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FINANCE SECTOR

DATE:17/09/2010 PRESENTED BY:

VIJENDRA KALMODIYA

GAURAV SHARMA

AJIT SAHU

AKANSHA

VIKAS DEWANGAN

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INTRODUCTION

Finance is the science of funds management. The general

areas of finance are business finance, personal finance, andpublic finance. Finance includes saving money and oftenincludes lending money. The field of finance deals with theconcepts of time, money, and risk and how they are

interrelated. It also deals with how money is spent andbudgeted.

One aspect of finance is through individuals and businessorganizations, which deposit money in a bank. The bank thenlends the money out to other individuals or corporations forconsumption or investment, and charges interest on the loans.

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FINANCIAL SECTOR

A category of stocks containing firms that provide financial

services to commercial and retail customers. This sectorincludes banks, investment funds, insurance companies andreal estate. Financial services perform best in low interest rateenvironments.

A large portion of this sector generates revenue frommortgages and loans, which gain value as interest rates drop.

Furthermore, when the business cycle is in an upswing, thefinancial sector benefits from additional investments. Improvedeconomic conditions usually lead to more capital projects andincreased personal investing. New projects require financing,

which usually leads to a larger number of loans.

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TYPES OF FINANCIAL MARKET

Capital markets which consist of:

Stock markets, which provide financing through the issuance of shares

or common stock, and enable the subsequent trading thereof. Bond markets, which provide financing through the issuance of bonds,

and enable the subsequent trading thereof.

Commodity markets, which facilitate the trading of commodities.

Money markets, which provide short term debt financing and investment.

Futures markets, which provide standardized forward contracts for tradingproducts at some future date.

Insurance markets, which facilitate the redistribution of various risks.

Foreign exchange markets, which facilitate the trading of foreignexchange.

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FINANCE SECTOR OF INDIA

Financial Sector of India is intrinsically strong, operationally sundry and

exhibits competence and flexibility besides being sensitive to Indiaseconomic aims of developing a market oriented, industrious and viableeconomy.

The growth of financial sector in India at present is nearly 8.5% per year.

The rise in the growth rate suggests the growth of the economy. Thefinancial policies and the monetary policies are able to sustain a stablegrowth rate.

The financial sector in India had an overall growth of 15%, which has

exhibited stability over the last few years although several other marketsacross the Asian region were going through a turmoil. With the opening ofthe financial market variety of products and services were introduced to suitthe need of the customer. The Reserve Bank of India (RBI) played adynamic role in the growth of the financial sector of India.

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Growth of the banking sector in IndiaThe banking system in India is the most extensive. The total asset value of

the entire banking sector in India is nearly US$ 270 billion. The total depositsis nearly US$ 220 billion. Banking sector in India has been transformedcompletely. Presently the latest inclusions such as Internet banking and Corebanking have made banking operations more user friendly and easy.

Growth of the Capital Market in IndiaThe ratio of the transaction was increased with the share ratio and depositsystem

The removal of the pliable but ill-used forward trading mechanismThe introduction of infotech systems in the National Stock Exchange (NSE)in order to cater to the various investors in different locationsPrivatization of stock exchanges

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Growth in the Insurance sector in India

With the opening of the market, foreign and private Indian players are keen

to convert untapped market potential into opportunities by providing tailor-made products:

The insurance market is filled up with new players which has led to theintroduction of several innovative insurance based products, value add-ons,

and services. Many foreign companies have also entered the arena such asTokio Marine, Aviva, Allianz, Lombard General, AMP, New York Life,Standard Life, AIG, and Sun Life

The competition among the companies has led to aggressive marketing, and

distribution techniques.

The active part of the Insurance Regulatory and Development Authority(IRDA) as a regulatory body has provided to the development of the sector

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Financial Sector of India Chief Characteristics

The financial sector of India allows Most Favored Nation(MFN) reputation to all international banks and firms offeringfinancial facilities.

The sector has relaxed previous MFN tax exemption onbanking activities

Allows 12 new financial bank division authorizations everyyear to international banks, that is higher as compared to theexisting 8 every year

Raises the 10% limit of reinsurance by insurance firms in

IndiaPermits 51% foreign endowment in fiscal advisory, issuing,hiring, business enterprise capital, business banking andnon-banking credit firms.

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FINANCE COMPANIES OF INDIA

SBI Capital Markets Limited

Birla Global Finance Limited

DSP Meriyll Lynch Limited.

Housing Development Finance Corporation.

PNB Housing Finance Limited.

ICICI Group.

LIC Finance Limited.

L & T Finance Limited.

Karvy Group.

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HOUSING DEVELOPMENT FINANCECORPORATION

Housing Development Finance Corporation Limited or HDFC , founded1977 by Hasmukhbhai Parekh, is an Indian NBFC, focusing on homemortgages.

HDFC was incorporated in 1977 with the primary objective of meeting a

social need - that of promoting home ownership by providing long-termfinance to households for their housing needs. HDFC was promoted with aninitial share capital of Rs. 100 million.

Business Objectives

The primary objective of HDFC is to enhance residential housing stock in thecountry through the provision of housing finance in a systematic andprofessional manner, and to promote home ownership. Another objective isto increase the flow of resources to the housing sector by integrating thehousing finance sector with the overall domestic financial markets..

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HDFC Limited, India's premier housing finance institution has assisted morethan 3.4 million families own a home, since its inception in 1977 across 2400cities and towns through its network of over 271 offices.

It has international offices in Dubai, London and Singapore with serviceassociates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's andPIO's to own a home back in India.

As of December 2009, the total asset size has crossed more than Rs.104,560 crores including the mortgage loan assets of more than Rs.90,400

crores. The corporation has a deposit base of over Rs. 23,000 crores,earning the trust of nearly one million depositors. Customer Service andsatisfaction has been the mainstay of the organization.

HDFC has set benchmarks for the Indian housing finance industry.Recognition for the service to the sector has come from several national and

international entities including the World Bank that has lauded HDFC as amodel housing finance company for the developing countries.

HDFC has undertaken a lot of consultancies abroad assisting differentcountries including Egypt, Maldives, and Bangladesh in the setting up ofhousing finance companies .

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ORGANISATION AND MANAGEMENT

Board of Directors

Mr. Deepak S. Parekh - Chairman

Mr. Keshub Mahindra - Vice Chairman

Mr. Keki M. Mistry - Vice Chairman & Chief Executive Officer

Mr. V. Srinivasa Rangan - Executive Director

Ms. Renu Sud Karnad - Managing Director

Mr. Shirish B. Patel Mr. B. S. Mehta

Mr. D. M. Sukthankar Mr. D. N. Ghosh

Dr. S. A. Dave Dr. Ram S. Tarneja

Mr. N. M. Munjee Dr. Bimal Jalan

Mr. D. M. Satwalekar Dr. J. J. Iran

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FINANCIAL HIGHLIGHTS

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SUBSIDIARIES AND ASSOCIATE COMPANIES

HDFC Mutual Fund

HDFC Asset Management Company Ltd (AMC) was incorporated under theCompanies Act, 1956, on December 10, 1999, and was approved to act asan Asset Management Company for the HDFC Mutual Fund by SEBI vide its

letter dated July 3, 2000.

The present equity shareholding pattern of the AMC is as follows :

Particulars % of the paid up equity capital

HDFC Limited 60

Standard Life Investments Limited 40

http://www.hdfcfund.com/http://www.hdfcfund.com/

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HDFC Bank

The Housing Development Finance Corporation Limited (HDFC) wasamongst the first to receive an 'in principle' approval from the Reserve Bankof India (RBI) to set up a bank in the private sector.

The bank was incorporated in August 1994 in the name of 'HDFC BankLimited', with its registered office in Mumbai, India. HDFC Bank commencedoperations as a Scheduled Commercial Bank in January 1995.

Last year amalgamation of Centurion Bank of Punjab took place with

HDFC.Indias 2nd largest private bank.

Bank currently has an nationwide network of 1,725 Branches and 4,393ATM's in 780 Indian towns and cities.

http://www.hdfcbank.com/http://www.hdfcbank.com/

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HDFC Standard Life Insurance CompanyHDFC Standard Life, one of Indias leading private life insurance companies,

offers a range of individual and group insurance solutions. It is a jointventure between HDFC Limited and Standard Life plc, the leading providerof financial services in the United Kingdom.

HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds26.00% of equity in the joint venture, while the rest is held by others.

HDFC Standard Lifes product portfolio comprises solutions, which meet

various customer needs such as Protection, Pension, Savings, Investmentand Health.

The company currently has 32 retail and 4 group products in its portfolio,along with five optional rider benefits catering to the savings, investment,protection and retirement needs of customers.

http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/

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