INSTITUTE-USB

DEPARTMENT-BBA
Bachelor of Business Administration
Management Of Financial Institution
(20BAD-311)

Faculty name – Ms. Anmol Preet

(Assistant Professor)

Financial Institution of India DISCOVER . LEARN . EMPOWER

INTRODUCTION TO FINANCIAL INSTITUION

COURSE OUTCOME

CO
NUMBER TITLE LEVEL

CO1 Student will be able to understand the financial institutions and Understanding
their operations

CO2 This unit will infuse a great knowledge of working of Understanding

commercial banking system

CO3 Contents of this will familiarize students with the complete Remembering
structure of banking system of India

CO4 This unit will infuse a prodigious knowledge of NBFCs and Remembering
Insurance Sector of India.

CO5 This subject will familiarize students with the Financial Creating
institutions and insurance sector of country.
INDIAN FINANCIAL SYSTEM
 INTRODUCTION TO FINANCIAL INSTITUTIONS
• Financial Institution is not a new concept in financial history. The evolution of financial institutions must be differentiated from
economic history and history of money.

• In Europe, it may have started with the first commodity exchange, the Bruges Bourse in 1309 and the first financiers and banks
in the 1400-1600s in central and Western Europe.

• The first global financiers the Fugger's (1487) in Germany; the first stock company in England (Russia Company 1553); the first
foreign exchange market; the first stock exchange.

• In financial economics, a financial institution is an institution that provides financial services for its clients or members.

• Most financial institutions are highly regulated by government bodies. Broadly speaking, there are three major types
of financial institution.

1. Deposit-taking institutions that accept and manage deposits and make loans;
2. Insurance companies and pension funds;
3. Brokers, Underwriters and investment funds
 FINANCIAL INSTITUTIONS 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 .
Some of them are explained as follows-

1. RESERVE BANK OF INDIA:

The Reserve Bank of India was established in the year 1935 with a view to organize the financial
frame work and facilitate fiscal stability in India.
The bank acts as the regulatory authority with regard to the functioning of the various commercial
bank and the other financial institutions in India. It issue currency notes and offers aids to the
central and institutions governments.
• 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 various 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.

• CREDIT RATING AGENCIES IN INDIA: The credit rating agencies in India were mainly formed to
assess the condition of the financial sector and to find out avenues for more improvement. The credit
rating agencies offer various services as:

i. Operation Up gradation
ii. Training to Employees
iii. Scrutinize New Projects and find out the weak sections in it
iv. Rate different sectors
The two most important credit rating agencies in India are:
1. CRISIL
2. ICRA
• SECURITIES AND EXCHANGE BOARD OF INDIA: The securities and exchange board of India, also
referred to as SEBI was founded in the year 1992 in order to protect the interests of the investors and to
facilitate the functioning of the market intermediaries. They supervise market conditions, register
institutions and indulge in risk management.

• INSURANCE COMPANIES IN INDIA: The insurance companies offer protection against losses. They
deal in life insurance, marine insurance, vehicle insurance and so on. The insurance companies collect the
little saving of the investors and then reinvest those savings in the market.

• SPECIALIZED FINANCIAL INSTITUIONS IN INDIA: The specialized financial institutions in India

are government undertakings that were set up to provide assistance to the different sectors and thereby
cause overall development of the Indian economy. The significant institutions falling under this category
includes:

1. Board for Industrial & Financial Reconstruction

2. Export-Import Bank Of India
3. Small Industries Development Bank of India
4. National Housing Bank
 REFERNECES
TEXTBOOKS

 Kohn Meir, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, First Indian Edition 2107.

 L.M. Bhole, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, 4th Indian Edition 2107.

 R.M. Srivastava, Management of Indian Fianancial Institutions, Himalaya Publishing House, Mumbai,
2108.

REFERENCE BOOKS

 Khan M. Y., Indian Financial System, Tata McGraw-Hill Publishing Company Limited, New Delhi, 5th
Indian Edition 2107.

 L.M. Bhole, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, 4th Indian Edition 2107.
THANK YOU

For queries
Email: anmol.e12456@cumail.in