Financial Market Entities
1. Commercial Banks
Commercial banks include
Public Sector Banks (PSB), Private Sector Banks and
Foreign Banks. The main activity of these banks are
acceptance of
deposits from the public for the purpose of
lending or
investment.
2. Cooperative Banks
Coop Banks are also allowed to
raise deposits and provide
advances from and to public.
Urban Cooperative Banks (UCBs) are controlled by respective
state governments and
RBI, while
other Coop banks are controlled by
NABARD and
state governments. Except for certain exemptions in paying a
higher interest on deposits, the UCBs regulatory
framework is similar to the other banks.
3. Non-Banking Financial Companies (NBFCs)
NBFCs are allowed to
raise money as
deposits from the public and
lend through various instruments including
leasing, hire purchase, bill discounting, etc. These are
licensed and
supervised by
RBI.
4. Primary Dealers (PDs)
PDs deals with
government securities both in
Primary market and
Secondary market. Their basic responsibility is to provide markets for
government securities and strengthen the government securities market.
5. Financial Institutions (FIs)
FIs are those developmental institutions that provide
long-term funds for
industry and
agriculture. FIs raise their resources through
long-term bonds from the financial market and
borrowings from
international FIs.
6. Payment and Settlement System / Clearing Houses / Currency Chests
An efficient and effective Payment and Settlement system is a
necessary condition for a well running
financial system. Maintenance of
Clearing Houses at various centers, creation of
currency holding
chests in different geographical areas and creation of the mechanism for
electronic transfers of funds
(EFT) are vital activities undertaken by RBI.
7. Stock Exchanges
A stock exchange is duly approved by capital market regulator to provide
sale and
purchase of
securities on behalf of
investors. The stock exchanges provide
Clearing House facilities for
netting of
payments and
securities delivery. Securities include
equities, debt, derivatives, etc.
8. Brokers
Only brokers are approved by capital market regulator to operate on the stock exchange. Brokers perform the job of
intermediary between
buyers and
sellers of
securities. They help build-up an
order book, carry out
price discovery and are responsible for
broker's contracts being
honored. The services are subject to
brokerage.
9. Equity and Debt Raisers
Companies wishing to
raise equity or
debt through
stock exchanges have to approach the capital market regulator with the prescribed applications and a proforma for permission to raise equity and debt and get them
listed on a
stock exchange.
10. Investment Bankers / Merchant Bankers
Merchant banks undertake a number of activities such as undertaking the
issue of
stocks, fund raising and management. They also provide
advisory services and
counsel on
mergers and acquisitions (M&A), etc. They are licensed by
capital market regulator.
11. Foreign Institutional Investors (FIIs)
FIIs are
foreign-based funds authorized by capital market regulator to
invest in the Indian
equity and
debt market through
stock exchanges.
12. Depositories
Depositories hold
securities in
demat form (not in physical form), maintain
accounts of
Depository Participants (DPs), who in turn, maintain
sub-accounts of their
customers. On instructions of the
stock exchange clearing house, supported by documentation, a
depository transfers
securities from the
buyers to
sellers accounts in electronic form.
13. Mutual Funds (MFs)
An MF is a form of
collective investment that pools money from
investors and
invests in
stocks, debt and other securities. It is a
less risky investment option for an
individual investor. MFs require the regulators' approval to start an
Asset Management Company (AMC) and each scheme has to be
approved by the regulator before it is launched.
14. Registrars
Registrars maintain a
register of
share and
debenture holders and process
share and
debenture allocation, when
issues are subscribed. Registrars too need regulator's approval to do business.
If you want to add more financial entities in this list, feel free to comment or send a message through Contact Page
