1. A bank is a business organization that deals in borrowing and lending money and makes a profit through interest charged on loans. The Central Bank, also known as the Reserve Bank of India, controls the country's money supply and promotes financial stability. 2. The Central Bank regulates other banks, acts as a lender of last resort, clears checks, and manages foreign exchange rates and monetary policy. Commercial banks accept deposits, lend funds, use checks, and provide other services like agency functions. 3. Export credit agencies provide insurance to exporters against payment risks and help recover bad debts. The Export Import Bank finances imports/exports and provides related services, while the IMF promotes exchange rate stability and balance of payments adjustments between

1. UNIT - III

2. BANK
• Meaning:
• A bank is a business organisation which deals in money, i.e., borrowing
and lending of money. In this borrowing and lending of money it makes
profit.
• Definition:
• According to Banking Regulation Act 1949 “ Banking means the accepting
for the purpose of lending or investments of deposits of money from the
public, repayable on the demand or otherwise and withdraw by cheque,
draft, order to otherwise”.

3. Central Bank or Reserve Bank of India
• Introduction
• The Central Bank is a Apex institution
• The Central Bank also known as the Reserve Bank of India
• The RBI set up in 1935 and nationalised in 1949.
• The Central Bank run for promote financial and economic stability.
• The RBI run for welfare of the country not for profit making banks like
ordinary banking.

4. DEFINITION
• According to Dr. Naseem A. Azad the Central bank is the bank which
control the whole economy of the nation and has a monopoly of note
issue and rate over all the banks of country.

5. Functions of Central Bank
1. It act as a note issuing Agency
2. It act as the banker to state
3.It acts as the Banker’s bank
i) Custodian of Cash Reserves of Commercial
Banks
ii)Lender of the Last Resort
iii) Clearing Agent
4.In controls Credit
5.It Manages Exchange Rate
6. Promote Economic Development

7. FUNCTIONS OF COMMERCIAL BANKS
• 1.Primary Functions
• 2.Secondary Functions
• 1.Primary Functions
• 1. Acceptance of Deposits from Public
• 2. Lending of Funds
• 3. Use of Cheque system
• 2.Secondary Functions
• 1. Agency Functions
• 2.General Utility Functions

8. Functions of ECGC
In case of loss of export of goods and services, it provides credit risk insurance covers
to exporters
Export Credit Insurance covers are offered to banks and financial institutions to enable
exporters to obtain better facilities from them. It assists exporters in recovering bad
debts.
 It offers insurance protection to exporters in the case of any payment risks.
It provides guidance to activities related to export.
It Provides information regarding creditworthiness of overseas buyers

9. Export and Import Bank of India (EXIM)
The Export and Import Bank of India, popularly known as the EXIM Bank was set up in 1982.
Functions of the EXIM Bank
• Finances import and export of goods and services from India
• It also finances the import and export of goods and services from countries other than India.
• It finances the import or export of machines and machinery on lease or hires purchase basis as well.
• Provides refinancing services to banks and other financial institutes for their financing of foreign trade
• EXIM bank will also provide financial assistance to businesses joining a joint venture in a foreign country.
• The bank also provides technical and other assistance to importers and exporters. Depending n the country of origin there are a lot of processes
and procedures involved in the import-export of goods. The EXIM bank will provide guidance and assistance in administrative matters as well.
• Undertakes functions of a merchant bank for the importer or exporter in transactions of foreign trade.
• Will also underwrite shares/debentures/stocks/bonds of companies engaged in foreign trade.
• Will offer short-term loans or lines of credit to foreign banks and governments.
• EXIM bank can also provide business advisory services and expert knowledge to Indian exporters in respect of multi-funded projects in
foreign countries

10. Functions of International Monetary Fund
• It serve as a short term credit Institution.
• The fund provides a mechanism for improving short-term balance of
payments position.
• The fund provides machinery for International consultations.
• It provides a reservoir of the currencies of the members’ countries
and enables members to borrow one another’s currency.
• It promote orderly adjustments of exchange rate to promote exchange
stability.

11. Industrial Development Bank of India,
• IDBI Bank 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. IDBI Bank is on a par with nationalized banks and
the SBI Group as far as government ownership is concerned.
Objectives OF IDBI
The main objectives of IDBI is to serve as the apex institution for term finance for industry in India. Its objectives include:
• Co-ordination, regulation and supervision of the working of other financial institutions such as IFCI , ICICI, UTI, LIC,
Commercial Banks and SFCs.
• Supplementing the resources of other financial institutions and there by widening the scope of their assistance.
• Planning, promotion and development of key industries and diversification of industrial growth.
• Devising and enforcing a system of industrial growth that conforms to national priorities.

12. Functions OF IDBI
• The IDBI has been established to perform the following functions-
• To grant loans and advances to IFCI, SFCs or any other financial institution by way of refinancing of loans granted by
such institutions which are repayable within 25 year.
• To grant loans and advances to scheduled banks or state co-operative banks by way of refinancing of loans granted by
such institutions which are repayable in 15 years.
• To grant loans and advances to IFCI, SFCs, other institutions, scheduled banks, state co-operative banks by way of
refinancing of loans granted by such institution to industrial concerns for exports.
• To discount or re-discount bills of industrial concerns.
• To underwrite or to subscribe to shares or debentures of industrial concerns.
• To subscribe to or purchase stock, shares, bonds and debentures of other financial institutions.
• To grant line of credit or loans and advances to other financial institutions such as IFCI, SFCs, etc.
• To grant loans to any industrial concern.
• To guarantee deferred payment due from any industrial concern.
• To guarantee loans raised by industrial concerns in the market or from institutions.
• To provide consultancy and merchant banking services in or outside India.
• To provide technical, legal, marketing and administrative assistance to any industrial concern or person for promotion,
management or expansion of any industry.
• Planning, promoting and developing industries to fill up gaps in the industrial structure in India.
• To act as trustee for the holders of debentures or other securities.