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UNIVERSITY OF MUMBAI

PROJECT ON:

FINANCIAL SERVICES

PROJECT BY:

NAKUL.Y.MEHTA

T.Y.BCOM (BANKING &INSURANCE)

SEMESTER-V

2010-2011

PROJECT GUIDE

PROF.- MUKESH KANOJIA

M.K.SANGHVI COLLEGE OF COMMERCE &ECONOMICS

VILE PARLE (WEST)

Mumbai 400056

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DECLARATION

I Ms. NAKUL YOGESH MEHTA Student of T.Y.BCom (Banking

& Insurance- Semester V) of Malini Kishor Sanghvi College of Commerce &
Economics, hereby declare that I have completed the project on
‘___________________________’ in the academic year 2010-2011. The
information submitted is true and original to the best of my knowledge.

Date of submission Signature of student

---------------------- --------------------

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CERTIFICATE

This is to certify that NAKUL YOGESH MEHTA of T.Y.B.com (BANKING

& INSURANCE – SEMESTER-V) of Malini Kishor Sanghvi College of
Commerce & Economics has successfully completed the project on
“_________________” in the academic year 2010-2011. The information is true &
original to the best of our knowledge.

Signature of Principal Signature of Project Guide

(Dr. (Mrs) Krushna Gandhi) (Mukesh Kanojia)

Signature of Co-ordinator

(Purvi Dholakia)

College seal Signature of External Examiner

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ACKNOWLEDGEMENT

Any accomplishment requires efforts of many people & this work is no different. I
am grateful to the UNIVERSITY OF MUMBAI to have introduced this final
project of our curriculum.

With a deep sense of gratitude, I wish to express my sincere thanks to my project

guide Prof.___________________ for his support in preparation of project report.

I take the opportunity to thank Prof.Purvi Dholakia, T.Y.Bcom (Banking &

Insurance) coordinator for giving me the opportunity to work on this project.

I would also like to express my gratitude towards the library staff of M. K.

SANGHVI COLLEGE, my family & friends without whose support my project
would not have been possible.

EXECUTIVE SUMMARY
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01.Introduction and meaning of financial services

02.Scope of financial services

03.History of financial services

04.Indian financial services

05.Significant factors

06.Structure of financial system

07.Features of financial services

08.Types of financial services Investment service company

a.Bank

b.Insurance company

c.Other financial services

d.Stock markets

e.Mutual funds

f.Debt markets

g.Innovative financial instruments

h.Conglomerates

09.Fundamentals of financial services

10.Causes for financial services

11.Emerging functions in marketing of financial services

12.Portfolio management

13.Case study

14.Conclusion
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15.Bibliography

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FINANCIAL
SERVICES

INTRODUCTION
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The financial services sector plays a predominant role in stimulating and

sustaining the economic growth of a nation. Till recently, the public sector
institutions have been showing dominance in all the areas of financial
services like banking, insurance, term lending, housing finance, etc in the
Indian financial system.

But after the initiative of economic liberalization by the government,

the private as well as the foreign players are also putting rapid strides in this
sector.

Consequently the financial services sector in India started growing

rapidly in the economy. The competitive climate in the Indian financial
services sector has drastically changed over the last few years.

MEANING OF FINANCIAL SERVICES

Financial services mean mobilizing and allocating savings. It
includes all activities involved in the transformation of savings into
investment. It is also called as “financial intermediation”.

Financial intermediation is a process by which funds are

mobilized from a large number of savers and make them available to all
those who need it and particularly to corporate customers. Thus, financial
services sector is a key area and it is very vital for industrial developments.

Financial services refer to services provided by the finance

industry. The finance industry encompasses a broad range of organizations
that deal with the management of money. Among these organizations are
banks, credit card companies, insurance companies, consumer finance
companies, stock brokerages, investment funds and some government
sponsored enterprises. As of 2009, the financial services industry
represented 40% of the market capitalization of the S&P 500 in the United
States.

SCOPE OF FINANCIAL SERVICES

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Dealing in foreign exchange market activities.

Dealing in secondary market activities.

Participating in money market instruments like commercial papers,

certificate of deposits, treasury bills, discounting of bills.

Arrangements of funds from financial institutions for the clients project cost
or his working capital requirements.

Planning for mergers and acquisitions and assisting for their smooth
carryout.

Promoting credit rating agencies for the purpose of rating companies which
want to go for public issues of debt instruments.

Guiding corporate customers in capital restructuring.

HISTORY OF FINANCIAL SERVICES

The Indian financial services industry has undergone a drastic change in

1990. During the late seventies and eighties, the Indian financial services
industry was dominated by commercial banks and other financial
institutions which cater to the requirements of the Indian industry. Infact the
capital market has played a secondary role. The economic liberlisation has
brought in a complete transformation in the Indian financial services
industry. Prior to the economic liberalization, the Indian financial sector
was characterized by so many factors which retarded the growth of financial
services sector.

INDIAN FINANCIAL SERVICE SECTOR

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The Indian financial services industry has experienced significant growth in

the last few years. There has been a considerable broadening and deepening
of the Indian financial markets due to various financial market reforms
Undertaken by the regulators, the introduction of innovative financial
instruments in the recent years and the entry of sophisticated domestic and
international players. Sectors such as banking, asset management and
brokerage have been liberalised to allow private sector involvement, which
has contributed to the development and modernisation of the financial
services sector. This is particularly evident in the non-banking financial
services sector, such as equities, derivatives and commodities brokerage,
residential mortgage and insurance services, where new products and
expanding delivery channels have helped these sectors achieve high growth
rates

SOME OF THE SIGNIFICANT FACTORS ARE AS

FOLLOWS:
1.Excessive controls in the form of regulations of interest rates, money rates.

2.Too many controls over the prices of securities under the erstwhile controller of
capital issues

3.Non-availability of financial instruments on a large scale as well as on different

varieties.

4.Absence of independent credit rating and credit research agencies.

5.Strict regulation of the foreign exchange market with too many restrictions on
foreign investment in Indian companies.

6.Lack of information about international developments in the financial sector.

STRUCTURE OF FINANCIAL SYSTEM

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THE FINANCIAL SYSTEM IMPLIES A SET OF COMPLEX AND CLOSELY

CONNECTED INSTITUTIONS, AGENTS, PRACTICES AND MARKETS. THE
FOLLOWING IS A TYPICAL STRUCTURE OF FINANCIAL SYSTEM IN
ANY ECONOMY.

FINANCIAL SYSTEM

FINANCI
FINANCIAL AL
FINANCIAL FINANCIA
INSTITUTIO L
INSTRUMENT SERVICE
NS MARKETS
S S

FINANCIAL INSTITUTIONS.

FINANCIAL INSTITUTIONS ARE BUSINESS ORGANISATIONS

WHO ACT AS MOBILIZERS AND DEPOSITORIES OF SAVINGS, AND
SUPPLIERS OF CREDIT OR FINANCE. THESE INSTITUTIONS PROVIDE
VARIOUS FINANCIAL SERVICES TO THE BUSINESS ORGANISATIONS
AND COMMAN PEOPLE. FINANCIAL INSTITUTIONS CAN BE DIVIDED
INTO BNAKING AND NON BANKING INSTITUTIONS. BANKING
INSTITUTIONS DEAL IS FINANCIAL ASSETS SUCH AS DEPOSITS,
LOANS, SECURITIES ETC. AND NON FINANCIAL INSTITUTIONS DEAL
IN REAL ASSETS SUCH AS MACHINERY, EQUIPMENTS, STOCK OF
GOODS AND REAL ESTATE. THEIR ACTIVTIES MAY BE GENERAL OR
SPECIAL. THESE INSTITUTIONS PARTICIPATE IN THE ECONOMY S
PAYMENT MECHANISM BY PROVIDING TRANSACTION SERVICES,
MONEY SUPPLY AND CREDIT.

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FINANCIAL MARKETS

FINANCIAL MARKETS ARE THE CENTRES WHICH PROVIDE

FACLITIES FOR BUYING AND SELLING OF FINANCIAL CLAIMS AND
SERVICES. THE PARTICIPANTS IN THE FINANCIAL MARKETS ARE
FINANCIAL INSTITUTIONS, BROKERS, DEALERS, BORROWERS AND
INVESTORS. THEY ARE INTERLINKED BY THE LAWS, CONTRACTS,
AND COMMUNICATION NETWORKS. FINANCIAL MARKETS CAN BE
DIVIDED INTO TWO PARTS. THE PRIMARY MARKETS WHICH DEALS IN
NEW FINANCIAL CLIAMS OR INSTRUMENTS. IT IS ALSO CALLED AS
NEW ISSUE MARKET. THE SECONDARY MARKET DEALS IN SECURITES
WHICH ARE ALREADY ISSUED BT THE COMPANIES AND INVESTORS
IN PROVIDING LIQUDITY. HOWEVER, STOCK EXCHANGES ARE BOTH
PRIMARY AND SECONDARY MARKETS SEGMENTS.

FINANCIAL MARKETS ARE ALSO CLASSIFIED AS CAPITAL

MARKETS AND MONEY MARKET. THE MONEY MARKET DEALS IN THE
SHORT TERM CLAIMS WITH MATURITY PERIOD OF LESS THAN A
YEAR AND CAPITAL MARKETS DEALS IN LONG TERM CLAIMS OR
SECURITIES. THE CAPITAL MARKET IS CO EXTENSIVE NOT ONLY
WITH THE STOCK MARKET BUT IT IS MUCH WIDER THAN THE STOCK
MARKET. THE FINANCIAL MARKETS MAY BE CLASSIFIED AS
ORGANISED OR UNORGANISED, FORMALS OR INFORMALS AND
DOMESTIC OR FOREIGN MARKETS.

FINANCIAL INSTRUMENTS

FINANCIAL INTRUMENTS ARE CLAIMS TO THE

PAYMENT OF OF MONEY IN FUTURE OR A PERIODIC INTERVAL. FOR
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EG. THE IMPORTANT FINANCIAL INTRUMENTS ARE SHARES,

DEBENTURES, BONDS, FIXED DEPOSITS ETC. REGULAR PAYMENT IN
THE FORM OF INTEREST OR DIVIDENT IS PAID BY THE COMPANY TO
THE INVESTORS. DIRECTLY TO THE ULTIMATE SAVERS SUCH AS
EQUITY SHARES, DEBENTURES. SECONDARY INTRUMENTS ARE
ISSUED BY INTERMEDIARIES TO THE ULTIMATE SAVERS AS BANK
DEPOSITS, UNITS AND INSURANCE POLICIES. THE FINANCIAL
INSTRUMENTS DIFFER FROM EACH OTHER IN RESPECT OF THEIR
INVESTMENTR CHARACTERISTICS. THE IMPORANT
CHARACTERISTICS ARE LIQUIDITY, TRANSFERABILITY, VOLATILITY,
MATURITY, RISK, AND RETURN.

FINANCIAL SERVICES

A FINANCIAL SERVICE IS ANY KIND OF SERVICE OF A

FINANCIAL NATURE OFFERED BY A FINANCIAL SERVICE PROVIDER.
ALL BANKING AND INSURANCE RELATED SERVICES ARE INCLUDED
IN THIS CONCEPT. THESE SREVICES ARE INTANGIBLE AND INVISIBLE.
THERE SHOULD BE PROXIMITY BETWEEN THE SERVICE PROVIDER
AND THE CONSUMER IN ORDER TO COMPLETE A SERVICE
TRANSACTION. THESE SERVICES COVER A WIDE RANGE OF
ECONOMIC ACTIVITIES. FINANCIAL SERVICES HAVE DEVELOPED TO
MEET THE NEEDS OF COMPANIES. BANKING AND INSURANCE ARE
TRADITIONAL FINANCIAL SERVICES. THE MODERN FINANCIAL
SERVICES INCLUDE OVER THE COUNTER SERVICES. SHARE
TRANSFER, PLEDGING OF SHARES, MUTUAL FUNDS, FACTORING,
DISCOUNTING, VENTURE CAPITAL AND CREDIT CARDS. FINANCIAL
SERVICES HAVE STARTED LONG BACK IN WESTERN COUNTRIES. IN
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INDIA, THESE SERVICES HAVE STARTED LONG BACK IN WESTERN

COUNTRIES. IN INDIA, THESE SERVICES HAVE STARTED DURING
1980s. THESE SERVICES PLAY A SIGNIFICANT ROLE IN THE CHANGED
BUSINESS SERVICES.

FEATURES OF FINANCIAL SERVICES

MEMBERSHIP MANAGEMENT MEMBER :

MEMBERSHIP REGISTRATION

MEMBERS AND CUSTOMERS

MEMBERSHIP EXIT

MEMBERSHIP TRANSFER

MINIMUM MEMBERSHIP PERIOD

FINANCIAL MANAGEMENT :

ACCOUNT PAYABLE

FIXED ASSETS
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REPORTING SYSTEM :

REGULATORY REPORTS E.G. CENTRAL BANK

USER CUSTOMIZED REPORTS

SERVICE MANAGEMENT

FOSA (FRONT OFFICE SERVICES ACTIVITIES)

On-the-counter transactions (banking services) such as savings deposits,

withdrawals, loans repayment, salary payments

Teller functions – Tellers, Head tellers, Cash Drawer and Strong room cash
Management

BOSA (BACK OFFICE SERVICES ACTIVITIES)

Behind the scene activities such as Salary processing, loans processing,

journals processing, etc

DIFFERENT TYPES OF FINANCIAL SERVICES

The finance industry provides a number of services to the clients. There are
different types of financial services company to provide these services to
different commercial sectors as well as to the individuals. There are
different types of financial services like lending money for different
purposes, insurances, depository services, mortgage services, investment
services, credit rating services and many more. The different types of
financial services company jointly create one of the largest industries of the
world. There are a number of financial services companies in the world.

Some of these companies are the following:

Investment services company

Bank

Insurance company

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Intermediation or advisory services company

Conglomerates

Credit Rating Agencies

1.INVESTMENT SERVICE COMPANY

The investment services companies provide services like asset management,

hedge funds, custody services and many more.

Asset management - the term usually given to describe companies which run
collective investment funds.

Hedge fund management - Hedge funds often employ the services of "prime
brokerage" divisions at major investment banks to execute their trades.

Custody services - Custody services and securities processing is a kind of 'back-

office' administration for financial services. Assets under custody in the India was
estimated to $65 trillion at the end of 2008.

2.BANKS

It is one of the biggest financial services companies of the world. There

are different types of banks in the world. Some of these are commercial
banks, private banks and many more. There are some banks that work
for the capital markets only. Banks provide a number of financial
services to the clients. These services include depository services,
lending services, credit card facilities and many more.

A "commercial bank" is what is commonly referred to as simply

a "bank". The term "commercial" is used to distinguish it from an
"investment bank", a type of financial services entity which, instead of
lending money directly to a business, helps businesses raise money from other
firms in the form of bonds (debt) or stock (equity).

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Banking services

The primary operations of banks include:

Keeping money safe while also allowing withdrawals when needed

Issuance of checkbooks so that bills can be paid and other kinds of payments can
be delivered by post

Provide personal loans, commercial loans, and mortgage loans (typically loans to
purchase a home, property or business)

Issuance of credit cards and processing of credit card transactions and billing

Issuance of debit cards for use as a substitute for checks

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Allow financial transactions at branches or by using Automatic Teller Machines

(ATMs)

Provide wire transfers of funds and Electronic fund transfers between banks

Facilitation of standing orders and direct debits, so payments for bills can be made
automatically

Provide overdraft agreements for the temporary advancement of the Bank's own
money to meet monthly spending commitments of a customer in their current
account.

Provide Charge card advances of the Bank's own money for customers wishing to
settle credit advances monthly.

Provide a check guaranteed by the Bank itself and prepaid by the customer, such as
a cashier's check or certified check.

Notary service for financial and other documents.

Other types of bank services

Private banking - Private banks provide banking services exclusively to high net
worth individuals. Many financial services firms require a person or family to have
a certain minimum net worth to qualify for private banking services. Private banks
often provide more personal services, such as wealth management and tax
planning, than normal retail banks.

Capital market bank - bank that underwrite debt and equity, assist company deals
(advisory services, underwriting and advisory fees), and restructure debt into
structured finance products.

Bank cards - include both credit cards and debit cards. ICICI bank is the largest
issuer of bank cards.

Credit card machine services and networks - Companies which provide credit card
machine and payment networks call themselves "merchant card providers".
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BANK CARDS

Bank cards include both credit cards and

debit cards . In India ICICI BANK is the
largest issuer of bank cards ]

AMERICAN EXPRESS

MASTER CARD

VISA

Banking survey report RNCOS

The Indian banking sector, despite the global crisis, is still fuelling the economy.

A report 'Opportunities in Indian Banking Sector', by market research company,

RNCOS forecasts that the Indian banking sector will grow at a healthy compound
annual growth rate (CAGR) of around 23.3 per cent till 2011.

The total asset base of the 77 scheduled commercial banks (SCBs) added up to
91.8 per cent of India’s GDP (at current market prices) through the financial year
2008.

According to a study report by Dun and BradStreet, around 80 per cent of the
overall assets of SCBs were accounted for by 22 leading banks with a balance
sheet size of above US$ 11.83 billion each. This included 16 Public Sector Banks
(PSBs), 3 Private Sector Banks and 3 Foreign Banks.

Deposits of private sector banks increased at a CAGR of 26 per cent during fiscal
year 2004–2008, compared to the total CAGR growth of 20.5 per cent by all SCBs.
Advances of private sector banks increased at a CAGR of 32 per cent against a
CAGR of 30.1 per cent by all SCBs for the same period.

Public sector banks accounted for above 66 per cent of the collective total income
(including interest income and non-interest income) of all SCBs.

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Retail banking accounted for a 41 per cent share of the overall revenue generated
by PSU banks while it was 36 per cent for private sector banks, and for foreign
banks the share of retail banking also stood at around 36 per cent.

As per figures released by the Reserve Bank of India (RBI), bank credit increased
by 24 per cent till January 2, 2009, compared to the 21 per cent growth in the
previous year. Credit to industry increased by 30.2 per cent till December 19, 2008,
against 24.9 per cent in the same period in the previous year.

Further, according to RBI data, lending by banks increased by more than 76 per
cent during April-November 2008, as compared to the same period an year ago.

With the credit growth, leading Indian banks are likely to increase their earnings
by around 40 per cent y-o-y in the December 2008 quarter.

Public sector banks are going in for a major image overhaul. With global banks
getting pressurised under the economic downturn, several companies and
individuals are digressing from private banks to state-owned banks. To make the
most of this situation, they are adopting new strategies and technologies to attract
more customers.

State-owned banks are now offering services like Internet banking and
personalised cheque books, and evaluation of loan proposals within a specific
period. Many such banks run processing centres and back offices. The State Bank
of India has even introduced two-faced ATMs.

Whereas, the Indian Bank has introduced wealth management services for its high
networth (HNI) clients providing various types of financial advisory and wealth
management services.

HSBC BANK HISTORY

HSBC Bank was founded in 1865 to serve the needs of the merchants
of the China coast and finance the growing trade between China, Europe and
the United States. The origins of HSBC Bank in India can be traced back to
October 1853 when the Mercantile Bank of India, London and China was
founded in Bombay.
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In 1959, The Hong Kong and Shanghai

Banking Corporation (HSBC) acquired the
Mercantile Bank of India and the head office
of the HSBC Bank was established in
Bombay (Mumbai). In 1987, HSBC Bank
gave India its first ATM.

Through the 1990s, HSBC Bank blossomed into one of the leading
banking and financial services organizations of the world. As on June 30
2004, the Bank has over 110 million customers worldwide with assets over
US$1,154 billion. HSBC Bank has about 10,000 offices in 76 countries and
territories in Europe, the Asia Pacific region, the Americas, the Middle East
and Africa.

Foreign exchange services

Foreign exchange services are provided by many banks around the world. Foreign
exchange services include:

Currency Exchange - where clients can purchase and sell foreign currency bank
notes

Wire transfer - where clients can send funds to international banks abroad from
India.

Foreign Currency Banking - banking transactions are done in foreign currency

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3.INSURANCE

The insurance companies provide the clients with risk coverage

services. These services are designed to cover a number of risks that are
related to an individual's life, property and many more. These services are
not only designed to provide security but at the same time there are a
number of insurance plans that are designed to provide regular income to the
clients. The insurance policies can be divided in several types like general
insurance, life insurance, commercial insurances and a lot more.

Insurance brokerage - Insurance brokers shop for insurance (generally

corporate property and casualty insurance) on behalf of customers. Recently a
number of websites have been created to give consumers basic price comparisons
for services such as insurance, causing controversy within the industry.

Insurance underwriting - Personal lines insurance underwriters actually underwrite

insurance for individuals, a service still offered primarily through agents, insurance
brokers, and stock brokers. Underwriters may also offer similar commercial lines
of coverage for businesses. Activities include insurance and annuities, life
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insurance, retirement insurance, health insurance, and property & casualty

insurance.

Reinsurance - Reinsurance is insurance sold to insurers themselves, to protect them

Insurance survey report by ASSOCHAM

The insurance sector is one of the most promising sectors in India today.

In an ASSOCHAM report— 'Insurance Sector Futuristic Growth'— stated that

India's insurance sector is likely to reach US$ 46.25 billion by 2010. The report
said, "The total insurance business will reach a level of US$ 46.25 billion in the
next two years from the current level of US$ 1.15 billion." Private insurance
business is likely to see a 140 per cent growth rate due to the aggressive marketing
techniques used by them. Conversely, state-owned insurance companies would see
a 35–40 per cent growth rate.

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India is the fifth largest life insurance market in the emerging insurance economies
globally and the segment is growing at a healthy 32–34 per cent annually.
According to a report by research firm RNCOS—'Booming Insurance Market in
India (2008–2011)'—the total life insurance premium in India is projected to grow
to US$ 259.72 billion by 2010–11. The general insurance sector is likely to grow at
a rate of 18 per cent in 2008, compared to 13 per cent in 2007. The 17 major non-
life insurers collected a total of US$ 840.27 million as premium in April 2008.

Life Insurance Corporation (LIC) is bullish on growth and is targetting business in

excess of US$ 59.14 billion by 2011–12.

The government is planning to ease restrictions on foreign investments in

insurance, banking and pensions, and allow foreign direct investment (FDI) of 49
per cent from the present 26 per cent.

INSURANCE UNDERWRITING

Personal lines insurance underwriters actually underwrite insurance for

individuals, a service still offered primarily through agents, insurance
brokers, and stock brokers. Underwriters may also offer similar commercial
lines of coverage for businesses. Activities include insurance and annuities,
life insurance, retirement insurance, health insurance, and property &
casualty insurance.

Some Well Known Insurers Includes:

GOVT. COMPANIES IN GENERAL INSURANCE IN INDIA

The new India assurance co. Ltd

The oriental Insurnce co. Ltd

The national insurance ltd

United India insurance ltd

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PRIVATE COMPANIES IN GENERAL INSURANCE

LTD

Bajaj Allianz general insurance ltd

Icici Lombard general insurance ltd

Bharti axa general insurance ltd

Ing vysya general insurance ltd

cholamandalam general insurance ltd

GOVT. COMPANIES IN LIFE INSURANCE

Life insurance corporation of India (LIC)

PRIVATE COMPAINES IN LIFE INSURANCE

Max new York life co. Ltd

Icici prudential co. Ltd

Tata aig

Met life insurance co. Ltd

Birla sunlife insurance co. Ltd

Aviva life insurance co. Ltd

Bajaj Allianz life insurance co.ltd

Hsbc canara life insurance co. Ltd

4.OTHER FINANCIAL SERVICES

Intermediation or advisory services - These services involve stock brokers (private

client services) and discount brokers. Stock brokers assist investors in buying or
selling shares. Primarily internet-based companies are often referred to as discount
brokerages, although many now have branch offices to assist clients. These

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brokerages primarily target individual

investors. Full service and private client
firms primarily assist execute trades and
execute trades for clients with large
amounts of capital to invest, such as large
companies, wealthy individuals, and
investment management funds.

Private equity - Private equity funds are

typically closed-end funds, which usually take controlling equity stakes in
businesses that are either private, or taken private once acquired. Private equity
funds often use leveraged buyouts (LBOs) to acquire the firms in which they
invest. The most successful private equity funds can generate returns significantly
higher than provided by the equity markets

Venture capital - Venture capital is a type of private equity capital typically

provided by professional, outside investors to new, high-potential-growth
companies in the interest of taking the company to an IPO or trade sale of the
business.

Angel investment - An angel investor or angel (known as a business angel or

informal investor in Europe), is an affluent individual who provides capital for a
business start-up, usually in exchange for convertible debt or ownership equity. A
small but increasing number of angel investors organize themselves into angel
groups or angel networks to share research and pool their investment capital.

Conglomerates - A financial services conglomerate is a financial services firm that

is active in more than one sector of the financial services market e.g. life insurance,
general insurance, health insurance, asset management, retail banking, wholesale
banking, investment banking, etc. A key rationale for the existence of such
businesses is the existence of diversification benefits that are present when
different types of businesses are aggregated i.e. bad things don't always happen at
the same time. As a consequence, economic capital for a conglomerate is usually
substantially less than economic capital is for the sum of its parts.

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5.STOCK MARKETS

Fund raising by India Inc through initial public offers (IPOs) rose by a whopping
62 per cent since the beginning of 2008 to 29 May, 2008 to US$ 4.2 billion, against
US$ 2.6 billion during the same period in 2006, according to global deal data
provider, Dealogic. Significantly, fund mobilisation during the first quarter of 2008
was the second highest for a quarter in the Indian capital's history.

In recent months, the Indian stock market has slowed down due to the global
economic turmoil. However, expectations of it rebounding soon are also high.

Further, according to global consultancy firm, Deloitte Haskins & Sells, the Indian
economy and capital markets are expected to witness a turnaround within six to
nine months.

According to the initial public offering (IPO) estimates for 2009, by Thomson
Reuters study, India Inc is likely to raise four times the proceeds it garnered from
the primary market in 2008. As per the study, India Inc is targetting to raise a
massive US$ 15.28 billion through public issues.

Furthermore, SEBI will be making it easier for companies to raise money from the
stock market, by relaxing eligibility rules to facilitate faster raising of funds from
existing shareholders.

Presently, only companies having had a market capitalisation of above US$ 1.97
billion in the last one year are entitled to this route. SEBI plans to bring down this
figure.

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Private Equity

In finance, private equity is an asset class consisting of equity securities in

operating companies that are not publicly traded on a stock exchange. Investments
in private equity most often involve either an investment of capital into an
operating company or the acquisition of an operating company. Capital for private
equity is raised primarily from institutional investors. There is a wide array of
types and styles of private equity and the term private equity has different
connotations in different countries.

Among the most common investment strategies in private equity include leveraged
buyouts, venture capital, growth capital, distressed investments and mezzanine
capital. In a typical
leveraged buyout
transaction, the private
equity firm buys
majority control of an
existing or mature firm.
This is distinct from a
venture capital or
growth capital
investment, in which
the private equity firm
typically invests in
young or emerging
companies, and rarely obtain majority control.

According to a report by global research firm Preqin, private equity investments

are likely to perk up in the second-half of 2009 and fuel the global economic
recovery. "With approximately US$ 1 trillion of dry powder (term used to denote
capital available for deals) available, private equity is poised to play a major role in
the coming economic recovery," the report revealed.

Private equity (PE) players see are bullish on investing in India as a profitable
destination, expecting the inflows to be around US$ 5 billion-US$ 8 billion in the
coming year.

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Industry experts feel that long-term investing in India is a profitable option.

According to a survey by Deloitte during the last six months, sectors driven by
domestic consumption and infrastructure are expected to witness a lot of activity.
Sandeep Gill, managing director of Deloitte corporate finance, said, "We have
observed two key points, the competitive environment for investment opportunities
for PE houses is expected to ease during 2009, as smaller PE firms and hedge
funds exit the market. Second, the volume of PE deals in the market will be
dependent on how quickly promoters are willing to accept lower valuations."

The total number of PE deals during the first five months of 2008 stood at 170,
with an announced value of US$ 6.39 billion as against 159 deals amounting to
US$ 4.97 billion during the corresponding period in 2008. India is among the top
10 countries in terms of value of private equity deals across the world, according to
the global deal tracking firm, Zephyr. The sector is going to see a flurry of activity
and investments in the coming months.

Many companies have ambitious plans to enter the private equity (PE) business
and raise funds.

Indivision India Partners is planning to raise another fund-Indivision II, with a

corpus in excess of US$ 425 million raised through Indivision I.

Other bigwigs planning fund raisings are the Tata and Aditya Birla groups with
plans to raise US$ 350 million and US$ 250 million, respectively. In August 2008,
Reliance Capital had announced setting up a US$ 1 billion PE fund.

Private equity firm, Actis has raised a US$ 2.9 billion private equity fund ‘Actis
Emerging Markets 3 (AEM3)’ for the emerging markets of China, India, Africa,
Latin America and South-east Asia. The fund will be pumping in US$ 1 billion as
investments in India over the next 3-4 years.

US-based Apollo Management, with an asset base of more than US$ 20 billion,
will be soon setting up shop in India. The PE firm has plans to spend around US$
800 million in investments in Indian and the US markets.

Tata Capital Ltd is planning to float a US$ 350 million private equity (PE) fund.

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EMERGENCE OF PRIMARY EQUITY MARKETS

Now, we are also witnessing the emergence of many private sector

financial services. The capital market, which was very sluggish, has become
a popular source of raising finance. The primary equity market has emerged
as an important vehicle to channelise the savings of the individuals and
corporates for productive purposes and thus to promote the industrial and
economic growth of the country.

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6.MUTUAL FUNDS

A mutual fund is a professionally managed type of collective investment scheme

that pools money from many investors and invests it in stocks, bonds, short-term
money market instruments, and/or other securities. The mutual fund will have a
fund manager that trades the pooled money on a regular basis. The net proceeds or
losses are then typically distributed to the investors annually.

Since 1940, there have been three basic types of investment companies in the
United States: open-end funds, also known in the U.S. as mutual funds; unit
investment trusts (UITs); and closed-end funds. Similar funds also operate in
Canada. However, in the rest of the world, mutual fund is used as a generic term
for various types of collective investment vehicles, such as unit trusts, open-ended
investment companies (OEICs), unitized insurance funds, and undertakings for
collective investments in transferable securities (UCITS).

According to a report by research firm RNCOS, the Indian mutual funds

retail market is presently growing at a CAGR of around 30 per cent, and is likely to
touch US$ 300 billion by 2015.

The growth momentum of the mutual fund industry continues in the new fiscal
year (2008–09). Fund mobilisation has increased by a whopping 77.4 per cent to
US$ 327.93 billion during April–June 2008, compared to US$ 184.81 billion in
April–June 2007. Consequently, average Assets Under Management (AUM) of the
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mutual fund industry has increased to US$ 132.33 billion for June 2008, against
US$ 99.86 billion in the corresponding period in 2007.

Further, at approx. US$ 96 billion–US$ 98 billion in assets for February 2009, the
mutual funds (MF) industry has seen a sharp increase of about 8.7 per cent in
AUM since the previous month. This is also the third consecutive monthly rise in
assets for the industry as a whole.

As per SEBI, the mutual fund industry made an overall investment of US$ 2.14
billion in equities between January-September 2008. According to market sources,
the mutual funds industry has mustered an estimated US$ 1.24 billion during the
same period. In September 2008, the AUM totalled to US$ 1.10 trillion.

To improve the capital market, the government is likely to remove the restriction
on profit-making Navratna and mini-Ratna public sector undertakings (PSUs) from
investing in mutual funds.

Life Insurance Corporation of India (LIC) has put in over US$ 2.75 billion into
liquid funds of different fund houses. The amount was more than three times its
similar investments made in 2008.

Looking ahead, the Indian mutual funds market is estimated to grow at a CAGR of
18 per cent in the next five years, with the country's mutual funds assets expected
to more than double to US$ 298.73 billion by 2012, according to a report by US-
based financial services research and consulting firm, Cerulli Associates.

HSBC Mutual Fund

HSBC is one of the world's leading banking giants and boasts of a

140-year history in banking services. HSBC operates in more than 70
countries across the globe and has assets of over $1.2 trillion on the
consolidated group balance sheet. The investment banking and fund
management businesses of the group is handled by HSBC Investments.
HSBC Asset Management India Private Limited acts as the Asset
Management Company to the HSBC Mutual Fund.

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HSBC Securities and Capital Markets India Private

Limited, an affiliate of the HSBC group, is the sponsor of
the fund and owns 75 percent stake.

7.DEBT MARKET

Preferred shares can be considered part of debt or equity. Attributing

preferred shares to one or the other is partially a subjective decision but will also
take into account the specific features of the preferred shares.

When used to calculate a company's financial leverage, the debt usually

includes only the Long Term Debt (LTD). Quoted ratios can even exclude the
current portion of the LTD. The composition of equity and debt and its influence
on the value of the firm is much debated and also described in the Modigliani-
Miller theorem.

Financial analysts and stock market quotes will generally not include other
types of liabilities, such as accounts payable, although some will make adjustments
to include or exclude certain items from the formal financial statements.
Adjustments are sometimes also made to, for example, exclude intangible assets,
and this will affect the formal equity; debt to equity (dequity) will therefore also be
affected.

Financial economists and academic papers will usually refer to all liabilities as
debt, and the statement that equity plus liabilities equals assets is therefore an
accounting identity (it is, by definition, true). Other definitions of debt to equity
may not respect this accounting identity, and should be carefully compared.

Due to the high volatility in the equity markets, Indian investors are choosing debt
market and mutual funds over equities.

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According to an ASSOCHAM
report, around US$ 333.27
million was invested in the
debt market against US$
249.89 million in equities, as on
the third week of June 2008. The
report revealed that investors
favoured corporate bonds,
particularly debentures
issued by leading companies. The
debt market in India included
segments like government securities, corporate bond market, PSU (public sector
undertaking) bonds, and fixed deposits among others.

According to a report by Goldman Sachs, with insurance, mutual funds and

pension sector experiencing rapid growth, India's debt market is estimated to grow
four-fold, from about US$ 400 billion (45 per cent of GDP) in 2006 to about US$
1.5 trillion (about 55 per cent of GDP) by 2016.

Significantly, the non-government sector is expected to grow from US$ 100 billion
in 2006 to US$ 575 billion in 2016, increasing its share in GDP from 10 per cent to
22 per cent.

CLASSIFICATION OF FINANCIAL SERVICES INDUSTRY

The financial intermediaries in India can be traditionally classified into two:

CAPITAL MARKET INTERMEDIARIES

MONEY MARKET INTERMEDIARIES

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1.CAPITAL MARKET INTERMEDIARIES

The capital market intermediaries consist of term lending institutions

and investing institutionswhich mainly provide long term funds.

2.MONEY MARKET INTERMEDIARIES

The money market intermediary consists of commercial banks, co-

operative banks and other agencies which supply only short term funds.

Hence the term “financial services industry” includes all kinds of

organizations which intermediate and facilitate financial transactions of both
individuals and corporate customers.

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9.INNOVATIVE FINANCIAL INSTRUMENTS

In recent years, innovation has been the key word behind the
phenomenal success of many of the financial service companies and it forms
an integral part of all planning and policy decisions. This has helped them to
keep in tune with the changing times and changing customer needs.
Accordingly, many innovative financial instruments have come into the
financial market in recent times.

SOME OF THEM HAVE BEEN BRIEFLY DISCUSSED BELOW:

COMMERCIAL PAPER

TREASURY BILL

CERTIFICATE OF DEPOSIT

BILLS OF EXCHANGE

PROMISSORY NOTE

1. COMMERCIAL PAPER

A commercial paper is a short term negotiable money market

instrument. It has the character of an unsecured promissory note with a fixed
maturity of 3 to 6 months. Banking and non-banking companies can issue
this for raising their short term debt. It also carries an attractive rate of
interest. Commercial papers are sold at a
discount from their face value and redeemed at
their face value. Since its denomination is very
high. It is suitable only to institutional
investors and companies.

2.TREASURY BILL

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A treasury bill is also a money market instrument issued by the central

government. It is also issued at a discount and redeemed at par. Recently,
the government has come out with the short term treasury bills of 182 days
bills and 364 days bills.

3.CERTIFICATE OF DEPOSIT

The scheduled commercial banks have been permitted to issue

certificate of deposit without any regulations on interest rates. This is also a
money market instrument and unlike a fixed deposit receipt. It is a
negotiable insturment and hence it offers maximum liquidity. As such, it has
a secondary market. Since the denomination is very high, it is suitable to
mainly instituional investors and companies.

4.PROMISSORY NOTE

A promissory note is a written promise by the maker to pay money to the payee.
Bank note is frequently transferred as a promissory note, a promissory note made
by a bank and payable to bearer on demand. A maker of a promissory note
promises to unconditionally pay the payee (beneficiary) a specific amount on a
specified date.

A promissory note is an unconditional promise to pay a specific amount to bearer

or to the order of a named person, on demand or on a specified date.
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A negotiable promissory note is unconditional promise in writing made by one

person to another, signed by the maker, engaging to pay on demand, or at fixed or
determinable future time, sum certain in money to order or to bearer. (see Sec.194)

A promissory note, briefly stated, is a promise to pay a sum of money.

Original parties to a promissory note.

There are originally two parties in a promissory note. The one who makes the
promise and signs the instrument is called the "maker" and the party to whom the
promise is made or the instrument is payable is called the "payee"

5.BILLS OF EXCHANGE

A bill of exchange or "draft" is a written order by the drawer to the drawee to pay
money to the payee. A common type of bill of exchange is the cheque (check in
American English), defined as a bill of exchange drawn on a banker and payable
on demand. Bills of exchange are used primarily in international trade, and are
written orders by one person to his bank to pay the bearer a specific sum on a
specific date. Prior to the advent of paper currency, bills of exchange were a
common means of exchange. They are not used as often today.

A bill of exchange is an unconditional order in writing addressed by one person to

another, signed by the person giving it, requiring the person to whom it is
addressed to pay on demand or at fixed or determinable future time a sum certain
in money to order or to bearer. (Sec.126)

It is essentially an order made by one person to another to pay money to a third

person.

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A bill of exchange requires in its inception three parties--the drawer, the drawee,
and the payee.

The person who draws the bill is called the drawer. He gives the order to pay
money to third party. The party upon whom the bill is drawn is called the drawee.
He is the person to whom the bill is addressed and who is ordered to pay. he
becomes an acceptor when he indicates his willingness to pay the bill. (Sec.62) The
party in whose favor the bill is drawn or is payable is called the payee.

The parties need not all be distinct persons. Thus, the drawer may draw on himself
payable to his own order.

A bill of exchange may be endorsed by the payee in favour of a third party, who
may in turn endorse it to a fourth, and so on indefinitely. The "holder in due
course" may claim the amount of the bill against the drawee and all previous
endorsers, regardless of any counterclaims that may have disabled the previous
payee or endorser from doing so. This is what is meant by saying that a bill is
negotiable.

In some cases a bill is marked "not negotiable". In that case it

can still be transferred to a third party, but the third party can
have no better right than the transferor.

10.CONGLOMERATES

A financial services conglomerate is a financial services firm that is active

in more than one sector of the financial services market e.g. life insurance,
general insurance, health insurance, asset management, retail banking,
wholesale banking, investment banking, etc. A key rationale for the
existence of such businesses is the existence of diversification benefits that
are present when different types of businesses are aggregated i.e. bad things
don't always happen at the same time. As a consequence, economic capital

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for a conglomerate is usually substantially less than economic capital is for

the sum of its parts.

FUNDAMENTALS OF FINANCIAL SERVICE SECTOR

A detailed study on the fundamentals of financial concepts is sure

to give some idea on the concepts of finance. The investors need to go
through some theories of finance that will help them to understand the
behavior of market in a better way. There are a number of factors that
influence the functioning of the investment market. The individual
investor's choice of investment may vary from one person to another.
While some investors go for investing in the risky securities, some
investors tend to play safe in the market by investing in the less risky
security. Arbitrage is one of the most important fundamentals of
financial concepts. It typically defines the process of taking advantage
of the price different between two or more markets. A clear concept on
the arbitrage practicing may be beneficial for the investors. The cash
flow is another fundamental of the financial concept that refers to the
process of cash being transferred by a business or an organization.
Understanding of the cash flow management may be useful to evaluate a
particular business or in determining the problems with liquidity.
Money market makes an important part in the concept of finance.
Investment in currencies is getting popular with the passage of time. A
study on the forex market is crucial for all those who are investing in
the money market. The forex market handles the trading of one
currency with another country's currency and it is the largest financial
market in the world in terms of transaction volume. The various types
of risks that come under the domain of financial concepts are - systemic
risk, credit risk, consumer credit risk, settlement risk, liquidity risk and
market risk.

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FINANCIAL SERVICES THEORIES

The prime concept of finance theory is to study the various ways by

which a business or an individual raises money. Allocating money into
projects while considering the risk factors attached to them also fall under
the canopy of finance theory fundamentals. The concept of finance may also
be integrated with the concepts such as: study of money and other assets,
managing and profiling project risks, control and management of assets and
also. In simple understanding, 'financing' also means provision and
allocation of fund for a particular business module or project. Number of
finance theories that offer separate approaches to the finance hypotheses.
Some of the major and popular finance theories of the world are: arbitrage
pricing theory, rational choice theory, prospect theory, cumulative prospect
theory, Monte Carlo option model, binomial options pricing model, Black
model and legal origins theory. T h e A r b i t r a g e Pricing Theory for example
talks about the general theory of asset pricing. The proper asset pricing is
necessary for the proper pricing of shares. The Arbitrage Pricing Theory
states that the return that is expected from a financial asset can be presented
as a linear function of various theoretical market indices and macro-
economic factors. Here it is assumed that the factors considered are
sensitive to changes and that is represented by a factor-specific beta
coefficient. The Prospect theory of finance, on the other hand, discusses the
alternatives involving risks. It takes into consideration the alternatives that
come with uncertain outcomes. The model is descriptive by nature and it
tries to represent the real-life choices but not optimal decisions. This theory
proposes how the investors should use diversification in order to optimize
their portfolios.

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CAUSES FOR FINANCIAL INNOVATION

FOLLOWING ARE THE CAUSES OF FINANCIAL INNOVATIONS:

Economic Liberalization

Investor Awareness

Low Profitability

Customer Service

Keen Competition

Improved Communication Technology

Global Impact

ECONOMIC LIBERALISATION

Reform of the financial sector constitutes the most important

component of India’s programmed towards economic liberalization. The
recent economic liberalisation measures have opened the door to foreign
competitors to enter into our domestic market.

INVESTOR AWARENESS

With a growing awareness amongst the investing public, there has

been a distinct shift from investing the savings in physical assets like gold,
silver, land, etc. to financial assets like shares, debentures, mutual funds,
etc.

LOW PROFITABILITY
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The profitability of the major financial intermediary, namely the banks

has been very much affected to recent times. There is a decline in the
profitability of traditional banking products.

CUSTOMER SERVICE

Now-a-days the customer’s expectations are very great. They want newer
products at lower cost or at lower credit risk to replace the existing one.

KEEN COMPETITION

The entry of many financial intermediaries in the financial sector

market has led to severe competition among themselves. This keen
competition has paved the way for the entry of varied nature of innovative
financial products so as to meet the varied requirements of the investors.

IMPROVED COMMUNICATION TECHNOLOGY

The communication technology has become so advanced that even the

world’s issuers can be linked with the investors in the global financial
market without any difficulty by means of offering so many options and
opportunities.

GLOBAL IMPACT

Many of the providers and users of capital have changed their roles all
over the world.

VARIOUS ELEMENTS OF FINANCIAL SERVICES MARKETING:

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In the formulation of overall marketing strategies in the financial

services industry, the following decisions are considered important in the
present liberalized environment

Product Planning

Pricing Policy

Branding

Customer Service

Distribution Policy

Promotion Policy

Market Segmentation

PRODUCT PLANNING

The financial companies should aim at creating new generic products

as per the needs of the customers. Attractive schemes have to be created
with efficient delivery in order to optimize customer satisfaction. It is
always better to bring modification in the existing products by adding some
new features and elimination of outdated products.

In the competitive market, the task of selling a product is tougher

since the core products are the same. This necessitates product
differentiation. There should be different products in the arrays of the
company, so that the company can cater to the needs of the different groups
of investors or customers.

In order to design and develop new products one should take the help
of market research to asses the needs of the customers, availability of
existing product and future growth in demand.

PRICING POLICY

The potential customers generally frame their investment strategies in

the background of pricing decisions. The prices take different dimension
depending upon the type of financial services. The price of financial
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services is always linked with returns.For an insurance company the price

means the premium, for the banks it is the net asset value. However, while
deciding pricing, incentives, brokerage and agency commission is also to be
decided in advance because the expenses towards these items will affect the
ultimate returns to the investors. After all in all cases only the competitive
price and the promised return catch the sentiment of the customers.

BRANDING

Brand name very often signifies the market segments, inherent benefits
and investment objectives and also the customer’s loyalty. This process
consists of product name, designing brand policy like individual family or
corporate brand.

CUSTOMER SERVICES

Marketing of services is significantly influenced by the quality of

service and interpersonal relationship between the customers and service
organizations. In order to motivate the potential customers, the service
should be offered in the best possible manner. In the competitive world of
financial services, market orientation of product and customer orientation of
service are the two key factors. Prompt and timely service as per the needs
of customer would make difference. The personal touch in services has
shown a positive result in the recent times. The quality of services offered in
turn helps to develop loyalty among the customers. Services can be provided
either directly by the company through the service the service department or
through intermediaries like registrars or external agencies. Customers are
involved in a very real relationship with the company and even one weak
link can significantly damage their trust.

MARKET SEGMENTATION

The financial service industries are expected to satisfy both rural and urban
customers, small and large-scale entrepreneurs, high and low earning
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customers, retail and institutional customers. The segmentation of market

based on the changing needs of customers is considered to be the most
appropriate solution. Identification of market segment is crucial to take
further action regarding promotion and distribution of the product. Market
segment will be identified in the basis of nature of the product, direct and
indirect benefits of the product on the one hand and behavior or attitude of
the customers, etc.

DISTRIBUTION POLICY

The determination of proper channel for selling the product is also a

key issue in the marketing of financial products. Before launching a product,
there should be a clear-cut idea about the channel of distribution of the
product so as to make it accessible to the ultimate customers. The channels
which directly link to the cudtomers or through the intermediaries like
agents, brokers, franchisees should be determined based on the internal
marketing strength of the organization.

PROMOTION POLICY

The promotion of sale may be through advertisement, road shows,

personal finance shows, contest, etc. the various promotional tools used by
the major players are personal and impersonal promotions.

EMERGING FUNCTIONS IN MARKETING OF FINANCIAL

SERVICES

The following are the emerging functions of financial service

industries and having greater significance in this competitive market.

Product Development

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Channel Management

Appraisal Management

Territory Sales Management

Branch Management

Brand Management

PRODUCT MANAGEMENT

To monitor profitability for each product line. To Asses the potential of

retail asset business based on market feedback and to enhance existing
products and develop new products.

CHANNEL MANAGEMENT

To identify third-party agencies such as direct sales agents,

verification agencies and to finalize terms and conditions, responsibilities
and pricing of each agency. To monitor the performance of these agencies
on an ongoing basis and ensure a high-quality channel operation.

APPRAISAL MANAGEMENT

To scrutinize and recommend and approval or rejection of retail loan

proposals received from branches by way of credit scoring system and sound
judgment.

TERRITORY SALES MANAGEMENT

To build the retail asset business in liaison with direct selling agents
and branch head in order to achieve the business targets for the region. To
identify and recommend suitable third-party agencies for marketing,
collection and verification of operations as well as to ensure quality of
credit portfolio and flow-up default cases.

BRANCH MANAGEMENT

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To achieve the business target of the branch with a predominantly

retail business.

BRAND MANAGEMENT

To develop strong brand name for the product and corporate image
for the company through various innovative devices.

Today’s financial services industry requires new strategies to survive

and continue to operate. They have to adopt new marketing strategies and
tactics which will enable them to capture the maximum opportunities with
lowest risk in order to enable them to survive and to meet the tough
competition from global players of the domestic and foreign origin.

PORTFOLIO MANAGEMENT

Portfolio management means selection of securities and constant

shifting of the portfolio in the light of varying attractiveness of the
constituents of the portfolio. It is a choice of selecting and revising
spectrum of securities to it with the characteristics of an investor.

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OBJECTIVES

SHORT TERM HIGH PRIORITY OBJECTIVES

LONG TERM HIGH PRIORITY OBJECTIVES

LOW PRIORITY OBJECTIVES

MONEY MAKING OBJECTIVES

SHORT TERM HIGH PRIORITY OBJECTIVES

Investors have a high priority towards achieving certain objectives in

a short time. For e.g. a young couple will give high priority to buy a house.
Thus, investors will go for high priority objectives and invest their money
accordingly.

LONG TERM HIGH PRIORITY OBJECTIVES

Some investors look forward and invest on the basis of objectives of

long-term needs. They want to achieve financial independence in long
period. For e.g. investing for post retirement period or education of a child
etc. Investors usually prefer a diversified approach while selecting different
types of investments.

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LOW PRIORITY OBJECTIVES

These objectives have low priority in investing. These objectives are

not painful. After investing in high priority assets, investors can invest in
these low priority assets. For e.g. provision for tour, domestic appliances
etc.

MONEY MAKING OBJECTIVES

Investors put their surplus money in this kind of investment. Their

objective is to maximize wealth. Usually, the investors invest in shares of
companies, which provide capital appreciation apart from regular income
from dividend.

CASE STUDIES

ICICI BANK
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I have a account with ICICI

bank because it’s our salary account,
and we are kind of forced to use ICICI
Bank. And since we have a salary
account, we get a decent service. But
yes, the credit card department, and the
call centre sucks big time. That’s my
personal experience.

They put you on hold for 5 to 10 mins. (just imagine listening to the
same junk music/tone/adverts continuously), and then there is no guarantee
that you will get to speak to someone or your problem would be solved.
Infact, today I was put on hold for around 7 mins, and after that the call as
abruptly disconnected! Next time I call the call center, I get to speak to a
totally new person, and start from scrap describing the problem. The people
at the call center just promise to do things, and nothing actually happens. If
it happens, then you are really your luck.

Hope K V Kamath reads this

My advice to all - Avoid ICICI as far as possible. Many people

predict that the bank would collapse in a few years from now. Have an
account with any nationalized bank.

HSBC BANK

HSBC bank recovery agents bash up 58-year-old professor

Two days back RBI had put on its website guidelines for the bank’s
recovery agents and in it has warned the banks about strict actions would be
taken against them and even penalize the license of the bank but it seems
still the warning is falling on deaf ears. Again an incident of unruliness by
recovery agent of the bank has come into limelight. It is HSBC bank in
news. This time the victim is a professor of a reputed engineering college,
Prof J.S. Kalra. He has charged a multinational bank which allegedly sent a
pack of intimidating loan recovery agents to hound him. Kalra had taken a
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loan of Rs 4.5 lakh to buy a Santro from the Noida branch of HSBC last
year. The incident took place in September but the 58-year-old professor. He
is hopeful of justice, encouraged by the recent strict guidelines issued by the
RBI against banks intimidating customers to recover loan. Even the Finance
Minister Pranab Mukherjee too has iterated that “strictest action” will be
taken against banks stooping to strong-arm methods.Prof J.S. Kalra of the
Delhi College of Engineering has filed his complaint against the bank. In his
complaint he told the police that the agents abused and beat him up outside
the Indraprashta University campus in north Delhi for delaying monthly
installments of a loan. They did not care to stop even after he told them that
he was a heart patient and that he had developed chest pain. “They even
threatened to kill me,” Kalra said in his complaint. Police have registered a
case of criminal intimidation against the loan recovery agents, allegedly
hired by HSBC bank. Devesh Chandra Srivasatava, deputy commissioner of
police (north) told the press “They got into Kalra’s car and refused to leave
till he paid the loan installments immediately. They hurled abuses, and beat
him up. When they saw Kalra developing heart problem, they left him”

CONCLUSION OF FINANCIAL SERVICES

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Financial services comprises of assisting in sourcing of funds, funding,

advising and procedural assistance in deployment of funds. Financial
services is the integral part in the modern business world.

Many of the financial services are provided by the employees of the firm
itself i.e. it becomes an internal or finance manager’s function. Otherwise
the firm would source it from an external agency.

Commercial banks, merchant banks, investment banks, mutual funds,

venture capital funds, rating agencies, non-banking finance companies
(NBFC), leasing and hire purchase companies, are some of the entities that
provide financial services.

BIBLIOGRAPHY

WWW.HSBC.CO.IN

WWW.ICICI.COM

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