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Financial services
In general, all types of activities, which are of a financial nature, could be brought under the term
'financial services'. The term financial services' in a broad, sense means "mobilizing and
allocating savings". Thus it includes all activities involved in the transformation of savings into
investment.
Financial services can also be called 'financial inter mediation'. Financial intermediation is a
process by which funds are mobilizing from a large number of savers and make them available to
all those who are in need of it and particularly to, corporate customers.
Classification of Financial Services Industry
The financial intermediaries in India can be traditionally classified into two:
i. Capital Market intermediaries
ii. Money market intermediaries.
The capital market intermediaries consist of term lending institutions and investing
institutions which mainly provide lung term funds. On the other hand, money market
consists of commercial banks, co-operative banks and other agencies which supply only
short term funds. Hence, the term 'financial services industry' includes all kinds of
organizations which intermediate .and facilitate financial transactions of both individuals
and corporate customers.
Scope of Financial Services
Financial services cover a wide range of activities. They can be broadly classified into two,
namely:
i. Traditional. Activities
ii. Modern activities.
Traditionally, the financial intermediaries have been rendering a wide range of services
encompassing both capital and money market activities. They can be grouped under two heads,
viz.
a. Fund based activities
b. Non-fund based activities.
a. Fund based activities: The traditional services which come under fund based activities are
the following:
i. Underwriting or investment in shares, debentures, bonds, etc. of new issues
(primary market activities).

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ii. Dealing in secondary market activities.
iii. Participating in money market instruments like commercial papers, certificate of
deposits, treasury bills, discounting of bills etc.
iv. Involving in equipment leasing, hire purchase, venture capital, seed capital,
v. Dealing in foreign exchange market activities. Non fund based activities
Non fund based activities
Financial intermediaries provide services on the basis of non-fund activities also. This can be
called 'fee based' activity. Today customers, whether individual or corporate, are not satisfied
with mere provisions of finance. They expect more from financial services companies. Hence a
wide variety of services, are being provided under this head. They include:
i. Managing die capital issue i.e. management of pre-issue and post-issue
activities relating to the capital issue in accordance with the SEBI guidelines and
thus enabling the promoters to market their issue.
ii. Making arrangements for the placement of capital and debt instruments with
investment institutions.
iii. Arrangement of funds from financial institutions for the clients' project cost or his
working capital requirements.
iv. Assisting in the process of getting all Government and other clearances.
Modern Activities:
i. Rendering project advisory services right from the preparation of the project
report rill the raising of funds for starting the project with necessary Government
approvals.
ii. Planning for M&A and assisting for their smooth carry out.
iii. Guiding corporate customers in capital restructuring
iv. Acting as trustees to the debenture holders.
v. Recommending suitable changes in the management structure and management
style with a view to achieving better results.
vi. Structuring the financial collaborations / joint ventures by identifying suitable
joint venture partners and preparing joint venture agreements, Rehabilitating and
restructuring sick companies through appropriate scheme of reconstruction and
facilitating the implementation of the scheme.
vii. Hedging of risks due to exchange rate risk, interest rate risk, economic risk, and
political risk by using swaps and other derivative products.
viii. Managing In- portfolio of large Public Sector Corporations.

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Financial services In general, all types of activities, which are of a financial nature, could be brought under the term 'financial services'. The term financial services' in a broad, sense means "mobilizing and allocating savings". Thus it includes all activities involved in the transformation of savings into investment. Financial services can also be called 'financial inter mediation'. Financial intermediation is a process by which funds are mobilizing from a large number of savers and make them available to all those who are in need of it and particularly to, corporate customers. Classification of Financial Services Industry The financial intermediaries in India can be traditionally classified into two: i. Capital Market intermediaries ii. Money market intermediaries. The capital market intermediaries consist of term lending institutions and investing institutions which mainly provide lung term funds. On the other hand, money market consists of commercial banks, co-operative banks and other agencies which supply only short term funds. Hence, the term 'financial services industry' includes all kinds of organizations which intermediate .and facilitate financial transactions of both individuals and corporate customers. Scope of Financial Services Financial services cover a wide range of activities. They can be broadly classified into two, namely: i. Traditional. Activities ii. Modern activities. Traditionally, the financial intermediaries have been rendering a wide ran ...
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