Essay On Financial Intermediaries

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Recommended: Concept of financial intermediaries

Financial Intermediaries fall into various categories. However the three main classifications are depository institutions, contractual savings institutions and investment intermediaries. Each of these categories serves a different function in the economic realm.

QUESTION NUMBER 1: Find out two examples for each type of financial intermediary.
(1)
EXAMPLES OF DEPOSITORY INSTITUTION:
 Bank al habib
 Tabung haji ( Islamic financial institution)

(2)
EXAMPLES OF CONTRACTUAL SAVINGS INSTITUTION:
 Jubilee Life Insurance Company Limited
 IGI Insurance Limited
(3)

QUESTION NUMBER 2: You are supposed to provide brief description about your given example.

(1)
EXAMPLE 1:
BANK AL …show more content…

This Bank is involved in the creation of deposits.
Example 2:
Tabung haji is a depositary institution because they accept deposits from Muslim individuals and make loan according to the Islamic principles.
(2)
Jubilee life insurance and IGI company falls in contractual saving institutions because these companies works on the same principle on which contractual saving institutions works. Contractual saving institutions take funds from the people in the form of installments known as premium to keep their policy holder in active. Then the companies provide them corporate bonds and mortgages. While depositary institutions and investment intermediaries working principle is different from contractual saving institutions.

Question number 4: Moreover, each of the above financial intermediaries are further broken into various other types. You are required to state and justify in which of the further categories your. Chosen examples fall into.
(1)
Bank al habib comes under the category of commercial banks which are also called thrift institution. They take deposits from the people and lend money in the form of loans

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