Page 321 - DMGT207_MANAGEMENT_OF_FINANCES

Management of Finances

Notes Self Assessment

Fill in the blanks:
13. The ……………… .maintains record of Government revenue and expenditure under various
heads.

14. There are ……………… types of co-operative banks operating in our country.
15. The ……………… bank grants loans to exporters and importers and also provides
information about the international market.

16. IFCI was established to cater to the financial needs of industrial concerns in ………………
and ……………… sectors.
17. The forte of NBFCs has been credit delivery to areas not covered by ……………… and
financial institution.
18. ……………… are financial institutions that provide banking services without meeting the
legal definition of a bank.
19. IFCI has played a key role in the development of cooperatives in the ……………… and
……………… sectors.
14.8 Regulatory Bodies

Regulation of financial institutions is very important for a structured growth of a country. As
you know that the financial institutions play the key role in the growth of an economy so it is
important to regulate the financial institutions. In India Reserve Bank of India (RBI) and Securities
and Exchange Board of India (SEBI) are the main regulators of financial institutions.

14.8.1 Reserve Bank of India (RBI)

The Reserve Bank of India was established on April 1, 1935, under the Reserve Bank of India Act,
1934. The main functions of the Bank are to act as the note-issuing authority. Banker’s Bank,
Banker to the government and to promote the growth of the economy. The Bank also performs
a wide range of promotional functions to support the pace of economic development. The
Reserve Bank is the controller of foreign exchanges and worked as the watchdog of the entire
financial system.
The RBI, as the central bank of the country, is the centre of the Indian Financial and Monetary
System.
Its role in bank management is quite unique. The RBI performs the four basic functions of
management, viz., planning, organising, directing and controlling in laying a strong foundation
for the functioning of commercial bank.

14.8.2 Securities and Exchange Board of India (SEBI)

Objectives of SEBI

According to SEBI Act, 1992 the overall objective of the SEBI is “to protect the interests of
investors in securities and to promote the development of, and to regulate the securities market
and for matters connected therewith or incidental thereto”. To elaborate, the SEBI regulates
stock exchanges and securities industry to promote their orderly functioning. It protects the
rights and interests of investors, particularly individual investors, and guides them. It prevents

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