This document provides an overview of the role of financial institutions in India. It discusses the evolution of financial institutions from their foundation phase to the current reforms phase. It describes the various types of financial institutions in India including development banks, specialized institutions, state-level institutions, investment institutions, and non-banking financial companies. The document also outlines some of the key roles of financial institutions like providing services, mobilizing savings, and facilitating development. It discusses recent reports that aim to improve the financial services sector by 2020 with a focus on customer needs, inclusion, and tapping new market segments.

1. ROLE OF FINANCIAL INSTITUTIONS IN INDIA
Guided By: Prof. Rao

2. NAGINDAS KHANDWALA COLLEGE OF COMMERCE,
ARTS AND MANAGEMENT STUDIES
MALAD (WEST), MUMBAI - 400 064
PROJECT REPORT ON
THE ROLE OF FINANCIAL INSTITUTIONS IN INDIA
SUBMITTED BY
UNNATI PRAJAPATI
T.Y.B.M.S. SEMESTER – V
PROJECT GUIDE
PROF. HANUMANTHRAO GALLIPILLY
UNIVERSITY OF MUMBAI
2014 – 2015

3. RESEARCH
METHODOLOGY

4. TITLE OF THE PROJECT:
“The role of Financial Institutions in India”

5. OBJECTIVES OF THE RESEARCH:
 To understand the role of these institutions in the lives of
businessmen.
 To understand the dependability of these institutions on
the economy, industrial development and well-being of
the nation.
 To understand the consumer thought-process towards the
upcoming financial institutions.
 To understand the various schemes and policy introduced
for the progress of the nation.

6. Formulating the Research Problem:
 Unit of Analysis: Financial Institutions in India
 Characteristic of Interest: Importance
 Time and Space boundary: 3 months and area from
Borivali to Malad

7. Choice of Research Design:
 The project is much of an Exploratory Research
as it provides insights into the problem.
 It is regarded as a tentative or input for further
research.
 It is flexible, mostly consists of secondary data and
defines the research properly.

8. Source of Data:
 Primary Data: The primary data is collected by surveying
businessmen and getting first hand data.
 Secondary Data: The secondary data is collected from the
information available by various analysts through their
research books and internet.
Sample Design and Size:
 The sample design: Random Sampling
 The sample size: 100 Consumers

9. RESEARCH DETAILS

10. INTRODUCTION OF FINANCIAL INSTITUTION
Definition:
 Financial Institution is an establishment that focuses on
dealing with financial transactions, such as investments, loans
and deposits. Conventionally, financial institutions are
composed of organizations such as banks, trust companies,
insurance companies and investment dealers.
Meaning:
 Since all people depend on the services provided by financial
institutions, it is imperative that they are regulated highly by
the federal government.

11. EVOLUTION
 Foundation Phase
 Expansion Phase
 Consolidation Phase
 Reforms Phase

12. ROLES OF FINANCIAL INSTITUTIONS
 Introduction of Niche strategies.
 Development and Support Services
 Micro finance Credit
 Mopping up Savings
 Capital mobilization
 Trade Facilitation Programme
 Financial Innovation
 Managing Risk

13. IMPORTANCE IN THE SOCIETY
 Provide wide range of services and different types of
banking products.
 The importance of financial institutions is apparent during
market booms and recessions.
 Banks are encouraged or even compelled to lend money
to home buyers and small businesses.
 Financial institutions offer various types of insurance,
ranging from life insurance to insurance
on mortgage contracts.

14. CHALLENGES
 The credit crisis of 2008 and 2009 underscores the importance
of financial institutions to the economy.
 Injection of trillions of dollars into financial institutions during
the credit crisis to prevent collapse and the subsequent collapse
of the economy.
 A characteristic of all financial institutions that accept public
funds is that they are heavily regulated.
 If people kept their money instead of saving or investing it,
then the allocation of economic resources would be much less
efficient.

15. CURRENT STATUS OF FINANCIAL
INSTITUTIONS IN INDIA

16. TYPES OF FINANCIAL INSTITUTIONS
Financial Institutions
Development Banks
(National)
Specialised
Institutions
State level
Institutions
Investment
Institutions

17. DEVELOPED BANKS
 Industrial Development Bank Of India (IDBI)
 Industrial Credit And Investment Corporation Of India (ICICI)
 Small Industries Development Bank Of India (SIDBI)
 Industrial Finance Corporation Of India Ltd (IFCI)
 Industrial Investment Bank Of India (Formerly IRBI)

18. STATE LEVEL INSTITUTIONS
 State Financial Corporations (SFCs)
 State Industrial Development Corporations (SIDCs)

19. SPECIALIZATION INSTITUTIONS
 National Bank For Agriculture And Rural Development
(NABARD)
 Export Import Bank Of India
 National Housing Bank (NHB)

20. INVESTMENT INSTITUTIONS
 Life Insurance Corporation of India (LIC)
 Unit Trust of India (UTI)
 General Insurance Corporation of India (GIC)

21. Non-Banking Financial Companies
(NBFCs)
 Non-banking financial companies (NBFCs) are fast emerging as
an important segment of Indian financial system.
 It is an heterogeneous group of institutions (other than
commercial and co-operative banks) performing financial
intermediation in a variety of ways.
 They raise funds from the public, directly or indirectly, and lend
them to ultimate spenders.
 Thus, they have broadened and diversified the range of products
and services offered by a financial sector.
 Gradually, they are being recognised as complementary to the
banking sector.

22.  The types of NBFCs registered with the RBI are:-
o Equipment leasing Company
o Hire-purchase Company
o Loan Company
o Investment Company
 Now, these NBFCs have been reclassified into three categories:-
o Asset Finance Company (AFC)
o Investment Company (IC)
o Loan Company (LC)

23. Government And Funding Schemes
 The fund based schemes include:-
o Term and Composite Loan
o Equipment Finance
o Working Capital
o Finance for Market Activities
o Credit Linked Capital Subsidy for SSI
 The non-fund based schemes include:-
o Public Issue Appraisal
o Credit Syndication
o Corporate Advisory Services

24. Small Scale Industries (SSI)
 Small Industries Development Organisation (SIDO)
 National Small Industries Corporation Ltd (NSIC)

25. REPORTS FORMULATED FOR
IMPROVEMENTS
 Report 1: Intuit released - 2020 Report: The Future of
Financial Services
o A New Playing Field for Financial Services
o Shifting Segments, Changing Markets
o The New Customer Connection
o Reputation and Relationships Rule

26.  Report 2: Ross Dawson - Vision 2020 Financial Services
Sector
o Tied IT services in India
o Tapping the bottom of the pyramid
o Financial inclusion
o 2020: Customer perspective
o Microfinance and financial apartheid
o India’s demographics
o Unstructured economy
o Banking in 2020