FS Presentation

Financial Services
• Financial service is part of financial system that provides different types

of finance through various credit instruments, financial products and
services.
•In financial instruments, we come across cheques, bills, promissory
notes, debt instruments, letter of credit, etc.
•In financial products, we come across different types of mutual funds.
Extending various types of investment opportunities. In addition, there
are also products such as credit cards, debit cards, etc.
•In services we have leasing, factoring, hire purchase finance etc.,
through which various types of assets can be acquired either for
ownership or on lease.
•There are different types of leases as well as factoring too.
• Financial services enable the user to obtain any asset on credit,
according to his convenience and at a reasonable interest rate.
Importance of Financial services
• It is the presence of financial services that enables a country to improve its

economic condition whereby there is more production in all the sectors leading
to economic growth .
• The benefit of economic growth is reflected on the people in the form of

economic prosperity wherein the individual enjoys higher standard of living.
• It is here the financial services enable an individual to acquire or obtain various

consumer products through hire purchase
• The presence of these financial institutions promote investment, production,

saving etc.
Importance of Financial Services
• Vibrant Capital Market.

• Expands activities of financial markets.
• Benefits of Government.
• Economic Development.
• Economic Growth.
• Ensures Greater Yield.
• Maximizes Returns.
• Minimizes Risks.
• Promotes Savings.
• Promotes Investments.
• Balanced Regional Development.
• Promotion of Domestic & Foreign Trade
CHARACTERISTICS OR NATURE OF FINANCIAL SERVICES
• 1. Intangibility: Financial services are intangible. Therefore, they cannot

be standardized or reproduced in the same form.
• 2. Inseparability: Both production and supply of financial services have to
be performed simultaneously.
• 3. Perishability: Like other services, financial services also require a match
between demand and supply. Services cannot be stored. They have to be
supplied when customers need them.
• 4. Variability : Financial service organizations have to offer a wide range
of products and services .
• 5. Dominance of human element: Financial services are labor intensive .
• 6. Information based: Financial service industry is an information based
industry. It involves creation, dissemination and use of information.
Information is an essential component in the production of financial
services.
• It refers to services that are used to acquire assets or funds for a customer.
• Following are some of the examples of financial services:
• Leasing,
• Credit card services,
• Factoring,
• Portfolio management,
• Financial consultancy services,
• Underwriting,
• Discounting and rediscounting of bills,
• Depository services,
• Housing finance,
• Hire purchases,
• Mutual Fund management.
Depository services
• A Depository is an organization, which holds
investors' securities in electronic form.
• The depository also provides services related
to various transactions in such securities. A
depository interfaces with its investors
through Depository Participants.
Leasing
• A “lease” is defined as a contract between a
lessor and a lessee for the hire of a specific
asset for a specific period on payment of
specified rentals.
• The leasing company is the legal owner of the
goods, but ownership is effectively conveyed
to the lessee, who incurs all benefits, costs,
and risks associated with ownership of the
assets.
Credit card services
Credit Card Services are any products, credit
services and/or financial accommodations relating
to credit cards and/or other cash management
services.
The services includes reviewing applications,
mailing and activating credit cards, issuing
statements, and processing payments. A card
issuer can also offer rewards and benefits, as well as
report your payment history and other information
to the credit bureaus.
Factoring
•Factoring is a type of financing in which one
company buys another company’s accounts
receivable, i.e., its invoices (money it is owed).
•When a seller sends its customer an invoice, the
factoring company pays the seller between 70%
and 85% of the invoice’s value immediately.
•The seller gets the balance when the customer
has paid the invoice. The customer pays the
invoice factoring company.
Portfolio management
• Portfolio management involves building and
overseeing a selection of investments that will
meet the long-term financial goals and risk
tolerance of an investor.
• The key to effective portfolio management is the
long-term mix of assets. Generally, that means
stocks, bonds, and "cash" such as certificates of
deposit. There are others, often referred to as
alternative investments, such as real estate,
commodities, and derivatives.
Financial consultancy services.
• Financial consulting is a service provided by
Certified Financial Consultants to large
corporations, government agencies and
individual clients.
• The role of a financial consultant is to provide
an independent, expert opinion on a proposed
business plan or decision.
Underwriting
• In the financial primary market, securities underwriting is
the process by which investment banks raise investment
capital from buyers on behalf of corporations and
governments by issuing securities (such as stocks or bonds).
• As an underwriter, the investment bank guarantees a price
for these securities, facilitates the issuance of the
securities, and then sells them to the public (or retains
them for their own proprietary account).
• This process is often seen in initial public offerings (IPOs),
where investment banks help a corporation raise funds
from the public.
Discounting and rediscounting of bills
• Under this type of lending, Bank takes the bill drawn by
borrower on his (borrower's) customer and pay him
immediately deducting some amount as
discount/commission. The Bank then presents the Bill to the
borrower's customer on the due date of the Bill and collects
the total amount.
• Rediscounting of commercial bills is a system wherein a
financial institution rediscounts unmatured discounted
commercial bills with any other financial institution.
Housing finance
•Housing Finance” shall mean financing, for purchase/
construction/ reconstruction/ renovation/ repairs of
residential dwelling units, which includes: Loans to
individuals or group of individuals including co-operative
societies for construction/ purchase of new dwelling units
•NHB regulates the housing finance system of the
country, extends refinance to different primary lenders
and lends directly in respect of projects undertaken by
public housing agencies for housing construction and
development of housing related infrastructure.

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Financial Services

• Financial service is part of financial system that provides different types

• It is the presence of financial services that enables a country to improve its

• The benefit of economic growth is reflected on the people in the form of

• It is here the financial services enable an individual to acquire or obtain various

• The presence of these financial institutions promote investment, production,

• Vibrant Capital Market.

• 1. Intangibility: Financial services are intangible. Therefore, they cannot

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