2. Equities: Basics and Beyond
Introduction to Financial Markets
Role of the Financial Sector
Investments in
Financial
Instruments
Lending to
Borrowers or
Capital Expenditure
Individual and
Corporate
Savings
%
Income
Return on
Investments
3. Equities: Basics and Beyond
Introduction to Financial Markets
The Indian Financial System
Ministry of
Finance,
Govt. of India
Ministry of
Consumer Affairs
RBI
SEBI
IRDA
PFRDA
FMC
Commercial and
Cooperative
Banks
Mutual Funds
Life Insurance
Pensions
Commodities
Financial
Institutions
Other Capital
Market Entities
Non-Life
Insurance
NBFCs
4. Equities: Basics and Beyond
Introduction to Financial Markets
Exponential Growth of Financial Services
Our growing economy and improved
GDP has resulted in increase in
household income and savings.
Indian households have high savings
rate of more than 20% of GDP half of
which goes towards financial assets.
Banking
Indian Financial
Sector
Insurance
Growing Needs of Investors
Innovative Products
Improved Distribution
Transparency in Operations
Financial
Markets
Growing Competition
Technological Advances
5. Equities: Basics and Beyond
Introduction to Financial Markets
Growth Potential of Financial Services
(in INR billion)
2010
2020
Banking Revenue
2,500
10,600
Life Insurance Premium
2,500
10,700
Mutual Funds AUM
7,500
41,000
150
700
Broking Revenue
All the major segments of financial services Banking, Insurance and Markets
are expected to grow 4-5 times by 2020.
6. Equities: Basics and Beyond
Introduction to Financial Markets
Financial Services – Opportunities
Vibrant economy and exponential growth of the Financial
sector offers enormous opportunities for professional and
business growth.
More than 9 million people will be employed in the financial
services by 2022 which is double of 2008 figures. Every
year 3-4 lakh people will find employment in this sector
The key is to develop expertise and skill-sets in
understanding the nature and growth of financial markets
and continuous learning of the latest developments
7. Equities: Basics and Beyond
Introduction to Financial Markets
Lecture Summary
We saw how Financial services have grown in India.
With high savings rate, favorable demography and use
of technology this sector will grow multiple times in
coming years throwing lot of employment opportunities.
8. Equities: Basics and Beyond
Introduction to Financial Markets
Thank You
Module by inQuisitive learning
Editor's Notes
Welcome to the introductory module on financial services in India.Over last 20 years, financial services have grown many folds in India. However still less than 50% of population has access to formal financial services.This sector is a high growth sector which is going to throw up large number of employment opportunities in coming years. Let us know more about thissector.
Financial sector plays very important role in any country’s economy. It acts like a bridge connecting savings and investments. It brings Investors, Corporate and Government on the same platform.The cycle shows how savings from individuals or corporate is invested in financial instruments like stocks, bonds, etc. Companies or lending institutions raise capital through financial instruments. This capital is then invested in building factories, buying machinery, etc. or lent to borrowers to buy houses, cars, etc.The investment in stocks, bonds, etc. gives returns to investors. This forms their investment income which forms part of their savings or profits.These are again invested in financial instruments and the cycle continues.
This diagram shows different segments of the Indian financial system along with their regulators.Banks, Financial Institutions and Non-Banking Financial Companies fall under RBI purview. The 2 primary functions of this segment are to give loans to companies or individuals and to take deposits from the investors.Mutual Funds and other capital market entities like exchanges, brokers, investment banks, etc. fall under SEBI regulations. The main function of this segment is to direct individual or corporate savings to equity and debt markets through stocks and bonds.Third segment of the financial services is Insurance, regulated by IRDA. Insurance companies provide protection against unexpected events like death, accident, illness, etc. To provide the risk protection these companies collect premium from insurance holders which is invested in different financial products like stocks, bonds, etc.Fourth segment is of Pension funds regulated by PFRDA. Main function is to ensure financial security to individual investors at old age.Last segment which doesn’t fall under purview of finance ministry but is considered to be a part of financial sector is commodity market. This includes trading of commodities like gold, crude oil, agricultural commodities, etc. in physical market and on commodity exchanges.
All the segments of financial services in India have grown exponentially in last 2 decades. After the reforms of 1991, financial sector was opened up and regulatory bodies were strengthened boosting confidence of domestic and international investors in India.In last decade India’s GDP has grown at an average rate of 7% which is second highest growth rate in world after China. This growth has resulted in increase of household income. Indian households have high savings rate of more than 20% of GDP. Half of this saving goes in financial assets like fixed deposits, stocks, bonds, etc.Other factors which have played role in growth of financial services are – new products, better distribution network, transparency in operations, technological advancements, etc.
All the major segments of financial services i.e. Banking, Insurance and Markets are expected to grow 4-5 times by 2020.
Vibrant economy and exponential growth of the BFSI sector offers enormous opportunities for professional and business growth. More than 9 million people will be employed in the financial services by 2022 which is double of the 2008 figures.Every year, 3-4 lakh people will find employment in this sector. Experts believe that the financial sector will be the next big thing after information technology in creating employment and scope for self-employment opportunities. The key is to develop expertise and skill-sets in understanding the nature and growth of financial markets and continuous learning on the current developments. It is important to gain proficiency in various aspects of the financial markets to get into this space.Our courses will provide you with knowledge specific to roles in financial services. Our platform will help you in keeping track of latest developments in this sector and different employment opportunities.
In this module we saw how financial services have grown in India.With high savings rate, favorable demography and use of technology this sector will grow multiple times in coming years throwing lot of employment opportunities.
