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Financial Services in India- Brief Overview
Indian financial services industry has been through the toughest of the times and yet stands
strong and robust among the world economies. Having a deep impact of the far-reaching changes
in the Indian economy since liberalization, the new face of this industry is evolving in a strong,
transparent and resilient system.
Over the last few years, financial markets have witnessed a significant broadening and deepening
of service baskets with the introduction of several new instruments and products in banking,
insurance and capital markets space. The sector was opened up to new private players including
foreign companies who embraced international best practices and modern technology to offer a
more sophisticated range of financial services to corporate, retail and institutional customers.
Financial sector regulators too have been visionaries to ensure that new regulations and
guidelines are in tandem with global norms. These developments have given a robust boost to the
development and modernisation of the financial services sector in India.
Insurance Sector
Indian life insurance sector collected new business premiums worth Rs 11,742.7 crore
(US$ 1.92 billion) for April-May 2013, according to data from the Insurance Regulatory
and Development Authority (IRDA). Life insurers collected Rs 1, 07, 010.7 crore (US$
17.47 billion) worth of new premiums for the financial year ended March 31, 2013.
Meanwhile, the general insurance industry grew by 19.6 per cent in April-May period of
FY14, wherein the non-life insurers collected premium worth Rs 13,552.46 crore (US$
2.21 billion).
Banking Services
According to the Reserve Bank of India (RBI)’s ‘Quarterly Statistics on Deposits and
Credit of Scheduled Commercial Banks’, March 2013, Nationalised Banks accounted for
52.4 per cent of the aggregate deposits, while the State Bank of India (SBI) and its
Associates accounted for 22 per cent. The share of New Private Sector Banks, Old
Private Sector Banks, Foreign Banks, and Regional Rural Banks in aggregate deposits
was 13.6 per cent, 5.1 per cent, 4 per cent and 2.9 per cent, respectively.
Nationalised Banks accounted for the highest share of 51 per cent in gross bank credit
followed by State Bank of India and its Associates (22.7 per cent) and New Private Sector
Banks (14 per cent). Foreign Banks, Old Private Sector Banks and Regional Rural Banks
had shares of around 4.9 per cent, 5 per cent and 2.5 per cent, respectively.
Banks’ credit (loan) growth increased to 18 per cent for the fortnight ended September 6,
2013, while deposits grew by 13.37 per cent showed the data by RBI.
India's foreign exchange reserves increased to US$ 277.73 billion as of October 4, 2013.

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Mutual Funds Industry in India
India’s asset management companies (AMCs) have witnessed growth of 0.7 per cent in August
2013 wherein their average assets under management (AUM) stood at Rs 7.66 lakh crore (US$
125.10 billion).
Private Equity, Mergers & Acquisitions in India
Private equity (PE) and venture capital (VC) firms remained bullish about India’s
consumer goods and services sector. PE and VC investments increased by more than 46
per cent in the first half of FY14, with consumer companies in retail, e-commerce,
consumer packaged goods and quick service restaurants raising US$ 609.39 million
through 51 deals.
Meanwhile, Indian merger and acquisition (M&A) space witnessed substantial levels of
deal activity in the first nine months of 2013. There happened 377 deals amounting to
US$ 23.9 billion, according to a survey by tax advisory firm Grant Thornton.
Foreign Institutional Investors (FIIs) in India
Investments in Indian markets (equity, debt and derivatives) through participatory notes
(P-Notes) increased to US$ 23.74 billion by the end of July 2013, according to the data
released by Securities and Exchange Board of India (SEBI).
P-Notes allow high net-worth individuals (HNI), hedge funds and other foreign
institutions to invest in Indian markets through registered FIIs.
The FIIs investments through P-Notes registered a growth of 11.45 per cent in July 2013
as compared to 10.93 per cent in June 2013.
Overseas investors infused more than US$ 2 billion in the Indian stock market in the
month of September 2013. Since the beginning of 2013, they have pumped a net US$
13.7 billion in equities.
Moreover, given the higher yields offered by Government and corporate debt, the FIIs
have been aggressively buying bonds since the beginning of 2013. The debt market
attracted a net inflow of about Rs 25,000 crore (US$ 4.08 billion) in January-May 2013.
As of October 4, the number of registered FIIs in the country stood at 1, 744 and the total
number of sub-accounts at 6, 358.
Financial Services in India: Recent Developments
Bangalore-based online retailer Flipkart has raised US$ 200 million from its existing
investors including South African technology company Naspers Group and private equity
(PE) firms Accel Partners and Tiger Global. The investors have already placed

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Financial Services in India- Brief Overview Indian financial services industry has been through the toughest of the times and yet stands strong and robust among the world economies. Having a deep impact of the far-reaching changes in the Indian economy since liberalization, the new face of this industry is evolving in a strong, transparent and resilient system. Over the last few years, financial markets have witnessed a significant broadening and deepening of service baskets with the introduction of several new instruments and products in banking, insurance and capital markets space. The sector was opened up to new private players including foreign companies who embraced international best practices and modern technology to offer a more sophisticated range of financial services to corporate, retail and institutional customers. Financial sector regulators too have been visionaries to ensure that new regulations and guidelines are in tandem with global norms. These developments have given a robust boost to the development and modernisation of the financial services sector in India. Insurance Sector Indian life insurance sector collected new business premiums worth Rs 11,742.7 crore (US$ 1.92 billion) for April-May 2013, according to data from the Insurance Regulatory and Development Authority (IRDA). Life insurers collected Rs 1, 07, 010.7 crore (US$ 17.47 billion) worth of new premiums for the financial year ended March 31, 2013. Meanwhile, the general insurance industry grew ...
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