the different types of financial services

7/29/2019 The Different Types of Financial Services

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The Different Types of Financial Services

Safe & Innovative Investment Plan 30Lac on Retirement&15K pm Pension

Money is indispensable in almost all aspects of living. Weuse money to buy our needs and necessities. Yet there arethings and instances when we need more money for otherequally significant aspects of life like investing in a businessor building a home. It is at such times when we would need

appropriate financial services from corresponding institutionsand professionals likefinance brokers for mortgages.

Financial services are of varied types. These services areprovided by different businesses whose transactions involvemanagement of money such as banks, credit card firms,investment companies, insurance companies and somegovernment agencies.

Banks are among the major providers of financial services.The general function of a bank is to provide their clients witha secure and safe place to store and deposit their money.What the banks do with their clients money is to put theseinto guaranteed investments for profits. The clients will alsobe paid a little interest for their checking or savings
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accounts. Banks also offer other financial services like loans,checks, mortgages and credit cards. They also offer foreigncurrency services like currency exchange, wire transfer andforeign money banking. Anyone who needs such services

may directly approach the bank for inquiries or may askassistance from people mire knowledgeable in the field suchas finance orpersonal loan brokers. These financial serviceassistants will help determine your needs and find the mostappropriate services for you. They have contacts and accessto various services and institutions so your chances ofobtaining your needed financial services are higher.

Banks are also of different types based on their operations.

There are those operating as private banks. Their servicesare limited only for people who have high amount of networth (difference between owned and owed properties). Aclient must meet the required net worth to qualify for thebanks services. Yet compared to other retail banks, privatebanks have a lot of other services to offer their clientsincluding tax planning and wealth management.

Another type of financial service is an investment service.Firms offering such services give assistance to an individualor an entity who wish to invest on funds, shares or stocks.Typically, the investor would place his money to the serviceand rely on the firm to manage the investment and ensure itsgain. The firms offering investment services may also offerprofessional consultation and advice to investors for acertain cost.

Insurances and insurance plans are financial services forwhich an insurance broker may help you with. There aredifferent types of insurances and the broker you will hire willhelp you find the most suitable plan and insurance providerfor your needs.
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Credit card services are also among the most commonlyused financial services in the society. As you know, whenyou use a credit card to purchase something, the credit cardfirm will charge a high interest on this money you have

literally borrowed to pay for your purchases.

Some other types of financial services are equity funds,venture capital and expert advice on financial matters.

Top 10 financial services companies in India

The financial system of a country has a great impact on theeconomy with financial services companies responsible forthe robust economic growth. There has to be a direct linkbetween the regulatory institutions and the intermediaryinstitutions while determining the financial system of acountry.

Financial services provided by finance companies includeinsurance, housing financing, mutual funds, credit reporting,debt collection, stock broking, portfolio management, andinvestment advisory.

List of top 10 financial services companies in India

Find below a comprehensive list of top financial services

companies in India.

SBI Capital Markets Limited:

This happens to be the oldest organizations in the sphere ofcapital markets in India. Established in 1986 in the form of


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an ancillary of SBI, they have ranked second in Asia'sProject Advisory services. The company is a traiblazer inprivatization and securitization. The subsidiaries of SBICapital Markets are SBICAPs Ventures Ltd., SBICAP

Trustee Co.Ltd. and many others.

Bajaj Capital Limited:

One of the major financial services companies in India, BajajCapital offers best investment advisory and financialplanning services. The services are meted out to theinstitutional investors, NRIs, corporate houses, individual

investors, high network clients as well.

DSP Merrill Lynch Limited:

A major player in the equity and debt market in India, DSPMerrill Lynch offers financial advises to varied corporationsand institutions. With an array of wealth management andinvestor services, their services are customized in a manner

that they meet every investor requirement.

Birla Global Finance Limited:

The subsidiary of Aditya Birla Nuvo Ltd., this company hasoperations in the corporate finance and capital market arena.

An alliance with Sun Life Financial of Canada, they havegiven birth to Birla Sun Life Insurance Co Ltd., Birla Sun LifeDistribution Co. and alike.

Housing Development Finance Corporation:

A best financial solution for home loans, NRI loans, HDFC isthe one stop destination for personal finance. With overseasbranches in Singapore, Kuwait, Qatar, Saudi Arabia and


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many others, HDFC has been going great guns every year.

PNB Housing Finance Limited:

This company offers premium solutions for relieving theborrower segment. The Home Loan Life Insurance Plan ofthis has come in conjunction with TATA AIG, with the lowestpremium when compared to the peers.

ICICI Group:

Wide arena of financial products and services, ICICI Group

has solutions like InstaBanking, Online Trading, Insta Insure,ICICI Bank imobile etc. Providing high class financialservices in all segments of the society, ICICI Group dealswith Mutual Fund, Private Equity, Securities, and LifeInsurance etc.

LIC Finance Limited:

It is the biggest Housing Finance Company in India,providing finance to individuals for repair or construction orrenovation of any old or new apartment or house.

L&T Finance Limited:

Established in 1994 by the Larsen and Turbo group, this hasbecome a significant name in the financial sector. Funds forautomobiles, Agricultural Instruments, secured loans; they

have all types of loans for a long tenure.

Karvy Group:

With Mutual Funds Services, Depository Services, DebtMarket Services, Investment Banking and many others,


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Karvy Group has spanned across the domestic financialsector as well as abroad.


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INDIAN FINANCIAL SERVICES OVERVIEW

The Indian f inanc ial serv ices sector is one of th e mos t

complex , yet one of the most rob ust serv ice segments

of the Indian econom y. Spanning f rom insurance tocapi tal markets, banking to foreign d irect investments

(FDI) and from mu tual fund s to pr ivate equ i ty (PE)

investments, the f inancial serv ices sector co vers al l

related segments under i ts umbrel la. Having major

ef fects in i ts abstract as wel l as phys ical form p ost

l iberal isat ion , the f inancial serv ices segment is

und oub tedly the mains tay of Indian economy.

Today it is at par with the international financial frameworksand promises to surpass them in terms of performance in theyears to come. This is very much evident from the fact thatIndian financial services industry was amongst the leastaffected during the crisis the world faced in 2010-11.

Major developments pertaining to the sub-segments ofIndian financial services industry are discussed hereafter.

Insu rance Sector

Indian life insurance sector collected new businesspremiums worth Rs 11,742.7 crore (US$ 1.96 billion) for

April-May 2013, according to data from the InsuranceRegulatory and Development Authority (IRDA). Lifeinsurers collected Rs 1, 07, 010.7 crore (US$ 17.84billion) worth of new premiums for the financial year

ended March 31, 2013 Meanwhile, the general insurance industry grew by 19.6

per cent in April-May period of FY14, wherein the non-life insurers collected premium worth Rs 13,552.46crore (US$ 2.26 billion)


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Bankin g Serv ices

According to the Reserve Bank of India (RBI)sQuarterly Statistics on Deposits and Credit of

Scheduled Commercial Banks, September 2012,Nationalised Banks accounted for 52.0 per cent of theaggregate deposits, while the State Bank of India (SBI)and its Associates accounted for 22.3 per cent. Theshare of New Private Sector Banks, Old Private SectorBanks, Foreign Banks, and Regional Rural Banks inaggregate deposits was 13.6 per cent, 4.8 per cent, 4.3per cent and 2.9 per cent, respectively

Nationalised Banks accounted for the highest share of50.9 per cent in gross bank credit followed by StateBank of India and its Associates (22.1 per cent) andNew Private Sector Banks (14.7 per cent). ForeignBanks, Old Private Sector Banks and Regional RuralBanks had shares of around 4.9 per cent, 4.9 per centand 2.6 per cent, respectively

India's foreign exchange (forex) reserves stood at US$

280.167 billion for the week ended July 5, 2013,according to data released by the central bank. Thevalue of foreign currency assets (FCA) - the biggestcomponent of the forex reserves stood at US$252.103 billion, according to the weekly statisticalsupplement released by the RBI

Mutual Fund s Industry in India

Indias asset management companies (AMCs) havewitnessed growth for the fifth consecutive quarter whereintheir average assets under management (AUM) during April-June 2013 increased by 3.68 per cent. The AUMs valuetouched a new high of Rs 8.47 lakh crore (US$ 141.17


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billion), according to the latest statistics available fromindustry body Association of Mutual Funds in India (AMFI).

Private Equ i ty , Mergers & Acq uis i t ion s in India

Private equity (PE) firms upped their investments inIndia Inc by a hefty 42 per cent to US$ 5.4 billionthrough 197 deals during the first half of 2013; majordeal being the US$ 1.2 billion-BhartiAirtel deal,according to a report by EY India (formerly Ernst &Young).

Meanwhile, Merger and acquisition (M&A) activity inIndia was also quite intense in April-June 2013 period.The deal tally stood at US$ 10.9 billion across 130transactions, according to global deal tracking firmMergermarket.

Foreign Ins t i tut io nal Inv estors (FIIs) in Ind ia

Foreign investors have immense faith in Indian financialmarkets. The fact is substantiated through statistics

which show that they pumped massive US$ 10 billion inIndian markets in January-March 2013 quarter.Moreover, FII ownership in top 500 companies ishighest at 21.2 per cent for the reported quarter. Itincreased by 1.28 per cent in the January-Marchquarter alone and 2.87 per cent in 2012-13.

The number of registered FIIs in India stood at 1,757 inFY 2012-13 while the number of FII sub-accounts roseto 6,335, from 6,322 at the end of 2011-12.

Financial Servic es in Ind ia: Recent Developments

Tata Communications 100 per cent subsidiary TataCommunications Payment Solutions (TCPS) haslaunched Indias first white label ATM (WLA) at


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Chandrapada, a tier-V town near Mumbai. The WLAhas been branded 'Indicash' by the company. TCPSalready operates about 27, 000 ATMs for 37 banks inIndia.

Meanwhile, US-based Customers Bancorp Inc (CUBI)has plans to infuse US$ 51 million in multiple securitiesof Religare Enterprises Ltd. Religare is currentlyaspiring for a banking licence to enter the bankingindustry.

The investments will take place through a combinationof primary and secondary market transactions.

Financial Servic es: Governm ent Init iat ives

The Finance Ministry has constituted a standing councilof experts to assess the international competitivenessof the Indian financial sector. The council, to be headedby the Secretary, Department of Economic Affairs, willanalyse various monetary and non-monetarytransaction costs (of doing business in the Indian

market), and make recommendations for improving itscompetitiveness.

The council will also examine related policies andoperating frameworks and the performance of varioussegments of the Indian capital market. It will also studyand suggest possibilities for reform measures aimed atimproving transparency, promoting development and

strengthening governance in the Indian capital markets,while ensuring that risks are limited and investorinterests are sustained.

Also, the RBI has, for the time being, relaxed the normthat stipulates non-banking finance companies (NBFCs)to have a minimum gap of six months between two non-


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convertible debentures (NCDs) issues. The move isaimed at streamlining the process of moving into amore robust asset-liability management framework in anon-disruptive manner.

Foreign investments fuel Indian financial markets in a bigway. Experts believe that India has fared really well over thepast few years and the similar macroeconomic trends wouldcontinue in 2013. This would result in steady FII equity flowsthat would enhance stock valuations, strengthen investmentcycle, and sustain consumption growth (especially at low-income levels). Moreover, portfolio fund flows are anticipatedto be higher in 2013 than those in 2012, on the back ofGovernment reforms like passing bills that would escalateforeign investment limits in insurance, having a uniformgoods and services tax, and reconciling subsidies.

Moreover, with the Parliament passing the much awaitedBanking Laws Amendment Bill recently, the face of the

Indian banking industry is set to get a lift in the coming yearsas the passage of the bill has paved the way for more banks.This will not only create a healthy competition among theplayers in the industry, but will also escalate the style ofoperation and technology.

the different types of financial services

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