TYBBI

UNIVERSITY OF MUMBAI
PROJECT ON: FINANCIAL SERVICES

PROJECT BY: NAKUL.Y.MEHTA T.Y.BCOM (BANKING &INSURANCE) SEMESTER-V 2010-2011

PROJECT GUIDE PROF.- MUKESH KANOJIA

M.K.SANGHVI COLLEGE OF COMMERCE &ECONOMICS VILE PARLE (WEST) Mumbai 400056
1

TYBBI

DECLARATION

I Ms. NAKUL YOGESH MEHTA Student of T.Y.BCom (Banking & Insurance- Semester V) of Malini Kishor Sanghvi College of Commerce & Economics, hereby declare that I have completed the project on ‘___________________________’ in the academic year 2010-2011. The information submitted is true and original to the best of my knowledge.

Date of submission ----------------------

Signature of student --------------------

2

TYBBI

CERTIFICATE

This is to certify that NAKUL YOGESH MEHTA of T.Y.B.com (BANKING & INSURANCE – SEMESTER-V) of Malini Kishor Sanghvi College of Commerce & Economics has successfully completed the project on “_________________” in the academic year 2010-2011. The information is true & original to the best of our knowledge.

Signature of Principal (Dr. (Mrs) Krushna Gandhi)

Signature of Project Guide (Mukesh Kanojia)

Signature of Co-ordinator (Purvi Dholakia)

College seal

Signature of External Examiner

3

TYBBI

ACKNOWLEDGEMENT

Any accomplishment requires efforts of many people & this work is no different. I am grateful to the UNIVERSITY OF MUMBAI to have introduced this final project of our curriculum. With a deep sense of gratitude, I wish to express my sincere thanks to my project guide Prof.___________________ for his support in preparation of project report. I take the opportunity to thank Prof.Purvi Dholakia, T.Y.Bcom (Banking & Insurance) coordinator for giving me the opportunity to work on this project. I would also like to express my gratitude towards the library staff of M. K. SANGHVI COLLEGE, my family & friends without whose support my project would not have been possible.

EXECUTIVE SUMMARY
4

TYBBI

01.Introduction and meaning of financial services 02.Scope of financial services 03.History of financial services 04.Indian financial services 05.Significant factors 06.Structure of financial system 07.Features of financial services 08.Types of financial services Investment service company a.Bank b.Insurance company c.Other financial services d.Stock markets e.Mutual funds f.Debt markets g.Innovative financial instruments h.Conglomerates 09.Fundamentals of financial services 10.Causes for financial services 11.Emerging functions in marketing of financial services 12.Portfolio management 13.Case study 14.Conclusion
5

TYBBI 15.Bibliography 6 .

TYBBI FINANCIAL SERVICES INTRODUCTION 7 .

housing finance. It is also called as “financial intermediation”. SCOPE OF FINANCIAL SERVICES 8 . credit card companies. the public sector institutions have been showing dominance in all the areas of financial services like banking. The finance industry encompasses a broad range of organizations that deal with the management of money. etc in the Indian financial system. investment funds and some government sponsored enterprises. MEANING OF FINANCIAL SERVICES Financial services mean mobilizing and allocating savings. Till recently. Among these organizations are banks. stock brokerages. Financial services refer to services provided by the finance industry.TYBBI The financial services sector plays a predominant role in stimulating and sustaining the economic growth of a nation. As of 2009. insurance. consumer finance companies. the private as well as the foreign players are also putting rapid strides in this sector. financial services sector is a key area and it is very vital for industrial developments. insurance companies. term lending. the financial services industry represented 40% of the market capitalization of the S&P 500 in the United States. But after the initiative of economic liberalization by the government. It includes all activities involved in the transformation of savings into investment. The competitive climate in the Indian financial services sector has drastically changed over the last few years. Thus. Financial intermediation is a process by which funds are mobilized from a large number of savers and make them available to all those who need it and particularly to corporate customers. Consequently the financial services sector in India started growing rapidly in the economy.

TYBBI Dealing in foreign exchange market activities. The economic liberlisation has brought in a complete transformation in the Indian financial services industry. Dealing in secondary market activities. Promoting credit rating agencies for the purpose of rating companies which want to go for public issues of debt instruments. certificate of deposits. Planning for mergers and acquisitions and assisting for their smooth carryout. treasury bills. discounting of bills. the Indian financial sector was characterized by so many factors which retarded the growth of financial services sector. Prior to the economic liberalization. the Indian financial services industry was dominated by commercial banks and other financial institutions which cater to the requirements of the Indian industry. During the late seventies and eighties. HISTORY OF FINANCIAL SERVICES The Indian financial services industry has undergone a drastic change in 1990. INDIAN FINANCIAL SERVICE SECTOR 9 . Infact the capital market has played a secondary role. Guiding corporate customers in capital restructuring. Arrangements of funds from financial institutions for the clients project cost or his working capital requirements. Participating in money market instruments like commercial papers.

This is particularly evident in the non-banking financial services sector. money rates. 6. such as equities. derivatives and commodities brokerage. where new products and expanding delivery channels have helped these sectors achieve high growth rates SOME OF THE SIGNIFICANT FACTORS ARE AS FOLLOWS: 1. There has been a considerable broadening and deepening of the Indian financial markets due to various financial market reforms Undertaken by the regulators. 2.Strict regulation of the foreign exchange market with too many restrictions on foreign investment in Indian companies. 4. residential mortgage and insurance services.Too many controls over the prices of securities under the erstwhile controller of capital issues 3.Non-availability of financial instruments on a large scale as well as on different varieties. 5. the introduction of innovative financial instruments in the recent years and the entry of sophisticated domestic and international players.Absence of independent credit rating and credit research agencies. asset management and brokerage have been liberalised to allow private sector involvement. which has contributed to the development and modernisation of the financial services sector.Lack of information about international developments in the financial sector.Excessive controls in the form of regulations of interest rates.TYBBI The Indian financial services industry has experienced significant growth in the last few years. STRUCTURE OF FINANCIAL SYSTEM 10 . Sectors such as banking.

MONEY SUPPLY AND CREDIT. AND NON FINANCIAL INSTITUTIONS DEAL IN REAL ASSETS SUCH AS MACHINERY. LOANS. BANKING INSTITUTIONS DEAL IS FINANCIAL ASSETS SUCH AS DEPOSITS. STOCK OF GOODS AND REAL ESTATE. FINANCIAL SYSTEM FINANCI AL SERVICE S FINANCIAL INSTITUTIO NS FINANCIA L MARKETS FINANCIAL INSTRUMENT S FINANCIAL INSTITUTIONS. FINANCIAL INSTITUTIONS CAN BE DIVIDED INTO BNAKING AND NON BANKING INSTITUTIONS. 11 .TYBBI THE FINANCIAL SYSTEM IMPLIES A SET OF COMPLEX AND CLOSELY CONNECTED INSTITUTIONS. AND SUPPLIERS OF CREDIT OR FINANCE. THESE INSTITUTIONS PROVIDE VARIOUS FINANCIAL SERVICES TO THE BUSINESS ORGANISATIONS AND COMMAN PEOPLE. THEIR ACTIVTIES MAY BE GENERAL OR SPECIAL. THESE INSTITUTIONS PARTICIPATE IN THE ECONOMY S PAYMENT MECHANISM BY PROVIDING TRANSACTION SERVICES. FINANCIAL INSTITUTIONS ARE BUSINESS ORGANISATIONS WHO ACT AS MOBILIZERS AND DEPOSITORIES OF SAVINGS. EQUIPMENTS. SECURITIES ETC. AGENTS. THE FOLLOWING IS A TYPICAL STRUCTURE OF FINANCIAL SYSTEM IN ANY ECONOMY. PRACTICES AND MARKETS.

DEALERS. THE FINANCIAL MARKETS MAY BE CLASSIFIED AS ORGANISED OR UNORGANISED.TYBBI FINANCIAL MARKETS FINANCIAL MARKETS ARE THE CENTRES WHICH PROVIDE FACLITIES FOR BUYING AND SELLING OF FINANCIAL CLAIMS AND SERVICES. FINANCIAL MARKETS CAN BE DIVIDED INTO TWO PARTS. IT IS ALSO CALLED AS NEW ISSUE MARKET. THE SECONDARY MARKET DEALS IN SECURITES WHICH ARE ALREADY ISSUED BT THE COMPANIES AND INVESTORS IN PROVIDING LIQUDITY. FINANCIAL MARKETS ARE ALSO CLASSIFIED AS CAPITAL MARKETS AND MONEY MARKET. THEY ARE INTERLINKED BY THE LAWS. THE MONEY MARKET DEALS IN THE SHORT TERM CLAIMS WITH MATURITY PERIOD OF LESS THAN A YEAR AND CAPITAL MARKETS DEALS IN LONG TERM CLAIMS OR SECURITIES. HOWEVER. FORMALS OR INFORMALS AND DOMESTIC OR FOREIGN MARKETS. CONTRACTS. THE CAPITAL MARKET IS CO EXTENSIVE NOT ONLY WITH THE STOCK MARKET BUT IT IS MUCH WIDER THAN THE STOCK MARKET. FOR 12 . THE PARTICIPANTS IN THE FINANCIAL MARKETS ARE FINANCIAL INSTITUTIONS. FINANCIAL INSTRUMENTS FINANCIAL INTRUMENTS ARE CLAIMS TO THE PAYMENT OF OF MONEY IN FUTURE OR A PERIODIC INTERVAL. THE PRIMARY MARKETS WHICH DEALS IN NEW FINANCIAL CLIAMS OR INSTRUMENTS. BROKERS. BORROWERS AND INVESTORS. AND COMMUNICATION NETWORKS. STOCK EXCHANGES ARE BOTH PRIMARY AND SECONDARY MARKETS SEGMENTS.

AND RETURN. SECONDARY INTRUMENTS ARE ISSUED BY INTERMEDIARIES TO THE ULTIMATE SAVERS AS BANK DEPOSITS. DEBENTURES. TRANSFERABILITY. FINANCIAL SERVICES A FINANCIAL SERVICE IS ANY KIND OF SERVICE OF A FINANCIAL NATURE OFFERED BY A FINANCIAL SERVICE PROVIDER. MUTUAL FUNDS. FIXED DEPOSITS ETC. DEBENTURES. DISCOUNTING. THERE SHOULD BE PROXIMITY BETWEEN THE SERVICE PROVIDER AND THE CONSUMER IN ORDER TO COMPLETE A SERVICE TRANSACTION. VOLATILITY. REGULAR PAYMENT IN THE FORM OF INTEREST OR DIVIDENT IS PAID BY THE COMPANY TO THE INVESTORS. UNITS AND INSURANCE POLICIES.TYBBI EG. MATURITY. FINANCIAL SERVICES HAVE DEVELOPED TO MEET THE NEEDS OF COMPANIES. IN 13 . PLEDGING OF SHARES. THE IMPORANT CHARACTERISTICS ARE LIQUIDITY. THE FINANCIAL INSTRUMENTS DIFFER FROM EACH OTHER IN RESPECT OF THEIR INVESTMENTR CHARACTERISTICS. BANKING AND INSURANCE ARE TRADITIONAL FINANCIAL SERVICES. RISK. FACTORING. SHARE TRANSFER. THESE SREVICES ARE INTANGIBLE AND INVISIBLE. VENTURE CAPITAL AND CREDIT CARDS. FINANCIAL SERVICES HAVE STARTED LONG BACK IN WESTERN COUNTRIES. BONDS. THE MODERN FINANCIAL SERVICES INCLUDE OVER THE COUNTER SERVICES. ALL BANKING AND INSURANCE RELATED SERVICES ARE INCLUDED IN THIS CONCEPT. DIRECTLY TO THE ULTIMATE SAVERS SUCH AS EQUITY SHARES. THESE SERVICES COVER A WIDE RANGE OF ECONOMIC ACTIVITIES. THE IMPORTANT FINANCIAL INTRUMENTS ARE SHARES.

THESE SERVICES HAVE STARTED DURING 1980s.TYBBI INDIA. THESE SERVICES PLAY A SIGNIFICANT ROLE IN THE CHANGED BUSINESS SERVICES. THESE SERVICES HAVE STARTED LONG BACK IN WESTERN COUNTRIES. FEATURES OF FINANCIAL SERVICES MEMBERSHIP MANAGEMENT MEMBER : MEMBERSHIP REGISTRATION MEMBERS AND CUSTOMERS MEMBERSHIP EXIT MEMBERSHIP TRANSFER MINIMUM MEMBERSHIP PERIOD FINANCIAL MANAGEMENT : ACCOUNT PAYABLE FIXED ASSETS 14 . IN INDIA.

insurances. credit rating services and many more. The different types of financial services company jointly create one of the largest industries of the world. There are a number of financial services companies in the world. There are different types of financial services like lending money for different purposes. etc DIFFERENT TYPES OF FINANCIAL SERVICES The finance industry provides a number of services to the clients. journals processing. investment services. CENTRAL BANK USER CUSTOMIZED REPORTS SERVICE MANAGEMENT FOSA (FRONT OFFICE SERVICES ACTIVITIES) On-the-counter transactions (banking services) such as savings deposits. mortgage services. loans repayment. Some of these companies are the following: Investment services company Bank Insurance company 15 . There are different types of financial services company to provide these services to different commercial sectors as well as to the individuals. Head tellers.G. loans processing. salary payments Teller functions – Tellers.TYBBI REPORTING SYSTEM : REGULATORY REPORTS E. depository services. withdrawals. Cash Drawer and Strong room cash Management BOSA (BACK OFFICE SERVICES ACTIVITIES) Behind the scene activities such as Salary processing.

Hedge fund management . These services include depository services.BANKS It is one of the biggest financial services companies of the world. Some of these are commercial banks. 2.Hedge funds often employ the services of "prime brokerage" divisions at major investment banks to execute their trades. custody services and many more. Asset management . 16 . hedge funds. instead of lending money directly to a business. Custody services . credit card facilities and many more. Assets under custody in the India was estimated to $65 trillion at the end of 2008. Banks provide a number of financial services to the clients.INVESTMENT SERVICE COMPANY The investment services companies provide services like asset management. private banks and many more. There are different types of banks in the world. helps businesses raise money from other firms in the form of bonds (debt) or stock (equity).Custody services and securities processing is a kind of 'backoffice' administration for financial services.the term usually given to describe companies which run collective investment funds. lending services. a type of financial services entity which.TYBBI Intermediation or advisory services company Conglomerates Credit Rating Agencies 1. The term "commercial" is used to distinguish it from an "investment bank". A "commercial bank" is what is commonly referred to as simply a "bank". There are some banks that work for the capital markets only.

property or business) Issuance of credit cards and processing of credit card transactions and billing Issuance of debit cards for use as a substitute for checks 17 . commercial loans. and mortgage loans (typically loans to purchase a home.TYBBI Banking services The primary operations of banks include: Keeping money safe while also allowing withdrawals when needed Issuance of checkbooks so that bills can be paid and other kinds of payments can be delivered by post Provide personal loans.

so payments for bills can be made automatically Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account.Private banks provide banking services exclusively to high net worth individuals. such as a cashier's check or certified check. Provide a check guaranteed by the Bank itself and prepaid by the customer.Companies which provide credit card machine and payment networks call themselves "merchant card providers".TYBBI Allow financial transactions at branches or by using Automatic Teller Machines (ATMs) Provide wire transfers of funds and Electronic fund transfers between banks Facilitation of standing orders and direct debits. than normal retail banks. Bank cards . Other types of bank services Private banking . 18 . underwriting and advisory fees). Notary service for financial and other documents. such as wealth management and tax planning. Credit card machine services and networks . ICICI bank is the largest issuer of bank cards.include both credit cards and debit cards. assist company deals (advisory services. Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly. Private banks often provide more personal services. and restructure debt into structured finance products. Many financial services firms require a person or family to have a certain minimum net worth to qualify for private banking services.bank that underwrite debt and equity. Capital market bank .

despite the global crisis. Deposits of private sector banks increased at a CAGR of 26 per cent during fiscal year 2004–2008. Public sector banks accounted for above 66 per cent of the collective total income (including interest income and non-interest income) of all SCBs.3 per cent till 2011.5 per cent by all SCBs. Advances of private sector banks increased at a CAGR of 32 per cent against a CAGR of 30. around 80 per cent of the overall assets of SCBs were accounted for by 22 leading banks with a balance sheet size of above US$ 11.1 per cent by all SCBs for the same period. According to a study report by Dun and BradStreet.TYBBI BANK CARDS Bank cards include both credit cards and debit cards . by market research company. compared to the total CAGR growth of 20. is still fuelling the economy. 3 Private Sector Banks and 3 Foreign Banks. 19 .83 billion each. The total asset base of the 77 scheduled commercial banks (SCBs) added up to 91. This included 16 Public Sector Banks (PSBs). In India ICICI BANK is the largest issuer of bank cards ] AMERICAN EXPRESS MASTER CARD VISA Banking survey report RNCOS The Indian banking sector. RNCOS forecasts that the Indian banking sector will grow at a healthy compound annual growth rate (CAGR) of around 23.8 per cent of India’s GDP (at current market prices) through the financial year 2008. A report 'Opportunities in Indian Banking Sector'.

As per figures released by the Reserve Bank of India (RBI). and for foreign banks the share of retail banking also stood at around 36 per cent. bank credit increased by 24 per cent till January 2. lending by banks increased by more than 76 per cent during April-November 2008. leading Indian banks are likely to increase their earnings by around 40 per cent y-o-y in the December 2008 quarter. Credit to industry increased by 30. compared to the 21 per cent growth in the previous year. State-owned banks are now offering services like Internet banking and personalised cheque books. 2008. 20 .TYBBI Retail banking accounted for a 41 per cent share of the overall revenue generated by PSU banks while it was 36 per cent for private sector banks. the Indian Bank has introduced wealth management services for its high networth (HNI) clients providing various types of financial advisory and wealth management services. To make the most of this situation. Many such banks run processing centres and back offices. With global banks getting pressurised under the economic downturn. several companies and individuals are digressing from private banks to state-owned banks. The origins of HSBC Bank in India can be traced back to October 1853 when the Mercantile Bank of India. Further. Whereas. London and China was founded in Bombay. HSBC BANK HISTORY HSBC Bank was founded in 1865 to serve the needs of the merchants of the China coast and finance the growing trade between China. according to RBI data. 2009. Europe and the United States.2 per cent till December 19. as compared to the same period an year ago. and evaluation of loan proposals within a specific period. they are adopting new strategies and technologies to attract more customers. Public sector banks are going in for a major image overhaul.9 per cent in the same period in the previous year. against 24. The State Bank of India has even introduced two-faced ATMs. With the credit growth.

154 billion. Foreign exchange services include: Currency Exchange . As on June 30 2004. the Asia Pacific region.banking transactions are done in foreign currency 21 . In 1987. HSBC Bank has about 10.000 offices in 76 countries and territories in Europe. Through the 1990s.where clients can send funds to international banks abroad from India.TYBBI In 1959. HSBC Bank blossomed into one of the leading banking and financial services organizations of the world. The Hong Kong and Shanghai Banking Corporation (HSBC) acquired the Mercantile Bank of India and the head office of the HSBC Bank was established in Bombay (Mumbai). Foreign exchange services Foreign exchange services are provided by many banks around the world. HSBC Bank gave India its first ATM. the Bank has over 110 million customers worldwide with assets over US$1. the Americas. Foreign Currency Banking . the Middle East and Africa.where clients can purchase and sell foreign currency bank notes Wire transfer .

The insurance policies can be divided in several types like general insurance. Insurance underwriting . These services are designed to cover a number of risks that are related to an individual's life. Insurance brokerage . insurance brokers. life insurance. Underwriters may also offer similar commercial lines of coverage for businesses. a service still offered primarily through agents. property and many more.Insurance brokers shop for insurance (generally corporate property and casualty insurance) on behalf of customers. causing controversy within the industry. commercial insurances and a lot more. life 22 . Activities include insurance and annuities. These services are not only designed to provide security but at the same time there are a number of insurance plans that are designed to provide regular income to the clients. Recently a number of websites have been created to give consumers basic price comparisons for services such as insurance.TYBBI 3. and stock brokers.Personal lines insurance underwriters actually underwrite insurance for individuals.INSURANCE The insurance companies provide the clients with risk coverage services.

25 billion in the next two years from the current level of US$ 1. 23 . Conversely. In an ASSOCHAM report— 'Insurance Sector Futuristic Growth'— stated that India's insurance sector is likely to reach US$ 46. Reinsurance .25 billion by 2010. retirement insurance. state-owned insurance companies would see a 35–40 per cent growth rate. The report said." Private insurance business is likely to see a 140 per cent growth rate due to the aggressive marketing techniques used by them.Reinsurance is insurance sold to insurers themselves.15 billion. health insurance. to protect them Insurance survey report by ASSOCHAM The insurance sector is one of the most promising sectors in India today. "The total insurance business will reach a level of US$ 46. and property & casualty insurance.TYBBI insurance.

and allow foreign direct investment (FDI) of 49 per cent from the present 26 per cent.72 billion by 2010–11. According to a report by research firm RNCOS—'Booming Insurance Market in India (2008–2011)'—the total life insurance premium in India is projected to grow to US$ 259. The government is planning to ease restrictions on foreign investments in insurance. banking and pensions. health insurance.14 billion by 2011–12. life insurance.27 million as premium in April 2008. compared to 13 per cent in 2007. a service still offered primarily through agents. The general insurance sector is likely to grow at a rate of 18 per cent in 2008. Ltd The oriental Insurnce co. COMPANIES IN GENERAL INSURANCE IN INDIA The new India assurance co. The 17 major nonlife insurers collected a total of US$ 840. Ltd The national insurance ltd United India insurance ltd 24 . Life Insurance Corporation (LIC) is bullish on growth and is targetting business in excess of US$ 59. retirement insurance. Activities include insurance and annuities.TYBBI India is the fifth largest life insurance market in the emerging insurance economies globally and the segment is growing at a healthy 32–34 per cent annually. Some Well Known Insurers Includes: GOVT. INSURANCE UNDERWRITING Personal lines insurance underwriters actually underwrite insurance for individuals. and property & casualty insurance. and stock brokers. insurance brokers. Underwriters may also offer similar commercial lines of coverage for businesses.

although many now have branch offices to assist clients.OTHER FINANCIAL SERVICES Intermediation or advisory services . Primarily internet-based companies are often referred to as discount brokerages. Ltd Birla sunlife insurance co. Ltd 4. COMPANIES IN LIFE INSURANCE Life insurance corporation of India (LIC) PRIVATE COMPAINES IN LIFE INSURANCE Max new York life co. Ltd Bajaj Allianz life insurance co. Ltd Aviva life insurance co. Stock brokers assist investors in buying or selling shares.ltd Hsbc canara life insurance co. Ltd Icici prudential co. Ltd Tata aig Met life insurance co.TYBBI PRIVATE COMPANIES IN GENERAL INSURANCE LTD Bajaj Allianz general insurance ltd Icici Lombard general insurance ltd Bharti axa general insurance ltd Ing vysya general insurance ltd cholamandalam general insurance ltd GOVT. These 25 .These services involve stock brokers (private client services) and discount brokers.

Venture capital is a type of private equity capital typically provided by professional.An angel investor or angel (known as a business angel or informal investor in Europe). outside investors to new.Private equity funds are typically closed-end funds. wealthy individuals. is an affluent individual who provides capital for a business start-up. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital. such as large companies. The most successful private equity funds can generate returns significantly higher than provided by the equity markets Venture capital . general insurance. Angel investment .A financial services conglomerate is a financial services firm that is active in more than one sector of the financial services market e. As a consequence.g.e. economic capital for a conglomerate is usually substantially less than economic capital is for the sum of its parts. 26 . retail banking. and investment management funds. high-potential-growth companies in the interest of taking the company to an IPO or trade sale of the business. usually in exchange for convertible debt or ownership equity. health insurance. Full service and private client firms primarily assist execute trades and execute trades for clients with large amounts of capital to invest. etc. which usually take controlling equity stakes in businesses that are either private. wholesale banking. A key rationale for the existence of such businesses is the existence of diversification benefits that are present when different types of businesses are aggregated i. bad things don't always happen at the same time. Conglomerates . Private equity funds often use leveraged buyouts (LBOs) to acquire the firms in which they invest. or taken private once acquired. Private equity . asset management. life insurance.TYBBI brokerages primarily target individual investors. investment banking.

Furthermore.28 billion through public issues.2 billion. only companies having had a market capitalisation of above US$ 1. against US$ 2. SEBI plans to bring down this figure. according to global consultancy firm. As per the study. fund mobilisation during the first quarter of 2008 was the second highest for a quarter in the Indian capital's history.97 billion in the last one year are entitled to this route.STOCK MARKETS Fund raising by India Inc through initial public offers (IPOs) rose by a whopping 62 per cent since the beginning of 2008 to 29 May. expectations of it rebounding soon are also high. SEBI will be making it easier for companies to raise money from the stock market. In recent months. However. Dealogic. Significantly.TYBBI 5. According to the initial public offering (IPO) estimates for 2009. Further. by relaxing eligibility rules to facilitate faster raising of funds from existing shareholders. the Indian stock market has slowed down due to the global economic turmoil. the Indian economy and capital markets are expected to witness a turnaround within six to nine months. India Inc is likely to raise four times the proceeds it garnered from the primary market in 2008. 27 .6 billion during the same period in 2006. according to global deal data provider. Presently. by Thomson Reuters study. India Inc is targetting to raise a massive US$ 15. Deloitte Haskins & Sells. 2008 to US$ 4.

" the report revealed. In a typical leveraged buyout transaction. There is a wide array of types and styles of private equity and the term private equity has different connotations in different countries. Among the most common investment strategies in private equity include leveraged buyouts. Capital for private equity is raised primarily from institutional investors. the private equity firm buys majority control of an existing or mature firm.TYBBI Private Equity In finance. growth capital. private equity investments are likely to perk up in the second-half of 2009 and fuel the global economic recovery. expecting the inflows to be around US$ 5 billion-US$ 8 billion in the coming year. "With approximately US$ 1 trillion of dry powder (term used to denote capital available for deals) available. Private equity (PE) players see are bullish on investing in India as a profitable destination. private equity is poised to play a major role in the coming economic recovery. and rarely obtain majority control. Investments in private equity most often involve either an investment of capital into an operating company or the acquisition of an operating company. private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange. This is distinct from a venture capital or growth capital investment. distressed investments and mezzanine capital. in which the private equity firm typically invests in young or emerging companies. venture capital. 28 . According to a report by global research firm Preqin.

Actis has raised a US$ 2. Reliance Capital had announced setting up a US$ 1 billion PE fund.9 billion private equity fund ‘Actis Emerging Markets 3 (AEM3)’ for the emerging markets of China. managing director of Deloitte corporate finance. sectors driven by domestic consumption and infrastructure are expected to witness a lot of activity. the competitive environment for investment opportunities for PE houses is expected to ease during 2009. with a corpus in excess of US$ 425 million raised through Indivision I. Tata Capital Ltd is planning to float a US$ 350 million private equity (PE) fund. "We have observed two key points. Private equity firm. Africa. The fund will be pumping in US$ 1 billion as investments in India over the next 3-4 years. The sector is going to see a flurry of activity and investments in the coming months. According to a survey by Deloitte during the last six months. with an asset base of more than US$ 20 billion. Indivision India Partners is planning to raise another fund-Indivision II. US-based Apollo Management. India. Sandeep Gill. will be soon setting up shop in India. Other bigwigs planning fund raisings are the Tata and Aditya Birla groups with plans to raise US$ 350 million and US$ 250 million. 29 .97 billion during the corresponding period in 2008. The PE firm has plans to spend around US$ 800 million in investments in Indian and the US markets." The total number of PE deals during the first five months of 2008 stood at 170. Second. according to the global deal tracking firm. Zephyr.TYBBI Industry experts feel that long-term investing in India is a profitable option. said. In August 2008. the volume of PE deals in the market will be dependent on how quickly promoters are willing to accept lower valuations. Many companies have ambitious plans to enter the private equity (PE) business and raise funds. respectively. India is among the top 10 countries in terms of value of private equity deals across the world.39 billion as against 159 deals amounting to US$ 4. as smaller PE firms and hedge funds exit the market. Latin America and South-east Asia. with an announced value of US$ 6.

we are also witnessing the emergence of many private sector financial services. 30 . which was very sluggish.TYBBI EMERGENCE OF PRIMARY EQUITY MARKETS Now. The primary equity market has emerged as an important vehicle to channelise the savings of the individuals and corporates for productive purposes and thus to promote the industrial and economic growth of the country. has become a popular source of raising finance. The capital market.

mutual fund is used as a generic term for various types of collective investment vehicles. and closed-end funds. average Assets Under Management (AUM) of the 31 .MUTUAL FUNDS A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks. However. The growth momentum of the mutual fund industry continues in the new fiscal year (2008–09). compared to US$ 184. Since 1940. Similar funds also operate in Canada. The net proceeds or losses are then typically distributed to the investors annually. open-ended investment companies (OEICs).S. also known in the U. as mutual funds. and/or other securities. the Indian mutual funds retail market is presently growing at a CAGR of around 30 per cent.93 billion during April–June 2008. such as unit trusts.81 billion in April–June 2007. The mutual fund will have a fund manager that trades the pooled money on a regular basis. According to a report by research firm RNCOS. and is likely to touch US$ 300 billion by 2015. unit investment trusts (UITs).TYBBI 6.4 per cent to US$ 327. there have been three basic types of investment companies in the United States: open-end funds. in the rest of the world. bonds. Consequently. Fund mobilisation has increased by a whopping 77. unitized insurance funds. short-term money market instruments. and undertakings for collective investments in transferable securities (UCITS).

Cerulli Associates. Looking ahead. the AUM totalled to US$ 1. This is also the third consecutive monthly rise in assets for the industry as a whole. the mutual fund industry made an overall investment of US$ 2.10 trillion.33 billion for June 2008. the Indian mutual funds market is estimated to grow at a CAGR of 18 per cent in the next five years. Life Insurance Corporation of India (LIC) has put in over US$ 2. As per SEBI. HSBC Asset Management India Private Limited acts as the Asset Management Company to the HSBC Mutual Fund. HSBC operates in more than 70 countries across the globe and has assets of over $1.73 billion by 2012.TYBBI mutual fund industry has increased to US$ 132. at approx.24 billion during the same period. against US$ 99. Further.75 billion into liquid funds of different fund houses. In September 2008. The amount was more than three times its similar investments made in 2008. HSBC Mutual Fund HSBC is one of the world's leading banking giants and boasts of a 140-year history in banking services.86 billion in the corresponding period in 2007. the mutual funds (MF) industry has seen a sharp increase of about 8. the mutual funds industry has mustered an estimated US$ 1.14 billion in equities between January-September 2008.2 trillion on the consolidated group balance sheet. 32 .7 per cent in AUM since the previous month. The investment banking and fund management businesses of the group is handled by HSBC Investments. US$ 96 billion–US$ 98 billion in assets for February 2009. To improve the capital market. the government is likely to remove the restriction on profit-making Navratna and mini-Ratna public sector undertakings (PSUs) from investing in mutual funds. according to a report by USbased financial services research and consulting firm. with the country's mutual funds assets expected to more than double to US$ 298. According to market sources.

an affiliate of the HSBC group. and should be carefully compared. 7. 33 .TYBBI HSBC Securities and Capital Markets India Private Limited. Financial analysts and stock market quotes will generally not include other types of liabilities. debt to equity (dequity) will therefore also be affected. is the sponsor of the fund and owns 75 percent stake. and this will affect the formal equity. by definition. When used to calculate a company's financial leverage. Quoted ratios can even exclude the current portion of the LTD. Due to the high volatility in the equity markets. for example. true). although some will make adjustments to include or exclude certain items from the formal financial statements. Other definitions of debt to equity may not respect this accounting identity. exclude intangible assets. Attributing preferred shares to one or the other is partially a subjective decision but will also take into account the specific features of the preferred shares.DEBT MARKET Preferred shares can be considered part of debt or equity. and the statement that equity plus liabilities equals assets is therefore an accounting identity (it is. Adjustments are sometimes also made to. the debt usually includes only the Long Term Debt (LTD). Indian investors are choosing debt market and mutual funds over equities. such as accounts payable. Financial economists and academic papers will usually refer to all liabilities as debt. The composition of equity and debt and its influence on the value of the firm is much debated and also described in the ModiglianiMiller theorem.

corporate bond market. with insurance. as on the third week of June 2008. from about US$ 400 billion (45 per cent of GDP) in 2006 to about US$ 1. Significantly. increasing its share in GDP from 10 per cent to 22 per cent. The debt market in India included segments like government securities. around US$ 333.TYBBI According to an ASSOCHAM report.5 trillion (about 55 per cent of GDP) by 2016. and fixed deposits among others. CLASSIFICATION OF FINANCIAL SERVICES INDUSTRY The financial intermediaries in India can be traditionally classified into two: CAPITAL MARKET INTERMEDIARIES MONEY MARKET INTERMEDIARIES 34 . According to a report by Goldman Sachs. mutual funds and pension sector experiencing rapid growth. The report revealed that investors favoured corporate bonds. PSU (public sector undertaking) bonds. particularly debentures issued by leading companies. India's debt market is estimated to grow four-fold.27 million was invested in the debt market against US$ 249.89 million in equities. the non-government sector is expected to grow from US$ 100 billion in 2006 to US$ 575 billion in 2016.

2.MONEY MARKET INTERMEDIARIES The money market intermediary consists of commercial banks. Hence the term “financial services industry” includes all kinds of organizations which intermediate and facilitate financial transactions of both individuals and corporate customers. 35 .TYBBI 1. cooperative banks and other agencies which supply only short term funds.CAPITAL MARKET INTERMEDIARIES The capital market intermediaries consist of term lending institutions and investing institutionswhich mainly provide long term funds.

innovation has been the key word behind the phenomenal success of many of the financial service companies and it forms an integral part of all planning and policy decisions. It also carries an attractive rate of interest. SOME OF THEM HAVE BEEN BRIEFLY DISCUSSED BELOW: COMMERCIAL PAPER TREASURY BILL CERTIFICATE OF DEPOSIT BILLS OF EXCHANGE PROMISSORY NOTE 1.INNOVATIVE FINANCIAL INSTRUMENTS In recent years. This has helped them to keep in tune with the changing times and changing customer needs. Since its denomination is very high. Accordingly. It is suitable only to institutional investors and companies. many innovative financial instruments have come into the financial market in recent times. COMMERCIAL PAPER A commercial paper is a short term negotiable money market instrument.TREASURY BILL 36 . 2.TYBBI 9. Commercial papers are sold at a discount from their face value and redeemed at their face value. Banking and non-banking companies can issue this for raising their short term debt. It has the character of an unsecured promissory note with a fixed maturity of 3 to 6 months.

4. the government has come out with the short term treasury bills of 182 days bills and 364 days bills. Bank note is frequently transferred as a promissory note. As such.TYBBI A treasury bill is also a money market instrument issued by the central government. it is suitable to mainly instituional investors and companies. 3. it has a secondary market. Recently.CERTIFICATE OF DEPOSIT The scheduled commercial banks have been permitted to issue certificate of deposit without any regulations on interest rates. This is also a money market instrument and unlike a fixed deposit receipt. Since the denomination is very high. It is a negotiable insturment and hence it offers maximum liquidity. 37 . a promissory note made by a bank and payable to bearer on demand. A promissory note is an unconditional promise to pay a specific amount to bearer or to the order of a named person.PROMISSORY NOTE A promissory note is a written promise by the maker to pay money to the payee. A maker of a promissory note promises to unconditionally pay the payee (beneficiary) a specific amount on a specified date. on demand or on a specified date. It is also issued at a discount and redeemed at par.

126) It is essentially an order made by one person to another to pay money to a third person. defined as a bill of exchange drawn on a banker and payable on demand. They are not used as often today. There are originally two parties in a promissory note.TYBBI A negotiable promissory note is unconditional promise in writing made by one person to another. (Sec. signed by the person giving it. A bill of exchange is an unconditional order in writing addressed by one person to another. The one who makes the promise and signs the instrument is called the "maker" and the party to whom the promise is made or the instrument is payable is called the "payee" 5.194) A promissory note. engaging to pay on demand. sum certain in money to order or to bearer. or at fixed or determinable future time. Original parties to a promissory note. bills of exchange were a common means of exchange. Prior to the advent of paper currency. signed by the maker. requiring the person to whom it is addressed to pay on demand or at fixed or determinable future time a sum certain in money to order or to bearer.BILLS OF EXCHANGE A bill of exchange or "draft" is a written order by the drawer to the drawee to pay money to the payee. and are written orders by one person to his bank to pay the bearer a specific sum on a specific date. 38 . Bills of exchange are used primarily in international trade. A common type of bill of exchange is the cheque (check in American English). is a promise to pay a sum of money. briefly stated. (see Sec.

A key rationale for the existence of such businesses is the existence of diversification benefits that are present when different types of businesses are aggregated i. Thus. and the payee. but the third party can have no better right than the transferor. asset management. the drawee. etc. In that case it can still be transferred to a third party. he becomes an acceptor when he indicates his willingness to pay the bill. health insurance. life insurance. and so on indefinitely. He gives the order to pay money to third party.e. As a consequence. The person who draws the bill is called the drawer.62) The party in whose favor the bill is drawn or is payable is called the payee.g. the drawer may draw on himself payable to his own order. regardless of any counterclaims that may have disabled the previous payee or endorser from doing so. The "holder in due course" may claim the amount of the bill against the drawee and all previous endorsers. bad things don't always happen at the same time. The party upon whom the bill is drawn is called the drawee. This is what is meant by saying that a bill is negotiable. retail banking. who may in turn endorse it to a fourth. economic capital 39 .CONGLOMERATES A financial services conglomerate is a financial services firm that is active in more than one sector of the financial services market e. wholesale banking. investment banking. He is the person to whom the bill is addressed and who is ordered to pay. (Sec. In some cases a bill is marked "not negotiable".TYBBI A bill of exchange requires in its inception three parties--the drawer. 10. general insurance. The parties need not all be distinct persons. A bill of exchange may be endorsed by the payee in favour of a third party.

A study on the forex market is crucial for all those who are investing in the money market. Arbitrage is one of the most important fundamentals of financial concepts. FUNDAMENTALS OF FINANCIAL SERVICE SECTOR A detailed study on the fundamentals of financial concepts is sure to give some idea on the concepts of finance. The forex market handles the trading of one currency with another country's currency and it is the largest financial market in the world in terms of transaction volume. liquidity risk and market risk. some investors tend to play safe in the market by investing in the less risky security. settlement risk.TYBBI for a conglomerate is usually substantially less than economic capital is for the sum of its parts. A clear concept on the arbitrage practicing may be beneficial for the investors. There are a number of factors that influence the functioning of the investment market. Investment in currencies is getting popular with the passage of time. The various types of risks that come under the domain of financial concepts are . The individual investor's choice of investment may vary from one person to another.systemic risk. consumer credit risk. 40 . Understanding of the cash flow management may be useful to evaluate a particular business or in determining the problems with liquidity. credit risk. The cash flow is another fundamental of the financial concept that refers to the process of cash being transferred by a business or an organization. Money market makes an important part in the concept of finance. While some investors go for investing in the risky securities. The investors need to go through some theories of finance that will help them to understand the behavior of market in a better way. It typically defines the process of taking advantage of the price different between two or more markets.

binomial options pricing model. Here it is assumed that the factors considered are sensitive to changes and that is represented by a factor-specific beta coefficient. In simple understanding. managing and profiling project risks. control and management of assets and also. Number of finance theories that offer separate approaches to the finance hypotheses. cumulative prospect theory. on the other hand. The Prospect theory of finance. The proper asset pricing is necessary for the proper pricing of shares. This theory proposes how the investors should use diversification in order to optimize their portfolios. Black model and legal origins theory. T h e A r b i t r a g e Pricing Theory for example talks about the general theory of asset pricing. prospect theory. rational choice theory. The model is descriptive by nature and it tries to represent the real-life choices but not optimal decisions. It takes into consideration the alternatives that come with uncertain outcomes. 41 . The Arbitrage Pricing Theory states that the return that is expected from a financial asset can be presented as a linear function of various theoretical market indices and macroeconomic factors.TYBBI FINANCIAL SERVICES THEORIES The prime concept of finance theory is to study the various ways by which a business or an individual raises money. Some of the major and popular finance theories of the world are: arbitrage pricing theory. discusses the alternatives involving risks. Allocating money into projects while considering the risk factors attached to them also fall under the canopy of finance theory fundamentals. 'financing' also means provision and allocation of fund for a particular business module or project. The concept of finance may also be integrated with the concepts such as: study of money and other assets. Monte Carlo option model.

INVESTOR AWARENESS With a growing awareness amongst the investing public. LOW PROFITABILITY 42 . etc. to financial assets like shares. there has been a distinct shift from investing the savings in physical assets like gold. mutual funds.TYBBI CAUSES FOR FINANCIAL INNOVATION FOLLOWING ARE THE CAUSES OF FINANCIAL INNOVATIONS: Economic Liberalization Investor Awareness Low Profitability Customer Service Keen Competition Improved Communication Technology Global Impact ECONOMIC LIBERALISATION Reform of the financial sector constitutes the most important component of India’s programmed towards economic liberalization. The recent economic liberalisation measures have opened the door to foreign competitors to enter into our domestic market. silver. debentures. land. etc.

This keen competition has paved the way for the entry of varied nature of innovative financial products so as to meet the varied requirements of the investors. GLOBAL IMPACT Many of the providers and users of capital have changed their roles all over the world. CUSTOMER SERVICE Now-a-days the customer’s expectations are very great. KEEN COMPETITION The entry of many financial intermediaries in the financial sector market has led to severe competition among themselves. IMPROVED COMMUNICATION TECHNOLOGY The communication technology has become so advanced that even the world’s issuers can be linked with the investors in the global financial market without any difficulty by means of offering so many options and opportunities. namely the banks has been very much affected to recent times. They want newer products at lower cost or at lower credit risk to replace the existing one.TYBBI The profitability of the major financial intermediary. VARIOUS ELEMENTS OF FINANCIAL SERVICES MARKETING: 43 . There is a decline in the profitability of traditional banking products.

This necessitates product differentiation. In order to design and develop new products one should take the help of market research to asses the needs of the customers. availability of existing product and future growth in demand. In the competitive market. so that the company can cater to the needs of the different groups of investors or customers. the task of selling a product is tougher since the core products are the same. Attractive schemes have to be created with efficient delivery in order to optimize customer satisfaction. The price of financial 44 .TYBBI In the formulation of overall marketing strategies in the financial services industry. the following decisions are considered important in the present liberalized environment Product Planning Pricing Policy Branding Customer Service Distribution Policy Promotion Policy Market Segmentation PRODUCT PLANNING The financial companies should aim at creating new generic products as per the needs of the customers. PRICING POLICY The potential customers generally frame their investment strategies in the background of pricing decisions. There should be different products in the arrays of the company. The prices take different dimension depending upon the type of financial services. It is always better to bring modification in the existing products by adding some new features and elimination of outdated products.

The quality of services offered in turn helps to develop loyalty among the customers. Customers are involved in a very real relationship with the company and even one weak link can significantly damage their trust. MARKET SEGMENTATION The financial service industries are expected to satisfy both rural and urban customers. BRANDING Brand name very often signifies the market segments. for the banks it is the net asset value. The personal touch in services has shown a positive result in the recent times. In the competitive world of financial services. the service should be offered in the best possible manner.TYBBI services is always linked with returns.For an insurance company the price means the premium. Prompt and timely service as per the needs of customer would make difference. small and large-scale entrepreneurs. inherent benefits and investment objectives and also the customer’s loyalty. incentives. After all in all cases only the competitive price and the promised return catch the sentiment of the customers. designing brand policy like individual family or corporate brand. CUSTOMER SERVICES Marketing of services is significantly influenced by the quality of service and interpersonal relationship between the customers and service organizations. In order to motivate the potential customers. This process consists of product name. brokerage and agency commission is also to be decided in advance because the expenses towards these items will affect the ultimate returns to the investors. Services can be provided either directly by the company through the service the service department or through intermediaries like registrars or external agencies. However. high and low earning 45 . market orientation of product and customer orientation of service are the two key factors. while deciding pricing.

contest. PROMOTION POLICY The promotion of sale may be through advertisement. EMERGING FUNCTIONS IN MARKETING OF FINANCIAL SERVICES The following are the emerging functions of financial service industries and having greater significance in this competitive market. personal finance shows. retail and institutional customers. there should be a clear-cut idea about the channel of distribution of the product so as to make it accessible to the ultimate customers. direct and indirect benefits of the product on the one hand and behavior or attitude of the customers. etc. Before launching a product. Identification of market segment is crucial to take further action regarding promotion and distribution of the product. franchisees should be determined based on the internal marketing strength of the organization. brokers. etc. The segmentation of market based on the changing needs of customers is considered to be the most appropriate solution. the various promotional tools used by the major players are personal and impersonal promotions. DISTRIBUTION POLICY The determination of proper channel for selling the product is also a key issue in the marketing of financial products. Product Development 46 . The channels which directly link to the cudtomers or through the intermediaries like agents. road shows.TYBBI customers. Market segment will be identified in the basis of nature of the product.

BRANCH MANAGEMENT 47 . APPRAISAL MANAGEMENT To scrutinize and recommend and approval or rejection of retail loan proposals received from branches by way of credit scoring system and sound judgment. collection and verification of operations as well as to ensure quality of credit portfolio and flow-up default cases. To monitor the performance of these agencies on an ongoing basis and ensure a high-quality channel operation. To identify and recommend suitable third-party agencies for marketing.TYBBI Channel Management Appraisal Management Territory Sales Management Branch Management Brand Management PRODUCT MANAGEMENT To monitor profitability for each product line. TERRITORY SALES MANAGEMENT To build the retail asset business in liaison with direct selling agents and branch head in order to achieve the business targets for the region. responsibilities and pricing of each agency. To Asses the potential of retail asset business based on market feedback and to enhance existing products and develop new products. verification agencies and to finalize terms and conditions. CHANNEL MANAGEMENT To identify third-party agencies such as direct sales agents.

They have to adopt new marketing strategies and tactics which will enable them to capture the maximum opportunities with lowest risk in order to enable them to survive and to meet the tough competition from global players of the domestic and foreign origin. BRAND MANAGEMENT To develop strong brand name for the product and corporate image for the company through various innovative devices. It is a choice of selecting and revising spectrum of securities to it with the characteristics of an investor. Today’s financial services industry requires new strategies to survive and continue to operate.TYBBI To achieve the business target of the branch with a predominantly retail business. 48 . PORTFOLIO MANAGEMENT Portfolio management means selection of securities and constant shifting of the portfolio in the light of varying attractiveness of the constituents of the portfolio.

TYBBI OBJECTIVES SHORT TERM HIGH PRIORITY OBJECTIVES LONG TERM HIGH PRIORITY OBJECTIVES LOW PRIORITY OBJECTIVES MONEY MAKING OBJECTIVES SHORT TERM HIGH PRIORITY OBJECTIVES Investors have a high priority towards achieving certain objectives in a short time. Investors usually prefer a diversified approach while selecting different types of investments. a young couple will give high priority to buy a house. They want to achieve financial independence in long period. For e.g. Thus. For e. investors will go for high priority objectives and invest their money accordingly. investing for post retirement period or education of a child etc.g. LONG TERM HIGH PRIORITY OBJECTIVES Some investors look forward and invest on the basis of objectives of long-term needs. 49 .

which provide capital appreciation apart from regular income from dividend.g. Their objective is to maximize wealth. Usually. MONEY MAKING OBJECTIVES Investors put their surplus money in this kind of investment.TYBBI LOW PRIORITY OBJECTIVES These objectives have low priority in investing. For e. the investors invest in shares of companies. After investing in high priority assets. CASE STUDIES ICICI BANK 50 . domestic appliances etc. provision for tour. investors can invest in these low priority assets. These objectives are not painful.

Kalra had taken a 51 . I get to speak to a totally new person. Kalra. and the call centre sucks big time. But yes. and after that the call as abruptly disconnected! Next time I call the call center. we get a decent service. Many people predict that the bank would collapse in a few years from now. the credit card department.S. That’s my personal experience. and start from scrap describing the problem. today I was put on hold for around 7 mins. They put you on hold for 5 to 10 mins. This time the victim is a professor of a reputed engineering college. Infact. Prof J. (just imagine listening to the same junk music/tone/adverts continuously).Avoid ICICI as far as possible. Again an incident of unruliness by recovery agent of the bank has come into limelight. It is HSBC bank in news. Have an account with any nationalized bank. If it happens. Hope K V Kamath reads this My advice to all . He has charged a multinational bank which allegedly sent a pack of intimidating loan recovery agents to hound him. and then there is no guarantee that you will get to speak to someone or your problem would be solved.TYBBI I have a account with ICICI bank because it’s our salary account. and nothing actually happens. then you are really your luck. The people at the call center just promise to do things. And since we have a salary account. HSBC BANK HSBC bank recovery agents bash up 58-year-old professor Two days back RBI had put on its website guidelines for the bank’s recovery agents and in it has warned the banks about strict actions would be taken against them and even penalize the license of the bank but it seems still the warning is falling on deaf ears. and we are kind of forced to use ICICI Bank.

they left him” CONCLUSION OF FINANCIAL SERVICES 52 . In his complaint he told the police that the agents abused and beat him up outside the Indraprashta University campus in north Delhi for delaying monthly installments of a loan. He is hopeful of justice.S. Kalra of the Delhi College of Engineering has filed his complaint against the bank. allegedly hired by HSBC bank. and beat him up. They did not care to stop even after he told them that he was a heart patient and that he had developed chest pain.TYBBI loan of Rs 4. The incident took place in September but the 58-year-old professor.5 lakh to buy a Santro from the Noida branch of HSBC last year. deputy commissioner of police (north) told the press “They got into Kalra’s car and refused to leave till he paid the loan installments immediately. They hurled abuses. When they saw Kalra developing heart problem.” Kalra said in his complaint.Prof J. “They even threatened to kill me. Even the Finance Minister Pranab Mukherjee too has iterated that “strictest action” will be taken against banks stooping to strong-arm methods. Devesh Chandra Srivasatava. encouraged by the recent strict guidelines issued by the RBI against banks intimidating customers to recover loan. Police have registered a case of criminal intimidation against the loan recovery agents.

it becomes an internal or finance manager’s function. Financial services is the integral part in the modern business world. leasing and hire purchase companies.e.CO. mutual funds. merchant banks. Commercial banks. venture capital funds. funding. are some of the entities that provide financial services.TYBBI Financial services comprises of assisting in sourcing of funds. investment banks.ICICI.HSBC.COM 53 . advising and procedural assistance in deployment of funds. BIBLIOGRAPHY WWW.IN WWW. Many of the financial services are provided by the employees of the firm itself i. non-banking finance companies (NBFC). Otherwise the firm would source it from an external agency. rating agencies.

Master your semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master your semester with Scribd & The New York Times

Cancel anytime.