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Introduction

Financial Institutions :
Financial institutions are those organizations, that are involved in providing various types of
financial services to their customers. The financial institutions are controlled and supervised by
the rules and regulations delineated by government authorities.
Some of the financial institutions also function as mediators in share markets and debt security
markets. There the principalfunction of financial institutions is to collect funds from the
investors and direct the funds to various financial services providers in search for those funds.

These are the various Financial Institutions:
Banks
Stock Brokerage Firms
Building Societies
Asset Management Firms
Credit Unions
Insurance Companies

Financial institutions deal with various financial activities associated with bonds, debentures,
stocks, loans, risk diversification, insurance, hedging, retirement planning, investment, portfolio
management, and many other types of related functions. With the help of their functions,
the financial institutions transfer money or funds to various tiers of economy and thus play a
significant role in acting upon the domestic and the international economic scenario.

For carrying out their business operations, financial institutions implement different types of
economic models. They assist their clients and investors to maximize their profits by rendering
appropriate guidance. Financial institutions also impart a wide range of educational programs to
educate the investors on the fundamentals of investment and also regarding the valuation of
stock, bonds, assets, foreign exchanges, and commodities.

Financial institutions can be both private or public in nature.
financial institution is that type of an institution, which performs the collection of funds from
private investors and public investors and utilizes those funds in financial assets. The functions
of financial institutions are not limited to a particular country, instead they have also become
popular in abroad due to the growing impact of globalization.

Types of Financial Institutions
Financial institutions are the firms that provide financial services and advice to their clients. The
financial institutions are generally regulated by the financial laws of the government authority.

Various types of financial institutions are as follows:
Commercial Banks
Credit Unions
Stock Brokerage Firms
Asset Management Firms
Insurance Companies
Finance Companies
Building Societies
Retailers

Role of Financial Institutions
The various financial institutions generally act as an intermediary between the capital market
and debt market. But the services provided by a particular institution depends on its type.
The financial institutions are also responsible to transfer funds from investors to the companies.
Typically, these are the key entities that control the flow of money in the economy.





Services Offered by Various Financial Institutions

The services provided by the various types of financial institutions may vary from one institution
to another.
For example,
The services offered by the commercial banks are -
insurance services,
mortgages,
loans and
credit cards.

The services provided by the brokerage firms, on the other hand, are different and they are -
insurance,
securities,
mortgages,
loans,
credit cards,
money market and
check writing.

The insurance companies offer -
insurance services,
securities,
buying or selling service of the real estates,
mortgages,
loans,
credit cards and
check writing.



The credit union is co-operative financial institution, which is usually controlled by the members
of the union. The major difference between the credit unions and banks is that the credit unions
are owned by the members having accounts in it.

The stock brokerage firms are the other types of financial institutions that help both the
corporations and individuals to invest in the stock market.

Another type of financial institution is the asset management firms. The prime functionality of
these firms is to manage various securities and assets to meet the financial goals of the investors.
The firms also offer fund management advice and decisions to the corporations and individuals.

Financial Institution Marketing :

Financial institution marketing refers to the various marketing policies of the financial
institutions. For the promotion of the various financial products and services offered by financial
institutions, it is necessary to lay out an efficient marketing plan.
Financial institutions focus on the practical implementation of marketing methods for selling
their financial products and services. In order to do that, it is essential that the financial
institutions utilize their marketing resources and functions in a proper way. For launching their
products, the financial institutions take into consideration a number of factors, which include the
timing, degree, and blend of customer demand.

Usually, the financial institution marketing services can be categorized into the following types:
Marketing research and analysis
Marketing strategy

Implementation planning
Process, project, and vendor management
Leadership and organizational management
Reporting
Measurement
Feedback and control systems

For the selling purpose of the financial products and services, financial institutions often take the
assistance of various advertising firms. They provide valuable marketing advices and techniques
to numerous banks, credit unions, and various other financial services providers.

Various techniques that are implemented for enhancing sales of financial products and services
include the following:
Cross selling of equity and debt capital market products, such as stocks, bonds, and CDOs
(Collateralized Debt Obligations)
Formulation of marketing plans and market research
Assessment of client financing and other facilities and recommendation of suitable action
Supervision of the functions of the relationship managers
Keep informed and cover capital market activities and corporate finance
Advising and training staff

For marketing the financial products and services, the various forms of advertisements that are
utilized include the following:
Consumer media print advertisements
Web banner advertisements
Annual report
Logo
Informational brochures and displays
Consumer radio advertisements
Poster
Newspaper advertisements


In financial economics, a financial institution is an institution that provides financial
services for its clients or members. Probably the greatest important financial service provided by
financial institutions is acting as financial intermediaries. Most financial institutions
areregulated by the government.
Broadly speaking, there are three major types of financial institutions
1. Depositary Institutions : Deposit-taking institutions that accept and manage deposits and
make loans, including banks, building societies, credit unions, trust companies,
and mortgage loan companies
2. Contractual Institutions : Insurance companies and pension funds; and
3. Investment Institutions : Investment Banks, underwriters, brokerage firms.
Some experts see a tendency of global homogenisation of financial institutions, which means that
institutions tend to invest in similar areas and have similar investment strategies. Consequences
might be that there will be no banks that serve specific target groups and e.g. small scale
producers are left behind.
Function
Financial institutions provide service as intermediaries of financial markets. They are responsible
for transferring funds from investors to companies in need of those funds. Financial institutions
facilitate the flow of money through the economy.
Standard settlement instructions[
Standard Settlement Instructions (SSIs) are the agreements between two financial institutions
which fix the receiving agents of each counterparty in ordinary trades of some type. These
agreements allow traders to make faster trades since time used to settle the receiving agents is
conserved. Limiting the trader to an SSI also lowers the likelihood of afraud.
Regulation
Financial institutions in most countries operate in a heavily regulated environment as they are
critical parts of countries' economies. Regulation structures differ in each country, but typically
involve prudential regulation as well as consumer protection and market stability. Some
countries have one consolidated agency that regulates all financial institutions while others have
separate agencies for different types of institutions such as banks, insurance companies and
brokers.
Countries that have separate agencies include the United States, where the key governing bodies
are the Federal Financial Institutions Examination Council (FFIEC), Office of the Comptroller of
the Currency - National Banks, Federal Deposit Insurance Corporation (FDIC) State "non-
member" banks, National Credit Union Administration (NCUA) - Credit Unions, Federal
Reserve (Fed) - "member" Banks, Office of Thrift Supervision - National Savings & Loan
Association, State governments each often regulate and charter financial institutions.
Countries that have one consolidated financial regulator include: Norway with the Financial
Supervisory Authority of Norway, Hong Kong with Hong Kong Monetary Authority and Russia
with Central Bank of Russia. See also List of financial regulatory authorities by country.


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.

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.

The bank formulates different rates and policies for the overall improvement of the banking
sector. 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 varied 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:
Operation Up gradation
Training to Employees
Scrutinize New Projects and find out the weak sections in it
Rate different sectors
The two most important credit rating agencies in India are:
CRISIL
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. The insurance companies are
collaborating with different foreign insurance companies after the liberalization process. This
step has been incorporated to expand the Indian Insurance market and make it competitive.

Specialized Financial Institutions 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:
Board for Industrial & Financial Reconstruction
Export-Import Bank Of India
Small Industries Development Bank of India
National Housing Bank












Housing Development Finance Corporation Limited
HDFC is an Indian financial conglomerate based in Mumbai, India.
[2][3]
It is a major player for
housing finance in India. It also has a presence in banking, life and general insurance, asset
management, venture capital and education loans.
History[edit]
It was founded in 1977 as the first specialised mortgage company in India.
[4]
HDFC was
promoted by the Industrial Credit and Investment Corporation of India.
[5]
Hasmukhbhai
Parekh played a key role in the foundation of this company.
In 2000, HDFC Asset Management company launched its mutual fund schemes.
[5]
In the same
year, IRDA granted registration to HDFC Standard Life Insurance, as the first private sector life
insurance company in India.
[5]

Products and Services[edit]
Mortgages[edit]
The company provides housing finance to individuals and corporates for purchase/construction
of residential houses.
[6]
It is one of the largest providers of housing loans in India.
[6]
In its Annual
Report for financial year 2012-13, the company has disclosed that it has disbursed approx. INR
456,000 crores in 35 years of its existence for a total of 4.4 million housing units.
[1]

The average loan profile amounts to INR 2.18 million (US$ 35,160) which lasts for about 13
years and covers approx. 65% of actual property value.
[4]

Life Insurance[edit]
The company has been providing life insurance since the year 2000, through its subsidiary
HDFC Standard Life Insurance company Limited. It offers 33 individual products and 8 group
products. It uses HDFC group network to cross sell by offering customized products. It operates
out of 451 offices across India serving over 965 locations. It had a market share of 4.6% of life
insurance business in India as on 30 September 2013.
[4]
HDFC Life has over 15,000
employees.
[7]

General Insurance[edit]
The company offers general insurance products such as:
Motor, health, travel, home and personal accident in the retail segment which accounts for
47% of its total business and
Property, marine, aviation and liability insurance in the corporate segment
[4]

Mutual Funds[edit]
HDFC provides mutual fund services through its subsidiary HDFC Asset Management Company
Limited. The average Assets Under Management (AUM) of HDFC Mutual Fund for the quarter
Jul-13 to Sep-13 was INR 1.03 trillion.
[8]

Operations[edit]
HDFC's distribution network spans 333 outlets (including 83 offices of HDFC's distribution
company HDFC Sales Private Limited) which cater to approx. 2,400 towns and cities spread
across India.
[2]
To cater to Non-Resident Indians, HDFC has offices
in London, Singapore and Dubai and service associates in Middle East countries.
[2]

In addition, HDFC covers over 90 locations through its outreach programmes. HDFC's
marketing efforts continue to be concentrated on developing a stronger distribution network.
Home loans are also sourced through HDFC Sales, HDFC Bank Limited and other third
party Direct selling Agents (DSA).
Major subsidiaries and associates[edit]
HDFCs key associate and subsidiary companies include HDFC Bank Limited, HDFC Standard
Life Insurance Company Limited, HDFC ERGO General Insurance Company Limited, HDFC
Asset Management Company Limited, GRUH Finance Limited, HDFC Venture Capital Limited
and Credila Financial Services Private Limited.
[4]

HDFC Bank:
HDFC holds approx. 22.8% of shares in HDFC Bank. HDFC Bank sources home loans for
HDFC for a fee.
[9]

The key business areas of HDFC bank are wholesale and retail banking and treasury
operations. On 31 March 2013, its market capitalisation was INR 1.5 trillion (US$ 27.31billion),
making it India's seventh largest publicly traded company.
[10]

HDFC Standard Life Insurance Company Limited:
HDFC holds approx. 72% of shares in HDFC Life. Standard Life holds 26% shares. In
September 2013, it was ranked third in terms of market share of private life insurance
companies in India.
[4]
On the same date, it had a network of approx. 72,000 financial consultants
to sell its policies.
[4]

HDFC Asset Management Company:
HDFC formed this Mutual fund company with Standard Life Investments and holds approx. 60%
of its shares. It manages 44 schemes comprising debt, equity, exchange traded fund and fund
of fund schemes.
[4]
Average assets under management (AUM) as at the end of September 2013
were INR 1.07 trillion.
[4]
It is ranked first in the industry in India on the basis of Average Assets
under management.
[4]

HDFC ERGO General Insurance Company:
HDFC formed this General Insurance company with ERGO Insurance Group. HDFC holds 74%
and ERGO holds 26% of the shares. By the end of September 2013, its Market share in
General Insurance stood at 4.1% (overall) in terms of gross gross direct premium in first half
year of FY 2013-14.
[4]
The total employee strength of the company as on March 31, 2013 was
1,389.
[7]

GRUH Finance:
HDFC holds approx. 59% in GRUH. It is a housing finance company offering loans to individuals
for purchase, construction and renovation of dwelling units. It also offers loans to the self-
employed segment where formal income proofs are not available.
[4]
It has a retail network of 136
offices across 7 states in India.
[4]

HDFC Property Fund:
It was launched in 2005. Its first scheme was a close ended fund for domestic investors: 'HDFC
India Real Estate Fund'. The funds of this scheme are managed by HDFC Venture Capital
Limited. Its another scheme is for international investors and is a closed ended fund: 'HIREF
International Fund'.
[4]

Credila Financial Services:
Credila is a non-banking finance company and was the first Indian lender to exclusively focus on
education loans. The company lends to under-graduate and post-graduate students studying in
India or abroad. HDFC holds approx. 89% shares in this company. The average amount of
education loan disbursed is INR 880,000 approx.
[4]

Listings and Shareholding[edit]
Listing: The equity shares of HDFC are listed on Bombay Stock Exchange where it is a
constituent of the BSE SENSEX index,
[11]
and the National Stock Exchange of India where it is a
constituent of the S&P CNX Nifty.
[12]

Shareholding: On 30 September 2013, 73.09% of the equity shares of the company were
owned by the Foreign Institutional Investors (FII). Around 185,000 individual public shareholders
own approx. 9.25% of its shares. The remaining 17.66% shares are owned by others.
[13]

Shareholders (as on 30-September-2013) Shareholding
[13]

Promoter Group 00.00%
Foreign Institutional Investors (FII) 73.09%
Individual shareholders 09.25%
Insurance companies 08.42%
Mutual Funds/UTI 03.04%
Corporate Bodies 02.77%
Financial Institutions/Banks 02.11%
NRI/OCB/FDI/Others 01.32%
Total 100.0%
Employees[edit]
As on 31 March 2013, the company had 1,833 employees, out of which 22% were
women.
[6]
The company incurred INR 5.28 billion on employee benefit expenses for the financial
year 2012-13.
[1]

Employee productivity: For FY 2012-13, the company reported a per employee profit of US$
489,000 and per employee assets of US $18.5 million.
[4]

Centre for Housing Finance: HDFCs Training Centre is located in Lonavla and it was
established in 1989. It is mainly used for training programmes, workshops, conferences and
strategy meetings.
[14]

Awards and recognitions
In 2013, a survey on "India's Best Boards" listed HDFC's Board of Directors among the 5
best boards in India.
[3][15]

In May 2013, Forbes listed it at #561 in the Global 2000 list of largest companies.
[16]

In 2012, HDFC Limited was recognised as one of India's 'Best Companies to work for' in a joint
study conducted by The Economic Times and 'The Great Place to Work Institute'

2008

- HDFC SELECTED AS THE 'TOP INDIAN COMPANY IN FIS / NBFCS / FINANCIAL SERVICES SECTOR'
FOR THE DUN & BRADSTREET - AMERICAN EXPRESS CORPORATE AWARDS 2007

- HDFC LTD HAS ANNOUNCED THE OPENING OF A NEW OFFICE AT OLD MAHABALIPURAM ROAD,
SHOLINGANALLUR. OPENING OF THIS OFFICE MARKS ITS 7TH OFFICE IN CHENNAI CITY AND 16TH IN
TAMIL NADU.

- HDFC TO SPREAD ITS NETWORK TO CAPTURE INDIAN RURAL MARKET

- HDFC TIE UP WITH POSTAL DEPARTMENT TO EXTEND RURAL REACH

- HDFC FIRST OVERSEAS BRANCH IN BAHRAIN INAUGURATED

- HDFC LAUNCHED INDIA'S FIRST RURAL BANKING BPO AT TIRUPATI

2009

- HDFC INTRODUCES A "SPECIAL DISBURSEMENT OFFER" FOR ITS NEW HOME LOANS.

- HOUSING DEVELOPMENT FINANCE CORPORATION (HDFC) HAD INCREASED ITS STAKE IN HDFC
BANK.

- HFDC OFFERS 8.25 PER CENT FIXED RATE FOR NEW LOANS

- HDFC PLANS TO MOP UP $820 MN VIA BONDS

- HDFC - AGREEMENT TO ACQUIRE STAKE IN CREDILA LTD.

- HDFC HIKES STAKE IN HDFC BANK



2010

- HDFC 4000TH ATM LAUNCHED AT VIJAY MAHAL IN MANGALORE.

- HDFC NEW KANJUR MARG OFFICE INAUGURATED

-COMPANY HAS SPLITS ITS FACE VALUE OF SHARES FROM RS 10 TO RS 2

2011

-HDFC SIGNED MOU WITH INDIAN ARMY FOR TOTAL SALARY SOLUTIONS

-HDFC 5000TH ATM LAUNCHED AT SWAMI NARAYAN CHOWK, RAJKOT

-HDFC INTENSIVE RURAL CAMPAIGN LAUNCHED WITH 1ST MEGA LOAN MAHOTSAV IN
PIMPALGAON IN MAHARASHTRA

-HDFC FIRST BANK TO RETAIL SILVER BARS IN INDIA

2012

-HDFC LAUNCHES SOLITAIRE RANGE OF WOMENS CREDIT CARDS

-HDFC BANK AND VODAFONE INDIA LAUNCH M-PAISA A PRODUCT FOR FINANCIAL INCLUSION

-LEH BRANCH LAUNCHED

-HDFC LAUNCHES TAX PAYMENT FACILITY THROUGH ATM

-BOUQUET OF PREMIUM TRAVEL CREDIT CARDS LAUNCHED

-HDFC LAUNCHES INFINIA CREDIT CARD

-HDFC 2000TH BRANCH INAUGURATED AT MANGALIYA SADAK NEAR INDORE




IDBI Bank Limited is an Indian government-owned financial service company, formerly known
as Industrial Development Bank of India, headquartered in Mumbai, India. It was established in
1964 by an Act of Parliament to provide credit and other financial facilities for the development
of the fledgling Indian industry.
It is currently 10th largest development bank in the world in terms of reach, with 2678 ATMs,
1477 branches, including one overseas branch at Dubai, and 996 centers, including two
overseas centres at Singapore & Beijing.
[3]
IDBI Bank is on a par with nationalized banks and
the SBI Group as far as government ownership is concerned. It is one among the 26
commercial banks owned by the Government of India.
The Bank has an aggregate balance sheet size of INR 3.2 trillion as on 31 March 2013.
[4]

IDBI was a wholly owned subsidiary of RBI up to February 1976. It was delinked from RBI w.e.f.
February 1976 and was made an autonomous corporation fully owned by the Government of
India. The IDBI is the apex financial institution and besides providing financial assistance on
consortium basis, the major function of coordination between the various institutions is looked
after by the bank. It also provides refinance facility to the eligible financial institutions including
term loans. The bank sanctions the financial assistance to the industrial concerns engaged in the
manufacture or processing of goods, mining, transport generation and distribution of power etc.
both in private and public sectors. There is no restriction on the quantum of assistance or the
maximum or minimum limits.


History[edit]
Overview of development banking in India[edit]
Development Banking emerged after the Second World War and the Great Depression in
1930s. The demand for reconstruction funds for the affected nations compelled in setting up of
national institutions for reconstruction. At the time of Independence in 1947, India had a fairly
developed banking system. The adoption of bank dominated financial development strategy
was aimed at meeting the sectoral credit needs, particularly of agriculture and industry. Towards
this end, the Reserve Bank concentrated on regulating and developing mechanisms for
institution building. The commercial banking network was expanded to cater to the requirements
of general banking and for meeting the short-term working capital requirements of industry and
agriculture. Specialised development financial institutions (DFIs) such as the IDBI, NABARD,
NHB and SIDBI, etc., with majority ownership of the Reserve Bank were set up to meet the
long-term financing requirements of industry and agriculture.
Formation of Industrial Development Bank of India (IDBI)[edit]
The Industrial Development Bank of India (IDBI) was established in 1964 under an Act of
Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 1976, the ownership
of IDBI was transferred to the Government of India and it was made the principal financial
institution for coordinating the activities of institutions engaged in financing, promoting and
developing industry in India. IDBI provided financial assistance, both in rupee and foreign
currencies, for green-field projects as also for expansion, modernisation and diversification
purposes. In the wake of financial sector reforms unveiled by the government since 1992, IDBI
also provided indirect financial assistance by way of refinancing of loans extended by State-
level financial institutions and banks and by way of rediscounting of bills of exchange arising out
of sale of indigenous machinery on deferred payment terms.
[citation needed]

After the public issue of IDBI in July 1995, the Government shareholding in the Bank came
down from 100% to 75%.
IDBI played a pioneering role, particularly in the pre-reform era (196491), in catalyzing broad
based industrial development in India in keeping with its Government-ordained development
banking charter.
[citation needed]

Some of the institutions built with the support of IDBI are the Securities and Exchange Board of
India (SEBI), National Stock Exchange of India (NSE), the National Securities Depository
Limited (NSDL), the Stock Holding Corporation of India Limited (SHCIL), the Credit Analysis &
Research Ltd, the Exim Bank (India), the Small Industries Development Bank of India (SIDBI)
and the Entrepreneurship Development Institute of India.
Conversion of IDBI into a commercial bank[edit]
A committee formed by RBI under chairmanship of S.H.Khan recommended the development
financial institution (IDBI) to diversify its activity and harmonise the role of development
financing and banking activities by getting away from the conventional distinction between
commercial banking and developmental banking. To keep up with reforms in financial sector,
IDBI reshaped its role from a development finance institution to a commercial institution. With
the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003, IDBI attained
the status of a limited company viz., IDBI Ltd.
Subsequently, in September 2004, the Reserve Bank of India incorporated IDBI as a 'scheduled
bank' under the RBI Act, 1934. Consequently, IDBI, formally entered the portals of banking
business as IDBI Ltd. from 1 October 2004. The commercial banking arm, IDBI BANK, was
merged into IDBI in 2005.
Acquisition of United Western Bank[edit]
In 2006, IDBI Bank acquired United Western Bank Satara in a rescue. By acquiring UWB, IDBI
Bank more than doubled the number of its branches from 195 to 425.
[5][6]

Listings and shareholding[edit]
IDBI Bank's equity shares are listed on Bombay Stock Exchange and the National Stock
Exchange of India.
[7][8]

As on 31 March 2014, Government of India held 76.72% shares in IDBI Bank. Over 4 lakh
public shareholders owned 8.75% of its shares. Insurance companies held approx. 12.32% of
the shares while remaining 7.21% shares were held by others.
[1]

Employees[edit]
As on 31 March 2013, the bank had 15,465 employees, out of which 197 were employees
with disabilities.
[1]
The average age of bank employees on the same date was 33 years.
[1]
The
bank reported business of INR 25.64 crores per employee and net profit of INR 12.17 lakhs per
employee during the FY 2012-13.
[1]
The company incurred INR 1,538 crores towards employee
benefit expenses during the same financial year.
[1]

Awards and recognitions[edit]
IDBI Bank was ranked #1197 in the Forbes Global 2000 in May 2013.
[9]

It received the 'Overall Best Bank' and 'Best Public Sector Bank' awards in the Dun &
Bradstreet Banking Awards, 2011.
[10]

In 2011, it received Banking Technology awards for best use of Business Intelligence and
the best Risk Management from Indian Banks Association.
[11]