A financial intermediary is an institution that acts as a bridge between people who have surplus money and those who need funds. These intermediaries make financial transactions smoother, safer, and more efficient. Common examples include banks, NBFCs, mutual funds, and insurance companies.
By pooling funds, managing risk, and offering structured financial products, intermediaries help both individuals and businesses access capital at scale—something that would be difficult to achieve independently. In India’s growing economy, financial intermediaries play a vital role in supporting savings, investments, credit availability, and long-term financial stability.
Let’s take a closer look at the role of financial intermediaries in India and how they influence everyday financial decisions.
Key players in the Indian financial intermediation system
Banks
Banks are the most well-known financial intermediaries. They mobilise deposits from individuals and businesses and offer interest in return. These deposits are then lent to borrowers for purposes such as home purchases, education, or business expansion.
By connecting savers and borrowers, banks enable credit creation and fuel economic growth.
Non-Banking Financial Companies (NBFCs)
NBFCs provide a wide range of financial services, including loans, investments, and fixed deposits. While they cannot accept demand deposits like banks, NBFCs are known for offering flexible products and competitive returns.
Bajaj Finance, a leading NBFC in India, plays a strong role in financial intermediation by offering Fixed Deposits with flexible tenures, high interest rates, and digital booking—making it easier for individuals to grow their savings securely.
Bajaj Finance Fixed Deposits allow investors to choose tenures that align with short-term needs or long-term goals, without market volatility. Start earning up to 7.30% p.a. returns.
Mutual funds
Mutual funds pool money from multiple investors and invest it across equities, debt instruments, or a mix of assets. This allows investors to benefit from diversification and professional fund management, even with smaller investment amounts.
While mutual funds can deliver higher returns, they are subject to market risks—making stable options like fixed deposits an important portfolio counterbalance.
Many investors balance market-linked products with Bajaj Finance FDs to add certainty and predictability to their overall financial plan. Book FD.
