Financial institution
Financial institution is an organization that deals with financial transactions, such as deposits, advances or investments. The role of these institutions is to utilize the surplus of money, in the form of savings to promoters of different activities that need funds. And thus they are able to generate income from the idle funds available with people.
Types of Financial Institutions
- Commercial Banks
- Investment Banks
- Insurance Companies
- Investment Companies
- Brokerages
- Unit Investment Trusts
- Face Amount Certificate Companies
- Management Investment Companies
- Non Bank Financial Institutions
Regulators of Financial Institutions
The financial institutions operating in India are governed by various regulating bodies based on their type of operations. Some of the regulating bodies are:
- Reserve Bank of India
- Securities and Exchange Board of India (SEBI)
- Central Board of Direct Taxes
- Insurance Regulatory and Development Authority (IRDA)
- Central Board of Excise & Customs
The regulators ensure that the financial institutions ensure transparency in their dealings and follow certain rules and regulations. They promote awareness programs to educate the general mass about the various products offered by these institutions. Their presence inculcates a feeling of security in people’s mind. They frame the regulations keeping international standards and the economy of the country at the priority.
