India’s wide and diversified financial services sector is growing swiftly due to supply and demand considerations (new service providers joining current sectors, new financial solutions and products, etc.) as well as higher disposable incomes and customized financial solutions. The Indian financial services industry is divided into many important subsegments. These include mutual funds, pension funds, insurance companies, stock brokers, wealth managers, financial advice firms, and commercial banks. They range in size from small local businesses to large international conglomerates. The services cater to a wide spectrum of clients, including individuals, businesses, and governmental organizations.
Ten Distinct Categories of Financial Services:
1. Banking
The banking industry is the cornerstone of India’s financial services industry. Throughout the country, there are several public (27), private (21), foreign (49), regional rural (56), urban/rural cooperative (more than 95,000), and regional banks. This category offers the financial services listed below:
Personal Finances: Bank accounts, savings accounts, credit cards, and so forth
Business banking includes checking and savings accounts, treasury services, merchant services, and more.
loans (business, home equity, vehicle, working capital, and so forth)
The banking sector is regulated by the Reserve Bank of India (RBI), which also keeps an eye on the capitalization, liquidity, and overall financial health of the sector.
2. Professional Advisory
In India, there are many professional financial advising service providers who provide a broad range of services to both people and businesses. These services include tax advice, real estate consulting, risk consulting, investment due diligence, valuation, and M&A advise. These services are offered by a range of providers, from large multinational companies to lone domestic consultants.
3. Wealth Management
Financial services provided by this segment include managing and investing clients’ funds in a variety of financial instruments based on their time horizons, risk tolerance, and financial goals, including debt, equity, mutual funds, insurance, derivatives, structured products, real estate, and commodities.
4. Mutual Funds
Mutual fund service providers offer professional investment services across funds composed mostly of equity-linked and debt assets. In general, the buy-in for mutual fund solutions is lower than that of debt and stock market items. These products are very well-liked in India since they usually provide lower risks, tax advantages, predictable returns, and diversification features. Over the past five years, the mutual funds market has experienced double-digit growth in assets under management due to its popularity as a low-risk wealth multiplier.
5. Insurance
The financial services available in this market are mostly split into two groups: (automotive, house, medical, fire, travel, etc.) overall protection
Life insurance, encompassing money-back, unit-linked, pension plans, and term life policies
People and organizations are protected from unforeseen catastrophes and mishaps by insurance products. Payouts for these products are influenced by a variety of important qualitative and quantitative parameters, including the type of product, time horizons, customer risk assessment, premiums, and others. Both life insurance (number 24) and general insurance (number 39) are provided by numerous insurance companies in India.
The insurance sector is governed by the Insurance Regulatory and Development Authority of India (IRDAI).
6. Stock Market
The stock market segment provides investors and users of the National Stock Exchange and Bombay Stock Exchange in India with a variety of equity-linked products and investment options. Capital appreciation, or the rise in the value of the equity solution and dividends, as well as company payments to investors, are what define customers’ returns.
7. Treasury/Debt Instruments
Both public and private entities can invest in bonds (debt) under this category of services. The bond issuer or borrower will pay the investor’s principle back together with set payments, or interest, at the end of the investment period. There are many different kinds of instruments in this sector, such as capital-gain bonds, tax-free bonds, listed bonds, non-convertible debentures, and GoI savings bonds.
8. Tax and Audit Consulting
This category includes a broad range of financial services for the tax and auditing sectors. It is feasible to divide this service area into segments based on individual and business clientele. These include: Individual taxation (calculating tax obligations, filing taxes, getting advice on how to save taxes, etc.)
Business tax (tax liability calculation, transfer pricing structure and analysis, GST registration, tax compliance assistance, etc.)
In the auditing sector, service providers offer statutory audits, stock audits, risk audits, process/transaction audits, service tax audits, tax audits, internal audits, and other solutions. These services are essential for lowering risk and ensuring that corporate organizations run both effectively and efficiently in terms of both quality and quantity. You could research taxes in India.
9. Capital Restructuring
The primary goal of these services, which are primarily offered to businesses, is the restructuring of capital structure (debt and equity) to improve profitability or address crises like bankruptcy, unstable markets, a shortage of liquidity, or hostile takeovers. As financial solutions, this segment typically offers lender negotiations, capital raising, structured deals, and quick M&A.
10. Portfolio Management
In order to assist clients in reaching their financial objectives, portfolio managers in this field evaluate and optimize investments for clients across a broad variety of assets (debt, stocks, insurance, real estate, etc.). These solutions are highly customized and specialized. Generally targeting high net worth individuals, they divide into discretionary and non-discretionary services.
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