The financial services industry in India has undergone significant changes since 1990. Before then, commercial banks and other financial institutions dominated the sector and met the financial needs of Indian businesses. However, after economic liberalization in the 1990s, the financial services sector gained more prominence and has developed into a major industry. Financial services encompass businesses that manage money, including banks, insurance companies, investment funds, and other entities. They mobilize funds from investors, facilitate their effective use, help manage risk, promote economic development, and provide liquidity and employment opportunities, contributing importantly to national GDP.
The financial services industry in India has undergone significant changes since 1990. Before then, commercial banks and other financial institutions dominated the sector and met the financial needs of Indian businesses. However, after economic liberalization in the 1990s, the financial services sector gained more prominence and has developed into a major industry. Financial services encompass businesses that manage money, including banks, insurance companies, investment funds, and other entities. They mobilize funds from investors, facilitate their effective use, help manage risk, promote economic development, and provide liquidity and employment opportunities, contributing importantly to national GDP.
The financial services industry in India has undergone significant changes since 1990. Before then, commercial banks and other financial institutions dominated the sector and met the financial needs of Indian businesses. However, after economic liberalization in the 1990s, the financial services sector gained more prominence and has developed into a major industry. Financial services encompass businesses that manage money, including banks, insurance companies, investment funds, and other entities. They mobilize funds from investors, facilitate their effective use, help manage risk, promote economic development, and provide liquidity and employment opportunities, contributing importantly to national GDP.
The Indian financial services industry has undergone a
metamorphosis since1990. Before its emergence the commercial banks and other financial institutions dominated the field and they met the financial needs of the Indian industry. It was only after the economic liberalisations that the financial service sector gained some prominence. Now this sector has developed into an industry. In fact, one of the world’s largest industries today is the financial services industry. Financial services
Financial services are the
economic services provided by the finance industry, which encompasse s a broad range of businesses that manage money, incl uding credit unions, banks, credit-card companies, Financial Services Authority insurance companies, Seychelles logo on building accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual asset managers, and some Function of financial service
Mobilization of funds: A financial service helps in mobilizing fund
from investors, individual, institutions and corporate entities. These funds are mobilized through different financial instruments like equity shares, bonds, mutual funds etc. Effective utilization of funds: These financial services also help in effective utilization of mobilized funds. Financial services helps in this regard through services like factoring, securitization, credit rating etc. Services of Credit Rating Company enables investors to make wise and informed decisions related to investment. Similarly merchant banking services helps companies in mergers and acquisitions. Transforming risk: Financial services like insurance helps in reduction of risk by transferring risk to those who are more willing to bear it. Enhancement of economic development: A financial service helps in economic development of the country by mobilization and deployment of funds. Ideal savings of individuals are channelized into productive investment through financial services. Provision of liquidity: The financial service industry promotes liquidity in the financial system by allocating and reallocating savings and investment into various avenues of economic activity. It facilitates easy conversion of financial assets into liquid cash. Creation of employment opportunities: The financial service industry creates and provides employment opportunities to millions of people all over the world. Characteristics of Financial Services Customer-centric Intangibility Concomitant Perishable in nature Domiance of human element Advisory Heterogeneity Information base Importance of financial services Economic growth: The financial service industry mobilises the savings of the people, and channels them into productive investments by providing various services to people in general and corporate enterprises in particular. In short, the economic growth of any country depends upon these savings and investments. Promotion of savings: The financial service industry mobilise the savings of the people by providing transformation services. It provides liability, asset and size transformation service by providing huge loan from small deposits collected from a large number of people. In this way financial service industry promotes savings. Capital formation: Financial service industry facilitates capital formation by rendering various capital market intermediary services. Capital formation is the very basis for economic growth. Creation of employment opportunities: The financial service industry creates and provides employment opportunities to millions of people all over the world. Contribution to GNP: Recently the contribution of financial services to GNP has been increasing year after year in almost countries. Provision of liquidity: The financial service industry promotes liquidity in the financial system by allocating and reallocating savings and investment into various avenues of economic activity. It facilitates easy conversion of financial assets into liquid cash. Thank you