BFSI SECTOR• Banking, financial services and insurance (BFSI) is an industry term of art for companies that provide a range of such products/services.• Banking may include core banking, retail, private, corporate, investment, cards and the like.• Financial services may include stock-broking, payment gateways, mutual funds etc.• Insurance covers both life & general insurance.
BANKING• The Indian banking industry has its foundations in the 18th century,• The General Bank of India(1786) & Bank of Hindustan(1770) are first Bank in India• The Reserve Bank of India, Indias central banking authority, was established in April 1935, but was nationalized on January 1, 1949• In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India".• More than 26 nationalise banks and private banks in india• State bank of india is the largest bank in india
STRUCTURE OF BANKING INDUSTRY IN INDIA
GROWTH AND FUTURE PROSPECTS• As per IBA-FICCI-BCG the Indian banking industry is set for an exponential growth with its assets size from $1,350 bn.(2010) to $28,500 bn.(2025)• Total bank credit grew at 15.9 per cent, while total deposits growth was 14.3 per cent as at end September 2012• Indian banks face the prospect of retirement of nearly 55 per cent of their people so here huge opportunity for employment• New banking license
FINANCIAL SERVICES• The history of Indian financial markets spans back 200 years,around the end of the 18th century• India financial market comprise of the primary market, FDIs,alternative investment options, the pension sectors, assetmanagement segment as well.• One of the oldest across the globe and is definitely the fastestgrowing and best among all the financial markets of theemerging economies.
CONTINUE….• The capital market of India initially developed around Mumbai; with around 200 to 250 securities brokers participating in active trade during the second half of the 19th century.• India has a strong financial regulatory system, administered by Reserve Bank of India (RBI) and supported by securities and exchange board of India (SEBI), which govern capital markets and mutual funds, among other financial institutions
STRUCTURE OF FINANCIAL SERVICES IN INDIA
GROWTH AND FUTURE PROSPECTS • Large proportion of India’s population has limited access to bank credit. Market • Unorganized money lending is a general practice in micro-credit.Expansion • High level of professionalism, more transparency and low interest rates brought in by organized microfinance firms, is expected to expand the market. • High GDP growth rate, driven by significant corporate earnings,Favorable is expected to create the need for more intermediaries in the capital market. Growth • Lower penetration of the retail investor segment in the capitalDynamics markets offers a significant opportunity, given the increasing per capita incomes. High • India’s high savings rate offers significant opportunity to channelize resources into the financial markets. Saving • RBI projects India’s gross domestic savings to be 34 per cent in Rate FY11, which is likely to increase to 35.3 per cent by FY12.
INSURANCE• In 1818, when Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of European community.• In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer.• In the year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to regulate the insurance business.• The oldest existing insurance company in India is the National Insurance Company Ltd., which was founded in 1906.• Currently India is a US$41 billion industry.
CONTINUE…..• The Insurance Act of 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business.• The Govt. of India introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies.• Foreign investment was also allowed and capped at 51% holding in the Indian insurance companies.• In 2006, the Actuaries Act was passed by parliament to give the profession statutory status on par with Chartered Accountants, Notaries, Cost & Works Accountants, Advocates, Architects and Company Secretaries.• A minimum capital of US$80 million(Rs.400 Cr.) is required by legislation to set up an insurance business.
STRUCTURE OF INSURANCE SECTOR IN INDIA Insurance Industry In India Life General Insurance Insurance Motor Fire Health MarineInsurance Insurance Insurance Insurance
LIFE INSURANCE• The Government of India issued an Ordinance on 19 January 1956 nationalising the Life Insurance sector• Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign insurers and came into existence in 1956• Today 1 public and 23 private life insurance companies operating in India.
GENERAL INSURANCE• In 1972, the general insurance sector was to be nationalized with effect from 1 January 1973.• At that time107 insurers were amalgamated and grouped into four companies, namely- New India Assurance Co Ltd (NIACL), Oriental Insurance Company Ltd (OIC), United India Insurance Co Ltd (UIIC) National Insurance Company Ltd (NIC).• Today there are 27 (4 public and 23 private) general insurance companies including the ECGC and Agriculture Insurance Corporation of India are operating in India
GROWTH AND FUTURE PROSPECT• According to BRIC data life insurance industry is estimated to grow at a compounded annual growth rate (CAGR) of 14.1 per cent• Life insurance industries reach US$ 111.9 billion in 2015 from US$ 66.5 billion in 2011• The Indian health insurance industry is expected to grow at a CAGR of 37.2% from FY’2011 - FY’2016 second largest in insurance sector.• Currently, in India approx. two million people (0.2% of the total population of above1 billion) are covered under mediclaim
IT IN THE (BFSI) SECTOR IN INDIA.• BFSI sector contributed to 11.1% of total spending for IT in India, or about $3.4 billion.• Indian capital market is highly depend on IT• Innovative products like virtual debit cards and services like branchless and mobile banking require a mammoth IT infrastructure.• Insurance sector is increasing its footprint including mobile, internet and E-Insurance accounts.
INDIAN BFSI SECTOR HAS HUGE POTENTIAL• The BFSI sector certainly offers a ray of hope to fresh graduates who are ready to take a plunge in the industry.• Companies are also going all the way to encourage freshers, by assigning challenging projects in diverse areas to develop their skills.• Entry level executives should look forward to an extremely fast paced challenging enterprising and remunerative career in the BFSI sector.• In the context of the challenging global economic environment, the Indian financial sector has remained relatively resilient.• Expansion within the sector which will not only create new job opportunities for young talent, but will also offer a major scope for skilled, knowledgeable and experienced workforce