Indian Finacial System

INDIAN FINACIAL SYSTEM
Research Assignment
➢ Research and discuss the RBI measures and regulations for NBFCs in
India
➢ Identify and list down the various financial services offered by

financial institutions in India
Narendra
NAME : AKASH GOWDA P
CLASS : 2nd BBA B
ROLL NO : 22D2075
1. Research and discuss the RBI measures and
regulations for NBFCs in India
The Reserve Bank of India (RBI) implements various measures and

regulations to govern Non-Banking Financial Companies (NBFCs) in
India, ensuring their stability, soundness, and compliance with
regulatory standards. Here are some key measures and regulations:
1. Registration and Regulation: NBFCs need to register with the
RBI to operate in India. The RBI regulates their activities under the
provisions of the Reserve Bank of India Act, 1934, and the directions
issued under this act. NBFCs are classified based on their size and
business activities, and specific regulations apply accordingly.
2. Capital Adequacy Norms: NBFCs are required to maintain a
minimum level of capital adequacy to ensure their solvency and
ability to absorb losses. The capital adequacy norms for NBFCs are
based on the Basel III framework, which mandates a minimum capital
requirement, including Tier I and Tier II capital.
3.Asset Classification and Provisioning: NBFCs need to classify
their assets correctly based on their credit quality and make
provisions for expected losses. The RBI has laid down guidelines for
asset classification and provisioning, similar to those for banks, to
ensure transparency and prudence in lending practices.
4. Liquidity Management: NBFCs are required to maintain liquidity
to meet their obligations as they arise. The RBI monitors their
liquidity position and may issue directions to ensure that NBFCs
maintain adequate liquidity buffers to withstand liquidity stress.
5. Corporate Governance: The RBI mandates NBFCs to adhere to
strong corporate governance practices to ensure effective oversight
and management. NBFCs are required to have a board of directors
with a mix of independent and executive directors, and they need to
comply with disclosure requirements.
6. Prudential Norms: The RBI imposes prudential norms on NBFCs
to mitigate risks associated with their operations. These norms cover
various aspects such as exposure limits, concentration risk, risk
management practices, and internal control systems.
7. Regulatory Reporting and Supervision: NBFCs are required to
submit periodic reports to the RBI, disclosing their financial position,
operational performance, and compliance with regulatory
requirements. The RBI conducts regular inspections and supervisory
reviews to assess the financial health and compliance status of NBFCs.
8. Stress Testing and Risk Management: The RBI encourages
NBFCs to conduct stress tests to assess their resilience to adverse
scenarios and take necessary risk mitigation measures. NBFCs are also
required to have robust risk management frameworks in place to
identify, measure, monitor, and control various risks they are exposed
to.
9. Customer Protection and Fair Practices: The RBI lays down
guidelines to ensure that NBFCs treat their customers fairly and
protect their interests. NBFCs are required to adhere to fair lending
practices, transparent pricing, and grievance redressal mechanisms.
10. Regulatory Updates and Amendments: The RBI periodically
updates its regulations and guidelines for NBFCs to adapt to changing
market conditions, address emerging risks, and strengthen the
regulatory framework. NBFCs need to stay abreast of these updates
and ensure compliance with the latest regulatory requirements.
These measures and regulations play a crucial role in maintaining

financial stability, promoting investor confidence, and protecting the
interests of stakeholders in the NBFC sector in India
2. Identify and list down the various financial services
offered by financial institutions in India
Financial institutions in India offer a wide range of financial services

to cater to the diverse needs of individuals, businesses, and the
economy as a whole. Here are some of the key financial services
offered by financial institutions in India:
1. Banking Services:
❖ Savings Accounts
❖ Current Accounts
❖ Fixed Deposits
❖ Recurring Deposits
❖ Loans (Personal Loans, Home Loans, Car Loans, Education
Loans, etc.)
❖ Credit Cards
❖ Debit Cards
❖ ATM Services
❖ Mobile Banking
❖ Internet Banking
❖ NEFT, RTGS, IMPS, and other fund transfer services
❖ Cash Management Services
3. Investment Services:
❖ Mutual Funds
❖ Equity Trading
❖ Derivatives Trading
❖ Commodity Trading
❖ Currency Trading
❖ Portfolio Management Services (PMS)
❖ Wealth Management Services
❖ Retirement Planning Services
❖ Systematic Investment Plans (SIPs)
❖ Systematic Withdrawal Plans (SWPs)
❖ Systematic Transfer Plans (STPs)
3. Insurance Services:
❖ Life Insurance
❖ Health Insurance
❖ General Insurance (Property Insurance, Vehicle Insurance, etc.)
❖ Travel Insurance
❖ Term Insurance
❖ ULIPs (Unit Linked Insurance Plans)
❖ Pension Plans
❖ Annuities
4. Capital Market Services:
❖ Underwriting of Securities
❖ Merchant Banking Services
❖ Stock Broking Services
❖ Depository Services (Demat Accounts)
❖ IPO (Initial Public Offering) Services
❖ Rights Issue Services
❖ Buyback of Shares
❖ Equity Research and Advisory Services
5. Asset Management Services:
❖ Asset Reconstruction Services
❖ Securitization Services
❖ Debt Syndication
❖ Lease Financing
❖ Factoring Services
❖ Venture Capital
❖ Private Equity
6. Payment and Settlement Services:
❖ Payment Gateway Services
❖ Electronic Clearing Services (ECS)
❖ Real-Time Gross Settlement (RTGS)
❖ National Electronic Funds Transfer (NEFT)
❖ Immediate Payment Service (IMPS)
❖ Cheque Truncation System (CTS)
❖ Electronic Bill Presentment and Payment (EBPP)
7.Financial Advisory Services:
❖ Financial Planning
❖ Tax Planning
❖ Retirement Planning
❖ Estate Planning
❖ Investment Advisory Services
❖ Risk Management Services
❖ Corporate Finance Advisory
These are just some of the financial services offered by various
financial institutions in India. The landscape is constantly evolving
with advancements in technology and changes in regulatory
frameworks, leading to the emergence of new services and products
to meet the evolving needs of customers and businesses.

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➢ Identify and list down the various financial services offered by

The Reserve Bank of India (RBI) implements various measures and

These measures and regulations play a crucial role in maintaining

Financial institutions in India offer a wide range of financial services

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