FINANCIAL SERVICES

FINANCIAL
SERVICES
 Financial service is part of financial system
that provides different types of finance
through various credit instruments,
financial products and services.
 In financial instruments, we come
across cheques, bills, promissory
notes, debt instruments, letter of
credit, etc.
 IMPORTANCE OF FINANCIAL SERVICES

 Vibrant Capital Market.

 Expands activities of financial markets.
 Benefits of Government.
 Economic Development.
 Economic Growth.
 Ensures Greater Yield.
 Maximizes Returns.
 Minimizes Risks.
 Promotes Savings.
 Promotes Investments.
 Balanced Regional Development.
 Promotion of Domestic & Foreign
Trade.
 FINANCIAL SERVICES OFFERED
BY VARIOUS FINANCIAL
INSTITUTIONS

 Factoring.
 Leasing.
 Forfaiting.
 Hire Purchase Finance.
 Credit card.
 Merchant Banking.
 Book Building.
 Asset Liability Management.
 Housing Finance.
 Portfolio Finance.
 Underwriting.
 Credit Rating.
 Interest & Credit Swap.
 Mutual Fund.
 I M P O RTA N C E O F
FINANCIAL
SERVICES

 1.promoting investment.
 2. Promoting savings
 3. Minimizing the risks
 4. Maximizing the Returns
 5. Ensures greater Yield
 6. Economic growth
 7. Economic development
 8. Benefit to Government
 9. Expands activities of Financial
Institutions
 10. Capital Market
 FUNCTIONS OF FINANCIAL
SERVICES

 Good financial system search in the

following ways :
 1. Promotion of liquidity.
 2. Link between savers and investors
 3. Information available
 4. Helps in projects selection
 5. Allocation of risk
 7. Reduce cost of transaction and
borrowing
 8. Financial deepening and broadening
 FINANCIAL
SERVICES
The services provided by the Financial Institutions. These
services generally include the banking services, Foreign
exchange services, investment services, insurance services and
few others. Following is a very brief description of the
services
 Banking Services – Includes all the operations provided by
the banks including to the simple deposit and withdrawal of
money to the issue of loans, credit cards etc.
 Foreign Exchange services – this includes the
currency exchange, foreign exchange banking or the
wire transfer
 Investment Services – It generally includes the asset
management, hedge fund management and the custody
services
 Insurance Services – It deals with the selling of insurance
policies, brokerages, insurance underwriting or the
reinsurance
 Some of the other services include the advisory services,
 FINANCIAL INTERMEDIARIES

 A financial intermediary is an institution which

connects the deficit and the surplus. The best
example of an intermediary can be a bank which
transforms the bank deposits to bank loans. The
role of financial intermediary is to channel funds
from people who have extra inflow of money i.e.,
the savers to those who do not have enough
money to fulfill the needs or to carry out the
basic activities i.e. the borrowers.
 Functions of Financial Intermediaries
 Maturity transformation
 Risk transformation
 Convenience denomination