Reserve Bank of India
01. Central
bank is a bank which acts as a banker to the government; has monopoly of
note issue and controls the entire banking system
02. RBI is the central bank in India
03. RBI was established by an act of Parliament in 1934
04. The initial share capital for RBI was Rs. 5 crores
05. RBI was nationalized under (transfer of public ownership) act 1948
06. Its affairs are regulated by central board of directors
07. It has four regional centres at Mumbai, Kolkatta, Chennai and Delhi
08. The central office of the bank is at Mumbai
09. RBI is note issuing authority; banker, agent and financial adviser
to the government; custodian of cash reserves of banks; custodian of nation’s
reserves of foreign exchange; lender of the last resort; controller of credit
etc.
10. Currency
notes other than one rupee notes are issued by RBI
11. RBI has credit control – regulation of cash reserves of commercial
banks, regulating the flow of credit, qualitative control and open market
operations
12. Handles all government transactions
13. It is a banker’s bank
14. It maintains the exchange rate for the Indian rupee; hold the
country’s reserves in foreign currencies and administration of the exchange
management regulations
Scheduled commercial banks
15. They are included in the second schedule to the RBI act, 1934
16. They can avail facilities from RBI – accommodation in the form of
refinance and loans and advances; remittance facility at concessive rates as
also grant of authorized dealer’s license to handle foreign exchange business.
17. Have paid up capital and reserves – aggregate value of not less
than Rs. 5 lakhs.
18. It can be a state cooperative bank or company registered under the
companies act
19. Scheduled commercial banks are – State Bank of India and
associates, nationalized banks, private sector banks, regional rural banks,
urban cooperative banks, state cooperative banks
20. Scheduled Commercial Banks to maintain CRR up to 3 percent of their
demand and time liabilities which can go
upto a maximum of 15 percent
Public sector banks
21. State Bank of India and associate banks
22. Nationalized banks – 20
23. Banks were nationalized on 19.07.1969
- fourteen banks
24. Nationalised banks are: Central Bank of
India, Bank of India, Bank of Baroda, Allahabad Bank, Union Bank of India,
United Commercial Bank, Indian Overseas Bank, Indian Bank, Canara Bank,
Syndicate Bank, Punjab National Bank, United Bank of India, Dena Bank, Bank of
Maharashtra, Andhra Bank, Corporation Bank, Oriental Bank of Commerce, Punjab
and Sind Bank and Vijaya Bank. (19) and Industrial Development Bank of India =
20
25. Industrial Finance Corporation of India is a development bank
26. Its operations are project finance, financial services and
corporate advisory services
27. Industrial Investment Bank of India was set up in 1971 for
rehabilitation of sick industrial companies.
28. Reconstituted as Industrial Reconstruction Bank of India in 1985 under
the IRBI act, 1984
29. IRBI was incorporated in March, 1997 as Industrial Investment Bank of
India Limited under the companies act, 1956
30. SIDBI was set up in 1990 under an act of parliament (SIDBI) act 1989 as
a wholly owned subsidiary of IDBI
31. It is the principal financial institution for promoting and financing
development of industry in the small scale sector
32. 14 banks were nationalized on 19th July 1969
33. New private sector banks were formed as per RBI guidelines 1993
34. They were registered under companies act 1956
35. They were included in second schedule to the RBI act, 1934
36. The minimum paid up capital of a new bank shall be Rs. 100 crores
37. Priority sector lending norms should be adopted by these banks
38. The banks are governed by the provisions of the RBI act, 1934, the
Banking regulation act, 1949 and other relevant statutes.
39. They are not allowed to set up a subsidiary or mutual fund for at
least three years after their establishment
40. Regional Rural banks were established on 2.10.1975
41. To develop rural economy by providing credit and other facilities for
the purpose of development of agriculture, trade, commerce, industry and other
productive activities in rural areas, particularly to the small and marginal
farmers, agricultural laborers, artisans and small entrepreneurs
42. They are scheduled commercial banks
43. Included in second schedule to RBI act, 1934
44. The gross NPAs of regional rural banks should not be more than 10
percent.
45. The banks should comply with the IRDA regulations for acting as a
corporate agent
46. The authorized capital of a regional rural bank is Rs. 5 crore and
issued/paid up capital minimum of Rs. 25 lakhs and maximum of Rs. 100 lakhs
47. The prescribed minimum level of share holding should be 51
percent for sponsor institutions
48. Local area banks were established on 24.08.1996
49. They were set up in the private sector to cater to credit needs of the
local people and to provide efficient and competitive financial intermediation
services in their area of operation
50. They are required to observe the priority sector lending target of 40
percent of net bank credit, as applicable to other domestic banks, out of which
25 percent shall be given to weaker sections
51. They were registered as public limited companies as per Companies
act, 1956.
52. They were licensed as per Banking regulation act 1949
53. Included in the second schedule to RBI act, 1934
54. They have the minimum paid up capital of Rs. 5 crore
55. Promoters’ contribution to be Rs 2 crores.
56. They can be promoted by individuals, corporate entities, trusts and
societies
57. The area of operation of local area bank shall be a maximum of three
geographically contiguous districts.
58. To comply with the provisions of the Banking Regulation act, 1949, RBI
act, 1934 and other statutes
59. They are subject to prudential norms, accounting policies and other
policies laid down by RBI
60. NBFCs consist of eight categories – each one of them conducting a
particular business activity
61. Equipment leasing company undertakes equipment leasing or the
financing of such activity
62. Hire purchase finance company is engaged in hire purchase transaction
or the financing of such transactions
63. Loan company provides finance by making loans or advances or otherwise
for any activity other than its own.
64. The main business of any investment company is the acquisition of
securities and trading in such securities to earn a profit
65. Mutual Benefit Financial Company are the companies which are notified
by the Central Government under section 620 A of the companies act 1956
66. Miscellaneous non banking company – the principal business of such
company is managing, conducting or supervising as a promoter, foreman or agent
of any transaction or arrangement by which the company enters into an agreement
67. Housing finance company – acquisition of construction of houses
including the acquisition or development of plots of land
68. Residuary non banking company – receives deposits 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 manner.
69. Effective 4.3.2003, NBFCs are not allowed to offer more than 11
percent per annum interest on public deposit
70. No official agency guarantees or undertakes the repayment of deposits
or interest
71. NBFC deposits are uninsured and not backed by security
72. They are not allowed to offer more than 2 percent brokerage
73. They are not allowed to offer gifts or incentives
74. All depositors must be issued proper receipts for deposits
75. NBFCs having track record of less than 2 years is not eligible to
accept public deposits
76. NBFC seeking public deposit should be a profit making company
Life Insurance corporation of India
77. LIC was established in 1956 as wholly owned corporation of the
Government of India
78. LIC came into being from 1.9.1956
79. To spread life insurance across the country, particularly in the rural
areas and to the socially and economically backward classes.
80. Besides insurance business, LIC in pursuance of Government of India
guidelines invests a major portion of its funds in central and state government
securities and other approved securities including special deposits with
Government of India.
81. Extends assistance to develop infrastructure facilities like housing,
rural electrification, water supply and sewerage and provides financial
assistance to the corporate sector by way of term loans, underwriting off and
direct subscription to shares and
debentures.
82. It also provides resource support to financial institutions through
subscription to their shares/bonds and by way of term loans.
83. UTI - the largest mutual fund
organization in India was set up in 1964 by an act of parliament.
84. Established to fulfill the objectives of mobilizing of retail savings,
investing them in the capital market and passing on the benefits accrued from
the acquisition, holding, management and disposal of securities to the small
investors.
85. General Insurance Corporation of India was formed and registered on
January, 1973 under the insurance act 1938 in accordance with the provisions of
the General Insurance Business (Nationalization) act, 1972
86. The New India Assurance Company Limited; The United India Insurance
Company Limited, The Oriental Insurance Company Limited and National Insurance
Company Limited
87. Need based insurance companies to meet the diverse and emerging needs
of various segments of society and provides financial assistance to industrial
projects by way of term loans, short term loans and direct subscription to
shares/debentures of new and existing industrial enterprise.
88. NABARD was established in 1982 under an act of parliament
89. It is the apex development bank for promotion and development bank for
promotion and development of agriculture, small scale industries, cottage and
village industries, handicrafts and other rural crafts and other allied
economic activities in rural areas
90. It serves as an apex financing agency for the institutions providing
investment and production credit for promoting the various developmental
activities in rural areas
91. Takes measures towards institution building for improving absorptive
capacity of the credit delivery system, including monitoring, formulation of
rehabilitation schemes, restricting of credit institutions, training of
personnel etc.
92. Coordinates the rural financing activities of all institutions engaged
in developmental work at the field level and maintains liaison with Government
of India, state governments, RBI and other national level institutions
concerned with policy formulation
93. Export and Import Bank of India
- EXIM bank was established in 1982
94. Public sector financial institution created by an act of Parliament
vide - the Export and Import Bank of
India act 1981.
95. Principal financial institution for – financing, facilitating and
promoting India’s foreign trade
96. They provide Indian exporters with investment loans, export product
development loans, loans for export marketing, pre shipment credit, suppliers
credit for exports or projects and advisory services.
97. Equity finance available for acquiring of setting up companies abroad
for manufacturing, marketing, trading etc.
98. It offers buyers credit and lines of credit to foreign governments and
banks
99. It has facilities to provide advance information and business advisory
services to Indian exporters in respect of multilaterally funded projects
overseas.
100. It offers advisory and information services to exporters and sponsors
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