Saturday, December 30, 2017

Trading Procedure at Stock Exchanges

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Trading Procedure at Stock Exchanges

Securities can be traded at a stock exchange only if it is listed at that stock exchange or any of the other stock exchanges. Listing is a procedure by which, the issuing company has to enter into an agreement, called the listing agreement, with a stock exchange and has to abide by the clauses of the listing agreement regarding disclosure of information, payment of listing fees redressal of investor’s grievance etc.

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Once listed, the security can be traded at other stock exchanges too. The sale and purchase (transaction) of securities at the stock exchange can be done only through registered share brokers. An investor desiring to enter into a transaction has to place an order with one of the share brokers. In the ‘outcry’ system where the brokers used to shout, the deals are confirmed in few hours but in the screen-based system, the deals are confirmed immediately. The investor then gives the delivery of the securities in case of sale, or makes the payment in case of purchase of security, to the stock broker.

The stock broker in turn makes the payment for the securities sold or delivers the security certificate purchased on the completion of settlement programme of the stock exchange. Generally, it takes 15 to 20 days for completion of the transaction. The National Stock Exchange and the Over The Counter Exchange of India (OTCEI) have been operating since their inception at the national level through satellite-linked computer based system. To be in tune with the NSE, the stock exchanges at Mumbai, Delhi, Ahmedebad, and Calcutta, have already converted their operations from the ‘outcry’ system to the computerised one. The transactions at these stock exchanges now take place through computer based online screen system.

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Friday, December 29, 2017

Functions Of Securities And Exchange Board Of India (SEBI)

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Functions Of Securities And Exchange Board Of India (SEBI)

1. The SEBI Act armed SEBI with statutory powers.

2. It has entrusted SEBI with the responsibility of dealing with various matters relating to the capital market.

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SEBI’s principle tasks are to:

1. regulate the business in stock exchanges and any other securities market.

2. register and regulate the working of capital market intermediaries (brokers, merchant bankers, portfolio mangers and so on).

3. register and regulate the working of mutual funds.

4. promote and regulate self-regulatory organizations.

5. prohibit fraudulent and unfair trade practices in securities markets.

6. promote investors’ education and training of intermediaries of securities markets.

7. prohibit insider trading in securities.

8. regulate substantial acquisition of shares and take-over of companies.

9. perform such other functions as may be prescribed.

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Thursday, December 28, 2017

Securities And Exchange Board Of India (SEBI)

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SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

In 1988, SEBI was created by an administrative feat of the Ministry of Finance. Since then SEBI has gradually been granted more and more powers. With the repeal of the Capital Issues Control Act and the enactment of the SEBI Act in 1992, the regulation of the primary market has become the preserve of SEBI. Further, the Ministry of Finance has transferred a number of powers under the Securities Contracts (Regulation) Act 1956 also to SEBI.

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Before the establishment of the SEBI, the principal legislations governing the securities markets in India were the Capital Issues Control Act 1956 (governing the primary market) and the Securities Contract (Regulation) Act 1956 (governing the secondary market). The regulatory powers were vested with the Controller of Capital Issues (for the primary market) and the Stock Exchange Division (for the secondary market) in the Ministry of Finance, Government of India.

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Wednesday, December 27, 2017

Group A and Group B Shares In India Stock Exchange

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Group A and Group B Shares In India Stock Exchange

The listed shares are divided into two categories: Group A shares (also referred to as cleared securities or specified shares) and Group B shares (also referred to as non-cleared securities or non-specified shares).

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For Group A shares, the facility for carrying forward a transaction from one account period to another is available; for Group B shares, it is not. Group A shares basically represent large, well-established companies that have a broad investor base and are very actively traded.

Since transactions in these shares can be carried forward, these shares attract a lot of speculative trading.

This seems to be the reason why these shares, other things being equal, tend to command higher price-earning multiples. This is clear from the fact that whenever a share is moved from Group B to Group A, its market price rises; likewise, when a share is shifted from group A to Group B market price declines.

The Mumbai Stock Exchange employs several criteria for shifting stocks from the non-specified list to the specified list. The key ones are that the company must have an equity base of Rs. 10 crore, a market capitalization of Rs. 25–30 crore, a public holding of 35 to 40 percent, a shareholding population of 15,000 to 20,000 a dividend paying status and a good growth potential.

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Tuesday, December 26, 2017

What Is Private Placement Definition And Meaning

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What Is Private Placement Definition And Meaning

In a private placement, funds are raised in the primary market by issuing securities privately to some investors without resorting to underwriting (insurance against risk by a guarantor). The investors in this case may by financial institutions, commercial banks, other companies, shareholders of promoting companies, and friends and associates of the promoters.

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Monday, December 25, 2017

What Is Right Issue Definition And Meaning

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What Is Right Issue Definition And Meaning

A right issue involves selling securities in the primary market by issuing rights to the existing shareholders. When a company issues additional equity capital, it has to be offered in the first instance to the existing shareholders on a pro rata (proportional) basis. This is required under Section 81 of the Companies Act 1956. The shareholders however, may by a special resolution forfeit this right, partially or fully, to enable a company to issue additional capital to the public.

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Sunday, December 24, 2017

What Is Public Issue Definition And Meaning

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What Is Public Issue Definition And Meaning

By far the most important mode of issuing securities, a public issue involves sale of securities to the public at large. A company making a public issue informs the public about it through statutory announcements in the newspapers, makes application forms available through stock brokers and others and keeps the subscription open for a period of three to seven days. If the issue is over-subscribed, the pattern of allotment is decided in consultation with the stock exchange where the issue is proposed to be listed.

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After the allotment pattern is finalized the company mails the allotment advice/letter alongwith refund order, if any. This is supposed to be done within 10 weeks of the closure of subscription. If the full amount is not asked for at the time of allotment, the balance is called in one or two calls later. The letter of allotment is exchangeable for share certificates (or debenture certificates, as the case may be), after it is duly stamped by the bank where the balance payment is made.

Of course, if the allottee wants he can sell the letter of allotment itself by transmitting it alongwith a transfer deed. If the allottee fails to pay to call money as and when called by the company, the shares are liable to be forfeited. In such a case, the allottee is not eligible for any refund of the amounts already paid. While a new company set up by promoters without a track record is required to issue its shares at par, other companies are allowed to make a public issue at a premium.

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Saturday, December 23, 2017

Methods of Raising Capital

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Methods of Raising Capital

(1). Shares:

Otherwise known as ‘ordinary shares’ these are shares in the issued capital of company which are held on terms that make the holder a ‘member’ of the company, entitled to vote at annual meetings and elect directors, and to participate through dividends in the profits of the company. The holders of the ordinary shares carry the residual risk of the business: they rank after debenture holders and preference shareholders for the payment of dividends and they are liable for losses, although this liability is limited to the value of the share and to the limit of guarantee given by them.

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(2). Debentures:

Fixed-interest securities issued by limited companies in return for long-term loans. The term is sometimes also used to refer to any title on a secured interest–bearing loan. Debentures are dated for redemption (i.e. repayment of their nominal value by the borrower to the holder), debentures are usually secured. Debenture interest must be paid whether the company makes a profit or not. In the event of non-payment debenture holders can force liquidation and rank ahead of all shareholders in their claims on the company’s assets. The interest which debentures bear depends partly on long-term rates of interest prevailing at the time and partly on the type of debenture, but will in any case, because of the lower risk involved is less than borne by preference shares. Debenture shares are most appropriate for financing companies whose profits are stable and which have substantial fixed assets, such property companies.

(3). Convertible debentures:

These carry an option at a fixed future date to convert the stock into ordinary shares at a fixed price. This option is compensated for by a lower rate of interest than an ordinary debenture, but convertible debentures are attractive since they offer the investor, without sacrificing his security, the prospect of purchasing equity shares cheaply in the future. For this reason, convertible debentures are issued at a time when it is difficult to raise capital either by equity or fixed interest securities. There are three ways in which a company may raise capital in the primary market.

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Friday, December 22, 2017

List Of 24 Stock Exchange Institutions Operating In India

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List Of 24 Stock Exchange Institutions Operating In India:

The Approved Stock Exchanges in India as follows:

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1. Meerut Stock Exchange, Meerut (UP)

2. UP Stock Exchange, Kanpur (UP)

3. Mumbai Stock Exchange, Mumbai (Maharashtra)

4. Over the Counter Exchange of India, Mumbai (Maharashtra)

5. National Stock Exchange, Mumbai (Maharashtra)

6. Pune Stock Exchange, Pune (Maharashtra)

7. Ahmedabad Stock Exchange, Ahmedabad (Gujarat)

8. Sourashtra Stock Exchange, Rajkot (Gujarat)

9. Vadodara Stock Exchange, Vadodara (Gujarat)

10. Bangalore Stock Exchange, Bangalore(Karnataka)

11. Canara Stock Exchange, Mangalore (Karnataka)

12. Bhubaneshwar Stock Exchange, Bhubaneshwar (Orissa)

13. Calcutta Stock Exchange, Calcutta (West Bengal)

14. Delhi Stock Exchange, Delhi.

15. Guwahati Stock Exchange, Guwahati (Assam)

16. Hyderabad Stock Exchange, Hyderabad (Andhra Pradesh)

17. Jaipur Stock Exchange, Jaipur (Rajasthan)

18. Ludhiana Stock Exchange, Ludhiana (Punjab)

19. Chennai Stock Exchange, Chennai (Tamil Nadu)

20. Coimbatore Stock Exchange, Coimbatore (Tamil Nadu)

21. MP Stock Exchange, Indore (Madhya Pradesh)

22. Magadh Stock Exchange, Patna (Bihar)

23. Capital Stock Exchange, Kerala Ltd. Tiruvananthapuram (Kerala)

24. Cochin Stock Exchange, Cochin (Kerala)

Secondary market in India got a boost when Over The Counter Exchange of India (OTCEI) and National Stock Exchange (NSE) were established. It may be noted that NSE and OTCEI have been established by the all India Financial Institution, while other stock exchanges are in the form of associations.

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Thursday, December 21, 2017

What Is Secondary Market Definition And Meaning

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What Is Secondary Market Definition And Meaning

The secondary market refers to the network system for the subsequent sale and purchase of securities. An investor can apply and get allotted, a specified number of securities by the issuing company in the primary market. However, once allotted, the securities can thereafter be sold and purchased in the secondary market only.

A security emerges in the primary market, but its subsequent movement takes place in the secondary market. Secondary market is represented by stock exchanges in the capital market. Stock exchanges provide an organized market place for investors to trade in securities.

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A stock exchange permits the prices of the securities to be determined by the market forces. The bidding process flows from demand and supply, underlying each security. This means that the specific price of a security is determined, more or less, in the manner of an auction. Stock exchange provides a market in which the members (share brokers) and investors participate to ensure liquidity to the latter. At present, there are 22 stock exchanges operating in India.

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Wednesday, December 20, 2017

What Is Primary Market Definition And Meaning

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What Is Primary Market Definition And Meaning

The primary market refers to the set up by which the industry raises funds by issuing different types of securities. These securities are issued directly to the investors, both individual and institutions. The primary market discharges the important function of transfer of savings, especially of the individual, Government and public sector undertakings.

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In the primary market, the new issues of securities are presented in the form of Public issues, Right issues and Private Placements. Its efficient operation is made possible by the financial intermediaries and financial institutions, who arrange long-term financial transactions for the clients. Issues of the securities in the primary market may be made through any of the following medium:

(i) Prospectus

(ii) Offer for sale

(iii) Private placement

The securities offered to the public through prospectus are directly subscribed by the investor. The issuing companies widely publicise the offer through various media. The Securities Exchange Board of India (SEBI) has classified various issues in three groups i.e., New issues, Right issues and Preferential issues.

The SEBI has issued various guidelines regarding proper disclosure for investor’s protection. These guidelines are required to be duly observed by the companies making issue of capital. The guidelines issued by the SEBI broadly cover the requirements regarding issue of capital by the companies. The guidelines are applicable to all the companies after the repeal of Controller of Capital Issues (CCI ) Act 1947.

The boom in the primary capital market, that started in the mid-eighties and accelerated thereafter, started slowing down by 1995. There are several reasons for this slowing down of resource mobilization in the primary market. In particular, the low return on new issues, some resulting in stock market fiasco, seems to have shattered the confidence of the investors.

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Tuesday, December 19, 2017

The Share Market In India

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The Share Market In India:

India has a well developed share market system, which is one of the best in the developing world. It has one of the oldest stock markets in Asia. The first stock exchange was established in 1875 in Bombay (Mumbai), when the stock brokers against at their plight following the severe depression in securities, decided to form an association to protect the character and interest of native share and stock brokers.

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India has the second largest share holding population with around 1.5 crore shareholders; next only to the United States of America which has about 5 crore shareholders. India is significantly ahead of countries like Japan, United Kingdom and France in this regard, the Indian figure may look impressive, but it constitutes only 1.5 percent of the total population.

The country also has a large number of debenture holders, whose figure stands at around 50 lakhs (5 million). Here, it is important to note that most of the debenture holders are prospective shareholders as they are waiting for the conversion of their debentures into equity shares. The enhanced interest in capital market is a result of increasing industrialization, growing awareness among people and globalization of the capital market.

Indian capital market can be divided into primary market (new issues market) and secondary market.

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Monday, December 18, 2017

Mumbai Inter-Bank Offer Rate (MIBOR) and Mumbai Inter-Bank Bid Rate (MIBID)

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Mumbai Inter-Bank Offer Rate (MIBOR) and Mumbai Inter-Bank Bid Rate (MIBID):

On June 15, 1998 National Stock Exchange launched two new Reference Rates for the loans of Inter-Bank Call Money Market. These rates are Mumbai Inter-Bank Offer Rate (MIBOR) and Mumbai Inter-Bank Bid Rate (MIBID).

MIBOR will be the indicator of Landing Rate for loans which MIBID will be the landing rate of receipts.

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Sunday, December 17, 2017

The Secondary capital Market In India

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The Secondary capital Market In India:

The secondary capital market, on the other hand, is the market for old or already issued securities. It is composed of Industry Security Market or the stock exchange in where industrial securities are bought and sold, and the Gilt-edged Market where the government and semi-government, securities are traded.

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Saturday, December 16, 2017

The Primary Capital Market In India

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The Primary Capital Market In India:

The primary capital market refers to the new issues market, which relates to the issue of shares, preference shares and debentures of non-government public limited companies, and also to the raising of fresh capital by Government companies, and also to the raising of fresh capital by Government companies and the issue of public sector bonds.

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Friday, December 15, 2017

The Industrial Securities Market In India

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The Industrial Securities Market In India:

The industrial securities market is the market for equities and debentures of companies of the corporate sector. This market further classified into the following:

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(a) New Issues Markets; for raising fresh capital in the form of shares and debentures.

(b) Old Issues Market; for buying and selling shares and debentures of existing companies this market is commonly known as the stock market or stock exchange.

Both markets are equally important, but often the new issues market will be facilitated only when there are abundant facilities for transfer of existing securities. The capital market is also classified into Primary Capital Market and Secondary Capital Market.

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Thursday, December 14, 2017

The Gilt-Edged Market In India

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The Gilt-Edged Market In India:

The Gilt-edged market is the market for Government and semi-government securities, which carry fixed interest rates and backed by RBI. The securities traded in this market are stable in value and are much sought after by banks and other institutions.

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Wednesday, December 13, 2017

Classification Of Capital Market In India

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Classification Of Capital Market In India:

The capital market in India can be classified into

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• Gilt-edged Market on Government and Semi-government Securities;

• Industrial Securities Market;

• Development Financial Institutions (DFI), and

• Non-banking Financial Companies (NBFC)

The Industrial Securities Market comprises of the New Issues Market, Old Issues Market and the Stock Exchange.

The Development Financal Institutions comprises of the IFCI, ICICI, SFCs, IDBI, IIBI and the Unit Trust Of India (UTI).

The financial intermediaries consists of merchant banks, mutual funds, leasing companies, venture capital and other companies.

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Tuesday, December 12, 2017

Capital Markets

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Capital Market

Capital market may be defined as on organised mechanism for effective and efficient transfer of money-capital or financial recourses from the individuals or institutional savers to industrialist. The development of a effective capital market depends upon the availability of savings, well organised financial system and the entrepreneurship quantities of its people.

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Capital market is a market for long-term funds, just as the money market is the market for short-term funds. It refers to all the facilities and the institutional arrangements for borrowing and lending term funds (medium-term and long-term funds). It does not deal in capital for purpose of investment.

The demand for long-term money capital comes predominantly from private sector manufacturing industries and agriculture and from the government largely for the purpose of economic development. As the central and state governments investment are not only on economic overheads as transport, irrigation and power development but also on basic industries and some times, even consumer goods industries, they require substantial sums from the capital market. The supply of funds for the capital market comes largely from individual savers, corporate savings, banks, insurance companies, specialized financing agencies and government.

Among institutions, we may refer to the following:

1. Commercial banks are important investors, but are largely interested in government securities and, to a small extent, debentures of companies.

2. LIC and GIC are growing importance in the Indian capital market, though their major interest is still in government securities.

3. Provident funds constitute a major medium of savings but their investments are mostly in government securities.

4. Special institutions set up since Independence, viz. the IFCI, ICICI, IDBI, UTI etc., all these aim at providing long-term capital to the private sector.

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Monday, December 11, 2017

Financial Markets

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FINANCIAL MARKETS

Financial market deals in financial securities or instruments and financial services. It may be variously classified as primary and secondary, money markets and capital markets, organised and unorganised markets official and parallel markets, and foreign and domestic markets. Financial market provides money and capital supply to the industrial concern as well as promote the savings and investments habits of the public. In simple sense, financial market is a market which deals with various financial instruments (share, debenture, bonds, treasury bills, commercial bills etc.) and financial services (merchant banking, underwriting etc).

Financial markets may be divided into two major classifications:

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A. Capital market

B. Money market

Capital Market In India:

The capital market in India is made up of the primary market and the money market. The money market is made up of the stock market and the debt market. Also, the stock market comprises of the Over-The-Counter Exchange Of India (OTCEI), the Regional Stock Exchange (RSE) and the National Stock Exchange (NSE).

Money Market In India:

The money market in India is made up of the primary market and the secondary market.

The Primary market consists of the call-money market and the treasury bill market while the secondary market is made up of the commercial bills market and the short term loans market.

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Sunday, December 10, 2017

Non-Banking Non-Financial Institutions

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NON-BANKING NON-FINANCIAL INSTITUTIONS

Non-banking non–financial institutions are providing fee based services to the public, such as merchant banking, underwriting, counseling, etc. These institutions will not lending any financial assistance to public but they will provide financial services.

The main fee based services that falls under the Non-Banking Non-Financial Insitutions are as follows:

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(1). Merchant Banking

(2). Underwriting

(3). Credit Rating

(4). Consultancy

(5). Project Preparation

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Saturday, December 9, 2017

Non-banking Finance Companies (NBFC)

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Non-banking Finance Companies (NBFC)

The categories of NBFCs and the nature of their main activities currently being followed by the RBI, which are very similar to the ones discussed by the Shah Working Group, are as follows:

1. Equipment leasing company (ELC) means any company which is carrying on as its principal business, the activity of leasing of equipment or the financing of such activity.

2. Hire-purchase finance company (HPFC) means any company which is carrying on as its principal business, hire-purchase transactions or the financing of such transactions.

3. Housing finance company (HFC) means any company which is carrying on as its principal business, the financing of the acquisition or construction of houses including the acquisition or development of plots of land in connection therewith.

4. Investment company (IC) means any company which is carrying on as its principal business, the acquisition of securities.

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5. Loan company (LC) means any company which is carrying on as its principal business, the providing of finance whether by making loans or advances, or otherwise for any activity other than its own. This category does not include an equipment leasing company or a hire-purchase finance company or a housing finance company.

6. Mutual benefit financial company (MBFC) means any company which is notified by the Central Government under Section 620A of the Companies Act 1956 (1 of 1956).

7. Miscellaneous non-banking company (MNBC) means a company carrying on all or any of the following types of business :

(a) Managing, conducting or supervising as a promoter, foreman or agent of any transaction or arrangement by which the company enters into an agreement with a specified number of subscribers that every one of them shall subscribe a certain sum in installment over a definite period and that every one of such subscribers shall in his turn, as determines by lot or by auction or by tender or in such other manner as may be provided for in the agreement be entitled to the prize amount.

(b) Conducting any other form of chit or kuri which is different from the type of business referred to above. Undertaking or carrying on or engaging in or executing any other business similar to the business referred to above.

8. Residuary non-banking company (RNBC) means a company which receives any deposit under any scheme or arrangement, by whatever name called, in one lump sum or in installments by way of contributions or subscriptions or by sale of units or certificates or other instruments, or in any other manner and which according to the definitions contained in the Non-Banking Financial Companies (Reserve Bank) Directions, 1977 or as the case may be, the Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 1977 is not an insurance company or a company belonging to one to seven at the previous page.

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Friday, December 8, 2017

Financial Services In A Financial System

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Financial Services In A Financial System

Financial Services are the another and unavoidable component of the financial system of the country. Normally financial services are provided by the non-banking financial companies and later it is called as non-banking financial service companies. Financial services are divided into two major categories such as:

Fund Based Financial Services

Fund based financial services such as leasing, venture capital, hire purchasing, insurance and mutual funds etc. Because, these services are related to the funds transfer from one place to another place and one person to another person.

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Fee Based Financial Services

Fee based financial services such as merchant banking, underwriting, project counseling, credit rating etc., because, these services such as merchant banking, underwriting, project counseling, credit rating etc., because, these services are not related to any funds transfer activities.

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Thursday, December 7, 2017

Venture Capital Funds (VCFs)

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Venture Capital Funds (VCFs)

The Union Budget for 1999–2000 stressed the need for higher investment in venture capital activity (investment in economic activities where risk is high and there is considerable innovation involved e.g. in the knowledge based enterprises). As it is difficult to access capital market to raise funds for technology development/demonstration, especially for small and medium industries, VCF has a major role to play in this area.

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The National Venture Fund for Software and IT industry (NVFSIT) launched in the current financial year merits mention in this context. The Small Industry Development Bank of India (SIDBI) Venture Capital Ltd. (SVCL) manages NVFSIT, which is a wholly owned subsidiary of SIDBI. In the backdrop of these developments, SEBI initiated a process of interaction with industry participants and experts to identify the various issues and key areas for the development of the VCF industry in India.

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Wednesday, December 6, 2017

Role of Life Insurance Corporation (LIC) In India

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Role of Life Insurance Corporation (LIC) In India:

The activities of the LIC can be broadly classified into two categories. First, it mobilizes long-term contractual savings. Its policy-holders view the LIC as a trustee of their funds, a source of emergency fund to guard against any financial misfortune and a way to accumulates funds by the time of retirement from work. As an agency it is designed to the inculcation of savings for the sake of rainy days.

During the last forty years of its operations, there has been concentration of colossal funds in hands of this monolithic state owned corporation. The resources thus obtained by the LIC from policy-holders are invested in diverse ways for different purposes. Basically LIC is an investment institution. It is a big investor of funds in government marketable securities.

Since April, 1975 the amended Section 27A of the Insurance Act, 1938 the LIC is required to invest to not less than 50% of its accruals of premium income in government marketable securities. Of this not less than 25% in central government securities. Besides it has to give loans to approved authorities like electricity boards or state government for socially oriented schemes like electricity, housing, water supply etc. These loans and investments should not exceed 87.5 percent of accretion to the controlled fund of the LIC.

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The remaining 12.5 percent can be made to the private sector directly in the form of purchase of shares and debentures. Besides it grants loans to the private corporate sector and finances projects by subscribing shares and debentures of private industries. Its contribution to financing of industries in the private corporate sector is also indirect. The investment in the share capital and bonds of IFCI, SFCs, UTI and IDBI flow back to private sector in the form of direct loans. The LIC is also engaged in underwriting new issues.

The LIC plays an important role in the securities market in India. It purchases even when the market is dull (bearish) and prices are low in order to reap the benefit of future price appreciation. Nor does it usually sell shares from its stock when the market is at higher prices.

Although Income Tax concessions provide incentive to higher income groups through LIC policies, the insuring public does not get the real value of its long-term savings because of chronic inflation. Barring risk coverage, the rate of return offered by LIC is much lower compared to other savings media. It is true LIC has grown at a fast speed yet it can grow at a faster rate if it can make the message of life insurance more attractive by its operational efficiency and innovative attitude.

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Tuesday, December 5, 2017

Life Insurance Corporation (LIC) Of India

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LIFE INSURANCE CORPORATION OF INDIA

The Life Insurance Corporation of India (LIC) was set up in the year 1956 by nationalizing 245 insurance companies. The Primary objective of nationalization was to protect the interest of policy-holders against misuses and embezzlement of funds by private insurance companies.

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Secondly, the object of nationalization was to direct investment of funds in government securities, leaving a meager part for the private sector.

What marks and distinguishes the LIC from other long-term financial institutions is this that it discharges the two fold function of mobilization of long-term savings and their effective channelisation as well. The other agencies are suppliers of fund obtained from government and the Reserve Bank of India.

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Monday, December 4, 2017

Private Sector General Insurance Corporation in India

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Private Sector General Insurance Corporation in India

Some of the Private Sector General Insurance Corporation in India are as follows:

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• CH NBH Assn General Insurance Corporation.

• ICICI Lombard General Insurance Corporation.

• Bajaj Allianz General Insurance Corporation.

• AIG General Insurance Corporation.

• IFFCO Tokio General Insurance Corporation.

• Royal Sundaram General Insurance Corporation.

• Reliance General Insurance Corporation.

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Sunday, December 3, 2017

Private Sector Life Insurance Corporation In India

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Private Sector Life Insurance Corporation In India:

Some of the Private Sector Life Insurance Corporation operating in India are as follows:

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• ICICI Prudential Life Insurance Corporation Limited.

• ING Vysya Life Insurance Corporation Limited.

• HDFC Standard Life Insurance Corporation Limited.

• Birla Sun Life Insurance Corporation Limited.

• SBI Life Insurance Corporation Limited.

• Om Kotak Life Insurance Corporation Limited.

• Met Life Insurance Corporation Limited.

• Allianz Bajaj Life Insurance Corporation Limited.

• Max New Yark Life Insurance Corporation Limited.

• Tata AIG Life Insurance Corporation Limited.

• AMP Sanmar Life Insurance Corporation Limited.

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Saturday, December 2, 2017

Insurance Sector In India

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INSURANCE SECTOR IN INDIA
Insurance is one of the fund based financial services which provides risk coverage facilities to the human beings. Realising the vast potential in Indian market, foreign insurance companies started entering into India and even banking organisations (SBI, ICICI, etc.) also showed much interest in insurance business, this is being attributed to global technology and conversions of services as a result of which Indian Insurance market registered highest growth in the Asian region even though Indian’s share of global insurance premium is less 0.5% (1998) than that of US 24.2 percent and Japan 21 percent.

The private players from India and abroad are well aware that only 25 percent of the insurable population have been covered by insurance by existing companies which includes that Indian insurance market has potential enough to exploit. In this process IRDA has so for granted registration for 12 private life insurance companies and 9 general insurance. If the existing public sector insurance companies are included, there are currently 14 insurance companies in the life side and 13 companies in general insurance business.

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Insurance sectors in India has been classified into Public Sector Insurance and Private Sector Insurance.

The Public sector Insurance consists of the Life Insurance and General Insurance.

The Life Insurance consists of the Life Insurance Corporation Of India (LIC) and the Postal Life Insurance while the General Insurance consists of the National Insurance, New India Assurance Corporation, Oriental Fire And General Insurance Corporation and the United India Insurance Corporation.

Also, the Private Sector Insurance in India consists of the Life Insurance and the General Insurance.

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Friday, December 1, 2017

Specialized Financial Institutions In India

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SPECIALIZED FINANCIAL INSTITUTIONS

The following are the specialized financial institutions established by government to provide financial and non–financial assistance to various industrial sectors in India.

finance
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• Shipping Credit and Investment Corporation of India (SCICI), 1986.

• Infrastructure Leasing and Financial Service Limited (IL and FS), 1988.

• Technology Development and Information Company of India Limited (TDICI),
1988.

• Risk Capital and Technology Finance Corporation Limited (RCTFC), 1988.

• Tourism Finance Corporation of India (TFCI), 1989.

• Small Industries Development Bank of India (SIDBI), 1989.

• Infrastructure Development Finance Company (IDFC), 1997.

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Thursday, November 30, 2017

Export Import Bank (EXIM Bank)

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EXPORT IMPORT BANK (EXIM BANK)

Origin of Export Import Bank (EXIM Bank)

EXIM bank was set up in January 1982 as a wholly owned by the central government.

Capital of Export Import Bank (EXIM Bank)

EXIM bank was established with the paid up capital of Rs. 50 crores. It is empowered from RBI and also from central government to further capital raise by issue of bonds and grants from government.

finance
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Objectives Of Export Import Bank (EXIM Bank)

EXIM bank was established mainly for the purpose of promoting export and trading in India. The objectives are as follows:

• To promote the export and import activities

• To meet the financial requirements of the exporters

• To provides guarantee and make foreign exchange facilities to exporters.

Functions Of Export Import Bank (EXIM Bank)

EXIM banks performs the following important functions:

1. Grants direct loans in India and outside for import and export.

2. Refinances loans and suppliers of credit.

3. Rediscounts usance export bills export bills for banks.

4. Provides overseas investment finance.

5. Bulk import finance.

6. Foreign currency preshipment credit.

7. Product equipment finance programme.

8. Business advisory and technical assistance (BATA).

Management Of Export Import Bank (EXIM Bank)

EXIM bank is one of the wholly owned by central government, hence, the entire management is controlled by the central government.

Working Result Of Export Import Bank (EXIM Bank)

EXIM banks business is exclusively devoted to India’s export and import activities. The aggregate loans and outstanding reached Rs. 16.16 billion during the first decade of the its operation. During the year 1990–91, it was sanctioned Rs. 1984 crore and it has increased to Rs. 12011 crore in 2002–03. The share of EXIM bank in industrial finance is 2.11% in the year 2002–03.

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Wednesday, November 29, 2017

National Bank For Agricultural And Rural Development

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NATIONAL BANK FOR AGRICULTURAL AND RURAL DEVELOPMENT

Origin Of National Bank for agricultural and rural development

The National Bank for agricultural and rural development was set up on July 12, 1982, based on the Recommendation of the All India rural credit survey committee under an act of Parliament as a central or apex institution for financing agricultural and rural sectors. It has taken over the functions of Agricultural Refinance and Development Corporation (ARDC) and Agricultural credit department of Reserve Bank of India.

Capital Of National Bank for agricultural and rural development

The National Bank for Agricultural and Rural Development Functioning with the paid up capital of Rs. 100 crore which is subscribed by Government and Reserve Bank of India in equal amount. Further capital can be raised from the special borrowings from the Central Government.

finance
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Objectives of National Bank for agricultural and rural development

The main objectives of National Bank for Agricultural and Rural Development are as follows:

• To provides refinance assistance for agriculture, Small Scale Industries and Village Industries.

• To undertakes promotional activities for integrated rural development

• To coordinates agricultural finance alongwith the state government

• To undertakes research and development in agriculture, rural industries

Functions of National Bank for agricultural and rural development

The National Bank for agricultural and rural development discharges are:

1. It provides all sorts of reference to Co-operatives, Commercial Banks, and Regional Rural Banks, in respect the above three agencies and advices the government thereon. It makes loans to state government to enable them to subscribe to the share capital of co-operative bank.

2. It helps in promoting research in agriculture and rural development. National bank for agricultural and rural development undertakes evaluation and monitoring projects financed by it. It is responsible for the development, operation and co-ordination relating to rural credit.

Management Of National Bank for agricultural and rural development

National Bank for Agricultural and Rural Development is wholly owned by central government, hence it is managed by the central government constituted management board.

Working Result of National Bank for agricultural and rural development

National Bank for Agricultural and Rural Development operates through 28 regional offices, 336 district offices, one sub-office at Port blair and one special cell in Srinagar during the year 1986. National Bank for Agricultural and Rural Development sanctioned short-term credit to Small Scale Industries Rs. 400 crore and it has increased to Rs. 1200 crore in the year 1990-91. Nearly Rs. 400 crore have been provided as medium term loans to various activities, Rs. 200 crore have been sanctioned as long-term loans contributing to the share capital of co-operative institutions.

National Bank for Agricultural and Rural Development has refinanced banks for implementing the national programmes of mass assistance of small and marginal farmers. It also refinance development activities of the handloom sectors. It extends refinance to state co-operative banks, provide block capital to industrial Co-operative Societies and rural artisans against state government guarantee. Service area approach of commercial banks is supported by National bank for agricultural and rural development through various special assistance.

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Tuesday, November 28, 2017

State Finance Corporation In Tamil Nadu

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STATE FINANCE CORPORATION IN TAMIL NADU

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The Madras Industrial Investment Corporation (MIIC) was started as early as 1949, under the companies act and it was renamed as Tamil Nadu Industrial Investment Corporation (TIIC). It was the first State Finance Corporation in India, after the establishment of the State Finance Corporation Act, 1951, the first State Finance Corporation was in Punjab in 1953.

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Monday, November 27, 2017

State Finance Corporation (SFC) India

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STATE FINANCE CORPORATION (SFC)

Origin Of The State Finance Corporation:

Central government decided to promote the Small Scale Industries and Medium Scale Industries at the state level by establishment of State Finance Corporation under a special Act. It is called as State Finance Corporation Act 1951. According to this act, state government have been empowered to set up State Finance Corporation. At present these are 18 State Finance Corporation in India.

finance
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Capital Of State Finance Corporation

State Finance Corporations will have a paid up capital from Rs. 50 lakhs to Rs. 5 crore which will be contributed by the respective state government, Schedule Commercial Bank, Reserved Bank of India and various financial institutions.

Objectives Of State Finance Corporation

• To provides financial assistance to Small scale industries

• To promote tiny, village and cottage Industries

• To provides infrastructure facilities to SSI

Functions Of State Finance Corporation

• Long term loans to Small Scale Industries.

• Refinance from Reserve Bank of India and Industrial Development Bank of India

• Assistance from International Development Agency (IDA) and foreign currency hire of credit from the IDBI

Management Of State Finance Corporation

State Finance Corporation are managed by Board of directors constituted by the respective State Government, Central Government, Reserve Bank of India, Schedule Commercial Bank and Financial Institutions as nominated directors to the State Finance Corporation.

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Sunday, November 26, 2017

Industrial Reconstruction Bank Of India (IRBI)

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INDUSTRIAL RECONSTRUCTION BANK OF INDIA (IRBI)

Origin Of Industrial Reconstruction Corporation of India

In April 1971, Industrial Reconstruction Corporation of India (IRCI) was set up by IDBI and other development and public sector banks. IRCI was reconstituted and renamed as Industrial Reconstruction Bank of India in 1985 with a special Act in the parliament.

finance
[Post Image Courtesy of Stuart Miles at FreeDigitalPhotos.net]

Capital Of Industrial Reconstruction Corporation of India

Industrial Reconstruction Bank of India was started with initial paid up capital of Rs. 50 crore which is contributed by central government, Reserve Bank of India, SCB and various financial institutions. Further capital can be raised with the help of issue of shares, debentures and accept deposits from public.

Objectives Of Industrial Reconstruction Corporation of India

Industrial Reconstruction Bank of India was established mainly for rehabilitating sick industrial units in India.

• To identify and remedial measures to sick industries.

• To provides financial assistance to reconstruction of sick industrial units.

• To promote the sick units into profitable units.

Functions Of Industrial Reconstruction Corporation of India

The following are the major functions of the Industrial Reconstruction Bank of India Credit and reconstruction agency for industrial revival modernization, rehabilitation, expansion, reorganization, diversification and rationalization. Empowered to grant loans and advances:

• Underwrite stocks, share and bonds.

• Guarantee loans and advances, performances and deferred payments.

• Gives assistance for capital expenditure, addition of balancing equipment etc.

Management Of Industrial Reconstruction Corporation of India

Industrial Reconstruction Bank of India is managed by the Board of directors with a full time chairman. Directors are nominated by central government, Reserve Bank of India, Schedule commercial Bank and financial institutions.

Subsidiaries of Industrial Reconstruction Bank of India

On March 27 1997, Industrial Reconstruction Bank of India was transformed into Industrial Investment Bank of India Ltd (IIBI) under the Companies Act. IIBI acts as a coordinating agency in the field of reconstruction.

Working Result of Industrial Reconstruction Corporation of India

Industrial Reconstruction Bank of India sanctioned financial assistance to various sick industrial units. Industrial Reconstruction Bank of India sanctioned Rs. 92 crores in 1980– 81 but it has increased to Rs. 4526 crore in 2002–03. It contributed 80% of the financial assistance at all over India.

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Saturday, November 25, 2017

Industrial Development Bank Of India (IDBI)

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INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI)

Origin Of Industrial Development Bank of India

The Industrial Development Bank of India was set up as a wholly owned subsidiary of the RBI on July 1st 1964 under an act of parliament. In February 1976, it became an independent and autonomous bank.

Capital Of Industrial Development Bank of India

Industrial Development Bank of India was started with initial paid up capital of Rs. 100 crores and now it can raise further capital with the help of issue of shares, debentures and accept deposits from public.

finance
[Post Image Courtesy of LekkyJustDoIt at FreeDigitalPhotos.net]

Objectives Of Industrial Development Bank of India

The main objectives of the Industrial Development Bank of India are as follows:

• To provide credit, team finance, and financial services for the establishment of new projects.

• To expansion, diversification modernization and technology upgradation of existing Industrial concern.

• To provide several diversified financial products.

• To undertake merchant banking activities.

Functions Of Industrial Development Bank of India

The functions of Industrial Development Bank of India are as follows:

1. Direct finance—Project loan, soft loan, technical development loan, equipment finance etc.

2. Indirect finance—Refinancing, rediscounting of bills, seed capital to new entrepreneurs.

3. Special assistance—Promotion of development assistance funds.

4. General assistance—Non-financial promotional activities like marketing, research, consultancy etc.

Management Of Industrial Development Bank of India

Industrial Development Bank of India managed by board of directors which consist of 14 directors and one full time chairman. The directors are nominated by the government, Reserve Bank of India, company law board, insurance companies and various industries.

Subsidiaries of Industrial Development Bank of India are as follows:

• IDBI Bank Ltd.

• IDBI Capital Market Service Ltd.

• IDBI Mutual Funds.

• SIDBI

• IDBI Intech Ltd.

Industrial Development Bank of India has helped to set up the following institutions:

• Technical Consultancy Organization.

• EXIM Bank.

• Entrepreneurship Development Institute.

• Credit Rating and information service India Ltd.

Working Result Of Industrial Development Bank of India

Total assistance sanctioned by Industrial Development Bank of India in 1998–99 was Rs. 25,555 crores, of this 96.7% goes to direct assistance, 0.4% belongs to refinance. The total amount of assistance sanctioned by the Industrial Development Bank of India till the end of March 1999 from the date of its incorporation has been Rs. 1,07,264 crores.

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Friday, November 24, 2017

Industrial Finance Corporation Of India (IFCI)

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INDUSTRIAL FINANCE CORPORATION OF INDIA (IFCI)

Origin Of Industrial Finance Corporation of India

Industrial Finance Corporation of India, the first development bank in India was set up in July, 1, 1948 by passing a special Act as Industrial Finance Corporation of India Act 1948 in the parliament.

finance
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Capital Of Industrial Finance Corporation of India

Industrial finance corporation of India was started with the paid up share capital of Rs. 10 crore. The share capital was contributed by Reserve Bank of India, scheduled banks. Insurance companies, investment trust and co-operative banks. Industrial finance corporation of India can raise further capital with the help of issue of bonds, debentures, accepts deposits from public and advance from RBI.

Objectives Of Industrial Finance Corporation of India

The objective of Industrial finance corporation of India is to make medium and long-term credits more readily available to industrial concern in India particularly to the industries.

• Manufacturing, preservation or procession of goods

• The mining industry

• The shipping industries

• The hotel industries

• Generation or distribution of electricity or power

Functions Of Industrial Finance Corporation of India

The following are the main functions of the Industrial finance corporation of India:

1. Granting loans and advances.

2. Subscribing to the shares and debentures floated by industrial concern.

3. Guaranteeing loan taken from capital market.

4. Guarantee deferred payment in respect of import of capital goods by approved concerns.

5. Involves merchant banking activities.

6. Special assistance to women, SSI and backward area.

7. Consultancy for technical, marketing and financial.

Management Of Industrial Finance Corporation of India

Industrial finance corporation of India is managed by the board of directors which consist of 12 directors and one full time chairman. Some of the directors are nominated by IDBI, Central government, Scheduled Commercial Bank, Co-operative Banks and Insurance Companies.

Subsidiaries of Industrial Finance Corporation of India

Apart from the financial service to the industrial concern Industrial finance corporation of India promote some of the institutions:

• Tourism Finance Corporation of India Ltd.

• Management Development Institute.

• Risk Capital and Technology Finance Corporation Ltd.

• Technical consultancy organisation.

• Investment information and credit rating agency of India.

Working Result Of Industrial Finance Corporation of India

In 1970–71 loan sanctioned was Rs. 32.2 crore, in 1998 it was reached to Rs. 8684 crore. The total sanctioned by Industrial finance corporation of India as at the end of March 1999 stood at Rs. 47245 crore. Now-a- days Industrial finance corporation of India providing all kind of financial assistance to medium and large scale industrial sector in India.

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Thursday, November 23, 2017

Industrial Credit And Investment Corporation Of India (ICICI)

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INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA(ICICI)

Origin Of Industrial Credit and Investment Corporation of India

Industrial Credit and Investment Corporation of India was started in January, 5 1955 as a Public Ltd. Companies under the companies act. It is only development bank which has participation by foreign investors.

Capital Of Industrial Credit and Investment Corporation of India

Paid up share Capital of Industrial Credit and Investment Corporation of India is Rs. 25 crore, which was contributed by commercial banks, insurance companies, foreign investors from UK, USA, Germany, France and Japan.

finance
[Post Image Courtesy of DDPavumba at FreeDigitalPhotos.net]

Objectives Of Industrial Credit and Investment Corporation of India

The following are the major objectives of Industrial Credit and Investment Corporation of India:

1. To provide following are the major objectives of Industrial Credit and Investment Corporation of India.

2. To develop underwriting facilities, to help private sector units.

Functions Of Industrial Credit and Investment Corporation of India

The main functions of the Industrial Credit and Investment Corporation of India are as follows:

• Expansion of private sector industries.

• To give loans or guarantee of loans either in rupees or foreign currency.

• To underwrite shares and debentures and subscribes directory to share issued.

• To encourage and promote private capital.

• To promote private ownership of industrial investment alongwith the expansion of investment market.

Management Of Industrial Credit and Investment Corporation of India

Industrial Credit and Investment Corporation of India is managed by the board of directors which full time chairman. The directors are nominated by Government, Reserve Bank of India Foreign shareholders and IDBI.

Subsidiaries of Industrial Credit and Investment Corporation of India

Industrial Credit and Investment Corporation of India is one of the leading and wide range of financial service providers in India. The following are the subsidies of the Industrial Credit and Investment Corporation of India.

• ICICI Banking Corporation Ltd.

• ICICI Securities and Finance Company Ltd.

• ICICI Assets Management Company Ltd.

• ICICI Trust Ltd.

• ICICI Brokerage Service Ltd.

• ICICI Credit Corporation Ltd.

Working Result Of Industrial Credit and Investment Corporation of India

Industrial Credit and Investment Corporation of India provided financial assistance to industrial concerns has increased form 145.8 corer in 1961–62 to Rs. 34,220 crore in 1998–99 of the total loan sanctioned in 1998–99, 33% went to corporate finance, 29% to infrastructure, 19.5 each to oil gas and petrochemicals industries.

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Wednesday, November 22, 2017

Non-banking Financial Institutions In India

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Non-banking Financial Institutions In India

Non-banking Financial Institutions are providing fund based services such as investment, insurance, mutual funds and lending institutions.

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The Non-Banking Financial Institutions (NBFI) in India consists of the National Level Insitutions and the State Level Institutions.

The State Level Institutions consists of the State Finance Corporations (SFC) while theNational Level Institutions consists of the Finance Institutions and the Investment Institutions.

The Finance Institutions consists of the following:

1. Industrial Finance Corporation Of India (IFCI)

2. Industrial Development Bank Of India (IDBI)

3. Industrial Credit And Investment Corporation Of India (ICICI)

The Investment Institutions consists of the following:

1. The Life Insurance Corporation (LIC) Of India

2. The Unit Trust Of India (UTI)

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Tuesday, November 21, 2017

Non-banking Institutions In India

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Non-banking Institutions In India

Apart from the banking institutions, Non-banking institutions are also performing their function to improve the Indian financial system. Non-banking Institutions can be classified into the following two major categories:

finance
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1. Non-banking Financial Institutions.

2. Non-banking Non-financial Institutions.

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Monday, November 20, 2017

Foreign Banks in India

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Foreign Banks in India

RBI has been issuing licenses to various foreign banks to operate in India. 33 foreign and multinational banks are working in India today. The following are the major foreign banks play in Indian banking markets.

finance
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• ABN-Amro Bank N.V.

• Abu Dhabi Commercial Bank Ltd.

• American Express Bank Ltd.

• Antwerp Diamond Bank N.V.

• Arab Bangladesh Bank Ltd.

• Bank International Indonesia

• Bank of America NA

• Bank of Bahrain and Kuwait BSC

• Bank of Ceylon

• Barclays Bank PLC

• BNP Paribas

• Chinatrust Commercial Bank

• Chohund Bank

• Citibank N.A.

• Calyon Bank

• Credit Lyonnais

• Deutshe Bank AG

• Ing Bank N.V.

• JP Morgan Chase Bank

• Krung Thai Bank Public Company Ltd.

• Mashreq Bank psc

• MIZUHO Corporate Bank Ltd.

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Sunday, November 19, 2017

New Banks in Private Sector India

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New Banks in Private Sector India

In the year 2000, the government of India related entry level for private sector by reducing the government holding in nationalised banks from 51% to 33%. The RBI in 2003 thereby issued directions for establishment of private banks in India. Some of the new banks in private sector as follows:

finance
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• UTI Bank Ltd.

• Indus Ind Bank Ltd.

• ICICI Bank Ltd.

• Global Trust Bank Ltd.

• HDFC Bank Ltd.

• Centurian Bank Ltd.

• Bank of Punjab Ltd.

• Times Bank Ltd.

• IDBI Bank Ltd.

• Development Credit Bank Ltd.

• Kotak Mahindra Bank Ltd.

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Saturday, November 18, 2017

Private Sector Banks In India

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Private Sector Banks In India:

These comprise of foreign and private domestic banks. The foreign banks have market share of 8.5% of total deposits into banking industry and the domestic private banks have a share of 5.8% of total deposits of the banking industry. Presently 31 private domestic banks and 33 foreign banks are functioning in India.

finance
[Post Image Courtesy of BPlanet at FreeDigitalPhotos.net]

The following are the old generation private sector banks in India:

• Bharat Overseas Bank Ltd.

• City Union Bank Ltd.

• Development Credit Bank Ltd.

• Ing Vysya Bank Ltd.

• Karnataka Bank Ltd.

• Lord Krishna Bank Ltd.

• The Nainital Bank Ltd.

• SBI Coml. and Intl. Bank Ltd.

• Tamilnadu Mercantile Bank Ltd.

• The Bank of Rajasthan Ltd.

• The Catholic Syrian Bank Ltd.

• The Dhanalakshmi Bank Ltd.

• The Federal Bank Ltd.

• The Ganesh Bank of Kurndwad Ltd.

• The Jammu and Kashmir Bank Ltd.

• The Karur Vysys Bank Ltd.

• The Lakshmi Vilas Bank Ltd.

• The Ratnakar Bank Ltd.

• The Sangli Bank Ltd.

• The South Indian Bank Ltd.

• The United Wester Bank Ltd.

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Friday, November 17, 2017

The Indian Banking System

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The Indian Banking System:

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The Indian banking system has the Reserve Bank of India as the apex banking institution in the country.

The reserve bank of india then controls the schduled banks and the non-scheduled banks.

The scheduled banks consists of the state cooperative banks and the commercial banks while the non-scheduled banks is made up of the central cooperative banks and the other commercial banks as well.

Under the scheduled banks commercial banks, we have the Indian banks and the Foreign banks.

The Public sector banks and the Private sector banks are components of the Indian Banks.

Under the public sector banks in India, we have the State Banki Of India (SBI) and it subsidiaries, other nationalised Banks and the RRB.

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Thursday, November 16, 2017

State Bank of India (SBI)

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State Bank of India (SBI)

The largest Public sector bank of India which was created after nationalisation of Imperial Bank of India in 1955. It is now the largest commercial banks in India and in terms of branch largest in the world.

finance
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As part from the main State Bank of India, there are seven subsidiaries:

1. State Bank of Bikaner and Jaipur

2. State Bank of Hyderabad

3. State Bank of Indore

4. State Bank of Mysore

5. State Bank of Patiala

6. State Bank of Saurashtra

7. State Bank of Travancore

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Wednesday, November 15, 2017

Nationalised Banks In India

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Nationalised Banks In India

To use financial institutions as the instrument of promoting economic and social development in a more purposeful manner and to overcome the monopoly over financial resources, the government of India nationalised 20 commercial banks during the tenure of Prime Minister of Indira Gandhi.

finance
[Post Image Courtesy of Ambro at FreeDigitalPhotos.net]

On July 19, 1969, the first nationalisation of 14 banks took place with the following banks:

1. Bank of India

2. Union Bank of India

3. Bank of Baroda

4. Bank of Maharashtra

5. Punjab National Bank

6. Indian Bank

7. Indian Overseas Bank

8. Central Bank of India

9. Canara Bank

10. Syndicate Bank

11. United Commercial Bank

12. Allahabad Bank

13. United Bank of India

14. Dena Bank

On April 15, 1980 the second nationalisation took place with the following banks:

1. Andhra Bank

2. Corporation Bank

3. New Bank of India

4. Oriental Bank of Commerce

5. Punjab and Sind Bank

6. Vijaya Bank

In October 1993 the new bank of India was merged with Punjab National Bank, in March 2007, Bhart Overseas Bank merged with Indian Overseas Bank therefore, at present there are only 19 nationalised banks in the country besides the RBI.

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Tuesday, November 14, 2017

Scheduled Commercial Banks

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Scheduled Commercial Banks

Scheduled banks are those which are included in the second scheduled of Banking Regulation Act 1965 and others are non scheduled banks. To be included in the second scheduled of the Banking regulation act the bank full fill the following conditions:

finance
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• Must have paid up capital and reserves of not less than Rs. five lakh.

• It must also satisfy the RBI that its affairs are conducted in a manner.

• It is required to maintain a certain amount of reserves with the RBI.

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Monday, November 13, 2017

Commercial Banks Definition And Types

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Commercial Banks Definition And Types

Commercial Banks are the most important deposits mobilisation and disbursers of finance. Indian commercial banks are the oldest, biggest and fastest growing financial institutions. The main function of the commercial banks are accepting deposits and rendering loans to the public. Indian commercial banks can be classified into the following categories:

finance
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1. Scheduled Commercial Banks

2. Nationalised Banks

3. State Bank Of India (SBI)

4. Private Sector Banks In india

5. Foreign Banks In India

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Sunday, November 12, 2017

Banking Institutions

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Banking Institutions

Banking institutions are the key part of the economic development of the nation. Any country’s financial transaction should be properly arranged from investors to the needed industrialist. Banking institutions play a major role in the field of savings and investments of money from public and lending loans to the business concern.

finance
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Indian Banking institutions may be classified into two board categories :

(1) Commercial Banks

(2) Cooperative Banks

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Saturday, November 11, 2017

Financial Institutions In India

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Financial Institutions

Financial institutions are the major part of the Indian financial system. Hence, it is more importance than other component of the 1FS because all the components of IFS are directly or indirectly related with the financial institutions. Financial institutions are providing various services to the economic development with the help of issuing of the financial instruments.

finance
[Post Image Courtesy of JimboPhoto at FreeDigitalPhotos.net]

Financial institutions can be classified into banking and non-banking institutions. Now in India, all the financial institutions are systematically regulated and controlled by respective act.

The Banking financial institutions consists of commercial banks and cooperative banks while the non-banking institutions comprises of the non-banking financial institutions and the non-banking non-financial institutions.

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