FINANCIAL INTERMEDIARIES (NBFIS)

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FINANCIAL INTERMEDIARIES (NBFIS) Wc have studied banks and their functioris. Besides the hanks there arc other financial institutions too which practically perform the same functions (e.g. deposit mobilisation and advancing loans as thc banks but in a different way. These arc the non-banking financial institutions. l\h·aniijg. Thc NUris arc just intermediaries or middlemen transferring funds Ir orn ultimate lendersto ultimate borrowers […]

Functions of the NBFfs

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Functions of the NBFs The following are the main functions perforated  produce and provide near money and not money.Iii) Tile provide liquid assets  the community.  because their liabilities arc close substitutes for money,(iii) They pass on savings to ultimate investors and issue indirect securities to thc ultimate savers in return for savings. (iv) They create loadable funds or add to their nct […]

Significance of Credit Creation

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Significance of Credit Creation Credit creation vitally affects the level of economic activity (and hence national income, output and  employment) in the country. It is no wonder that the policy pursued by the monetary authority in the country is directed to the control of credit expansion or contraction. Left to itself, credit expansion or contraction may ‘boom the booms’ and […]

CREATION OF CREDIT

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CREATION OF CREDIT Creation of credit is onc of the most important functions of a modern bank. A hank has sometimes  been called a factory for the manufacture ofcredit. Let us see what we mean by credit creation. how it is created by the banks and, finally, whether the power ofthe banks to create  credit is absolute […]

BANKING

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BANKING A bank is an institution which deals in money. Broadly speaking, bank draw surplus money from the people who are not using it at the time, and lend to those who are in. a position to use it for productive purposes. Modern banks have developed from very small beginnings. The earlier bankers were goldsmiths. Crow ther observes that […]