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.