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Overview Of The Financial Services Sector In India

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The Indian financial services sector mainly comprises of Foreign Direct Investment(FDI), Insurance, Banking, Investment banks, Private Equity, Capital markets, Mutual funds and other smaller financial entities. It is also referred to as the measure for the economy. After globalization in 1991, the FDI in India has expanded a great deal, which has helped the improvement of financial sector. Indian Financial Industry is expected to grow at a very high rate in times to come. With the potential to become the fifth largest banking industry in the world by 2020 and third largest by 2025 according to KPMG-CII report. The asset management business in India is among the quickest growing within the world.

The ongoing activities of the legislature have prompted an uncommon increment in the reception of web and mobile banking among the regular citizen. On account of the profound infiltration of the advanced mobile phones. The financial transaction chain is getting gradually digitized and the area must be sufficiently vigorous to deal with situations in terms of security and safety. The rise of disruptive innovation, for example, the block chain must be mulled over for powerful working of the administrations. India is among the most preferred investment destination, with a vert vast market, it provides great opportunities for products like portfolio and wealth management services, mutual funds and insurance, among others. In addition, with a noteworthy portion of savings going into physical resources, for example, gold and real estates, the Indian government is concentrating on huge arrangement starts to draw in savers towards financial markets through incentives and tax benefits.

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A Few Indian Financial Services Companies:

  • ICICI Group: ICICI Group has solutions like InstaInsure, InstaBanking, Online Trading, ICICI Bank imobile etc.
  • Bajaj Capital Limited: One of the major financial services companies in India, Bajaj Capital offers best financial planning services and investment advise.
  • LIC Finance Limited: It is the biggest Housing Finance Company in India
  • L & T Finance Limited: Established in 1994 by the Larsen and Turbo group. It has become asignificant name in financial sector.
  • Birla Global Finance Limited: A noteworthy player in the equity and debt market in India Financial Institutions can be divided into 4 broad categories:
    • Investment
    • Fee Based
    • Depository
    • Risk Investment

This includes the investment trust companies (ITCs), hedge funds etc. Today the Indian monetary structure is characteristically solid, functionally diverse, globally competitive and effective. Amid the most recent fifteen years, the Indian budgetary framework has been incrementally deregulated and presented to global money related markets alongside the presentation of new instruments and items like hedge funds, derivatives and so forth. This requires money related expertise. NSE and BSE are the major stock markets for investments. JP Morgan, Kotak Mahindra Bank Limited, Goldman Sachs, Yes Bank Limited are the among the top investment banks in India.

Fee Based

This includes commission based credit rating companies, broking, cash management services etc. With the fast pace growth in the financial sector, small investors have also started investing in financial instrument like equity, options etc. for which they require financial expertise and permit to trade in the stock market which they get with the help of the various financial service companies. They provide them financial expertise on what to buy and on what to place their orders in the stock market, for this they charge fees to their customers.

Depository

A depository is a facility, for example, a building, office, or warehouse in which something is kept for storage or protection. It can allude to an association, bank, or organization that holds securities and aids the exchanging of securities. This includes banks both private and public, credit societies, NBFI’s etc. Banks being one of the most important type of the financial institutions helps the customers to deposit the money in return of some interest on the amount kept. They also provide loans to their customers in case the requires financial assistance.

Reserve Bank of India (RBI) is the major bank of India which controls all the other banks and the monetary situations in the country.

Risk

This mainly includes the insurance companies. Pension funds also come under this category. There are a total of 24 life insurance companies in India as of now of which LIC holds nearly two-thirds of the business and rest by the remaining companies. Insurance sector one of the most attractive in terms of tax-benefits. There is a huge scope of investment in insurance sector in India. With a very high number of individuals from middle-class families, these companies are targeting this segment of the market. They come up with the products so that these individual can afford them like health, life, disability, and pensions plan product. A large number of private and public players are now competing in both life and non-life segment. At present, FDI policy allows 49% of FDI in insurance sector.

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