation,
✓ Adoption of the policy,
✓ Policy Implementation
✓ Policy Evaluation.
1. Restrictive policies: -
It restricts, limits and discourages certain activities.
Example: - Custom duty imposed on imported goods so as to protect Indian goods,
ban on sale of liquor in some states etc.
2. Regulatory practices: -
It regulates and controls activities or process of a particular sector of economy.
Example: - Securities & Exchange Board of India (SEBI) regulates and controls Stock
& Capital markets in India.
3. Facilitating policies: -
It is a policy which makes the functioning of another activity easier and smooth.
Example: - National Skills Development Corporation (NSDC) formation is a
facilitating policy of the government of India for development of youth skills to
facilitate employment.
Post-Independence, Indian economy was in suffering and pain. Industrialisation was very
little and pace of industrialisation was very slow and almost stagnant. To revive the Indian
economy from crisis and misery the then Government of India framed Constitution of
India in 1950. Thus since independence many policies, laws & regulations were enacted,
formulated and implemented by the government for economic growth and social
development of the Indian economy.
Regulatory policies with regulation of trade, business etc. and Distributive policies
meant for the benefit of specific sections of the society were laid down by the
government.
Liberalization policy completely changed the face of Indian economy. Foreign exchanges
rules were simplified and foreign funds from FII (Foreign institutional Investors) and FDI
(Foreign Direct Investment) started to flow in Indian economy.
Privatisation helped in increasing market potential and competitiveness. It also paved way
for restructuring and reforming public sector companies.
• Delegation: - Majority control vested in the hands of the government and private
industries were allowed to play a very limited role in business operations of few
industrial sectors.
• Divestment: - Majority control and responsibility of particular government
company is gradually sold and surrendered to one or more private players.
• Displacement: - Eventually the growth of private sector industries in some sectors
completely eliminated government owned control and domination.
• Disinvestment: - Government sold its stake in public companies to private players.
FIIs are vital source for inflow of foreign currency for short term period.
INTRODUCTION
Business Facilitators: -
A Business Facilitator helps in easing and simplifying the process of doing business. It also helps
an organization in accomplishing it goals and objectives.
Non-Funding institutions consists of policy making & executive agencies like The Reserve
Bank of India (RBI), The Securities & Exchange Board of India (SEBI), Competition
Commission of India (CCI) & Insurance Regulatory and Development Authority (IRDA).
• Freight Forwarder: -
Freight forwarders act as an intermediary between the shipper and transportation
services and are responsible for the transportation of goods from one destination to
another.
• Business Incubator: -
Business incubators are organizations which helps startup and early stage companies
in achieving growth and success.
• Business Accelerator: -
The attention of business accelerators is on rapid growth and successful product
launch.
• Financial Consultant: -
A financial consultant helps an organization in arrangement of various sources of
finance like debt, equity etc.
Introduction: -
The Reserve Bank of India (RBI) is the central bank of India and was established on 1st April
1935. It is an independent authority which regulates the financial sector in India comprising
of commercial banks, financial institutions and non-banking finance companies.
Role of RBI: -
• It plays a vital role in facilitating and promoting business and trade in the economy.
• It helps in achieving economic growth & stability.
• It controls and formulates India’s monetary policy.
• It advises government in formulation of economic & financial policies.
• It helps in development of banking system & financial institutions.
• It helps in keeping inflation in check.
• It helps the government to raise money from public by way of issuing bonds and
government approved securities.
• Issuer of Currency: -
RBI prints money/currency and formulates the monetary policy with regard to money.
• Banker to banks: -
(i) RBI controls and supervises all the commercial banks in India.
(ii) It also provides financial support to scheduled banks and commercial banks
in India in the form of short-term loans & advances.
• Controller of Credit: -
The primary function of RBI is to control credit operations of banks. Credit control
helps in maintaining price stability in the economy.
• Promotional Functions: -
It plays a vital role in promoting commercial & co-operative banking in the country.
• Currency Policy: -
RBI ensures that the public has adequate supplies of currency notes and coins because
money supply is very critical in effective functioning of the economy. It also plays an
important role in maintaining exchange rate of Indian Rupee against other foreign
currencies.
• Credit Policy: -
RBI controls the credit available in the market through banks and other lending
institutions. It does so by implementing various qualitative and quantitative measures
which directly affects the overall money supply in the economy.
▪ Quantitative Measures:-
Quantitative controls are designed to regulate the flow of credit created
by the banking system. Some of the quantitative measures adopted by RBI
are discussed in table below:-
Introduction:-
Particulars Information
Date of Establishment 12th April,1988
(i) Quasi-judicial: -
SEBI can deliver judgments in relation to securities market in cases of fraud and other
unethical practices.
(ii) Quasi-legislative: -
SEBI can frame rules and regulations to protect interests of the investors.
(iii) Quasi-executive: -
SEBI is empowered to conduct investigation and enforce action against violators.
Powers of SEBI: -
(i) To approve and amend laws related to stock exchange.
(ii) To inspect books of accounts of stock exchange and financial intermediaries.
(iii) To ask for periodical returns from recognized stock exchanges.
(iv) To obligate certain companies to list their stocks on stock exchanges.
• The Competition Act, 2002 was enacted by the Government of India in order to
provide ideal environment for healthy competition and to promote economic
development in the Indian market.
• The Competition Act, 2002 has replaced The Monopolies and Restrictive Trade
Practices (MRTP) Act, 1969.
• The Competition Act, 2002 was subsequently amended as Competition
(Amendment) Act, 2007.
• This act led to the constitution of The Competition Commission of India (CCI).
Particulars Information
Date of Establishment 14th October,2003
Status of The Competition Body corporate having perpetual succession & Common
Commission of India(CCI) Seal
Introduction: -
Particulars Information
Name of the act under which it The Insurance Regulatory and Development Authority
was established Act, 1999
Duties of IRDAI: -
To regulate, promote and ensure orderly growth of the insurance & re-insurance business.
Development Banks: -
Development Banks are those banks which provides financial assistance to business entities.
These banks do not seek or accept deposits from the public. They receive funds from government
and other agencies.
There are four important national level development banks for the development of industries.
They are:
(i) Industrial Development Bank of India (IDBI)
(ii) Industrial Finance Corporation of India (IFCI)
(iii) Industrial Credit and Investment Corporation of India (ICICI)
(iv) National Small Industries Development Bank of India (SIDBI)
• NABARD is the apex development bank for promotion & development of agricultural and
rural sector in India.
• It was set up in 1982 and its headquarters are situated in Mumbai.
• It also looks after the development of cottage & small industries.
• Functions of NABARD: -
(i) Provides finance & credit to agricultural and rural sector.
(ii) Frames rules and policies for rural credit for all financing institutions in India.
(iii) It acts as a link between rural financing institutions and Government of India, State
government & RBI.
(iv) It monitors and evaluates projects refinanced by it.
(v) It provides training to rural institutions.
(vi) It also regulates co-operative and Regional Rural Banks (RRB’s).