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Unit 1 – An Overview of

Financial Service SectorMANAGEMENT OF FINANCIAL SERVICES

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Introdction

Financial Service Sector !

Financial In"tittion"# Inter$ediarie" – %orrow" & lend to ot'er" for(ro)t

Financial In"tr$ent"

Financial Mar*et" – +'ere )nancial in"tr$ent" are "old

Financial S,"te$ & It" Role In Econo$ic -evelo($ent

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Introdction

C'an.in. Role of Indian %an*in. Sector

S'ift fro$ traditional role of +C lendin.

S(eciali/ed Financial In"titte"

New Avene" for Cor(orate Finance

FII" inve"tin. In India

Indian Co$(anie" Inve"tin. A0road

Intere"t Rate & Forei.n Ec'an.e -ere.lation

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Cla""i)cation of Financial Service InIndia

Unor.ani/ed #Unre.lated and Or.ani/ed # Re.lated

Fnd %a"ed & Non Fnd %a"ed

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Strctre of Indian Financial S,"te$

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Introdction – Financial Service"

C'aracteri"tic" of Financial Service"

Intan.i0ilit,

In"e(ara0ilit, – Service 2rovider & Service

2eri"'a0ilit, – Good" v"3 Service"

Varia0ilit, – S%I v"3 4-FC5 1"t E$(lo,ee v"3 6nd E$(lo,ee

Scce"" Factor of Financial Service"

Innovation E.3 7ota* Ma'indra Savin. Accont

Service A.$entation

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 T,(e" of Financial Service"

Lea"in.

%ill -i"contin.

Factorin.

Secriti/ation

Ventre Ca(ital

C

M

Merch

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Cla""i)cation of Ri"* – Macro Ri"*

Li8idit, Ri"*

Fndin. Ri"*

A""et Li8idit, Ri"*

Intere"t Rate Ri"*

Crrenc, Ri"*

E8it, Ri"*

Co$$odit, Ri"*

Re(tation Ri"*

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Cla""i)cation of Ri"* – Micro Ri"*

-efalt Ri"*

Le.al Ri"*

O(erational Ri"*

Model Ri"*

2olitical Ri"*

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New Financial 2rodct" & Service"

Ri"*" & -erivative"

Mar*et Ri"*

-erivative 2rodct" – Forward Contract5 Ftre5 O(tion"5 etc3

ETF – Gold ETF

Gold ETF In India

Unit" 4eld In -e$at For$ Mar*et E9cienc,

-e$ateriali/ation of Secritie" : C-SL ;Central -e(o"itor, Service ;India< Li$NS-L ;National Secritie" -e(o"itor, Li$ited<

Fa"ter Settle$ent 2roce"" ;Clearin. 4o"e<

Cro"" %order Ta*e Over" : Fndin.

Indian Stoc* Mar*et" in tande$ wit' .lo0al $ar*et"

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New Financial 2rodct" & Service"

Evoltion of Re.lator, At'oritie"

2rovide Level 2la,in. )eld

R%I

SE%I

In"rance 2rodct"

Life – Ter$ 2lan & Endow$ent 2olicie"

Non Life – Mediclai$5 Fire5 T'eft5 Flood5 Eart'8a*e5 2ro(ert,5 Ve'icle5 etc3

F-I in In"rance Sector ;6=> to ?@><

IR-A

Cro"" %order Ta*eover -eal" & Financial Re"trctrin.

Service" of Merc'ant %an*er"

Valer"5 Law,er" etc3

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Role of Re.lator, At'oritie"

-o$ain of R%I & SE%I

R%I : %an*"5 FI"5 Fnd %a"ed N%FC"5 Mone, Mar*et5 Forei.n Ec'an.e Mar*e%ond"5 etc3

SE%I – Ca(ita Mar*et5 -erivative Mar*et5 Merc'ant %an*"5 Credit Ratin.5 Und"toc* 0ro*er"5 etc3

F-I – Inve"t$ent Nor$" 0, R%I & Re.i"tered Under SE%I

SAT ;Secritie" A((ellate Tri0nal< : A((ellate Tri0nal a.ain"t SE%I Order"

R%I re.lator of all %an*"

R%I re"(on"i0le for for$latin. contr," $onetar, (olic,

Control InBation & Li8idit, in t'e contr,

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Role of Re.lator, At'oritie"

2rotectin. Intere"t of S$all -e(o"itor"

CRR ;?>< & SLR ;66><

Re(o ;>< & Rever"e Re(o ;D><

Lender of La"t Re"ort

Ca(ital Ade8ac, Nor$ – Mini$$ Ca(ital to A0"or0 %"ine"" Ri"* ;A" a >of a""et"5 @> to 1>< ;'tt(##r0i3or.3in#"cri(t"#%SViewMa"Circlardetail"3a"(!IdH1&ModeHJ <

-e(o"it" U(to R"3 1 Lac" to 0e en"red 0, -e(o"it In"rance Cor(oration ofIndia

http://rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?Id=8133&Mode=0http://rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?Id=8133&Mode=0

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Role of Re.lator, At'oritie"

Control of Credit

2riorit, Sector Lendin. ;?J><

 Tondon Co$$ittee Nor$" ;2roce"" of +or*in. Ca(ital Loan<

Inventor, Nor$" – Lar.e Co$(anie" w'ere "ed a" 0enc'$ar*

Lendin. Nor$" – CACL – 13 St,le of Credit – -e$and Loan & CC ;%a"ed on Reali"tic 2roKection"<

arterl, Infor$ation S,"te$

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Le.al Enact$ent" in Financial Service Secto

Co$(anie" Act 1@=

Control Aair" of Co$(anie"

Inve"ti.ate Aair" of t'e co$(an,

 Tran"(arenc, of aair" of co$(anie" – E.3 MCA

%an*er" %oo*" of Evidence Act 1@1

 T'e cort i" e$(owered to order in"(ection of 0oo*" of 0an* & ta*e co(ie" of it

Secritie" Contract Re.lation Act ;SCRA< 1@=

 Govern" O(eration of Stoc* Ec'an.e & Tradin. of Secritie"

Finance Act

Indian %d.et

MaKor Area" : -irect & Indirect Tae"

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Le.al Enact$ent" in Financial Service Se

Re"erve %an* of India Act 1@?

E$(ower" t'e R%I to re.late t'e %an*in. Sector in India

Sc'edled Co$$ercial %an* : All 0an*" are li"ted in 6 nd Sc'edle of R%I Act

All t'e (ower" of R%I vi/3 $onetar, (olic,5 credit (olic, etc3 are t'ro.' R%I Ac

In"rance Re.lator, & -evelo($ent At'orit, ;IR-A< Act 1@@@

Control" In"rance Sector

All in"rance co$(anie" to 0e re.i"tered wit' IR-A

-e(o"it In"rance Cor(oration Act 1@=1

In"rance cover to 0an* de(o"it"

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Non %an*in. Financial Co$(anie"#In"tittion" ;N%FC" # N%FI"<

Advanta.e"

-iver"i)cation of )nancial "ector

ic* -eci"ion Ma*in.

C"to$er Orientation

Nic'e & C"to$i"ed Service" Caterin. Need" of S$all & Unor.ani/ed %orrower"

Relativel, 4i.'er Rate of Retrn on -e(o"it"

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Cate.orie" of N%FC"

E8i($ent Lea"in. Co$(an,

4ire 2rc'a"e Co$(an,

4o"in. Finance Co$(an,

Mtal %ene)t Finance Co$(an,

Mi"cellaneo" Non %an*in. Co$(an,

Re"idar, Non %an*in. Co$(an,