CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

FINAL DRAFT: LAW OF TORTS

TOPIC: FINANCIAL SERVICES AND CONSUMERS

SUBMITTED TO: -

MS. SNEHA SHARMA

CO-ORDINATOR OF C.R.C

CNLU Patna

Submitted By:

Shaurya Shukla

ROLL NO – 2160

B.A LLB, 1ST SEMESTER

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DECLARATION

I, hereby, declare that the work reported in B.A.,LLB(Hons.) Project report entitled
“Financial Services And Consumers” submitted at Chanakya National Law University is
an authentic record of my work carried out under supervision of Ms. Sneha Sharma . I have
not submitted this work elsewhere for any other degree or diploma. I am fully responsible for
the contents of my project work.

SIGNATURE OF CANDIDATE:

NAME OF CANDIDATE: SHAURYA SHUKLA

ROLL NO- 2160

CHANAKYA NATIONAL LAW UNIVERSITY

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ACKNOWLEDGEMENT

It feels great pleasure in submitting this research project to Ms. Sneha Sharma, CO-
ORDINATOR OF CRC, CNLU Patna without whose guidance this project would not
have been completed successfully.

Next, I would like to sincerely thank my seniors, whose suggestions and guidance
assisted me throughout the entire tenure of making the project.

Last but not the least, I would like to express my heartfelt gratitude towards my
parents and friends who guided me and helped me at every possible step.

Shaurya Shukla

B.A LLB

1st Semester

Roll No. 2160

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Table of Contents
DECLARATION ....................................................................................................................... 2
ACKNOWLEDGEMENT ......................................................................................................... 3
INTRODUCTION ..................................................................................................................... 5
HYPOTHESIS ........................................................................................................................... 5
RESEARCH METHODOLOGY............................................................................................... 6
CONCEPT OF CONSUMER FINANCE ................................ Error! Bookmark not defined.
TYPES OF CONSUMER FINANCE ..................................... Error! Bookmark not defined.
SOURCES OF CONSUMER FINANCE ............................... Error! Bookmark not defined.
COST OF CONSUMER FINANCE ....................................................................................... 13
FOUR C,s OF CONSUMER FINANCE ................................. Error! Bookmark not defined.
MAJOR AREAS OF CONSUMER FINANCE ..................... Error! Bookmark not defined.
CONSUMER FINANCE AS A SERVICE ........................... Error! Bookmark not defined.
A BRIEF REVIEW OF CONSUMER FINANCING COMPANIES IN INDIA ............Error!
Bookmark not defined.
CONSUMER FINANCING IN FUTURE............................... Error! Bookmark not defined.
CONCLUSION ........................................................................................................................ 22
BIBLIOGRAPHY .................................................................................................................... 23
BOOKS .................................................................................................................................... 23
WEBSITES…………………………………………………………………………………

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 INTRODUCTION

The buy-now-pay-later culture is still fairly nascent in India. Even today, there

exists a generation and segments of consumer who might prefer to accumulate funds

rather than take it on DEBT. But then again, the choice is a recent one. Earlier, in our

capital scarce economy, there was not enough credit available for industry, let alone

for the household sector. Today the corporate sector is flush with funds and banks as

-well as CFCs seem to have a surfeit of funds to lend. Demand for industrial leasing

has slumped, since industry has relatively larger and easier access to funds for

purchase of capital equipment. As a result, increasingly numbers of leasing companies

are diversifying into CF in a bid to attract borrowers.

On the other hand, a manifestation of the Government’s ongoing liberalisation

coupled with general economic growth has attempted to upgrade the status of

consumer claiming that consumers have been made a hub around which corporate

growth is being planned. It needs security to access its effectiveness and to measure a

gap between theoretical philosophy and practical considerations with regard to CF

activities in India. It is true that today, the consumers have relatively a wider range of

alternative products to choose from compared to the past. Across the board in

practically number of sectors like cars, electronic items and white goods, there has

been a tremendous surge in production. Cars, colour televisions, cellular phones,

audio equipment, as electronic gadgets are some of the products, which are, made

available to consumers. Besides, better utilisation of industrial capacities, new ones 1

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 are also being created at a rapid pace never seen before, all vying for consumer’s
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attention.

HYPOTHESIS

The problems faced by financial sector in India are advancing to priority sector, competition
from non-banking financial institution, NPAs, bureaucratization, political pressures, etc.
These factors are obstructing Indian economy in ameliorating.

RESEARCH METHODOLOGY

In this project Doctrinal Method of Research is used. Doctrinal Methods refer to Library
research, research or processes done upon some texts writings or Documents, legal
propositions and Doctrines, Articles, Books as well as Online Research and Journals relating
to the subject. This project is an intensive one so this method is sufficient to address the
findings and to arrive at concrete conclusions.

CONCEPT OF CONSUMER FINANCE

The consumer finance is a win-win system in which every one wins.

For the consumers it is an opportunity to upgrade standard of living in the here

and now instead of waiting for years of savings to accumulate.

For manufacturer, consumer finance stimulates demand and brings down

inventories.

For dealers it is one type of sales booting. For finance company it is profit

generation. /

We find use of CF going back from prehistoric times. We could found

evidences that ancient societies have used consumer finance (CF). It has grown at an

astounding pace since World War II. In USA it is widely used concept. In India it is at

fairly nascent stage.

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 TYPES OF CONSUMER FINANCE

The types of consumer finance are categorised as following: -

(A) Based on Schedule for Repayment

It has been further divided into two types of consumer finance.

(i) Instalment Payment:

This CF usually arises from the purchase of high priced items viz., TV,

washing machine, and freeze, etc. The buyer does not have to pay the entire amount at

once. Repayment is then made in instalments over several months until the debt is

retired. The number of months may be 6, 12, 18, 24, and 36 as case may be.

(ii) Single or Non-Instalment Payment:

According to this scheme customers are required to repay entire debt in

single or one payment.

(B) Based on Approval for Money Transaction:

This type of CF is further divided into two types of consumer finance:

(i) An Open Ended Consumer Finance:

It is available up to some pre-set amount without approval for each

transaction. The borrowers may apply for initial approval from a lender agreeing to

the terms of the CF and repayment.

Generally after approval customer receives an identifying number that can be

used whenever customer needs credit. We can consider credit cards as an example in

this category of consumer finance.

(ii) Closed Ended Consumer Finance:

It requires approval for each transaction. That amount can be added to the

previous credit financing without a new agreement between customer and lender.

(C) Based on Mode of Payment:3

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This type CF has been also further classified into two sub-types 4:3: C (i) Direct Money
Consumer Finance:4

This CF is extended to consumer by lending agencies of finance institutions.

The consumers can use the borrowed money to purchase the desired items.

The various plans available to consumers in this category of CF are as

follows:

(a) Check Credit Plan:

It is a form of open-ended consumer finance, in which lending institutions

especially a bank approves a predetermined credit. When customer overdraws

account, it automatically triggers to loan. So long as the payment schedule is met and

authorised limit of CF is not crossed customer can continue to increase the loan.

(b) Instalment Loan:

It is often used to meet needs over a longer period than the single payment

loans for several years like 1,2 or 3 years. Periodic payment tries to match customer's

ability to repay with size of the loan to be satisfied. Finance charges for these loans

depend on the source, amount and timings of loans as well as value of collateral

offered.

C (ii) Retailer Consumer Finance:

The retailer CF is directly related to sale of product. Seller of goods and

services offers it. The retailer CF has been further classified into three categories as

follows:

(a) 30 Days Consumer Finance:

The amount owed must be paid within a set time, usually thirty days. The

charge for credit is included in price of product for service. Most of Indian families

use this type of retail credit CF for purchase of milk, newspapers, food grains,

monthly rent payment to servant, washerman, etc.

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(b) Revolving Consumer Finance:

It helps customer to continue purchases and pay whole or a part of the balance

owed each month. It has certain advantages and disadvantages. First, it enables

purchase of a large rupee volume due to extended repayment period. Second, this

account is easy to use. Once the account has been opened, the customer is free to buy

without having credit rechecked with each purchase. he disadvantage of this type of CF is
that because of the ease and

convenience of purchase, customer may over purchase and thus he remains

continually in debt to the retailer. Second, the rate of interest ranges from 1.5 per cent

to 2 per cent per month.

(c) Bank Credit Cards:

The first bank credit card of the current type was issued in 1951 by Franklin

National Bank of USA. The bank credit cards are convenient because of their wide

acceptability and their centralised billing system regardless of where purchase is

made. There is only one monthly bill. Master card, BOB card, StanChart, Citibank

Card, are examples of bank credit cards.

SOURCES OF CONSUMER FINANCE

The major sources of consumer finance are as follows: -

4:4: (i) Commercial Banks:

The commercial bank offers loans to qualified individuals on secured and

unsecured basis. Secured loans are based on security of collateral like cash surrender,

gold, jewellery, real estates etc. The unsecured and single payment loans require, only a
customer’s signature

on a loan paper. The loan papers have contents like repayment schedule, amount, due

dates, etc. It includes various types of loans like the regular loans, credit cards and

check credit.

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The important advantages are as follows:

-+ Mostly the rates of interest charged are usually lower compared to other CF

schemes.

-* It increases credit rating with a bank in case of favourable repayment without 5

default.

The important disadvantages are as follows:

-+ It has rigid requirements to qualify for availing of consumer loans.

^ It often avoids small-unsecured loans, as they are not perceived to be profitable to

handle by the commercial banks. 4:4: (ii) Consumer Finance Companies:

These companies have specialised in offering of small loans to consumers.

They are commonly known as ‘small loans’ companies or personal Finance

companies. It includes leading companies like Countrywide, Whirlpool, Apple, MAS

finance, and Kotak Mahindra.

The important advantages of this source are as follows: -

-*■ One can obtain small loans from CFCs.

-*■ It is easier to qualify for availing consumer loans for individuals.

The important disadvantages of this source are as follows':

The rates of interest charged are higher and they charge flat interest rates (16 to 20

per cent)

-*■ The consumers are required to pay high processing fees.

4:4: (iii) Credit Unions:

It is a group of people. They have a common interest of activity so they join

together to form a co-operative for giving loans for purchases to their members. A

borrower must be a member of credit union. The credit unions are set up on the basis of caste,
employee, religion, nature of work etc., in India. The co-operative credit

unions are very popular in India.

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The important merits of credit unions area as follows:

-> The rate of interest is usually lower than other sources of consumer finance.

-> They offer small loans based on a signature only. They do not need any collateral,

and guarantors.

The key demerits of this source of consumer finance are as follows:

-+ Many customers may not like to reveal their financial needs to other colleagues.

-> If customer is not or can not become a member of credit union he/ she can not get

loan from it.

4:4: (iv) Savings and Loan Association:

They mainly focus on home mortgage loan. It could offer loans only to those

people who have saving account with the association. The consumer loan is provided

against the account. It is also known as an account secured loan. The rate of interest

charged is usually lower compared to CFCs but it is higher in relation to those

charged by other sources of consumer finance.

-*■ Life Insurance Corporation:

Life insurance policyholders can avail a loan in the amount of cash surrender

value plus any accumulated dividend or interest from the insurance company. Such

loans are called policy loans because the life insurance policy serves as collateral.

The important advantages are as follows:

-*■ It is simple and easier to obtain loan from Life Insurance Corporation.

-> Their interest charge is based on outstanding loan balance.

-*■ It offers flexible repayment schedule.

The important disadvantages are as follows:

An amount outstanding is deducted from benefits paid to the policyholder in the

event of death of insured.

-► A customer must be a Life Insurance Policyholder for getting loan.

4:4: (v) Pawn Broker:

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It is a last resort in a money crisis or when customer’s credit does not permit

borrowings from any other sources. Customer gets loan by taking personal property to

the Pawn Brokers to serve as collateral. Loans usually amount to less than 50 per cent

of appreciated market value of collateral. This type of CF has more disadvantages

than advantages. Such consumer loans are very expensive because it carries interest

rates from 24 per cent to 100 per cent per annum. The loans also lack adequate

protection to consumer. The chief advantage is that it is quick..

COST OF CONSUMER FINANCE

The following methods are used for repayment in consumer finance:

(i) Wage Assignment/Garnishment:

According to this method a creditor can collect amount due by attaching a part

of debtor’s income from employer. The legal process of attaching a debtor’s wage is

called garnishment.

(ii) Acceleration Clause:

This method provides that if more than one payment on the debt is missed or

in some cases if the payment is delayed for any reason the entire balance of the debt is

due and payable immediately.

(iii) Balloon Balance:

It refers to situation where a series of small monthly instalment is followed by

a series of much larger monthly payment.

(iv) Add on Clause:

This method holds that title remains with the seller until the account is paid. If

customer buys a house, the documents of house remain with the seller until the

amount owed is paid.

(v) Prepayment:

According to this method the customer repays the loan amount before the

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mature date. When customer does prepay, he receives a refund of a portion of the

interest charge otherwise payable by him.

(vi) Credit Life/Disability Insurance:6

It is a method of repayment of debt to the lender if the borrower dies or

becomes disabled. The borrower pays the premium and it is included in loan.

FOUR C,s OF CONSUMER FINANCE

Business firms have fully realised that profits can not be increased through the

gravity of credit if the consumer does not repay. There are four C’s of consumer

finance described in brief as follows:

4:7: (i) Character:

Character stands out as the most intangible and difficult to assess. Its

investigation includes family situation, personal habit like- drinking, gambling; and

virtues viz., -honesty, and courage.. It may be inferred from business and professional

behaviour including attitudes toward payment of debts and respect for right for others.

4:7: (ii) Capacity:

Capacity in a narrower sense means ability to pay a specific amount of money

as and when it is due. Its investigation includes the current income and amount of

income that has been earmarked for previously incurred debt regardless of size of the

income involved.

4:7: (iii) Collateral: ,

Collateral is a form of tangible property owed by the; borrower that is assigned

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to the lender to act as security such as gold, jewellery, real estate, etc.

4:7: (iv) Conditional:

Conditional credit is more freely extended during a good economic times than

during period of recession.

MAJOR AREAS OF CONSUMER FINANCE

We cari divide consumer finance in to three major areas as follows:

4:8:1: Housing Finance.

4:8: 2: Vehicle Finance.

4:8: 3: In-House Consumer Finance.

4:8:1: Housing Finance: '

The World Bank estimates the average ratio of mortgage credit supplied by

formal sector to housing investment were 28 per cent and in India it was 10 per cent.

Typically in developing economy the share of housing investment in GDP is about 2.5

per cent. It is estimated that Rs. 7,000 crore has been disbursed by the total formal

sectors’ finance for housing.

Major Sources of Housing Finance:

• Government: *

The government reimburses loan to HUDCO. The HUDCO provides housing

loans to development authority and State Housing Finance. In turn, State HF extends

loans to households.

• Commercial Banks:

The commercial banks extend hosing loans to HUDCO households

• LIC:

The LIC has approved Rs. 24,825 crore cumulative loans to HUDCO, State

Apex co-operatives and households directly. The LIC is the second largest housing

financing institution after HDFC...... ; • Capital Market:

The money raised through capital market is extended to HUDCO.

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Housing Finance In the Indian Context:

The HDFC and LIC have market shares of 85 per cent. As per annual report 7

1996-199-7 of the HDFC, it has a cumulative mortgage loan portfolio of over Rs.

12,232 crore. Loan disbursement to individuals constitutes 67 per cent, to corporate

bodies 32 per cent and over 2400 towns and cities in India. The Lloyd HF lends HF

without ceiling. The Apple HF lends up to Rs. 50 lakh. At the high end, there is

competition. Citibank’s Housing Division-Shelter and Stanchart HF concentrates on

high net worth individuals. Generally people want HF for purchase of new homes,

home improvements, renovations, home extensions, etc.

4:8: 2: Vehicle Finance:

Broadly there are two types of vehicle financing facilities:

Car Finance:

The current market size of 2.5 lakh cars is expected to explode in the coming

years with the imminent arrival of new models such as Hyundai, Matiz, Indica, Lancer,

Uno, etc. Well over 60 per cent of the cars will be purchased through finance

companies in the near future. The growth rate of car finance has been 15 per cent.

Total car finance potential is Rs. 1200 crore, out of which 70 per cent means rupees

700 crore comes from organised sector and 30 per cent means rupees 300 crore from

an unorganised sector. NBFC has 80 per cent market share. The present market share

of various companies is shown in the following pie diagram.

Two-Wheeler Finance:

In case of two-wheeler finance, the Bajaj Auto Finance, and the Kinetic

Finance are major players. Both are original manufacturers of two wheelers. Bajaj

Auto Ltd. has set up Bajaj Auto Finance Ltd. It has disbursed Rs. 45 crore in 1991-92.

Kinetic Engineering has tied up with three finance companies. The tie up between

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Integrated Finance Company and Kinetic Engineering is called Integrated. Kinetic. 20th
Century Kinetic is the result of tie up between 20th Century Finance and Kinetic

Engineering. Capital Trust and Kinetic Engineering have set up a Joint Venture called

Kinetic Capital.

4:8: 3: In-House Consumer Finance:

It is estimated that the size of market for consumer durable in India is between

Rs. 20,000 to 25,000 crore and even a quarter of ties fridge, washing-machines and

audio-system i.e. major in-house consumer durable bought on credit means consumer

financing worth over Rs. 7,500 crore. Though exact numbers are not available only

Rs. 200 to 250 crore worth of consumer durables (CD) were bought in 1997-98 on

borrowed money.

COMSUMER FINANCE AS A SERVICE

Introduction to Consumer Finance as a Service:

There are three key players in this business viz., lender, the finance company /

bank and the consumer.

It works on the simple principle that the bank / finance company borrows at

interest rate x, lends at interest rate y, and earns y-x profit.

4.10: (i) Characteristics of Consumer Finance Service:

Alike other services, CF services too consist of commonly accepted characteristics

outlined in brief as follows:

-*• Intangibility:

CF services can not be touched, patented and seen. Besides, absolute

standardisation of consumer financing services is also not possible. There can be no

inventories.

-*■ Inseparability:

CF services can not be separated from the person and firm providing it.

-> Heterogeneity:

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The human element is very much involved in providing and rendering CF service

and it makes standardisation a very difficult task to achieve.8

-+ Perishability:

Alike other services, CF services can not be stored because of its perishable

nature.

Ownership:

Alike other services, in case of CF services customers pay for its use (i.e.

instalment) but they never own it.

4.10: (ii) Methods of Overcoming Service Characteristics:

The following table shows implications of consumer finance service

Characteristics and ways of overcoming them:

Table no. 4:2: Implications of Consumer Finance Services

Service Intangibility

In locations Means of overcoming Difficult to judge quality and value i Focus on benefits
such as instalments

advance, difficult to promote, not

possible to have copyright.

payment, own Television, Fridge, by pa>

less, use brand names such as Countrywide

Whirlpool, etc.

Inseparability Direct sell, limited scale of operation Train more service personnel, work
fasted geographically limited market.

Heterogeneity Difficult to standardise quality.

Ownership customer cannot own.

Perishability No storing, problem of demand fluctuation.

Careful selection and training of person

reduce role of human element.

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Send him regular company reports, invite

for meetings AGM

Advertise heavily during Diwali, marriage

seasons, etc.; offer special gifts, reduced interest rates.

Classification of Consumer Finance Services:

A large number of classification schemes have been developed to provide

strategic insight in managing them.

The following are such schemes:

The Nature of The Service:

Services are classified according to weather services are directed at people or

possession, at mind, physical possession or assets. Here CF services are directed at

intangible assets with intangible actions.

Relationship between Service Organisation and Customers:

Services can be classified whether the nature of the relationship is continuous or intermittent
and whether a customer needs to get into a membership relationship with

the service organisation to access and utilise the service. In CF service, nature of

delivery is continuous and type of relationship is of membership type.

How the Service Is Delivered:

In CF services, customer goes to CFCs such as Countrywide, GLFL, Apple,

Whirlpool , etc. But in present fierce competition era such companies go to customers

to win them.

-> Proportion of Tangibility and Intangibility:

CF services have high intangibility content.

Service Inputs:

Services based on this criterion have been classified as primarily equipment based

or people based service. CF services are primarily people based service.

-> Contact between the Consumer and Service Provider:

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On this basis, services can be classified as high contact or low contact services.

CF service is low contact service.

All of the above mentioned CF services can be summarily classified as hereunder:

> Directed at intangible assets with intangible action.

> Membership type of relationship, with continuous nature of delivery.

> Highly intangible service.

> Primarily people based service.

> Low contact service.

A BRIEF REVIEW OF CONSUMER FINANCING COMPANIES IN INDIA

Consumer financing is an on-going and rapidly growing marketing

phenomenon in India. In fact, we can witness presence of CF in India even centuries

back but it was operative in different form on a small scale, long before people knew

very much about the ‘time value’ of money or what ‘interest’ is all about.

To be brief, organised consumer financing activities emerged in India with a

pioneering efforts put in around 1980s by Citibank which launched a package known

as Citi mobile for financing cars. Afterwards, the Citibank has also offered number of

such other schemes for vehicles and in-house finance to facilitate quick buying of

white goods. These efforts were responded by even American express but it did not

picked up momentum due to their own financial and bad debts problems.

In case of the public sector, the State Bank of India has initiated move to keep

private sector lender from appropriating the entire CF for almost everything i.e. home,

and cars to kitchen appliances. Although, the private sector till date occupies a

sizeable market share of consumer financing in India. The recent most vibrant, open,

global, liberalised and market-oriented new economic policy 1991 has opened

floodgates for them. Those companies before that in an old parlance were in business

of ‘hire-purchase’ have ventured into area of consumer finance, which even includes

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many non-banking finance companies (NBFCs). The major players in the area of CF consist
of 20th century finance, classical finance services and SRF finance. The 9

biggest merit of the area of CF is that there are no entry barriers in it.

One of the major developments that took place in 1995 with regard to

execution of a joint venture between Countrywide Financial Services, and Housing

Development Finance Corporation (HDFC). Their entry into the IHCF market was

revolutionary in order to increase availability and accessibility of CF facilities to wide

range of variety of cross sections of consumers in the country. In 1998-99, Kodak

Mahindra Finance Ltd. has innovatively introduced a cross between credit card and a

loan. It is aimed to make loan taking on a consumer durable a convenient experience.

Its application is designed to create win-win strategy alike barter for all three parties

involved in deal viz., consumer, company selling product and Kotak itself.

K- VALUE From KMFL (Kotak Mahindra Finance Ltd.)

A radical change has taken place in CF industry in the last decade. With the

opening up of an Indian economy and economic liberalisation measures, it has

resulted into gradual increase in disposal income of the Indian middle income group.

To better capitalise the purchasing power, CFCs have launched innovative schemes to

lure the customers.

The K-value scheme was introduced in November 1997. K-value is a customer

durable finance system and members are provided with a membership card with the

help of which they can make the purchases of durable as per the requirement. The K-

value is different than credit card where the usual repayment time is about 45 months.

In K-value scheme a member can repay for the purchase made in 12, 18, 24 or 30

months according to his choice and convenience. The K-value scheme, which is like

hire-purchase scheme also, provides the benefit of a plastic card. The only condition

to this scheme is that the purchase should not be less than Rs. 10,000/-. It provides

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psychological confidence of buying along with money power and also facilitates

quick buying without any delays. The members may also get benefits of competitive

prices. Though it looks like credit card but in a normal case the upper limit of a plastic

card is around Rs. 15,000/- where as that of K-value would run into lakh depending

upon the user’s choice. To be brief, the philosophy of K-value rests on that “The

customer is the King”.

CONSUMER FINANCING IN FUTURE

It is true that because of increased awareness, entry of multiple players and

induced wider range offering of CF schemes for variety of buying needs, competition,

market pressures, economic conditions and Government policy, consumer financing

activities will have to become customer-oriented and user-friendly in near future. It appears
that in near future battle of this rapidly growing potential market

will be gradually influenced by credit and business in a big way. The credit card in

fact takes care of core need of CF only, and offers revolving credit to consumers. It

provides relatively increased flexibility to opt for what should not be and what they

should purchase with or without the help of credit cards. It calls for wider database,

improved availability, and accessibility of information technology products and

networks, and expanded markets to bring down effective rate of interest and payment

and payment in flexible EMIs (Equal monthly instalments) as convenient and

beneficial to consumers. The privacy of loan taker is best taken care of by using ATM

(Automatic Teller Machine) credit card but it can met only accidental requirement and

cost of such financing is felt to be very high by consumers.

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CONCLUSION

Financial services can also be termed as, any service and product of a financial nature that is
the area under discussion to, or is governed by a measure maintained by a party or by a public
body that exercises regulatory or supervisory authority delegated by law. Financial services,
but is also present in the fields of insurance , estate, trust and agency services, securities, and
all forms of financial or market intermediation including the distribution of financial
products. Aligned with a background of sharp risk, market and regulatory pressures, financial
services organization are striving to grow and enhance their shareholder values.

Day by day customer needs and expectations are growing. Thus, making the mark in
increasing personal wealth, a mature population and the desire that can more easily be
reached to the personalized financial products and services. Intense competition has squeezed
market margins and forced most companies to cut costs while enhancing the quality of
customer choice and service. A financial services organization strive to become more
innovative and entrepreneurial, the war for talent is intensifying . The risks increase as the
products become more complex, the organization and business environment ever more
uncertain. At the same time , regulation is the tightening highlight within the reach of public.
and government pressure for improved supremacy, transparency and accountability.

In this environment, the winners will be the companies that can turn the challenges into
opportunities to build stronger and more enduring customer relationships, sharpen their
process efficiency, unlock talent and creativity, use improved risk management processes to
develop more sustainable returns and use used regulatory demands as a catalyst for
strengthening the business and enhancing market confidence. The fast pace of the change
aspect element within the global financial service market has created a need for a new
generation of solutions that can operate in real time with a very flawless reliability.

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The challenges faced by the financial services market are forcing market participants to keep
pace with technological advances, and to become more proactive and efficient while keeping
in mind to reduce costs and risks. Thus concluding here that the financial services market is
diverse and dynamic. An ever changing versatile , high growth market, financial services
consist of everything from individual or group consultants to banks , credit cards and
alternative financing providers.

BIBLIOGRAPHY

BOOKS

 LAW OF TORTS BY DR. R.K. BANGIA

 LAW OF TORTS BY DR. PSA PILLAI

WEBSITES

 www.legumlocus.com
 www.sullcrom.com
 www.consumersinternational.org
 www.emeraldinsight.com

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