2. Financial Services Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, including: credit unions banks credit card companies, credit card companies, insurance companies accountancy companies consumer finance companies, stock brokerages investment funds government sponsored enterprises
3. Functions of financial services 1. Facilitating transactions (exchange of goods and services) in the economy. 2. Mobilizing savings (for which the outlets would otherwise be much 2. Mobilizing savings (for which the outlets would otherwise be much more limited). 3. Allocating capital funds (notably to finance productive investment). 4. Monitoring managers (so that the funds allocated will be spent as envisaged). 5. Transforming risk (reducing it through aggregation and enabling it to be carried by those more willing to bear it).
4. Role/Scope of Financial Services i. Traditional Activities Fund based activities Non fund based activities ii. Modern activities
5. Fund based activities Participating in money market instruments like commercial Papers, certificate of deposits, treasury bills, discounting oftreasury bills, discounting of bills etc. Involving in equipment leasing, hire purchase, venture capital, seed capital, Dealing in foreign exchange market activities.
6. Investment in shares, debentures, bonds, etc. of new issues (primary market activities) Dealing in secondary market activities. Fund based activities
7. Non fund based activities Managing the capital issue i.e. management of pre-issue and post-issue activities relating to the capital issue in accordance with the SEBI guidelines and thus enabling the promoters to market their issue.enabling the promoters to market their issue. Making arrangements for the placement of capital and debt instruments with investment institutions.
8. Arrangement of funds from financial institutions for the clients project cost or his working capital requirements. Assisting in the process of getting all Non fund based activities Assisting in the process of getting all Government and other clearances.
9. Modern Activities Rendering project advisory services right from the preparation of the project report till the raising of funds for starting the project with necessary Government approvals. Planning for M&A and assisting for their smooth carry out.carry out. Guiding corporate customers in capital restructuring. Acting as trustees to the debenture holders. Recommending suitable changes in the management structure and management style with a view to achieving better results.
10. Structuring the financial collaborations / joint ventures by identifying suitable joint venture partners and preparing joint venture agreements. Rehabilitating and restructuring sick companies through appropriate scheme of reconstruction and facilitating the implementation of the scheme. Modern Activities facilitating the implementation of the scheme. Hedging of risks due to exchange rate risk, interest rate risk, economic risk, and political risk by using swaps and other derivative products. Managing In- portfolio of large Public Sector Corporations. Undertaking risk management services like insurance services, buy-back options etc.