Page 45 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Financial Institutions and Services

Notes Venture Capital: Venture capital is a type of private equity capital typically provided to early-
stage, high-potential, and growth companies in the interest of generating a return through an
eventual realization event.

3.10 Self Assessment

Fill in the blanks:

1. If a bank is ................, it benefits from interest rate increases and suffers from decreases.
2. Banks face several risks such as the ................ risk, .............. risk, .............. risk and ..............
risk.

3. .............. funds offered (savers) investors the benefits of both liquidity and a rate of interest
higher than they could earn on bank deposits.

4. .............. banking, is a system where banks hold only a certain percentage of their deposits
as ready cash.

5. The first Private Bank in India to receive an in principle approval from the Reserve Bank
of India was ...............
6. The two main reasons for the existence of financial institutions are ................ and .................

7. ........................ is any financial institution whose principal business is that of leasing
equipments or financing of such an activity.

8. ..................... is any financial intermediary whose principal business is that of buying and
selling of securities.
9. ..................... offer financial as well as technical assistance to the industries.

10. Venture capital is a type of ........................ capital.
11. The duration is the average period of ......................
12. .................. is established in the form of a trust to raise money through the sale of units to
the public or a section of the public.
13. The general policy on rural credit is to provide timely and adequate credit to farmers for
increasing agricultural .................. and ......................
14. ..................... have broadened and diversified the range of products and services offered by
a financial sector.
15. The government of India set up .................. on October 2, 1975.

3.11 Review Questions

1. What financial innovations do you see around you to have been done by financial market
in India?
2. Critically analyse the working of commercial banks in India.
3. "Financial market in India has come off age". Comment.
4. What are the most significant changes you see in the commercial banks of India in past
decade?

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