FINANCIAL INSTITUTIONS OPERATING IN INDIA

The specialised financial institutions operating in India include the institutions like Industrial Finance Corporation of India and many other financial institutes, these specific financial institutes are owned and managed by the government.  The main purpose is to improve the financial status of the country. Based on this particular information, the present study intends to represent an overview of the functions of the specific financial institutes operating in India. In addition, the discussion section of this study will further include examples of the specialised financial institutions operating in India.

Explanation of the specialised financial institutes 

In general terms, specialised financial institutions have been recognised as institutions that are specifically owned by the state and have been established with each establishment Act. These financial institutes of India have been set up by the intervention of the laws that are developed by the state and central governments. Consequently, the specialised financial institutes have been established with a core intention of providing long-term finance to business or corporate organisations. 

Overview of the functions of specialised financial institutions operating in India

The main functions of the specialised financial institutes that have been operated by the Indian state and central government have been discussed in the below section:

• In order to achieve success in industrial establishment, granting loans is a major function of the SFIs .
• These specialised financial institutes have been established with the intention to provide support and financial supply for the economic development of the country
• These institutes also offer some advisory services as well 

Examples of specialised financial institutions

In India, for the development of the Indian economic conditions including the financial status of different corporate organisations, the government of both state and central established several SFIs. To ensure greater flexibility in order to meet the need for changing the financial system, the government of India has established the Industrial Finance Corporation of India. State Financial Corporation was established under the State Financial Corporation Act, 1951. The set up of the Industrial Development Bank of India happened in 1964 for having a subsidiary of the Reserve Bank of India. The main objective of the establishment of IDBI is to coordinate the activities of other financial institutions along with providing financial assistance to other financial institutes. 

Merits of the specialised financial institutes

Specialised financial institutions operating in India have included different merits such as providing long term finance. As it has been found that long-term finance has not been provided by commercial banks, the SFIs have been established. Besides providing required funds, these financial institutes offer technical, managerial and financial advice and consultancy to support the business of firms. In addition, the institutes offer easy repayment of the loans that helps to decrease the burden of the repayment of the business loans. On the other hand, obtaining loans from financial institutions helps in increasing organisational goodwill as well. 

Limitations of specialised financial institutes

It has been found that the work process mentioned in the specific Acts developed by the government has bound the specialised financials that are operated in India. As a limitation, it can be stated that this particular phenomenon makes the whole process of working in these institutes lengthier and more time-consuming. On the other hand, the work process becomes more complex in comparison to the other commercial banks. Restrictions like limitations on dividend payment are imposed on the powers of the borrowing organisation by the financial institutes. This particular aspect can be recognised as a limitation of the work process of these institutions operating in India. 

The main functions of specialised financial institutions operating in India

The main functions of the specialised financial institutions that have been operated in India include helping in new projects during the changes identified in the financial structure of the state and the country where the institution is situated. This particular phenomenon helps in the development of the economy in general and backward regions particularly. On the other hand, the main functionality of the specialised financial institutes also includes the actions such as helping in the establishment of new business with meeting the requirement of large amounts of funds. 

Conclusion 

In order to sum up all that has been stated so far in the study, it can be stated that the study has included information regarding the specialised financial institutions operating in India. It has been seen that in India, the government has run financial institutions like State Financial Corporations, the Industrial Development Bank of India. Focusing on the functions of the previously mentioned financial institutions, the current study has shed light on the limitations and the merits such as the complex work process and the financial actions taken by the institutes respectively.