IJRFM Volume 2, Issue 2 (February 2012) (ISSN ) INDIAN FINANCIAL SERVICES ABSTRACT

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1 Reena Chander* Nisha Sharma** INDIAN FINANCIAL SERVICES ABSTRACT Financial Services enable the customers to control their own funds and also helpful to the financial institutions for reducing their cost, it mainly deals with the management of money. Financial services are provided for managing the funds and various advisory services are also provided under it. There are many financial institutions which provide financial services like Banking sector, Insurance, Mutual Funds, Foreign investment etc. In this paper, we have presented the nature of Indian financial sector, financial services provided by various Indian companies and threats and opportunities for Indian financial sector. It is true that financial institutions are growing rapidly but there are still some threats to financial institutions like changes in customer preferences, technology changes, and improvement of financial services for the welfare of customers and to face the challenges of globalization of financial services. Apart from threats there is a promising potential for massive growth in future for Indian financial services industry whether it is in Banking, Insurance or others. Keywords: - Financial Services; Financial System; Financial Institutions; Financial Instruments; Financial s. *Assistant professor, Department of Management,Doaba Group of Colleges, Rahon. **Assistant Professor, Department of Computer Applications, Doaba Group of Colleges, Rahon. International Journal of Research in Finance & ing 232

2 I. INTRODUTION Economic Growth and development of country depends upon its well established financial system (FS) and this system includes various sub-systems like financial institutions (FI s), financial markets (FM), financial instruments and financial securities. A financial system (FS) acts as an intermediary and facilitates the flow of funds from the area where it is in excess to the areas where it is needed. The success of financial system (FS) largely depends on the variety and quality of various financial services provided in the country. II. MEANING OF FINANCIAL SERVICES Financial Services are the part of financial system and played a major role in the long term economic growth and development of a country. These services are also helpful for channelizing resources to all the sectors of the country, it plays major role for the promotion and development of industries. This sector is the largest sector whether expressed in terms of money or wide range of business involved. In present era India s financial service sector is also facing boom because this sector faced important structural changes after liberalization in 1991 and with this cross border competition is increased. There has been a broad progress in financial markets because of which several new products and instruments have been introduced. New players in the market starts adopting new technologies and internationally best practices to offer more efficient financial services to the customers and to compete with new players existing players also starts updating their services. The financial markets in India are classified into three categories: - Capital, Money and Credit. International Journal of Research in Finance & ing 233

3 Indian Financial Capital Money Credit Govt. Security Stock Certificate of Deposits Call Money Commercial Papers Loan Marktet Loan from Lending Institutes Fig 1.1: Structure of Indian financial market in India [1] III.VARIOUS FINANCIAL ISTITUTES IN INDIA There are various financial institutions in India who rendered various financial services in India. Among all the financial institutions the most important sector is banking sector. The Banking Sector Commercial Cooperative Private Sector Public Sector banks Regional sector Fig 2.1: Banking Sector in India [1] International Journal of Research in Finance & ing 234

4 IJRFM Volume 2, Issue 2 (February 2012) (ISSN ) Other Financial Institutions Insurance Sector Mutual Fund Development Fig2.2: Types of Financial Institutions in India [1] IV.VARIOUS FINANCIAL SERVICES RENDERED IN INDIA Financial Services Private Public UTI Other mutual Funds IDBI ICIC SIDBI Others Fund Based 1)Dealing in secondary market activities 2)Underwriting 3)Dealing in foreign exchange market 4)Investment in shares, debenture & bonds 5)Equipment Leasing 6)Commercial Paper 7)Certificate of Deposits 8)Treasury Bills 9)Hire purchase 10)Bill Discounting 11)Venture Capital 12)Housing Finance 13)Insurance Services 14)Factoring Fee Based 1)Portfolio Management 2)Issue Management 3)Corporate Counseling 4)Loan Syndicationn 5)Merger and acquisition 6)Capital Restructuring 7)Credit Rating 8)Stock Broking Fig 3: Various services offered in India International Journal of Research in Finance & ing 235

5 IJRFM Volume 2, Issue 2 (February 2012) (ISSN ) V. THEATS AND OPPORTUNITIES TO INDIAN FINANCIAL SERVICE SECTOR Threats Increasse in competition after liberlisation Increase in expectancy of customers Outdated technologies and inefficient structure will lead inefficiency in financial service sector Balance of payment crisis will decrease the foreign investment Regulatory framwork is not properly developedfor the protection of investors Opportunities FDI will increase in Indiann finacial market because of its stable growth and increase in GDP ICT in financial services has made m- commerce to rise to its fullest which has made service providers to grow better in a competitive environment. Growth of financial sector will incerase job opportunities in country Fig4: Threats and opportunities to Indian financial service sector International Journal of Research in Finance & ing 236

6 VI. CONCLUSION In this paper we have discussed that financial services are the vital part of financial system of a country. Indian financial service sector is largely expanded after increasing the cross boarder competition. Indian financial service industry is a promising one and it holds potential for growth in future in every sector whether it is banking sector, insurance sector, investment sector or foreign investment sector. The financial sector of India making remarkable performance in every sector nationally as well as internationally. So to compete internationally there is a need to adopt technological changes in the Indian service sector. VII. REFERENCES [1] Rupa chanda, Trade in Financial Services: India s Opportunities & Constraints [2] 25// unit-I-inroduction to financial system [3] scope of financial services [4] of Indian financial servives.html [5] Franklin Allen, Rajesh Chakrabarti, Sankar De, India s Financial System [6] Chris Topher N.Sutton and Beth Jenkins, Role of the financial services sector for expanding economic opportunity [7] James A. Hanson and Sanjay Kathuria, India s Financial System: The Challenges of Reform International Journal of Research in Finance & ing 237