Financial Services: Meaning and Significance Financial services refers to services provided by the financial institut ions in a financial

system. The finance industry encompasses a broad range of or ganizations that deal with the management of money. Among these organizations ar e Asset Management Companies like leasing companies, merchant bankers and Liabil ity Management Companies like discounting houses and acceptance houses, and furt her general financial institutions like banks, credit card companies, insurance companies, consumer finance companies, stock exchanges, and some government spon sored enterprises. The term Financial Services in a broad sense means mobilising an d allocating savings. Thus, it includes all activities involved in the transforma tion of savings into investment. Following are some of the examples of financial services: 1.Leasing, credit card services, factoring, portfolio management and financial c onsultancy services. 2.Underwriting, discounting and rediscounting of bills. 3.Acceptances, brokerage and stock holding. 4.Depository services, housing finance and book building 5.Hire purchases and installment credit. 6.Mutual Fund management. 7.Deposit insurance. 8.Financial and performance guarantees. 9.E-commerce and securatisation of debts. 10.Loan syndicating and credit rating. The financial services can also be called financial intermediation. Financ ial intermediation is the process by which funds are mobilised from a large numb er of savers and make them available to all those who are in need of it. Classification of Financial Services Industry The financial intermediaries in India can be classified as: 1.Capital Market Intermediaries which constitutes Term Lending Institutions and Investing Institutions which mainly provide long term funds. 2.Money Market Intermediaries which consists of commercial banks, Cooperative Ba nks, and other financial agencies which supply only short term funds.