Microfinance In India, the Task Force on Supportive Policy and Regulatory Framework for Microfinance has defined MF (Microfinance) as the “Provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban or urban areas for enabling them to raise their income levels and improve living standards”. Major characteristics of Microfinance are: Small amounts of saving and credit Collateral free credit through collateral substitute like peer pressure Group formation to create peer pressure and bring discipline Easy access Less and simplified procedures and documentations Credit for both investment and consumption needs Poor are bankable Affordable interest rates Sustainability There are different methodologies for delivering microfinance like Grameen bank model of Prof. Yunus, SHG-Bank linkage model, Micro finance institutions (for profit and non profit),NBFC model, NGO model etc. In India SHG-Bank linkage model is the most popular model. Self Help Groups (SHG) Model Continue reading
Financial Institutions
The Reserve Bank of India (RBI): Objectives and Functions
The Reserve Bank of India (RBI) is the apex financial institution of the country’s financial system entrusted with the task of control, supervision, promotion, development and planning. RBI is the queen bee of the Indian financial system which influences the commercial banks’ management in more than one way. The RBI influences the management of commercial banks through its various policies, directions and regulations. Its role in bank management is quite unique. In fact, the RBI performs the four basic functions of management, viz., planning, organizing, directing and controlling in laying a strong foundation for the functioning of commercial banks. History of Reserve Bank of India (RBI) In 1921, the Imperial Bank of India was established to perform as central bank of India by the British Government. But unfortunately Imperial Bank failed to show its performance up to the mark and didn’t achieve any success as the Central Bank. Then the Continue reading
Life Insurance Corporation of India (LIC)
The Life Insurance Corporation (LIC) was established in India with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and became synonymous with life insurance. Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six lakh agency force. LIC has hundred divisional offices and has established extensive training facilities at all levels. At the apex, is the Management Development Institute, seven Zonal Training Centers and 35 Sales Training Centers. LIC of India is one of India’s leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking to stock broking to mutual funds to life insurance to investment banking, the group caters to the financials needs of individuals and corporate. The LIC has a net of over Rs. 1,800 crore. With a presence in 82cities in Continue reading