Provides micro loans/micro financial services Reserve Bank of India was established

as Independent body
Minimum requirement of Micro Finance Loans:
75% of total assets on recommendation of
Hilton Young Commission, 1926
Estd. through recommendation of a NBFC-MFI
Eg: Bajaj Finance, Muthoot Finance, Mahindra committee: Malegam Committee, 2010 (also 1st setup of RBI Headquarter
and Mahindra 1st April 1935
sees issues of MFIs) - Calcutta, At present
RBI Act of 1934
They are registered under Companies Act of To qualify for NBFC MFI license they should Headquarter - Mumbai in 1937
1956 have at least 75% of assets in Microfinance
Banking Regulation Act, 1949 1st RBI Governor - Osborne Smith
Gives loans and advances on gold

They cannot accept Demand Deposits

Non-Banking Financial License 1st Indian RBI Governor - CD Deshmukh
its regulates Banks
Companies (NBFC) CRR/SLR RBI was nationalised on 1st Jan 1949
Deposits not guaranteed
Regulate ban
They are regulated by RBI
except Rs.1 note (under Ministry of Finance)
They need not maintain CRR and SLR Micro Finance, collateral free loans
legal tender - FIAT Money
They offer financial services to low income Micro Units Development and Refinance
population Agency, launched in 2015 MUDRA scheme Plastic Money - Credit card, debit card, etc.

eg: Loan, Savings, Insurance loans upto 50,000 Sishu Hot Money - Assets such as stocks, deposits,
Functions of RBI Currency printing
bonds, etc
Microfinance loans is given to households loans upto 50,000-5 lakhs Kishore 3 types loan
having income less than Rs.1.25 lakhs/annum
loans upto 5 lakhs-10 lakhs Tarun
gave concept of Grameen Model Banks, 1970 Father of Micro Finance system
and was given Nobel Prize - Muhammed Yunus (Bangladesh)

1st Micro Finance institution in India Micro Finance

- SEWA Bank (1974)
Institution Monetary Policy
group of 10-20 people come together
to find ways to improve their living Lender of last resort and Bank of Banks
National Bank for Agriculture and Rural
conditions Development

Group of below poverty line (BPL)

Self Help Groups
(SHG) Set up - 12 July 1982, on recommendation of B.
Classification of
Informal
banking system
groups Usually in rural areas
Business Model
Sivaramman Committee (1979)
Money & Banking
group of 4-10 people Through NABARD Act 1981 NABARD
Joint Liability Group
Could be a small business Headquarter - Mumbai
venture for profit
Provide finance for agriculture and rural development

Regulate - RBI 1st bank - 1770 (Bank of Hindustan)

Supervises cooperative banks and RRBs Functions
Supervise - NABARD 1806 - Imperial Bank of Calcutta
Does not deal directly with people Merged
1840 - Imperial Bank of Bombay 1921 - Imperial Bank of India
Provides financing through PMAY, KCC, Ru Pay Kisan Cards 1955 - State Bank of India
1843 - Imperial Bank of Madras
1988, through Act of 1987 National Housing Bank
Other Financial 1st Indian owned bank - Allahabad Bank, in 1865
Securities and Exchange Board of India
Institutions RRB Act 1976
through SEBI Act of 1992, established on 12 April 1988
to enhance financial activities in rural areas
Statutory body
History of Banking
SEBI Regional Rural Banks (RRBs) eg: Grameen Banks
Headquarter - Mumbai
1st - Pratham Grameen Bank (2nd Oct 1975,
To protect the interests of investors Function Moradabad, UP)

Chairman - Madhabi Puri Buch (1st women, 1st non IAS chairman)

Insurance Regulatory and Development Authority of India

Estd. through IRDAI Act of 1999 IRDAI

2nd April 1990
as a statutory body April 2000 SIDBI
Headquarter: Lucknow