FINANCIAL SERVICES

DEFINITION

Facilities such as saving accounts, checking accounts, conforming leasing and money transfer, provided by Banks, Credit unions, and finance companies .

FEATURES

Intangible in nature.

Inseparable from the provider.

Customer centric.

Dynamic in nature

Credibility of partners is very important in them

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TYPES OF FINANCIAL SERVICES

Financial Services

Commercial Bank

Investment Services

InsuranceAdvisory Services

• Asset Management

• Hedge Fund Managers

• Custody services

• Private banking

• Investment Banks

• Bank cards

• Credit card machine services and networks

• Insurance Brokerage

• Insurance Underwriting

• Reinsurance

• Stock brokers (private client services) and discount brokers

PRIVATE BANKING FOR HIGH NET- WORTH INDIVIDUALS

High net worth individuals Income / net worth

Services Premier Banking Personal Investment services Trust services Investment planning Financial treasury Cash management Guarantees

RETAIL BANKING

Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks for their financial requirements.

Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, Consumer credit

BANK ASSURANCE

Banking and insurance services Conflict of interest Combination products Leverage on the existing customer base Innovative insurance products

LEASE

Lease is a form of contract transferring the use or occupancy of land, space, structure or equipment in consideration of a payment, usually in the form of rent. Lessor (leasing company - remains the

owner) Lessee: (the user – may be an individual or

organizations) Rentals are predetermines and are payable at fixed

intervals of time according to mutual convenience

ELEMENTS OF LEASING

Parties to the contract Assets Ownership separated from the user Term of lease Lease rentals

TYPES OF LEASE

Financial lease Operating lease Leverage lease Sale and lease back Cross border lease

FINANCIAL LEASE

Also known as a capital lease, a financial lease is a situation in which a finance company or other lessor purchases an asset, then leases that asset to a client or lessee for a specified amount of time. At that point, the client takes possession of the asset and is free to utilize the asset for the duration of the lease agreement. Once the client has fulfilled the terms of the lease, including paying any applicable interest, the client usually has the option of purchasing the asset from the finance company at an extremely low price.

OPERATING LEASE

A lease for which the lessee acquires the property for only a small portion of its useful life. An operating lease is commonly used to acquire equipment on a short-term basis. Any lease that is not a capital lease is an operating lease

LEVERAGE LEASE

A lease in which the lessor puts up some of the money required to purchase the asset and borrows the rest from a lender. The lender is given a mortgage on the asset and an assignment of the lease and lease payments. The lessee makes payments to the lessor, who makes payments to the lender.

CROSS BORDER LEASE

Cross-border leasing is a leasing arrangement where lessor and lessee are situated in different countries. This presents significant additional issues related to tax avoidance and tax shelters. Cross-border leasing has been widely used in some European countries, to arbitrage the difference in the tax laws of different jurisdictions, usually between a European country and the United States.

SALE AND LEASE BACK

A person who has an asset sells it to the lessor and takes the asset back on lease

Net lease - Lessee pays all maintenance charges, insurance, property taxes etc. May allow repurchase after the lease period.

CONTENTS OF A LEASE AGREEMENT

Amount, time and place of lease rental payment Time and place of equipment delivery Lessee’s Responsibility for taking possession of

leased equipment Lessees right to enjoy the benefits of warranties

provided by the equipment manufacturer Insurance of the equipment Options for renewal Options for purchase Return of the equipment