List of top seven Financial Institutions of India. The financial institutions are: 1. Commercial Banks 2. Merchant Banks 3. Mutual Funds 4. Investment Banks 5. Credit Unions 6. Savings and Loan Associations 7. Mutual Savings Banks.
Financial Institution # 1. Commercial Banks:
Banking is a business like any other business. Banks and other financial institutions exist to make profits. A commercial bank is a fairly simple business concern. Its basic objective is to provide certain services for customers and in return receives payment from them.
Such banks provide a full range of banking services, including savings and current accounts and loans for all commercial purposes. Commercial banks are designed primarily to finance the production, distribution, and sale of goods as well as providing long-term or capital funds, (as the State Bank of India is doing with its capital market business).
The term full-service banking has been used in recent years as a more appropriate term because of the diversification of commercial banks into various operations other than commercial lending, including consumer banking, mortgage banking, commercial sales financing, international banking and many other functions.
Financial Institution # 2. Merchant Banks:
These are commercial and investment banks that lend, borrow, underwrite, deal in securities, and provide other banking services.
Financial Institution # 3. Mutual Funds:
These are investment companies that issue and sell redeemable securities that present an undivided interest in the assets held by the funds, sometimes classified as management companies or unit investment trust; pooled resources of many investors that provide diversification and professional management.
Financial Institution # 4. Investment Banks:
Such banks are engaged in banking activities associated with securities underwriting, making a market in securities, and arranging mergers, acquisitions and restructuring regulated by the Securities and Exchange Board of India (SEBI).
Financial Institution # 5. Credit Unions:
These are non-profit making cooperative societies formed by individuals bound together by same common tie, such as a common employer or labour union. Typically credit union members hold members’ savings accounts and enjoy access to pooled savings of all members.
Financial Institution # 6. Savings and Loan Associations:
These are financial institutions, mostly mutual organisations having no capital stock, sometimes referred to as savings associations, building and loan associations, normally found in western countries. Such associations pool the savings of a neighbourhood in order to provide funds for home purchases.
Financial Institution # 7. Mutual Savings Banks:
These were originally set up to serve very small savers. These banks can use their deposits for a wide variety of purposes, including investment in bonds and blue chip-stocks.