EVOLUTION AND ROLE OF

FINANCIAL SERVICES COMPANIES IN

INDIA

DR RAVI INDER SINGH

 MEANING OF FINANCIAL SERVICE
• FINANCIAL SERVICES BASICALLY MEAN ALL THOSE KINDS
OF SERVICES PROVIDED IN FINANCIAL OR MONETARY
TERMS, WHERE THE ESSENTIAL COMMODITY IS MONEY.
• THESE SERVICES MAY RELATE DIRECTLY/INDIRECTLY TO
THE EXCHANGE OF MONEY, ADVISORY SERVICES
RELATED TO THE MANAGEMENT OF MONEY.
• THESE SERVICES INCLUDE; BANKING, LEASING, HIRE
PURCHASE, VENTURE CAPITAL, MERCHANT BANKING,
INSURANCE, HOUSING FINANCE, MUTUAL FUNDS,
FACTORING, STOCK BROKING AND MANY OTHERS.
 CLASSIFICATION OF FINANCIAL SERVICES
INDUSTRY
• BANKING COMPANIES
• NON BANKING FINANCE COMPANIES
• FINANCIAL INSTITUTIONS
 KINDS OF FINANCIAL SERVICES
• ASSET BASED/FUND BASED SERVICES
• FEE BASED/ ADVISORY SERVICE
 FUND BASED SERVICES INCLUDE
• EQUIPMENT LEASING/ FINANCE
• HIRE PURCHASE AND CONSUMER CREDIT
• BILL DISCOUNTING
• VENTURE CAPITAL
• HOUSING FINANCE
• INSURANCE SERVICES
• FACTORING
 FEE BASED/ADVISORY SERVICE
• ISSUE MANAGEMENT
• PORTFOLIO MANAGEMENT
• LOAN SYNDICATION
• MERGER AND ACQUISITION
• CAPITAL RESTRUCTURING
• CREDIT RATING
• STOCK BROKING
 CLASSIFICATAION OF FINANCIAL SERVICES
INDUSTRY
• CAPITAL MARKET INTERMEDIARIES: TERM
LENDING INSTITUTIONS AND INVESTING
INSTITUTIONS PROVIDING LONG-TERM
FUNDS.
• MONEY MARKET INTERMEDIARIES: INCLUDE
COMMERCIAL BANKS, COOPERATIVE BANKS
AND OTHER AGENCIES, WHICH SUPPLY FUNDS
FOR SHORT-TERM REQUIREMENTS.
 EVOLUTION OF FINANCIAL SERVICES IN
INDIA
• INITIAL PHASE (1960-80)
– MERCHANT BANKING (1960)
– INSURANCE AND LEASING FINANCE (1970)
• SECOND PHASE (1980-90)
– COUNTER SHARE TRANSFERS,
– PLEDGING OF SHARES,
– MUTUAL FUNDS,
– FACTORING,
– DISCOUNTING,
– VENTURE CAPITAL AND
– CREDIT RATING.
 EVOLUTION OF FINANCIAL SERVICES IN
INDIA- Contd.
• THIRD PHASE (1990-2002) (new institutions and instruments)
– THIS PERIOD STARTED AFTER POST LIBERALIZATION.
– THE DEPOSITORIES,
– THE STOCK LENDING SCHEMES,
– ONLINE TRADING,
– PAPERLESS TRADING,
– DEMATERIALIZATION,
– BOOK BUILDINGS ARE THE CONTEMPORARY ISSUES OF THIS PHASE.
– ALLOWED FOREIGN INSTITUTIONAL INVESTORS INTO THE CAPITAL
MARKET.
 PRESENT SCENARIO
• CONSERVATISM TO DYNAMISM
• EMERGENCE OF PRIMARY EQUITY MARKET
• CONCEPT OF CREDIT RATING
• PROCESS OF GLOBALIZATION
• PROCESS OF LIBERALIZATION
• THANKS