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Financial Services: Jul 2010

July, 2010

The Indian financial market is growing rapidly, with significant potential for further growth (National Stock Exchange is ranked 18th in terms of value of shares traded in the world). India has a strong financial regulatory system, administered by Reserve Bank of India (RBI) and supported by regulatory body such as Securities and Exchange Board of India (SEBI), which govern capital markets and mutual funds, among other financial institutions. India’s high savings rate offers significant opportunity for channelising resources into the financial markets.

India has more than 20 stock exchanges. The NSE and the BSE are the main exchanges, with the NSE contributing over 70 per cent of the turnover. There are more than 8,000 brokers in addition to about 44,000 sub-brokers registered with SEBI. Mutual funds in India had assets under management to the tune of US$165 billion (INR 7,944 billion) as of December 2009. More than 11,000 non-banking financial companies (NBFCs) are registered with the RBI. The microfinance segment in India too is witnessing rapid growth. Market capitalisation of Indian companies on the stock exchange has more than tripled between 2004–05 and 2009–2010.

The services sector in India, including financial services, attracted the maximum FDI between April 2009 and January 2010, amounting to US$ 3,877 million. In 2009, the largest inbound deal in the sector was T. Rowe Price Group Incorporation’s acquisition of a 26 per cent stake in UTI Asset Management Company Ltd for US$ 140.1million.

Sectoral Presentation (April 2010)

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