Ganesh Financial Service

8/12/2019 Ganesh Financial Service

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FINANCIAL SERVICES

Introduction:

The Indian financial services industry has undergone a metamorphosis

since1990. During the late seventies & eighties, the Indian financial services industry was

dominated by commercial bans and other financial institution which cater to the

re!uirements of the Indian industry. The economic liberali"ation has brought in a complete

transformation in the Indian financial services industry. The term #inancial $ervices% in a

broad sense means mobili"ing and allocating savings%. Thus it includes all activities involved

in the transformation of savings into investment. The financial service can also be called

financial intermediation. #inancial intermediation is a process by which funds are mobili"ed

from a large number of savers and mae them available to all those who are in need of it and

particularly to corporate customers. Thus, financial service sector is a ey area and it is very

vital for industrial developments. well developed financial services industry is absolutely

necessary to mobili"e the savings and to allocate them to various investable channels and

thereby to promote industrial development in country. #inancial services, through networ of

elements such as financial institution, financial marets and financial instruments, serve the

needs of individuals, institutions and corporate. It is through these elements that the

functioning of the financial system is facilitated. 'onsidering its nature and importance,

financial services are regarded as the fourth element of the financial system.

Definition of Financial Services:

#inancial services refer to services provided by the finance industry. The finance

industry encompasses a broad range of organi"ations that deal with the management of

money. mong these organi"ations are bans, credit card companies, insurance companies,

consumer finance companies, stoc broerages, investment funds and some governmentsponsored enterprises.


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s per section ()*10+ of the #inance ct, 199, -baning and financial services means the

following services provided by a baning company or a financial institution including a non

baning financial company, namely/

*vii+

rovision

and

transfer

of

information and data processing.

FEATURES OF FINANCIAL SERVICE:

*i+ financial leasing services including e!uipment leasing and hirepurchase by a

body corporate/*ii+ credit card services/*iii+ merchant baning services/*iv+ securities and foreign e2change *fore2+ broing/*v+ asset management including portfolio management, all forms of fund

management, pension fund management, custodial depository and trust

services, but does not include cash management/*vi+ advisory and other au2iliary financial services including investment and

portfolio research and advice, advice on mergers and ac!uisition and advice

on corporate restructuring and strategy/ and


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1 Custo!er"Oriented:

3ie any other service industry financial service industry is also a customer

oriented one. That customer is the ing and his re!uirements must be satisfied in full should

be the basic tenent of any financial service industry. It calls for designing innovative

financial products suitable to varied risreturn re!uirements of customer.

# Intan$i%ilit&:

#inancial services are intangible and therefore, they cannot be standardi"ed or

reproduced in the same form. 4ence, there is a need to have a trac record of integrity,

reputation, good corporate image and timely delivery of services.

' Si!ultaneous (erfor!ance:

5et another feature is that both production and supply of financial services have to

be performed simultaneously. Therefore, both suppliers of services and consumers should

have a good rapport, clearcut perception and effective communication.

) Do!inance of *u!an Ele!ent:

#inancial services are dominated by human element and thus, they are people

intensive. It calls for competent and silled personnel to maret the !uality financial

products. 6ut, !uality cannot be homogeni"ed since it varies with time, place and customer

to customer.

+ (eris, a%ilit&:

#inancial services are immediately consumed and hence inventories cannot be

created. There is a greater need for balancing demand and supply properly. In other words,

mareting and operations should be closely interlined.

I-(ORTANCE OF FINANCIAL SERVICES:


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1 Econo!ic .ro/t,:

The financial service industry mobili"es the savings of the people and channels them

into productive investment by providing various services to the people. In fact, the economic

development of a nation depends upon these savings and investment.

# (ro!otion of Savin$s:

The financial service industry promotes savings in the country by providing

transformation services. It provides liability, asset and si"e transformation service by

providing large loans on the basis of numerous small deposits. It also provides maturity

transformation services by offering shortterm claim to savers on their li!uid deposit and

providing longterm loans to borrowers.

' Ca0ital For!ation:

The financial service industry facilitates capital formation by rendering various

capital maret intermediary services 7 capital formation in the very basis for economic

growth. It is the principal mobili"e, of surplus funds to finance productive activities and thus

it promotes capital accumulation.

) (rovision of Liuidit&:

The financial service industry promotes li!uidity in the system by allocating and

reallocating savings and investment into various avenues of economic activity. It facilitates

easy conversion of financial asset into li!uid cash at the discretion of the holder of such

assets.

+ Financial Inter!ediation:

The financial service industry facilitates the function of intermediation between

savers and investors by providing a means and a medium of e2change and by undertaing

innumerable services.

2 Contri%ution to .N(:


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The contribution of financial services to 8ophers been going on increasing year after

year in almost all countries indecent times.

3 Creation of E!0lo&!ent O00ortunities:

The financial service industry creates and provides employment opportunities tomillions of people all over the world.

O45ECTIVES OF FINANCIAL SERVICES:

16 Fund raisin$:

#inancial services help to raise the re!uired funds from host of investors, individuals,

institution and corporate. #or this purpose, various instruments of finance are used.

#6 Funds de0lo&!ent:

n array of financial services is available in the financial marets which help the

players to ensure an effective deployment of funds raised. $ervices such as bill discounting,

paring of shortterm funds in the money maret, credit rating &securiti"ation of debts are

provided by financial services firms in order to ensure efficient management of funds.

'6 S0eciali7ed services:

The financial service sector provides speciali"ed services such as credit rating,

venture capital financing, lease financing, mutual funds, credit cards, housing finance, etc

besides baning and insurance. Institutions and agencies such as stoc e2changes, non

baning finance companies, subsidiaries of financial institutions, bans & insurance

companies also provide these services.

)6 Re$ulation:


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There are agencies that are involved in the regulation of the financial services

activities. In India, agencies such as the $ecurities and 2change 6oard of India *$6I+,

:eserve 6an of India *:6I+ and the Department of 6aning and Insurance of the

8overnment of India, regulate the functioning of the financial service institutions.

+6 Econo!ic $ro/t,:

#inancial services contribute, in good measure, to speeding up the process of

economic growth & development.

Functions of Financial Services:

16 Fund raisin$: "

#inancial services helps to raise the re!uired funds from a host of inventories,

individuals, institutions and corporate. #or this purpose, various instruments of finance

is used. The funds are demanded by corporate houses, individuals, etc.

#6 Funds develo0!ent:n array of financial services is available in financial marets which help the

player to ensure an effective development of fund raised. #inancial services assist inthe decision maing regarding the financing mi2. $ervices such as bill discounting,

factoring of debtors, paring of short term funds in the money maret, credit rating, e

commerce, and securiti"ation of debts are provided by financial services firms in order

to ensure efficient management of funds.

'6 S0eciali7ed services: "

The financial services sector provides speciali"ed services such as credit rating,

venture capital financing, lease financing, factoring, mutual funds, merchant baning,

stoc lending, depository, credit cards, housing finance, boo building, etc besides

baning and insurance. Institutions and agencies such as stoc e2changes, speciali"ed

and general financial institutions, nonbaning finance companies, subsidiaries of

financial institutions, bans and insurance companies also provide these services.

)6 Re$ulation: "There are agencies that are involved in the regulation of the financial services

activities. In India, agencies such as the securities and e2change board of India


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*$6I+, reserve ban of India *:6I+ and the department of baning and insurance of

the government of India, through a plethora of legislations, regulate the functioning of

the financial services institutions.

+6 Econo!ic $ro/t,:"

#inancial services contribute, in good measure, to speeding up the process ofeconomic growth and development. This taes place through the mobili"ation of the

savings of a cross section of people, for the purpose of channeling them into

productive investments. In this connection, it is to be noted that a number of

developed and developing countries which have a highly efficient financial marets,

have witnessed a greater rate of savings and investments.

SOURCES OF REVENUE:

ccordingly, there are two categories of sources of income for a financial

service company namely; fund based &fee based. #undbased income comes mainly from

interest spread, lease rentals, income from investments in capital maret and real estate.


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Classification of Financial Services:

Sco0e of Financial Services

#inancial services cover a wide range of activities. They can be broadly classified

into two, namely;

i. Traditional. ctivities

ii. >odern activities.

i Traditional Activities:

Traditionally, the financial intermediaries have been rendering a wide range of

services encompassing both capital and money maret activities. They can be grouped under

two heads, vi".

Fund"%ased Fee"%ased

Leasin$

*ire (urc,ase

Discountin$

Loans

Venture Ca0ital

*ousin$ Finance

Factorin$

Issue -ana$e!ent

(ortfolio -ana$e!ent

Ca0ital Restructurin$

Loan s&ndication

Mergers &

Cor0orate Counselin$

Forei$n Colla%orations


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1. #und based activities and

?. @onfund based activities.

Fund %ased activities;

The traditional services which come under fund based activities are the following;

Anderwriting or investment in shares, debentures, bonds, etc. of new issues *primary

maret activities+.

Dealing in secondary maret activities.

articipating in money maret instruments lie commercial

apers, certificate of deposits, treasury bills, discounting of bills etc.

Involving in e!uipment leasing, hire purchase, venture capital, seed capital,

Dealing in foreign e2change maret activities. @on fund based activities

Non fund %ased activities:

#inancial intermediaries provide services on the basis of nonfund activities also.This can be called Bfee basedC activity. Today customers, whether individual or corporate, are

not satisfied with mere provisions of finance. They e2pect more from financial services

companies. 4ence a wide variety of services, are being provided under this head. They

include;

>anaging the capital issue i.e. management of preissue and postissue activities

relating to the capital issue in accordance with the $6I guidelines and thus enabling

the promoters to maret their issue.


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>aing arrangements for the placement of capital and debt instruments with

investment institutions.

rrangement of funds from financial institutions for the clientsC pro=ect cost or his

woring capital re!uirements.

ssisting in the process of getting all 8overnment and other clearances.

ii -odern Activities:

6eside the above traditional services, the financial intermediaries render

innumerable services in recent times. >ost of them are in the nature of nonfund based

activity. In view of the importance, these activities have been in brief under the head B@ew

financial products and servicesC. 4owever, some of the modern services provided by them

are given in brief hereunder.

:endering pro=ect advisory services right from the preparation of the pro=ect report till

the raising of funds for starting the pro=ect with necessary 8overnment approvals. lanning for >& and assisting for their smooth carry out.

8uiding corporate customers in capital restructuring.

cting as trustees to the debenture holders.

:ecommending suitable changes in the management structure and management style

with a view to achieving better results.

$tructuring the financial collaborations E =oint ventures by identifying suitable =oint

venture partners and preparing =oint venture agreements.

:ehabilitating and restructuring sic companies through appropriate scheme of

reconstruction and facilitating the implementation of the scheme.

4edging of riss due to e2change rate ris, interest rate ris, economic ris, and

political ris by using swaps and other derivative products.


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>anaging In portfolio of large ublic $ector 'orporations.

Andertaing ris management services lie insurance services, buyhac options etc.

dvising the clients on the !uestions of selecting the best source of funds taing into

consideration the !uantum of funds re!uired, their cost, lending period etc.

8uiding the clients in the minimi"ation of the cost of debt and in the determination of

the optimum debte!uity mi2.

romoting credit rating agencies for the purpose of rating companies which want to go

public by the issue of debt instrument.

Andertaing services relating to the capital maret, such as 1+'learing services,?+:egistration and transfers, F+$afe custody of securities, +'ollection of income on

securities.

(RESENT SCENARIO OF FINANCIAL SERVICES

1+ Conservatis! to d&na!is!:

t present, the financial system in India is in a process of rapid transformation,

particularly after the introduction of reforms in the financial sector. The main ob=ective of the


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financial sector reforms into promotes an efficient, competitive and diversified financial

system in the country. This is essential to raise the locative efficiency of available savings

and to promote the accelerated growth of the economy as a whole. The emergence of various

financial institution and regulatory bodies has transformed the financial services sector from

being a conservative industry to a very dynamic one.

#6 E!er$ence of (ri!ar& Euit& -ar8et:

The capital marets have become a popular source of raising finance. The

aggregate fundraised by the industries have gone from :s. )9G( core in 19919? torso.

F?FH? crore in ?00(0G. Thus the primary maret has emerged as an important vehicle to

channeli"e the savings of the individuals and corporate for productive purposes and thus to

promote the industrial& economic growth of our nation.

'6 Conce0t of Credit Ratin$:

The investment decisions of the investors have been based on factors lie name

recognition of the company, reputation of promoters etc. now, grading from an independent

agency would help the investor in his portfolio management and thus, e!uity grading is

going to play a significant role in investment decision maing.

@ow it is mandatory for nonbaning financial companies to get credit rating

for their debt instruments. The ma=or credit rating agencies functioning in India are;

i. 'redit :ating Information $ervices of India 3td.

ii. 'redit nalysis and :esearch 3td.

iii. Investment Information and 'redit :ating gency.

iv. Duff helps 'redit :ating vt. 3td.

)6 (rocess of .lo%ali7ation:

The process of globali"ation ha paved the way for the entry of innovative financial

products into our country. The government is very een in removing all obstacles that stand

in the way of inflow of foreign capital. India is liely to enter the full convertibility era soon.


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4ence, there is every possibility of introduction of more and more innovative financial

services in our country.

26 (rocess of Li%erali7ation:

The government of India has initiated many steps to reform the financial servicesindustry. The 8overnment has already switched over to free pricing of issues from pricing

issues by the 'ontroller of capital issues. The interest rates have been deregulated. The

private sector has been permitted to participate in baning and mutual funds and the public

sector undertaings are being privati"ed. The financial service industry in India has to play

appositive and dynamic role in the years) India has to play a positive and dynamic role in the

years to come by offering many innovative products to suit to the varied re!uirements of themillions of prospective investors spread throughout the country.

.ro/t, Of Financial Services In India

I6 -erc,ant 4an8in$ Era:


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The period between 19(0 and 19H0 may be called the -merchant baning era.

During this period, financial services such as merchant baning, insurance and leasing

services began to grow. >erchant baners carried out the following functions.

Identifying pro=ects, preparing feasibility reports and developing detailed pro=ect

report.

'onducting mareting, managerial, financial and technical analysis on behalf of their

clients.

ssist in designing an appropriate capital structure.

cting as a bridge between the capital maret and the fundseeing institutions.

Anderwriting.

ssisting enterprises in getting their issues listed on the stoc e2change.


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encourage the savings habit among the people. ith their transparent asset and liability

management, mutual funds offer attractive and stable returns on the investorCs money.

IV6 De0ositor& Era:

In order to integrate Indian financial sector industry with the global financeservice industry, depositories where set up. The depository system was introduced with a

view to promoting the concept of paperless trading through the demateriali"ation of shares

and bonds. The stoclending schemes approved by the central government in the 199G199H

budgets conceived the idea of setting up a separate corporation to deal with the trading of

gilts. The introduction and populari"ation of boobuilding was also another step forward in

the direction of building a strong financial services sector in India.

V6 Le$islative Era:

$everal legislative were introduced in order to allow for broadbased development

in the financial services sector. The #: has been replaced by #>. #arreaching

amendments have been made in the Indian companies act, Income ta2 act, etc to facilitate

safe and orderly trading, and settlement of transactions. landmars development that tooplace in legislative era was the enactment of a separate law to regulate the internet trading of

securities.

VI6 Forei$n Institutional Investors Era 9FIIS6:

The economic reforms measures initiated by the government necessitated greater

free play for various participants. s part of it, divestment guidelines have been issued by the$6I in recent times, whereby foreign institutional investors are permitted to operate in the

Indian capital maret. $uch a step is aimed at enabling foreign investors to plunge into the

Indian capital maret and contribute to its growth and development.

VII6 4an8in$ Services:

The primary operations of bans include;

Jeeping money safewhile also allowing withdrawalswhen needed
http://en.wikipedia.org/wiki/Safehttp://en.wikipedia.org/wiki/Withdrawalhttp://en.wikipedia.org/wiki/Withdrawalhttp://en.wikipedia.org/wiki/Safe


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Issuance of checboosso that bills can be paid and other inds of payments can be

delivered by post

rovidepersonal loans, commercial loans, and mortgage loans*typically loans to

purchase a home, property or business+

Issuance of credit cardsand processing of credit card transactions and billing

Issuance of debit cardsfor use as a substitute for checs

llow financial transactions at branches or by using utomatic Teller >achines

*T>s+

rovide wire transfers of funds and lectronic fund transfersbetween bans

#acilitation of standing orders and direct debits, so payments for bills can be made

automatically

rovide overdraftagreements for the temporary advancement of the 6anKs own

money to meet monthly spending commitments of a customer in their current account.

rovide 'harge card advances of the 6anKs own money for customers wishing tosettle credit advances monthly.

rovide a chec guaranteed by the 6an itself and prepaid by the customer, such as a

cashierKs checor certified chec.

@otaryservice for financial and other documents.
http://en.wikipedia.org/wiki/Checkbookhttp://en.wikipedia.org/wiki/Unsecured_loanhttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Credit_cardshttp://en.wikipedia.org/wiki/Debit_cardshttp://en.wikipedia.org/wiki/Automatic_Teller_Machinehttp://en.wikipedia.org/wiki/Electronic_fund_transferhttp://en.wikipedia.org/wiki/Debithttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Cashier's_checkhttp://en.wikipedia.org/wiki/Certified_checkhttp://en.wikipedia.org/wiki/Notaryhttp://en.wikipedia.org/wiki/Checkbookhttp://en.wikipedia.org/wiki/Unsecured_loanhttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Credit_cardshttp://en.wikipedia.org/wiki/Debit_cardshttp://en.wikipedia.org/wiki/Automatic_Teller_Machinehttp://en.wikipedia.org/wiki/Electronic_fund_transferhttp://en.wikipedia.org/wiki/Debithttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Cashier's_checkhttp://en.wikipedia.org/wiki/Certified_checkhttp://en.wikipedia.org/wiki/Notary


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VIII6 Ot,er t&0es of 4an8 Services:

rivate baning rivate 6ans provide baning services e2clusively to high net

worth individuals. >any financial services firms re!uire a person or family to have a

certain minimum net worth to !ualify for private baning services. rivate 6ans often

provides more personal services, such as wealth management and ta2 planning, than

normal retail bans.

'apital maret ban 6an that underwritedebt and e!uity, assist company deals

*advisory services, underwriting and advisory fees+, and restructure debt into

structured financeproducts.

6an cards L 6an cards include both credit cardsand debit cards. 6an


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'ustody services The safeeeping and processing of the worldKs securities trades

and servicing the associated portfolios. ssets under custody in the world are

appro2imately N100 trillion.

I6 Insurance:

Insurance broerage Insurance broersshop for insurance *generally corporate

property and casualty insurance+ on behalf of customers. :ecently 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 ersonal lines insurance underwritersactually underwrite

insurance for individuals, a service still offered primarily through agents, insurance

broers, and stoc broers. Anderwriters may also offer similar commercial lines of

coverage for businesses. ctivities include insurance and annuities, life insurance,

retirement insurance, health insurance, andproperty & casualty insurance.

:einsurance :einsurance is insurance sold to insurers themselves, to protect them

from catastrophic losses.
http://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Underwriterhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Annuity_(financial_contracts)http://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Health_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Reinsurancehttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Underwriterhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Annuity_(financial_contracts)http://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Health_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Reinsurance


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CAUSES OF FINANCIAL INNOVATION:

#inancial intermediaries have to perform the tas of financial innovation to meet

the dynamically changing needs of the economy. There is a dire necessity for the financial

intermediaries to go for innovation due to following reasons;

16 Lo/ 0rofita%ilit&:

The profitability of the ma=or financial intermediary, namely bans has been very

much affected in recent times. There is a decline in the profitability of traditional baning

products. $o, they have compelled to see out new products which may fetch high returns.

#6


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+6 Custo!er service:

@owadays, the customer e2pectations are very great. They want newer products at

lower cost or at lower credit ris to replace the e2isting ones. To meet this increased

customer sophistication, the financial intermediaries are constantly undertaing research inorder to invent a new product which may suit to the re!uirement of the investing public.

Innovations thus help them in soliciting new business.

26 .lo%al i!0act:

>any of the providers and users of capital have changed their roles all over the

world. #inancial intermediaries have come out of their traditional approach and they are

ready to assume more credit riss. s a conse!uence, many innovations have taen place in

the global financial sector which has its own impact on the domestic sector also.

36 Investor a/areness:

ith a growing awareness amongst the investing public, there has been a distinct

shift from investing the savings in physical assets lie gold, silver, land etc. to financial

assets lie shares, debentures, mutual funds etc. To meet the growing awareness of the

public, innovation has become the need of the hour.


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Financial Services Industr&:

There is a potential source of confusion regarding careers in finance.


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Financial Institutions:

n establishment that focuses on dealing with financial transactions, such

as investments, loans and deposits are financial institution. 'onventionally, financial

institutions are composed of organi"ations such as bans, trust companies, insurance

companies and investment dealers. lmost everyone has deal with a financial institution on

a regular basis. verything from depositing money to taing out loans and e2change

currencies must be done through financial institutions.

In financial economics, a financial institution is an institutionthat provides financial services

for its clients or members. robably the most important financial service provided by

financial institutions is acting as financial intermediaries. >ost financial institutions are

highly regulatedby government.

6roadly speaing, there are three ma=or types of financial institutions;

#irst category of financial institutions include De0osit"ta8in$ institutionsthat accept and

manage deposits and mae loans, includingbans,building societies, credit unions, trust

companies, and mortgage loancompanies

$econd category of financial institutions include Contractual savin$ institutionswhich are

3ife insurance companies, fire and casualty insurance companies, pension funds and

government retirement funds.

Third category of financial institution isInvest!ent inter!ediaries. These institutions

include finance companies, mutual funds and money maretmutual funds.
http://en.wikipedia.org/wiki/Financial_economicshttp://en.wikipedia.org/wiki/Institutionhttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Financial_intermediaryhttp://en.wikipedia.org/wiki/Financial_regulationhttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Building_societyhttp://en.wikipedia.org/wiki/Credit_unionhttp://en.wikipedia.org/wiki/Trust_companyhttp://en.wikipedia.org/wiki/Trust_companyhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://www.blurtit.com/q261783.htmlhttp://en.wikipedia.org/wiki/Financial_economicshttp://en.wikipedia.org/wiki/Institutionhttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Financial_intermediaryhttp://en.wikipedia.org/wiki/Financial_regulationhttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Building_societyhttp://en.wikipedia.org/wiki/Credit_unionhttp://en.wikipedia.org/wiki/Trust_companyhttp://en.wikipedia.org/wiki/Trust_companyhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://www.blurtit.com/q261783.html


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*istor& of Financial Institutions

#or centuries, bans have influenced the economies and politics of the world.

Traditionally, bans originated as places where businesses could secure loans to purchase

inventory, and thereafter collect the funds with interest once the goods were sold. The origin

of the word ban is derived from the Italian word, MbancoM or des. During the :enaissance,

#lorentine baners conducted their transactions above dess covered in a green tablecloth.

It has been speculated the earliest bans were actually religious temples in the

ancient world, where deposits of grain and other goods were made. 'onsidered sacred

places, these temples were well protected from potential thieves. There are also historic

records which point to loan activity e2tended by priests to merchants in ancient 6abylon.

4ammurabiKs 'ode, the oldest, best preserved law code in e2istence was created circa 1G(0

6.'. and includes laws which were used to govern ban operations.

$ince then, baning has undergone a revolution with technology

transforming the way mericans ban. #irst telephone baning, and then T>s, debit and

credit cards, have lead the way to new innovations. Today, online baning and electronic

money are evolving. 6ans strive to serve the greater public in a competitive maret that

ensures a safe and sound baning system. #rom religious temples and Italian dess to coffee

houses and the Industrial :evolution, baning has forever changed the way we live.

Functions of Financial Institutions

#inancial institutions include bans, credit unions, asset management firms,

building societies, and stoc broerages, among others. These institutions are responsible fordistributing financial resources in a planned way to the potential users.


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There are a number of institutions that collect and provide funds for the necessary

sector or individual.


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and the assets used as collateral can be sei"ed if the entrepreneur defaults on the loan.In law and economics, insurance is a form of ris management primarily used to hedge

against the ris of a contingent, uncertain loss. Insurance is defined as the e!uitable

transfer of the ris of a loss, from one entity to another, in e2change for payment.

'6 Invest!ent Institutions =

Investments traded on the stoc e2change and in the other form are largely

held by KinstitutionsK. These may tae the form of pension funds, insurance companies,

collective investment funds *unit trusts or mutual funds+ and hedge funds. Indirect

investment via an investment institution in capital maret instruments is now the most

popular way for a private individual to invest. These institutions enable small investors

to buy a stae in a large, diversified portfolio of assets.

)6 (ension (rovidin$ Institutions =

The ension providing Institution is responsible for providing and financing

employment pensions for local government officeholders and employees in #inland. Its

member organi"ations include all #innish cities, other municipalities and =oint municipal

boards. >unicipal associations and limited liability companies may also apply for

membership.

+6 Ris8 -ana$e!ent Institutions "

:is management institutions do the wor of identification, assessment, and

prioriti"ation of riss followed by coordinated and economical application of resources to

minimi"e, monitor, and control the probability andEor impact of unfortunate events or to

ma2imi"e the reali"ation of opportunities.


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Ot,er T&0es of Financial Institution:

I6 Leasin$:

3easing is a process by which a firm can obtain the use of a certain fi2ed assets

for which it must pay a series of contractual, periodic, ta2 deductible payments. The lesseeis

the receiver of the services or the assets under the leasecontract and the lesser is the owner

of the assets. The relationship between the tenant and the landlord is called a tenancy, and

can be for a fi2ed or an indefinite period of time *called the termof the lease+. The

considerationfor the lease is called rent. gross leaseis when the tenant pays a flat rental

amount and the landlord pays for all property charges regularly incurred by the ownership

from lawnmowers and washing machines to handbags and =ewelry. Ander normal

circumstances, a freeholdowner of property is at liberty to do what they want with their

property, including destroys it or hand over possession of the property to a tenant. 4owever,

if the owner has surrendered possession to another *the tenant+ then any interference with the

!uiet en=oyment of the property by the tenant in lawful possession is unlawful. $imilar

principles apply to real propertyas well as topersonal property, though the terminology

would be different. $imilar principles apply to subleasing, that is the leasing by a tenant in

possession to a subtenant. The right to sublease can be e2pressly prohibited by the main

lease.

T&0es of leasin$:

3eases are classified into different types based on the variation in the elements of

a lease. Oery popularly heard leases are financial and operating lease. part from these, there

are sale and lease bac and direct lease, single investor lease and leveraged lease, and

domestic and international lease. 3ease finance is a very important financing option for an

entrepreneur with no inade!uate money for financing the initial investment re!uired in plant

and machinery. In lease finance, the lesser finances the asset or e!uipment and the lessee use

it in e2change of fi2ed lease rentals.
http://en.wikipedia.org/wiki/Leasehttp://en.wikipedia.org/wiki/Leasehttp://en.wikipedia.org/wiki/Timehttp://en.wikipedia.org/wiki/Considerationhttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/Gross_leasehttp://en.wikipedia.org/wiki/Gross_leasehttp://en.wikipedia.org/wiki/Freehold_(law)http://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Personal_propertyhttp://en.wikipedia.org/wiki/Leasehttp://en.wikipedia.org/wiki/Leasehttp://en.wikipedia.org/wiki/Timehttp://en.wikipedia.org/wiki/Considerationhttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/Gross_leasehttp://en.wikipedia.org/wiki/Freehold_(law)http://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Personal_property


27/54

T&0es of Lease:


28/54

In single investor lease, there are two parties lesser and lessee. The lesser

arranges the money to finance the asset or e!uipment by way of e!uity or debt. The

lender is entitled to recover money from the lesser only and not from the lessee in case of

default by lesser. 3essee is entitled to pay the lease rentals only to the lesser. 3everaged

lease, on the other hand, has three parties L lesser, lessee and the financier or lender.!uity is arranged by the lesser and debt is financed by the lender or financier. 4ere,

there is a direct connection of the lender with the lessee and in case of default by the

lesser/ the lender is also entitled to receive money from lessee. $uch transactions are

generally routed through a trustee.

)6 Do!estic and International Lease:

hen all the parties of the lease agreement reside in the same country, it is

called domestic lease. International lease are of two types L Import 3ease and 'ross

6order 3ease. hen lessor and lessee reside in same country and e!uipment supplier

stays in different country, the lease arrangement is called import lease. hen the lessor

and lessee are residing in two different countries and no matter where the e!uipment

supplier stays, the lease is called cross border lease.

II6 *ire (urc,ase:


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The term hire purchase originated in the A.J., and is similar to what are called

MrenttoownM arrangements in the Anited $tates. Ander a hire purchase contract, the buyer is

leasing the goods and does not obtain ownership until the full amount of the contract is paid.

Features of *ire (urc,ase:

4ire purchase is an option for those buyers who cannot pay the whole amount of

his or her purchase. 4ire purchase refers to an agreement where the buyer of a good can tae

goods on a monthly rental basis and once the rent e!uals original price of a good in addition

to the interest then the buyer may e2ercise his or her option to buy the goods at a

predetermined price or return the goods to the owner. 8iven below are some of the features

of hire purchase

1. The person who has hire the goods will give regular installment or rent to the owner of the

good which will include some portion of principal amount and some portion of interest as

agreed by both the parties.

?. The ownership of good passes only when the person has paid the last installment of the

goods which he or she has hired.

F. Ander hire purchase system the buyer can return the goods to the seller if he or she does

not want to continue with the agreement.

. In case of hire purchase the person who has taen the good on hire cannot transfer the

goods to a third party as he or she does not have the ownership of the goods.

III6 Factorin$ and forfeitin$


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Factorin$

#actoring is the process of purchasing invoices from a business at a certain discount. #actors

provide financing service to small and mediumsi"ed companies who need cash. #or this the

factor charges a fee e!ual to a percentage of the invoices purchased generally )P. #actoring

is a low value short term financing forms. It involves the purchase of invoices, for an amount

less than N10,000 a 901?0 days payment terms. fter shipping your goods or services, the

factor purchases the invoices, and advances cash to you company. #actoring provide li!uid

assets to small business. In fact bans have strict criteria when lending money so it is

difficult for these companies to obtain loans.

Forfeitin$

#orfeiting is the purchase of a series of credit instruments such as drafts, bills of e2change,

other freely negotiable instruments on a nonrecourse basis. @onrecourse means that if the

importer does not pay, the forfeiter cannot recover payment from the e2porter. The e2porter

gets immediate cash on presentation of relevant documents and the importer is the liable for

the cost of the contract and receives credit for -2 years and at certain per cent interest.

The forfeiter deducts interest at an agreed rate for credit period. The debt instruments are

drawn by the e2porter, accepted by the importer, and will bear an avail or unconditional

guarantee, issue by the importerCs ban. The forfeiter taes over responsibility for claiming

the debt from the importer. The forfeiter holds the notes until maturity, or sells them to

another investor. The holder of the notes presents each note to the ban at which they are

payable, as that fall due.

T&0es of Factorin$

8enerally speaing, there are three types of factoring arrangements;


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16 Discount>Advance Factorin$ /it, Notification: #unds are advanced to the client before

the due date of the receivables. The advance of funds fre!uently occurs soon after the

receivables are generated. The advance may be as much as 90P of the face value of the

invoices that are factored. The remaining 10P that is held bac is a cushion against customer

claims or allowances. Interest is charged by the factor in one of two ways. The interest ischarged until the accounts receivables are collected or, until the average maturity date

arrives.

#6 -aturit& Factorin$ /it, Notification:#unds advanced to the client are determined by a

calculation of the average due date of a monthCs sales. gain, with notification the client will

place a stamp on its invoices directing the customer to mae payments to the factor.

'6 Non"Notification Factorin$: factoring arrangement without notification leaves the

client to eep its own booeeping and collection responsibilities. In addition, there is no

notification provided to its customers.

)6 Non"recourse and Full Recourse:ithin this conte2t of factoring, there is also factoring

on a recourse and nonrecourse basis. :eceivables purchased on a nonrecourse basis, it is

the factor that assumes the ris and therefore the loss on those receivables, should the

account debtor become unable to pay the receivables. factoring arrangement on a full

recourse basis, the factor retains the collection function of the receivables it has funded. 6ut

if the clientCs customer fails to pay the invoice during the agreed upon repayment period, the

factor will return the receivable to the client and will e2pect a refund of the advanced funds.

IV6 -utual funds:


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mutual fund is a professionally managed type of collective investmentthat pools money

from many investors to buy stocs,bonds, shortterm money maretinstruments, andEor

other securities.

T&0es of !utual funds:

There are three basic types of registered investment companies defined in the Investment

'ompany ct of 190; o0en"end funds? unit invest!ent trusts 9UITs6? and closed"end

funds E;c,an$e"traded funds*T#s+ are openend funds or unit investment trusts that

trade on an e2change.

O0en"End Funds:ost

openend funds also sell shares to the public every business day/ these shares are also priced

at net asset value. professional investment manager oversees the portfolio, buying and

selling securities as appropriate. The total investment in the fund will vary based on share

purchases, redemptions and fluctuation in maret valuation.

Closed"end funds:'losedend funds generally issue shares to the public only once, whenthey are created through an initial public offering. Their shares are then listed for trading on a

stoc e2change. Investors who no longer wish to invest in the fund cannot sell their shares

bac to the fund *as they can with an openend fund+. Instead, they must sell their shares to

another investor in the maret/ the price they receive may be significantly different from net

asset value. It may be at a MpremiumM to net asset value *meaning that it is higher than net

asset value+ or, more commonly, at a MdiscountM to net asset value *meaning that it is lower

than net asset value+. professional investment manager oversees the portfolio, buying and

selling securities as appropriate.

Unit Invest!ent Trusts:Anit investment trusts or AITs issue shares to the public only once,

when they are created. Investors can redeem shares directly with the fund *as with an open

end fund+ or they may also be able to sell their shares in the maret. Anit investment trusts

do not have a professional investment manager. Their portfolio of securities is established at

the creation of the AIT and does not change. AITs generally have a limited life span,

established at creation.
http://en.wikipedia.org/wiki/Collective_investmenthttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Collective_investmenthttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Money_market


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E;c,an$e"Traded Funds: relatively recent innovation, the e2changetraded fund or T#

is often structured as an openend investment company, though T#s may also be structured

as unit investment trusts, partnerships, investments trust, grantor trusts or bonds *as an

e2changetraded note+. T#s combine characteristics of both closedend funds and openend

funds. 3ie closedend funds, T#s are traded throughout the day on a stoc e2change at aprice determined by the maret. 4owever, as with openend funds, investors normally

receive a price that is close to net asset value. To eep the maret price close to net asset

value, T#s issue and redeem large blocs of their shares with institutional investors.

V6 Credit ratin$:

credit rating estimates the credit worthinessof an individual, corporation, or even a

country. It is an evaluation made by credit bureaus of a borrowerCs overall credit history.Q1R

credit rating is also nown as an evaluation of a potential borrowerKs ability to repay debt,

prepared by a credit bureau at the re!uest of the lender *6lacKs 3aw Dictionary+. 'redit

ratings are calculated from financial history and current assetsand liabilities. Typically, a

credit rating tells a lender or investor the probability of the sub=ect being able to pay bac a

loan. 4owever, in recent years, credit ratings have also been used to ad=ust insurance

premiums, determine employment eligibility, and establish the amount of a utility or leasing

deposit.

poor credit rating indicates a high ris of defaultingon a loan, and thus leads to high

interest rates, or the refusal of a loan by the creditor.

Ne/ Financial (roduct and Services:

(reface
http://en.wikipedia.org/wiki/Credit_worthinesshttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Credit_rating#cite_note-0http://en.wikipedia.org/wiki/Black's_Law_Dictionaryhttp://en.wikipedia.org/wiki/Current_assethttp://en.wikipedia.org/wiki/Liability_(financial_accounting)http://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Credit_worthinesshttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Credit_rating#cite_note-0http://en.wikipedia.org/wiki/Black's_Law_Dictionaryhttp://en.wikipedia.org/wiki/Current_assethttp://en.wikipedia.org/wiki/Liability_(financial_accounting)http://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Interest_rate


34/54

$tructural change in international capital maret has led to the emergence of new products

and innovative techni!ues of operation in capital maret.

#inancial intermediaries including bans have already started e2panding their activities in

the financial services sector by offering a variety of new products.

16 -erc,ant 4an8in$:

ItCs a financial intermediary who helps to transfer capital from those who possess it to those

need it.

>erchant baning includes wide range of activities i.e. management of customers securities,

portfolio management, pro=ect counseling and appraisal, underwriting of shares and

debentures, acting as baner for refund orders, handling interest and dividend warrants etc.

>erchant baner renders a host of services to corporate and promotes industrial growth.

#6 Loan S&ndication:

3oan arranged by a ban called lead manager for a borrower who is usually a large corporate

customer or a government department.

The other bans who are willing to lend can participate in the loan by contributing an

amount suitable to their own lending policies.

$ince single ban canCt provide huge sum of loan, a number of bans =oin together and forma syndicate.

It also enables the members of the syndicate to share the credit ris associated with a

particular loan among themselves.

This is otherwise referred as -'onsortium #inancing.

'6 Venture Ca0ital:


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It refers tomoney provided by investors to startup firms and small businesses with perceived

longterm growth potential.

This is a very important source of funding for startups that do not have access to capital

marets.

It typically entails high ris for the investor, but it has the potential for aboveaverage

returns.

)6 -utual Funds:

This refers to fund raised by a financial service company by pooling the savings of the

public.

It is invested in a diversified portfolio with view to spreading and minimi"ing ris.

The fund provides Investment venue for small investors who canCt participate in the

e!uities of big companies.

It ensures low ris, steady returns, high li!uidity and better capital appreciation in long run.

+6 Factorin$:

It refers to managing the process of sales ledger by financial service company.

ItCs an arrangement under which financial intermediary assumes credit ris in the collection

of boo debts for its clients.

factor provides credit information, collects debts, monitors sales ledgers, and provides

finance against debts.

26 Forfeitin$:


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ItCs a techni!ue by which forfeiters *#inancing gency+ discounts an e2port bill and pay

ready cash to the e2porter who can concentrate on the e2port front without bothering about

the collection of e2port bills.

The e2porter is protected against the ris of nonpayment of debts by the importers.

36 Securiti7ation:

ItCs a process by which a financial company converts its illli!uid, nonnegotiable and high

value financial assets into securities of small value which are made tradable and transferable.

It is best suited for housing finance companies whose loans are always longterm in nature

and their money is loced up for a considerable period.

In such cases, securiti"ation would help the financial institution to raise cash against such

assets by means of issuing securities of small values to the public.

@6

Derivative Securit&:

ItCs a security whose value depends on the value of other basic variables bacing the security.

derivative security is basically used as ris management tool and it is resorted to cover the

riss due to price fluctuations by the investments manager.

It helps to brea the riss into various components such as credit ris, interest rates ris,e2change rates ris and so on.

In India some forms of derivatives are in operation namely forwards in fore2 maret

6 Letter of Credit 9LOC6:


37/54

n innovative funding mechanism for the import of goods and services on deferred payment

terms.

3


38/54


39/54

The evolution of $tate 6an of India can be traced bac to the first decade of the

19th century. $tate 6an of India *$6I+ is the nationKs largest and oldest ban. $tate 6an of

India is an Indiabased ban. s of >arch F1, ?01?, the 6an had a networ of ?0,19F

branches, including ),09( branches of its five associate bans. In addition to baning, the

'ompany, through its various subsidiaries, provides a range of financial services, whichinclude life insurance, merchant baning, mutual funds, credit card, factoring, security

trading, pension fund management, custodial services, general insurance *nonlife insurance+

and primary dealership in the money maret. Its segments include Treasury, which includes

investment portfolio and trading in foreign e2change contracts and derivative contracts/

'orporateEholesale 6aning, >id 'orporate ccounts 8roup and $tressed ssets

>anagement 8roup/ :etail 6aning, which includes personal baning activities, including

lending activities to corporate customers, and


40/54

*$6I+ is an association that promotes the growth and development of students businesses

through, educational and the e2change of !uality business referrals. The primary purpose of

$6I is to provide education and an opportunity to build trusting relationships through

networing and to enable students to pass !uality business referrals to each other.

The hilosophy of the organi"ation is to help business owners to improve their nowledge

through education, research, =oint mareting and networing. This process is enhanced by

attendance at seminars, participation in research pro=ects, trade shows and networing

events.

The mission statement of $6I aims at;

To retain the bans position as the premier Indian financial services.

8roup with world class standards and significant global business commitment to

e2cellence in customer, shareholder and employee satisfaction and to play a leading role

in the e2panding and diversifying financial services sector while continuing emphasis on

its development baning role.

Vision State!ent

Mcorporate visionM concretely describes how a company sees itself in the future, and

therefore must be realistic and attainable. In the current age of rapid change, a corporate

vision is of a more mediumterm nature.

The vision statement of $6I aims at

remier Indian financial services group with global perspective, world class standards of

the efficiency and professionalism and core institutional values.

:etain its position in the country as a pioneer in developing countries.

>a2imi"e shareholder value through high sustained earnings per share.

n institution with a culture of mutual care and commitment a satisfying and e2citing.

or environment and continuous learning opportunity.


41/54

DIFFERENT FINANCIAL SERVICES OF S4I

Through the #inancial $ervices 6usiness, the $6I 8roup provides essential innovative and

convenient products and services through the Internet, in order to address its customersK

MfinanceM related needs.

16 S4I LEASE

$6I 3ease develops leaserelated products and services mainly in the IT sector. 3easing can

be an advantage to a company in terms of raising funds, avoiding obsolescence ris of I'T

systems, and lowering the cost of operations.

ith the $6I 8roup%s Internet e2pertise and management resources, $6I 3ease is supporting

the growth of small and mediumsi"ed venture enterprises that are driving the I'T and the

economy forward.

$6I 3ease is also striving to develop the car lease maret, which is growing steadily year by

year. t the


42/54

#6 S4I INSURANCE

The spread of the Internet, deregulation of the financial industry, and liberali"ation are

causing great changes to the nonlife insurance sector in the form of fierce price competition

and new products and services. This period of disruption is impacting e2isting insurance

companies and creating business opportunities for new entrants.

ith this recognition of the current situation, $6I Insurance 'o., 3td. was established by $6I

4oldings and ioi Insurance 'o., 3td.


43/54

'herishing our point of view that consumers and businesses are both our customers, we wor

hard to evolve into an innovative mareting company that produces businesstoconsumer

interaction fruitful for both of the two and to thereby create relationships of trust and the

sense of anticipation between them.

)6 S4I -ERC*ANT 4ANerchant 6aning 8roup is strongly positioned to offer perfect financial solutions to

your business. e speciali"e in the arrangement of various forms of #oreign 'urrency

'redits for 'orporate.

e provide the resources, convenience and services to meet your needs by arranging #oreign

'urrency credits through;

'ommercial loans

$yndicated loans

3ines of 'redit from #oreign 6ans and #inancial Institutions

#'@: loans

3oans from 2port 'redit gencies

#inancing of Imports.

$6I is internationally the most referred 6an by 2port 'redit gencies for 8uarantees in

case of the Indian 'lients or ro=ects.

$6I being an Indian entity has no India e2posure ceiling. Their rimary focus is


44/54

3oans baced by 2port 'redit gencies

#oreign currency loans under the #'@: *6+ scheme

Import #inance for Indian corporate

+6 S4I -UTUALS FUND

S4Is >utual #und is IndiaKs largest ban sponsored mutual fund with an investor base

of over F million. $6I >utual #und is a =oint venture between the $tate 6an of India,

IndiaKs largest baning enterprise and $ociety 8eneral sset >anagement of #rance, one of

the worldKs leading fund management companies.

$ince its inception $6I >utual #und has launched thirtytwo schemes and successfully

redeemed fifteen of them. $6I >utual #und schemes have consistently outperformed

benchmar indices. $6I >utual is the first bansponsored fund to launch an offshore fund

:esurgent India utual #und manages over :s. 1G000 crores of assets. The fund has a

networ of 100 collection branches, ?( investor service centres, ?H investor service dess

and 0 district organi"ers.

26 S4I VENTURE CA(ITAL FINANCIN.:

$6I Oenture, the newly floated subsidiary of the $tate 6an of India, is liely to pic up

stae in a host of startups and private e!uity funds in the country. $6I Oenture is a wholly

owned subsidiary of $6I 'apital >arets, a subsidiary of $6I. Top sources in $6I said the

ban was toying with the idea of a twotier venture capital funding. M$6I Oenture will pump

money into companies through a second venture capital fund. This is because $6I does not

want to directly deal with private e!uity funds. If something goes wrong, the ban would be

trouble,M said a source.


45/54

ccording to the source, the corpus of the new venture capital fund is being wored out.

4owever, it is learnt that the corpus could be close to :s 1,000 crore *:s 10 billion+.

'urrently, there are ??) venture and private e!uity funds in the country. I'I'I Oenture is

the largest private e!uitycumventure capital fund with a corpus of more than :s 1,000

crore.

36 CORRES(ONDENT 4AN


46/54

2port of engineering goods on deferred payment terms

2ecution of turney pro=ects abroad

2ecution of overseas civil construction contracts abroad

2ports of services are the contracts for e2port of consultancy, technical and other

services.

ro=ect e2port contracts are generally of high value and e2porters undertaing them are

re!uired to offer competitive terms to be able to secure orders from foreign buyers in the face

of stiff international competition.

Their vast networ of branches spread all over the country which are authori"ed to handle

trade related transactions, substantial presence overseas with branchesEoffices in all ma=or

commercial centers of the world covering all time "ones and our strong networ of

correspondent relationship with top raning bans in several countries adds to our

competitive strengths to facilitate and meet various re!uirements of pro=ect e2porters. >ore

over they also en=oy the comprehensive credentials in International baning community.


47/54

FINANCIAL SERVICES (ROVIDED TO COR(ORATES

16 or8in$ Ca0ital Finance: $6I offers woring capital finance to meet the entire range

of shortterm fund re!uirements that arise within a corporate daytoday operational

cycle. The $6I woring capital loans can help your company in financing inventories,

managing internal cash flows, supporting supply chains, funding production and

mareting operations, providing cash support to business e2pansion and carrying current

assets. $6ICs woring finance products comprise a spectrum of funded and nonfunded

facilities ranging from cash credit to structured loans, to meet the different demands from

all segments of industry, trade and the services sector.

#6 Cor0orate Ter! Loan: The $6I corporate term loans can support your company in

funding ongoing business e2pansion, repaying high cost debt, technology up gradation,

:&D e2penditure, leveraging specific cash streams that accrue into your company,

implementing early retirement schemes and supplementing woring capital. The banCs

corporate term loans are generally available for tenors from three to five years,

synchroni"ed with your specific needs.$6I corporate term loans can have a bullet or

periodic repayment schedule, as re!uired by the client. The repayment mode may be

lined to the cash accruals of the company.

'6 Structured Finance: $6I structured finance involves assembling uni!ue credit

configurations to meet the comple2 fund re!uirements of large industrial and

infrastructure pro=ects. $tructured finance can be a combination of funded and non


48/54

funded facilities as well as other credit enhancement tools, lease contracts for instance, to

fit the multilayer financial re!uirements of large and longgestation pro=ects.

)6 Dealer Financin$: $6I e2tends financial support to the corporate distribution networs,

by providing both woring capital finance and term loans to select dealers of identified

companies. This gives dealers to leverage their business relationship with ma=or corporate to

avail low cost credit. lso, this type of financial solutions allows the corporate negotiate a

better price with dealers. Dealer financing may be e2tended in the bill discounting form or

simply as cash credit.

+6C,annel Financin$:'hannel financing is an innovative finance mechanism by which theban meets the various fund necessities along your supply chain at the supplierCs end itself.

'hannel finance ensures the immediate reali"ation of sales proceeds for the $6I clientCs

supplier, maing it practically a cash sale. $6I has the worldCs largest baning networ of

over 9,000 branches and this enables it to deliver the financial solution at your suppliersC

doorsteps, across the span of the country.

26Eui0!ent Leasin$ :The $6ICs has deployed a dedicated $trategic 6usiness Anit for lease

financing that is richly e2perienced in arranging lease contracts for procuring e2pensive

e!uipment for your pro=ect or plant. t $6I, we arrange lease agreements as stand alone

contracts or as part of a structured pacage.

36 Loan S&ndication: The $6I leverages its vast networ of relationships to arrange

syndicated credit products for corporate clients and industrial pro=ects.

ith its rich e2perience and strong reputation, $6ICs syndication des can assemble large

loan pacages involving a ring of reputed financial entities, domestic and international, that

match the large credit re!uirements of infrastructure pro=ects.


49/54

SBI Personal Banking Services:

The $6I ersonal 6aning service is controlled and accessible from the entire $6I branches

available throughout the country. In fact, it will be unfair to mention only about the branches.

The networ can be accessible through online baning services available from the $6I.

The ersonal 6aning services that are offered by the $tate 6an of India offer certain list of

services, and facility related schemes. $ome of the most popular ones are availing of

personal loans with lowest interest rates, online money transferring facility, opening up of

ta2 saving policies, fi2ed deposit schemes with higher and effective interest rates, etc. The

genuineness in service providing facility have made the $tate 6an of India a name to be

reconed and respected by millions of users and customers. The services are !uic, fast and

genuine. The $tate 6an of India personal baning services and schemes are created eeping

in mind the needs and demands of each and every individual customers. The services are

available twenty four hours online baning techni!ue. >oreover, the toll free customer care

number can be called anytime to clear the doubts and misconceptions regarding any service.

The $6I T> service is available throughout the country with the inclusion of wide range of

outlets opened twenty four hours and seven days a wee.

hile speaing of $6I personal baning services, let us have a loo at the detailed service

list offered by them.

$6I Term Deposits

$6I 3oan for ensioners

$6I :ecurring Deposits

3oan against >ortgage


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$6I 4ousing 3oan

3oan against $hares & Debentures

$6I 'ar 3oan

:entlus $cheme

$6I ducational 3oan

>edilus $cheme

$6I ersonal 3oan

:ates of Interest

S4I AT- Service :

There is a fre!uent availability of $6I T> counters all over the country. 5ou will find an

T> with every branch of the ban that is available in every city, town or village in the

country. There are free standing T>s available too which are stationed even in remote areasof the country to enable easy and anytime access for the people and travelers of the region.

There is also a ? hour helpline service of $6I T> card that is available. ith this number

you can directly access the customer care centers of your city town, village or any other

region. ll information about the use of cards and any particular difficulty that you may be

facing will be available here. 5ou can also en!uire for the location of T> counters in your

region as well as the information about newer ones that have come up. 5ou can also use thisnumber to locate the nearest T> counter from your home.

hen you log in to the official website lin of $6I you will find the T> locator on its

4ome age. This is a complete menu of all the T> counters that are available along with

the address and location details. There are appro2imately G?00 T> counters and this is a

number that is increased every year. There are T> counters in every neighborhood of cities

lie @ew Delhi, Jolata, 'hennai, >umbai, 6angalore, une, 8urgaon, @oida and @avi

>umbai.


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S4I NRI Accounts:

$6I @:I accounts include @: :upee ccounts, Asual $avings ccounts, 'urrent ccount,

#i2ed Deposits *in foreign currencies lie ound, $terling, A$N, uro, 'anadian Dollar &

ustralian Dollar+, Term Deposits *interest compounded !uarterly and paid out !uarterly+,

@:< ccounts, and #oreign 'urrency @:I *#'@:+ ccounts. 5ou can download $6I @:I

account opening form from the $6I website.

S4I NRI Loans:

$6I @:I loans include car loans and home loans. @:I car loans are offered to a borrower

who is an Indian resident with a relative @:I as the sponsor and guarantor. $6I @:I loan for

vehicles are available for purchase of passenger cars, >AOs or $AOs. $tate 6an of India

@:I home loans is available for purchase of a residential property, construction or renovation

of an e2isting property and loans for purchase of furnishings and other consumer durables.

loan of minimum :s. F lahs to a ma2imum of :s. ?0 lahs are available in a hybrid suite of

products including $6I >argin home loans, fle2i home loans, realty home loans and freedom

home loans.

S4I NRI Services :

6esides the usual savings and finance products by $6I, @:I baning services also include

investment and ta2 benefit schemes customi"ed for the @:Is. $pecial baning facilities arealso provided for the returning Indians. #reedom to maintain the assets ac!uired or inherited

abroad, maintaining and operating foreign currency accounts with foreign bans, balance

transfers from @:IE #'@: accounts to :#' accounts *in A$ N+.


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S4I ONLINE Services:

The $tate 6an of India is one of the largest bans of India that has the largest networs of

branches within the country as well as in overseas destinations. ith a networ of as many

as 11000 retail and commercial branches it is raned as one of the most popular financial

organi"ations of the country. It has successfully carved out a niche for itself both within

the urban and the rural sector. There is an array of options in financial investments and

baning products that has made public savings more secure and well managed.

The $6I 8roup is also a consistent partner when it comes to corporate baning and

providing financial services to the business and industrial sector of India. This is one of the

leading nationali"ed bans of the country that was also the foremost in bracing newer

technology within the folds of its operations.


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technological innovations that have been designed especially for $6I


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as well as a Demat account. The advantages you en=oy if you opt for the Demat account

are very much similar to that of any other savings account. 5ou are entitled to a $6I

debit card. 5ou can thus access money from any of the ))00 T> counter operated by

$6I all over the country. Today under the :6I guidelines, you can even withdraw money

from T>s of other bans using your $6I debit card. 5ou can also shop using your $6I

debit card. It can be also used in restaurants. It performs all the functions of a credit card

other than the credit limit. 4ere the limit is the amount of money you have in your

savings account.

$6I Demat service enables you to access various online reports, which tell you about the

maret response of the various mutual funds that have been launched. 5ou can also get acomplete detailed report of the gainers or losers of the various indices.

Date post:	03-Jun-2018
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