Submitted To- Mrs. Alka Sood
(Asst. Prof)
Submitted By:- Vipin Singh Bisht
18PBA006
MBA 4TH Sem

Introduction of financial service
 Financial services are the economic services provided by the
finance industry, which encompasses a broad range
of businesses that manage money, including credit
unions, banks, credit-
card companies, insurance companies, accountancy companies,
consumer-finance companies, stock brokerages, investment
funds, individual managers and some government-sponsored
enterprises.

 financial services are intangible
 Financial services are customer oriented
 The production and delivery of a services are simultaneous
function therefore are inseparable
 They are dynamic in nature as a financial service varies with
the changing requirements of the customer and the socio-
economic environment -must be dynamic socio economic
changes disposable income
 They are proactive in nature and help to visualize the
expectations of the market .
Feature of Financial services

Nature of Financial Services
 Financial services involve at least two people or firms, the
service provider and the user.
 Financial institution intermediate the flow of funds between
different economic decision-making units.
 The financial services are intangible.
 Financial services is an innovative activity and requires
dynamism.

Scope of Financial Services
 The following scope of financial services, and cover a
wide range of activities. They are can broadly classify
into two, namely:
 Traditional Activities
 Modern Activities

Modern Activities
 Rendering project advisory services
 Guiding corporate customers in capital restructuring.
 Acting as trustees to the debenture holders
 Structuring the financial collaborations / joint
ventures
 Rehabilitating and restructuring sick companies

Traditional Activities
 financial intermediaries have been rendering a wide range of services
encompassing both capital and money market activities. They can be
grouped under two heads, viz.
 1. Fund based activities and
 2. Non-fund based activities.
Fund based activities
1. Underwriting or investment in shares, debentures, bonds, etc. of new
issues (primary market activities).
2. Dealing in secondary market activities.
3. 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 Non fund based activities This can be called
‘fee based’ activity
 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.

Types of Financial Services
 Fund or asset based financial services
 Fee based financial services

Fund or asset based financial services
 It refers to services that are used to acquire assets or funds
for a customer. It consists of-
 Primary market activities .
 Secondary market activities.
 Foreign exchange activities .
 Specialized financial services.

Important fund based services
include
 Leasing
 Hire purchase
 Factoring
 Mutual fund
 Bill discounting
 Credit financing
 Housing finance
 Venture capital

Fee based financial services
When financial institutions operate in specialized fields to
earn income in form of fees, commission, brokerage or
dividends it is called a fee based service. They include-
 Issue management
 Portfolio management
 Corporate counseling
 Credit rating
 Stock broking
 Bank guarantee

Financial Regulation
 Financial regulation is a form of regulation or supervision,
which subjects financial institutions to certain
requirements, restrictions and guidelines, aiming to
maintain the integrity of the financial system. This may be
handled by either a government or non-government
organization

Need for regulation of financial
markets
 Market failure; When the market pricing mechanism is
incapable of maintaining all the requirements of a competitive,
efficient markets. Regulation restricts financial institution
activities in the vital areas of lending, borrowing and funding.
 Purpose of regulation:-
It controls the level of economic activity.
It promotes competition and fairness in trading.
It promotes the stability of financial institution.
It prevents issuers of the securities from defrauding investors.