Class ppt on captioned title

1. FINANCIAL SERVICES
PRESENTED BY- SAMYAK S TRIPATHY, A009
AMRITA MICHAEL, A003

2. INTRODUCTION
• services provided by the finance industry.
• The finance industry encompasses a broad range of organizations that deal with the
management of money.

3. Types of Financial Services
ATM’s
Provide
personal
Loans and
Commercial
Loans
Credit and
Debit Card
Banking
Services
Issuance of
Cheque Book
Foreign
Currency
Banking
Foreign
Exchange
Currency
Exchange
Re insurance
Insurance
Insurance
Brokerage
Wire Transfer
Hedge fund
Management
Investment
Asset
Management

4. BANKING SERVICE
• The product mix for business
banking services is very broad
and product lines are deep, with
many product items. Products
are often customized to the
needs of the customer.
• There can be two type of
banking products;
i. Fee based Banking Products/
Services
ii. Fund based Banking Products/
Services

5. FEE BASED SERVICES
Fee Based services can be divided into two categories
Retail Fee
Based
• Personal Tax Counselling
• Credit Cards
• Debit Cards
• Smart Cards
• E-Cash
• Automated Teller Machines (ATM)
• Foreign Inward/Outward
Remittances
• Fund Transfer Facilities
• Microfinance
• Online Trading
• Utility Bills Payment
• Portfolio Management
• Safe Deposit Lockers
• Safe-Custody Facilities
Corporat
e Fee
Based
• Cash Management Services
• Collection
• Payment
• Liquidity
• Merchant Banking
• Foreign Exchange Services
• Bill Discounting
• Factoring
• Forfeiting
• Leasing
• Credit Rating
• Letter of Credit
• Bank Guarantee

6. FUND BASED SERVICES
• Those where bank has to make the investment.
• There is a cost and risk of these services thus high return
expected from them.
• Some of the fund based services are:
i. Working Capital Finance
ii. Short Term Finance
iii. Bill Discounting
iv. Export Finance
v. Term Lending Buyer’s Credit / Supplier’s Credit

7. EXPORT FINANCE
• It is a short term working capital
finance allowed to an exporter.
• Finance and credit are available
not only to help export
production but also to sell to
overseas customer on credit.
• An exporter may avail financial
assistance from any bank, which
ensures the following factors :-
- Availability of the funds at the
required time to the exporter.
- Affordability of the cost of funds.

8. OBJECTIVES OF EXPORT FINANCE
• To cover commercial & Non-commercial or
political risk.
• To cover natural risks like an earthquake, floods
etc.

9. TYPES OF EXPORT FINANCE
• Pre-shipment finance is issued when the seller wants the payment
of the goods before shipment. The main objectives behind pre-
shipment finance or pre export finance is to enable exporter
(customer) to:
i. Procure raw materials.
ii. Carry out the manufacturing process.
iii. Provide a secure warehouse for goods and raw materials.
iv. Process and pack the goods.
v. Ship the goods to the buyers.
vi. Meet other financial cost of the business

10. • Post- Shipment finance- is on the other hand provided to an exporter
or seller against a shipment that has already been made.
• It is provided against evidence of shipment of goods or supplies made
to the importer or seller or any other designated agency.
• With this facility, exporters don’t wait for the importer to deposit the
funds.
• This facility is usually provided against availed bills by the importer’s
bank or under accepted bills under the LC.
Benefits of Post- Shipment finance
• Improved liquidity
• greater financial liquidity + flexibility in administrating receivables =
eases cash flow position
• It allows the exporter more liberal terms of payment to existing buyers
thus competing with foreign suppliers.

11. MUTUAL FUNDS
• It is a trust that pools
the savings of a
number of investors
who share a common
financial goal.
• Professional fund
managers then invest
these funds in a way
that helps investors
achieve their goal.

12. OBJECTIVES OF MUTUAL FUND
• Convenience:
Adjusting the denomination of securities to suit the
requirement of individual savers.
• Diversification:
Small investors can obtain better diversification
through mutual funds than by directly purchasing
securities.
• Expert management:
Benefit of trained, experienced & specialized
management
• Low cost due to economies of scale:

13. ADVANTAGES OF MUTUAL FUND
• Professional expertise
• Diversification
• Low cost of asset management
• Liquidity
• Ease of process
• Well regulated
• Convenient Administration
• Return Potential
• Transparency
• Flexibility
• Choice of schemes
• Tax benefits

14. DISADVANTAGES OF MUTUAL FUND
• Costs:
The investor pays fees as long as he remains with the fund.
• No tailor-made portfolios:
High net-worth individuals may find this to be a constraint as they will
not be able to build their own portfolio of shares.
• Managing a portfolio of funds:
large number of funds can provide too much choice for the investor. He
may need advice on how to select a fund.
• Delay in redemption:
It takes 3-6 days for redemption of the units and the money to flow back
into the investor’s account.
• Lower-than-market performance:
Consistently beating the market is difficult. Many mutual funds just keep
even with overall stock market index

15. TYPES OF MUTUAL FUNDS
Structure
Investment
Objectives
Special
Schemes
Open Ended
Close Ended
Growth Fund
Income Fund
Balanced Fund
Money Market
Fund
Sectoral
Schemes
Index
Schemes
Industry
Specific
Schemes

16. • Brokerage Services are given by the financial institution, where they
facilitates the buying and selling of financial securities between a buyer
and a seller.
• Where the services are given to clients, investors who trade on public
stocks and securities.
• Brokerage firms are entrusted with the responsibility of researching
the markets to provide appropriate recommendations, and in doing so
they direct the actions of pension fund managers and portfolio
managers alike.
• These firms also offer margin loans for certain approved clients to
purchase investments on credit, subject to agreed terms and conditions.

17. CREDIT RATING AGENCY
Small and Medium Enterprises Rating Agency (SMERA)
SMERA a joint initiative by SIDBI, Dun & Bradstreet Information Services India Private Limited
(D&B) and ors.
SMERA is the country's first Rating agency that focuses primarily on the Indian MSME segment
7000 ratings.
CRISIL
CRISIL is the largest credit rating agency in India
established in 1987
The world’s largest rating agency Standard & Poor's now holds majority stake in CRISIL.
Till date it has rated more than 5178 SMEs across India and has issued more than 10,000 SME

18. CREDIT RATING AGENCIES - CONTD
CARE Ratings
Incorporated in 1993, Credit Analysis and Research Limited (CARE) I
Industrial Development Bank of India (IDBI), Canara Bank, Unit Trust of India (UTI)
and others
CARE has completed over 7,564 rating assignments since its inception in 1993.
ONICRA Credit Rating Agency
ONICRA established in 1993 by Mr. Sonu Mirchandani.
It analyzes data and provides rating solutions for Individuals and Small and Medium
Enterprises(SMEs).

19. CREDIT RATING AGENCY - CONTD
ICRA
● established in 1991
● Moodys is the largest shareholder.
● MSME sector
● linear scale for MSME sector which
makes the benchmarking with peers
easier.

20. INSURANCE - ORIGIN
● Pharaoh dreams of seven fat and
glossy cows, coming out of the river
Nile, followed by seven lean and
hungry cows, with the latter
devouring the former.
● 13th Century, the earliest practice of
insurance of ships called marine
insurance - Lombards, Italy
● Yogakshema - Aryans
● pooling of resources - Manusmriti,
Arthashatra
● Lloyds

21. INSURANCE - OVERVIEW

22. INSURANCE - PHASES

23. AGRICULTURE INSURANCE
Farm Income Insurance Scheme
● Insuring production and market risks
● minimum guaranteed income
● cover only wheat and rice and would be compulsory for crop loans
● withdrawn in 2004
National Agriculture Insurance Scheme(NAIS)
● All crops, all types of farmers
● Area based
● Individual

24. HOUSING FINANCE
● “institutional patchworks”
● minority of households can
afford debt service on the least
expensive contractor-built unit
available.
● Traditional housing
programmes in developing
countries have produced
complete units that are highly
subsidised, high-cost solutions

25. HOUSING FINANCE - INDIA
● Housing finance sector in India
had its beginnings in the 1960s
● First private housing finance
company (HFC), HDFC, was
established in 1977
● HUDCO - 1970
● NHB in 1988
● National Housing Policy (NHP)
1994, 1998
● RERA

26. FACTORING SERVICES
● Conversion of credit sales into
cash
● Credit worthiness is evaluated
based on the financial strength
of the customer (debtor).
● Cost of factoring=
finance cost + operating cost

27. FACTORING SERVICES - TYPES
● Disclosed : customers are
notified of the factoring
agreement
● Undisclosed
● Recourse : client undertakes
to collect the debts from the
customer
● Non recourse : factor
undertakes to collect the
debts from the customer

28. DEMAT SERVICES - WHAT IS DEMAT
Conversion of physical securities into electronic form
Participants:
–Investors
–The Depository
•NSDL ]
•CDSIL
–The Depository Participants
–The Issuing Company

29. DEMAT SERVICES- PROCEDURE
● Fill DRF(Demat Request Form) available
with DP
● Deface the share certificate(s) one
wants to dematerialise by writing
across “Surrendered for
Dematerialisation”
● Submit the DRF and Share Certificates
to DP
● DP would forward them to the
issuer/their Registrar & Transfer Agent
● Investor’s depository a/c would be
credited with the dematerialised
securities

30. THANK YOU !!