What is the difference between a Financial Institution and an Intermediary?

SBI is a Leading Financial Institution

A financial institution is an organisation that raises and lends money to those who need them and earn interest as their main income. Examples:

1. State Bank of India - Scheduled Commercial Bank
2. HDFC - Leading Housing Finance Company
3. Rural Electrification Corporation - Term Lending Institution that funds state governments for electrification of villages

Financial intermediary on the other hand do not directly lend money but facilitate borrowing. They possess knowledge about the product and relationships with financial institutions. They render valuable services usually to the borrowers for a fee. This fee may be paid either by the borrower or the financial institution.

Many a times the financial institutions themselves create their own financial intermediaries to source business as well as generate fee as their primary incomes. For example 'SBI Caps' is a financial intermediary floated by SBI.

SBI CAP is a leading financial intermediary

In conclusion a financial institution directly deals with money by way of borrowing and lending and earns interest as the main income and a financial intermediary facilitates such borrowings and lending for a fee which constitutes their primary income.

4 Stocks to Invest in December 2016

I want to describe the four stocks I invested this December 2016 and why I did so. But first let us see the four stocks:

Name of the Stock	Read Research Report	Download Research Report
Rural Electrification Corporation	REC Research Report	REC Research Report
Power Finance Corporation	PFC Research Report	Power Finance Corporation
Great Eastern Shipping Co. Ltd.	--	--
Shipping Corporation of India Ltd.	SCI Research Report	SCI Research Report

All the scrips listed in Portfolio 2K15 are good then why did I choose only these four?

Name of the Stock	Price to Book Value (P2BV) on 5th December 2016	Price to Earnings (PE) Ratio
Rural Electrification Corporation	0.45	2.31
Power Finance Corporation	0.48	5.32
Great Eastern Shipping Co. Ltd.	0.65	11.58
Shipping Corporation of India Ltd. (SCI)	0.39	30.45

Most of the shares in our Portfolio 2K15 presently trading at high valuations. Only these four are trading at very attractive P2BV ratios giving us an opportunity to buy highly valuable assets at a discount.

SCI’s PE Ratio is beyond the permitted 15m but as already mentioned in the research report, SCI is a special situation case. The global shipping rates are at their nadir. Once these pick-up the company will do very well and we may not get the opportunity to buy the assets at a discount.