In-depth look at the role of financial institutions, markets in boosting economy of India

Economic growth and development of a country depend upon its financial system. Financial systems comprise financial institutions, financial markets, financial investments and services which help in the formation of the capital market. Effective growth of the financial system depends upon the quality and variety of financial services provided by different financial intermediaries available in the market. Financial services are the economic services provided by the finance industry. It comprises a broad range of organisations that manage money, including credit unions, banks, credit card companies, insurance companies, economic finance companies and some government-sponsored enterprises.

Financial services can be defined as the activity, benefits and satisfaction connected to the sale of money, which offers to consumers and users, financial-related value. Services and products provided to consumers and businesses by financial institutions such as banks, insurance companies and non-banking financial institutions all comprise the financial services industry.

Here are the services provided by financial institutions

Banking and financial services means the following services provided by the banking company or a financial institution including a non-banking financial company namely; financial leasing services including equipment leasing and hire purchase by body corporate, credit card services, merchant banking services, security and foreign exchange, asset management including portfolio management all forms of fund management, pension fund management, trust services but does not include cash management,  advisory and other auxiliary services include portfolio research, merger and acquisition and advice on corporate restructuring strategy.

Features of financial services

• Financial services are usually customer-oriented. The industries provide a service, and study the needs of their customers in depth before deciding the financial strategy, giving full consideration to costs, liquidity and maturity.
• The institutions have to supply services whenever there is a demand from the customer. Financial institutions have to ensure the proper link between demand and supply to maintain their reputation in the market.
• To maintain the proper balance and to gain a large market financial service industry has to offer a wide range of products and devices in the market for their customers.
• They provide direct sales to their customer and have a direct link with them.
• To fulfil the needs of all customers at the national or international level, the financial industries have extended their services and network of branches beyond geographical boundaries to meet the needs of their customers.
• Institutions have to focus on the quality and innovativeness of the services to build up their Goodwill in the market and also enjoy the confidence of their client.

Conclusion

Effective financial services are good for the citizens, society and governments. Various circumstances have kept many people out of net of financial services which has created a gap between those who are in the financial services net and those who are not.