Financial Services In India

FINANCIAL SERVICES IN INDIA: AN OVERVIEW OF CHALLENGES AND OPPORTUNITIES IN BANKS

INTRODUCTION The financial services sector in India has undergone a complete and new face change since 1990. The banking sector in India has experienced a rapid transformation. With the opening up of an industry that’s tightly protected by regulations to private players has introduced many challenges. The deregulatory efforts prompted many private financial institutions and non financial institutions to enter the banking sector. With the entry of private players into retail banking and with multi-nationals focusing on individual consumer, the banking system underwent a phenomenal change. The major trends triggering this change are commoditization of services, differentiation on features of the products and competition from local and international industry entrants. In order to meet these trends, the banks have changed the traditional line of business and introduced the new financial products and services.

Banks now rely on evolving long-

term association with customers for which they focus on sustaining profitable relation with customers rather than attracting new customers. A shift from the conventional interest based income structure to a more predictable and steady fee based income structure suggests a change in the basic outlook of modern financial services.

OBJECTIVE In this background it is proposed to carry out a detailed study which focuses on the rapid transformation of the financial services sector in India in general and of Banks in particular. The objective is to conduct a study of the different financial services rendered by various banks and financial institution and a comparison of the approaches and pricing of these services. The study will also include an analysis of the ‘customer taste’ on the

traditional business lines and the new technology based services provided by the financial institutions. The proposed study will be concentrated on certain nationalized banks( SBI, Syndicate Bank, Canara Bank, Corporation Bank, Indian Overseas Bank etc,), scheduled banks (Federal Bank, Karnataka bank etc,) and Private banks ( ICICI, HDFC, UTI, etc,). [ Study of services rendered by Co-operative Banks and rural banks can also be included.] The study will focus on (1)

The reasons for the change in the financial service sector such as changing

customer needs, development of technology, competition etc., (2)

Analysis of the various financial services and products

(3)

The basis of pricing of these products and services.

METHODOLOGY Primary data: It is planned to collect primary data on the basis of a Questionnaire and personal interview of the officials of banks. Secondary data: Details available on the website of the banks, Advertisements, articles and publications based on studies conducted in this field in the past, journals and books related to financial services.

USER GROUP This study will enable the financial institutions to review their existing services and products for improvements and introduction of new products and services. This will also enable the customers to avail the maximum opportunities based on the comparison of the different products.