Question

Discuss why regulations are important for financial institutions that lend finances to business enterprises (at least four points)

Answer 1

1. Regulations are important to protect the investors / savers from any malpractices and fraud that may take place within the institutions.

2. To make sure they work in interest of the society and economic development of the country and the nation.

3. To ensure stability, safety from the market disparities.

4. To have easy redressal norms in case of any grievances of the investors and customers.

5. To have a uniform rules and practices across all institutions.