Presentation on Financial services in India

Group Members Roll NumberName 5124Ankit Prajapati 5126Alpesh Rabari 5149Harshul Soni 5169Nisha Dharmani 5205Bhumika Shah

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, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises.

 Broadly, the Indian financial services sector can be segregated into segments, namely Banking, Insurance, Capital Markets, Private Equity and Mutual Funds. The history of banking dates back to the 1786 when the ‘General Bank of India' and the first insurance company – The Oriental Life Insurance Company was set up. The stock markets in India started as early as 1875, when Bombay Stock Exchange (BSE), the oldest stock exchange in Asia kick-started its operations. With the formation of UTI (Unit Trust of India) in 1963, the mutual fund industry came into being.  As of 2004, the financial services industry represented 20% of the market capitalization of the S&P 500 in the United States.

The banking industry grew by a Compound Annual Growth Rate (CAGR) of 20 percent March 2002 and One of the major trends that can be traced is the increase in the share of private banks in the Indian banking pie. The share of private banks increased to 16 percent during the year as compared to 9 percent during All this activity has seen the nine banks and seven micro-finance institutions from India being ranked in the top 50 banks in Asia and Forbes' World's Top 50 Microfinance Institutions, respectively

Financial Services Banking Services Foreign Exchange Services Investment Services Insurance Services Other Services

Banking Services Safe Deposits Loans Credit card & Debit card EFT Overdraft Private Banking

Foreign Exchange Services  Currency Exchange where clients can purchase and sell foreign currency banknotes  Foreign Currency Banking Banking transactions are done in foreign currency  Wire transfer where clients can send funds to international banks abroad

Investment services  Asset management The term usually given to describe companies which run collective investment funds. Also refers to services provided by others, generally registered with the Securities and Exchange Commission as Registered Investment Advisors.  Hedge fund management Hedge funds often employ the services of "prime brokerage" divisions at major investment banks to execute their trades.  Custody services The safe-keeping and processing of the world's securities trades and servicing the associated portfolios. Assets under custody in the world are approximately US$100 trillion.

 Investment Banking An investment bank is a financial institution that assists individuals, corporations, and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services (fixed income instruments, currencies, and commodities).  Underwriting Underwriters help the issuer to reach the minimum subscription limit for the validation of an issue. There are two types of underwriting. They are Soft Underwriting Hard Underwriting

 Merchant Banking A merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters to the firms they lend to. In the United Kingdom, the term "merchant bank" refers to an investment bank.

Insurance  Insurance brokerage Insurance brokers shop for insurance (generally corporate property and casualty insurance) on behalf of customers. Recently a number of websites have been created to give consumers basic price comparisons for services such as insurance, causing controversy within the industry.

 Insurance underwriting Personal lines insurance underwriters actually underwrite insurance for individuals, a service still offered primarily through agents, insurance brokers, and stock brokers. Underwriters may also offer similar commercial lines of coverage for businesses. Activities include insurance and annuities, life insurance, retirement insurance, health insurance, and property & casualty insurance.  Reinsurance Reinsurance is insurance sold to insurers themselves, to protect them from catastrophic losses

Other Financial Services  Intermediation or advisory services These services involve stock brokers (private client services) and discount brokers. Stock brokers assist investors in buying or selling shares. Primarily internet-based companies are often referred to as discount brokerages, although many now have branch offices to assist clients. These brokerages primarily target individual investors. Full service and private client firms primarily assist and execute trades for clients with large amounts of capital to invest, such as large companies, wealthy individuals, and investment management funds.

 Private equity Private equity funds are typically closed-end funds, which usually take controlling equity stakes in businesses that are either private, or taken private once acquired. Private equity funds often use leveraged buyouts (LBOs) to acquire the firms in which they invest. The most successful private equity funds can generate returns significantly higher than provided by the equity markets.  Venture capital Venture capital is a type of private equity capital typically provided by professional, outside investors to new, high-potential-growth companies in the interest of taking the company to an IPO or trade sale of the business.

 Angel investment An angel investor or angel (known as a business angel or informal investor in Europe), is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital  Debt resolution Debt resolution is a consumer service that assists individuals that have too much debt to pay off as requested, but do not want to file bankruptcy and wish to pay off their debts owed. This debt can be accrued in various ways including but not limited to personal loans, credit cards or in some cases merchant accounts. There are many services/companies that can assist with this.

 Conglomerates A financial services conglomerate is a financial services firm that is active in more than one sector of the financial services market e.g. life insurance, general insurance, health insurance, asset management, retail banking, wholesale banking, investment banking, etc. 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.e. bad things don't always happen at the same time. As a consequence, economic capital for a conglomerate is usually substantially less than economic capital is for the sum of its parts.