Meaning

y The term Financial services means mobilizing and

allocating savings and all activities in the transformation of savings into investments

Importance
y Promoting the overall savings of the economy y Distribute the savings effeceintly to and cater to the

social-economic needs y To facilitate trade transactions and credit facilities

FINANCIAL SYSTEM IN INDIA

FINANCIAL ASSETS : Deposits Insurance Policies Pension Fund Units FINANCIAL INTERMEDIARIES Banks / Insurance companies FI ,MF, PF

Invest thr

Direct Investments
Invest In: Govt. ,Busi others

INVESTORS: Individuals Business government

Channelized Investments
FINANCIAL MARKETS : Capital Market ySecondary yPrimary Money Market

FINANCIAL ASSETS Shares Debt Units

invest directly

 PORTFOLIO MANAGEMENT SERVICES  MERCHANT BANKING, UNDER WRITING  LEASING, HIRE-PURCHASE FACTORING, BILL DISCOUNTING  SECURITIZATION OF DEBTS CREDIT RATING MUTUAL FUNDS M ERGERS & ACQISITION  VENTURE CAPITAL

Types of financial services

y Fee based y Fund based

Fee based
y Fee Based Services Financial institutions operate in

specialized fields to earn a substantial income by way of fees, dividend commission, discount and brokerage on operations. y Issue Management y Portfolio management y Corporate counseling y Credit Rating y Mutual Funds y Capital Restructuring

Fund based
y The firm raises funds through equity, debt, and

deposits and invests these funds in securities or lends to those who are in need of capital y Leasing y Hire Purchase y Loans/Investment y Venture Capital y Factoring y Bill Discounting