Should opening a financial institution be more complicated than starting a business as a florist? If...

Should opening a financial institution be more complicated than starting a business as a florist? If so, how is the relationship between the government and the financial institution different and what does it mean about the rules between the two?

Expert Solution

Yes starting a financial institution is more complicated than starting a florist business because for setting up financial institutions, there are lot of regulatory requirement to be satisfied by the financial institution(FI). FI needs to take permissions from various authorities, has to satisfy the minimum capital requirement, need to appoint professional employees, maintain highly secured information systems, use many financial calculations and many more which are not required to meet in the florist business.

The relationship between government and FI is different because FI needs to report to Government on a regular basis. FI is accountable to the government for any non-legal transactions. FI acts in accordance with rules set up by the government from time to time to meet various policies.

The rules between florist and Government is more of a general citizen and government relationship where florist has to pay some taxes annually to the government and show Income return annually. The rules between FI and government is more of the economy concerned about the interest rates, deposit policies, provisional requirements.

jeff jeffy answered 2 years ago

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