Banking and Financial Awareness

India Infrastructure Finance Company Limited (IIFCL) provides guarantees for infrastructure loans to encourage infrastructure development in the country. It was established to provide long-term financial assistance to infrastructure projects. IDBI, SBI, and SIDBI are primarily banking and financial institutions but not specifically focused on infrastructure loan guarantees.

Life Insurance Corporation (LIC) received RBI approval to issue pre-paid cards to its clients, expanding its financial services beyond insurance. GIC, SIDBI, and NABARD are other financial institutions but were not granted this specific approval for pre-paid cards during the period referenced.

The RBI's regulatory, supervisory, and control powers over the banking sector come from both the RBI Act 1934 and the Banking Regulation Act 1949. The Banking Regulation Act gives comprehensive powers to regulate banking companies, while the RBI Act establishes the RBI's central role.

Selective credit control is a qualitative tool used by RBI to control credit flow to specific sectors. The primary method is through margin requirements and directing banks on lending against certain commodities, rather than blanket loan recalls or interest rate changes.

Teaser loans are loans with initially low interest rates for a fixed period (typically 1-3 years), after which the rate resets to market rates. These were commonly offered for home loans before RBI tightened regulations, as the housing sector is most sensitive to interest rate changes.

Section 21 of the RBI Act gives the RBI power to issue directives to banks. While the Banking Regulation Act provides supervisory powers, the specific authority to issue directives comes from the RBI Act itself. This is distinct from regulatory control covered in the Banking Regulation Act.