Question

What does authorised capital of any financial institution means?

Answer 1

The authorized capital of a company (sometimes referred to as the authorized share capital) is the maximum amount of share capital that the company is authorized by its constitutional documents to issue (allocate) to shareholders. Part of the authorized capital can (and frequently does) remain unissued. The authorized capital can be changed with shareholders' approval. The part of the authorized capital which has been issued to shareholders is referred to as the issued share capital of the company.  

The device of the authorized capital is used to limit or control the ability of the directors to issue or allot new shares, which may have consequences in the control of a company or otherwise alter the balance of control between shareholders. Such an issue of shares to new shareholders may also shift the profit distribution balance.

Answer 2

The authorized capital of a company (sometimes referred to as the authorized share capital, registered capital or nominalcapital, particularly in the United States) isthe maximum amount of share capital that the company is authorized by its constitutional documents to issue (allocate) to shareholders.