Financial services constitute an important component of the financial system. Financial services are regarded as the 4th element of the financial system. Services that are offered by financial companies are called 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. It includes all activities involved in the transformation of SAVINGS into INVESTMENTS.
FUND BASED CORPORATE FINANCIAL SERVICES:1. LEASING: A lease is an agreement under which a company or a firm acquires a right to
make use of a capital asset like machinery, on payment of a prescribed fee called rental charges.
2. HIRE PURCHASE: Hire Purchase is an agreement under which goods are let on hire
and under which the hirer has an option to purchase them in accordance with the terms of agreement.
3. MORTGAGE LOANS: Mortgage Loan is a financing arrangement in which a lender
extends finance for acquisition of real estate against the security of the real estate purchased out of the loan.
4. WORKING CAPITAL FINANCE: - It is that part of business which finances day to day
operations. Current assets represents the gross working capital.Net working capital is arrived at by deducting the current liabilities from the current assets.
5. FACTORING:- Factoring refers to the process of managing the sales register of a client
by a financial services company. The entire responsibility of collecting the book debts passes on to the factor.
6. FORFAITING: Forfeiting is a technique by which a forfeiter (financing agency)
discounts an export bill ready cash to the exporter who can concentrate on the exports front without bothering collection of bills.
is an unsecured money market instrument introduced in the Indian Money Market in 1990. CP is issued in the form of a promissory note and issued through private placement . 8. CERTIFICATE OF DEPOSIT:-It is another avenue for the corporate bodies to invest Their short-term surplus funds and reasonably good returns. It helps the firm to utilize Their unutilized balances in the current account and earn interest on it. 9. BANK DEPOSIT SCHEME:-Commercial banks offer traditionally two types of accounts to the corporate bodies. These accounts are known as current account deposit or fixed or term deposit accounts. 10. BONDS & DEBENTURES: - It is a part of fixed income investments, it is just an organizations IOU; i.e., a promise to repay a sum of money at a certain interest rate and over a certain period of time.
7. COMMERCIAL PAPER:-It
who own a house but do not have adequate income to meet their needs can apply for this loan. 6. EDUCATIONAL LOAN: - They are extended with the aim to provide financial support from the banking system to deserving students for pursuing higher education in India and abroad. 7. AUTOMOBILE LOAN: - Banks are extending credit for purchase of new two/four wheeler for personal/professional use. Bank finance is also available for purchase of used cars less than 3 years old. 8. DISCOUNTING/PURCHASE OF CHEQUES: - Banks are extending credit to customers by discounting/purchasing of outstation cheques. Many times the customers may receive cheques drawn on places outside their place of domicile. Generally they deposit these cheques for collection and credit to their account maintained with the banks. 9. DEPOSIT SCHEME: - Banks provide various deposit schemes for keeping the savings of people. Banks have to comply with the Know your Customer (KYC) norms introduced by RBI while opening and allowing operations in the accounts. 10. CHITTIES & NIDHIS: - Chits are financial instrument organized by individuals, firms, and companies. Monthly subscriptions collected from all the members are pooled together to form the fund. The chit amount will be offered to the member who bids the maximum. 11. Mutual Funds: A mutual fund refers to a fund raised by a financial service company by pooling the savings of the public. It is invested in a diversified portfolio with a view to spreading and minimizing the risk. The fund provides investment avenues for small investors who cannot participate in the equities of big companies. It ensures low risk, steady returns, high liquidity and better capitalization in the long run.
an electronic terminal, computer or magnetic tape, so as to order, instruct or authorize a financial institution to debit or credit an account. It is a mechanism where the paper instruments are replaced by electronic form. 10. CERTIFICATION SERVICE: - Banks issue various certificates to the customers for various purposes like bank certificate for exports, solvency certificate, certificate for inward remittances, certificate for income tax purpose, etc. 11. VENTURE CAPITAL FINANCE: - It is referred to as financing of new ideas or technologies. It has been regarded as early stage finance of relatively small, rapidly growing companies, the risk element is high but high growth can also be expected. It is usually in form of equity contribution.
5. FOREIGN INWARD REMITTANCE: - The foreign inward remittance involves transaction in foreign currency. There is no restriction as far as inward remittances are concerned, provided these remittances are received through an authorized dealer in foreign exchange. 6. FOREIGN OUTWARD REMITTANCE: - Authorized dealer are permitted in foreign exchange to undertake such transactions on behalf of their customers on production of documentary evidence. 7. FUND TRANSFER FACILITIES: - Fund transfer facilities provided by banks are cheques, drafts, mail transfers and telegraphic transfers. 8. SAFE DEPOSIT LOCKERS: - It is a facility provided by bank to their customers to keep their valuable like jewellery, title deeds, etc. 9. SAFE-CUSTODY FACILITIES: - Banks are providing facility to keep valuables like documents, title deeds, etc. The customer has to pay a charge for this facility. 10. CERTIFICATION: - Banks issue various certificates for various purposes for which they earn commission. 11. PORTFOLIO MANAGEMENT: - It is service offered by financial institutions to individuals for management of investment. Banks, NBFCs, and broking firms are providing portfolio management services to individuals. 12. BANASSURANCE: - It is a combination of banking and insurance. It is rather a package of banking and insurance product. Banks were not allowed to enter into insurance business till 2000. In April, 2000, RBI permits the banks to enter into the insurance sector.