Other Financial Institutions

Other Financial Institutions- Apart from banks, there are other institutions that carry out financial services and activities, these intermediaries play an important role in the economy. The various types of financial institutions that give banks competition are,

1. Term Lending Institutions: Term Lending Institutions provide term loans to various industries, services and infrastructure sectors to help them with new projects and expansions of existing facilities. At a national level, these institutions are typically specialized, catering to the needs of specific sectors. These include the,

Export Import Bank of India (EXIM Bank)
Small Industries Development Bank of India (SIDBI)
Tourism Finance Corporation of India Limited (TFCI)
Power Finance Corporation Limited (PFCL)
IFCI Ltd
State Financial Corporation (SFCs)
State Industrial Development Corporation (SIDCs)
North Eastern Development Financial Institutions Ltd. (NEDFI)

2. Non-Banking Finance Companies (NBFCs): The principle activities of NBFCs include equipment-leasing, hire purchase, loan and investment and asset finance. NBFCs have been competing with and complementing the services of commercial banks for a long time. Housing-finance companies form a distinct sub-group of the NBFCs. Some of the examples of NBFCs are,

Housing Development Finance Corporation Limited (HDFC)
Housing and Urban Development Corporation Limited (HUDCO)

3. Insurance Companies: Insurance/reinsurance companies provide substantial long-term financial assistance to the industrial and housing sectors. Such companies are,

Life Insurance Corporation of India (LIC)
General Insurance Corporation of India (GICI)

4. Mutual Funds: Mutual Funds aid fund mobilization, in that they offer alternate routes of investment to household. Most of the MFs arestandalone asset management companies. Banks have entered the asset management business either on their own or joint venture with others. A few Mutual funds organization are,