THRIFT INSTITUTIONS

Thrift institutions
INTRODUCTION

 Thrift institutions are a general term often used for mutual savings banks,

savings and loan associations, and credit unions.

 Non-profit depository financial institutions that were originally established

to provide limited banking services, often to specific groups, that were not
adequately offered by traditional banks.

 An organization formed as a depository for primarily consumer savings.

 A thrift institution is a financial organization that accepts primarily savings

account deposits and then invests most of the proceeds in mortgages.

MEANING

 A savings and loan association (or S&L), also known as a thrift, is a

financial institution that specializes in accepting savings deposits and
making mortgage and other loans.

 The terms "S&L" or "thrift" are mainly used in the United States.

 They are often mutually held (often called mutual savings banks), meaning
that the depositors and borrowers are members with voting rights, and have
the ability to direct the financial and managerial goals of the organization,
similar to the policyholders of a mutual insurance company.

 It is possible for an S&L to be a joint stock company and even publicly

traded.

SAMRITI GOEL

MBA LECTURER
 THRIFT INSTITUTIONS

FEATURES

The most important purpose of these institutions is to make mortgage loans on

residential property. These organizations, which also are known as savings
associations, building and loan associations, cooperative banks (in New England),
and homestead associations (in Louisiana), are the primary source of financial
assistance to a large segment of American homeowners. As home-financing
institutions, they give primary attention to single-family residences and are
equipped to make loans in this area.

Some of the most important characteristics of a savings and loan association are:

 It is generally a locally owned and privately managed home financing

institution.
 It receives individuals' savings and uses these funds to make long-term
amortized loans to home purchasers.
 It makes loans for the construction, purchase, repair, or refinancing of
houses.
 It is state or federally chartered.

SAMRITI GOEL

MBA LECTURER