Management of Financial Services Notes
Subject Overview
The second Finance group elective, examining India's financial services industry — mutual funds, insurance and venture capital, credit rating/
Subject at a glance
4
Units
34
Topics
4
Credits
4
Infographics
Unit-wise Syllabus
4 units — open any unit for detailed topic-wise notes, diagrams and important exam questions
- Meaning
- types and importance of financial services
- financial sector reforms and future challenges for Indian banks
- mutual and pension funds
- insurance services
- bank assurance
- venture capital and private equity
- hedge funds
- e-banking
- securitization
- depository system and SEBI's role
- dematerialization
Fund-based
Leasing, hire purchase, factoring, venture capital
Fee-based
Merchant banking, credit rating, portfolio management
Insurance
Life, general, bancassurance
Market infrastructure
Depositories, stock broking
Study guide
This unit surveys financial services: reforms, mutual and pension funds, insurance, bancassurance, venture capital, private equity, hedge funds, e-banking, securitisation and the depository system. Map the main service providers and their regulators.
- Concept and objectives of credit rating
- credit rating agencies in India
- rating methodology
- leasing concept and types
- tax aspects of leasing
- origin and development of merchant banking
- SEBI guidelines
- venture capital concepts in India
Term
Short, less than asset life
Most of the asset's life
Risks and rewards
Stay with the lessor
Pass to the lessee
Cancellable
Usually yes
Usually no
Example
Renting office equipment
Aircraft or machinery lease
Study guide
You study credit rating, leasing, tax aspects, merchant banking, SEBI guidelines and venture capital. Understand how a rating is assigned and used.
- Meaning
- features and process of debt securitization
- factoring development
- types
- procedural and financial aspects
- plastic money forms (credit and debit cards)
- credit card processes
- factors affecting utilization in India
Receivables
Short-term (up to about 180 days)
Medium-term export receivables
Coverage
Usually up to 80–90% advanced
Usually 100%
Recourse
With or without
Without recourse
Use
Domestic and export trade
Capital goods exports
Study guide
You study securitisation, factoring and plastic money. Trace how a pool of loans becomes a security.
- ALM significance
- process and techniques (gap, duration, simulation, value at risk)
- credit/operational/market/liquidity risk management
- corporate treasury management
- Basel norms
- ALM software
Credit risk
Borrower default
Market risk
Interest rates, FX, equity prices
Liquidity risk
Unable to meet withdrawals
Operational risk
People, process, systems failure
Study guide
You study ALM techniques, risk management, treasury and Basel norms. Practise a simple gap analysis.
Why Management of Financial Services Matters
Financial services are the largest employer of finance MBAs, with roles in banks, NBFCs, rating agencies and fintech.
How to Prepare for Management of Financial Services
- Learn each service with its regulator and a real example.
- Practise gap and duration problems.
- Follow fintech and NBFC news.
Management of Financial Services: Frequently Asked Questions
What is bancassurance?
Bancassurance is the sale of insurance products through bank branches.