Financial Institutions in India-
Financial sector plays an indispensable role in the overall development of a country. The most important constituent of this sector is the financial institutions, which act as a conduit for the transfer of resources from net savers to net borrowers, that is, from those who spend less than their earnings to those who spend more than their earnings.
The banking institutions of India play a major role in the economy of the country. The banking institutions are the providers of depository and transaction services. These activities are the major sources of creating money. The banking institutions are the major sources of providing loans and other credit ...view middle of the document...
Central Board of Direct Taxes (CBDT)
4. Central Board of Excise & Customs
* Apart from the Regulatory bodies, there are the Intermediaries that include the banking and non-banking financial institutions. Some of the specialized financial institutions in India are as follows:
1. Unit Trust of India (UTI)
2. Securities Trading Corporation of India Ltd. (STCI)
3. Industrial Development Bank of India (IDBI)
4. Industrial Reconstruction Bank of India (IRBI), now (Industrial Investment Bank of India)
5. Export - Import Bank of India (EXIM Bank)
6. Small Industries Development Bank of India (SIDBI)
7. National Bank for Agriculture and Rural Development (NABARD)
8. Life Insurance Corporation of India (LIC)
9. General Insurance Corporation of India (GIC)
10. Shipping Credit and Investment Company of India Ltd. (SCICI)
11. Housing and Urban Development Corporation Ltd. (HUDCO)
12. National Housing Bank (NHB)
Evolution and structure of the Indian Banking Industry:
The Indian banking industry has its foundations in the 18th century, and has had a varied evolutionary experience since then. The initial banks in India were primarily traders’ banks engaged only in financing activities. Banking industry in the pre-independence era developed with the Presidency Banks, which were transformed into the Imperial Bank of India and subsequently into the State Bank of India. The initial days of the industry saw a majority private ownership and a highly volatile work environment. Major strides towards public ownership and accountability were made with nationalisation in 1969 and 1980 which transformed the face of banking in India. The industry in recent times has recognised the importance of private and foreign players in a competitive scenario and has moved towards greater liberalisation.
In the evolution of this strategic industry spanning over two centuries, immense developments have been made in terms of the regulations governing it, the ownership structure, products and services offered and the technology deployed. The entire evolution can be classified into four distinct phases.
* Phase I- Pre-Nationalisation Phase (prior to 1955)
* Phase II- Era of Nationalisation and Consolidation (1955-1990)
* Phase III- Introduction of Indian Financial & Banking Sector Reforms and Partial Liberalisation (1990-2004)
* Phase IV- Period of Increased Liberalisation (2004 onwards)
Currently the Indian banking industry has a diverse structure. The present structure of the Indian banking industry has been analyzed on the basis of its organised status, business as well as product segmentation.
The entire organised banking system comprises of scheduled and non-scheduled banks. Largely, this segment comprises of the scheduled banks, with the unscheduled ones forming a very small component. Banking needs of the financially excluded population is catered...