Page 34 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 3: Financial Institutions

There are several concessions enjoyed by the RRBs by Reserve Bank of India such as lower Notes
interest rates and refinancing facilities from NABARD like lower cash ratio, lower statutory
liquidity ratio, lower rate of interest on loans taken from sponsoring banks, managerial
and staff assistance from the sponsoring bank and reimbursement of the expenses on staff
training. The RRBs are under the control of NABARD which has the responsibility of
laying down the policies for the RRBs, to oversee their operations, provide refinance
facilities, to monitor their performance and to attend their problems.
4. Non-banking Financial Companies: 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, like accepting deposits, making loans and advances,
leasing, hire purchase, etc. They raise funds from the public, directly or indirectly, and
lend them to ultimate spenders. They advance loans to the various wholesale and retail
traders, small-scale industries and self-employed persons. Thus, they have broadened and
diversified the range of products and services offered by a financial sector.

The types of NBFCs registered with the RBI are:
(a) Equipment leasing company
(b) Hire-purchase company
(c) Loan company

(d) Investment company.
Now, these NBFCs have been reclassified into three categories:
(a) Asset Finance Company (AFC)
(b) Investment Company (IC) and

(c) Loan Company (LC).

Task Find how many companies are registered under RBI as equipment leasing,
hire-purchase, loan and investment companies respectively. Enlist the major
players in each.

5. Co-operative Societies: The general policy on rural/agricultural credit is to provide timely
and adequate credit to farmers for increasing agricultural production and productivity.
It aims at providing better access to institutional credit for the small and marginal farmers
and other weaker sections to enable them to adopt modern technology and improved
agricultural practices has been a major concern of the policy.

The Cooperative Movement has a long history in our country and today, India's
Cooperative Movement is the largest in the world with currently a total of 447 cooperative
credit societies. It comprises of the following:

(a) The Primary Agricultural Co-operative Societies

(b) District Central Co-operative Banks
(c) State Co-operative Banks
(d) National Co-operative Development Corporation (NCDC)

LOVELY PROFESSIONAL UNIVERSITY 29