Need of Insurance

Reduction in Worries Reimbursement of losses Opportunity for investment Credit Enhancement Opportunity for Employment Temporary needs/threats Regular Savings Retirement

Benefits of Insurance
Shifting of Risks Providing Pecuniary Security Assuring expected Profits Safeguarding interest of Consumers Improving Credit Standing Providing Investment Opportunity Promoting Social Welfare Generating Employment Opportunities Capital Formation Encouraging Savings Helps Controlling Inflation

Classification/Types Of Insurance
1.Life Insurance 2. Non-life Insurance a. General Insurance Marine Insurance Fire Insurance Personal accident Insurance Motor Vehicle Insurance b. Miscellaneous Insurance Fidelity Guarantee Insurance Crop Insurance Burglary Insurance Cattle Insurance Cash in transit Insurance

Principles of Insurance
Principle of Insurable Interest Principle of Utmost Good Faith Principle of Indemnity Principle of Subrogation Principle of Contribution Principle of Causa Proxima Principle of Mitigation Of Loss

What is Insurance ?
"Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event." Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the Insurance Companies act as trustees to the amount collected

Factors should consider before buying any insurance

Adequate sum assured Rider benefit Claim history of company you are purchasing insurance Competitive price Administrative cost

Role of Banks in an Economy

Banks promote Capital Formation Investment in new enterprises Promotion of Trade and Industry Development of Agriculture Balanced development of different regions Influencing economic activity Implementation of Monetary Policy Monetisation of the economy Export Promotion Cells

Functions of Commercial Banks

Commercial banks in India have traditionally focused on meeting short-term financial needs of industry, trade and agriculture This traditional role has been changing given the increasing sophistication and diversification of the Indian economy. Hence, the range of services extended by commercial banks has increased significantly, sometimes leading to an overlap with the functions performed by other FIs The main functions of commercial banks can be segregated into 3 main areas: Functions of Commercial Banks -Payment System -Financial Intermediation -Financial Services

Main Functions of the RBI

To maintain monetary stability so that the business and economic life can deliver welfare gains of a properly functioning mixed economy To maintain financial stability and ensure sound financial institutions so that monetary stability can be safely pursued and economic units can conduct their business with confidence To maintain stable payments system so that financial transactions can be safely and efficiently executed To promote the development of financial infrastructure of markets and systems, and to enable it to operate efficiently i.e., to play a leading role in developing a sound financial system so that it can discharge its regulatory function efficiently To ensure that credit allocation by the financial system broadly reflects the national economic priorities and societal concerns To regulate the overall volume of money and credit in the economy with a view to ensure a reasonable degree of price stability