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Financial Services Mba

Financial Services Mba



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Published by Mohammed Imran
highlighted topics are there in syllabus
highlighted topics are there in syllabus

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categoriesBusiness/Law, Finance
Published by: Mohammed Imran on Nov 22, 2009
Copyright:Attribution Non-commercial


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MBA-Finance Management of Financial Services
UNIT - ILearning Objectives:
After reading this chapter you will be conversant with:
Meaning and Definitions of Financial services
Kinds of Financial services
Evolution and growth of these services
Nature and characteristics of financial services
Goods marketing v/s service marketing
Strategic financial services
Services Marketing triangle The Financial services sector in India is blooming and hasbecome one of thelucrative areas to professionalism. The sector has undergonemetamorphosissince 1990. Indian economy got liberalized during 1991 andthe financial sectorwas kept open for private and foreign players. During thelate eighties, thefinancial services industry in India was dominated bycommercial banks andother financial institutions governed by the CentralGovernment. The economicliberalization has brought in a complete transformation inthe Indian financialservices industry.Prior to the economic liberalization, the Indian financialservice sector wascharacterized by various other factors, which was related tothe growth of thissector. Some of the factors of significance are as follows:
 Too much of control and regulation by the apex bodies intheform of interest rates, money rates etc.
Controller of capital issues used to regulate the prices of securities
Absence off independent credit rating and credit researchagencies.
Strict regulation of the foreign exchange market
Restrictions on foreign investment and foreign equity
Non-availability of debt instruments on a large scale.However, after the economic liberalization the entirefinancial sector has undergone a sea-saw change and now new financial instrumentsare entering thecapital market on a daily basis. The present scenario in theIndian Capitalmarket is characterized by financial innovation and financialcreativity.Financial services basically mean all those kinds of servicesprovided infinancial or monetary terms, where the essential commodityis money. Theseservices include; Leasing, Hire purchase, venture capital,Merchant banking,Insurance, housing finance, Mutual funds, factoring, stockbroking and manyothers.
 The term Financial services in its broader sense refers to mobilizing andallocation of savings’’. It is identified as all those activitiesinvolved in theprocess of converting savings into investment. Financialservices also includeFINANCIAL INTERMEDIARIES such as Merchant Bankers,Venturecapitalists, Commercial banks, Insurance Companies etc.
 The financial services industry can be conventionallyclassified into twocategories:i) Capital market intermediaries, consisting of term lendinginstitutions and investing institutions providing long-termfunds.ii) Money market intermediaries, include commercial banks,cooperativebanks and other agencies, which supply funds for shorttermrequirements. Therefore, the term financial services includeall kinds of organizations, which intermediate and facilitatefinancial transactions of both individuals and corporatecustomers. The entities that provide these services are divided into thefollowing categories:
Non-Banking Finance companies (NBFCS)
Commercial banks and
Investment bank
Financial services sector is blooming in India and it haspassed through variousphases as mentioned below:i) Initial phase (1960-80)ii) Second phase (1980-90)iii) Third phase (1990-2002)i)
Initial phase:
Financial services at the initial phase introduced manyinnovativeservices such as merchant banking, Insurance and leasingfinance. The term merchant banking was not known till 1960. It wasused asan umbrella function. Its activities start from projectappraisal to

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