Merchant Banking and Financial Services, III Semester (MBA), UNIT-1
Definition of Scope of Financial Services
Financial services cover a wide range of activities. They can be broadly categorized into two parts, namely: 1. Traditional activities 2. Modern activities
a) Traditional
Activities
Conventionally the financial services are
identified under two heads:
1. Fund based activities and
2. Non-fund based activities
The traditional services which come under Fund
Based Activities are the following:
Ø Underwriting of shares, debentures
etc
Ø Dealing in foreign exchange
market activities
Ø Lease Financing, hire
purchase, venture capital, Factoring and Forfaiting,
Ø Housing Finance, Insurance
Services, Venture Capital financing etc.
Ø Dealing in secondary market activities
Ø Participating in money market instruments like treasury bills, discounting bills, commercial papers etc.
Non-Fund Based Activities Include
Ø The management of capital issues (pre and post issue management)
Ø Arrangement for the placement of capital and
debt instruments with investment institutions
Ø Arrangement of funds from financial
institutions
Ø Arrangement of working capital for clients
Ø Assisting in the process of obtaining government Clearance.
(b) Modern Activities
It includes
ØRendering project advisory services, right from the preparation of
the project report till the raising of funds for starting the project
Planning for mergers and acquisitions and assisting for their
smooth carry out.
ØDirecting corporate customers in capital restructuring
ØActing as trustees to the debenture holders
ØRecommending suitable changes in the management structure and
management style envisaging achieving better results.
ØPortfolio management of large public sector undertakings
ØCapital market services such as, Clearing services, Registration
and transfers, collection of income on securities etc.
