ROLE OF FINANCIAL INSTITUTIONS IN INDIA

Guided By: Prof. Rao

NAGINDAS KHANDWALA COLLEGE OF COMMERCE,ARTS AND MANAGEMENT STUDIESMALAD (WEST), MUMBAI - 400 064

 PROJECT REPORT ON

THE ROLE OF FINANCIAL INSTITUTIONS IN INDIA

SUBMITTED BYUNNATI PRAJAPATI

T.Y.B.M.S. SEMESTER – V

PROJECT GUIDEPROF. HANUMANTHRAO GALLIPILLY

 UNIVERSITY OF MUMBAI

2014 – 2015

RESEARCH METHODOLOGY

TITLE OF THE PROJECT:

“The role of Financial Institutions in India”

OBJECTIVES OF THE RESEARCH:

To understand the role of these institutions in the lives of businessmen.

To understand the dependability of these institutions on the economy, industrial development and well-being of the nation.

To understand the consumer thought-process towards the upcoming financial institutions.

To understand the various schemes and policy introduced for the progress of the nation.

Formulating the Research Problem:

Unit of Analysis: Financial Institutions in

India

Characteristic of Interest: Importance

Time and Space boundary: 3 months and

area from Borivali to Malad

Choice of Research Design:

The project is much of an Exploratory

Research as it provides insights into the

problem.

It is regarded as a tentative or input for

further research.

It is flexible, mostly consists of secondary

data and defines the research properly.

Source of Data:

Primary Data: The primary data is collected

by surveying businessmen and getting first

hand data.

Secondary Data: The secondary data is

collected from the information available by

various analysts through their research books

and internet.

Sample Design and Size:

The sample design: Random Sampling

The sample size: 100 Consumers

RESEARCH DETAILS

INTRODUCTION OF FINANCIAL INSTITUTION

Definition: Financial Institution is an establishment that

focuses on dealing with financial transactions, such as investments, loans and deposits. Conventionally, financial institutions are composed of organizations such as banks, trust companies, insurance companies and investment dealers.

Meaning: Since all people depend on the services provided

by financial institutions, it is imperative that they are regulated highly by the federal government.

EVOLUTION

Foundation Phase

Expansion Phase

Consolidation Phase

Reforms Phase

ROLES OF FINANCIAL INSTITUTIONS

Introduction of Niche strategies. Development and Support Services Micro finance Credit Mopping up Savings Capital mobilization Trade Facilitation Programme Financial Innovation Managing Risk

IMPORTANCE IN THE SOCIETY Provide wide range of services and different

types of banking products. The importance of financial institutions is

apparent during market booms and recessions.

Banks are encouraged or even compelled to lend money to home buyers and small businesses.

Financial institutions offer various types of insurance, ranging from life insurance to insurance on mortgage contracts.

CHALLENGES The credit crisis of 2008 and 2009 underscores

the importance of financial institutions to the economy.

Injection of trillions of dollars into financial institutions during the credit crisis to prevent collapse and the subsequent collapse of the economy.

A characteristic of all financial institutions that accept public funds is that they are heavily regulated.

If people kept their money instead of saving or investing it, then the allocation of economic resources would be much less efficient.

CURRENT STATUS OF FINANCIAL INSTITUTIONS IN

INDIA

TYPES OF FINANCIAL INSTITUTIONS

Financial Institutions

Development Banks (National)

Specialised Institutions

State level Institutions

Investment Institutions

DEVELOPED BANKS Industrial Development Bank Of India (IDBI)

Industrial Credit And Investment Corporation Of

India (ICICI)

Small Industries Development Bank Of India

(SIDBI)

Industrial Finance Corporation Of India Ltd (IFCI)

Industrial Investment Bank Of India (Formerly

IRBI)

STATE LEVEL INSTITUTIONS

State Financial Corporations (SFCs)

State Industrial Development Corporations

(SIDCs)

SPECIALIZATION INSTITUTIONS

National Bank For Agriculture And Rural

Development (NABARD)

Export Import Bank Of India 

National Housing Bank (NHB)

INVESTMENT INSTITUTIONS

Life Insurance Corporation of India (LIC)

Unit Trust of India (UTI)

General Insurance Corporation of India (GIC)

Non-Banking Financial Companies (NBFCs)

Non-banking financial companies (NBFCs) are fast emerging as an important segment of Indian financial system.

It is an heterogeneous group of institutions (other than commercial and co-operative banks) performing financial intermediation in a variety of ways.

They raise funds from the public, directly or indirectly, and lend them to ultimate spenders.

Thus, they have broadened and diversified the range of products and services offered by a financial sector.

Gradually, they are being recognised as complementary to the banking sector.

The types of NBFCs registered with the RBI are:-o Equipment leasing Companyo Hire-purchase Companyo Loan Companyo Investment Company

Now, these NBFCs have been reclassified into three categories:-o Asset Finance Company (AFC)o Investment Company (IC)o Loan Company (LC)

Government And Funding Schemes

The fund based schemes include:-o Term and Composite Loano Equipment Financeo Working Capitalo Finance for Market Activitieso Credit Linked Capital Subsidy for SSI

The non-fund based schemes include:-o Public Issue Appraisalo Credit Syndicationo Corporate Advisory Services

Small Scale Industries (SSI)

Small Industries Development Organisation (SIDO)

National Small Industries Corporation Ltd (NSIC)

REPORTS FORMULATED FOR IMPROVEMENTS

Report 1: Intuit released - 2020 Report: The Future of Financial Serviceso A New Playing Field for Financial Serviceso Shifting Segments, Changing Marketso The New Customer Connectiono Reputation and Relationships Rule

Report 2: Ross Dawson - Vision 2020 Financial Services Sectoro Tied IT services in Indiao Tapping the bottom of the pyramido Financial inclusiono 2020: Customer perspectiveo Microfinance and financial apartheido India’s demographicso Unstructured economyo Banking in 2020

THANK YOU