TYPES OF FINANCIAL INSTITUTIONS

Banking Institutions Organized sector Un-organized sector NON- BANKING INSTITUTIO NS Organized institutions Unorganize d institutions

Banking Institutions Organized sector Commercial banks Co- operative banks Foreign Banks Un-organized sector Indigenou s bankers Money lenders

Commercial banks Commercial BanksPrivate sector banks wherein 51% of the ownership lies in private hands E.g. ICICI Public sector banks wherein 51% of the ownership lies in government hands. E.g. SBI

Co-operative banks These are represented by group of societies registered under the act of the states relating to co-operative societies CO- OPERATIVE CREDIT SOCIETIES Rural credit societies which are primarily agricultural Urban credit societies which are primarily non-agricultural

Foreign Banks Set up in India since British days. These are the banks which are registered outside India but have their operations and branches in India. Example : Barclays bank, CITI bank etc.

UNORGANIZED SECTOR Indigenous bankers Money lenders

Indigenous bankers Forefathers of modern commercial banks. Local bankers. Raise the funds from the public and lend it also. E.g.Gujrati Shroffs or Marwari, in South India they may be called Chettiars, In North India they may be called Sahukars etc. Provide finance for productive purposes to trade, industries and agriculturalists.

Money lenders Depend entirely on their own funds for the working capital. May be rural or urban, professional or non-professionals. The main characteristics of money lenders are:  They use their own funds  Their clients are mainly the weaker sections of the society.  Their loans are highly exploitative because they charge high rate of interest.  Their operations are highly regulated.  The credit is prompt and flexible.

NON- BANKING INSTITUTIONS Organized financial institutions Development Finance Institutions Investment Institutions Unorganized financial institutions NBFCs

Development Finance Institutions Financial institutions set up for the development of the economy. Provide medium to long term funds so as to meet long term growth of the nation. E.g. IDBI, SIDBI etc.

Investment Institutions Includes those financial institutions which mobilize savings of the public at large and invest in corporate and government securities. These include: LIC, GIC, etc.

UNORGANIZED FINANCIAL INSTITUTIONS These include NBFCs providing whole range of financial services. The principal business is receiving of deposits under any scheme or arrangement in any manner or lending in any manner. E.g. hire purchase companies, investment companies etc.