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Institutional finance acts like an intermediary that builds a medium among that saver as well as investors to provide different types of financial services. Apart from conservational commercial banking procedures, institutional finance provides a financial service to different areas for the welfare of the people. Institutional finance looks after both capital risk as well as loan risk to the emerging companies to provide financial support at their initial business stage. All the institutional finance carries out detailed market research before providing financial help to the news organizations. Institutional finance principally works on price reduction of products or services as well as maintains transaction cost to support multiple organizations that emerge in the market.
Institutional finance
Price determination of product or service, as well as mobilization of the financial fund, is the main function of these organizations. Apart from that, institutional finance maintains liquidity, risk-sharing management along with providing easy access to financial operations to different types of organizations. Institutional finance is also responsible for dealing with financial loans as well as looking after different types of monetary functions such as deposits of capital, providing guidance of financial investments as well as maintaining currency exchange. There are different types of institutional finance found in India that grant the capital deposition along with provisioning loans as well as advances to the new emerging business organizations.
Different types of financial institutions
Mainly 4 types of financial institutions are seen in the business market: central banks and investment banks. Apart from that, different insurance organizations, as well as multiple brokerage firms, are included in financial institutions.
| Financial institutions | Functions |
| Commercial banks | These financial institutions are responsible for accepting deposits as well as giving loans. Commercial banks are also responsible for discounting the exchange of finance bills and maintaining investment funds. |
| Brokerage firms | This kind of financial institution is mainly looked after for buying and selling different financial products including socks of different organizations. |
| Insurance organizations | This kind of financial institution provides insurance coverage to the common people as well as business organizations that are emerging in the business market. Apart from that, it improves the financial operation efficiency as well as provides capital support that leads to economic progress. |
| Investment banks | These financial institutions are responsible for providing advice to business organizations as well as governments in order to meet their financial challenges. |
Other Financial institutions in India
In India, several types of financial institutions can be seen in the finance market. Those guide business organizations as well as government bodies in terms of financial services.
- Central banks in other financial institutions in India are mainly responsible for managing the banking performances of different banks as well as the reserve bank of India. This financial institution in India does not provide individual customer assistance.
- Internet Banks are another type of financial institution in India that mainly looks after the digital transactions of different business organizations to maintain the safety of digital financial performances.
- Credit Unions are the most significant financial institution in India that guides providing different types of conventional banking services to the common people as well as to business organizations.
- Another financial institution in India Loan Associations that mainly looks after the customer service in terms of providing loans as well as supporting them from financial loss.
- Other Financial institutions in India are Mortgage Companies that are also a significant part of the business market for originating as well as funding mortgages. Apart from that, these particular organizations are also responsible for lending financial options to different commercial real estate organizations.
Conclusions
Financial institutions give different kinds of financial services to the organization that guides to maintain the business performance of the organization as well as government bodies. It also provides an attractive rate of capital return policy that helps them to sustain in the business market as well as improve its productivity. Apart from that, this type of institution guides the business organization to assemble several risk factors in terms of financial services. On the other hand, financial institutions also provide assistance to emerging companies in order to recognize the market situation and guide them to mitigate the risk factors from a financial perspective.
