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Financial Services in India

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Financial Services in India

  1. 1. Financial Services in India
  2. 2. inQuisitive Learning Financial Services in India Role of the Financial Sector Investments in Financial Instruments Lending to Borrowers or Capital Expenditure Individual and Corporate Savings % Income Return on Investments
  3. 3. inQuisitive Learning Financial Services in India 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. 4. inQuisitive Learning Financial Services in India 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. 5. inQuisitive Learning Financial Services in India 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. 6. inQuisitive Learning Financial Services in India 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. 7. inQuisitive Learning Financial Services in India 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. 8. inQuisitive Learning Financial Services in India Thank You Module by inQuisitive learning

Notas do Editor

  • 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.
  • Thank you.

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