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Financial Services, 2ed

Dr R. Shanmugham

ISBN: 9788126564071

eBook also available for institutional users 

INR 739


Financial Services is a book on the fast-growing financial services industry of India. The book discusses the institutions, instruments, markets, regulations, and various other financial services offered in the financial system. The dynamic growth of the financial markets and the fast-paced reforms have opened up the need for financial intermediation, insurance, payment and settlement, and a host of other financial services. This book covers all those services. Two new chapters, Chapter 14 on Microfinance Institutions and Chapter 15 on Payment and Settlement Systems have been added in this second edition. While presenting each topic, the book focuses on the basic concepts, structure of the industry, regulatory issues, and the contemporary developments.


Preface to the Second Edition

Preface to the First Edition

About the Author

List of Figures

List of Tables

List of Boxes

List of Acronyms


1 Financial Services

1.1 Introduction

1.2 Financial Services: Concept

1.3 Nature of Financial Services

1.4 Indian Financial System

1.5 Functions of the Financial System

1.6 Financial Services Industry in India

1.7 Recent Trends in the Financial Sector

1.8 Conclusion


2 Capital Market

2.1 Introduction

2.2 Financial Market

2.3 Capital Market and Money Market

2.4 Capital Market Instruments

2.5 Capital Market Participants

2.6 Capital Market Segments

2.7 Capital Market: The Regulatory Framework

2.8 Role of SEBI in the Indian Capital Market

2.9 Indian Capital Market: A Review

2.10 Conclusion


3 Money Market

3.1 Introduction

3.2 Money Market

3.3 Structure

3.4 Participants

3.5 Money Market Segments

3.6 Money Market Securities

3.7 Debt Market

3.8 Debt Market in India: A Review

3.9 Conclusion


4 Merchant Banking

4.1 Introduction

4.2 Concept

4.3 Investment Banking vs. Merchant Banking

4.4 Origin

4.5 Merchant Banking in India: A Historical Perspective

4.6 Categories of Merchant Bankers

4.7 Merchant Banking Functions

4.8 Issue Management

4.9 SEBI Regulations

4.10 Merchant Banking in India: A Review

4.11 Conclusion


5 Factoring

5.1 Introduction

5.2 Concept

5.3 Factoring vs. Banking

5.4 Mechanism of Factoring

5.5 Forms of Factoring

5.6 Benefits of Factoring

5.7 Problems of Factoring

5.8 Factoring Industry: A Review

5.9 Forfaiting

5.10 Conclusion


6 Credit Rating

6.1 Introduction

6.2 Rating Services

6.3 What is Credit Rating?

6.4 Uses of Credit Rating

6.5 Credit Rating Process

6.6 Rating Methodology

6.7 Rating Revisions

6.8 Equity Grading

6.9 Credit Rating Industry: A Review

6.10 SEBI and Credit Rating

6.11 Future of Credit Rating

6.12 Conclusion


7 Securitisation

7.1 Introduction

7.2 Concept and Definition

7.3 Need for Securitisation

7.4 Historical Perspective

7.5 Participants in Securitisation Process

7.6 Mechanism of Securitisation

7.7 Benefits of Securitisation

7.8 Problems

7.9 Regulatory Framework

7.10 Risk Assessment in Securitisation

7.11 Documentation

7.12 Securitisation: Global Scenario

7.13 Securitisation in India

7.14 Conclusion


8 Venture Capital

8.1 Introduction

8.2 Evolution of Venture Capital Finance

8.3 Venture Capital: De?nition and Characteristics

8.4 Venture Capital, PE, Angel Investing and Crowdfunding

8.5 Venture Capital Terminology

8.6 Venture Capital Investment Process

8.7 Advantages of Venture Capital

8.8 Forms of Venture Capital Assistance

8.9 Venture Capital in the US and Europe

8.10 Venture Capital in India

8.11 SEBI and Venture Capital Funds

8.12 Conclusion


9 Depositories

9.1 Introduction

9.2 De?nition of Depositories

9.3 Need for Depositories

9.4 Depository System

9.5 Depositories: Legal Framework

9.6 Bene?ts of Depositories

9.7 Role of Depositories in the Capital Market

9.8 Depository Services in India

9.9 Conclusion


10 Leasing

10.1 Introduction

10.2 Lease: Definition of the Concept

10.3 Lease vs. Other Sources of Finance

10.4 Types of Lease

10.5 Benefits of Leasing

10.6 Rights and Obligations of Lessor and Lessee

10.7 Lease Evaluation: Lessee’s Point of View

10.8 Lease Accounting

10.9 Leasing Industry: A Review

10.10 Conclusion


11 Mutual Funds

11.1 Introduction

11.2 Mutual Fund: Concept and Rationale

11.3 Features of a Mutual Fund

11.4 Structure of a Mutual Fund

11.5 Types of Mutual Fund Schemes

11.6 How does a Mutual Fund Generate Earnings?

11.7 Bene?ts of Investing in a Mutual Fund

11.8 Mutual Fund Regulations

11.9 Net Asset Value

11.10 Risks in Mutual Fund Investments

11.11 Mutual Fund Industry in India

11.12 Conclusion


12 Insurance

12.1 Introduction

12.2 Insurance: De?nition

12.3 Why Insurance?

12.4 Principles of Insurance

12.5 History of Insurance Industry

12.6 Types of Insurance

12.7 Regulatory Framework and Market Intermediaries

12.8 Insurance Industry in India: A Review

12.9 Conclusion


13 Non-Banking Financial Companies

13.1 Introduction

13.2 Non-Banking Financial Companies: De?nition

13.3 Classification and Structure of NBFCs

13.4 Salient Features of NBFCs

13.5 Types of Activities of NBFCs

13.6 Regulation of NBFCs

13.7 NBFCs: Prudential Regulations

13.8 Fair Practices Code

13.9 Reforms In The NBFC Sector

13.10 NBFCs: Performance Review

13.11 Conclusion


14 Microfinance Institutions

14.1 Introduction

14.2 Microfinance: The Concept

14.3 Evolution of Microfinance Institutions

14.4 Microfinance Models

14.5 Regulatory Framework For NBFC-MFIs

14.6 Benefits of Microfinance

14.7 Government Policy

14.8 Review of Performance

14.9 Conclusion


15 Payment and Settlement Systems

15.1 Introduction

15.2 Payment and Settlement Systems: Meaning

15.3 Importance of Payment and Settlements System

15.4 Financial Market Infrastructure

15.5 Payment Systems in India

15.6 Essential Features of Modern Payment Systems

15.7 Regulatory Framework: Payment and Settlements Act 2007

15.8 New Developments in the Payments Sector

15.9 Growth Trends

15.10 Challenges in Retail Payment Systems

15.11 Credit Cards, Debit Cards and Other Cards


16 Other Financial Services

16.1 Introduction

16.2 Stock Broking

16.3 Custodial Services

16.4 Registrars and Share Transfer Agents (RTAs)

16.5 Portfolio Management Service

16.6 Wealth Management Service

16.7 Conclusion



Key Terms

Practice Questions

Short Answer Type Questions

Review Questions

Discussion Forum


Edu Sites

Further Reading