This document provides an overview of the evolution and types of financial services in India. It discusses how the sector has undergone liberalization since 1990, allowing private and foreign players to enter. The document defines financial services as services related to mobilizing and allocating savings. It outlines the evolution in three phases from 1960-2002, during which new institutions and instruments were established. The key characteristics of financial services are described, including their intangible nature and role in intermediating funds. The importance of financial services in channeling funds, debt management, and promoting savings is also highlighted. Finally, the document categorizes the main types of financial services in India into money markets, capital markets, retail markets, and wholesale markets.

1. Presented by :-
Diptanu Sutradhar.
16PBA006
School of Management Studies
Baddi University of Emerging Sciences & Tecnology

2. Contents
 Introduction
 Meaning
 Evolution
 Characteristics
 Importance
 Types of Services in India

3. INTRODUCTION
 The Financial services sector in India is blooming
 Now it has become one of the lucrative areas to
professionalism.
 During the late eighties, this industry was dominated by
commercial banks and other financial institutions
governed by the Central Government.
 The sector has undergone metamorphosis since 1990.
 Indian economy got liberalized during 1991 and the
financial sector was kept open for private and foreign
players.

4. Meanings & Definition
Financial services basically mean all those kinds of
services provided in financial or monetary terms,
where the essential commodity is money.
 The term Financial services refers to ― “mobilizing and
allocation of savings‘‘.
 Financial services also include FINANCIAL
INTERMEDIARIES such as Merchant Bankers, Venture
capitalists, Commercial banks, Insurance Companies etc.

5.  These services include;
 Leasing,
 Hire purchase,
 venture capital,
 Merchant banking,
 Insurance,
 housing finance,
 Mutual funds,
 factoring,
 stock broking and many others.

6. EVOLUTION OF FINANCIAL SERVICES IN INDIA:
 It has passed through various phases:
i) Initial phase (1960-80) :
 at the initial phase introduced many innovative services
such as merchant banking, Insurance and leasing finance.
 underwrote the public issues and helped in getting the
shares listed in the stock exchange.
 LIC, GIC and UTI initiated to enter into this segment
during this period.

7. ii) Second phase (1980-90):
 In this phase, it introduced many innovative value added
services such as over the counter share transfers, pledging
of shares, mutual funds, factoring, discounting, venture
capital and credit rating.
 Mutual funds provide major fund to the industry anywhere
in the developed countries.

8. iii) Third phase (1990-2002):
 This phase in financial services include the setting up of
new institutions and instruments.
 This period started after post liberalization.
 The depositories, the stock lending schemes, online
trading, paperless trading, dematerialization, book
buildings are the contemporary issues of this phase.

9. Nature or Characteristics of
Financial Services
 Financial services involve at least two people or firms, the
service provider and the user.
 Financial institutions intermediate the flow of funds
between different economic decision-making units.
 The financial services are intangible.
 Financial services must be customer friendly and they
should provide the services according to the requirements
of the customers.
 Financial service is an innovative activity and requires
dynamism.

10. Importance
Channelizing funds for economic development &
growth.
Implementing & monitoring debt management of the
country.
Ensures greater yield.
Promote savings
Expands balanced regional growths.

11. Types of Financial Services in India
• It consists of term lending Institutions which provide
long term funds.
Capital market
Services:
• It consists of commercial banks & financial
institutions which provide short term funds.
Money market
services:
• Services provided to individual for direct
consumption.
Retail market
services:
• Services provided to corporate institutions which may
be directly or indirectly converted into retail services.
Wholesale
market services:

12. Types of Financial Activities
Fund Based
Underwritting of
shares,Debentures etc.
Dealing in Foreign exchange
markets
Hire Purchase
Venture capital
Participation in Money Market
Instruments like T-bill, Disc. Bill, CP
etc.
Leasing
Fee based
Management of capital
issues
Arrangements of Working
Capital
Placements of capital and debt
instruments
Rendering project advisory
services,
Arrangements of funds
Portfolio Management in large
public sector.