Financial Institutions are dealing with financial transactions, such as investments, loans and deposits. It composed of organizations such as banks, stock exchanges, insurance companies and investment companies. Everything from depositing money to taking out loans and exchange currencies must be done through financial institutions.
Role of Financial Institutions are as follows
1. It promotes saving
2. It mobilizes saving and allocate it among different uses and users.
3. It facilitates capital formation, production and economic development.
Regulatory Authorities of financial institution in India
Reserve Bank of India (RBI): Commercial Banks-both Indian and foreign, regional rural banks, state cooperative banks fall within supervisory purview of RBI. Reserve Bank of India is the sole authority in respect of all transactions in the money market and foreign exchange market.
Securities and Exchange Board of India (SEBI): SEBI is the Principal regulator in the capital market in India. It has been also conferred the power to regulate the Mutual Funds and Venture Capital Funds in India.
Insurance Regulatory and Development Authority (IRDA): IRDA is the regulatory authority for all insurance companies in India.