2. Financial Services
Financial services mean all the activities involved in
transformation of saving into investment.
Features :-
Customer specific
Intangible
Concomitant (simultaneous usage and production)
Tendency to Perish
People based services
Market dynamics (Socio economic factors)
3. Constitution of Financial System
Financial
System
Financial
Markets
Financial
Institutions
Financial
Instruments
Financial
Services
4. Financial Markets:It is a place, Where financial Products are created and
transferred.
FINANCIAL MARKETS
Organized
Primary
Capital
market
Unorganized
Secondary
Money
Market
Forex
Market
5. Financial Institutions: It link the savers to the Investors
through conversion of instruments issued by them into Indirect Securities
Financial Institutions are engaged into different
types of transformation of funds
Liabilities Transformation: Converting Liabilities into assets
by banks
Size Transformation: collecting smalls money and further
pulling bulk funds in market
Risk Transformation: Act of Diversification
Maturity Transformation: Act of providing Liquidity
Preference
9. Financial Services: It is Mobilization of savings and
their transformation into Investment
Merchant Banking
Credit ratings
Factoring
Underwriting
Venture Capital
Leasing/ Hire Purchase
Stock broking
Advisory
Depositories
Mutual Funds
Insurance
Credit agencies
Housing Finance
Banking Guarantees
10. Functions of financial services
Facilitating transactions (exchange of goods and
services) in the economy.
Mobilizing savings .
Allocating capital funds (notably to finance productive
investment).
Monitoring managers (so that the funds allocated will
be spent as envisaged).
Transforming risk (reducing it through aggregation
and enabling it to be carried by those more willing to
bear it).
11. Types of Financial Services
Fund based services
Underwriting or investment in shares, debentures, bonds,
etc. of new issues (primary market activities).
Dealing in secondary market activities.
Participating in money market instruments like
commercial
Papers, certificate of deposits, treasury bills, discounting of
bills etc.
Involving in equipment leasing, hire purchase, venture
capital, seed capital,
Dealing in foreign exchange market activities. Non fund
based activities
12. Fee based services
Managing the capital issue — i.e. management of pre-
issue and post-issue activities relating to the capital
issue in accordance with the SEBI guidelines and thus
enabling the promoters to market their issue.
Making arrangements for the placement of capital and
debt instruments with investment institutions.
Arrangement of funds from financial institutions for
the clients’ project cost or his working capital
requirements.
Assisting in the process of getting all Government and
other clearances.