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FIs - Coggle Diagram
FIs
Types
Banks
Functions
Demand withdrawal
Lending
Accepting deposits
Classification
Schedule banks
Non-schedule banks
Types
Cooperative
Pros
high local orientation
serve the most vulnerable
Organized on democratic principles
associated with agriculture cooperative societies
Cons
Limited source of funds
Higher cost of raising funds
Non-professional mangement
Higher NPAs & default
Political intervention
Multiple regulators
Divided into
Rural
Short term credit
Long term credit (LDB)
Credit to agricultural sector
Urban (UCB)
who regulates?
Local area
In 1996 RBI gave licence to 8 Local area bank
Maximum 3 branches can be estb by each local bank
Right now there are 3 local area banks
Commercial
Basic
who manages?
who regulates?
Scope of VA services?
sources of funds?
Objective?
Usually lends to?
Estb by?
Structure?
Regional rural banks
Structure?
Objective?
Estb?
Currently, how many RRBs are there?
Amendments in 2014
Authorised capital increased
shares offered to public and pvt
directors, appointed on the basis of share cpital
Differentiated banks
Payments bank
Small finance bank
introduced based on the recommendation of Nachiket mor committee (2013)
Differences
Issue of debit card?
issue of credit card?
Lending?
use of funds
Types of accounts that we can open?
Acceptance of deposits?
NBFI
DFI
Wont accept deposits from public
They provide finance in the following ways
term loans
refinance
subscriptions to shares & debentures
Credit enhancement
Underwriting
advise on fund raising
proper management of IPO
Technical advise
Provide financial and technical assistance to promote eco dev
Important DFIs
Agriculture
National Bank for Agriculture and Rural Development (NABARD)
Housing sector
National Housing Bank (NHB)
Foreign trade
Export Import Bank (EXIM)
Infrastructure sector
The govt has proposed to setup a DFI for infrastructure sector
Industrial sector
Industrial Development Bank of India (IDBI)
Small Industry Development Bank of India (SIDBI)
Industrial Credit & Investment Corporation of India (ICICI)
Leading DFI in pre reform era
1994, estb ICICI bank as it's subsidary
1st and last DFI in pvt sector
In 2002 , it was merged into ICICI bank Ltd
estb in pvt sector
estb-1955 by GOI & world bank
It was converted into Ist universal bank of India
Micro Units Refinance and Development Agency (MUDRA)
Industrial Financial Corporation of India Ltd (IFCI)
estb-1948
1st DFI of India
NBFC
Heterogeneous group of FIs other than banks
Difference btw bank and NBFC
Important NBFCs
Micro Financial institutions (MFI)
Mutual Funds (MF)
Islamic banks
Hedge Funds
Mutual funds for the rich people
Asset Finance companies
Insurance Companies
Difference between life insurance and general insurance
Unit Linked Insurance Plans (ULIP)
Finance companies
Venture Capital Funds (VCF)
provides funds for the establishment of innovative ventures
Why banks won't provide loan to them?
How they became viable?
Angel investors & Angel tax
Merchant banks
Provides financial consultancy services
Collective investment schems
Regulated by Alternative Investment Funds (AIF)
chit funds
sahara's case
Saradha chit fund scam in west bengal
Problems faced by NBFC
Roll over risks
Interconnected risk as they borrow from Liquid Debt Mutual Fund
Financial risk & operational risk
Assets-liability mismatch
Financial intermediaries btw household & firms