Banking Licenses for the Nbfcs: a Necessary Evil?

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

Commercial banking provides consumers and potential customers with various financial services, such as deposits and loans, in a means of ensuring social stability, economic stability, and sustainable growth of the economy. Commercial banks offer a large range of investment products. While these products are not only for the use of personal accounts, they are also put to great use within organizations. Savings accounts, certificates of deposit, business loans, auto loans and mortgages are all examples of products that are offered in commercial banking. Due to the fact that certificates of deposit, saving and checking accounts are secured by the Federal Deposit Insurance Corporation (FDIC) in the United States, customers and consumers are

As I have stated before bank regulations are in place to be the backbone of the U.S. economy. Therefore, we live in a system that affects us every day. Banks have certain requirements and instruments that help them stay open and be profitable. In the 1990s, interstate banking was finally permitted to create nationwide banks of unprecedented size. Congress 's also attempted to force banks to make home loans to people who had limited creditworthiness. These regulations are a major factor in why as many banks failing and disappearing today as we did pre Federal Reserve System.

The banking industry is highly competitive. The financial services industry has beenaround for hundreds of years and just about everyone who needs banking servicesalready has them. Because of this, banks must attempt to lure clients away fromcompetitor banks. They do this by offering lower financing, preferred rates andinvestment services. The banking sector is in a race to see who can offer both the

The sector offers a considerable barrier to new entrants due to the high capital required to establish a new bank. As banking is professional services type required high creditability, strong brand presence is the key obstacle for newcomers.

Restrictions on the number of new financial services institutions allowed to enter the industry each year are needed to protect the integrity and stability of consumers’ cash and deposits, as well as outstanding loans and credit. Although many are private companies, financial institutions have a very public purpose, which is why federal regulations are needed. The safety and security of the financial institution is an important part of the overall financial system. Federal guidelines with capital structure requirements and market entry limits protect consumers from losing their money or assets to institutions who are not adequately funded to maintain business through times of financial downturn (Northeast Decision Sciences Institute, 2013). Barriers to entry in the United States financial services industry is needed and necessary to protect the American consumer and the American financial market from both foreign and domestic financial services companies. Regulating the entry of new financial services companies, whether foreign or domestic-based, also helps establish a level playing field for new and existing companies within the regulatory system (McDonough, 1993).

The Microcredit Foundation of India is a non- profit organization, and effective tool for alleviating poverty. The Microcredit Foundation has its base located in southern rural India. Microcredit works with just about everyone who needs their help; however their focus is women. Microcredit presents the women of rural communities with the opportunity to start a business. The services of micro credit are dedicated to creating a better stable economy, opportunities in the establishment of medium sized enterprises, and co-operative development. The Microcredit Foundation of India provides sufficient and affordable customer oriented funding and other financial services as well as consulting and training to the target groups. Microcredit also

The regulatory system has enabled banks to continue with their unique and central role in America's financial markets by carrying out deposit-taking, lending, and other activities. The importance of banks in the U.S. financial system has resulted in the fact that regulation and supervision by the government extends to many banking aspects. While the current banking laws and supervision has been developed by several stakeholders, the regulatory system has mainly responsible to various needs and serves as a critical part in setting up the standards and guidelines with which banking services are provided (Spong, 2000).

Although microfinance helps in combating poverty in developing countries, there is a side-effect of the implementation of MFIs in them. These are non-income or social impacts on the consumers.

Bank regulation plays a vital part in the economy today and can be attributed for a lot of its success. It has even been taken to the extent of individuals claiming bank regulation to be the backbone of our modern day economy. To fully understand this topic it is first important to define what bank regulations are. Bank regulations are a kind of government regulation that makes banks liable to certain requirements, restrictions and guidelines. Bank regulation includes determining specific regulations and guidelines to oversee all of the activities and operations of banking organizations. Banking regulations can vary widely between nations and can even be changed due to certain jurisdictions. However, even though they can differ, most

Bank mergers often occur to diminish costs and increase efficiency across the banking industry. In Finance 412, we have expressed the importance of regulatory burdens and the stress and challenges banks face with enforcing these regulations. According to Kersha Cartwright, a bank official that I spoke with, ProBank (PB), formerly located in Tallahassee, Florida, was under a regulatory order to raise more capital. Since 2009, regulators have been concerned with banks holding greater capital buffers and to keep larger reserves of liquid assets to prevent from becoming insolvent.

SME sector which contributes significantly to India’s GDP is a lucrative segment for credit too

As a young Indian, I always want India to be filled with people of new innovative, creative and productive ideas and thoughts. And I strongly believe that if these thoughts can be made into actions with the advancements in Information technology, it can heal India’s soaring problems like unemployment, illiteracy to an extent. But recent reports on India’s ‘ease of doing business’ rankings is very alarming. Even after 20 years of economic reforms, India slipped from 131st position in 2013 to 134th position in 2014.Among BRICS countries, India is doing the worst. And among the issues faced by Small, Medium Enterprises which includes startups, credit issues is a main concern. In a recent secondary research done by me in finding credit issues of SMEs, results showed that out of all SMEs, 92.77% have no finance or self-finance. This has really affected the growth of SMEs in India. Even after increase in number of venture capitalists/angel investors to protect new ideas, this result shows that time has been exceeded to find a sustainable solution for this issue.

The main aim of this report is to identify the key roles played by bank capital in the banking business. This report briefly outlines the main functions of bank capital and takes a brief look at the benefits of bank capital to the bank and the banking industry. It is hoped that from reading this paper a general understanding of the roles of bank capital in the banking business can be gained.

Microfinance institutions are playing an important role in the delivery of financial services to the poor. Increasingly, these MFIs are for-profit, limited liability companies, the ownership of which is in the hands of multiple shareholders. In most cases, shares are privately held (i.e., not publicly traded). Most such MFIs are licensed financial institutions finance companies and banks. Many are deposit takers. The microfinance industry has directed to change all that by building a financial market to meet diverse financial needs of under-served people (Armendáriz de Aghion and Morduch, 2004; Hermes and Lensink, 2011), and emerged merely with the objective of alleviating poverty, especially in developing countries (Brau, Hiatt, & Woodworth, 2009; Daley-Harris, 2006).