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Financial Intermediaries

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Financial Intermediaries
BBA (Finance) SEM VI

Financial Services

Financial Intermediaries
Introduction: Financial Institutions play an important role in capital market. Functions of financial institutions involve mobilizing of funds & channelizing them towards a productive way. The financial institutions do not directly add to the volume of real capital formation. They are only the intermediaries between savers and users of the funds. CENTRAL BANK: Central Bank plays an important role in the monetary & banking structure of a nation. It supervises controls & regulates the activities of banking sector. It has been assigned to handle & control the currency & credit of a country. Central banks have to perform following functions: Regulation of currency in accordance with the requirements of business & general public. Acts as the custodian of cash resources for other banks Acts as the custodian of foreign exchange reserve (International currency) of a nation. Settlement of clearance balances among banks Further requisite of a Central Bank is that it should not, to any extent, accept deposits from general public & grant loans or discount bills of general public. The central Banks are not profit making organizations but they earn much profit through various functions. The Central Bank monitors operations of commercial banks, industrial banks, agricultural banks, etc. Central Bank is controlled by Central Govt. of the country. An independent Act is formulated to regulate the activities of Central Bank.

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BBA (Finance) SEM VI

Financial Services

RESERVE BANK OF INDIA:

― RBI is the Central Bank of India. ― It started functioning from 1st April, 1935. It was established under The Reserve Bank of India Act, 1934. RBI was previously (till 1949) under management of private shareholders. ― The Central Govt. has authority to guide, regulate & monitor the activities of RBI. It has the authority to appoint the Governor & Deputy Governors. ― RBI is

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