Description
Since 1990 there has been rise in the financial services provided by banks & FIs, Efficiency of financial system largely depends upon quality & variety of FS.
FINANCIAL SERVICES
INTRODUCTION
?Since 1990 there has been rise in the
financial services provided by banks &
FIs.
?Efficiency of financial system largely
depends upon quality & variety of FS.
?Services offered by banking & financial
companies are called FS.
Meaning of Financial Services
?It means “mobilizing and allocating savings”. Thus,
it includes all activities involved in the
transformation of saving into investment .
?The „financial service? can also be called „financial
intermediation?.
?Financial intermediation is a process by which
funds are mobilized from a large number of savers
and make them available to all those who are in
need of it and particularly to corporate customers.
Definition of Financial Services
?“ Activities, benefits and
satisfactions, connected with the
sale of money, that offer to users
and customers, financial related
value”
Characteristics of Financial
services
? Intangible
? Direct Sale
? Heterogeneity
? Fluctuation in Demand
? Geographical Dispersion
? Lack of special Identity
? Require quality labour
? Perishability
? Protect Customer?s Interest
Objective/Functions of
Financial Services
? Fund Raising: Through various Fin. Instrument.
? Economic growth: Mobilizing Savings & productive
use
? Funds Deployment: Finance Mix (Bills Discnt.,
factoring of debtors, short -term money market fund)
? Specialized services: Credit rating, VC Financing,
Lease financing, MF, Credit cards, Housing financing,,
SEs.
? Regulation: SEBI, RBI, GOI, Dept. of Banking &
Insurance
Growth of Financial Services in India
Merchant banking Era:
* 1960-80 called MB era.
* Insurance, leasing companies began
their journey.
Investment Companies Era:
• Various investment institutions & banks
established. UTI,LIC,GIC-
• 1970 LIC Nationalized.
I
Continued….
Depository Era:
? Promoting the concept of paperless trading of shares &
bonds.
? In 1997-98 budget separate segment to deal with trading
of gilts.
? Introduction of Book-building method.
? Online trading introduced by BSE.
? Computerization of NSE.
Continued….
? Legislative Era:
? FERA has been replaced by FEMA.
? Amendment in Indian Companies Act, Income
tax act.
? Foreign Institutional Investor(FIIs) Era:
? FIIs are permitted to operate in Indian Capital
market.
? Funds are flowed to India through GDR & ADR.
Scope/Types of Financial
Services
? Financial services cover a wide range of activities.
? The financial intermediaries have been rendering a wide
range of services encompassing both capital and money
market activities.
They can be grouped under two heads
? Asset based/Fund based services
? Fee based/ Advisory services
Fund based services
? Equipment Leasing/Finance
? Hire-Purchase and Consumer credit
? Bill Discounting
? Venture Capital
? Housing Finance
? Insurance Services
? Factoring
? Forfeiting
Fee based or Advisory Services
? Issue Management
? Portfolio Management
? Corporate Counseling
? Loan Syndication
? Merger and Acquisition
? Capital Restructuring
? Credit Rating
? Stock Broking
Financial Services Sector-Problems
? Lack of Expertise :
? Inadequate Accommodation :
? Inadequate Technology: Lack of networking facility.
? Inadequate Quality Service: More fees.
? Captive Organization.-(subsidiary of large CB)
? Restricted scope for operation.(venture capital).
? Limited Innovation.
ASSIGNMENT -I
?EVOLUTION , GROWTH, &
PROBLEMS OF FINANCIAL
SERVICES SECTOR IN INDIA.
?DISCUSS THE VARIOUS PRODUCTS
OF FINANCIAL SERVICES SECTOR
AVAILABLE IN INDIA.
? DATE OF SUBMISSION: 25
TH
AUGUST
doc_452539907.ppt
Since 1990 there has been rise in the financial services provided by banks & FIs, Efficiency of financial system largely depends upon quality & variety of FS.
FINANCIAL SERVICES
INTRODUCTION
?Since 1990 there has been rise in the
financial services provided by banks &
FIs.
?Efficiency of financial system largely
depends upon quality & variety of FS.
?Services offered by banking & financial
companies are called FS.
Meaning of Financial Services
?It means “mobilizing and allocating savings”. Thus,
it includes all activities involved in the
transformation of saving into investment .
?The „financial service? can also be called „financial
intermediation?.
?Financial intermediation is a process by which
funds are mobilized from a large number of savers
and make them available to all those who are in
need of it and particularly to corporate customers.
Definition of Financial Services
?“ Activities, benefits and
satisfactions, connected with the
sale of money, that offer to users
and customers, financial related
value”
Characteristics of Financial
services
? Intangible
? Direct Sale
? Heterogeneity
? Fluctuation in Demand
? Geographical Dispersion
? Lack of special Identity
? Require quality labour
? Perishability
? Protect Customer?s Interest
Objective/Functions of
Financial Services
? Fund Raising: Through various Fin. Instrument.
? Economic growth: Mobilizing Savings & productive
use
? Funds Deployment: Finance Mix (Bills Discnt.,
factoring of debtors, short -term money market fund)
? Specialized services: Credit rating, VC Financing,
Lease financing, MF, Credit cards, Housing financing,,
SEs.
? Regulation: SEBI, RBI, GOI, Dept. of Banking &
Insurance
Growth of Financial Services in India
Merchant banking Era:
* 1960-80 called MB era.
* Insurance, leasing companies began
their journey.
Investment Companies Era:
• Various investment institutions & banks
established. UTI,LIC,GIC-
• 1970 LIC Nationalized.
I
Continued….
Depository Era:
? Promoting the concept of paperless trading of shares &
bonds.
? In 1997-98 budget separate segment to deal with trading
of gilts.
? Introduction of Book-building method.
? Online trading introduced by BSE.
? Computerization of NSE.
Continued….
? Legislative Era:
? FERA has been replaced by FEMA.
? Amendment in Indian Companies Act, Income
tax act.
? Foreign Institutional Investor(FIIs) Era:
? FIIs are permitted to operate in Indian Capital
market.
? Funds are flowed to India through GDR & ADR.
Scope/Types of Financial
Services
? Financial services cover a wide range of activities.
? The financial intermediaries have been rendering a wide
range of services encompassing both capital and money
market activities.
They can be grouped under two heads
? Asset based/Fund based services
? Fee based/ Advisory services
Fund based services
? Equipment Leasing/Finance
? Hire-Purchase and Consumer credit
? Bill Discounting
? Venture Capital
? Housing Finance
? Insurance Services
? Factoring
? Forfeiting
Fee based or Advisory Services
? Issue Management
? Portfolio Management
? Corporate Counseling
? Loan Syndication
? Merger and Acquisition
? Capital Restructuring
? Credit Rating
? Stock Broking
Financial Services Sector-Problems
? Lack of Expertise :
? Inadequate Accommodation :
? Inadequate Technology: Lack of networking facility.
? Inadequate Quality Service: More fees.
? Captive Organization.-(subsidiary of large CB)
? Restricted scope for operation.(venture capital).
? Limited Innovation.
ASSIGNMENT -I
?EVOLUTION , GROWTH, &
PROBLEMS OF FINANCIAL
SERVICES SECTOR IN INDIA.
?DISCUSS THE VARIOUS PRODUCTS
OF FINANCIAL SERVICES SECTOR
AVAILABLE IN INDIA.
? DATE OF SUBMISSION: 25
TH
AUGUST
doc_452539907.ppt