The financial sector constitutes one of the major components of the services sector and within the financial sector Banking and Insurance have a significant role to play. There has been a multifold increase in the demand for banking services along with a commensurate increase in insurance services to cover various commercial and personal risks arising due to the increasing complexities of modern life. The past few years have witnessed myriad institutional and structural changes paving the way for the entry of a number of private and foreign players in these fields. These, in turn, have thrown up numerous opportunities as well as challenges for banking and insurance companies. The present book is an attempt to describe the role of banking and insurance sectors in the current era of globalization, privatization and liberalization. Besides, the strides made in the field of information technology in recent years, have significantly impacted the operating environment resulting in increased competitive pressures and changing customer demands. A corollary of this is the increased employment opportunities in these sectors, directly and indirectly. Many universities have exhibited great foresight by introducing the subjects of Banking and Insurance at the undergraduate level. Delhi University in particular, has offered an Application Course in Banking and Insurance for the third year students of B.A. (restructured) programme. The subject of Insurance has also been offered as a discipline course for the B.A. (restructured) programme. We hope that the lucid style of the text presentation which has been supported with suitable tables, figures and illustrations will prove useful to our students in the understanding of these subjects as well as help them to keep abreast of the current developments taking place in these areas. It is also expected that this text will aid fellow teachers in clarifying certain theoretical and conceptual issues as well as provide useful insight to professionals in the fields of banking and insurance. Despite our best efforts, we acknowledge our human limitations and possible errors. We, therefore, invite constructive suggestions as they would be instrumental in further improving our work.