FI/FII

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CA Kripa Sah

CA Kripa Sah (Querist)
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24 May 2009 sir,
what is Financial institution?
and what is Foreign institutional investors??

Sachidanand Singh

Sachidanand Singh (Expert)
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25 May 2009 In India an FII is an entity registered with SEBI as an FII.

An FI is an entity registered with RBI as an FI.

FIs are non-banking financial services firms. They usually raise funds in wholesale market and do not have access to deposits payable by cheques that banks have.

FIIs are foreign firms making portfolio investments (generally) in India as they are active in security markets they need to get registered with SEBI

Vipul J. Bhavsar

Vipul J. Bhavsar (Expert)
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26 May 2009 FII - Foreign Institutional Investor - An investor or investment fund that is from or registered in a country outside India and making investment in India. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

FDI - Foreign Direct Investment - It is any form of investment that earns interest in enterprises which function outside of the domestic territory of the investor. There are some restrictions as regards making investment in particular sector.e.g. Indian aviation sector doesnt allow FDI directly or indirectly.

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Divya

Divya (Expert)
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27 May 2009
Foreign institutional investors are defined under SEBI Regulations as an institution that is a legal entity established or incorporated outside India proposing to make investments in India only in securities. Foreign institutional investors shall also include domestic asset management company or domestic portfolio manager who manage funds raised or collected or bought from outside India for the purpose of making investment in India on behalf of foreign corporate or foreign individuals.

Financial institution can be defined as a non banking institution which carries on any of the following activities as its business or as a part of its business –

a. Financing in any form be it loans, advances or otherwise for any activity other than its own.
b. Engage in the acquisition of shares, stocks, bonds, debentures or other securities issued by a government or local authority or any other marketable securities of a company, etc.
c. Provides for hiring or delivers any goods to a hirer under a Hire Purchase Agreement.
d. Insurance business.
e. Chit Fund business.
f. Collects under a scheme or arrangement otherwise of any sort monies by way of subscription or instruments and otherwise and distributes by way of awarding prices or gifts whether in cash or kind, or in any other manner to the persons from whom money has been collected or to any other person.

But does not include any institution which carried on as its principal business-

a. Agricultural operations.
b. Industrial activity.
c. The purchase or sale of any goods other than securities or of providing any services.
d. Real estate developers provided that the income of such institution shall not arise from financing similar institutions.

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