Banking Awareness: Major Financial Institutions of India

Major Financial Institutions of India

National Bank for Agriculture and Rural Development (NABARD)

It is an apex development bank in India, having headquarters in Mumbai and other branches are all over the country. The committee to review arrangements for institutional credit for agriculture and rural development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the chairmanship of Shri B. Sivaraman, conceived and recommended the establishment of National Bank for Agriculture and Rural Development (NABARD). It was established on 12 July 1982 by a special Act of parliament and its main focus was on upliftment of rural India by increasing the credit flow for elevation of agriculture & rural non farm sector and completed its 34 years on 1 Jan 2016. It has been entrusted with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". RBI sold its stake in NABARD to the Government of India, which now holds 99% stake. NABARD is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.NABARD is the apex institution in the country which looks after the development of the cottage industry, small industry and village industry, and other rural industries. NABARD also reaches out to allied economies and supports and promotes integrated development. NABARD discharge its duty by undertaking the following roles :

1. Serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas
2. Takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc.
3. Co-ordinates the rural financing activities of all institutions engaged in developmental work at the field level and maintains liaison with Government of India, state governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation
4. Undertakes monitoring and evaluation of projects refinanced by it.
5. NABARD refinances the financial institutions which finances the rural sector.
6. NABARD partakes in development of institutions which help the rural economy.
7. NABARD also keeps a check on its client institutes.
8. It regulates the institutions which provide financial help to the rural economy.

Small Industries Development Bank of India

Small Industries Development Bank of India is an independent financial institution aimed to aid the growth and development of micro, small and medium-scale enterprises (MSME) in India. Set up on April 2, 1990 through an act of parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India. Currently the ownership is held by 33 Government of India owned / controlled institutions. Beginning as a refinancing agency to banks and state level financial institutions for their credit to small industries, it has expanded its activities, including direct credit to the SME through 100 branches in all major industrial clusters in India. Besides, it has been playing the development role in several ways such as support to micro-finance institutions for capacity building and onlending. Recently it has opened seven branches christened as Micro Finance branches, aimed especially at dispensing loans up to ₹5 lakh.

• It is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities.
• SIDBI has also floated several other entities for related activities. Credit Guarantee Fund Trust for Micro and Small Enterprises provides guarantees to banks for collateral-free loans extended to SME. SIDBI Venture Capital Ltd. is a venture capital company focussed at SME. SME Rating Agency of India Ltd. (SMERA - provides composite ratings to SME. Another entity founded by SIDBI is ISARC - India SME Asset Reconstruction Company in 2009, as specialized entities for NPA resolution for SME.

Securities and Exchange Board of India

The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act, 1992.

• It was established by The Government of India on 12 April 1988 and given statutory powers in 1992 with SEBI Act 1992 being passed by the Indian Parliament. SEBI has its headquarters at the business district of BandraKurla Complex in Mumbai, and has Northern, Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai and Ahmedabad respectively. It has opened local offices at Jaipur and Bangalore and is planning to open offices at Guwahati, Bhubaneshwar, Patna, Kochi and Chandigarh in Financial Year 2013 - 2014.
• Controller of Capital Issues was the regulatory authority before SEBI came into existence; it derived authority from the Capital Issues (Control) Act, 1947.
• Initially SEBI was a non statutory body without any statutory power. However in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act, 1992. In April 1988 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

The SEBI is managed by its members, which consists of following:

1. The chairman who is nominated by Union Government of India.
2. Two members, i.e., Officers from Union Finance Ministry.
3. One member from the Reserve Bank of India.
4. The remaining five members are nominated by Union Government of India, out of them at least three shall be whole-time members.

The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as "...to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected there with or incidental there to".

SEBI has to be responsive to the needs of three groups, which constitute the market:

• The issuers of securities
• The investors
• The market intermediaries.

SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive function and it passes rulings and orders in its judicial capacity. Though this makes it very powerful, there is an appeal process to create accountability. There is a Securities Appellate Tribunal which is a three-member tribunal and is headed by Mr. Justice J P Devadhar, a former judge of the Bombay High Court. A second appeal lies directly to the Supreme Court. SEBI has taken a very proactive role in streamlining disclosure requirements to international standards.

National Housing Bank

National Housing Bank (NHB), a wholly owned subsidiary of Reserve Bank of India (RBI), was set up on 9 July 1988 under the National Housing Bank Act, 1987. NHB is an apex financial institution for housing. NHB has been established with an objective to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support incidental to such institutions and for matters connected therewith.

• NHB registers, regulates and supervises Housing Finance Company (HFCs), keeps surveillance through On-site & Off-site Mechanisms and co-ordinates with other Regulators.

NHB has been established to achieve, inter-Alia, the following objectives –

1. To promote a sound, healthy, viable and cost effective housing finance system to cater to all segments of the population and to integrate the housing finance system with the overall financial system.
2. To promote a network of dedicated housing finance institutions to adequately serve various regions and different income groups.
3. To augment resources for the sector and channelise them for housing.
4. To make housing credit more affordable.
5. To regulate the activities of housing finance companies based on regulatory and supervisory authority derived under the Act.
6. To encourage augmentation of supply of buildable land and also building materials for housing and to upgrade the housing stock in the country.
7. To encourage public agencies to emerge as facilitators and suppliers of serviced land, for housing.

Exim Bank (India)

Export-Import Bank of India is the premier export finance institution in India, established in 1982 under the Export-Import Bank of India Act 1981. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. Commencing operations as a purveyor of export credit, like other Export Credit Agencies in the world, Exim Bank of India has, over the period, evolved into an institution that plays a major role in partnering Indian industries, particularly the Small and Medium Enterprises, in their globalisation efforts, through a wide range of products and services offered at all stages of the business cycle, starting from import of technology and export product development to export production, export marketing, pre-shipment and post-shipment and overseas investment.

• Exim Bank is managed by a Board of Directors, which has representatives from the Government, Reserve Bank of India, Export Credit Guarantee Corporation of India, a financial institution, public sector banks, and the business community.

The Bank's functions are segmented into several operating groups including:

• Corporate Banking Group which handles a variety of financing programmes for Export Oriented Units (EOUs), Importers, and overseas investment by Indian companies.
• Project Finance / Trade Finance Group handles the entire range of export credit services such as supplier's credit, pre-shipment Agriculture Business Group, to spearhead the initiative to promote and support Agricultural exports. The Group handles projects and export transactions in the agricultural sector for financing.
• Small and Medium Enterprise: The group handles credit proposals from SMEs under various lending programmes of the Bank.
• Export Services Group offers variety of advisory and value-added information services aimed at investment promotion.
• Export Marketing Services Bank offers assistance to Indian companies, to enable them establish their products in overseas markets. The idea behind this service is to promote Indian export. Export Marketing Services covers wide range of export oriented companies and organizations. EMS group also covers Project exports and Export of Services.
• Besides these, the Support Services groups, which include: Research & Planning, Treasury and Accounts, Loan Administration, Internal Audit, Management Information Services, Information Technology, Legal, Human Resources Management and Corporate Communications.

IDBI Bank

IDBI Bank is an Indian government-owned financial service company, formerly known as Industrial Development Bank of India, headquartered in Mumbai, India. It was established in 1964 by an Act of Parliament to provide credit and other financial facilities for the development of the fledgling Indian industry.

• It is currently 10th largest development bank in the world in terms of reach, with 3000 ATMs, 1746 branches, including one overseas branch at Dubai, and 1285 centers, including two overseas centres at Singapore & Beijing. It is one of 27 commercial banks owned by the Government of India.
• The Bank has an aggregate balance sheet size of INR 3.56 trillion as on 31 March 2015.
• The Industrial Development Bank of India (IDBI) was established in 1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in India. IDBI provided financial assistance, both in rupee and foreign currencies, for green-field projects as also for expansion, modernisation and diversification purposes. In the wake of financial sector reforms unveiled by the government since 1992, IDBI also provided indirect financial assistance by way of refinancing of loans extended by State-level financial institutions and banks and by way of rediscounting of bills of exchange arising out of sale of indigenous machinery on deferred payment terms.
• After the public issue of IDBI in July 1995, the Government shareholding in the Bank came down from 100% to 75%.
• IDBI played a pioneering role, particularly in the pre-reform era (1964–91), in catalyzing broad based industrial development in India in keeping with its Government-ordained ‘development banking’ charter.
• Some of the institutions built with the support of IDBI are the Securities and Exchange Board of India (SEBI), National Stock Exchange of India (NSE), the National Securities Depository Limited (NSDL), the Stock Holding Corporation of India Limited (SHCIL), the Credit Analysis & Research Ltd, the Exim Bank (India), the Small Industries Development Bank of India (SIDBI) and the Entrepreneurship Development Institute of India.

Current Affairs July 03, 2017

1. Jharkhand opens GST call centre

A GST call centre has been opened in Jharkhand to help people with queries, while Chief Minister Raghubar Das reviewed the progress of the new tax system in the state, a day after it was rolled out.

The people would get information on registration, digital signature, OTP, tax rates on different goods, invoice and accounting from that centre.

2. Kerala CM launches G-Ride

Kerala Chief Minister Pinarayi Vijayan has launched 'G-Ride', a digital ride sharing platform specially designed and deployed for the IT industry, by the Group of Technology Companies (GTech), the industry body of IT companies in the state.

He said that the state government would accelerate the deployment of digital resources in development initiatives and also in addressing challenges faced by people.

3. Mumbai's 'Vikrikar Bhavan' renamed as GST Bhavan

'Vikrikar Bhavan' the headquarters of Maharashtra government's erstwhile Sales Tax department, was renamed as 'GST Bhavan’ as the new tax regime rolled out.

Senior IAS officer Rajiv Jalota, State GST commissioner, informed that the department has planned a helpline to assist traders and business community who have queries about GST implementation and modalities.

4. Telangana to Have Separate Agriculture Budget from Next Year

Telangana would have a separate budget for agriculture from the next year.

Chief Minister K Chandrasekhar Rao decided to substantially enhance funds for the agriculture sector and present a separate agriculture budget.

Rao also asked the officials to form farmers' associations at various levels -- from villages to the state -- to organise the cultivators.

5. PNB to block all Maestro debit cards from July 31

All Maestro cards issued by PNB will be blocked or hot listed on July 31, 2017 for security-based reasons.

Punjab National Bank (PNB) Maestro debit cards holders will face a card blockage if they fail to replace it with a more secure EMV chip based card by the end of this month.

The bank will not charge anything for the replacement and it will be provided free of cost.

6. FINO becomes payments bank

FINO Payments Bank has commenced operations as a payments bank with effect from June 30, according to the Reserve Bank of India.

FINO PayTech Ltd, Navi Mumbai, was one of the 11 applicants which were issued in-principle approval for setting up a payments bank.

Besides FINO, the other applicants which have launched payment bank operations are Airtel M Commerce Services, Department of Posts and Paytm Payments Bank.

7. Svatantra Microfin launches cashless solution ‘Saathi’ 

Mid-sized microfinance institution Svatantra Microfin is looking at doubling its loan disbursals to Rs. 800 crore by 2019, even as it plans to expand its operations to more States within the same period.

Svatantra has also launched an app, an end-to-end cashless solution called Saathi, for an entire spectrum of operations in areas such as loan originating system, loan management system and collections.

8. Achal Kumar Jyoti to be India's new Chief Election Commissioner 

Election Commissioner Achal Kumar Jyoti has been appointed the Chief Election Commissioner (CEC) of India by the Narendra Modi government.

He will take charge as the CEC on July 6 after Nasim Zaidi retires.

Zaidi had taken over as the 20th CEC on April 19, 2015.

Jyoti, former Chief Secretary of Gujarat, was appointed as the Election Commissioner on May 7, 2015.

9. Indian police officer recognised by prestigious award in US

A senior Indian police officer has been given a prestigious award in the US in recognition of his tireless efforts in fight against human trafficking.

Mahesh Muralidhar Bhagwat has been recognised with the prestigious Trafficking in Persons (TIP) Hero award.      

Bhagwat, who currently serves as Commissioner of Police of Rachakonda in Telangana, was presented the award by the US First Lady Melania Trump.

10. President receives first copy of book “PRESIDENT Pranab Mukherjee – A Statesman”

The President of India, Shri Pranab Mukherjee received the first copy of a book “President Pranab Mukherjee – A Statesman” from Prime Minister, Shri Narendra Modi who formally released it at a function held at Rashtrapati Bhavan.

The book “President Pranab Mukherjee – A Statesman” has been published by The Statesman, one of India’s oldest English-language newspapers.

THE HINDU EDITORIAL: 03-JULY–2017

THE HINDU EDITORIAL

Victory in Mosul

The capture by Iraqi forces of the Grand al-Nuri Mosque in Mosul, from where Islamic State leader Abu Bakr al-Baghdadi declared himself ‘caliph’ in July 2014, marks the end of the ‘caliphate’ in Iraq. For three years, the mosque was a symbol of power for the IS, whose black flag flew atop the historic 150-ft tall al-Hadba minaret. IS fighters blew up the minaret when they retreated, practically declaring their defeat in Iraq’s second largest city. They are now confined to some pockets of Mosul, and Iraqi commanders believe it is only a matter of days before they can declare total victory. For the Iraqi troops, the eight-month battle has been particularly torturous, given the high casualties and the strong IS resistance, on the battlefield and through suicide attacks elsewhere. It is quite a turnaround for the Iraqi army, which left its barracks and fled the city without even a nominal fight three years ago when it came under IS attack. The ease with which the IS took Mosul, home to over a million people, had raised alarming questions about the professional capability of the Iraqi army to defend its territory against further possible IS expansion. But Prime Minister Haider al-Abadi, who ordered the Mosul mission and stayed the course despite the huge challenges involved, has put to rest such concerns, for now. Mr. Abadi managed to stitch together a difficult alliance to fight the jihadists. While the elite Iraqi counter terror forces led the ground battle, Iran-trained Shia Popular Mobilization Units as well as the Kurdish Peshmerga militia also joined in. The U.S. provided air cover. Despite conflicting interests — the U.S. and Iran are rivals while both Tehran and Baghdad have uneasy ties with the Kurds — the joint front they forged against the IS could be a replicable model elsewhere, especially in Syria where the IS still controls territories. For Mr. Abadi, however, a bigger challenge is to rebuild Mosul, where hundreds of thousands of people have been displaced, and prevent the regrouping of the IS. The destruction of the ‘Caliphate’, the proto-state that Baghdadi established, doesn’t mean that the IS as an insurgency has been defeated. The group is likely to retreat to Iraq’s deserts, much like what al-Qaeda in Iraq, the predecessor of the IS, did during 2006-10 after the death of its leader, Abu Musab al-Zarqawi, and subsequent military blows. They struck back when they found an opportunity in crisis-stricken Syria and in Iraq’s restive Sunni belt, including Mosul, which was simmering against the sectarian policies of Nouri al-Maliki’s Shia regime. The IS may also bide its time. Mr. Abadi should reassure Mosul’s population that his government will not make the mistakes his predecessor committed. He has retaken the city, and now he has to win over its people.

Step back

The boundary stand-off with China at the Doka La tri-junction with Bhutan is by all accounts unprecedented; it demands calmer counsel on all sides. The tri-junction stretch of the boundary at Sikkim, though contested, has witnessed far fewer tensions than the western sector of the India-China boundary even as India and Bhutan have carried on separate negotiations with China. China’s action of sending People’s Liberation Army construction teams with earth moving equipment to forcibly build a road upsets a carefully preserved peace. In fact, during Chinese President Xi Jinping’s visit in 2014 the stretch was opened as an alternative route to Kailash Mansarovar for Indian pilgrims as a confidence-building measure. That the PLA decided to undertake the action just as the year’s first group of pilgrims was reaching Nathu La cannot be a coincidence. Moreover, it came only days after Prime Minister Narendra Modi’s bilateral meeting with President Xi in Kazakhstan. The warmth that officials reported at the meeting was obviously misleading, and it is important for India and China to accept that relations have deteriorated steadily since Mr. Xi’s 2014 visit. The stand-off comes after a series of setbacks to bilateral ties. Delhi has expressed disappointment over China’s rejection of its concerns on sovereignty issues, and refusal to corner Pakistan on cross-border terrorism or help India’s bid for Nuclear Suppliers Group membership. In turn, India’s spurning of the Belt and Road Initiative and cooperation with the U.S. on maritime issues has not played well in China — neither has the uptick in rhetoric, including statements from the Arunachal Pradesh Chief Minister questioning India’s “One China Policy” on Tibet, and from Army chief Bipin Rawat on India being prepared for a two-and-a-half front war. These issues have to be addressed through sustained dialogue. In the immediate term, however, talks must focus on defusing the tensions at the tri-junction. China has made the withdrawal of Indian troops a precondition for dialogue. This would be unacceptable to India, unless the PLA also withdraws its troops and road building teams. Apart from its own commitments to the status quo, Beijing must recognise the special relationship India and Bhutan have shared since 1947, the friendship treaty of 2007 that commits India to protecting Bhutan’s interests, and the close coordination between the two militaries. For its part, India would be keen to show that it recognises that the face-off is in Bhutanese territory, and the rules of engagement could be different from those of previous India-China bilateral clashes — at Depsang and Demchok in the western sector, for example. Bhutan’s sovereignty must be maintained as that is the basis for the “exemplary” ties between New Delhi and Thimphu. The Indian government has been wise to avoid escalation in the face of China’s aggressive barrage, but that should not stop it from communicating its position in more discreet ways.

VOCABULARY

1) Unprecedented

Meaning: Never having happened or existed in the past.

Example: This century has witnessed environmental destruction on an unprecedented scale.

Synonyms: Unequalled, Unmatched

Antonyms: Normal, Common

2) Warmth

Meaning: Enthusiasm, affection, or kindness.

Example: She smiled with real warmth.

Synonyms: Friendliness, Geniality

Antonyms: Hostility

3) Deteriorated

Meaning: Become progressively worse.

Example: Relations between the countries had deteriorated sharply.

Synonyms: Worsen, Decline

Antonyms: Improve

4) Sovereignty

Meaning: Supreme power or authority.

Example: The sovereignty of Parliament.

Synonyms: Jurisdiction, Supremacy

Antonyms: Subservience, Subjection

5) Spurning

Meaning: Reject with disdain or contempt.

Example: He spoke gruffly, as if afraid that his invitation would be spurned.

Synonyms: Refuse, Decline

Antonyms: Accept

6) Rhetoric

Meaning: The art of effective or persuasive speaking or writing, especially the exploitation of figures of speech and other compositional techniques.

Example: He is using a common figure of rhetoric, hyperbole.

Synonyms: Oratory, Delivery

7) Defusing

Meaning: Remove the fuse from (an explosive device) in order to prevent it from exploding.

Example: Explosives specialists tried to defuse the grenade.

Synonyms: Deactivate, Disarm

Antonyms: Activate

8) Status Quo

Meaning: The existing state of affairs, especially regarding social or political issues.

Example: They have a vested interest in maintaining the status quo.

9) Exemplary

Meaning: Serving as a desirable model; very good.

Example: Exemplary behavior.

Synonyms: Perfect, Excellent

Antonyms: Deplorable, Unworthy

10) Aggressive

Meaning: Ready or likely to attack or confront; characterized by or resulting from aggression.

Example: He’s very uncooperative and aggressive.

Synonyms: Hostile, Bellicose

Antonyms: friendly, Peaceful

11) Barrage

Meaning: Bombard (someone) with questions, criticisms, or complaints.

Example: His doctor was barraged with unsolicited advice.

12) Blew Up

Meaning: Begin to develop; Emerge or become public.

Example: Outside the sky was overcast and a wind had blown up.

Synonyms: Erupt

13) Torturous

Meaning: Characterized by, involving, or causing pain or suffering.

Example: A torturous five days of fitness training.

14) Barracks

Meaning: A building or group of buildings where soldiers live.

Example: The barracks was/were surrounded by a high wall.

Synonyms: Garrison, Camp

15) Militia

Meaning: A military force that is raised from the civil population to supplement a regular army in an emergency.

Example: Creating a militia was no answer to the army’s manpower problem.

16) Insurgency

Meaning: An active revolt or uprising.

Example: Rebels are waging an armed insurgency to topple the monarchy.

17) Restive

Meaning: Unable to remain still, silent, or submissive, especially because of boredom or dissatisfaction.

Example: The crowd had been waiting for hours and many were becoming restive.

Synonyms: Restless, Fidgety

Antonyms: Calm, Biddable

18) Simmering

Meaning: Show or feel barely suppressed anger or other strong emotion.

Example: She was simmering with resentment.

Synonyms: Rave, Chafe

19) Predecessor

Meaning: A thing that has been followed or replaced by another.

Example: The new President’s foreign policy is very similar to that of his predecessor.

Synonyms: Precursor, Antecedent

Antonyms: Successor