Financial Intermediaries:
Financial Intermediaries are the middlemen between these two types of people and channelize fund from households to the businessman /Government.
How Financial Intermediary works:
In an economy:
Common men (households)--------spend money and save money.
Households have “surplus” money in the economy
On the other hand,
Businessmen (industries) and even Government need money for functioning
These Financial intermediaries can be All India Financial Institutions (AIFI), Scheduled Commercial ,Non Scheduled Commercial banks, Cooperative banks,RRB ,Post offices
All India Financial Institutions (AIFI) :AIFI is group of financial institution engaged in developmental functions of the nation. As per RBI ,AIFI constitutes of:
- All India Development Banks
- Specialised Financial Institutions
- Investment Institutions
- Refinance Institutions
All India Development Banks comprises of IDBI,IFCI,SIDBI.
Specialised Financial Institutions comprises of EXIM Bank.
Investment Bank comprises of LIC & GIC
Refinance Institutions comprises of NABARD & NHB.
