kalpana singh

7/25/2019 Kalpana Singh

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A

Project ReportOn

WORKING CAPITAL

MANAGEMENT

For

Thesession 20131!

Athesissubmittedinthepartialfulfillmentoftherequirementforthe awardofthe degree

ofMBA(F


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Ac"no# $e%&e'ent

It givesmeimmensepleasure toexpress our sincere andwholehearted senseof

gratitude tomy guidefor their invaluableanduntiringguidanceandsupervision

throughoutmystudy.Toderivebenefitsoftheirenormousexperience,itisa

matterofgreatprivilegedforme.Itakethisopportunity toexpressmy sincere

thanksandfullappreciationtomy fwhoextendedtheirwholeheartedcooperation,

moralsupportandrenderingungrudgingassistancewheneverneeds.Iwishthemverybestintheir life.


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T A B LE O F C O N TENTS

Description Page No.

CompanyProfile 6-20

Introduction 21

MeaningandScopeinancial Ser!ices 2"-2#

StructureofinancialSystem 26-2$

%ypesofinancialSer!ices "0-&'

inancialSer!ices Industry &$-#6

inancialSer!ices Inno!ation #(-6"

)nalysis* indings 6&-6(

Conclusion 6'+i,liograpy 6$


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C O M P A N (P RO F IL E

Mahindra &Mahindra is the flagship company of the

Mahindra Group. Establishedin1945,ourcoreautomotive

andfarmeuipmentbusinesseshave gro!n into mar"et leaders

!hose triple bottom line ethic is driving industry

trendsto!ardstechnologicalinnovation,socialresponsibility, and

constantly improvingcustomersatisfaction.

#vertheyears,!e$vespuno%ntone!venturesinordertobettermeetth

e needsofourcustomers,epandingintoautomotiveand non'

automotive

components,informationtechnology,financialservices,andenergy.

(e operate

inafederatedstructuresothateachbusinesscanta"eris"sandgro!onit

s o!n andsimultaneouslyleveragesynergies across

theentireGroup$s competencies.

(e$vebeentheleaderinutilityvehiclesforoverfiftyyears,since!ebuiltt

he first(illys)eepson*ndiansoilin194+.

oday,ourportfoliocomprisesa!ide

spectrumofvehiclesfromt!o!heelerstoheavytruc"s,-/stoschoolb

uses.

#urservicesincludemaintenanceandrepairs,customi0ation,providin

gspares, and manufacturingand engineering. (e$reopening a

ne!organi0ed'sector mar"etfor pre'o!ned

carsandepandingintoforeignmar"etsincludingthe nited-tates

andEurope.

ormedin233,MahindraGraphicesearch6esignspeciali0esinconsu

lting on automotivestyle,engineering,78E7omputer'8ided


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Engineering:,and pro)ect management. ;ased

in ;einasco, *taly, !e


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consult!ithmanyEuropean andglobalautomotiveclients

tocreatestri"ing designs andsupportengineering.

#urstyleconsultingservicesbegin!itha brand

analysistounderstandandthen shapebrandidentity.

(eofferconceptde2333certifiedcompany,ourcustomersincludeiat,?ondaEurope, .;. 7o, andmanymore.

*n 2335,Mahindra&Mahindraenteredintoa)oint venture!ith

=avistar*nc -8, andMahindra=avistar8utomotiveset

outtobuildarangeo


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reuirementsthatarespecifictoyourneeds. #urne! state'of'the'art

plant at 7ha"an, near

Aune,


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isstaffed by33 highlytrained technicians,engineers,and

specialists,and stretchesover+33acres.

#urconstantdrivetoimprovemeansthatourrangeoftruc"sisnotonlyhi

gh on performance,butalsolo!onmaintenance.(ith

rigorousteststoensurehigh performanceeven

inthetoughestofconditionsand featuresthat!illma"e your

)ourneycomfortable nomatterho!faryou$regoing,

ourtruc"s!illhelpyou

prosperinyourbusiness.(hetherit$sgoods,peopleordreams,ourtruc"

smove itall.

*n233+,!eformedMahindra=avistarEnginesM=EA@: through

a)ointventure !ith

=avistar*nc,-8toproducedieselenginesformedium andheavy

commercialvehiclesin*ndia.

=avistar*ncis=orth8merica$slargestintegrated

truc"andenginemanufacturerandthetechnologyleaderinemissionsc

ontrol. #urpartnership integratesthe bestoftheirepertise!ith

ourstobring *ndia better,tougher,and cleanerengines.

#urplantat7ha"an hasaninstalledcapacityof45,333enginesperyear.

(e$ve alreadylocali0ed +3 percentofourenginecomponentsthrough

42 vendors. #ur

enginesareetensivelyvalidatedforover1,333hours.

(e$vetestedthemfor

1.5 million "m under different geographic conditions to ma"e surethey !ill

deliver the best performancefor bothonandoff high!ayapplications.

#ur


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from13?AtoB13?Aandisavailableinbothmechanicaland

electronicvariants. heelectroniccommon'

railGenerationBversionisthemost


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advancedengineavailableon *ndian roads.

M=EA@ispoisedtogro!tomar"etleadershipoverthenet fe!years.hrough eceptionaldedicationtoualityand"no!ledge

ofthe*ndianmar"et,!eare

committedtodevelopingarobustenginebusinessthat !illimprove

truc" performanceCandprosperityCfor many *ndianbusinesses.

heconceptofmobility isinthemidstofsignificantchange,drivenby

environmental concerns, oil economics, rapidly changingconsumer

needs, developmentofne!technologies and integration

ofmultipledisciplinesin

developingmobilitysolutions.-oberingfactsli"erising

fuelcostsandrapid urbanisationare)ust

someofthereasons!hythe!orldis loo"ingtone!er, superior mobility

solutions.

hefutureoftheautomotiveindustryiselectric. 8s!e!orry

aboutclimate

change,energysecurity,andthepriceofoil,technological

improvementsare ma"ingelectriccars ever cheaperand more

convenient.

(e acuired a ma)ority sta"e in the eva Electric 7ar 7ompany

in 2313 to

advancethedesignandproductionofelectriccars!orld!ide.

;yintegrating eva$s electriccartechnology!ithour

o!nleadingengineering,!ecanbuild higherperformance electric

vehiclesthat satisfycustomers$ demand both for better lifestyles

anda healthyenvironment.

8tMahindraE/8,

!eareconstantlysee"ingsolutionstoissuesthatrangefrom the"ind


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ofproductsthat!illde


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these vehicles !ill possess and the !ay they !ill be

manufactured. hese uestionsareshapingourvision

oftheutureofMobility.he advancedvehicles

ofthefuture!illnotonlyofferunmatchedfeatures,safety,andconvenience. hey!ill also be cleverandenvironmentally friendly.

heincreasingfusion

ofelectronicsand*!ithautomotivetechnologies!illgive

risetovehicles!ithadvancedintelligenceandconnectivity.#therdevel

opments in distribution models, financing options, fleible

o!nership models, personalisationofvehiclesandgreaterchoicesacrosstheecosystem!illfurther alter

theentireeperienceof interacting!iththe mobility ecosystem.

8s atotalsystemssolutionprovider,!edevelopall

ourElectric/ehicleE/: systemsin'house.(earepushingE/

technologytothenetstep tocreatebetter

energymanagement,fastercharging, andadvancedtelematics.(eoffer innovativeelectric vehiclesand

mobilitysolutions,technologylicensing, and

licensedmanufacturingand distribution.

(e$re!ellestablishedasama)orglobal

player!iththelargestdeployedfleetof electriccarsontheroadtoday.

(e$vesoldaround1,33electricvehiclesinEurope,andmorethan1,+33areontheroadacross8sia

and7entraland-outh 8merica.

*ntotal,!e$representin24countries!orld!ideCandgro!ing. he

MahindraGroup$smanufacturing epertise and !ide

globaldistribution net!or" !illhelp Mahindraevascaleup

productionand spread greentechnologyacross theglobe.


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*n2312,!einauguratedane!plantin;angalore,!iththecapacitytobuild

B3,333 vehicles per year.*n "eeping !ith


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ourcommitmentto

cleantechnology,theplantreceivedaAlatinumratingfrom

*ndianGreen;uilding7ouncil*G;7:.

hene!facilityharvestsrain!ater,uses natural light and ventilation,and harnesses solar energy for electricity and heating.

(iththiscleanmanufacturingprocessofcleanvehiclesandabattery

recyclingprogram,ourelectriccarsaimtohavethelo!est dust'to'

dirtcarbon footprints intheautomotive!orld.

*n233+,eva!asnamedoneof*ndiaDs7oolest 7ompaniesby

;usinessoday(e receivedthe233rostand-ullivanAo!ertrain7ompanyoftheeara!ard for

ecellentsalesvolume,mar"etpenetration,andcustomersatisfaction.

8ndin

2339,;usiness(ee"votedourfounderand7hiefechnology#fficer,7h

etan

Maini,oneof*ndiaDstop53 mostinFuentialpeople.*n 2313,theeva'

i!as cro!ned7ar of theearatthe #verdrive &7=;7/1a!ards.

Mahindra/ehicleManufacturers!assetupin233+topushourtechnologyto the edge. (e designedandbuilt

agreenfieldfacilityat7ha"an,nearAune, Maharashtra,to

integratethebestintechnology,environmentalsustainability,

socialresponsibility,andoperationalecellence.

-preadacross+33acresand planted !ith approimately13,333

trees,7ha"an offersafleibleand eco'friendly manufacturing

layoutformultipleMulti'Aurpose/ehiclesMA/s:, sportutility

vehicles-/s:,andcommercialvehiclesthatallo!sustorespondrapidlyto changingcustomerneeds.

(ithacurrentcapacityofB.2million vehiclesperyearandafuture'

ready epandable module setup, !e have the fleibility to

constantly innovate and

adapttochangesinmar"etdemandorcustomerreuirements.

(ecurrently manufacture Mahindra & Mahindra$s entire medium


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and heavy commercial

vehiclerangefromthe3.+5tonMaimotothe49

tonMahindra=avistartruc". he ne! Global -/

and Ai"'p range !ill


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also be manufacturedhere.

#urstaofover2,333ishighlytrainedinthefieldsofmechanical,electronic,civil and electric engineering as

!ell as paint technology. (e partner !ith t!o

regionaltribal*ndustrialraining*nstitutes**s:tofacilitate

amatchbet!een educational ualityand content

andindustrydemands. #urpartnership has

resultedinperiodicfacultytrainingsessions,arestructuringofthecurric

ulum,

andtherecruitmentof1+Bstudentstoanapprenticeshiptrainingschemeby

2311.

(ealsomaintainouro!nresidentialtrainingcentre!hichprovidesa

month'longtraining totheselectedtraineesbeforetheyinitiate!or"at

theshop floor.

(eusesolarenergy and!asteheatfromtheovenehausttopo!eractivitiesin

thepaintshop,reducingourconsumptionofgasandelectricityfor

anoverall reductionofB,533tonsof7#2peryear. 8clusterof+3 solar

dishesprovides the energyforcoolingthepaintusedforthe

vehiclebodies. 8nd byrecycling!aste !aterthrough

reverseosmosis and multipleeffectevaporation,!eachieve0ero

!ater dischargeacross theentire plant.

he-sangyongMotor7ompany)oinedMahindra&Mahindrain2311.ounded in 1954 asthe ?a'dong'h!anMotor (or"shop, -sangyong

istodayama)or player inthe-outh

Horeanutilityvehiclespaceanden)oysamar"etpresenceinmore

than93countries.

;asedinAyeongtae",-outhHorea,-sangyongismorethan

4,33people!ho arepassionateaboutcars.


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*nthe19I3s,!ebuiltHorea$s firstlargebusesandbeganeportingthem

in19II. *n the19+3s,!eepanded intospeciali0ed

truc"sfrombusestofiretruc"s. (e !elcomed the era of

four'!heel drive !ith


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ne!independentlydevelopedplatforms,theHorando,andMusso,in199B. *n

199+,!eintroducedthe7hairman,oneofHorea$sleading

luurysedans. oday, !e are a leader in -/s !ith a full productline including eton **, Hyron, Horando,8ctyon,and8ctyon-ports.

(ealsooffersedanandMA/productlines, 7hairmanandodius.

(e$re currently focusing on strengthening our global

competitiveness by

producingenvironmentallyfriendlyengines.(e$vedeveloped aneco'

friendly dieselcommonrailenginetoconformtotheE#5standards.(earealso designinganengine to comply !iththeE#I.

*nthenetfe!years,!eplantostrengthenourglobal

distributionnet!or".(e

havealreadysetuplocalheadofficesandpartscentersinEurope.

(ebelieve

thatemergingmar"etsarethe"eytosustainablegro!th,and!earebuilding localbasesin mar"etssuch as7entral8merica, Eastern Europe,

8frica, 7hina,and *ndia.

*nadditiontoourfocusongreentechnologyanddeveloping

mar"ets,!eloo" for!ard tocapitali0ingonourne!relationship !ith

Mahindra&Mahindra.;oth "no!nforour -/s,

!ecanstrengthenourpositionsinthe-/mar"etthroughtechnicalcooperationand sharedepertise.

(eenteredintoruralfinanceandinsurancebecause!esa!an

opportunityto provideservicesinareas!here

thedemandforfinancialproductsandservicesis higherthan

theformalban"ingsystem can supply. ;yma"ingcreditavailable,!e

openopportunitiesforpeopletoimprovetheiro!n

livesandcreatelasting systems of livelihood.


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Mahindrainance and itssubsidiariesofferacomplete

rangeoinancialservices and

insurancesolutionsforbothbusinessesand personallife. #urflagship

financialservicesbusinessprovidesvehicle,asset,andpersonalfinanci

ng. #ur generaland

lifeinsurancebro"ingservicesprovidecustomers!ith securityand

protection. (e provide rural housing finance for ne!

construction and renovation. #urbusinessinsurance plansprotect

the small businesses that drive

employmentandeconomicgro!thandsafeguardagainst

ris"sthatmight other!isehavelifelongramifications. (e

havemorethan one million relationships!ithcustomersinruraland

semi'urban*ndia,ma"ingusthelargest non'

ban"ingfinancialcompany=;7:in thecountry. (e see

ruralfinanceand insuranceasanintegralpart ofsustainableeconomic

developmentandasmart business move,empo!eringcustomers to

createa brighterfuturefor themselves.

Intodaysworld, beingmobilehasbecomeanecessityrather thanaluxury.MahindraFinanceoffersawiderangeofvehicleloanstosuiteverycustomersneeds,bothcommercialandpersonal.

efinancethepurchaseoftractors, utilityvehicles,cars,threewheelers,

commercialvehicles, andconstructione!uipment. ealsooffer vehiclerefinance

forpre"ownedvehiclesofallkindsandbrands. #achtypeofloanhasbeen

customi$edtoitscustomer base, withtailoredrepayment policiesforfarmers

purchasingtractorsversusurbanfamiliesbuyingtheir firstcar.

Talktoustoday to%umpstartyourbusinesswithanewcommercialvehicle orgive

yourselfnewfreedomwithanM&' (multi"utility vehicle). hateveryourneeds,ourreliablepartnershipswithIndiastopvehiclemanufacturersensuresthatyoull

getthe bestvalue for yourmoney.

As a total risk solution provider,


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MahindraInsurance *rokersprovidescomprehensivegeneralinsurance packages

forbothindividualsandbusinesses. +ur-/approachensuresthatallyour

generalinsuranceneedsare welltakencareof withouthassle orstress.

ebuild insurancesolutionsthat addressyourlifestyleandbusinesstobringyoua

personali$ed, comprehensive plan. 0onsult with us about our life insuranceoptionstocreateaplanthatsrightforyou,fromvehicleinsurancetohealthcare.Tellusaboutyourbusinessandwellconstructaplanthatcoversallyourneedsfrom thegeneraltothespecificforexample,our+ffice1ackagesatisfiesthe

completeinsurancere!uirementofanofficeandourMoney Insuranceoptionadds

protectionagainstthelossofmoneyintransit.Werethereforyoufromrisk

profiling to building insurance plans to claims administration, bringing you

securityandconvenience evenwhentheunexpectedhappens.

+ur-/approachtolife insurance meansallyour needsare metunderoneroof.

+urmissionis tobuildyoua personal insurance solution and deliverfaster claim

settlements. e strive to provide you with the best insurance products and

superior service withtheutmostconvenience andsimplicity.

+urteam ofinsurancespecialistshastheknow"howandtheresourcestomeetall

yourinsuranceneeds. eofferacomprehensiverange oflife insuranceplansforbothindividualsandcorporations,fromretirementtoendowment,childrensplanstowholelifeplans,superannuationtocreditcovers,andmore.2rawingfrom this

extensive portfolio,wehelp youselectaninsurance solution thataddressesallyour

needs.

Mahindra 3ural4ousingFinancemakes available the fundsyou need tobuild orrenovateyourhome. eextendcreditinruralareas that have never hadaccess before,

enablingpeople toinvestintheirhomesfor the firsttime.

+ur reasonable and flexible"rateloansmake


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itpossibleforyoutobuyyourfirsthome,addanewroomforyourgrowing

family,orrepairandmaintainthe homeyoualready cherish. Many ofourclients use

ourloanstorebuild infirm mudstructures in solid brickandmortar. +thers

repairtheirroofsortilecementfloorsto maketheirhomesmorecomfortableandattractive.

+ur loans have already helped nearly 56, rural customers transform their

homes,andtheir lives.


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Asubsidiary ofMahindra7 MahindraFinancial8ervices, MahindraInsurancerokersbeganoperationsin!""#. Wereoneofthefewinsurance brokingcompanies in India to be awarded I8+ 95:; 0ertification for roup0reditTerm 0overtoretailcustomerswithauto and

tractorloans fromMahindraFinance. *ycustomi$ingourlifeinsurance

optionstoyourneeds,webringyougreatervaluebyprovidingmorerelevant,

moreuseful,andmore cost"efficientsolutions.


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In;5;,weentered intoa strategicalliancewith=eapFrogInvestmentswiththe vision of

bringingcriticalfinancial servicesto the nextbillionconsumers. +ur

partnershipcreatessignificantimpactbyenablingmillions ofpeopletoprotect their

assets,andthusthelivelihoodsonwhichtheir familiesdepend.


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ebelievethatthe fastestandmostsustainableway toprovidehousingforallIndiansisthroughtheprivatesector. 0ontinuingresearchandconversationledus to

expand our services to establish Mahindra 3ural 4ousing Finance as a

subsidiaryof$ahindraand$ahindra%inancial&ervicesin!""'.Wereworking

hardtoexpandcreditaccesstolow"incomecustomersinruralandsemi"urban

India,andour customer base isalreadyapproaching56,.

+urbusinessmodelrestsonempowering our customersto securetheir ownhomes

throughreasonableandflexiblehome loans. e provideloans forhome purchase,

construction, extension, and improvement so that people can transform their

homes,and their lives. Forexample,we finance homereconstructiontoconvert infirm

mudstructuresto solid brickandmortar. ealsofundrehabilitative efforts

likereflooringcementfloorsintile. +urhousingfinanceserviceshelppeople

improvetheirown lives,whetheritsasmallrenovationorfirst"timeconstruction.


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e consider rural financing to be thecornerstone ofpovertyreduction, rural

developmentandinclusivegrowthinmany partsofthecountry.*y extending

accesstofinancialservicestocustomersinruralandsemi"urbanareas,wegive themthe

meanstopursue their owngoals.

Today,$ahindraand$ahindra%inancial&ervicesisoneofIndiaspremiernon" bankingfinancecompanies(?*F0) andthelargest?*F0 operatinginruralIndia.

ehaveofficesintheareasweserveso thatwecanprovide ourcustomerswith

personali$edfinance solutions,andweemploy over 9,localpeople sothatour

employeestrulyunderstandour customers.

*y providingloanstoourcustomersbasedontheirfutureearnings,we helppeopleopenbusinesseswhentheycouldntgetstartedotherwise.Weunderstandthatit

takesmoneytomakemoney. efundutilityvehicles, tractors,andcars, construction

e!uipment, personal loans, and homes for

over two million


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customers,andwe offer low"risk fixed depositbankingandadvisecustomerson

investmentsinmutualfunds. +urgoalisnotonlytobuildabetterfinancial

servicescompany,buttoenableIndiasfuturegrowth.


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I N T R O ) *C T I O NT OT + EP RO, E C T

he


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ME AN I N GO FF I N A N C I A L- E R. I C E -

inancial services meanmobili0ingandallocatingsavings.*t includes all activities involved in the

transformation of savings into

investment.*tisalsocalledasJ


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- C O P EO FF I N ANC I A L- E R . I C E -

6ealinginforeignechangemar"etactivities.

6ealinginsecondarymar"etactivities.

Aarticipating in money mar"et instruments li"e

commercial papers,

certi


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+ I - T O R (O FF I NA N C I A L - E R . I C E -

he *ndian


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deepening ofthe*ndian


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information


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aboutinternationaldevelopmentsinthefinancial sector.

-TR*CT * REO FFIN ANCI AL- (-TE M

hefinancialsystem

impliesasetofcompleandcloselyconnectedinstitutions,

agents,practicesandmar"ets.hefollo!ingisatypical

structureoinancial systeminanyeconomy.

FINANCIAL -(-TEM

*=8=7*8@

*=-**#

=-

*=8=7*

8@

M8HE

-

*=8=7*8

@

*=-ME=

-

*=8=7*

8@

-E/*7E

-


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AFI NANCI AL IN-TIT*TI ON-

inancialinstitutionsarebusinessorgani0ations!hoact

asmobili0ersand depositories of saving, and suppliers of credit or

finance. hese institutions provide variousfinancialservicestothe

businessorgani0ationsand common people.inancial

institutionscan bedivided intoban"ingand nonban"ing institutions.

;an"inginstitutionsdealin financialassetssuchasdeposits,loans,securitiesetc.and non'financialinstitutionsdealinrealassetssuch

asmachinery, euipments,stoc"ofgoods andrealestate.heir

activitiesmaybegeneral or special.heseinstitutionsparticipate in

theeconomy$spaymentsmechanismby

providingtransactionservices, moneysupply andcredit.

FI NANCI AL MAR KET-

inancialmar"etsarethecenters!hichprovide

facilitiesforbuyingandsellingoinancialclaimsandservices.heparticipantsinthefinancialm

ar"ets

arefinancialinstitutions,bro"ers,dealers,borro!ersandinvestors.he

y are interlin"ed by the la!s, contracts, and communication

net!or"s. inancial mar"etscan bedivided

intot!oparts.heprimarymar"ets!hich dealsin ne! financial

claims or instruments. *t is also called as ne! issue mar"et. he

secondary mar"et


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deals in securities


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!hicharealreadyissuedbutthecompaniesandinvestorsinprovidingli

uidity. ?o!ever,stoc"echanges arebothprimary andsecondary

mar"ets segments.

inancial mar"ets are also classified as capitalmar"ets

and money

mar"et.hemoneymar"etdealsintheshorttermclaims!ith

maturityperiodof lessthan

ayearandcapitalmar"etsdealsinlongtermclaimsorsecurities.he

capitalmar"etisco etensivenotonly!ith

thestoc"mar"etbutitismuch !ider than

thestoc"mar"et.hefinancialmar"etsmaybeclassified

asorgani0edor unorgani0ed,formalsor informals anddomesticor

foreignmar"ets.

CFI NANCI AL I N-TR*MENT-

inancialinstrumentsareclaimstothepaymentofmon

ey in future ora periodicinterval.ore.g.

theimportantfinancialinstrumentsare

shares,debentures,bonds,fied depositsetc.regularpaymentin

theform of interest or dividendis

paidbythecompanytotheinvestors. 6irectlytothe ultimate

saverssuch aseuityshares,debentures.-econdaryinstrumentsare

issued byintermediariestotheultimate

saversasban"deposits,unitsand

insurancepolicies.hefinancialinstrumentsdifferfromeach

otherinrespectof theirinvestment characteristics.he important

characteristics are liuidity, transferability,volatility,

maturity,ris",andreturn.


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)FI NANCI AL -ER.I CE-

8financial serviceisany


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"indofserviceofa

financialnatureoeredbyafinancialserviceprovider.8ll ban"ing and

insurance related services are included in this concept. hese

servicesareintangibleand invisible.hereshouldbeproimitybet!een the serviceproviderand

theconsumerinordertocompleteaservicetransaction.

heseservicescovera!iderange

ofeconomicactivities.inancialserviceshave developed

tomeettheneedsofcompanies. ;an"ingand insurancearetraditional

financialservices.he modern financialservicesinclude overthe

counterservices. -hare

transfer,pledgingofshares,mutualfunds,factoring,discounting,venture capitalandcreditcards. inancial serviceshavestarted

longbac"in!estern countries.*n*ndia,theseserviceshave

startedlongbac"in !esterncountries.*n

india,theseserviceshavestarted

during193s.heseservicesplayasigni# M # ? TM # M* # 3:

Membershipregistrati

on.

Membersandcustome

rs. Membershipeit.

Membershiptransfer.

Minimummembershipperiod.

F I ?A? 0 I A =M A ? A># M # ? T :

8ccountpayab

le.

iedassets.


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3 # 1 + 3 T I ? >8 @ 8 T# M :

egulatory reports e.g.7entralban".


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sercustomi0edreports.

8 # 3 ' I 0 #M A ? A > # M # ? T

F+8A(F3+?T+FFI0#8#3'I0#8A0TI'ITI#8)

+n"the"counter transactions (banking services) such as savings deposits,

withdrawals,loansrepayment,salarypayments

Tellerfunctions(Tellers,4eadtellers,0ash2rawerand8trongroomcash

Management

*+8A(*A0+FFI0#8#3'I0#8A0TI'ITI#8)

*ehind the scene activities such as 8alary processing, loans processing,%ournalsprocessing,etc

) I FF E R E N TT ( PE -O FF I NA N C I A L-E R. I C E -

he


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*nvestmentservicescompany

;an"

*nsurancecompany

*ntermediationoradvisoryservicescompany

7onglomerates

7reditating8gencies

1I N. E-T M E N T- E R. I C EC O M P A N (

he investment services companies provide services

li"e asset

management,hedgefunds,custodyservicesandmanymore.

8 s set m a n ag em e n t'

thetermusuallygiventodescribecompanies!hichrunc o l le c tiveinv e st m e n tfu n d s.

?e d ge fu n d m a n ag em e n t' ?edge funds often employ the

services of primebro"eragedivisionsat

ma)orinvestmentban"stoeecutetheir trades.

7u sto d yser v ic es'

7ustodyservicesandsecuritiesprocessingisa"indof

Dbac"'officeDadministrationforfinancialservices.8ssetsundercustodyi

n the*ndia !as estimatedto NI5 trillionattheend of 233.

;. *A?8

*t is one of the
http://en.wikipedia.org/wiki/Collective_investment_fundhttp://en.wikipedia.org/wiki/Collective_investment_fund


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biggest


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servicescompaniesofthe !orld.here are

dierenttypesofban"sinthe

!orld.-omeofthesearecommercialban"s,privateban"sandmany

more.herearesomeban"sthat!or"forthecapitalmar"etsonly.;an"spr

ovide a number of


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n"i n&seri ces

he primaryoperations of ban"sinclude>

Heepingmoneysafe!hilealso allo!ing!ithdra!als !henneeded

*ssuance of chec"boo"s so that bills can be paid and other

"inds of payments can be delivered by post

Arovidepersonalloans,commercialloans,andm o r tga g elo a n s ty

pically loans to purchaseahome, propertyor business:

*ssuance of c re d it c ards and processing of credit card

transactions and billing

Issuanceofd e b i tca r d sforuse as asubstitute for checks

Allow financial transactions at branches or by using Au t o m a ti c T e ll e r

Mac hi n es(ATMs)

1rovide wire transfersof fundsand#l ec tr o n i c f u n d tr a ns f e rs betweenbanks

Facilitationofstandingordersanddirectd e b it s ,sopaymentsforbillscanbe made

automatically

1rovideov e r d r aft agreementsforthetemporaryadvancementofthe*ankBs

ownmoney tomeetmonthly spendingcommitmentsofacustomerintheir

currentaccount.

1rovide 0harge card advances of the *ankBs own moneyfor customers

wishingtosettle creditadvancesmonthly.

1rovideacheckguaranteedbythe*ankitselfandprepaidbythecustomer, such

as a ca s hi e rBsc h e c k or
http://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Credit_cardshttp://en.wikipedia.org/wiki/Debit_cardshttp://en.wikipedia.org/wiki/Automatic_Teller_Machinehttp://en.wikipedia.org/wiki/Automatic_Teller_Machinehttp://en.wikipedia.org/wiki/Electronic_fund_transferhttp://en.wikipedia.org/wiki/Electronic_fund_transferhttp://en.wikipedia.org/wiki/Debithttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Cashier's_checkhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Credit_cardshttp://en.wikipedia.org/wiki/Debit_cardshttp://en.wikipedia.org/wiki/Automatic_Teller_Machinehttp://en.wikipedia.org/wiki/Automatic_Teller_Machinehttp://en.wikipedia.org/wiki/Electronic_fund_transferhttp://en.wikipedia.org/wiki/Debithttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Cashier's_check


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certi fiedch eck .

Other t4peso 5 6 n"seri ces

? ot ary service for financial and other

documents.

1r iv a te b a n k in g"1rivatebanksprovidebankingservicesexclusively

toh ig h n e tw o r th in d iv i d u a l s .Many financialservicesfirmsre!uireapersonorfamilytohave acertainminimum networthto!ualifyforprivatebankingservices.1rivatebanks

often provide more personal services, such as wealth management and tax

planning,thannormalretailbanks.

0apitalmarketbank"bankthatu n d er w r it e debtande ! ui ty ,assistcompany deals

(advisory services,underwritingandadvisory

fees),andrestructuredebtintost r u c t u red f in a n ce products.

*ankcards"include bothcr e d i tc ar d s andd e b i tca r d s .I0I0I bank isthe largest issuerofbankcards.

0reditcardmachine servicesandnetworks"0ompanieswhichprovidecreditcard

machine andpaymentnetworkscallthemselvesCmerchantcardprovidersC.

AN KCA R ) -

*ank cards include both cred i t card s and d e b i t car d s .In India I0I0I *A?isthelargestissuerofbankcards

D

AM#3I0A?#E13#88

MA8T#30A32
http://en.wikipedia.org/wiki/Certified_checkhttp://en.wikipedia.org/wiki/Notaryhttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/High_net_worth_individualshttp://en.wikipedia.org/wiki/High_net_worth_individualshttp://en.wikipedia.org/wiki/Underwritehttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Structured_financehttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Certified_checkhttp://en.wikipedia.org/wiki/Notaryhttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/High_net_worth_individualshttp://en.wikipedia.org/wiki/High_net_worth_individualshttp://en.wikipedia.org/wiki/Underwritehttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Structured_financehttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Debit_card


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'I8A

n"i n&s7r e4repo rt RNCO-

The Indianbankingsector,despite theglobalcrisis, isstillfuellingthe economy.

AreportB+pportunitiesinIndian*anking8ectorB, bymarketresearchcompany,

3?0+8forecaststhattheIndianbankingsectorwillgrowata healthy compound

annualgrowthrate (0A>3) of around;.per centtill;55.

Thetotalassetbaseofthescheduledcommercialbanks(80*s)addedupto

)*.+percentofIndias-/atcurrentmarketprices0throughthefinancialyea

r;G.

Accordingtoastudy reportby 2unand*rad8treet,around Gpercentof the

overallassetsof80*swereaccountedforby;;leadingbankswithabalance sheet

si$eofabove &8H55.Gbillioneach.Thisincluded5-1ublic8ector*anks

(18*s),1rivate 8ector *anksand Foreign*anks.

2epositsof private sectorbanksincreasedata0A>3of ;-percentduringfiscal

year;(;G,comparedtothe total0A>3growthof ;.6percentbyall80*s.Advancesofprivatesectorbanksincreasedata0A>3of;percentagainsta

0A>3 of .5per centbyall80*sforthesame period.

1ublicsectorbanksaccountedforabove--percentofthecollectivetotalincome

(includinginterestincome andnon"interestincome) ofall80*s.

3etailbankingaccountedfora5percentshareoftheoverallrevenuegenerated by

18&bankswhileitwas-percentforprivatesectorbanks,andforforeign bankstheshare

ofretailbankingalsostoodat around-percent.

Asperfiguresreleasedby the3eserve*ankofIndia(3*I), bankcreditincreased by

;percenttillJanuary ;,;9,comparedtothe;5percentgrowthinthe previousyear.

0redittoindustryincreasedby.;per centtill2ecember 59,;G,


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against;.9per centinthe same periodinthepreviousyear.

Further,accordingto3*Idata,lendingbybanksincreasedbymorethan-per

centduringApril"?ovember ;G,ascomparedtothesame periodanyear ago.

iththecreditgrowth,leadingIndianbanksarelikelytoincreasetheirearnings

byaroundper cent y"o"yinthe 2ecember ;G!uarter.

1ublicsector banksaregoinginforama%orimageoverhaul. ithglobalbanks

gettingpressurised undertheeconomic downturn,severalcompaniesand

individualsaredigressingfrom privatebankstostate"ownedbanks.Tomakethe

mostofthissituation,they areadoptingnewstrategiesandtechnologiestoattract more

customers.

8tate"owned banks are now offering services like Internet banking and

personalisedche!ue books,andevaluation of loan proposalswithina specific

period.Manysuchbanksrunprocessingcentresandbackoffices.The8tate*ank of India

hasevenintroducedtwo"facedATMs.

hereas,theIndian *ankhas introducedwealthmanagementservicesforits high

networth(4?I)clientsprovidingvarioustypesoffinancialadvisory andwealth

managementservices.

+- C A N K+ I -TO R (

48*0*ankwasfoundedin5G-6toservetheneedsofthemerchants ofthe0hina

coastandfinancethe growingtradebetween0hina,#urope and the&nited8tates.

Theoriginsof48*0*ankinIndiacanbetracedbackto +ctober

5G6whentheMercantile*ankofIndia,=ondonand0hinawas foundedin*ombay.

In5969, The4ongongand8hanghai*anking0orporation(48*0)ac!uired the Mercantile *ank of India and the head office of the 48*0 *ank

was established in *ombay (Mumbai). In 59G, 48*0 *ank gave


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IndiaitsfirstATM.

Throughthe599s,48*0 *ank

blossomed into one of the leading banking

andfinancial servicesorgani$ations ofthe

world.AsonJune;,the*ankhasover

55millioncustomersworldwidewithassets

over&8H5,56 billion.48*0*ank has about 5, officesin - countries

andterritoriesin#urope, theAsia1acificregion, theAmericas, theMiddle

#astandAfrica.

Fo rei& n e8ch n& e ser ices

Foreignexchangeservicesareprovidedbymanybanksaroundtheworld.Foreign

exchange servicesinclude:

0 u rr e n cy # x c h a n g e"whereclientscanpurchaseandsellforeigncurrencybank notes

i re t r a ns f er"whereclientscansendfundstointernationalbanksabroadfrom

India.

Fo rei gn0u rren cy*anking"bankingtransactionsare done inforeigncurrency

3 I N-*RANCE

The insurance companies provide the clients with risk coverage

services.Theseservicesaredesignedtocoveranumberofrisksthatare

relatedtoanindividualBslife,propertyandmanymore.Theseservicesare not onlydesigned to provide security but at the same time there are a number of

insurance plansthatare designedtoprovide regular income tothe clients.

The insurancepoliciescan


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be divided in several types like general insurance, life insurance,

commercialinsurancesandalotmore.

Insurancebrokerage "Insurancebrokersshopforinsurance(generally

corporateproperty andcasualty insurance)onbehalf ofcustomers.3ecently a

numberofwebsites havebeencreatedtogiveconsumersbasicpricecomparisons for

servicessuchasinsurance, causingcontroversywithintheindustry.

Insuranceunderwriting"1ersonallinesinsuranceun d er w r it e r sactually underwrite

insuranceforindividuals,aservicestillofferedprimarilythroughagents,in s u r a n c e b r o k e r

s ,ands to c k b r o k er s .&nderwritersmayalsooffersimilarcommerciallines

ofcoverageforbusinesses. Activitiesinclude

insuranceanda n nu i ti e s ,li f e i ns u r a n c e ,retirementinsurance,h ea lt h i ns u r a n c e ,andp r o p erty 7c a su a lt y i ns u r a n c e .

3ein su ran ce" 3einsuranceisinsurancesoldtoinsurersthemselves,toprotectthem

I n s 7 r n ce s 7 r e 4r ep o rt 6 4 A --O C + A M
http://en.wikipedia.org/wiki/Underwriterhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Annuity_(financial_contracts)http://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Health_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Reinsurancehttp://en.wikipedia.org/wiki/Underwriterhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Insurance_brokerhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Annuity_(financial_contracts)http://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Health_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Property_%26_casualty_insurancehttp://en.wikipedia.org/wiki/Reinsurance


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Th e in su ran cesect or iso ne ofthe mos tpromisin g s ectorsinIndi a tod ay.

InanA88+04AMreportBInsurance8ectorFuturistic>rowthBstatedthat

IndiaBsinsurancesectorislikelytoreach&8H-.;6billionby;5.Thereport

said,CThetotalinsurancebusinesswillreachalevelof&8H-.;6billioninthe next

twoyearsfrom the current levelof&8H5.56billion.C 1rivateinsurance businessislikely

toseea5percentgrowthrateduetotheaggressivemarketing

techni!uesusedbythem.0onversely,state"ownedinsurancecompanieswouldsee

a 6(per centgrowthrate.

India isthe fifthlargestlife insurancemarket intheemerginginsuranceeconomiesglobally andthe segmentisgrowingatahealthy ;( percentannually.Accordingtoareportbyresearchfirm 3?0+8B*oomingInsuranceMarketinIndia(;G(;55)Bthetotallifeinsurancepremium inIndiaispro%ectedtogrow to&8H ;69.;billion by;5(55. The generalinsurance sector islikelytogrow at

arate of5Gpercentin;G,comparedto5percentin;. The5ma%ornon" life

insurerscollectedatotalof &8HG.;millionaspremiuminApril;G.

=ife Insurance 0orporation(=I0) isbullishon growthandis targettingbusinessin

excessof &8H69.5billionby;55(5;.

The government is planning to ease restrictions on foreign investments in

insurance,bankingand pensions,andallowforeigndirectinvestment(F2I)of9 per

centfromthe present;-per cent.

I ? 8 & 3 A ? 0 #& ?2 # 3 3 I T I ? >

1ersonallinesinsuranceunderwritersactually underwriteinsurancefor individuals, a service still offered primarily through agents, insurance

brokers,andstock brokers.&nderwritersmay alsooffersimilarcommercial

linesofcoveragefor businesses. Activities


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include insurance and annuities, life insurance,

retirementinsurance, healthinsurance,andproperty

7casualtyinsurance.

8omeellnownInsurersIncludes:

>+'T.0+M1A?I#8I?>#?#3A=I?8&3A?0#I?I?2IA

ThenewIndiaassuranceco.=td

TheorientalInsurnceco.=td

Thenationalinsuranceltd

&nitedIndiainsuranceltd

13I'AT#0+M1A?I#8I?>#?#3A=I?8&3A?0#=T2

*a%a%Allian$generalinsuranceltd

Icici=ombardgeneralinsuranceltd

*hartiaxageneralinsuranceltd

Ingvysyageneralinsuranceltd

cholamandalamgeneralinsuranceltd

>+'T.0+M1A?I#8I?=IF#I?8&3A?0#

=ifeinsurancecorporationofIndia(=I0)

13I'AT#0+M1AI?#8I?=IF#I?8&3A?0#

Maxnew@orklifeco.=td

Icici prudential co. =td


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Tataaig

Metlifeinsuranceco.=td

*irlasunlifeinsuranceco.=td

Avivalifeinsuranceco.=td

*a%a%Allian$lifeinsuranceco.ltd

4sbccanaralifeinsuranceco.=td

! OT+ERFINANCI AL -ER.I CE-

Intermediationoradvisory services"Theseservicesinvolvestockbrokers(private client

services) and discountbrokers.8tock brokersassistinvestors inbuyingor

sellingshares.1rimarily internet"basedcompaniesareoftenreferredtoasdiscount

brokerages,althoughmany nowhavebranchofficestoassistclients.These

brokeragesprimarilytargetindividualinvestors.Fullserviceandprivateclient firms

primarilyassist executetrades and executetrades forclients with large

amountsofcapitaltoinvest,suchaslargecompanies,wealthy individuals,and

investmentmanagementfunds.

1rivatee!uity"1r iv a t e e ! u ityfundsare typically closed"endfunds,whichusually

takecontrollinge!uity stakesinbusinessesthatareeither private, ortakenprivate

onceac!uired.1rivatee!uity fundsoftenuseleveragedbuyouts(=*+s)toac!uire

thefirms in which theyinvest. The most successful privatee!uityfunds can

generate returnssignificantlyhigherthanprovidedbythe e!uity markets

'enturecapital"' e n tu rec a p it a lisatype of privatee!uity capitaltypically providedby

professional, outsideinvestorstonew,high"potential"growth

companiesintheinterestoftakingthecompany toanI1+ortradesaleofthe business.

Angelinvestment"Ana n g el i n v e s to r orangel(knownasa businessangel or informal

investor in #urope),is an affluent
http://en.wikipedia.org/wiki/Private_equityhttp://en.wikipedia.org/wiki/Private_equityhttp://en.wikipedia.org/wiki/Venture_capitalhttp://en.wikipedia.org/wiki/Angel_investorhttp://en.wikipedia.org/wiki/Private_equityhttp://en.wikipedia.org/wiki/Venture_capitalhttp://en.wikipedia.org/wiki/Angel_investor


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individualwho providescapitalfora

businessstart"up, usually inexchangefor

convertible debt or ownershipe!uity.A

small butincreasingnumber of angelinvestorsorgani$e themselvesintoangel

groups or angel networks to share

researchandpooltheir investmentcapital.

0onglomerates" Afinancialservices

conglomerateisafinancialservicesfirmthatisactiveinmorethanonesectorof the

financial services market e.g. life insurance, general insurance, health

insurance,assetmanagement,r e t a il b a n ki n g ,wholesalebanking, investment

banking,etc.Akeyrationalefortheexistenceofsuchbusinessesistheexistence ofdiversification benefitsthatare presentwhen different typesof businessesare

aggregatedi.e. badthingsdonBtalwayshappenatthe sametime.Asaconse!uence,

ec o no m icc a p it a lforaconglomerateisusually substantially lessthane c o n o m i c

ca p it a lisfor thesumof itsparts.

6. -TOCK MARKET-

FundraisingbyIndiaIncthroughinitialpublicoffers(I1+s)rosebyawhopping

-;per centsincethe beginningof ;Gto;9May,;Gto&8H.;billion,against &8H;.-

billionduringthe sameperiod in;-,accordingto global deal data

provider,2ealogic.8ignificantly,fundmobilisationduringthe first!uarter of;Gwasthe secondhighestfor a!uarterintheIndiancapitalBshistory.

Inrecentmonths, theIndianstockmarkethassloweddownduetothe global economic

turmoil. 4owever, expectations
http://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capital


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of itreboundingsoonare alsohigh.

Further,accordingto globalconsultancy firm,2eloitte4askins 78ells, theIndian

economyandcapitalmarketsareexpectedtowitnessaturnaroundwithinsixto nine

months.

Accordingtotheinitialpublicoffering(I1+)estimatesfor;9, by Thomson

3eutersstudy,India Incislikely toraise fourtimestheproceedsitgarneredfrom the

primarymarketin ;G.As per the study,India Inc istargettingtoraise a massive

&8H56.;Gbillionthroughpublic issues.

Furthermore,8#*Iwillbemakingiteasierforcompaniestoraisemoneyfrom the stock

market, by

relaxingeligibilityrules

to facilitate faster

raising offundsfrom

existingshareholders.

1resently, only

companies having hada

marketcapitalisation of

above &8H 5.9billion

in thelastoneyearare

entitled to thisroute.

8#*Iplansto bring

downthisfigure.

Pri te E97i t4

In finance, private e!uity is an a s s e t c l a s s consisting of e ! u ity s e c u r i ti e sinoperatingcompaniesthatare notp ub li c l y t ra d e d onas to c k e x c h a ng e . Investments in

private e!uity most often involve either an investment of capital into an

operatingcompany orthea c ! u is it io n ofanoperatingcompany.0apitalforprivate e!uity

is raised primarily from
http://en.wikipedia.org/wiki/Asset_classhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Publicly_tradedhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Mergers_and_acquisitionshttp://en.wikipedia.org/wiki/Asset_classhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Publicly_tradedhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Mergers_and_acquisitions


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i n s ti t u t io n a lin v e s t o r s .Thereisawidearrayoftypesandstylesofprivatee!uity andthe

termprivate e!uityhas differentconnotationsindifferentcountries.

Amongthemostcommoninvestmentstrategiesinprivatee!uity includeleveraged

buyouts,venturecapital, g r o wt hc a p it a l ,distressedinvestmentsandme$$anine

capital.Inatypicalleveragedbuyouttransaction,theprivatee!uityfirm buys

ma%oritycontrolofanexistingormaturefirm.Thisisdistinctfromaventure

capitalorgrowthcapitalinvestment,inwhichtheprivatee!uityfirm typically

investsinyoungor emergingcompanies,andrarelyobtainma%oritycontrol.

Accordingtoareportbyglobalresearchfirm1re!in,privatee!uityinvestments arelikely

toperkupinthesecond"half of;9andfueltheglobaleconomic

recovery.Cithapproximately&8H5trillionofdrypowder(term usedtodenotecapitalavailablefor deals)available,privatee!uityispoisedtoplayama%orrole in

thecomingeconomic recovery,C the reportrevealed.

1rivatee!uity (1#)playersseearebullishoninvestinginIndiaasaprofitable destination,

expecting the inflowsto be around&8H6billion"&8HG billioninthe comingyear.

Industryexpertsfeelthatlong"terminvestinginIndiaisaprofitable option.

Accordingtoasurveyby2eloitteduringthelastsixmonths,sectorsdrivenby

domesticconsumptionandinfrastructureareexpectedtowitnessalotofactivity.8andeep>ill,managingdirector of2eloittecorporatefinance,said, Cehave

observedtwokeypoints, thecompetitiveenvironmentforinvestmentopportunities

for1#housesisexpectedtoeaseduring;9,assmaller1#firmsandhedge

fundsexitthemarket.8econd, thevolumeof1#dealsinthemarketwillbe

dependentonhow!uicklypromotersare willingtoacceptlowervaluations.C

Thetotalnumberof1#dealsduringthefirstfivemonthsof;Gstoodat5,

withanannouncedvalueof&8H-.9billionasagainst569dealsamountingto

&8H.9billionduringthecorrespondingperiodin;G.Indiaisamongthetop

5 countriesintermsof value of privatee!uitydealsacrossthe world,accordingto

theglobaldealtrackingfirm,Kephyr.Thesectorisgoingtoseeaflurryofactivity
http://en.wikipedia.org/wiki/Institutional_investorhttp://en.wikipedia.org/wiki/Growth_capitalhttp://en.wikipedia.org/wiki/Institutional_investorhttp://en.wikipedia.org/wiki/Growth_capital


65/91

andinvestmentsinthe comingmonths.

Manycompanieshaveambitiousplanstoentertheprivatee!uity(1#)business andraise

funds.

IndivisionIndia1artnersis planningtoraiseanotherfund"IndivisionII,witha

corpusinexcessof &8H;6millionraisedthroughIndivisionI.

+ther bigwigsplanningfundraisingsare theTataandAditya*irlagroupswith

planstoraise&8H 6millionand&8H ;6million,respectively.InAugust ;G,

3eliance 0apitalhadannouncedsettingupa &8H5billion1#fund.

rivatee1uityfirm,2ctishasraiseda3&4!.)billionprivatee1uityfund2ctis5merging$arkets6/25$6 0fortheemergingmarketsof7hina,India,2frica, =atinAmericaand8outh"eastAsia.Thefundwillbepumping in&8H 5billion as

investmentsinIndiaover the next"years.

&8"basedApolloManagement,withanassetbaseofmorethan&8H;billion,

willbesoonsettingupshopinIndia.The1#firmhasplanstospendaround&8H

GmillionininvestmentsinIndianandthe &8 markets.

Tata 0apital=tdisplanningtofloata &8H6 millionprivate e!uity(1#) fund.


66/91

E M E R GE NC E O F PR I M A R ( E: * I T (M A R KET -

?ow, we are also witnessing the emergence of many private sector

financialservices.Thecapitalmarket,whichwasverysluggish,hasbecome

apopularsourceofraisingfinance.Theprimarye!uitymarkethasemerged

asanimportantvehicle tochannelise the savingsoftheindividualsand

corporatesfor productive purposesandthustopromotethe industrialand

economicgrowthofthecountry.


67/91

-. M*T*AL F* N)-

A'7t7$57n%isaprofessionallymanagedtypeofcollective investmentscheme

thatpoolsmoneyfrommanyinvestorsandinvestsitinstocks, bonds,short"term

moneymarketinstruments,andLorothersecurities.Themutualfundwillhavea

fundmanagerthattradesthepooledmoney onaregular basis. The net proceedsor

lossesare thentypicallydistributedtothe investorsannually.

8ince59,therehavebeenthreebasictypesofinvestmentcompaniesinthe &nited8tates: open"endfunds, also knowninthe&.8. as mutualfunds unit investment trusts

(&ITs) andclosed"endfunds.8imilarfunds alsooperate in

0anada.4owever,intherestoftheworld,mutualfundisusedasagenericterm for various

typesofcollective investment vehicles,suchasunittrusts, open"ended

investmentcompanies(+#I0s), uniti$edinsurancefunds,andundertakingsfor

collective investmentsintransferable securities(&0IT8).

Accordingtoareportbyresearchfirm 3?0+8,theIndianmutualfunds

retailmarketispresentlygrowingata0A>3 of aroundper cent,andislikelyto

touch&8Hbillionby;56.

Thegrowthmomentumofthemutualfundindustrycontinuesinthenewfiscal year(;G(

9).Fund mobilisation has


68/91

increasedbyawhopping.percentto&8H;.9billionduringApril(June

;G,comparedto&8H5G.G5billioninApril(June;.0onse!uently,average

Assets&nderManagement(A&M)ofthemutualfundindustry hasincreased to

&8H5;.billionforJune;G,against &8H99.G-billionin thecorrespondingperiodin;.

Further,atapprox.&8H9-billion(&8H9GbillioninassetsforFebruary ;9,the

mutualfunds(MF)industryhasseenasharpincreaseofaboutG.percentin A&Msincethe

previousmonth.Thisisalsothethirdconsecutivemonthly risein assetsfor the

industryas a whole.

Asper8#*I, themutualfundindustry madeanoverallinvestmentof&8H;.5 billion

ine!uities between January"8eptember ;G.Accordingtomarket sources,

themutualfundsindustry hasmusteredanestimated&8H5.;billionduringthe same

period.In8eptember ;G, the A&M totalledto&8H5.5trillion.

Toimprovethecapitalmarket,thegovernmentislikelytoremovetherestriction on profit"

making?avratnaandmini"3atna public sector undertakings(18&s)from

investinginmutualfunds.

=ifeInsurance0orporationofIndia(=I0)hasputinover &8H;.6 billioninto

li!uidfunds of different fundhouses.The amountwasmorethanthree timesits similar

investmentsmade in ;G.

=ookingahead,theIndianmutualfundsmarketisestimatedtogrowata0A>3of

5Gpercentinthenextfiveyears,withthecountryBsmutualfundsassetsexpected

tomorethandoubleto&8H;9G.billionby ;5;,accordingtoareport by &8"

basedfinancialservicesresearchandconsultingfirm,0erulliAssociates.

+- CM 7 t 7 $F 7 n %

48*0isoneoftheworldBsleadingbankinggiants andboastsofa

5"year history in banking services. 48*0 operates in more than

countries across the globe and has assets of

over H5.; trillion on the consolidated


69/91

groupbalancesheet. Theinvestmentbankingandfund

managementbusinessesofthegroupishandledby 48*0

Investments.

48*0AssetManagementIndia1rivate=imitedactsastheAssetManagement0ompanytothe48*0MutualFund.

48*0 8ecurities and 0apital Markets India 1rivate =imited, an

affiliateofthe48*0group,isthesponsorofthefundandowns6percent stake.

; )ET MARKET

1referredsharescanbeconsideredpart ofdebtor e!uity.Attributing

preferredsharestoone or theother ispartially asub%ective decisionbutwillalso take

intoaccountthespecific featuresofthe preferredshares.

hen used tocalculateacompanyBs f in a n c i al l e v er a g e ,thedebtusually

includesonly the=ongTerm 2ebt(=T2).


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should be care fully

compared.

2ueto thehigh volatility in the

e!uity markets, I ndian investors

are choosing debt market and

mutual funds over e!uities.

Accordingto an A88+04AM

report, around &8H .;

million was invested in the

debt market against &8H

;9.G9millionine!uities,asonthethirdweekofJune;G. Thereportrevealedthatinvestorsfavouredcorporatebonds,particularly debenturesissuedby leading

companies.The debtmarketinIndia includedsegmentslike governmentsecurities,

corporatebondmarket,18&(publicsectorundertaking) bonds,andfixeddeposits

amongothers.

According to a report by >oldman 8achs, with insurance, mutual funds and

pensionsectorexperiencingrapidgrowth, IndiaBsdebtmarketisestimatedtogrow four"

fold,fromabout&8Hbillion(6percentof>21)in;-toabout&8H

5.6trillion(about66per centof >21) by;5-.

8ignificantly,the non"government sector isexpectedto growfrom &8H5 billion

in;-to&8H66billionin;5-,increasingits share in>21from5percentto

;;per cent.

C L A -- I F I CA T I O N O F F I N A NC I A L


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-E R. I C E -I N ) * -T R (

ThefinancialintermediariesinIndiacanbetraditionallyclassifiedintotwo:

0A1ITA=MA3#TI?T#3M#2IA3I#8

M+?#@MA3#TI?T#3M#2IA3I#8

5 .0 A 1 I T A =M A 3 # TI ? T # 3M #2 I A 3 I # 8

Thecapitalmarketintermediariesconsistoftermlendinginstitutions

andinvestinginstitutionswhichmainlyprovidelongtermfunds.

; .M +?# @M A 3 # TI ? T# 3M # 2 I A 3 I # 8

The money market intermediary consists of commercial banks, co"

operativebanksandotheragencieswhichsupplyonlyshorttermfunds.

8encethe term financial services industry9includes allkinds oforgani$ations which intermediate and facilitate financial transactions of

bothindividualsandcorporatecustomers.


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A commercial paper is a short term negotiable money market

instrument. It has the character of an unsecured promissory note with a

fixedmaturityofto-months.*anking andnon"bankingcompaniescan

issuethisforraisingtheirshortterm debt.Italsocarriesanattractiverateofinterest.0ommercialpapersaresoldatadiscountfrom theirfacevalueand

redeemed at their face value. 8ince its denomination is very high. It is

suitableonlytoinstitutionalinvestorsandcompanies.

2 T R E A - * R ( I L L

Atreasury billisalsoamoneymarketinstrumentissuedby thecentral

government.Itisalsoissuedatadiscountandredeemedatpar.3ecently,

thegovernmenthascomeoutwiththeshorttermtreasurybillsof5G;days

billsand-daysbills.

3 C E R T I F I CA T EO F) E P O- I T

The scheduled commercial banks have been permitted to issuecertificateofdepositwithoutany regulationsoninterestrates.Thisisalsoa money

market instrument and unlike a fixed deposit receipt. It is a

negotiableinsturmentandhenceitoffersmaximumli!uidity.Assuch,ithas a

secondary market. 8ince the


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denominationisveryhigh,itissuitabletomainlyinstituionalinvestorsand

companies.

! PROMI--OR(NOTE

Apromissory noteisawrittenpromisebythemakertopaymoney tothepayee.

*a n k no t e isfre!uentlytransferredasapromissorynote,apromissorynotemade bya bank

and payableto bearer on demand. A maker ofa promissorynote

promisestounconditionally pay thepayee(beneficiary)aspecificamountona

specifieddate.

Apromissorynoteisanunconditionalpromisetopayaspecificamounttobearer ortotheorder ofa namedperson, ondemandor onaspecifieddate.

Anegotiable promissory noteisunconditionalpromiseinwritingmadeby one

persontoanother,signedby themaker,engagingtopay ondemand,oratfixedor

determinable futuretime,sumcertaininmoneytoorder or tobearer. (see 8ec.59)

Apromissorynote,brieflystated, isa promise topayasum of money.

+riginalpartiestoapromissorynote.

Thereareoriginally twopartiesinapromissory note.Theonewhomakesthe

promiseandsignstheinstrumentiscalledtheCmakerCandtheparty towhom the

promiseismade or the instrumentispayable iscalledtheCpayeeC
http://en.wikipedia.org/wiki/Bank_notehttp://en.wikipedia.org/wiki/Bank_note


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< I LL- OFE=C+ANGE

Abillofexchange orCdraftC isawrittenorder by thedrawertothedraweetopay money

tothepayee.Acommontypeofbillofexchangeisthec h e !u e (checkin

American#nglish),definedasabillofexchangedrawnonabankerandpayable

ondemand.*illsofexchangeareused primarily ininternationaltrade,andare

writtenordersby onepersontohisbanktopay thebeareraspecificsum ona

specificdate.1riortotheadventofpapercurrency,billsofexchangewere a

commonmeansof exchange. Theyare notusedasoftentoday.

Abillofexchangeisanunconditionalorderinwritingaddressedby one personto another,

signed by the person giving it, re!uiring the person to whom it is

addressedtopayondemandoratfixedordeterminablefuturetimeasumcertaininmoneytoorderor tobearer. (8ec.5;-)

Itisessentially anordermadeby one persontoanother topaymoney toathird person.

A billofexchangere!uiresinitsinceptionthree parties""the drawer, the drawee, andthe

payee.

Thepersonwhodrawsthebilliscalledthedrawer.4egivestheordertopay money

tothirdparty.Theparty uponwhom thebillisdrawniscalledthe drawee.

4eisthepersontowhom thebillisaddressedandwhoisorderedtopay.he becomesanacceptor whenhe indicateshiswillingnesstopaythebill.(8ec.-;) The partyinwhose

favorthebillisdrawnor ispayableiscalledthepayee.

Thepartiesneednotallbedistinctpersons.Thus,thedrawermay drawonhimself

payabletohisownorder.

Abillofexchangemay beendorsedby the payeeinfavour ofathirdparty,who

mayinturnendorseittoafourth,andsoonindefinitely.TheCholderindue courseCmay

claim theamountofthebillagainstthedraweeandallpreviousendorsers,regardlessofany counterclaimsthatmayhavedisabledtheprevious

payeeorendorserfrom doingso.Thisiswhatismeantbysayingthatabillis negotiable.
http://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Cheque


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In some cases a bill is marked Cnot negotiableC. In that case it can still be

transferredtoathirdparty,butthethirdparty canhavenobetterrightthanthe transferor.

9.0 +? > =+ M # 3 A T# 8

Afinancialservicesconglomerateisafinancialservicesfirmthatisactive

inmorethan one sector ofthefinancialservicesmarket e.g.lifeinsurance,

generalinsurance, healthinsurance, asset management,retailbanking, wholesale

banking, investment banking, etc. A key rationale for the

existenceofsuchbusinessesistheexistenceofdiversificationbenefitsthat are

present when different types of businesses are

aggregated i.e. bad things donBt always happen at the

sametime. Asaconse!uence, economiccapitalfora

conglomerateisusuallysubstantiallylessthanec o no m i c

capit a lisforthesumofitsparts.

F &? 2 A M # ?T A = 8+ FF I ? A ? 0 I A =8 # 3 ' I 0 #8 # 0 T+ 3

Adetailedstudy onthefundamentalsoffinancialconceptsissureto

givesomeideaontheconceptsoffinance.Theinvestorsneedtogothrough

sometheoriesoffinancethatwillhelpthem tounderstandthebehaviorof market

inabetterway. There are anumber of factorsthat influencethe functioning

oftheinvestment market. The individual investorBs choiceof

investmentmayvary from one person to
http://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capitalhttp://en.wikipedia.org/wiki/Economic_capital


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another.hilesomeinvestorsgoforinvestingintherisky securities,some investors

tend to play safe in the market by investing in the less risky

security.Arbitrageisoneofthemostimportant fundamentalsoffinancial

concepts.Ittypically definestheprocessoftakingadvantageoftheprice differentbetween two or more markets.A clear concept on thearbitrage practicingmay

bebeneficialfortheinvestors.Thecash flow isanother fundamentalof the

financialconceptthatreferstothe processof cashbeing transferredby

abusinessoranorgani$ation.&nderstandingofthecashflow management may be

useful to evaluate a particular business or in

determiningtheproblemswithli!uidity.Moneymarketmakesanimportant

partintheconceptoffinance.Investmentincurrenciesisgettingpopular

withthepassageoftime.Astudy ontheforexmarketiscrucialforallthose who areinvesting in the money market. The forex market handles the tradingof

onecurrency withanothercountryBscurrency andit isthelargest

financialmarketintheworldintermsoftransactionvolume.Thevarious types of

risks that come under the domain of financial concepts are "

systemicrisk,creditrisk,consumercreditrisk,settlementrisk,li!uidityrisk

andmarketrisk.

F I NA N C I A L- E R . I C E -T+EO R I E -

Theprimeconceptoffinancetheory istostudy thevariouswaysby which a

business or an individual raises money. Allocating money into

pro%ectswhileconsideringtheriskfactorsattachedtothemalsofallunder

thecanopyoffinancetheoryfundamentals.Theconceptoffinancemayalso

beintegratedwiththeconceptssuchas:study ofmoneyandotherassets,

managingandprofilingpro%ectrisks, controlandmanagementofassetsand also.

In simple understanding, BfinancingB also means provision and

allocationoffundforaparticularbusiness moduleor pro%ect.?umberof

financetheoriesthat offerseparateapproaches to thefinancehypotheses.8omeofthema%orandpopularfinancetheoriesofthe worldare:arbitrage pricing

theory,rationalchoice theory,prospecttheory,cumulative prospect theory,

Monte0arlooptionmodel, binomialoptions pricingmodel, *lack model and

legal origins theory. The


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Arbitrage 1ricing Theory for example talks about the general theory of

assetpricing.Theproperassetpricingisnecessary fortheproperpricingof

shares.TheArbitrage1ricingTheorystatesthatthereturnthatisexpected from

afinancialassetcanbepresentedasalinearfunctionofvarioustheoreticalmarketindicesandmacro"economicfactors.4ereitisassumed

thatthefactorsconsideredaresensitivetochangesandthatisrepresented byafactor"

specificbetacoefficient.The1rospecttheoryoffinance,onthe otherhand,

discussesthealternativesinvolvingrisks.Ittakesinto consideration the

alternatives that come with uncertain outcomes. The

modelisdescriptivebynatureandittriestorepresentthereal"lifechoices

butnotoptimaldecisions.This theoryproposeshowtheinvestorsshould

usediversificationinordertooptimi$etheirportfolios.

CA* -E -F O RF I NA N C I A LI NN O . A T I O N

F+==+I?>A3#T4#0A&8#8+FFI?A?0IA=I??+'ATI+?8:

#conomic=iberali$ation

InvestorAwareness

=ow1rofitability

0ustomer8ervice

een0ompetition

Improved0ommunicationTechnology

>lobalImpact


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E C O N O M I CL I E RA L I - A T I O N

3eform ofthefinancialsectorconstitutesthemostimportantcomponentof Indias programmed towards economic liberali$ation. Therecent economic liberalisation measures have opened the door to foreign

competitorstoenterintoourdomesticmarket.

I N. E-TO RA W A R E N E- -

ith a growing awareness amongst the investing public, there has

beenadistinctshiftfrominvestingthesavingsinphysicalassetslikegold,

silver,land,etc.tofinancialassetslikeshares,debentures,mutualfunds, etc.

LO WPR O F I T A I L I T (

The profitability of the ma%or financial intermediary, namely the

bankshasbeen verymuchaffectedtorecenttimes.Thereisadeclineinthe

profitabilityoftraditionalbankingproducts.

C* -TO M E R-E R . I C E

?ow"a"daysthecustomersexpectationsareverygreat.Theywantnewer

productsatlowercostoratlowercreditrisk toreplacetheexistingone.

KEE NC O M P ET I T I O N

Theentry ofmany financialintermediariesinthefinancialsector market

has led to severe competition among themselves. This keen

competitionhaspavedtheway fortheentry ofvariednatureofinnovative

financialproductssoastomeetthevariedre!uirementsoftheinvestors.

I MPR O . E )C O M M*N I C A T I O NT E C + N OLOG (

Thecommunicationtechnologyhasbecomesoadvancedthateventhe

worldsissuerscan be linked with the


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investorsintheglobalfinancialmarketwithoutanydifficultybymeansof

offeringsomanyoptionsandopportunities.

GLO A LI MP AC T

Manyoftheprovidersandusersofcapitalhavechangedtheirrolesall

overtheworld.

.AR I O * -ELE M E N T -O FF I N AN C I A L-E R . I C E -MAR KET I N G/

In the formulation of overall marketing strategies in the financial

servicesindustry,thefollowing decisionsareconsidered importantinthe

presentliberali$edenvironment

1roduct1lanning

1ricing1olicy

*randing

0ustomer8ervice


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thesentimentofthecustomers.

RA N ) I N G

*randnameveryoftensignifiesthemarketsegments,inherentbenefits

andinvestmentob:ectivesandalsothe customersloyalty.Thisprocess

consistsofproductname,designingbrandpolicylikeindividualfamilyor

corporatebrand.

C* -TO M E R-E R . I C E -

Marketing of services is significantly influenced by the !uality of service

andinterpersonalrelationship betweenthecustomersandservice organi$ations.

In order to motivate the potential customers, the service shouldbe offeredinthe

bestpossible manner.Inthecompetitiveworldof financialservices,

marketorientationofproductandcustomerorientationof

servicearethetwokeyfactors.1romptandtimelyserviceaspertheneeds of customer

would make difference. The personal touch in services has

shownapositiveresultintherecenttimes.The!uality ofservicesofferedin

turnhelpstodeveloployalty amongthecustomers.8ervicescanbeprovided

eitherdirectly bythecompanythroughtheservicetheservicedepartmentorthroughintermediarieslikeregistrars orexternalagencies. 0ustomersare

involvedinaveryrealrelationshipwiththecompanyandevenoneweak

linkcansignificantlydamagetheirtrust.

MAR KE T-E G M E N T A T I O N

Thefinancialserviceindustriesareexpectedtosatisfy bothruralandurban

customers, small and large"scale entrepreneurs, high and low earning

customers,retail and institutional customers. The segmentation ofmarket

based on the changing needs of customers is considered to be the most

appropriatesolution. Identification of

market segment is crucialtotakefurther


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actionregardingpromotionanddistribution oftheproduct.Marketsegment

willbeidentifiedinthebasisofnatureoftheproduct, directandindirect benefitsof

the productonthe onehandandbehavior orattitudeof the customers,etc.

) I -T R I * T I O NP OL I C (

Thedeterminationofproperchannelforsellingtheproductisalsoa key issue

in the marketing of financial products. *efore launching a

product,thereshouldbeaclear"cutideaaboutthechannelofdistributionof the

product so as to make it accessible to the ultimate customers. The

channelswhichdirectlylinktothecudtomersorthroughtheintermediaries

likeagents,brokers,franchiseesshould bedeterminedbasedon theinternal

marketingstrengthoftheorgani$ation.

PR O M OT I O NP O L I C (

Thepromotionofsalemay bethroughadvertisement,roadshows,

personalfinanceshows,contest,etc.thevariouspromotionaltoolsusedby

thema%orplayersarepersonalandimpersonalpromotions.

E M E R G I N G F* NC T I O N - I N MAR KET I N G O F

F I N ANC I A L -E R. I C E -

The following are the emerging functions of financial service

industriesandhavinggreatersignificanceinthiscompetitivemarket.

1roduct2evelopment

0hannel Management


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AppraisalManagement

Territory8alesManagement

*ranchManagement

*randManagement

PR O ) *C TM A N A GE M E N T

Tomonitorprofitability foreachproductline.ToAssesthepotentialof retail

asset business based on market feedback and to enhance existing

productsanddevelopnewproducts.

C + A N N E LM A N A GE M E N T

To identify third"party agencies such as direct sales agents,

verificationagenciesandtofinali$etermsandconditions,responsibilities

andpricingofeachagency.Tomonitortheperformanceoftheseagencies

onanongoingbasisandensureahigh"!ualitychanneloperation.

AP P RA I - A LM A NA GE M E N T

Toscrutini$eandrecommendandapproval orre%ectionofretailloan

proposals received from branches by way of credit scoring system and

sound%udgment.

TE RR I TO R (- A L E -M A NA GE M E N T

Tobuildtheretailassetbusinessinliaisonwithdirectsellingagents

andbranchheadinordertoachievethebusinesstargets fortheregion.To identify

and recommend suitable third"party agencies for marketing, collection andverification of operations as well as to ensure !uality of

creditportfolioandflow"updefaultcases.

RA N C + MA N A GE M E N T


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Toachievethebusinesstargetofthebranch withapredominantly

retailbusiness.

RA N )M A N A G E M E N T

Todevelopstrongbrandnamefortheproductandcorporateimage

forthecompanythroughvariousinnovativedevices.

Todaysfinancialservicesindustry re1uiresnewstrategiestosurviveandcontinuetooperate.They havetoadoptnewmarketingstrategiesand

tacticswhichwillenablethem tocapturethemaximumopportunitieswith lowest

risk in order to enable them to survive and to meet the tough

competitionfromglobalplayersofthedomesticandforeignorigin.

P O R T F OL I OMA NA GE M E N T

1ortfolio management means selection of securities and constant

shifting of the portfolio in the light of varying attractiveness of the

constituents of the portfolio. It is a choice of selecting and revising spectrum

of securities to it with


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thecharacteristicsofaninvestor.

O , E C T I . E -

84+3TT#3M4I>413I+3IT@+*J#0TI'#8

=+?>T#3M4I>413I+3IT@+*J#0TI'#8

=+13I+3IT@+*J#0TI'#8

M+?#@MAI?>+*J#0TI'#8

-+O R TTE R M+ I G +PR I O R I T (O , E C T I . E -

Investorshaveahighprioritytowardsachievingcertainob%ectivesin

ashorttime.Fore.g.a youngcouplewillgivehighpriority tobuyahouse.

Thus,investorswillgoforhighpriority ob%ectivesandinvesttheir money

accordingly.

LO N GTE R M+ I G +PR I O R I T (O , E C T I . E -

8omeinvestorslookforwardandinvestonthebasisofob%ectivesof long"term

needs. Theywanttoachieve


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financialindependenceinlongperiod. Fore.g.investingforpostretirement

periodoreducationofachildetc.Investorsusually preferadiversified

approachwhileselectingdifferenttypesofinvestments.

LO WPR I O R I T (O , E C T I . E -

Theseob%ectiveshavelowpriorityininvesting.Theseob%ectivesare

notpainful.Afterinvestinginhighpriorityassets,investorscaninvestin

theselowpriorityassets.Fore.g.provisionfortour,domesticappliances etc.

M O N E (MA K I N GO , E C T I . E -

Investorsputtheirsurplusmoney inthiskindofinvestment.Their

ob%ectiveisto maximi$ewealth. &sually,theinvestorsinvestinsharesofcompanies, which provide capital appreciation apart from regular income

fromdividend.


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CA - E- T *) I E -

I C I C I AN K

IhaveaaccountwithI7I7Ibankbecauseitsoursalaryaccount,andwe are kind of forced to use I0I0I *ank. And since we have a salary

account,wegetadecentservice.*utyes,thecreditcarddepartment,andthecallcentresucksbigtime.Thatsmypersonalexperience.

Theyputyouonholdfor6to5mins.(%ustimaginelisteningtothe

same%unkmusicLtoneLadvertscontinuously),andthenthereisnoguarantee

thatyouwillgettospeaktosomeoneoryourproblemwouldbesolved. Infact,today

Iwasputonholdforaround mins,andafterthatthecallas abruptlydisconnectedN

?exttimeIcallthecallcenter,Igettospeaktoa

totallynewperson,andstartfromscrapdescribingtheproblem.Thepeople

atthecallcenter%ustpromisetodothings,andnothingactuallyhappens.If

ithappens,thenyouarereallyyourluck.

4ope'amathreadsthis

My advicetoall "AvoidI0I0Iasfaraspossible.Manypeople predict that

the bank would collapse in a few years from now. 4ave an

accountwithanynationali$edbank.


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4 8* 0* A ?

4 8* 0ban kreco v e r yagent sb a s hu p6 G" y ea r "ol dp r ofes s o r

Two daysback ;Ihad puton itswebsiteguidelinesfor the banksrecovery agentsandinithaswarnedthebanksaboutstrictactionswouldbe

takenagainstthemandevenpenali$ethelicenseofthebank butitseems

stillthewarningisfallingondeafears. Againanincident ofunrulinessby recovery

agent ofthe bank has come into limelight. It is 48*0 bank in

news.Thistimethevictimisaprofessorofareputedengineeringcollege,

1rofJ.8.alra.4ehaschargeda multinationalbankwhichallegedly senta

packofintimidatingloanrecoveryagentstohoundhim.alrahadtakena

loanof3s.6lakhtobuya8antrofromthe?oidabranchof48*0last

year.Theincidenttookplacein8eptemberbutthe6G"year"oldprofessor.

4eishopefulof%ustice,encouragedbytherecentstrictguidelinesissuedby the 3*I

against banks intimidating customers to recover loan. #ven the

FinanceMinister P r n 6 M 7 " h erje etoohasiteratedthatstrictestaction9willbetakenagainstbanksstoopingtostrong"armmethods.1rofJ.8.alra of the

2elhi 0ollege of #ngineering has filed his complaint against the

bank.Inhiscomplainthetoldthepolicethattheagentsabusedandbeathim

upoutsidetheIndraprashta&niversitycampusinnorth2elhifordelaying

monthlyinstallmentsofaloan.Theydidnotcaretostopevenafterhetold

themthathewasaheartpatientandthathehaddevelopedchestpain.Theyeventhreatened to killme,9


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I L I OG RAP + (

. 4 8*0.0 + . I ?

. I 0 I 0 I .0 + M
http://www.hsbc.co.in/http://www.icici.com/http://www.hsbc.co.in/http://www.icici.com/

kalpana singh

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