Dr.

Ram Manohar Lohiya National Law University

ECONOMICS
FINAL DRAFT 2014
TOPIC: - SOURCES OF INSTITUTIONAL
FINANCE IN INDIA AND THEIR ROLE IN
ECONOMIC DEVELOPMENT
Submitted to: -

Submitted By: -

Dr. Mitali Tiwari

Lakshya Dheer

Assistant Professor (Economics)

Roll No. 72, II Semester

RMLNLU, Lucknow

RMLNLU, Lucknow

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TABLE OF CONTENTS

Table of Contents
TABLE OF CONTENTS.................................................................................................................2
ACKNOWLEDGEMENT...............................................................................................................3
INTRODUCTION...........................................................................................................................4
NATIONAL LEVEL AND STATE LEVEL FINANCIAL INSTITUTIONS.................................6
1.

NATIONAL LEVEL FINANCIAL INSTITUTIONS..........................................................6

2.

STATE LEVEL FINANCIAL INSTITUTIONS................................................................10

INDIAN FINANCIAL INSTITUTIONS IN DETAIL..................................................................14

ROLE OF FINANCIAL INSTITUTIONS IN ECONOMIC DEVELOPMENT..........................17
BIBLIOGRAPHY..........................................................................................................................22

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ACKNOWLEDGEMENT

I would like to take this opportunity to thank Dr. Mitali Tiwari [Assistant
Professor (Economics)], for giving me this topic. I would also like to thank her for
her guidance and help throughout this research project.
I would further like to thank the library of our college, and its staff, which helped
me to reach to the exact books, required for this research and gave an environment
which helped me research.
I would like to thank the people at Samsung, Microsoft, Wikipedia, Google,
magazines, and the books that I referred to which helped me to complete this
project.
Lastly, I am thankful to my friends, parents and especially my seniors for their
support and suggestions in the project.
Thank You.

Lakshya Dheer

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INTRODUCTION

Financial sector plays an indispensable role in the overall development of a country. The most
important constituent of this sector is the financial institutions, which act as a conduit for the
transfer of resources from net savers to net borrowers, that is, from those who spend less than
their earnings to those who spend more than their earnings. The financial institutions have
traditionally been the major source of long-term funds for the economy. These institutions
provide a variety of financial products and services to fulfil the varied needs of the commercial
sector. Besides, they provide assistance to new enterprises, small and medium firms as well as to
the industries established in backward areas. Thus, they have helped in reducing regional
disparities by inducing widespread industrial development.
A financial institution is an establishment that conducts financial transactions such as
investments, loans and deposits. Almost everyone deals with financial institutions on a regular
basis. Everything from depositing money to taking out loans and exchanging currencies must be
done through financial institutions.
The Government of India, in order to provide adequate supply of credit to various sectors of the
economy, has evolved a well-developed structure of financial institutions in the country. These
financial institutions can be broadly categorised into All India institutions and State level
institutions, depending upon the geographical coverage of their operations. At the national level,
they provide long and medium term loans at reasonable rates of interest. They subscribe to the
debenture issues of companies, underwrite public issue of shares, guarantee loans and deferred
payments, etc. Though, the State level institutions are mainly concerned with the development of
medium and small scale enterprises, but they provide the same type of financial assistance as the
national level institutions.
Financial institution is an establishment that focuses on dealing with financial transactions, such
as investments, loans and deposits etc. In simple words we can say that the financial institution is
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an institution which provides financial services for its clients or members. Most financial
institutions are regulated by the government. Almost all money related transactions, from
depositing money to taking out loans and exchange currencies must be done through financial
institutions. Almost all financial institutions are regulated by the government. When it comes to
India, The RBI (Reserve Bank of India) takes care of these financial institutions in most of the
cases. Some of the financial institutions of India are RBI, Credit Rating Agencies, Commercial
Banks, SEBI, Specialized Financial Institutions and Insurance Companies.
According to Economic Survey 2012-131, at the end of March 2012, there were four institutions
regulated by Reserve Bank of India as all-India Financial Institutions:
o
o
o
o

Export - Import Bank of India (Exim Bank)

National Bank for Agriculture and Rural Development (NABARD)
Small Industries Development Bank of India (SIDBI)
National Housing Bank (NHB)

1 http://indiabudget.nic.in/es2012-13/echap-05.pdf
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NATIONAL LEVEL AND STATE LEVEL FINANCIAL

INSTITUTIONS

1. NATIONAL LEVEL FINANCIAL INSTITUTIONS2

A wide variety of financial institutions have been set up at the national level. They cater to the
diverse financial requirements of the entrepreneurs. They include all India development banks
like IDBI, SIDBI, IFCI Ltd, IIBI; specialised financial institutions like IVCF, ICICI Venture
Funds Ltd, TFCI; investment institutions like LIC, GIC, UTI; etc.
A) All-India Development Banks (AIDBs):- Includes those development banks which
provide institutional credit to not only large and medium enterprises but also help in
promotion and development of small scale industrial units.
o Industrial Development Bank of India (IDBI):- was established in July 1964 as
an apex financial institution for industrial development in the country. It caters to
the diversified needs of medium and large scale industries in the form of financial
assistance, both direct and indirect. Direct assistance is provided by way of
project loans, underwriting of and direct subscription to industrial securities, soft
loans, technical refund loans, etc. While, indirect assistance is in the form of
refinance facilities to industrial concerns.
o Industrial Finance Corporation of India Ltd (IFCI Ltd):- was the first
development finance institution set up in 1948 under the IFCI Act in order to
pioneer long-term institutional credit to medium and large industries. It aims to
provide financial assistance to industry by way of rupee and foreign currency
loans, underwrites/subscribes the issue of stocks, shares, bonds and debentures of
2 http://business.gov.in/business_financing/financial_institutions.php
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industrial concerns, etc. It has also diversified its activities in the field of
merchant

banking,

syndication

of

loans,

formulation

of

rehabilitation

programmes, assignments relating to amalgamations and mergers, etc.

o Small Industries Development Bank of India (SIDBI):- was set up by the
Government of India in April 1990, as a wholly owned subsidiary of IDBI. It is
the principal financial institution for promotion, financing and development of
small scale industries in the economy. It aims to empower the Micro, Small and
Medium Enterprises (MSME) sector with a view to contributing to the process of
economic growth, employment generation and balanced regional development.
o Industrial Investment Bank of India Ltd (IIBI):- was set up in 1985 under the
Industrial reconstruction Bank of India Act, 1984, as the principal credit and
reconstruction agency for sick industrial units. It was converted into IIBI on
March 17, 1997, as a full-fledged development financial institution. It assists
industry mainly in medium and large sector through wide ranging products and
services. Besides project finance, IIBI also provides short duration non-project
asset-backed financing in the form of underwriting/direct subscription, deferred
payment guarantees and working capital/other short-term loans to companies to
meet their fund requirements.
B) Specialised Financial Institutions (SFIs):- are the institutions which have been set up to
serve the increasing financial needs of commerce and trade in the area of venture capital,
credit rating and leasing, etc.
o IFCI Venture Capital Funds Ltd (IVCF):- formerly known as Risk Capital &
Technology Finance Corporation Ltd (RCTC), is a subsidiary of IFCI Ltd. It was
promoted with the objective of broadening entrepreneurial base in the country by
facilitating funding to ventures involving innovative product/process/technology.
Initially, it started providing financial assistance by way of soft loans to promoters
under its Risk Capital Scheme. Since 1988, it also started providing finance
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under 'Technology Finance and Development Scheme' to projects for
commercialisation of indigenous technology for new processes, products, market
or services. Over the years, it has acquired great deal of experience in investing in
technology-oriented projects.
o ICICI Venture Funds Ltd: - formerly known as Technology Development &
Information Company of India Limited (TDICI), was founded in 1988 as a joint
venture with the Unit Trust of India. Subsequently, it became a fully owned
subsidiary of ICICI. It is a technology venture finance company, set up to sanction
project finance for new technology ventures. The industrial units assisted by it are
in the fields of computer, chemicals/polymers, drugs, diagnostics and vaccines,
biotechnology, environmental engineering, etc.
o Tourism Finance Corporation of India Ltd. (TFCI):- is a specialised financial
institution set up by the Government of India for promotion and growth of tourist
industry in the country. Apart from conventional tourism projects, it provides
financial assistance for non-conventional tourism projects like amusement parks,
ropeways, car rental services, ferries for inland water transport, etc.
C) Investment Institutions: - are the most popular form of financial intermediaries, which
particularly catering to the needs of small savers and investors. They deploy their assets
largely in marketable securities.
o Life Insurance Corporation of India (LIC):- was established in 1956 as a
wholly-owned corporation of the Government of India. It was formed by the Life
Insurance Corporation Act, 1956, with the objective of spreading life insurance
much more widely and in particular to the rural area. It also extends assistance for
development of infrastructure facilities like housing, rural electrification, water
supply, sewerage, etc. In addition, it extends resource support to other financial
institutions through subscription to their shares and bonds, etc. The Life Insurance
Corporation of India also transacts business abroad and has offices in Fiji,
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Mauritius and United Kingdom. Besides the branch operations, the Corporation
has established overseas subsidiaries jointly with reputed local partners in
Bahrain, Nepal and Sri Lanka.
o Unit Trust of India (UTI):- was set up as a body corporate under the UTI Act,
1963, with a view to encourage savings and investment. It mobilises savings of
small investors through sale of units and channelizes them into corporate
investments mainly by way of secondary capital market operations. Thus, its
primary objective is to stimulate and pool the savings of the middle and low
income groups and enable them to share the benefits of the rapidly growing
industrialisation in the country. In December 2002, the UTI Act, 1963 was
repealed with the passage of Unit Trust of India (Transfer of Undertaking and
Repeal) Act, 2002, paving the way for the bifurcation of UTI into 2 entities, UTI-I
and UTI-II with effect from 1st February 2003.
o General Insurance Corporation of India (GIC):- was formed in pursuance of
the General Insurance Business (Nationalisation) Act, 1972(GIBNA), for the
purpose of superintending, controlling and carrying on the business of general
insurance or non-life insurance. Initially, GIC had four subsidiary branches,
namely, National Insurance Company Ltd, The New India Assurance Company
Ltd, The Oriental Insurance Company Ltd and United India Insurance Company
Ltd. But these branches were delinked from GIC in 2000 to form an association
known as 'GIPSA' (General Insurance Public Sector Association).

2. STATE LEVEL FINANCIAL INSTITUTIONS3

Several financial institutions have been set up at the State level, which supplement the financial
assistance provided by the all India institutions. They act as a catalyst for promotion of
3 http://business.gov.in/business_financing/financial_institutions.php
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investment and industrial development in the respective States. They broadly consist of State
financial corporations and State industrial development corporations.
A) State Financial Corporations (SFCs) :- are the State-level financial institutions which
play a crucial role in the development of small and medium enterprises in the concerned
States. They provide financial assistance in the form of term loans, direct subscription to
equity/debentures, guarantees, discounting of bills of exchange and seed/ special capital,
etc. SFCs have been set up with the objective of catalysing higher investment, generating
greater employment and widening the ownership base of industries. They have also
started providing assistance to newer types of business activities like floriculture, tissue
culture, poultry farming, commercial complexes and services related to engineering,
marketing, etc. There are 18 State Financial Corporations (SFCs) in the country:-

1. Andhra Pradesh State Financial Corporation (APSFC)

2. Himachal Pradesh Financial Corporation (HPFC)
3. Madhya Pradesh Financial Corporation (MPFC)
4. North Eastern Development Finance Corporation (NEDFI)
5. Rajasthan Finance Corporation (RFC)
6. Tamil Nadu Industrial Investment Corporation Limited
7. Uttar Pradesh Financial Corporation (UPFC)
8. Delhi Financial Corporation (DFC)
9. Gujarat State Financial Corporation (GSFC)
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10. The Economic Development Corporation of Goa ( EDC)

11. Haryana Financial Corporation ( HFC )
12. Jammu & Kashmir State Financial Corporation ( JKSFC)
13. Karnataka State Financial Corporation (KSFC)
14. Kerala Financial Corporation ( KFC )
15. Maharashtra State Financial Corporation (MSFC )
16. Odisha State Financial Corporation (OSFC)
17. Punjab Financial Corporation (PFC)
18. West Bengal Financial Corporation (WBFC)

B) State Industrial Development Corporations (SIDCs) :- have been established under

the Companies Act, 1956, as wholly-owned undertakings of State Governments. They
have been set up with the aim of promoting industrial development in the respective
States and providing financial assistance to small entrepreneurs. They are also involved in
setting up of medium and large industrial projects in the joint sector/assisted sector in
collaboration with private entrepreneurs or wholly-owned subsidiaries. They are
undertaking a variety of promotional activities such as preparation of feasibility reports;
conducting industrial potential surveys; entrepreneurship training and development
programmes; as well as developing industrial areas/estates. The State Industrial
Development Corporations in the country are:1. Assam Industrial Development Corporation Ltd (AIDC)
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2. Andaman & Nicobar Islands Integrated Development Corporation Ltd (ANIIDCO)

3. Andhra Pradesh Industrial Development Corporation Ltd (APIDC)
4. Bihar State Credit and Investment Corporation Ltd. (BICICO)
5. Chhattisgarh State Industrial Development Corporation Limited (CSIDC)
6. Goa Industrial Development Corporation
7. Gujarat Industrial Development Corporation (GIDC)
8. Haryana State Industrial & Infrastructure Development Corporation Ltd. (HSIIDC)
9. Himachal Pradesh State Industrial Development Corporation Ltd. (HPSIDC)
10. Jammu and Kashmir State Industrial Development Corporation Ltd.
11. Karnataka State Industrial Investment & Development Corporation Ltd. (KSIIDC)
12. Kerala State Industrial Development Corporation Ltd. (KSIDC)
13. Maharashtra Industrial Development Corporation (MIDC)
14. Manipur Industrial Development Corporation Ltd. (MANIDCO)
15. Nagaland Industrial Development Corporation Ltd. (NIDC)
16. Odisha Industrial Infrastructure Development Corporation

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17. Omnibus Industrial Development Corporation (OIDC), Daman & Diu and Dadra &
Nagar Haveli
18. Pudhucherry Industrial Promotion Development and Investment Corporation Ltd.
(PIPDIC)
19. Uttar Pradesh State Industrial Development Corporation
20. Punjab State Industrial Development Corporation Ltd. (PSIDC)
21. Rajasthan State Industrial Development & Investment Corporation Ltd. (RIICO)
22. Sikkim Industrial Development & Investment Corporation Ltd. (SIDICO)
23. Tamil Nadu Industrial Development Corporation Ltd. (TIDCO)
24. State Infrastructure & Industrial Development Corporation of Uttaranchal Ltd. (SIDCUL)
25. Tripura Industrial Development Corporation Ltd. (TIDC)

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INDIAN FINANCIAL INSTITUTIONS IN DETAIL

A) Reserve Bank of India (RBI)

RBI is the central bank of India, which was established in 1st April 1935 accordance with the
provisions of the Reserve Bank of India Act, 1934. All of us know that it issues currency notes.
Apart from this, it acts as the regulatory authority with regard to the functioning of the various
commercial bank and the other financial institutions in India. It also formulates different rates
and policies for the overall improvement of the banking sector.
B) Commercial Banks
Both public and private sector banks come under this category. The commercial Banks are
usually categorized into Scheduled Commercial Banks and Unscheduled Commercial Banks. So,
we can divide commercial banks as under,
o

Scheduled Commercial Banks: Those banks that have been listed under the Second
Schedule of the Reserve Bank of India Act, 1934.
o

Public Sector Banks: Those banks in which majority of stake is held by the
government. All nationalized banks (for which IBPS conducts common exam)
and SBI comes under this category.

Private Sector Banks: Those banks in which majority of stake is held by private
individuals. Axis Bank, ICICI Bank, HDFC Bank etc., come under this category.

Nonscheduled commercial banks: The Banks which are not included in the Second
Schedule of RBI Act 1934.

C) Credit Rating Agencies:

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The main aim of Credit Rating Agencies is to assess the condition of the financial sector and to
find out avenues for more improvement. CIBIL, Credit Environment India, CRISIL, SME Rating
Agency of India, ICRA Ltd, High Mark Credit Information Services, Equifax and Experian are
the examples of the Credit Rating Agencies of India.

Some of the services offered by Credit Rating Agencies are,

o

Operation Up gradation

Training to Employees

Scrutinize New Projects and find out the weak sections in it

Rate different sectors.

D) SEBI
The SEBI (Securities and Exchange Board of India) is the regulator for the securities market in
India. It was established in the year 1988 and given statutory powers on 12 April 1992 through
the SEBI Act, 1992.
Specialized Financial Institutions
Specialized Financial Institutions in India make an important segment amongst all the financial
institutions in India. The Indian financial institutions are governed under the regulations of both
the state and central governments. The governments on the other hand use them in structuring the
planning and development of the country. The main target of Specialized Financial Institutions is
to provide assistance to the different sectors and thereby cause overall development of the Indian
economy.
Some of the Specialized Financial Institutions of India are
o

Export-Import Bank of India (EXIM Bank): It is the premier export finance institution
of the country, established in 1982 under the Export-Import Bank of India Act 1981.

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o

Small Industries Development Bank of India: It is an independent financial institution

aimed to aid the growth and development of micro, small and medium-scale enterprises
(MSME) in India. Set up on April 2, 1990

National Housing Bank: It is a state owned bank and regulation authority in India,
created on July 8, 1988[2] under section 6 of the National Housing Bank Act (1987).

Board for Industrial & Financial Reconstruction: It is an agency of the government of

India, part of the Department of Financial Services of the Ministry of Finance. It was
established in 1987.

National Bank for Agriculture and Rural Development (NABARD): National Bank
for Agriculture and Rural Development (NABARD) is an apex development bank in
India having headquarters based in Mumbai (Maharashtra)4 and other branches are all
over the country. It was established on 12 July 1982 by a special act by the parliament
and its main focus was to uplift rural India by increasing the credit flow for elevation of
agriculture & rural non-farm sector and completed its 25 years on 12 July 2007.5

E) Insurance Companies
Insurance companies are the companies of risk management. They provide us the equitable
transfer of the risk of a loss, from one entity to another in exchange for payment.

"Nabard

Rural

Innovation

Fund

Agriculture

and

Industry

Survey",

http://Agricultureinformation.com
5 https://www.nabard.org
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ROLE OF FINANCIAL INSTITUTIONS IN ECONOMIC

DEVELOPMENT
Financial intermediaries perform an important role in the development process, particularly
through their role in allocating resources to their most productive uses. More efficient financial
markets help economic agents hedge, trade, pool risk, raising investment and economic growth.
Financial institutions provide consumers and commercial clients with a wide range of services
and different types of banking products. The importance of financial institutions to the wider
economy is apparent during market booms and recessions. During economic upturns, financial
institutions provide the financing that drives economic growth, and during recessions, banks
curtail lending. This can exacerbate a country's financial problems and draw attention to the fact
that economies are heavily reliant upon the financial sector.
The importance of financial institutions and passed legislation made it easier for more people to
obtain products and services from these entities. In many countries, banks are encouraged or
even compelled to lend money to home buyers and small businesses. Readily available loans
encourage consumer spending, and this spending leads to economic growth. There is now a clear
realization that sustainable development will not and cannot be achieved by governments acting
alone. In this context, the expertise of the private sector plays an important role.
Role
1- Motivating the Financial Sector
In general Financial Institutions will only use their resources for the benefit of their interest - i.e.
help to generate profits, either directly or indirectly. The considerations are important because
with the help of growth of institutions there is increase in the investment business in the country.
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With existence of more institutions there will be motivation in the financial sector to perform
better and take steps for the strengthening of country. This will leads towards the prosperity in
the country by eliminating the risk.
2- Development & Introduction of Niche strategies
With the development & introduction of FIs we can see the strategies for different sector
especially for the niche sector of the country. The institutions develop & spread knowledge about
financial products to assist the efficiency for the achievement of sustainable economic growth. In
2003 union bank introduce the 'RAAS Financing Scheme' for the small community of
Gujranwala division engaged in surgical industry. For this approach to offer attractive
opportunities for the financial help for growing & profitable market segment. SME bank
introduced Express loan scheme for niche sector as well in 2004-05.
3- Financing the Small Scale Sector
Credit is the prime input for sustained growth of small scale sector and its availability is thus a
matter of great importance. The provision of short term credit/working capital to small
enterprises for its day to day requirement for purchasing raw material and other inputs like
electricity, water, etc. and for payment of wages and salaries; and long term credit for creation of
fixed assets like land, building, plant and machinery help the SME sector to perform better.
4- Tailor made schemes
With the help of different institutions several tailor made schemes for the betterment of economic
sector of the country are available at door steps. Introduction of country wide schemes cannot
give expected growth. As discussed earlier RAAS Financing Scheme, Express loan, Green
tractor scheme, Yellow Cap Scheme etc showed extensive results for the betterment of growth in
the country.
5- Development and Support Services
With the existence of different institutions development and support services in the form of loans
and grants to different agencies working for the promotion and development of industries like
associations, chambers are available. The main example of import of thermo bonded machines
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for the production of thermo bonded footballs is possible with the help of banks in Sialkot. Other
support was observed in rural industrialization, human resource development, technology upgradation and marketing & promotion in the country.
6- Micro finance Credit
With the development of different institutions like KHUSHHALI Bank, First Microfinance
Bank, Tameer Micro finance etc Micro Credit is available to the most poorest sector of country.
This proactive step to facilitate growth of the micro finance sector in country is very
commendable. It is envisaged to emerge as the apex community by providing a complete range
of financial and non-financial services such as loan funds, grant support, equity and institution
building support.
7- Introduction of more Institutions
Banking system and the Financial Institutions play very significant role in the economy. First and
foremost is in the form of catering to the need of credit for all the sections of society. The
modern economies in the world have developed primarily by making best use of the credit
availability in their systems. An efficient banking system must cater to the needs of high end
investors by making available high amounts of capital for big projects in the industrial,
infrastructure and service sectors. At the same time, the medium and small ventures must also
have credit available to them for new investment and expansion of the existing units. Rural
sector in a country like Pakistan, India can grow only if cheaper credit is available to the farmers
for their short and medium term needs. This expected potential help the investors for the
introduction of more FIs in the country.
8- Mopping up Savings
The banks and the financial institutions also cater to another important need of the society i.e.
mopping up small savings at reasonable rates with several options. The common man has the
option to park his savings under a few alternatives, including the small savings schemes
introduced by the government from time to time and in bank deposits in the form of savings
accounts, recurring deposits and time deposits. Another option is to invest in the stocks or mutual
funds.

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9- Availability of Financial services to households & individuals
Individuals have a major impact on the environment through their activities and consumption of
goods and services, and in some cases their impact is proving more intractable than commercial
impacts. Financial institutions can have a major impact on the activities of individuals by the
provision of suitable financial arrangements - for instance, access to cheap mortgage finance is a
prerequisite of widespread home ownership, and car ownership has been greatly increased by the
availability of car loans and hire purchase. In the absence of suitable financing arrangements,
products or goods may struggle to achieve sales, particularly if they have high capital costs.

10- Capital mobilization

Capital mobilization is generally one of the most necessary conditions for development. The role
played by FIs in the process of financial integration in developing countries is very vital. With
the help of this channel benefit of integration materialized. With the help of capital mobilization
capacity building, good governance & economic reforms can easily be achieved.
11- Trade Facilitation Programme
The Trade Facilitation Programme (TFP) aims to foster trade in the countries of operations, both
intra-regional and global. Through the programme, institutions provides guarantees to
confirming banks, taking the political and commercial payment risk of international trade
transactions undertaken by banks in the countries of operations. This pioneering programme
remains a vital source of trade finance in many of countries of operations.
12- Insurance and financial services
The institutions are supporting a broad range of financial services to help expand local capital
markets and develop local financial infrastructure. In 2002-08 there was a strong focus on
leasing transactions and investment with new commitments made to insurance companies; a
pension funds etc I Pakistan. The Bank also participated in a number of structured finance
transactions, encouraging the use of capital market products in the region. Growth in this sector

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will continue as demand for more varied financial services increases and as improved legislation
provides the necessary infrastructure for financial sector development.
13- Achievement of Growth
Well-developed financial systems allow economies to reach their potential since they allow firms
which have successfully identified profitable opportunities to exploit these opportunities as
intermediaries by channelling investment funds from those in the economy who are willing to
defer their consumption plans into the future. Achievement of growth in country becomes easy
with introduction of financial institutions. Different stages of financial development require
adequate institutional processes to be in place.

14- Financial Innovation

Development of FIs helps in focusing on the improvements in technology and its impact on how
financial products are delivered. Funds are transferred directly from ultimate savers to ultimate
borrowers. With reduction of trust deficit financial innovation is possible on better grounds. We
know the flow of short-term funds is facilitated by money markets & the flow of long-term funds
is facilitated by capital markets. These activities also help in financial innovations.
15- Managing Risk in Financial Institutions
Risk factor is one of the most critical factors while dealing with finance. The facilitation of
issuance of new securities e.g., the sale of new corporate stock or new Treasury securities or
facilitation of trading of existing securities e.g., the sale of existing stock etc. involve factor of
risk. We are not confident either the securities traded in secondary markets are liquid or not.
Focusing on risk management in the financial institution is very necessary.

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BIBLIOGRAPHY

The following are the resources that I have used in making this Project: http://Agricultureinformation.com
https://nabard.org
http://business.gov.in/business_financing/financial_institutions.php
Wikipedia.org;
http://en.wikipedia.org/wiki/National_Bank_for_Agriculture_and_Rural_Development#c

ite_note-NABARD-4; http://en.wikipedia.org/wiki/All_India_Financial_Institutions
http://www.investopedia.com/walkthrough/corporate-finance/1/financial-institutions.aspx
http://wiki.answers.com/Q/What_is_the_role_of_financial_institutions_in_economic_dev

elopment
http://www.gr8ambitionz.com/2013/08/major-financial-institutions-of-india.html
http://www.indiastat.com/banksandfinancialinstitutions/3/financialinstitutions/99/allfinan
cialinstitutions/107697/stats.aspx

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