ipl-logo

Three Major Types Of Financial Intermediaries

1049 Words5 Pages
bulb-icon

Recommended: Banking notion

As the financial institutions play such an important role in the economy that they are also called financial intermediaries.
As the financial institutions play such an important role in the economy that they are also called financial intermediaries. Banks are the financial intermediaries that accept deposits and make loans. These are the Commercial Banks, Savings and Loan Associations, Mutual Savings banks and credit unions. Insurance Companies, Finance Companies, Pension funds, mutual funds and investment banks are also formed from the growth of banks.
Type of Intermediaries:
There are three main types of Financial Institutions with their subtypes as shown below:
• Depository Institutions (Banks): ------) Commercial Banks ------) Savings …show more content…

These include commercial banks and thrift Institutions as explained below:
Commercial Banks: These banks raise funds by accepting deposits on which cheques can be written, savings deposits and fixed time deposits. These banks use these funds in commercial, consumer and mortgage loans and to buy Pakistan Govt. Securities and Municipal Bonds. There are a number of Commercial banks in Pakistan and these are the largest financial intermediary and have the most diversified collections of assets.
Askari Bank, Habib Metropolitan Bank, MCB, Standard Chartered Bank, Bank AlFalah, UBL, Bank AlHabib Limited, NBP, HBL, Citi Bank, Allied Bank Limited.etc. are some of the examples of Commercial Banks.
Savings and Loan Associations and Mutual Savings Banks: These institutions get funds through savings deposits which are called shares and fixed and current account deposits. The best example of this Institution is National Savings Bank of Pakistan.
Credit Unions: These institutions are less in numbers which are cooperative lending institutions which are organized around a particular group that is union members, employees of a particular firm.etc. They acquire funds from shares also called deposits and give consumer loans. U Microfinance Bank Ltd, SME Bank Ltd., Tameer Microfinance Bank Ltd., Khushhali Bank Ltd, …show more content…

For these institutions the liquidity of assets is not important because these mostly invest in long term securities.
Life Insurance Companies: These insure people against financial hazards and sell annuities. They acquire funds from the premiums and they use in buying corporate bonds and mortgages. They also purchase some stocks. In Pakistan there are very few or some Insurance Companies which are Jubilee Life Insurance, EFU Life Insurance, IGI Insurance, Adamjee Life Insurance, State Life Insurance.etc
Fire and Casualty Insurance Companies: These companies insure the public against loss from theft, fire and accidents. These are just like Life Insurance Companies but they have a greater possibility of loss if major disasters occur. They usually buy more current liquid assets than Life Insurance Companies. They purchase mostly Municipal bonds, corporate bonds and stocks and Pakistan Govt. Bonds. IGI Insurance Comp. Limited, ACE Insurance Ltd., Asia Insurance Company Ltd.,

Show More
Related
1055 Words | 5 Pages

Medical benefits to employees or individuals are provided inform of insurance. Health insurance is an insurance that covers an individual against the risk of incurring medical expenses. It means that, health insurance is a coverage that provides payment as a benefit in case of sickness, injury and medical expenses. The insurance company or an agency provides insurance cover to an individual, a group of people or to an organization (Thomas, 2000). However, in this case we will compare medical benefits of Blue Cross Blue Shield Health Insurance Company (BCBS) and United Healthcare (UHC).

Read More
1718 Words | 7 Pages

Banking system is essential in our economics to maintain an effective circulation of money. The bank has functions for regulation of currency to aid strong economy. Distribution of the money is crucial to promote construction of the nation and prevention of bankruptcies. In our modern economic structure is supported and developed by the banking system. However, there was a period that the national bank was shut down by the government the consequence of the bank war.

Read More
1153 Words | 5 Pages

Life is full of wonder and beauty yet, life is also mysterious and unpredictable as well. With that said, it is best to prepare for the life ahead no matter how long and wild it could be. Insurance companies were created for this reason; preparing for the unexpected. Whether there is a hurricane, earthquake, or fire, there are insurance companies out there that allow people to buy coverage for the unpredictable future. Jackson National Life is such an insurance company that was founded on the principles of helping its customers prepare for the future ahead.

Read More
414 Words | 2 Pages

Back ground of organization JPMorgan Chase & Co has one of the longest histories in the financial banking institutions in the United States. There are a multitude of banking Firms that are associated with the organization to include but is not limited to: J.P. Morgan & Co., The Chase Manhattan Bank, Bank One, Manufacturers Hanover Trust Co., Chemical Bank, The First National Bank of Chicago, National Bank of Detroit, The Bear Stearns Companies Inc., Robert Fleming Holdings, and the Cazenove Group just to name a few of the more reputable organizations. Each of the banking firms, in its own time, was or is closely tied to innovations in finance and the growth of the U.S. and global economies. History of Organization JP Morgan Chase traces its roots back to 1799 in New York City as

Read More
2146 Words | 9 Pages

Smoot-Hawley, Reconstruction Finance Corporation, Revenue Act Of 1932 The significance of this triad is that all of these things were failed attempts under Hoover between 1929 and 1932 to pull America out of the Great Depression. Smoot-Hawley Tariff was created by Reed Owen Smoot and Willis C. Hawley in June 1930. It raised tariffs on over 20,000 imported goods and added a flat fee. It made American products affordable to stimulate the economy and pull us out of the Great Depression.

Read More
102 Words | 1 Pages

Aegon Life Rising Star Insurance Plan – Overview This non-participating unit-linked child insurance plan helps make provisions for important milestones in the lives of children. It secures their future and allows them to outshine the dreams of their parents. One is able to meet the needs of children and fulfil their aspirations with the help of this insurance plan. Why Buy This Plan One should purchase this plan if: • One wants to financially secure the child’s future inspite of any future contingencies • One wants to take advantage of equity markets but does not want to take risk by investing directly

Read More
1681 Words | 7 Pages

The capital business sector is the business sector for securities, where organizations and the legislature can raise long haul stores. The capital business sector incorporates the stock exchange what 's more, the security market. Money related controllers, for example, the U.S. Securities and Exchange Commission, direct the capital markets in their individual nations to guarantee that financial specialists are ensured against extortion. The capital markets comprise of the essential business sector, where new issues are appropriate to financial specialists, and the optional business sector, where existing securities are exchanged. (n.d.).

Read More
2030 Words | 9 Pages

They also employ many of their existing members to help sell such insurance. This struck me because

Read More
1090 Words | 5 Pages

After the Civil War, new forms of insurance such as fire insurance were developed. Many foreign companies also began to provide various insurance services because they were eager to have a share in such a profitable business. In fact, both nation’s first fire insurance was originated from Great Britain. Shifting from property-casualty, life insurance industry really took off in the 1840s as demand for life insurance grew rapidly with medical advancements and knowledge in consequences of premature death and natural disasters. How the insurance sector was regulated were also similar for both countries.

Read More
699 Words | 3 Pages

Apart from that I will go through the websites of the ASIC, APRA, ICA, product updates and other intranet resources of the company. Janet can take her complaint or dispute to the dispute resolution department of the AKC Insurance and AKC will aim to resolve her complaint or dispute as quickly

Read More
923 Words | 4 Pages

Furthermore during an induction all new staff members are required to read the policies and procedures book on their induction and during this time (or any other time) it is to be flagged up about any changes they may feel appropriate. (Recruitment Policy, 2015) A way in which country wide maintain their policy and procedure is by implementing any recommendations held by the Care commission, by the Scottish Social Services Council (SSSC) and national care standards. Q5.)

Read More
850 Words | 4 Pages

Organizational Structure Bank of America is an American financial services corporation and is the second largest bank holding organization by assets, in the United States. The headquarter of the financial organization is situated in Charlotte, North Carolina. The bank has approximately 5,700 retail banking offices and 17,250 ATMs in the United States. The online banking system of the bank has more than 30 million active users.

Read More
904 Words | 4 Pages

Exposure to credit risk is managed in part by obtaining collateral and corporate and personal guarantees. Counterparty limits are established by the use of a credit classification system, which assigns each counterparty a risk rating. Risk ratings are subject to regular revision. Liquidity Risk Liquidity risk is the risk that the company is unable to meet its payment obligations associated with its financial liabilities when they hall due and to replace funds when they are withdrawn. GK’s liquidity management process, as carried out within the Group through the ALCOs and treasury departments includes: o Monitoring future cash flows and liquidity on a daily basis o Maintaining a portfolio of highly marketable and diverse assets that can easily be liquidated as protection against any unforeseen interruption to cash flow o Maintaining committed lines of credit Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Read More
976 Words | 4 Pages

I would frame the banking as an industry that is built on trust. Trust that is reaffirmed by the governments, and regulators. Banks have an imperative role in our economic growth, and development. Correspondingly, without the bank industry, there is no industry to replace them as the conduit for social and economic policy. Equally important, there is no industry to replace them as the key performer in creating our economies multiplier effect.

Read More
1977 Words | 8 Pages

With a one-player market to 24 in 13 years, the industry has witnessed phases of rapid growth along with extent of growth moderation and intensifying competition. When India became open to foreign investment, the banking and financial sectors were reformed. By opening up of the economy, the life insurance witnessed dynamic changes as a number of global and foreign companies entered and increased the competition between the Indian

Read More

More about Three Major Types Of Financial Intermediaries

Related Topics

Open Document