Satoshi DEX Leverages Layer 2 To Transform DeFi Ecosystem.pdf
financial services is a major component of financial system
1. Unit 5 Financial Services
Definition:
Facilities such as savings accounts, checking accounts,
confirming, leasing and money transfer, provided
generally by banks, credit unions and finance companies.
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3. Financial intermediaries
• Commercial banks and other banks
• Insurance companies
• Credit card issue companies
• Stock exchanges
• Leasing companies
• Mutual fund corporations
• Investment agencies
• Finance companies and other financial institutions
4. Features of financial services
• Intangibility
• Customer oriented
• Perishable in nature
• Inseparable
• Direct sale
• Labor intensive
• Dynamism
• heterogenity
5. Importance of financial services
• Economic growth
• Promotion of savings
• Capital formation
• Provision of liquidity
• Creation of employment opportunities
6.
7. Types/ classification of financial services
Fund based services Fee based financial
services
Leasing Portfolio management
Factoring Loan syndication
Discounting of bills Corporate counseling
Venture capital Foreign collaboration
Loan Mergers and acquisitions
Housing finance Capital restricting
Hire purchase system
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21. Portfolio management
• Portfolio management is a method of managing
and allocating funds on various best alternatives
to reduce the uncertainty.
Objectives:
• Security of invested amount.
• Guaranteed returns
• Capital growth
• Liquidity
• Marketability
22. Loan indication
• It is the process where large number of lender
contribution amount and grant loans to company
or any project and share risk and returns of the
same.
• Merits:
1. Huge amount of loan for long term
2. Less time and efforts for financing.
3. Diversification risk
4. Promotion of giant projects
23. • Corporate counseling:
It refers to a set of activities performed to ensure the
efficient running of a corporate enterprise and to
improve the performance.
• Foreign collaborations:
It is an alliance in corporate to carry on agreed task
collectively with the participation of resident and
non resident entities.
1. Optimum utilization of resources
2. Technical assistance
3. Economic development
4. Improves standard of living
5. Improves balance of payment
6. International relationship
24. Mergers and Acquisitions
• Mergers refers to combining of two or more company and
forming new company.
• Amalgamation: according to section 1(1A) of the income tax
act 1961, the term amalgamation means the merger of one
or more company with another company or merger of two or
more companies to form one company.
Types of merger:
Horizontal merger:
It is refers to combining two or more company which are in
same product line and indirect completion
Vertical Merger:
it is a merger between two or more company producing
different goods or services for specific one finished product.
Vertical mergers occurs when two or more company working
in different level under the same industry.
25. Conglomerate merger:
A merger between firms that are involved in
totally unrelated business activities. There are two
types of conglomerate mergers. Pure and mixed
conglomerate mergers.
Acquisition:
It refers to taking over the business activity of one
or more company by another company.
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26. Merits of acquisitions and merits:
• Reduces competitions
• Tax benefits for acquiring company
• Efficient and effective management
• Revival of sick units
• Helps in acquisition of more market shares
• Reduces cost of operation
• Scope for expansions
• Helps in diversification of the business
Demerits of Mergers and Acquisitions:
• Creates over capitalization situation
• Increases managerial problems
• Creates monopoly situation
• Customers Exploited in terms of high prices
27. Capital Restructuring
• It is the process of reorganizing structure or
combination of various debt and equity.
