FINANCIAL SECTORS IN INDIA AGILE CAPITAL SERVICES

DIFFERENT FINANCIAL SECTORS PRESENT IN INDIA

1. ASSIGNMENT-4 AGILE CAPITAL SERVICES FINANCIAL SECTORS IN INDIA SUBMITTED BY- VIREN VIJAYVARGIYA

2. TABLE OF CONTENT FINANCIAL SECTOR SHARE MARKET MUTUAL FUNDS REAL ESTATE GOLD PROVIDENT FUND FIXED DEPOSIT POST OFFICE INSURANCE

3. FINANCIAL SECTOR- Group or institution providing us financial services can be termed as financial services/sectors. INDUSTRY SPEICFIC DEFINANTION: CUSTOMER SPECIFIC DEFINANTION: A place where transaction of money takes place and customer aim to gain profit can be termed as financial sectors. The financial sector is a segment of the economy composed of companies and institutions that provide commercial and retail customers with financial services. A large portion of this sector produces mortgage and loan income, which increases the value as interest rates decline.

4. SHARE MARKET- The share market is a platform where buyers and sellers come together to trade on publicly listed shares during specific hours of the day. People often use the terms ‘equity market’ and ‘stock market’ interchangeably. The principal stock exchanges in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Stock markets can be further classified into two parts: primary markets and secondary markets. PRIMARY SHARE MARKETS: When a company registers itself for the first time at the stock exchange to raise funds through shares, it enters the primary market. This is called an Initial Public Offering ( IPO ), after which the company becomes publicly registered and its shares can be traded within market participants. SECONDARY SHARE MARKET: Once a company’s new securities have been sold in the primary market, they are then traded on the secondary stock market. Here, investors get the opportunity to buy and sell the shares among themselves at the prevailing market prices. Typically investors conduct these transactions through a broker or other such intermediary who can facilitate this process.

5. DEMERITS MERITS OWNERSHIP LIQUIDITY TRANSPARENCY CAPITAL FORMATION INVESTMENT OPPORTUNTIES RISK FRAUD TIME CONSUMING VOLATILITY EMOTIONAL INVESTMENT

6. MUTUAL FUNDS- A mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds, money market instruments and/or other securities. Equity market + Debt market+ Mutual funds. There are 3 types- small cap, medium cap, large cap. Small cap mutual funds: Small cap mutual funds are open-ended equity mutual funds that invest at least 65% of their investments in small cap stocks. Small cap stocks are those companies that rank below 250th in terms of market capitalisation. These are small companies that are new entrants in the market.

7. Mid cap mutual funds are open-ended equity mutual funds that invest at least 65% of their investments in mid cap company stocks. Mid cap stocks are those companies that rank 101st to 250th in terms of market capitalisation values. Mid cap companies have a good track record and have the potential to grow into large cap companies. However, there can also be chances of downfall. Medium cap mutual funds:: Large cap mutual funds: Large cap mutual funds are open-ended equity mutual funds that invest a significant portion, i.e., at least 80% of their investments typically in companies having a market capitalisation of more than thousands of crore. These companies usually tend to be the market leaders in their specific industrial sectors and thus likely also demonstrate an excellent past track record of wealth generation. They have a strong market positioning, as they are known to exhibit strong growth with high profits.

8. DEMERITS MERITS Advanced portfolio management Dividend reinvestment Risk reduction Convenience and fair pricing High expense ratios and sales charges Management abuses Tax inefficiencies Poor trade execution

9. REAL ESTATE- Real estate is defined as the land and any permanent structures, like a home, or improvements attached to the land, whether natural or man-made. Real estate is a form of real property. Investment real estate is real estate that generates income or is otherwise intended for investment purposes rather than as a primary residence. It is common for investors to own multiple pieces of real estate, one of which serves as a primary residence while the others are used to generate rental income and profits through price appreciation. Residential: Investment real estate can include residential land and properties. Residential investments typically involve homes, townhouses, and condominiums. Residential properties can be multi-family or single-family units. Commercial: An investment in commercial real estate might involve the ownership of retail stores, office buildings, or storage facilities and warehouses. Investment in commercial real estate is typically more involved and costly than residential investments. Commercial property leases can be longer than a residential rental agreement. Both the costs and profitability are usually measured on a per-square-foot basis.

10. DEMERITS MERITS Appreciation of Property Values Steady Cash Flow from Rental Income Tax Benefits and Incentives Market Volatility and Economic Factors High Initial Investment and Ongoing Expenses Lack of Liquidity

11. GOLD- A gold fund is a type of investment fund that holds assets related to gold. The two most common types of gold funds are those holding physical gold bullion, gold futures contract, or gold mining companies. Gold funds are popular investment vehicle among investors who wish to hedge against perceived inflation risks. The gold standard is a monetary system in which paper money is freely convertible into a fixed amount of gold. In other words, in such a monetary system, gold backs the value of money.

12. DEMERITS MERITS LIQUID INVESTMENT LOW RISK OF INFLATION PORTFOLIO DIVERSIFICATION HISTORICAL ANGLE SHORT TERM PRICE SWINGS SECURITY ISSUES LACK OF INCOME DIVIDEND

13. PROVIDENT FUND- It is a savings and retirement fund in India that is typically established and contributed to by salaried employees and their employers. It is a government-backed initiative aimed at providing financial security to employees during their retirement years. Types of Provident fund: The general Provident Funds is a type of PF maintained by government bodies, including local authorities, the railways, and other such bodies. The recognized Provident Fund is the one that applies to all privately owned organizations that have more than 20 employees. Moreover, holding a rightful claim to the PF associated with your organization, you will be given a UAN or Universal Account Number. This enables you to transfer your PF funds from one employer to another whenever you move from one occupation to another. The public provident fund is defined by the voluntary nature of investment on the part of the employee. The PPF is also associated with a minimum deposit of Rs. 500 and a maximum amount of Rs. 1.5 lakh. The PPF has a lock-in period of 15 years.

14. DEMERITS MERITS TAX BENEFIT FIXED INTEREST RATE LONG-TERM NATURE GOVERNMENT BACKING PARTIAL WITHDRAWALS AND LOANS LOWER LIQUIDITY LIMITED ACCESS FOR NRIs FIXED INTEREST RATE MARKET-LINKED RETURNS ABSENT

15. An organization which keeps money safely for its customers; the office or building of such an organization. You can take money out, save, borrow or exchange money at a bank A fixed deposit (FD) is an instrument through which you can grow a lumpsum over a fixed tenure at a fixed interest rate. It is a safe investment option that guarantees consistent interest rates. The interest rate remains unaffected by market fluctuations, and you get good returns on maturity, that is, after the lock-in period. You can choose to get your interest on a periodic basis, or at maturity. BANKS/FIXED DEPOSITS-

16. Types of FD’s are: Standard term deposits- This is the most common type of FD available at all banks. You deposit a fixed amount of money for a specific tenure, and the bank pays you interest on it at regular intervals or at maturity. The interest rate is pre-determined by the bank and varies based on the tenure and amount invested. Senior citizen fixed deposits- These are FDs designed specifically for senior citizens. They offer higher interest rates than standard FDs and are available to individuals aged 60 years and above. Flexi fixed deposit- This is a type of FD that allows you to withdraw money from your account without breaking the FD. You can withdraw up to a certain limit without incurring any penalty, and the interest rate is calculated on the remaining balance. Recurring deposit - This is a type of FD where you deposit a fixed amount of money at regular intervals (usually monthly) for a specific tenure. The interest rate is predetermined by the bank and varies based on the tenure and amount invested. Tax-saving FD- A Tax- Saving Fixed Deposit (FD) is a type of fixed deposit account that offers a tax deduction under Section 80C of the Income Tax Act, 1961 1. Any investor can claim a deduction of a maximum of Rs. 1.5 lakh per annum by investing in a tax-saving fixed deposit account. The lock-in period for this type of FD is 5 years, and the interest earned is taxable.

17. DEMERITS MERITS Stable Returns Low Risk Capital Preservation Flexible Tenure Options Ease of Investment Interest is Taxed Upon Lower Interest Rate Interest Rate can be Lower than Inflation No Increase in Interest Rate

18. The Post Office savings bank is the oldest and by far the largest banking system in the country, serving the investment need of both urban and rural clientele. The schemes and services offered by post office are: Post Office Saving Schemes Money Remittance Services Mutual Funds Forex Services Postal Life Insurance(PLI) Jansuraksha Scheme India Post Payments Bank POST OFFICE-

19. DEMERITS MERITS ACCESSIBLITY GOVERNMENT BACKING COMMUNITY HUB LIMITED SERVICES LONG WAIT TIMES LACK OF INNOVATION

20. INSURANCE- Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured. Most people have some insurance: for their car, their house, their healthcare, or their life. Insurance policies hedge against financial losses resulting from accidents, injury, or property damage. Insurance also helps cover costs associated with liability (legal responsibility) for damage or injury caused to a third party The two types of insurance are LIFE INSURANCE GENERAL INSURANCE

21. LIFE INSURANCE: Life insurance helps you achieve your financial goals. Suppose you are planning higher studies for your children abroad. In such a scenario, a good life insurance policy will ensure that your children have the financial strength to fulfil their dreams even in your absence. With life insurance, you can also plan for better retirement life, as you can build a corpus by the end of the policy term. General insurance ensures you have financial preparedness to tackle any emergencies that require monetary support. It keeps you financially covered against any unexpected losses or damages to you, your property or any asset. Health insurance, motor insurance, and home insurance are popularly bought as general insurance in India. GENERAL INSURANCE:

22. DEMERITS MERITS FINANCIAL SUPPORT INSURAANCE DECREASES RISKS THE STABILITY OF THE LIVING STANDARD INSURANCE HAS MANY TERMS AND CONDITIONS LONG AND COSTLY LEGAL PROCEDURES FRAUD AGENCY

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