FINANCIAL

INSTITUTIONS

In financial economics. rather than tangible property are called Financial Institution. loans. a financial institution is an institution that provides financial services for its clients or members.DEFINITION Institution which collects funds from the public and places them in financial assets. . such as deposits. and bonds.

IMPORTANCE PROVIDE FUNDS INFRASTRUCTURAL FACILITIES PROMOTIONAL ACTIVITIES DEVELOPMENT OF BACKWARD AREAS ‡ PLANNED DEVELOPMENT ‡ ACCELERATING INDUSTRIALISATION ‡ EMPLOYMENT GENERATION ‡ ‡ ‡ ‡ .

‡ FACILITATE THE FLOW OF MONEY. ‡ OTHER FUNCTIONS: ‡ ACT AS INTERMEDIARIES. ‡ ‡ ‡ ‡ ‡ . Providing Commercial Loans. Issuing Share Certificates. Providing Real Estate Loans.FUNCTIONS ‡ PRIMARY FUNCTIONS: Accepting Deposits. Providing Mortgage Loans.

BANKS A. UNORGANISED . ORGANISED B. UNORGANISED 2. NON-BANKING FINANCIAL INSTITUTION A.TYPES OF FINANCIAL INSTITUTION 1. ORGANISED B.

THEY DON¶T ONLY PROVIDE FINANCE BUT ALSO DEVELOPES NEW ENTERPRISES .SPECIALISED FINANCIAL INSTITUTION SPECIALISED FINANCIAL INSTITUTIONS ARE ALSO CALLED DEVELOPMENT BANKS.

.ADVANTAGES OF RAISING LOANS FROM SPECIALISED FINANCIAL INSTITUTION ‡ AVAILABILITY OF FINANCE FOR DEVELOPMENT SCHEMES. ‡ AVAILABILITY OF FINANCE DURING PERIOD OF DEPRESSION. ‡ REASONABLE SECURITY REQUIREMENTS. ‡ UNDERWRITING FACILITY. ‡ EASY REPAYMENT FACILITY.

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