Page 30 - Corporate Finance PDF Final new link

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30 Corporate Finance BRILLIANT’S

Department of company affairs etc. Two H§$nZr A\o$`g© Am{X Ûmam [Z`§{ÌV {H$`m OmVm h¡Ÿ&
major Regulatory and Promotional Insti- ^maV _| Xmo à_wI ao½`yboQ>ar VWm à_moeZb
tutions in India are Reserve Bank of India B§ñQ>rQ²>`yeÝg [aOd© ~¢H$ Am°\$ B§{S>`m (RBI) VWm
(RBI) and Securities Exchange Board of In- {gŠ`y[aQ>rO E§S> EŠgM|O ~moS>© Am°\$ B§{S>`m (SEBI)
dia (SEBI). Both RBI and SEBI administer, h¢Ÿ& RBI VWm SEBI XmoZm| hr gånyU© {dÎm àUmbr H$mo
legislate, supervise, monitor, control and ES>{_{ZñQ>a, bo{OñboQ>, gwnadmBO, _m°ZrQ>a, H§$Q´>mob
discipline the entire financial system. VWm {S>{gpßbZ H$aVo h¢Ÿ&
(ii) Banking institutions: Banking institutions (ii) ~¢{H§$J B§ñQ>rQ²>`yeÝg… ~¢qH$J B§ñQ>rQ²>`yeÝg bmoJm|
mobilize the savings of the people and ex- H$s ~MV H$mo J{Verb ~ZmVo h¢ VWm b|qS>J _Zr go
tend credit by lending money. They also H«o${S>Q> XoVo h¢Ÿ& do F$U ^r XoVo h¢Ÿ& do JwS>²g VWm
create credit. They provide a mechanism
for the smooth exchange of goods and ser- g{d©gog Ho$ gwMmê$ {d{Z_` Ho$ {bE EH$ H$m`©àUmbr
vices. àXmZ H$aVo h¢Ÿ&
There are three basic categories of bank- ~¢qH$J B§ñQ>rQ²>`yeÝg H$s VrZ àmW{_H$ lo{U`m± h¢…
ing institutions:
(a) Commercial Banks (a) H$_{e©`b ~¢Šg
(b) Co-operative Banks (b) H$moAm°nao{Q>d ~¢Šg
(c) Developmental Banks (c) S>odbn_|Q>b ~¢Šg
(iii) Non-banking institutions: These institu- (iii) Zm°Z-~¢qH$J B§ñQ>rQ²>`yeÝg… `o B§ñQ>rQ²>`yeÝg bmoJm|
tions also mobilize financial resources di- go àË`j `m AàË`j ê$n go \$m`Z|{e`b [agmog}g
rectly or indirectly from the people. They H$mo ^r J{Verb H$aVo h¢Ÿ& do J{Verb {H$`o J`o
lend the financial resources mobilized but \$m`Z|{e`b [agmog}g H$mo CYma XoVo h¢ {H$ÝVw H«o${S>Q>
do not create credit. Zht XoVo h¢Ÿ&
They can be categorized as investment do BÝdoñQ>_|Q> H$ånZrO, hmCqgJ H$ånZrO, brqOJ
companies, housing companies, leasing H$ånZrO, hm`a nMo©g H$ånZrO, ñno{e`bmBÁS>
companies, hire purchase companies, spe-
\$m`Z|{e`b B§ñQ>rQ²>`yeÝg (EXIM ~¢H$ Am{X),
cialized financial institutions (EXIM Bank BÝdoñQ>_|Q> B§ñQ>rQ²>`yeÝg, ñQ>oQ> bodb B§ñQ>rQ²>`yeÝg
etc.), investment institutions, state level in-
stitutions etc. Am{X Ho$ ê$n _| dJuH¥$V {H$`o Om gH$Vo h¢Ÿ&
2. Financial Markets: Financial markets 2. \$m`Z|{e`b _mH}$Q²>g… \$m`Z|{e`b _mH}$Q²>g dh
are places where the borrowers/users of fund ñWmZ h¢ Ohm§ \§$S> Ho$ ~m°amoAa/`yOa VWm \§$S> Ho$ b|S>g©/
and the lenders/ givers of fund meet in various
ways, depending on the demand and supply of {Jdg© {d{^ÝZ VarH$m| go {_bVo h¢ Omo \§$S> H$s _m§J VWm
fund. Amny{V© na {Z^©a H$aVm h¡&
The financial market consists of: \$m`Z|{e`b _mH}$Q> _| gpå_{bV h¢…
(i) Primary Market: Where the first-time (i) àm`_ar _mH}$Q>… Ohm§ \$ñQ>©-Q>mB_ b|S>g© VWm \$ñQ>©-
lenders and the first-time borrowers meet; Q>mB_ ~m°amoAg© {_bVo h¢&
(ii) Secondary Market: Where the person who (ii) goH§$S>ar _mH}$Q>… Ohm§ ì`pŠV Omo AmJo {Zdoe H$aZo _|
are interested in further investment come ê${M boVo h¢ \$m`Z|{e`b B§ñQ¯>_|Q>g (Qy>ëg Omo ì`mnma