ICFAI BUSINESS SCHOOL MUMBAI

INTERIM REPORT ON

“ Comparative study of financial

products for retail customers ”

BY
AYUSH JAIN
Enrolment No: - 23BSP0430

Ruhi Financial Services Pvt. Ltd

 INTERIM REPORT

ON

“ Comparitive study of financial

products for retail customers ”

BY
AYUSH JAIN - 23BSP0430

RUHI FINANCIAL SERVICE PVT LTD.

A report is submitted in partial fulfilment of the

requirement of PGPM Program of IBS Mumbai

College Faculty Guide: Company Guide:

Prof. Sanjay Katira Mr. Abhijit Sinha
ABSTRACT

I am doing my Summer Internship Program at Ruhi financial service

Pvt ltd Mumbai, Maharashtra for the Finance Profile. In this Interim
report, I would share my experience and the work done till date.
During this period, basic training session was conducted to understand
functions of Financial market, Product of Financial market, types of
market, different kinds of markets, Market Research, . As a part of
Internship, the Company has given products to acquire client to Invest
in products.
 INTRODUCTION

About the Company

Ruhi financial is a startup venture to manage people portfolio by adopting a 360-

degree approach, wealth structuring, In a era of constant change and volatile
financial Market, Investors need an Qualified /Trained and unbiased professional to
assist them in achieving their short term and long term Investment goal.
At Ruhi Financial our utmost aim is to assist our clients with dedication & integrity
for exceeding their expectations & build enduring long-term relationships.
Having more than a decade of experience in financial industry help us offer
technology-based services to our clients to efficiently monitor their portfolio which
help them reach their financial goals. We are one stop solution for all financial
needs. Our aim is to be the most reliable, prompt & efficient financial service
provider. We Endeavor to be one stop financial supermarket helping our clients in
wealth creation, Retirement planning, tax solution, goal based planning& insurance.

HISTORY OF FINANCIAL SECTOR

Major changes in the history of the Indian financial sector after the 1991-1992
independence policies.
The financial services sector provides financial services to individuals and
companies. This economic sector is made up of various financial firms including
banks, real estate agents, lenders, financial companies, real estate agents, and
insurance companies. As noted above, the financial services industry is perhaps the
most important sector in the economy, earning the world in terms of income and
equity financing. Major conglomerates own the sector, but also include a number of
different companies.

An efficient, transparent and well-developed financial system is essential for the

rapid economic growth of any country / economy. The process of economic
development is always accompanied by the consistent and consistent growth of
financial institutions. However, their institutional structure, operational policies,
regulatory / legal framework are very different, and are strongly influenced by the
existing political and economic environment. Planned economic development in
India had great freedom / regulation / globalization of the Indian economy since the
early nineties had a significant impact on the future of system development /
financial sector. The current essay lays the foundations for the transformation of
India's financial system in the wake of the development of economic freedom. The
definition of a practice that arises is an organization / building / institution and not
quantitative data. The emergence of the Indian financial system declined, from a
defining point of view, by three distinct phases. Accordingly, the essay is divided
into three sections corresponding to three sections. The key elements of the
planning of the Indian financial system prior to 1951 are described in Section 1.
The key elements of the plan during the second phase are presented in Section 2.
Section 3 is devoted to describing the emerging situation of the 1990s.
Phase-I: PRE-1951

The planning of the Indian financial system before 1951 was almost identical to the
theoretical model of the financial institution in the traditional economy. The
traditional economy, according to R. The key elements of the pre-1951 financial
plan were appropriately described by L.C. Gupta as: “The main features of pre-
liberal industrial financial institutions are closed aspects of industrialization; a
structured and small industrial security market, with no outreach centres and a lack
of participation of non- mediated financial institutions in the long-term industry
financing of the industry. As a result, the industry had a significant limit to the
availability of external storage. It simply means that the financial system did not
respond to investment opportunities. Such a financial system would obviously not
have been able to maintain a high level of industrial growth, especially the growth
of new businesses and innovation.
Phase- II: 1951 to MID-EIGHTIES

In stark contrast to the 1951 scenario, when the financial system organization left
the ambiguity, the ability of the financial and credit system to various businesses in
various ways was greatly strengthened in the second phase. The planning of India's
financial system during the post-1951 period arose as a result of the needs of the
planned economic development. In pursuit of the broader economic and social
goals of the state to protect economic growth through social justice as enshrined in
the Indian Constitution, under the provisions of the Directive of State Policy, a
planned economic development plan was introduced in 1951. Significant effects on
the financial system. With the adoption of a mixed economy as a pattern of
industrial development, in which the recommended role was taken in the public and
private sectors, there was a need to align the financial system with the priorities set
by Government's economic policy. In other words, the plan indicated the allocation
of resources through the financial plan to align with the priorities of the five-year
plan. The need for budget allocations in line with the corresponding pattern
means Government control over debt and finance
allocation. The financial priorities of a financial institution in a planned economic
development can be divided into four broad categories:
Ownership of financial institutions in the State / Government. Strengthening of institutional
structure. Investor protection as well Participation of financial institutions in corporate
governance.

Phase III: Post Nineties

He planning of India's financial system, from the mid-eighties in general, and the
introduction of a new economic policy in 1991, have been marked by dramatic
changes.
The need for economic reform or a new economic policy was felt mainly for the
following reasons:
The increase in inflation was a major factor in bringing about a new economic
policy. It was 5.4% of gross domestic product in 1981-82 and rose to 8.4% of
GDP in 1990- 91.
The organized balanceibrium payment occurs when the total import exceeds the
total export value. In 1980-81 it was against Rs. 2,214 Crores and rose to 17,367
Crores in 1990-91.
Petrol prices were high during the Iranian war of 1990-91 and at that time India
did not receive funds from the gulf countries which led to poor cash flow. It was
called the Gulf Crisis.
The reduction in foreign reserves was not even enough to cover two weeks' import
in 1990-99. The stocks were R15 8151 crores in 1986-87, down to 6252 crores in
1989-1990.

Increased inflation pressure due to inflation. Production costs are high due to the
high inflation rate that affects domestic and foreign demand.
Lack of sufficient profits has plagued the public sector in recent years due to
mismanagement of some state-owned enterprises and losses.
For the above reasons it was inevitable for the government to adopt a new
economic policy.
The basic philosophy of the development process in India was the transformation
of a free market economy and freedom / regulation / globalization. Major changes
in economic policy such as macroeconomic strengthening, industrial
empowerment, trade liberalization, currency conversion, subsidy reduction,
financial sector / capital markets
/ banking transformation to facilitate the simplification and redevelopment of DE
offices are underway, and have had a significant impact on industrial sector
structure. Industrial in India. In the current context of the emerging economy, the
role of Government in the transparent economic governance of globalization /
trade, the critical importance of Government in this sector will be greatly
diminished. As a sound agreement, the Government's role in the distribution of
finance and debt has been marked by a sharp decline and planning of India's
financial system, which is governed for up to eighty years by state control,
testifying to developments / changes focused on major markets. The capital
market is emerging as a major resource distribution agency with all segments of
the Indian economy as public, private, and national companies competing to grow
resources in major markets. At the heart of this development is the fact that India's
financial system is poised to be integrated into the domestic and international
economy.

OVERVIEW OF FINANCIAL SECTOR

India has a fast-growing diversified financial sector, both with strong growth in
existing financial services firms and new entities entering the market. The sector
consists of commercial banks, insurance companies, non-bank financial
companies, co-operatives, pension funds, joint ventures and other small financial
institutions. The regulator of banks has allowed new businesses such as payment
banks to be formed more recently thus adding to the types of businesses operating
in the sector. However, the financial sector in India is mainly a banking sector
with commercial banks accounting for more than 64% of total assets held by the
financial system.

The Government of India has introduced a number of reforms to liberate, control

and develop the industry. The Government and the Reserve Bank of India (RBI)
have taken various steps to facilitate access to finance for small, medium and
micro enterprises (MSMEs). These measures include the introduction of the Small
Business Credit Fund Scheme, issuing guidelines to banks on financial
requirements and the establishment of the Micro Units Development and
Refinance Agency (MUDRA). With collective pressure from the government and
the private sector, India is undoubtedly one of the world's largest markets. In
2017, a new portal called 'Udyami Mitra' was launched by the Small Industries
Development Bank of India (SIDBI) with the aim of improving access to credit
for Micro, Small and Medium Enterprises' (MSMEs) in the country.

India has earned a total of 10 in protecting shareholder rights following changes

implemented by the Securities and Exchange Board of India (SEBI). Market size
The Mutual Fund (MF) industry in India has seen rapid growth in assets under
Management (AUM). AUM's total sector revenue stood at Rs 24.03 trillion
between April November 2018. At the same time the total portfolio of Mutual
fund (MF) financial portfolios reached a high of 74.6 million as of June 2018.
Another important factor is the Indian financial industry insurance industry.

The insurance industry has been growing at a tremendous rate. The total value for
the first year of life insurance companies reached Rs 193,866.23 crore during
FY18. Along with the secondary market, the Initial Public Offers (IPOs) market
has also seen rapid growth. The total amount of initial Public Contributions (IPOs)
increased to US $ 1.2 billion which increased from 37 April-June 2018. Over the
past few years India has seen a significant increase in M&A. At H12018, 74
acquisition deals took place in the financial sector. The total value of the
transaction was US $ 4.166 billion.

In addition, India's leading Bourse Stock Exchange (BSE) will establish a

partnership with Ebix Inc. building an insurance distribution network in the
country using a new distribution exchange platform. Investment / Development
Investment of Foreign Investors (FPIs) in major Indian markets amounted to Rs
6,310 crore as of November 22, 2018. From October 2018, Financial Inclusion
Lab has selected the founders of fintech 11 with an investment of US $ 9.5 million
promoted by IIM-Ahmedabad's Bharat Inclusion Initiative (BII) and JP Morgan,
Michael and Susan Dell Foundation, and the Bill and Melinda Gates Foundation.
Independent equity and venture funds (PE/ VC) amounted to US $ 25.20 billion
between January and October 2018.

Government Efforts In December, 2018, the Securities and Exchange Board of

India (SEBI) recommended the inclusion of a direct list of Indian companies and
other regulatory changes. The Bombay Stock Exchange (BSE) has introduced
futures contracts and options for Sensex 50 companies from October 26, 2018. In
September 2018, SEBI requested recommendations to tighten regulations that
would improve overall management standards for market providers, mediators or
financial infrastructure providers.

INTRODUCTION OF INVESTMENT AVENUES

Saving means not spending all your current income on spending. Investing on the
other hand, choosing what assets to carry. We can choose to invest in secure
assets, dangerous assets, or a combination of both. In normal use, however, the
term savings often mean to invest in a secure asset with an insured bank account.
It is easy to confuse saving with safe investment. An investor's portfolio is simply
his or her set of investment assets. Once a portfolio is established, it is revised or
measured by selling existing securities and using the proceeds to buy new
securities, by investing more to increase the overall size of the portfolio, or by
selling securities to reduce the size of the portfolio.
Investment is a sacrifice of a certain present value of an uncertain future reward. It
includes access to many decisions such as type, mix, value, time, distance etc.
"Moreover, making such decisions should not only go forward but also make
sense. Thinking about the uncertain future. Until then, they re-evaluate and re-
evaluate their various investment commitments by looking at new information,
changing expectations and ending traditionally. In some cases, such as the
purchase of a bank deposit certificate, the amount of the subsequent amount of
money received is not known exactly.
There is no comprehensive point of view of investments ’based on the concept of
cost flows and receipts over time. From this point of view, the purpose of the
investment is to set the pattern for this flow over time to be as attractive as
possible. When expenses and receipts are defined as cash, total receipts at any
time are called cash flows, and aseries of cash flows over a period of time are
called cash flows. The purpose of the investment is to make these currencies more
attractive than they would otherwise be.

There is also the art of investing. The art of this art knows what it analyzes and
how to do it. And, however, there is also the precise art of being able to evaluate
investments from other quality information / information, such as the personal
characteristics of the people involved, whether the proposed new product will sell
well and so on. The planting of his word has many meanings. It means different
things to different people.

For someone who has lent money to someone else, it could be a return on
investment. Similarly, if a person buys shares in a company, bullion or real estate
for the purpose of informing the price, it also invests in him. Similarly, an
insurance plan or pension plan is an investment for its buyer. From these
illustrations, it is clear that the investment is a financial commitment to earn more
money. In other words, an investment is considered a sacrifice of a certain present
value of money in anticipation of a reward.

“An investment is a commitment to make money in anticipation of a specific

profit. If the investment is made well, the return will be equal to the risk the
investor takes”. Investment "The purchase by a single investor or institution of
financial or real assets that produces a return in proportion to the risk taken over a
particular future investment".

TYPE OF INVESTMENT AVENEUS

As an investor, everyone has a clear desire to get a sky-high return as soon as

possible with minimal risk of losing money. The investor must understand that
investing is not a casino, where you will hit the jackpot overnight.
Interestingly, there is no other investment option that guarantees a high return on a
low risk. In a working world and its bitter reality, risk and reciprocity are directly
proportional, e.g. above risk, height is advantageous and vice versa. However, it is
very important to build a strong, sustainable and long-term portfolio, which puts
your excessive corpus to your advantage. This leads to the base of the investor
profile.

When choosing an investment method, a person will compare their risk profile
with the product. Understanding the urge to take risks will be important. There are
other investments that can potentially produce better and more volatile inflation
returns, compared to others but more often than not, with significant risks.
Also, the investor should understand that all investment products fall into two
broad baskets - financial assets and non-financial assets. The former category
consists of market-related products such as shares and joint funds as well as fixed
income products such as bank deposits, provident fund, and the latter is
particularly prominent in India, which includes physical investments in gold and
real estate.

Equity

Equity as an inheritance category is beneficial but not everyone’s cup of tea. It is

probably the most volatile asset class with no guaranteed return. Investment is not
limited to stock options, but the timing of entry and exit is very important. Over
time, however, stock markets may become the most efficient asset class with the
highest alpha.
When you put your money into cash, investors will opt for a solid loss stop to
minimize damage. It is advisable to have an expert opinion before buying shares.
To place your hard-earned money in a straight line, one needs to have a data
account.

Mutual Funds

A mutual fund is a professionally managed investment fund that collects money

from many investors to buy securities. They can invest their money in one or more
security measures. Mutual Funds can invest in stocks, debt or both. They can be
effectively regulated or synthetic funds.
In operating funds, the fund manager plays a key role in selecting scrip’s to
generate returns, while transaction funds or trading funds (ETFs) invest based on
the indicators set out below. Stock schemes are classified according to capital-
capitalization or the sectors in which they invest.
Debt Mutual Funds are best suited for investors looking for sustainable low-risk
profits. They do not change much as the corpus is placed on fixed interest-
bearing securities such as corporate bonds, government securities, financial
liabilities, trading paper and other financial market instruments. However, shared
debt is not a risk, nor does it guarantee a return.

Bonds or Debentures

Debts or bonds are long-term investment options with fixed cash flows according
to the quoted interest rate. They are considered less dangerous. The amount of risk
involved in debentures or bonds depends on who is issuing. Includes Government
security, savings bonds, bonds of public units etc.

Bank Fixed Deposits (FDs)

FD in banks is considered one of the safest and traditional investment options in

the nation. It is different from being added to savings accounts. They give a fixed
interest rate on the principal amount at a predetermined time. Bank FD offers a
higher interest rate than savings accounts. However, the amount of interest earned
is added to the individual's income and is taxed as a slab for each income.
Public Provident Fund (PPF)

The Community Service Fund is one of the most popular investment products,
with a long maturity period of 15 years. The impact of tax-exempt interest is huge,
especially in recent years. It is a safe investment as interest earned (reviewed
quarterly by the government) and the invested principal is backed by a royal
guarantee.

National Pension System (NPS)

The National Pension Scheme is a long-term investment product managed by the

Pension Fund Regulatory and Development Authority (PFRDA). It is a
combination of equity, fixed currency, corporate bonds, liquid funds and
government funds, among others.

Real Estate

Buying property is one of the most popular ways to invest in the country.
However, the material you use should never be considered an investment.
Investment in real estate is not limited to real estate as components such as
offices, real estate, housing, student housing, data centers, and shared spaces are
also gaining traction among investors.
Real estate is the most important factor affecting the price of property and the
rental income that can be earned. Investing in real estate brings returns in two
ways - capital investment and employment. However, unlike other categories of
assets, wealth is not the most valuable asset.

Gold

It is a traditional way of investing heavily among Indians, but having gold in the
form of jewellery has security concerns and high costs in the form of 'cost-
effectiveness'. However, buying gold coins or biscuits is still an option but a gold
ETF can be counted as a viable alternative. Investing in gold notes through ETFs
is much safer and more expensive.
Although they are a class of liquid goods, many novice investors are deceived by
‘double’ or ‘mixed’ jewellery, if purchased without proper knowledge or from
dreaded jewellery.

Life Insurance

Insurance schemes sold as life insurance will not be considered investment

options as they offer risk cover in the event of a misfortune. However, many
Indians view insurance as an investment. Life insurance is a health safety tool.
The main purpose of other forms of investment is to recover but the main purpose
of life insurance is to protect our families from adverse events.
Summary

Investments are made for the purpose of wealth creation and all the instruments
mentioned above achieve their objectives, depending on the risks involved. The
investor must understand risk anticipation, time limits and tax management in a
variety of investment strategies in order to make an investment call wisely and
brutally.

What Are Financial Markets?

Financial markets refer broadly to any marketplace where securities trading occurs,
including the stock market, bond market, forex market, and derivatives market.
Financial markets are vital to the smooth operation of capitalist economies.

Financial markets play a vital role in facilitating the smooth operation of capitalist
economies by allocating resources and creating liquidity for businesses and
entrepreneurs. The markets make it easy for buyers and sellers to trade their
financial holdings. Financial markets create securities products that provide a return
for those with excess funds (investors/lenders) and make these funds available to
those needing additional money (borrowers).
The stock market is just one type of financial market. Financial markets are created
when people buy and sell financial instruments, including equities, bonds,
currencies, and derivatives. Financial markets rely heavily on informational
transparency to ensure that the markets set prices that are efficient and appropriate.

INTRODUCTION TO FINANCIAL MARKETS

Financial markets are structures that allow for the buying and selling of financial
claims and services like stocks market, bond market, derivatives are known as
financial market. Financial institutions, agents, brokers, dealers, borrowers,
lenders, investors, and others participate in these markets, which are linked by the
country's laws, contracts, and communication networks.

Classification of Financial Market

Organized Market
There are standardised rules and regulations controlling financial dealings in
organised markets, which are overseen by various regulatory agencies. These
organised marketplaces are divided into two categories: capital markets and
money markets.
Unorganized Market
Unorganized market are those in which money lenders, indigenous bankers,
dealers, and others lend money to the public. There are also private finance
businesses, chit funds, and other financial institutions whose operations are not
regulated by the RBI (Reserve Bank of India). Deposits are also taken from the
general public by indigenous bankers.

Capital Market
Medium and long-term funds are traded on the market. It includes all long-term
borrowings from banks and financial institutions, as well as borrowings from
international markets and capital raising through the issuance of various
instruments such as shares, debentures, and bonds. The Securities Market is the
place where securities are traded. It consists of two parts: the Primary Market and
the Secondary Market.

Primary Market
It deals with new or fresh security issues. These new shares are available to
investors for the first time through an Initial Public Offering (IPO) (IPO). An
initial public offering (IPO) is a sort of public offering in which a company's
shares are sold for the first time to potential investors such as consumers,
institutional clients, or workers. It's a method of raising funds for future expansion
or other corporate purposes.

Secondary Market
The secondary market is facilitating the buying and selling of shares and other
assets, the secondary market, also known as the stock market or stock exchange,
plays an equally vital role in mobilising long-term funds.

Money Market
The Money Market is a market for short-term funds that deals in financial assets
with maturities of less than a year. Treasury Bills or T-Bills, Commercial Paper,
Certificates of Deposits, and other money market instruments. The money market
is an uncontrolled and unstructured market, unlike the capital markets, which are
structured in a formal manner. The money market offers a lower rate of return to
investors, but it does offer a wide range of products. Unlike the capital markets,
which are organised in a formal manner, the money market is uncontrolled and
unstructured. The money market has a lesser rate of return than the stock market,
but it has a larger selection of it.

Derivative Market

Financial products or contracts that derive their "worth" from an underlying asset
are known as derivatives. For example, the derivate of Reliance's shares
(Underlying Asset) will derive its value from Reliance's share price (Value).

Types of Derivatives Contract

Forward Contract
A Forward Contract is a contract between two parties in which they promise to
buy or sell a particular amount of underlying at a rate determined on the contract's
date on a fixed forward date or within a fixed forward period. In terms of quantity
and settlement date, forward contracts are customizable (Tailor made).

Future Contract
A futures contract is a contract between an exchange and a trader in which the
trader commits to buy or sell a standardised amount of the underlying on a certain
future maturity date (Last Thursday of the month). In terms of quantity and
settlement date, future contracts are uniform.
Spot Price — Also known as Market Price, this is the price quoted for an asset's
instant sale or acquisition.
Future Price - This is the market price at which a future contract is traded.
Lot Size - The smallest amount of an item (stock, commodities) that must be
purchased or sold in order to trade futures.

Option Contract
An option contract is one in which the buyer or seller has the right but not the duty
to buy or sell a specific amount of an underlying asset at a pre-determined strike
price on or before a standardised future maturity date (also called exercise price).
The option buyer pays a premium to the seller in exchange for the right. Call and
Put options are the two forms of option.
CURRENT SCENARIO OF FINANCIAL SERVICE

India's financial sector growth is currently about 8.5% per annum. Rising growth
rates boost economic growth. Monetary policies and monetary policies are able to
maintain a stable growth rate.
Changes in monetary policy and economic policies over the past few years have
had a profound impact on the Indian economy. A major step towards further
opening up the financial market was the abolition of laws that restrict the growth of
the financial sector in India. To maintain such growth for a long time inflation
should be significantly lower.
India's financial sector has grown by 15% overall, indicating stability over the past
few years even though many other markets in the Asian region have been
struggling. The development of a financial sector plan has been key to similar
growth. With the opening of the financial markets a variety of products and services
are introduced to suit the needs of the customer. The Reserve Bank of India (RBI)
has played a significant role in the growth of the Indian financial sector.
Market Size

As of June 2021, AUM-owned joint venture industry stood at Rs. 33.67 billion. As
of June 2021, the total number of accounts stands at 102.6 million. In May 2021,
the joint bag industry surpassed 10 crore folios. Entry into Indian co-operative fund
plans through a formal investment plan (SIP) was Rs. 96,080 million on FY21.
Equity Joint Funds have registered a full entry of Rs. 8.04 trillion by the end of
December 2019.
Another important factor in the Indian financial industry is the insurance industry.
The insurance industry has been growing at a tremendous rate. The total amount for
the first year of life insurance companies has reached Rs. 2.59 lakh crore on FY20.
In addition, India’s leading bourse, Bombay Stock Exchange (BSE), will form a
partnership with Ebix Inc. to build an insurance distribution network in the country
through a new distribution platform.

Investments/Developments

In May 2021, the Reserve Bank of India (RBI) authorized Eroute Technologies to
operate as a prepaid payment company (PPI).
In February 2021, the Reserve Bank of India (RBI) withdrew Rs. 34,250 crore
acquisition of Dewan Housing Finance Corporation (DHFL) acquisition by Piramal
Group.
In January 2021, Sundaram Asset Management Company announced the
acquisition of Principal Asset Management for Rs. 338.53 pounds
In January 2021, the National Stock Exchange (NSE) presented its findings on the
Nifty Financial Service Index. This service guide may provide institutions and
investors who sell more flexibility in managing their finances.
In November 2020, the LIC took steps to assist in the immediate completion of the
proposal by introducing a digital program - ANANDA.
In November 2020, Paytm reported a 2x increase in digital gold transactions over
the past six months. New customers have increased by 50% since the start of this
financial year and the total number of orders has increased by 60%.
In November 2020, the Reserve Bank of India (RBI) announced the launch of its
Innovation Hub. In order to promote access to financial services and assets and to
encourage investment, this initiative will create an ecosystem. The Reserve Bank's
Innovation Hub (RBIH) aims to promote innovation across the financial sector
through technology and to create a conducive environment for innovation.
VC's investment grew to US $ 3.6 billion in July-September 2020 from US $ 1.5
billion in the last quarter, funded by mega deals, including US $ 1.3 billion
acquired by online retailer Flipkart.
On November 6, 2020, WhatsApp launched its UPI payment services in India with
the approval of the National Payments Corporation of India (NPCI) on 'Go Live' on
the UPI in a restricted manner.
In June 2021, Unified Payments Interface (UPI) recorded a $ 2.80 billion
transaction worth Rs. 5.47 lakh crore The value of transactions using the instant
payment service (IMPS) increased to 279.81 million (volume) and reached Rs. 2.66
trillion in total by May 2021.
Government Initiatives

The government has approved 100% FDI for insurer mediators and increased the
FDI limit on the insurance sector to 74% from 49% under the Union Budget 2021-
22.
In January 2021, the Central Board of Direct Taxes launched an automated e-portal
on the department's website to process and receive complaints about tax evasion,
undisclosed external requests and registration of complaints about 'Benami'
buildings.
In December 2020, the Reserve Bank of India released a circular framework for the
announcement of shares by NBFCs, in which it proposed that NBFCs should have
at least 15% Capital to Risk Weighted Ratio (CRAR) over the past 3 years,
including one year. Of accounting that proposes to declare the assignment.
In November 2020, the Union Cabinet approved a government grant of Rs. 6,000
crores on the NIIF Platform supported by the National Investment and
Infrastructure Fund (NIIF) comprising Aseem Infrastructure Finance Limited
(AIFL) and NIIF Infrastructure Finance Limited (NIIF) (NIIF- IFL).
In November 2020, two MoUs were signed - one between the India International
Exchange (India INX) and the Luxembourg Stock Exchange and the other between
the State Bank of India and the Luxembourg Stock Exchange to co-operate with
financial services, ESG (environmental, social and administrative) and green
finance. in the local market.
On November 11, 2020, the Cabinet Committee on Economic Affairs approved the
continuation of the revitalization of public-private partnerships (PPPs) in the
'Infrastructure Disability Infrastructure (VGF)' programs until 2024-25. Rs. 8,100
pounds.

Road Ahead

India is expected to become the fourth largest independent market in the world by
2028.India today is one of the world's most powerful economies after strong
banking and insurance sectors. Relaxation of foreign investment regulations has
received a positive response in the insurance sector, with many companies
announcing plans to increase their stake in partnership with Indian companies. In
future episodes, there may be a series of cooperation agreements between major
international insurance companies and local players.
The Association of Mutual Funds in India (AMFI) has identified fivefold growth in
AUM to Rs. 95 lakh crore and triple growth in investor accounts to 130 million by
2025.
India's mobile wallet industry is projected to grow by a Compound Annual Growth
Rate (CAGR) of 150% to US $ 4.4 billion by 2022, and mobile wallet transactions
will affect Rs. 32 trillion over the same period.

PORTER’S FIVE FORCES OF FINANCIAL SERVICE

INDUSTRY

1.Threats of New Entrants

New entrants to Credit Services bring new products, new ways of doing things and
put pressure on Discover Financial Services on low-cost strategies, reduce costs,
and offer new value proposals to customers. Discover Financial Services must
manage all of these challenges and create effective barriers to protect its
competitive edge.
How Financial Services can tackle the Threats of New Entrants

By introducing new products and services. New products not only bring new
customers to the fold but also give the old customer a reason to buy Discover
Financial Service products.
By building a scale economy to reduce the planned costs per unit.

Capacity building and spending on research and development. New entrants are
less likely to enter the dynamic industry where established players such as Disco
Financial Services continue to define standards on a regular basis. It greatly reduces
the window of unconventional benefits for new firms thus discouraging new
players in the industry.

2.Bargaining Power of Suppliers

All companies in the Credit Services sector buy their immature goods from
multiple suppliers. Top providers can reduce the amount of Getting Financial
Services available in the market. Powerful financial providers use their negotiating
power to deliver high prices to firms in the Credit Services sector. The overall
effect of high supplier negotiation is that it reduces the overall profitability of
Credit Services.

How Discover Financial Services can tackle Bargaining Power of the Suppliers

By building an effective supply chain with multiple providers.

By experimenting with product design you use a variety of materials so that when
prices rise from one raw item the company can switch to another.
Developing dedicated suppliers to their factory-based business. One of the lessons
Discover Financial Services can learn from Wal-Mart and Nike is how these
companies have made third-party producers their business-only business which
creates a situation where these third-party producers have less negotiation power
than Wal-Mart and Nike.

3.Bargaining Power of Buyers

Consumers are often the hardest hit. They want the best deals you can get by paying
the lowest possible price. This puts pressure on Discover Financial Services benefits
over time. The smaller and more powerful customer base of Discover Financial
Services enhances customer engagement and enhances their ability to claim
growing discounts and offers.
How Discover Financial Services can tackle the Bargaining Power of Buyers

By building a large customer base. This will help in two ways. It will reduce
consumer negotiation capacity and will also provide an opportunity for the factory
to simplify its sales and production process.
By quickly introducing new products. Customers tend to seek discounts and offers
on established products so if Discover Financial Services continues to come up
with new products it can reduce consumer negotiation power.
The new products will also reduce existing Discover Financial Services customer
rivals from their competitors.

4.Threats of Substitute Products or Services

When a new product or service meets the same customer needs in different ways,
the profitability of the industry suffers. For example, services like Dropbox and
Google Drive are replacing hardware storage drives. The threat to a replacement
product or service is high if it offers a price proposition that is uniquely different
from the industry supply.
How Discover Financial Services can tackle the Treat of Substitute Products / Services
Directed by the service rather than just the product.

By understanding the customer’s basic needs rather than what the customer buys.
By increasing customer transaction costs.

5.Rivalry among the Existing Competitors

If the rivalry between the players in the industry is tense then it will lower prices
and reduce the overall profitability of the industry. Discover Financial Services
operates in the highly competitive Credit Services industry. The competition affects
the long-term profits of the organization.

How Discover Financial Services can tackle Intense Rivalry among the Existing
Competitors in Credit Services industry
By creating a continuous difference. By building a scale so that we can compete
better Working with competitors to increase market size rather than competing with
a smaller market.
CHALLENGES OF FINANCIAL SERVICE
Regulatory Compliance in Finance

The volatile regulatory environment poses a never-ending challenge to financial

institutions of all kinds. Regtech is an emerging industry that can help reduce the
burden of compliance. Using Fintech's latest technology to address compliance,
Regtech's start closes the gap between regulators and the financial services industry

Cybercrime in Finance

Data breaches involving financial services firms increased by 480% from 2017 to
2018. With each attack cost millions of financial institutions, new solutions are
needed if we are to avoid the repetition of illegal West Coast days. Any cybercrime
solutions that come from protecting financial services, block chain technology must
be the foundation. As more and more institutions adopt ledger technology (DLT)
technology, block chain will be a facto solution to keeping financial data safe while
at rest. Integrating DLT with existing financial infrastructure presents major
obstacles that need to be overcome. However, it has passed the point of questioning
whether the block chain is a sacred graph of financial data security.

Eliminating Data Breaches

Financial services firms are mainly targeted at cybercrime. Because of the sensitive
data they carry, they are more likely to be victims. In fact, financial services firms
have been beaten 300 times more often than other businesses.

Big Data Use in Finance

Big data provides opportunities and barriers for financial service providers.
Touching social media, consumer information, and news feeds can help banks
better serve their customers, while better protecting their interests.
But random data streams of useful information are no small feat. It requires strong
data analysis technology if institutions are to benefit.

Customer Retention in the Financial Services Industry

Competition for financial services clients has never been stronger. While product
integrity may not be immortal, it is certainly a lifeline.
What is important for many customers this year is greater customization, automated
services, and easy access to services. Institutions that can bring all three will hold
their share in the market.
Exceeding Consumer Expectations

Consumers continue to have high expectations for their financial institutions. Many
want a highly customized service from their financial providers.
According to the 2019 Accenture Global Financial Services Consumer Study, one
in two consumers is seeking personalized advice from banks based on their
circumstances. They want to be evaluated on their spending habits and financial
management advice. 64% of participants are interested in insurance premiums that
match their behavior, such as having a good driving record.

SCOPE OF THE STUDY

In today's environment many ways to invest are offered by various public and
private financial institutions, and people are completely confused as to where to
invest. Current study Inputs and risks play a significant role in the selection of
specific investment options. As the research report shows that the frequency of
investment behavior, pattern, factors, and income level play a very important role in
determining the investment pattern. Therefore, analyzing the factors affecting the
investment pattern and other investment strategies provides important details.

IMPORTANCE OF THE STUDY

For Individual Investors: The study looks at the investor's behavior and the
decisions they make on various investment options. In Investment Organizations:
Research support in an investment organization, in view of investment trends,
credibility drives better implementation and recommendations on growing
investment strategies. Ethical Finance: Ethical financial concepts are relatively new
compared to other financial concepts. This study hopes to ensure the effectiveness
of effective ethical investment in all types of investments.