Tag: specialised financial institutions

Receivable turnover ratio = Net credits sale/ Average accounts receivable = 10
and average collection period  =360
receivables turnover ratio = 36
Hence a receivable turnover ratio of 10 implies that the credit sales are 10 times the average receivables or in other words receivables are generated 10 times during the year.

NABARD is entrusted by government for development of rural areas in India. Small industries, village industries and cottage industries are the most prevailing industries in rural parts of India, with limited amount of finances. Hence, The NABARD provides refinancing facilities to such industries.

Each member bank of the group banking system retains its separate entity and maintains its board of directors but however, the group banking system enjoy the benefits of centralized administration. 

Merchant bank and investment banks both provide advice to companies regarding potential mergers and also provide investment research to those companies.

Just as investment banks, industrial banks sell certificates that are labelled as investment share. This helps public to invest in such bonds and certificates through industrial banks. Hence, Industrial banks are also known as investment banks.

German banking system is the best example of mixed banking system. German banks perform large variety of functions which includes functions of a commercial bank as well as investment bank. These banks can also be called as universal banks.

Unit Banking System refers to a single and usually small banks providing financial services to local people. Such banks do not have any connecting branches. The concept of Unit Banking System was originated in USA.

RBI stands for Reserve Bank of India, RBI commenced with its operations from 1st April 1935. The Reserve Bank Staff college was set up by RBI  for training their existing staff with specified banking skills. 

The IFCI was the first development bank owned by government of India post independence. The main focus  was to cater to the long term financial needs of the industrial sector.