India is home to a wide variety of financial institutions that are essential to the development of the national economy. These organizations meet the different financial needs of people and companies while also making a substantial contribution to the expansion of the economy as a whole.
Here are some of the major and prominent financial institutions in India
1. Reserve Bank of India (RBI)
The RBI is the central bank of India and is responsible for regulating the country’s monetary policy. It was established in 1935 and has its headquarters in Mumbai. The RBI also plays a crucial role in maintaining financial stability in the country.
2. National Bank for Agriculture and Rural Development (NABARD)
The NABARD was established in 1982 with the aim of promoting sustainable rural development in the country. It provides financial assistance to farmers, rural cooperatives, and other rural institutions. NABARD also plays a crucial role in promoting rural entrepreneurship and supporting infrastructure development in rural areas. Some important points are –
a) The importance of institutional credit in boosting the rural economy has been clear to the Government of India right from its early stages of planning. Therefore, the Reserve Bank of India (RBI) at the instance of the Government of India, constituted a Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) to look into these very critical aspects.
The Committee was formed on 30 March 1979, under the Chairmanship of Shri B. Sivaraman, former Member of the Planning Commission, Government of India.
b) NABARD came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC) with its headquarters in Mumbai. Set up with an initial capital of Rs.100 crore, its’ paid-up capital stood at Rs.17,080 crore as on 31 March 2022.
c) NABARD was set up with a mission to promote sustainable and equitable agriculture and rural development through participative financial and non-financial interventions, innovations, technology, and institutional development for securing prosperity.
Read More: What is Inflation and Deflation – Its Measurements, Stages and Causes.
3. Securities and Exchange Board of India (SEBI)
The Securities and Exchange Board of India was constituted as a non-statutory body on April 12, 1988, through a resolution of the Government of India. The Securities and Exchange Board of India was established as a statutory body in the year 1992 and the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) came into force on January 30, 1992.
a) The Securities and Exchange Board of India (SEBI) headquarter is located in Mumbai.
b) The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as “…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”.
Read More: How to Prepare and Crack Banking Examination on the First Attempt
4. Insurance Regulatory and Development Authority of India (IRDAI)
Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry.
The IRDA was incorporated as a statutory body in April 2000 under section 4 of the IRDAI Act 1999.
The key objectives of the IRDA include the promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums while ensuring the financial security of the insurance market.
IRDAI headquarters is located in Hyderabad.
Objectives:
a) To protect the interest of and secure fair treatment to policyholders.
b) To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long-term funds for accelerating the growth of the economy.
c) To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates.
d) To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery.
e) To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players.
f) To take action where such standards are inadequate or ineffectively enforced.
g) To bring about the optimum amount of self-regulation in the day-to-day working of the industry consistent with the requirements of prudential regulation.
Read More: UPSC – Historical Background of UPSC
5. Pension Fund Regulatory & Development Authority (PFRDA)
The Government of India had, in the year 1999, commissioned a national project titled “OASIS” (an acronym for Old Age Social & Income Security) to examine policy related to old age income security in India. Based on the recommendations of the OASIS report, the Government of India introduced a new Defined Contribution Pension System for the new entrants to Central/State Government service, except to Armed Forces, replacing the existing system of Defined Benefit Pension System.
On 23rd August 2003, the Interim Pension Fund Regulatory & Development Authority (PFRDA) was established through a resolution by the Government of India to promote, develop and regulate the pension sector in India. The PFRDA is ensuring the orderly growth and development of the pension market.
a) The Pension Fund Regulatory & Development Authority Act was passed on 19th September 2013, and the same was notified on 1st February 2014. PFRDA is regulating NPS, subscribed by employees of Govt. of India, State Governments, and by employees of private institutions/organizations & unorganized sectors.
b) PFRDA was started with a vision to be a model Regulator for the promotion and development of an organized pension system to serve the old age income needs of people on a sustainable basis.
6. Industrial Development Bank of India (IDBI)
The IDBI is a development finance institution that was established in 1964 to promote industrial development in the country. It offers a wide range of financial products and services to support businesses in various sectors, including infrastructure, manufacturing, and services.
Read More: Puzzle: What Was The Money in My Pocket
7. Life Insurance Corporation of India (LIC)
The LIC is the largest life insurance company in India and was established in 1956. It offers a wide range of life insurance products to individuals and has a significant presence in rural areas of the country. The LIC also invests in various sectors of the economy and plays a crucial role in supporting the country’s economic growth.
8. State Bank of India (SBI)
The SBI is the largest public sector bank in India and is headquartered in Mumbai. It was founded in 1806 and has a network of over 22,000 branches and 58,000 ATMs across the country. The bank offers a wide range of financial products and services to individuals, businesses, and other institutions.
In conclusion, there are many different institutions serving the many financial requirements of both individuals and companies in the vast and diversified Indian financial institution environment. These organizations are essential to the growth, development and regulation of financial services of the nation’s economy.
Read More:
