Which of the following are regulated by Reserve Bank of India (RBI)?1....
Housing Finance Companies are regulated by National Housing Bank, Merchant Banker/Venture Capital Fund Company/stock-exchanges/stock brokers/sub-brokers are regulated by Securities and Exchange Board of India, and Insurance companies are regulated by Insurance Regulatory and Development Authority. Similarly, Chit Fund Companies are regulated by the respective State Governments and Nidhi Companies are regulated by Ministry of Corporate Affairs, Government of India. Companies that do financial business but are regulated by other regulators are given specific exemption by the Reserve Bank from its regulatory requirements for avoiding duality of regulation.
Which of the following are regulated by Reserve Bank of India (RBI)?1....
The correct answer is option 'D', None of the above.
The Reserve Bank of India (RBI) is the central banking institution of India and it is responsible for regulating and supervising various financial entities and activities in the country. However, the three entities mentioned in the question, i.e., Housing Finance Companies, Merchant Banking Companies, and Venture Capital Fund Companies, are not directly regulated by the RBI.
Let's understand why each of these entities is not regulated by the RBI:
1. Housing Finance Companies:
Housing Finance Companies (HFCs) are financial institutions that provide home loans and other housing-related financial services. While the RBI does not directly regulate HFCs, they are regulated by the National Housing Bank (NHB). NHB is a subsidiary of the RBI and it was set up specifically to regulate and supervise HFCs in India.
2. Merchant Banking Companies:
Merchant banking companies are financial intermediaries that provide various services such as underwriting, issue management, loan syndication, and project advisory. In India, merchant banking activities are regulated by the Securities and Exchange Board of India (SEBI). SEBI is the regulatory authority for the securities market in India and it is responsible for regulating merchant banking activities, along with other capital market intermediaries.
3. Venture Capital Fund Companies:
Venture Capital Fund Companies (VCFCs) are entities that raise capital from investors and invest in high-risk, high-potential startups and early-stage companies. In India, VCFCs are regulated by the Securities and Exchange Board of India (SEBI). SEBI has put in place regulations and guidelines for VCFCs to ensure investor protection and promote the growth of the venture capital industry in the country.
In conclusion, while the Reserve Bank of India (RBI) is responsible for regulating and supervising various financial entities and activities in India, the entities mentioned in the question, i.e., Housing Finance Companies, Merchant Banking Companies, and Venture Capital Fund Companies, are not directly regulated by the RBI. They are regulated by other regulatory authorities such as the National Housing Bank (NHB) and the Securities and Exchange Board of India (SEBI).