INSTITUTE-USB

DEPARTMENT-BBA
Bachelor of Business Administration
Management Of Financial Institutions
(21BAT-314)

Faculty name – Ms. Anmol Preet

(ASSISTANT PROFESSOR)

INTRODUCTION TO INDIAN FINANCIAL INSTITUTION DISCOVER . LEARN . EMPOWER

INTRODUCTION TO INDIAN FINANCIAL INSTITUTIONS

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

• India, with its rapidly growing economy and diverse financial landscape, boasts a wide array of financial
institutions that play a crucial role in fueling economic growth, channeling funds, and providing essential
services to individuals, businesses, and the government.

• Indian financial institutions form a dynamic ecosystem that supports economic growth, financial inclusion, and
investor protection.

• With a mix of traditional banking institutions, innovative NBFCs, robust capital market platforms, and vigilant
regulatory bodies, India's financial sector continues to evolve and adapt to meet the diverse needs of a rapidly
developing economy.
 I. BANKING INSTITUTIONS:

1.Commercial Banks: Commercial banks form the core of India's financial system, providing a
range of banking services such as savings and current accounts, loans, and investment products.
Notable examples include the State Bank of India (SBI), HDFC Bank, ICICI Bank, and Punjab
National Bank.
2.Cooperative Banks: These banks are owned and operated by cooperatives, serving the needs of
specific communities or regions. They play a crucial role in rural and agricultural finance,
promoting financial inclusion. Examples include National Cooperative Bank and NABARD.
3.Small Finance Banks (SFBs): These banks are aimed at financial inclusion and providing banking
services to underserved segments, particularly in rural and semi-urban areas. They offer basic
banking products along with microfinance services. Examples include Equitas Small Finance Bank
and Ujjivan Small Finance Bank.
4.Payments Banks: These banks focus on providing digital and payment services, targeting
unbanked and underbanked populations. They offer services such as mobile payments, remittances,
and utility bill payments. Airtel Payments Bank and Paytm Payments Bank are prominent
examples.
 II. NON-BANKING FINANCIAL INSTITUTIONS (NBFCS):

1.Asset Finance Companies: These NBFCs provide loans for purchasing assets like vehicles and
equipment. They play a crucial role in supporting economic activities and growth.

2.Microfinance Institutions (MFIs): MFIs provide small loans and financial services to low-income
individuals and micro-entrepreneurs, contributing to poverty alleviation and financial inclusion. SKS
Microfinance and Bandhan Bank are prominent examples.

3.Housing Finance Companies (HFCs): HFCs specialize in providing housing loans and related services,
enabling individuals to realize their dream of owning a home. HDFC Ltd and LIC Housing Finance are
leading HFCs.

4.Infrastructure Finance Companies: These NBFCs focus on funding infrastructure projects, contributing
to the development of critical sectors such as transportation, energy, and telecommunications.
 III. CAPITAL MARKET INSTITUTIONS:

1.Stock Exchanges: India has several major stock exchanges, with the Bombay Stock
Exchange (BSE) and National Stock Exchange (NSE) being the most prominent. These
platforms facilitate trading in equities, derivatives, and other financial instruments.

2.Depositories: Entities like National Securities Depository Limited (NSDL) and Central
Depository Services Limited (CDSL) provide dematerialization and safekeeping of
securities, streamlining the trading and settlement process.

3.Mutual Funds: Mutual fund companies pool funds from investors to invest in a
diversified portfolio of assets, offering individuals exposure to various asset classes
without directly owning them. SBI Mutual Fund and HDFC Mutual Fund are among
the largest players.
 IV. REGULATORY AUTHORITIES:

1.Reserve Bank of India (RBI): India's central bank regulates and supervises the entire financial system,
including commercial banks, NBFCs, and payment systems. It formulates monetary policy to maintain
price stability and financial stability.

2.Securities and Exchange Board of India (SEBI): SEBI regulates and oversees the securities market,
ensuring transparency, fairness, and investor protection in capital market transactions.

3.Insurance Regulatory and Development Authority of India (IRDAI): IRDAI regulates and promotes
the insurance industry, ensuring the financial stability and consumer protection of policyholders.

4.Pension Fund Regulatory and Development Authority (PFRDA): PFRDA regulates and develops the
pension sector, including the National Pension System (NPS), to provide retirement savings solutions.
 HIGHLIGHTS OF FINANCIAL SYSTEM

• A financial system is a network of financial institutions, financial markets, financial instruments

and financial services to facilitate the transfer of funds.
• The system consists of savers, intermediaries, instruments and the ultimate user of funds.
• The level of economic growth largely depends upon and is facilitated by the state of financial
system prevailing in the economy.
• The financial system mobilizes the savings and channelizes them into the productive activity and
thus influences the pace of economic development.
• In Short, financial system deals with three inter-related and interdependent variables, i.e., money,
credit and finance.
 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