Short Notes - Regulatory Bodies

Reserve Bank of India

In 1926, the Hilton-Young Commission recommended the creation of a

central bank for India.

The Reserve Bank of India Actwas enacted in 1934, under which the
RBI was formed.

The RBI Act came into force on April 1, 1935, and the RBI
commenced its operations.

The Reserve Bank of India was nationalisedin 1949.

The RBI is also known as ‘Mint Streetʼ

Organizational Structure

Short Notes  Regulatory Bodies 1

 The Central Board of Directors is at the top of the RBIʼs organizational
structure.

The Governor is the RBIʼs chief executive.

The Central Government nominates 14 Directors on the Central

Board.

The RBI Governor and a maximum of four Deputy Governors are

also ex officio Directors on the Central Board.

Short Notes  Regulatory Bodies 2

 Current RBI Governor – =>
Shaktikanta Das Sanjay malhotra1 / :

since dec 2024

The RBI has 4 zonal offices:

1. Delhi
2. Chennai
3. Kolkata
4. Mumbai

Board for Financial Supervision (BFS)

Short Notes  Regulatory Bodies 3

 Sub-committee of the Central Board of RBI

Set up in November 1994

For consolidated supervision of the financial sector

Governor of the RBI is the Chairman of the BFS

Department of Supervision DoS formed in November 2019  holistic

approach to supervision and regulation

Models used for Supervision

CAMELS CALCS

For supervision of For supervision of

domestic banks foreign banks

C  Capital Adequacy C  Capital Adequacy

A  Asset Quality A  Asset Quality
M  Management
L  Liquidity
E  Earnings
L  Liquidity C  Compliance
S  Sensitivity to Market S  Systems
Risk
S System and control

Risk-based
Supervision

Short Notes  Regulatory Bodies 4

 Recommended by former Deputy Governor, K.C. Chakrabarty after
financial crisis of 2008
RBS Framework  SPARC Supervisory Program for Assessment of Risk
and Capital)
All the scheduled commercial banks in India are now under the RBS
framework

Board for Regulation and Supervision of

Payment and Settlement Systems (BPSS)

The BPSS lays down policies for regulation and supervision of payment
and settlement systems in India.
The Reserve Bank Governor is the Chairman of the BPSS.

Subsidiaries of RBI

1. Deposit Insurance and Credit Guarantee Corporation DICGC

>
-

1978

The Deposit Insurance and Credit Guarantee Corporation DICGC

came into existence in 1978.
-

The Head Office of the DICGC is located in Mumbai.

-
-

All co-operative banks and commercial banks including the branches

of foreign banks functioning in India, Local Area Banks, and Regional
Rural Banks are covered under the Deposit Insurance Scheme.

The DICGC insures principal and interest up to a maximum amount of

*
₹ 5 lakhs.

Short Notes  Regulatory Bodies 5

 2. Bharatiya Reserve Bank Note Mudran Private Limited BRBNMPL >
-
1995
BRBNMPL was established in 1995 to augment the production of
bank notes in India and to enable bridging of the gap between
supply and demand for bank notes in the country.

BRBNMPL manages two Presses, one at Mysore in Karnataka and

-

the other at Salboni in West Bengal.

-

3. Reserve Bank Information Technology Private Limited ReBIT ->

2016

ReBIT was set up by RBI in 2016 for its IT and cyber security needs
and to bensure cyber resilience of Indian banking.

It focuses on IT and cyber security (including related research) of

the financial sector and assists in IT systems audit and assessment
of the RBI.

4. Indian Financial Technology and Allied Services IFTAS

IFTAS designs, deploys & provides the essential IT-related services,

required by the Reserve Bank of India, banks, and financial
institutions.

IFTAS operates CLOUD, the only community cloud in the country,

hosting cloud-based solutions dedicated to the Banking & Financial
Community.

Short Notes  Regulatory Bodies 6

 5. Reserve Bank Innovation Hub RBIH - 2022

RBIH was set up as a Section 8 company under Companies Act,

2013, with an initial capital contribution of ₹100 crore.

RBIH aims to promote and facilitate an environment that accelerates

innovation across the financial sector.

The Governor of RBI inaugurated RBIH on 24 March, 2022, in

Bengaluru.

Functions of RBI
Monetary Policy

Monetary policy is a set of actions to control a nation's overall money

supply and achieve economic growth.

Types of Monetary Policy

Short Notes  Regulatory Bodies 7

 Expansionary Monetary Contractionary Monetary
Policy Policy

An expansionary An contractionary
monetary policy is monetary policy is
focused on increasing focused on decreasing
the money supply in an the money supply in an
economy. economy.

An expansionary An contractionary
monetary policy is monetary policy is
implemented by lowering implemented by
key interest rates thus increasing key interest
increasing money supply. rates thus decreasing
money supply.

How does the RBI control Inflation?

Inflation is a general increase in the prices of goods and services in

an economy.

When the general price level rises, each unit of currency buys fewer
goods and services.

During inflation, RBI uses a contractionary monetary policy to reduce

the supply of money within an economy by lowering the prices of
bonds and rising interest rates.

Thus, consumption falls, prices fall and inflation slows down.

Instruments of Monetary Policy

Quantitative Instruments Qualitative Instruments
Influence the total volume of the credit Influence the selective use of credit

Short Notes  Regulatory Bodies 8

 Quantitative Instruments

1. Repo Rate >

- Borrow 0 25 %
.

of NDTL
Repo rate is the interest rate at which the RBI lends money to
commercial banks; against a collateral. overnight >
-

Term Repo -7 NDTL

14 days 0 75 %
-
.
. 28 .

&
Longterm Repo-1 . 3
yes
.

1. 5 LG .

2. Reverse Repo Rate

Reverse repo rate is the rate at which the RBI borrows money from
commercial banks.

During inflation, RBI increases repo rate as this acts as a disincentive

for banks to borrow from the central bank. This ultimately reduces
the money supply in the economy and thus helps in arresting
inflation.

An increase in the reverse repo rate will decrease the money supply
and vice-versa. An increase in reverse repo rate means that
commercial banks will get more incentives to park their funds with
the RBI, thereby decreasing the supply of money in the market.

3. Liquidity Adjustment Facility LAF

LAF is a tool used by RBI, which enables banks to borrow money

through repurchase agreements (repo) or to lend to the RBI using
reverse repo contracts.

(fixed) to its
bank would charge
Lending Rate (BPLR)
rate
Bench Prime
-

S
most credit custome
worthy
standardisation) not so

(Bring transparency ,

productive
< MSF rate
Reporte
.

Short Notes  Regulatory Bodies 9

Baserate - Vate below which a

Bank can not offer loans to
 it customers .

g6 25 %
.

Collectual.
Bank can Kept SLI as

4. Marginal Standing Facility MSF up to 1% of Banki NDTL

MSF is a window for banks to borrow from the RBI in an emergency

situation when inter-bank liquidity dries up completely.
For overnight

5. Policy Corridor

The Corridor in monetary policy of the RBI refers to the area between
the reverse repo rate and the MSF rate.

The MSF rate as the ceiling and the Reverse Repo rate as the floor
determine the policy corridor.

9 6 75 .

6. Bank Rate >

-
long ferm lending rate .

rate
used in Rediscounting
Bank rate is the rate at which the RBI provides loans to commercial
·

Penalty Rate banks without any collateral.

(Bank rate + x % )
Set by RBI

0-15 % (RBI Act 1949) in .

2007
7. Cash Reserve Ratio CRR
4 5 %&
.

CRR is the percentage of deposits that banks have to maintain with

the RBI. The proportion required to be maintained is notified by the
RBI from time to time. CRR
Interest on
=
0% interst after
2007
Narshimah CIR
-
shad be / BY

E 8. Statutory Liquidity Ratio SLR 0 -

40 % (RBI Act 1949)
18 %
SLR is money kept in terms of liquid assets like cash, gold, RBI
approved securities.

SLR is maintained so that banks have liquid reserves, which can be

used in times of need.

with investment grade rating

* Bonds & Debentures of private firms
Bank
* Certificate
Short Notes  Regulatory Bodies
of Depositissued by 10
with Alt Ratings
↑ Commercial paper of NBFC
 * Securities issued by WB ,
ADB

NABARD SIDBI
* securities" by ,

maintained RBI Penalise

report if not
.

>
-
Bank show 15 day
every

9. Open Market Operations OMOs)

OMOs include both, repurchase (repo or reverse repo) operations

and outright purchase and sale of government securities, for
injection and absorption of liquidity, respectively.

10. Market Stabilization Scheme MSS

MSS was introduced in 2004. Under this scheme, the RBI absorbs
surplus liquidity in the market, by selling short-dated government
securities and treasury bills.

Qualitative Instruments

1. Margin Requirements

Margin requirement refers to the difference between the current

value of the security offered for loan (called collateral) and the value
of loan granted.

For example, mortgaging land for Rs 100 lakh with the bank for a loan
of Rs 75 lakh. So, the margin requirement would be Rs 25 lakh.

In case of inflation, the margin requirement is increased so that

demand for loans are decreased.

2. Credit Rationing

Rationing of credit is a method by which RBI seeks to limit the

maximum amount of loans and advances. RBI may also fix ceiling for
specific categories of loans and advances.

Short Notes  Regulatory Bodies 11

 3. Moral Suasion

Moral suasion is a request by the RBI to the commercial banks to

take specific measures as per the economy's trends. For instance,
RBI may direct banks not to give out certain loans.

4. Direct Action

RBI has the power to take direct action against commercial banks in
case of non-compliance of any rules and regulations or against any
illicit activities performed by these banks.

Operation Twist was an unconventional measure used by RBI to

revive the economy during the COVID19 pandemic.

Under Operation Twist the RBI twists the yield of government

securities by simultaneously selling short-term securities and buying
long-term securities through open market operations.

What is Operation Twist?

Operation Twist was an unconventional measure used by RBI to
revive the economy during the COVID19 pandemic.

Under Operation Twist the RBI twists the yield of government

securities by simultaneously selling short-term securities and
buying long-term securities through open market operations.

Short Notes  Regulatory Bodies 12

 Monetary Policy Committee

MPC was constituted on September 29, 2016 to determine the policy

rate to achieve the inflation target.

The MPC has six members, including the RBI Governor, who is the
Chairperson of the MPC.

MPC is responsible for fixing the benchmark interest rate in India.

The current mandate of the committee is to maintain 4% annual

inflation until 31 March 2026 with an upper tolerance of 6% and a
lower tolerance of 2%.

Short Notes  Regulatory Bodies 13

 II. Currency Management

Central government is responsible for design and minting of coins of

various denominations.

Currency notes are issued by RBI; Rupee 1 note is issued by the

central government.

RBI notes are a liability, whereas coins and Rupee 1 notes are
assets.

Demonetization is the act or process of removing the legal status of

currency unit.  Demonetization can be done to overcome
hyperinflation, to curb black money, to foster economic stability, to
remove counterfeit currency, etc.

What is Demonetization?

Demonetization is the act or process of

removing the legal status of currency
unit.

Demonetization can be done to

overcome hyperinflation, to curb black
money, to foster economic stability, to
remove counterfeit currency, etc.

Phases of Demonetization in India

1946 1978 2016

What are Currency Chests?

Short Notes  Regulatory Bodies 14

 Branches of selected banks where bank notes and rupee coins
are stored on behalf of RBI, for further distribution.

RBI has set up over 3054 currency chests all over the country.

The Committee on Currency Movement CCM chaired by Shri

D.K.

Mohanty recommended that RBI should encourage banks to

open large Currency Chests (CCs) with modern facilities and
Chest Balance Limit CBL of at least ₹ 10 billion.

Banker to Banks
RBI enables smooth, swift and seamless clearing and settlement of inter-bank
transactions and provides an efficient means of funds transfer for banks.

RBI acts as a lender of last resort.

Banker to Governments

Various accounts of Central Government are maintained in E

Kuber CBS system in all the Regional Offices of the RBI.

The Central Government is required to maintain a minimum

cash balance with the Reserve Bank: Rs.10 crore on a daily

Short Notes  Regulatory Bodies 15

 basis and Rs.100 crore on Fridays, and at the annual account
closing day.

Ways and Means Advances

The Ways and Means Advances Scheme was introduced in

O
1997.  RBI grants WMA to the Central and State Governments
to tide over temporary mismatches in the receipts and
payments of Governments.

WMA help Governments to bridge the interval between

expenditure and receipts.

Financial Regulation and Supervision

The Board for Financial Supervision BFS is the principal

guiding force behind RBIʼs regulatory and supervisory
initiatives.

In respect of banks, RBI derives its powers from the provisions

of the Banking Regulation Act, 1949.

Foreign Exchange Management

RBI is the custodian of Indiaʼs foreign exchange reserves.

RBI supervises and regulates forex through the provisions of

the Foreign Exchange Management Act, 1999.
-

Payment Systems

Short Notes  Regulatory Bodies 16

 Payment and Settlement Systems Act, 2007

The Payment and Settlement Systems Act came into force with
effect from 12 August 2008.

The PSS Act, 2007 provides for the regulation and supervision
of payment systems in India.

RBI is authorized under the Act to constitute the Board for

Regulation and Supervision of Payment and Settlement
Systems BPSS.

Pre-paid Payment Instruments

PPIs can be loaded / reloaded by cash, debit to a bank

account, credit and debit cards, PPIs, and other payment
instruments issued by entities regulated in India and in INR
only.

The cash loading of PPIs is limited to Rs. 50,000/- per month.

Short Notes  Regulatory Bodies 17

 Types of PPIs
Small PPIs Full-KYC PPIs

They can be used only for purchase of goods and services

They can be used for purchase of goods and services, cash

withdrawal and funds transfer The amount outstanding at any
point of time shall not exceed Rs. 10,000

The amount outstanding at any point of time shall not exceed

Rs. 2,00,000/The total amount debited during any given month
shall not exceed Rs. 10,000.

No limits prescribed for total credits or debits during a month.

Funds transfer is not permitted Funds transfer is allowed within

a limit of Rs.10,000/- per month per holder.

Retail Payment Systems

Retail payment systems can be broadly classified based on the medium of
transactions, i.e., paper-based systems, electronic systems, mobile-based.

Short Notes  Regulatory Bodies 18

 Electronic Payments
Real Time Gross Settlement System

RTGS was implemented by the RBI in March 2004, for inter-

bank payments settlement on a 'real' time and gross basis.

The RBI implemented the Next Generation RTGS NGRTGS in

2013, which is built on ISO20022 standards.

National Electronic Funds Transfer

NEFT was introduced in November 2005. It is a nation-wide

payment system, facilitating one-to-one funds transfer.

Short Notes  Regulatory Bodies 19

 With effect from 16 December, 2019, NEFT has now become a
24X7 system.  The minimum amount to be remitted through
RTGS is ₹ 2,00,000/- with no upper or maximum ceiling.

Immediate Payment System

IMPS is an instant, 24X7, interbank electronic fund transfer

service, launched in 2010.

The service is designed for mobile phone users and can be

availed through MMID Mobile Money Identifier), a unique 7-
digit unique number.

RuPay Card

The RuPay card payment scheme, launched by the NPCI,

allows all Indian banks and financial institutions in India to
participate in electronic payments.

RuPay cards are accepted at all ATMs across India.

Unified Payments Interface

UPI is a system that powers multiple bank accounts into a
single mobile application.

The NPCI has launched its own UPI-based app called Bharat
Interface for Money BHIM.

USSD (*99#)

Short Notes  Regulatory Bodies 20

 The NPCI has launched the National Unified USSD Platform
NUUP to make mobile banking accessible to all non - smart
phone users.

Banking customers can avail this service by dialling *99#, a

common number across all Telecom Service Providers, on their
mobile phones.

Clearing Corporation of India (CCIL)

CCIL was set up in April 2001 as a Central Counter Party CCP

for clearing and settlement of trades in money market,
government securities and foreign exchange markets.

The act of CCIL interposing as CCP upon acceptance of the

trades by it by replacement of the existing obligations with the
new obligations is known as “Novationˮ.

National Payments Corporation of India (NPCI)

NPCI was launched in 2008 as a joint initiative of RBI and

Indian Banksʼ Association IBA.

NPCI is an umbrella organization for operating retail payments

and settlement systems in India.

Short Notes  Regulatory Bodies 21

 Negotiated Dealing System

NDS is an online trading platform for trading of Government

-

securities in India, created by RBI in February 2002.

- -

On August 1, 2005, RBI introduced the anonymous screen-

-

based order matching module on NDS, called NDSOM. It is

- -

operated by The Clearing Corporation of India CCIL on behalf

- -

of the RBI.
-

SECURITIES AND EXCHANGE BOARD OF INDIA

SEBI is the regulatory body for securities and commodity

market in India.
12 April
SEBI came into existence in 1988 through an Executive Order,
and attained statutory status in 1992.

SEBI is headquartered in Mumbai.

As of 1st March 2022, Madhabi Puri Buch is the chairman of

SEBI.
Tuhin Kanta Pandey is the current chairperson

She is the first woman chairperson of SEBI.

Who are the intermediaries registered with SEBI?

Basic function -

Protect the interests of investors

.
in Securities market a to
promote and
the market
regulate
>
-
Regulatory function --
Registration ,
audit
Short Notes  Regulatory Bodies 22
 Stock Exchanges

Brokers Portfolio

Managers

Underwriters

Depositories

Participants

Credit Rating Agencies

Venture Capital Funds

Mutual Funds

FIIs

Retail Individual Investor

Retail individual investor means an investor who applies or bids for securities for a
value of not more than Rs. 2,00,000.

Categories of Investors Qualified Institutional Buyer

QIBs are those institutional investors who are generally perceived to possess
expertise and the financial muscle to evaluate and invest in the capital markets.

Non-Institutional Investor
Investors who do not fall within the definition of the other two categories are
categorized as “Non Institutional Investorsˮ.

Short Notes  Regulatory Bodies 23

 Quasi-Judicial
Authority to deliver judgements related to fraud and other unethical practices

Powers of SEBI

Quasi-Executive
Authority to implement regulations and to take legal action against violators

Quasi-Legislative

Right to frame rules and regulations to protect the interests of

the investors.

Securities Appellate Tribunal is formed as a statutory body as

per the provisions of Section 15K of the SEBI Act, 1992 where
orders passed by the SEBI are appealed, heard and resolved.
Securities Appellate Tribunal SAT

Insider Trading
What is Insider Trading?
Insider trading is the trading of a public company's stock or other securities
based on unpublished price-sensitive information.

Short Notes  Regulatory Bodies 24

 Penalty for Insider Trading
Minimum penalty:Rs. 10 lakh • Maximum penalty:Rs. 25 crore,
or 3 times the profit; whichever is higher.

Investor Protection and Education Fund (IPEF)

Investor Education and Protection Fund Authority was

established by Government of India on 7th September, 2016 for
administration of Investor Education and Protection Fund under
the provisions of section 125 of the Companies Act, 2013.

 In 2013, SEBI had set up a committee to find out ways and

means to best utilize the IPEF.

The committee was restructured in 2022.

Rolling Settlement

Short Notes  Regulatory Bodies 25

 SEBI introduced T5 rolling cycle in July 2001, which was
shortened to T3 rolling cycle in April 2002. The T3 cycle was
shortened to T2 in April 2003. In February 2022, SEBI
introduced the T1 settlement cycle.

Subsidiaries of NABARD

Any pooling of funds under any scheme or arrangement, which

is not registered with SEBI and involving a corpus amount of
Rs. 100 crore or more shall be deemed to be a collective
investment scheme.

NATIONAL BANK FOR AGRICULTURE AND RURAL

DEVELOPMENT
NABARD was established on the recommendations of the B.
Sivaraman Committee on 12 July 1982.

NABARD is fully owned by Government of India.

NABARD has its head office at Mumbai.

NABARD is responsible for the supervision and statutory

inspection of State Cooperative Banks StCBs), District
Cooperative Central Banks DCCBs) and Regional Rural Banks
RRBs).

Collective Investment Scheme

NABKISAN Finance Limited

Short Notes  Regulatory Bodies 26

 Incorporated in 1997 enterprises engaged in agriculture, allied
and rural non-farm activities.

NABSAMRUDDHI Finance Limited

Incorporated in 1997  Registered as a Non-Banking Finance Company NBFC
with RBI

Provides credit facilities to legal entities for promotion, expansion,

commercialization and modernization in non-farm activities including
microfinance, MSME, housing, education, transport, etc.

NABFINS Limited
Incorporated in 1997.
Registered with RBI as a Non-Banking Financial Company  Micro-finance
Institution NBFCMFI.
Provides financial services by providing micro finance and other facilities to
needy and disadvantageous sections of the society.

NABFOUNDATION

Incorporated as a not-for-profit company in August 2019 

Aims to implement sustainable projects in the field of
agriculture and rural development in a coordinated manner.

NABCONS (NABARD Consultancy Services)

Created in 2003 to provide consultancy in all spheres of agriculture, rural
development and allied areas.

Short Notes  Regulatory Bodies 27

 7 major verticals under NABCONS

1. Agriculture & Animal Husbandry AAH,

2. Food Processing & Storage FPS,

3. Third Party Monitoring & Infrastructure TPM,

4. International Business & Climate change IB & CC,

5. Skills for livelihood,

6. Banking & Finance B&F and

7. Socio-economic Studies SES

NABVENTURES Limited
A venture growth equity fund that invests in agriculture, food, rural businesses
and agri/rural financial services at early to mid-stage.

NABSanrakshan Trustee Company Private Limited

Aims to carry out credit guarantee and related activities towards sustainable and
equitable agriculture and rural development.

Short Notes  Regulatory Bodies 28

 Financial Responsibilities of NABARD

Rural Infrastructure Development Fund -unf)

Set up in 1995 with an initial corpus of Rs 2000 crore, for supporting rural
infrastructure projects

Eligible activities under RIDF:

1. Agriculture and related sector
2. Social sector
3. Rural connectivity

Long Term Irrigation Fund

Set up in 201617 with an initial corpus of Rs 20,000 crore, for

funding and fast tracking the implementation of incomplete
major and medium irrigation projects.

Under LTIF, NABARD provides loan towards Central share as

well as State Share with a tenor of 15 years.

Central share is provided to National Water Development

Agency NWDA.

NABARD Infrastructure Development Assistance

Short Notes  Regulatory Bodies 29

 Set up in 201011 as a new line of credit support for funding
rural infrastructure projects.

Offers customized terms based on the requirements of the

borrower, nature of the project, and risk profile of the borrower.

Warehouse Infrastructure Fund

Set up in 201314 with an initial corpus of Rs 5000 crore, for providing
affordable credit to facilitate augmentation of the existing agricultural
warehousing infrastructure.

Micro Irrigation Fund

Set up in 201920 with an initial corpus of Rs 5000 crore, to

mobilize additional resources for expanding coverage under
micro irrigation and incentivizing its adoption.

State Governments are provided loans at 3% below the cost of

funds; the 3% being compensated by the Government of India
as interest subvention.

Developmental Responsibilities of NABARD

Kisan Credit Card Scheme

Short Notes  Regulatory Bodies 30

 Introduced in August 1998 to provide term loan for agricultural
needs of the farmers  Recommended by R. V. Gupta
Committee

Farmers can avail collateral-free loan up to Rs. 1 lakh

Premium borne by both the bank and borrower in respective

21 ratio.

Self Help Group – Bank Linkage Programme

Started in 199293 to link SHGs of poor to the formal financial

institutions.

Largest microfinance programme in the world, in terms of the

client base and outreach  Project EShakti launched on 15
March 2015 to digitize SHGs.

Supervisory Responsibilities of NABARD

NABARD conducts inspections of State Cooperative Banks StCBs), District
Central Cooperative Banks DCCBs) and Regional Rural Banks RRBs).

SMALL INDUSTRIES DEVELOPMENT BANK

OF INDIA
Established on April 02, 1990 as a wholly owned subsidiary of
Industrial Development Bank of India IDBI.

Delinked from IDBI w.e.f. March 27, 2000 SIDBI is

headquartered in Lucknow.

Short Notes  Regulatory Bodies 31

 Aims to aid the growth and development of micro, small and
medium-scale enterprises MSME in India.

Shareholding Pattern of SIDBI

Name of Shareholder % of Holding

Subsidiaries of SIDBI
SIDBI Venture Capital Ltd.

Set up in July 1999 as an Investment Management Company •

SVCL managed funds have assisted MSMEs in various sectors
like manufacturing, technology, services, etc.

Credit Guarantee Fund Trust for Micro and Small

Enterprises
Jointly set up by SIDBI, Ministry of MSMEs, and Government of India in 2000.

Operates the Credit Guarantee Scheme CGS for MSEs in respect of credit
facilities up to Rs. 2 crores.

Launched the Udaan portal in 2020, to increase the reach of CGS to eligible.
entrepreneurs and entities.

India SME Technology Services Ltd. Set up in November 2005 to strengthen

and accelerate the process of technological modernization in the MSME
sector.

Short Notes  Regulatory Bodies 32

 Conducts Zero Defect  Zero Effect ZED Scheme Awareness Workshops for
MSMEs..

SME Rating Agency of India Ltd.

Launched in 2005, SMERA is world's first SME-focused rating

agency  SMERA is a wholly owned subsidiary of Acuité
Ratings & Research Ltd.

India SME Asset Reconstruction Company Ltd.

Incorporated in 2008, as the countryʼs first Asset
Reconstruction Company for MSME NPAs.

Aims to acquire NPAs, primarily from MSMEs, and accelerates

the restructuring of potentially viable units and liquidation of
unviable units.

Micro Units Development & Refinance Agency Ltd.

Set up on April 08, 2015 for “funding the unfundedˮ micro

enterprises.

Pradhan Mantri MUDRA Yojana PMMY launched on April 8,

2015 for providing loans up to Rs. 10 lakh to the non-corporate,
non-farm SMEs.

Short Notes  Regulatory Bodies 33

 Products under PMMY

1. Shishu: loans up to Rs. 50,000/

2. Kishor: loans above Rs. 50,000/- and up to Rs. 5 lakh

3. Tarun: loans above Rs. 5 lakh to Rs. 10 lakh

Receivables Exchange of India Ltd.

Incorporated on February 25, 2016 as a joint venture between
SIDBI and NSE

Operates the TReDS platform as per trade guidelines issued by

RBI

To decrease the financing concerns faced by MSMEs in India,

RBI introduced the concept of TReDS in 2014.

Trade Receivable Discounting Systems TReDS is a

mechanism for financing trade receivables on a secure digital
platform.

Loan Facilitation & Syndication Service

SIDBI facilitates bank loans for new as well as existing
manufacturing and service sector units in partnership with

Short Notes  Regulatory Bodies 34

 Banks, Rating Agencies (RAs) and Accredited Consultants
(ACs).

It is a transparent, structured mechanism for timely

consideration of loan applications.

NATIONAL HOUSING BANK

Set up on 9 July, 1988 as an apex level

NHB RESIDEX

Indiaʼs first official housing price index

Launched in July, 2007, to track the movement in prices of

residential properties in select cities on quarterly basis, taking
2007 as the base year.

Includes the following indices:

Housing Price Indices HPI

Land Price Indices LPI

Building Materials Price Indices BMPI

Housing Rental Index HRI

Short Notes  Regulatory Bodies 35

 EXPORT-IMPORT BANK OF INDIA

Established in 1982 for the purpose of financing, facilitating

and promoting foreign trade in India.

EXIM is wholly owned by Government of India.

Functions of EXIM
Buyerʼs Credit

Overseas buyer can open a "letter of credit" in favour of the

Indian exporter and can import goods and services from India
on deferred payment terms.

Exporter benefits through reduced transaction costs and

complexities of internal trade transactions.

Corporate Banking
EXIM offers a range of financing programmes to enhance the
export competitiveness of Indian companies.

Lines of Credit

EXIM extends LOC to Indian exporters to enable them to enter

new areas and expand their business without payment risk
from importers.

EXIM also extends LOC to overseas institutions and entities, to

enable overseas buyers to import developmental and

Short Notes  Regulatory Bodies 36

 infrastructure projects, equipment, goods and services from
India, on deferred credit terms.

Overseas Investment Finance

EXIM provides term loans to Indian companies for equity investment in their
overseas Joint ventures or wholly owned subsidiaries.

EXIM provides support to project activities in engineering, procurement, and

construction.
~
Mumbai

EXPORT CREDIT GUARANTEE Cecac)

CORPORATION OF INDIA LTD. - mino Commerce
industry

Establishment Founded in 1957 as a wholly owned company

of the Government of India.

Primary Objective Enhances the competitiveness of Indian

exporters by providing credit insurance covers.

Services for Exporters:

Offers a variety of credit risk insurance covers to safeguard

against losses in exporting goods and services.

Support to Banks and Financial Institutions:

Provides Export Credit Insurance covers to banks and

financial institutions, helping exporters secure better
financial facilities.
non-payment by importer
->
Protection against the

Short Notes  Regulatory Bodies 37

 Overseas Investment Insurance:

Offers insurance to Indian companies for their investments

in joint ventures abroad, covering equity and loan
contributions.

Export Risks Insurance Corporation ERIC  1957

-

Export Credit and Guarantee Corporation Limited ECGC  1964

Export Credit Guarantee Corporation of India ECGC  1983

Functions of ECGC

Provides a range of credit risk insurance covers to exporters against loss

in export of goods and services.

Offers Export Credit Insurance covers to banks and financial institutions

to enable exporters to obtain better facilities from them.

.
related to export
* Provide guidance to activities

* Assist exporters in recovery bad betts

Short Notes  Regulatory Bodies 38
 Provides Overseas Investment Insurance to Indian companies investing
in joint ventures abroad in the form of equity or loan.

Short Notes  Regulatory Bodies 39

~ 8000 or lent in first quarter

1 ear sanction for greenfield &

Brownfield