The Indian Financial services industry has undergone a metamorphosis since 1990.

During the late 70s and 80s ,the Indian financial services industry was dominated by commercial banks and other financial institutions which cater to the requirements of Indian industry. In fact the capital market played a secondary role only. The economic liberalization has brought ion a complete transformation in the Indian financial services industry. Prior to the economic liberalization the Indian financial service sector was characterized by so many factors which retarded the growth of this sector.

Prior to the economic liberalisation the Indian financial service sector was characterised by so many factors which retarded the growth of this sector. Some of the significant factors were: Excessive controls in the form of regulations of interest rates, money rates etc Too many control over the prices of securities under the erstwhile controller of capital issues. Non availability of financial instruments on a large scale as well as on different varities. Absence of independent credit rating and credit research agencies.

Strict

regulation of the foreign exchange market with too many restrictions on foreign investment and foreign equity holding in Indian companies.
Lack

of information about international developments in the financial sector.

Non

scale.

availability of debt instruments on a large

However, after the economic liberalisation,the entire financial sector has undergone a sea change and now we are witnessing the emergence of new financial products and service almost everyday.

The term Financial services in a broad sense means mobilizing and allocating savings. Thus it includes all activities involved in the transformation of saving into investment.

The term financial services can be defined as activities ,benefits and satisfactions , connected with the sale of money, that offer to users and customers financial related value

Financial service organizations render services to industrial enterprises and ultimate consumer markets. Within the financial services industry the main sectors are : Banks Financial Institutions Non Banking Finance Companies

The suppliers of financial services(financial intermediaries) include the following type of institutions: Banks and financial institutions House building societies Insurance companies Credit card issue companies Investment trusts and mutual funds Stock exchanges Leasing/Equipment finance/consumer finance co; Unit trusts

Intangible Direct

sale Heterogeneity Fluctuation in demand Protect customer interests(customer oriented) Labour intensive Requires quality labour Dominance of human element Perishability Simultaneous performance

Traditional

activities Asset/Fund based activities Fee based/Non fund based activities Modern activities

Equipment

leasing/finance Hire purchase & consumer credit Bill discounting Venture capital Housing Finance Insurance companies Factoring etc

1.Merchant Banking Issue management Portfolio management Corporate counseling Loan syndication Mergers and acquisitions Capital restructuring 2.Credit rating(AAA,A++,B,C,D) 3.Stock broking and so on

Lack

of qualified personnel Lack of investor awareness Lack of transparency Lack of specialization Lack of recent data Lack of efficient risk management system