A REPORT ON COMPARATIVE ANALYSIS OF RETAIL TRADE SALES
BY AARTI NAINWANI
09BS0000013
KOTAK MAHINDRA BANK
A REPORT ON COMPARATIVE ANALYSIS OF RETAIL TRADE SALES BY AARTI NAINWANI 09BS0000013 KOTAK MAHINDRA BANK
A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF MBA PROGRAM OF ICFAI UNIVERSITY, DEHRADUN
DISTRIBUTION LIST:
DATE OF SUBMISSION: 15TH OF MAY 2010
DECLARATION
I Aarti Nainwani, here by declared that the project entitled comparative analysis of retail trade sales "which is being submitted in partial fulfillment of the requirements for the awards of degree from the ICFAI Business School is an own record carried out by me under the supervision of Mrs. Sejal
Desai & Mr. Nikunj Saraiya Associate Vice President and Senior
Manager, (KOTAK BANK) The matter embodied in this project has not been submitted so far for the award of any degree or diploma.
ACKNOLEDGEMENT
The special thanks goes to my helpful supervisor Mr. prof. Wag.
The Supervision & support that he gave truly help the progression & smoothness of internship program.
The co-operation is much indeed appreciated.
My grateful thanks also go to both Mrs. Segal Desai (U.P) & Mr. Nikunj. Samaya. A big conclusion from both of you during these 14 weeks is very great indeed.
TABLE OF CONTENTS
Declaration Acknowledgement EXECUTIVE SUMMARY History of Banking Banking Systems in India Kotak Mahindra Bank Objective Reserve Bank of India Hierarchy of RBI Competitors MAJOR TRADE PRODUCTS PROVIDED BY KOTAK MAHINDRA BANK LETTER OF CREDIT Graphs Findings CONCLUSIONS & RECOMMENDATIONS References Annexure QUESTIONNAIRE
EXECUTIVE SUMMARY
The service industry is one of the fastest growing sectors in
India today. Tlie upcoming sectors, which are really showing the graph towards upwards, are Telecom, Banking, and Insurance.
These sectors really have a lot of responsibility towards the economy. Main focus of this report is based on of the
COMPARATIVE ANALYSIS OF RETAIL TRADE SALES Kotak
Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to lite insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The project report gives an insight about the trade products of Kotak
Mahindra bank and throws the lights upon the SWOT (Strengths, weakness, opportunities, threats) analysis of bank.
HISTORY OF BANKING
How did banking originate? What activity resulted in Banking, as know it today? To answer these questions it is necessary to step back into history – to several thousands of years and study its origins.
Barter Man was, in the dawn of history, simple and self- sufficient. He lived in caves, killed animals when hungry and he had no other wants. As time passed, men began living in villages and started to till the ground. Often the produce of a farmer’s fields was more that he required. Similarly, a fisherman often caught more family required. In the ideal situation, the farmer would exchange his produce for fish with the fisherman. This exchange is known as barter. And in the ideal world they would both be content. The ideal situation, the farmer would exchange his produce for fish with the fisherman. This exchange is known as barter. And in the ideal world they would both be content. However, a complication could and would arise if the farmer did not require or want fish. If the farmer required a plough and the smith requires steel there would be tremendous and horrendous difficulty in matching those that individuals had with that which they needed. And it was on account of this difficulty of meeting needs that the barter system surrendered to money.
Money
Money was created or rather born to reduce the value the items people had to a common denominator to facilitate exchange of products to satisfy needs. The Fisherman would sell his fish as would the farmer for money. The farmer would then armed with the money he has in hand purchase a plough. The fisherman with the money he received, would buy the food he needs for his family. The earliest form of money was bones on which marks were made to distinguish between values. Metals then began to be used – the most popular being gold, silver and bronze. As men began to travel from country to country to exchange goods and to trade, banking was born. The term money is derived from the temple of “Juno Moneta” Money he has received, would buy the food he needs for his family. The earliest form of money was bones on which marks were made to distinguish between values. Metals then began to be used – the most popular being gold, silver and bronze. Symbols, sizes and signs on these differed from time to time and from goods and to trade, banking was born. The term money is derived from the temple of “Juno Moneta” which was used by the Romans as a mint for their coins. BANKING Banks were born to facilitate trade – to lend monies to purchase goods, to store monies and to change currencies. Banking began thousands of years ago. The Assyrians, exchanging foreign coins and making loans –
mainly in connection with trade. Temples such as those of Ephesus and Delphi were Greek banking institutions. The Romans did not have State Banking but had minute regulations regarding private banks. These were calculated to create utmost confidence in the system. Ancient Rome had two types of bankers – those who made loans and those who exchanged foreign monies. The term “bank” is derived from the Italian word “banco” which means bench. The early bankers, the Jews of Lombard, transacted their business at benches in the market place and later in inns and taverns. In those days if a banker failed, his “bankco” or bench was broken, hence the term “bankrupt” Another opinion is that the term “bank” evolved from the German word “back” meaning a joint stock fund which was Italianised into “banco” As many of these inns/taverns were by the signs they had such as eagle, crossed swords etc.
BANKING SYSTEM IN INDIA
The Banking System in India consists of:
Reserve Bank
Development Banks
Public Sector Bank.
Foreign Banks
Private Sector Banks
Cooperative Banks
Regional Rural Banks
The Reserve Bank of India is the Central Bank of the Country and came into being by the Reserve Bank of India Act. 1934. It was nationalized in 1948. The Bank that issues and regulates the issue of currency in India
The banker to the Government of India and the State governments. It manages the public debt. It has obligation to transact the banking business of the Central Government. It undertakes to accept money on behalf of the Government and make payment on its behalf.
The banker’s bank. Commercial banks maintain their current account with the Reserve Bank of India.
The bank the manages the volume of credit created by the commercial banks to ensure price stability.
The bank that manages the external value of the currency (Indian Rupee)
The lender of Last Resort. It will lend to banks in trouble.
Development Banks
These were set up to five long term finance for the development of the country. These are the Industrial Finance Corporation of India and the Industrial Development Bank of India, The Industrial Reconstruction Bank of India and the National Bank for bank of Industrial Bank of India and the National Bank for Agriculture and Rural Development. A former development bank, the Industrial Credit and Investment Corporation of India Ltd. By a reverse merger in 2002, became a normal commercial bank. It is expected that the other development banks, having outlived their utility would also be either converted to commercial banks or merged with commercial banks. PUBLIC SECTOR BANKS
These are banks which the Government either owns or has majority stake in The largest is the state Bank of India, which was formed by the merger of the Presidency Banks – the Bank of Bengal, the Bank of Bombay and the Bank Madras in 1921. It was then Imperial Bank. It was nationalized or associates. The other nationalized banks came into being on July 19, 1969 when Mrs. Gandhi’s Government nationalized fourteen banks that had deposits of Rs. 50 Crores or more. On April 15, 1980, six more banks having demand
and time liabilities of not less than Rs. 200 Crores were nationalized. This was done to take banking to the villages and serve the developmental needs of all sectors of the economy.
Foreign Banks
These are branches of banks incorporated outside India. The large ones that have been operating in for many years are Standard Chartered Bank. Citibank. American Express bank. ABN Amro. Paribas and hong Kong and Shanghai Banking Corporation. In 1995/96 many other foreign banks (optimistic in view of India’s liberalization) opened branches in India. However, after banking began to become increasingly competitive and margins began to squeeze coupled with large non-performing assets, many banks closed their branches. These include Dresdner Bank, Comerz bank, KBC Bank and commercial Bank of Siam.
Private Sector Banks
These banks are not government owned or controlled. Their shares are freely traded in the Stock Markets. These may be divided into: These may be divided into: Old Private Sector Banks such Federal Bank, Dhanalakshmi Bank, Catholic Cyrian Bank
New Generation Banks such as HDFC Bank, IDBI Bank, UTI Bank and ICICI Bank. Those have
permitted to open provided they had a capital of Rs. 100 Crores.
Cooperative Banks
Cooperative Banks are those that created by a group of individuals to support either a community or a religious group. They operate in metropolitan, urban and semi urban centers to cater to the needs of small borrowers. These are controlled by the RBI and by State Cooperative Acts. In recent years these have been under a cloud on account as several (particularly in Gujarat and Andhra Pradesh) collapsed under controversy. They were used as vehicles by individuals to finance activities which did not succeed.
Regional Rural Banks
These came into being on October 2, 1975 when 5 regional rural banks were established under what became the Regional Rural Banks Act 1975 these were to bridge the gap in rural credit granting loans and advances to small and marginal farmers, artisans, small entrepreneurs and persons of small means engaged in trade, commerce, industry or other productive activities within their area of operation.
Local area Banks
Local Area Banks came into existence in 1999 and licences were given for these banks as it was felt that
regular commercial banks were not financial the rural/agricultural sector adequately. Licences have given to open branches in there districts. Branches in urban/ scmi urban areas have granted only after ten branches were established in rural areas/ Villages. Four licences were in total granted – two in Andhra, one in Punjab and one in Gujarat. They have opened with an initial capital of Rs 5 Crores. A Report issued in 2002 has recommended that the capital should increased to Rs 25 corers and that these be permitted to operate in six districts.
Kotak Mahindra Bank
Kotak Mahindra is one of India’s leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial
banking, to stock brioking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The Group has a net worth of over Rs. 2,900 Crores, employs around 8,800 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 282 cities and towns in India and offices in New York, London, Dubai and Mauritius. The Group services around 2 million customer accounts. In October 2005, Kotak Group acquired the 40% stake in Kkotak prime held by Ford credit International (FCI) and FCI acquired the stake in ford Credit Kotak Mahindra FCKM) held by kotak Group. In may 2006, Kotak Group 25% stake held by Goldman sachs in Kotak Capital and Kotak Securities Kotak Mahindra Bank, one of India’s leading private sector banks today announced a major landmark – opening of its 100th full fledged bank branch in Saket, New Delhi. This is a record feat as kotak Mahindra Bank is the only private sector bank in India which has reached its 100th bank branch in just 4 years, a feat that none of the other private sector banks in India have achieved till date.
Mr. Uday S. Kotak is an executive Vice Chairman and Managing Ditector at Kotak Mahindra Bank Limited. He has been with the firm since August, 2002. Mr. Kotak is the principal Founder and promoter at Kotak Mahindra Finance Ltd. He is responsible for the growth of Kotak Mahindra from a fledgling finance company to a financial institution providing the full basket of financial services. Mr. Kotak has over 18 years of experience in the financial services industry. He is Chairman and Director of Kotak Mahindra primus Limited. Mr. Kotak is also Director of Kotak Mahindra Bank Limited. He is a director of Kotak Mahindra Asser management Company Limited. He is the Chairman of Kotak Securities Ltd. He is also on the board of the following subsidiary companies of kotak Mahindra Bank Limited: Kotak Securities Limited, Kotak Mahindra Capital Company Limited, and Om Kotak Mahindra Life
Insurance Company Limited. Previously, he has served as Non Execcutive Director of Blue Star Limited until October 2002. He is a Member of Advisory Committee of National Stock Exchange of India Ltd. Mr. Kotak, received a post-graduate degree in Business Administration from Jamnalal Bajaj Institute of Management Studies of Mumbai University
Kotak Mahindra Bank amongst hewitt’s “Top 25 Best Employers”
Mumbai, April 17, 2009: Kotak Mahindra Bank, One of India’s leading Private Banks has bagged the Hewitt Best Employer’s in Indian award for the second time in a row Mr. Sudhro Bhaduri Executive Vice President-HR, Kotak Mahindra Bank received the Award. Speaking on the occasion Mr. Bhaduri Said, “We are indeed very Proud to be the recipients of the prestigious Hewitt-Outlook Business ‘Best Employers in India’ Study for the second time. Our people practices are aligned to our culture and values and this makes kotak Mahindra Bank a preferred employer in the industry. Through significant time, energy and investment in people Management practices and processes, we have been able to maintain Kotak Mahindra Bank as one of the Best Employers in India in 2009.” An independent Jury comprising of has selected the Hewitt Best Employer awardees eminent members from the industry and academic world. The 2009 study also introduced new research initiatives to evaluate how new dimensions such as personal Values, CSR, and workplace diversity impact human capital management for business
growth and witnessed participation from over 230 organizations. The views of over 800,000 employees have been represented by over 46,000 employees across India, making this one of the largest employee research studies conducted in the country.
Some of the important milestones of kotak Mahindra Group 1986: Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987: Kotak Mahindra Finance Limited enters the Lease and Hire purchase Market. 1990: The Auto Finance division is started 1991: The investment Banking Division is started. Thakes over FICOM, one of India Enters the Funds Syndication sector 1995:Brokerage and Distribution businesses incorporated into a separate Company- Kotak Securities Investment BNanking Division incorporated into a separate Company- Kotak Mahindra Capital Company 1996: The Auto Finance Business is hived off into a separate company- Kotak Mahindra prime Limited (Formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Group’s entry into information distribution. 1998: Enters the mutual fund market with launch of kotak Mahindra Asset management Company. 2000: Kotak Mahindra ties up with Old Mutual plc. For the Life Insurance business. Kotak Securities launches its on-line broking sits (www.kotaksecurities.com) commencement of private equity activity though setting up of Kotak Mahindra venture Capital Fund. 2001: Matrix sold to Friday Corporation Launches Insurance Services
2003: Kotak Mahindra Finance Ltd. Converts to a commercial Bank – the first Indian Company to do so. 2004: Launches India Growth Fund, a private equity fund. 2005: Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly knoen as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund.
Growth Story of kotak Group
Kotak Symbol
KOTAK PRODUCT LINE
Savings Accounts Our Saving Accounts are designed to ensure you receive the benefits of quick & convenient banking transactions along with options for your money to earn high returns. The savings account goes beyond the traditional role of savings, to provide you a range of services from funds transfer options to online payments of bills to attractive returns earned through a comprehensive suite of investment options We have a number of variants of our savings accounts customized to suit your individual needs so pick the one that matches your requirements & sit back to enjoy the Kotak experience!
TERM DEPOSITS
Kotak Mahindra Bank brings you term Deposit at highly attractive interest rates coupled with special facilities like Overdraft and Re-investment option.
Features & Benefits
Ease and convenience of operation not a Kotak Bank customer and wish to apply for term deposit online? For the first time in India, New To Bank customer can also apply online for term deposit. if you are existing customer, you place a term deposit through phone Banking or Net Banking. What’s more,
you can even renew this deposit by placing an instruction over phone. Needless to mention, he can do all this and by walking across into any of our branches.
Liquidity through overdraft of sweep-in facility your deposit will be available to you should you need them in case of an emergency. You can avail up to 85% overdraft against your term by paying 2% above your deposit rate.
This facility is available for deposits above Rs. 50,000 for a tenure of 181 days or more. You can also choose to link your term deposit to your savings / current account, whereby if need be, your term deposit will automatically be encased to meet your withdrawal requirement.
No penalty on pre-mature encashment In Case your term deposit is pre-maturely encased, you will earn interest at the rate prevailing on the date of deposit for the withdrawn amount.
Nomination facility available you can avail this facility for each & every accounts. That you open with us i.e. nominate different persons for different term deposit accounts. You can choose to change the nominee though a declaration in the appropriate form to revise the nomination during the term of the deposit.
In case you are availing the 2-Way-Sweep feature, nomination, if any, made by you in respect of the
saving / current account for which you are availing this feature will be deemed to be the nomination for any sweep TD created pursunt to the Active Money feature availed by you.
DEMAT ACCOUNT We offer streamlined, efficient depository that allow you to hold your shares in convenient, “Demat” formats and leverage opportunities in the stock market when you sport them.
Our services include
Dedicated and trained Customer Care Office to
handle and answer all your queries.
Highly competitive service charges. For the current
charges on our demat services.
Three in one account – Demat, Trading, Bank have
all in one account. For details
Free Online access to your Demat account
We also cater to the debt requirements of
companies, including the issue of Commercial
paper, Certificate of Deposits, etc, We also provide
a composite Dema account that can hold Equity
shares as well as Government Securities, Bonds
etc.
LIFE INSURANCE
Kotak Mahindra Old Mutual Life Insurance Ltd.
Kotak Mahindra Old Mutual Life Insurance is a 74:26
Joint venture between Kotak Mahindra Bank Ltd. And
Mutual Plc. Kotak Mahindra Old Mutual Life Insurance is one of the fastest growing insurance companies in India and has shown remarkable growth since it’s inception in
2q001.
Old Mutual, a company with 160 years experience in life insurance, is an international financial services group listed on the London Stock Exchange and included in the
FTSE 100 list of companies, with assets under management worth $ 400 Billion as on 30th June, 2006.
For Customer This joint venture translates into company that combines international expertise with the understanding of the local market.
MUTAL FUND
Kotak Mahindra Asset Management Company Limited
(KMAMC)
Kotak Mahindra Asset Management Company Limited
(KMAMC), a wholly owned subsidiary of KMBL, is the
Asset Manager for Kotak Mahindra Mutual Fund (KMMF).
KMAMC started operations in December 1998 and has over 4 Lac investors in various schemes. KMMF offers schemes catering to investors with Varying risk – return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.
We are sponsored by kotak Mahindra Bank Limited, one of India’s fastest growing banks, with a pedigree of over twenty years in the Indian Financial Markers. Kotak
Mahindra Asset Management Co. Ltd., a wholly owned subsidiary of the bank, is our Investment Manager.
We made a humble beginning in the mutual fund space with the launch of our first scheme in December, 1998.
Today we offer a complete bouquet of products and services suiting the diverse and varying needs and risk- return profiles of our investors.
We are committed to offering innovative investment solutions and world class services and conveniences to facilitate wealth creation for our investors.
CAR FINANCE
Kotak Mahindra Prime Limited (KMPL) is a subsidiary of
Kotak Mahindra Bank Limited formed to finance all passenger vehicles. The company is dedicated to and retail customers. The Company offers car financing in the form of loans for the Inventory funding to car dealers and has entered into strategic arrangement with various car manufactures.
HOME LOAN
Why are home loans the best way to materialize your dream? The reasons are simple and straight-forward.
The decision to by a home is one of the biggest financial decisions that an individual takes. There are many concerns that an individual grapples with while considering his requirements, because a home often truly represents the wholeness of his personality and aspirations. Whatever the purpose of buying a home is- whether it is place to reside in, an investment in property to avail capital appreciation, or a source of rental income, availing home loan is today the most convenient and best way to realize one’s dram.
At Kotak Mahindra Bank, we offer highly customized facilities of availing home loans. Importantly, we appoint a dedicated manager who takes customers through the
entire process, Starting with the filling in of the application forms and culminating in the loan disbursement process. This otherwise difficult process is made simpler and more convenient for the customer.
Sometimes, Customers are unable to spare that extra time from their hectic schedules, and the Bank Doorstep
Service makes the home buying process seamless and pleasurable. A relationship that is happy from the start is extended through the attention the customer gets through his loan repayment tenure and beyond.
Features & Benefits The key advantages of Kotak Mahindra Bank Home Loans are: • High Eligibility for Businessmen
• Doorstep Service
• Attractive Interest Rates
• Simplified Documentation
• Insurance Options to cover you’re your Home loans at attractive premium
• Quicker Turnaround time
PERSONAL LOAN
Our quick and easy personal Loans are called jaldi Loans. Personal Loans help to make a difference in your life. No matter what your financial needs are-unexpected expenses, Whatever the occasion, our range of personal Loans can help. The procedure is simple, documentation is minimal and approval is quick.
Features and Benefits
Avail loans from Rs. 50,000 – 50 lakh*: You avail of a loan from Rs. 50,000 -50 Laks* for any purpose based on your income and repayment capacity and fulfill all your financial needs.
Quick approval: With a jaldi Loan, you are not far away from making your dreams come true. In as less as 72 hours your can turn your dreams into reality.
Minimal paperwork & hassle free processing: Our minimal document requirements leave you tension and hassle free. Additionally, worries are kept at day, as no security or collateral is required.
Flexible repayment Our flexible loan tenors range from
12-60 Months for salaried customers and 12-36 Months
from businessmen / Professionals, which don’t’s overburden you with a worry to pay heavy EMLs.
Convenience of service at your doorstep: Our Jaldi Loans are just a Phone call away; you can fix an appointment with any of representatives and they could you in all your loan formalities.
Customer Privileges:
If you are a Kotak Mahindra Bank account Holder,
we have special rates for you.
If You are an auto / personal / home loan customer
are a credit card holder or paying an insurance
premium or enjoying an OD/CC facility avail of
instant loans without income documents.
If you’re an existing Kotak Mahindra Bank personal
Loan customer with a clear repayment of 12 months
or more, we can top-Up your personal loan.
COMMERCIAL LOANS
First Group (FG) represents the asset arm of kotak Bank which offers a one stop for all financial needs of customers of Transportation, Logistics, Infrastructure, and Tractor Industries.
Though our varied products, we commit ourselves to becoming “banker” to the customer rather than being
“asset financier” to our customers.
The First Group’s services offered include:-
PRODUCT PORTFOLIO
Commercial Vehicle Financing
Infrastructure Financing
Tractor and Farm Equipment Financing
SARAL Loans
Working Capital Financing
GOLD
Kotak Mahindra Bank brings you Gold eternity, 24 Carat pure Gold coins and bars, carrying a 99.99% Assay
Certification, signifying the highest level of purity as per international standers.
• Manufactured in Switzerland by PAMP, one of the world’s premier gold refiners and a brand recognized world wide as a guarantee of excellence and quality
• Certified by one of the top assayers in the world
• Tamper proof packaging to ensure the purity of the gold bar
• Unique number on every certicard, with records maintained in Switzerland
• Competitive pricing based on daily pricing in the international bullion market
Kotak Gold Eternity come to you in varied denominations. You can choose from a range of coins and bars in 5 gm, 8gm, 20gm, 50gm and 100gm.
Current Account
At Kotak Mahindra Bank, we know how critical it is for your business to have quick and timely access to funds.
We understand how important smooth and seamless banking transactions are for business relationships.
Our Current Accounts Have been designed to help you compete effectively in the contemporary business environment. They include a 2 Way Sweep feature that delivers liquidity combined with higher returns.
Features and benefits
Minimum Account Balance required is Nil
2 Way Sweep for liquidity and higher returns
Free-up country cheque collection for 13 locations
Personalised Cheque Book
KOTAK CREDIT CARDS
Fortune Gold Card
Interest Free Cash Withdrawals Zero Charge EMI 2.5% Fuel Surcharge Waiver 0% Balance Transfer Free for Life
Trump Gold Card
10% Cash Back Across All Restaurants 10% Cash Back on Movies and plays 2.5%Fuel Surcharge Waiver Free for Life
League Platinum Card
Exclusive Dining Benefits at the Taj Auto encashment of Reward Points SMS us and we will Reach you Lost or stolen card fraud cover
Royale Signaturs Card
Special Concierge services to assist you Enjoy golf privileges worldwide Auto encashment of Reward points Lost or Stolen card fraud cover Exclusive dining benefits at the Taj
Project at Glance: “COMPARATIVE ANALYSIS OF KOTAK MAHINDRA BANK TRADE PRODUCTS WITH ITS COMPETITONS” Objective: The main of the present study of is accomplish the following objective.
Proper understanding and analysis of banking industry.
To know about brand awareness of kotak Mahindra bank and customer’s Preference about Kotak Mahindra Bank.
Conduct marker survey on a sample selected from the customer and derived opinion on that research.
Along with it I will be gaining the thorough knowledge of banking sector. This will given me in more confidence in marketing products given to me.
As the Kotak Mahindra Bank well reputed bank in India it’s great chance for me to observed different products launch by other companies Like ICICI Bank, HDFC Bank etc.
RESERVE BANK OF INDIA
Establishment
The Reserve Bank of India was established on April 1,
1935 in accordance with the provisions of the Reserve
Bank of India Act, 1934.
The Central Office of the reserve Bank was initially established in Calcutta but was permanently moved to
Mumbai in 1937. The Central Office is where the
Governor sits and where policies are formulated.
Though originally privately owned, since nationalization in 1949, the Reserve Bannk is fully owned by the
Government of India.
Main Functions
Monetary Authority:
Formulates, implements and monitors the monetary
policy.
Objective: maintaining price stability and ensuring
adequate flow of credit to productive sectors.
Regulator and supervisor of the financial system:
Prescribes broad parameters of banking of banking operations within which the country’s banking and financial system functions.
Objective: maintain public confidence in the system, protect depositors interest and provide cost-effective banking services to the public.
Manager of Foreign Exchange Manages the Foreign exchange Management Act, 1999.
Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
Issuer of currency: Issues and exchanges or destroys currency and coins not fits circulation.
Objective: to give the public adequate quantity of supplices of currency notes and coins and in good quality.
Developmental Role Performs a wide range of promotional functions to support national objectives.
Related Functions Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
Banker to banks: maintains banking accounts of all scheduled banks.
Hierarchy of RBI
MARKETING OF KOTAK Marketing at Kotak Mahindra Banki categorizes in to four departments – Marketing Communications, Corporate Communications, Marketing Activation & Marketing Operations. These departments act as an advisory and support channel towards marketing strategies and PR planning to ensure effective brand building through brand awareness and visibility. The objective is to implement effective campaigns and promotions which would help in meeting the business targets and getting media coverage for the same.
We provide support at two broad levels – Branch Marketing and Central Marketing Marketing Activation All marketing activities done of any marketing collaterals for the branches. Branch centric PR & outdoor support also comes under the branch marketing. Promotion Documents Promotion Proposal Please fill the promotion proposal once the branch finalizes a promotional activity Provide a description of the activity that you wish to undertake. Please mention if any special Offers like AQB waiver etc are required. (For all AQB related offers approvals from Amit Pathak, & Amresh Mohan are necessary). Other details like Venue, activity period needs to be filled in correctly. If you need any marketing or promotion material please specify the correct quantity detail out planned cost break up for any sponsorship or manpower that you need for the activity. Give the planned promotion in form of planned leads and conversions. We can then match them with the actual leads and conversions post the activity. Branch manager of any relevant authority needs to approve the activity.
To download a copy of a promotion proposal please click here Promotion Codes
Promotion codes are generated to track the efficiency of the activity. Marketing generates the code the activity is approved.
Marketing Communications Marketing Communications takes care of the creation, rollout and analysis of all national campaigns at the brand product level. This includes doing various brand and product campaigns as well as researches to monitor the growth of the brand and the campaign deliveries. This department also takes care of creative conceptualization and rollout of regional requests (events, promotions, contests, campaigns) central marketing also provides support to both the product team and the branches in terms of conceptualizing and standardizing marketing collaterals. These include standard branch collaterals like posters, banners, e- mailers, brochures etc.
Process for Marketing Collaterals Please fill in the creative brief with all relevant details which will help us to understand your requirements and design appropriate collaterals for you. Please ensure that creative brief is filled in detail so that the creative team gets an accurate understanding of the requirement. Partially filled briefs / requests without creative brief will not be entertained.
After receiving the creative brief marketing would come up with design of the collaterals and share it with the concerned team
All collaterals will be subject to compliance / legal approval
Post compliance / legal approval the collaterals would be put into print
Post campaign you are requested to send the details of the leads captured / business sourced, so the we can have an understanding of the effectiveness of the campaigns.
All regional requests need to be routed through the respective Regional Marketing Manager for that region.
COMPETITORS
HDFC BANK
The Housing Development Finance Corporation Limited
(HDFC) was amongst the first to receive an “in principle” approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI’s liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of
‘HDFC Bank Limited’, with its registered office in
Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.
ICICI Bank
ICICI Bank is India’s second-largest bank with total assets of Rs 3,793.01 billion (US$ 75 billion) at March 31,
2009 and profit after tax Rs. 75.58 billion for the year ended March 31, 2009. The Bank has a network of 1,471 branches and 4,721 ARMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management.
SBI BANK
The origin of the Bank of India goes back to the first decade of the nineteenth century with the establishment of the bank of Calcutta in Calcutta on 2
June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2
January 1809). A unique institution, it was the first Joint- stock bank of British India sponsored by the Government of Bengal. The bank of Bombay (15 April 1840) and the
Bank of Madras (1 July 1843) followed the Bank of
Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the
Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India’s economy. Their evolution was, however, shaped by ideas culled from similar development in Europe and England, and was influenced by changes occurring in the structure
of both the local trading environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework.
AXIS BAND
Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank
Was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI-I),
Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company
Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. And United India
Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 359.76 Crores with the public holding (other than promoters) at 57.79%. The Bank’s Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 853 branches and Extension Counters (as on 30th June 2009). The Bank has a network of over 3723 ATMs (as on 30th June 2009) providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.
SOME OTHER COMPETITORS ARE…….
Trade
Import Export Inland Misc. Remittance
Advance Remittance Export Bill for Collection Inland Bill for Collection Direct Import Bills Direct Dispatch Import Bill for Collection Inland Letter of Credit Foreign currency Letter of Inland Bank Guarantee Letter of Credit credit backed Bill Buyers Credit Clean Bill Discounting Discounting LC backed Bill Discounting Pre Shipment Finance Post Shipment Finance
Outward Remittance Buisness Travels Inward Remittance Study Abroad Commission Medical Treatment Freight Subscription Fees Family Maintainance Etc. Etc. MAJOR TRADE PRODUCTS PROVIDED BY
KOTAK MAHINDRA BANK
Letter of Credit
Remittances o Inward o Outward
Forward Charges
LETTER OF CREDIT
After a contract is concluded between buyer and seller, buyer's bank supplies a letter of credit to seller.
Seller consigns the goods to a carrier in exchange for a bill of lading.
Seller provides bill of lading to bank in exchange for payment. Seller's bank exchanges bill of lading for payment from buyer's bank. Buyer's bank exchanges bill of lading for payment from the buyer.
Buyer provides bill of lading to carrier and takes delivery of goods.
A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking.
The letter of credit can also be source of payment for a transaction, meaning that redeeming the letter of credit will pay an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, stormwater ponds, etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or cancelled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and Traveler's cheques. Typically, the documents a beneficiary has to present in order to receive payment include a commercial invoice, bill of lading, and documents proving the shipment was insured against loss or damage in transit. However, the list and form of documents is open to imagination and negotiation and might contain requirements to present documents issued by a neutral
third party evidencing the quality of the goods shipped, or their place of origin.
Terminology
The English name “letter of credit” derives from the French word “accreditation”, a power to do something, which in turn is derivative of the Latin word “accreditivus”, meaning trust. The Application any defence relating to the underlying contract of sale. This is as long as the seller performs their duties to an extent that meets the requirements contained in the letter of credit.
Some of the Documents Called for under a Letter of Credit
• Financial Documents
Bill of Exchange, Co-accepted Draft
• Commercial Documents
Invoice, Packing list
• Shipping Documents
Transport Document, Insurance Certificate, Commercial, Official or Legal Documents
• Official Documents
License, Embassy legalization, Origin Certificate, Inspection Cert , Phyto-sanitary Certificate
• Transport Documents
Bill of Lading (ocean or multi-modal or Charter party), Airway bill, Lorry/truck receipt, railway receipt, CMC Other than Mate Receipt, Forwarder Cargo Receipt, Deliver Challan...etc
• Insurance documents
Insurance policy, or Certificate but not a cover note.
pre shipment packing list
International Trade Payment methods
• Advance payment (most secure for seller)
Where the buyer parts with money first and waits for the seller to forward the goods
• Documentary Credit (more secure for seller as well as buyer)
Subject to ICC's UCP 600, where the bank gives an undertaking (on behalf of buyer and at the request of applicant ) to pay the shipper ( beneficiary ) the value of the goods shipped if certain documents are submitted and if the stipulated terms and conditions are strictly complied.
Here the buyer can be confident that the goods he is expecting only will be received since it will be evidenced in the form of certain documents called for meeting the specified terms and conditions while the supplier can be confident that if he meets the stipulations his payment for the shipment is guaranteed by bank, who is independent of the parties to the contract.
• Documentary collection (more secure for buyer and to a certain extent to seller)
Also called "Cash Against Documents". Subject to ICC's URC 525, sight and usance, for delivery of shipping documents against payment or acceptances of draft, where shipment happens first, then the title documents are sent to the [collecting bank] buyer's bank by seller's bank [remitting bank], for delivering documents against collection of payment/acceptance
• Direct payment (most secure for buyer)
Where the supplier ships the goods and waits for the buyer to remit the bill proceeds, on open account terms.
FORWARD CHARGES / HEDGING
By hedging, in the general sense, we can imagine the company entering into a transaction whose sensitivity to movements in financial prices offsets the sensitivity of their core business to such changes. As we shall see in this article and the ones that follow, hedging is not a simple exercise nor is it a concept that is easy to pin down. Hedging objectives vary widely from firm to firm, even though it appears to be a fairly standard problem, on the face of it. And the spectrum of hedging instruments available to the corporate Treasurer is becoming more complex every day.
Another reason for hedging the exposure of the firm to its financial price risk is to improve or maintain the competitiveness of the firm. Companies do not exist in isolation. They compete with other domestic companies in their sector and with companies located in other countries that produce similar goods for sale in the global marketplace. Again, a pulp- and-paper company based in Canada has competitors located across the country and in any other country with significant pulp-and-paper industries, such as the Scandinavian countries.
Companies that are the most sophisticated in this field recognize that the financial risks that are produced by their businesses present a powerful opportunity to add to their bottom line while prudently positioning the firm so that it is not pejoratively affected by movements in these prices. This level of sophistication depends on the firm's experience, personnel and management approach. It will also depend on their competitors. If there are five companies in a particular sector and three of them engage in a comprehensive financial risk management program, then that places substantial pressure on the more passive companies to become more advanced in risk management or face the possibility of being priced out of some important markets. Firms that have good risk management programs can use this stability to reduce their cost of funding or to lower their prices in markets that are deemed to be strategic and essential to the future progress of their companies.
Most importantly, hedging is contingent on the preferences of the firm's shareholders. There are companies whose shareholders refuse to take anything that appears to be financial price risk while there are other companies whose shareholders have a more worldly view of such things. It is easy to imagine two companies operating in the same sector with the same exposure to fluctuations in financial prices that conduct
completely different policy, purely by virtue of the differences in their shareholders' attitude towards risk.
REMITTANCES
Generally, remittances are monies transferred from one individual to another.
International remittances are transfers of funds by foreign workers—"remitters"—who are living and working in developed countries typically to their families who are still living in their home countries. Examples include Middle Easterners living in Europe, Latin Americans in the United States, and Koreans or Filipinos in Japan. Although the use of remittance funds varies from country to country, the recipients of remittances commonly rely on them for living costs, education, and investments.
Remittances Have Increased Significantly and Become a Major Source of Income for Developing Countries. The topic of remittances has become a popular one in the international financial community in recent years as both the rate and volume of remittances have increased exponentially. Gathering accurate data on international remittances has been very difficult for a number of reasons, including the fact that a good portion of the transfers is made on an informal basis. Some official statistics do exist, however, and they present startling numbers. In 1995, remittances to developing countries totaled about $57.8 billion and shot up to $96.5 billion by 2001. The World Bank estimated that in 2005 migrants sent home approximately $167 billion, up 73% from 2001 (the true amount could be 50% higher or more). In 2006, the World Bank reported that remittances grew to approximately $206 billion; others put the figure at $298 billion. These flows have led analysts to conclude that the growth of remittances has exceeded private capital flows and official development assistance to developing countries. Moreover, remittances are a reliable source of foreign capital; in the 1990s they were the least volatile source of foreign exchange.
Migrants send money to their home countries through formal and informal channels. Formal channels include major money transfer operators (MTOs), such as Western Union and Money Gram, and banks, such as Bank of America. Some migrants use formal channels, but language barriers as well as related costs for these services may deter remitters from using them. Consequently, most remittances occur through informal channels. For instance, migrants may carry cash home themselves or send cash through the mail or a friend.
There is growing evidence that remittances have reduced poverty levels in several developing nations. One study of 71
developing countries found that a per capita increase of 10% in international remittances leads to a 3.5% decline in people living in poverty. In another study, the World Bank concluded that, based on available data, remittances have been associated with reduced poverty in several low-income countries such as Uganda (11% reduction), Bangladesh (6% reduction), and Guatemala (20% reduction).
However, there is also conflicting evidence that remittances have very little impact on the incidence of extreme poverty, or, even worse, the opposite effect. Some analysts argue that remittances in some countries contribute to a growing inequality or gap, particularly in poor rural areas, between the groups of people within a community who receive remittances and those who do not. This may reflect the cost of sending family members to foreign lands to work. Migrants are typically from families that are neither the poorest (who cannot afford to send someone away) nor the richest (who have no need to send someone away) in the community, but who have a status more analogous to middle-class. Additionally, increased income to remittance-receiving families can lead to the formation of "affluent" neighborhoods that stand apart from the rest of the poor village. The poorest families thus seem to be even poorer in comparison to the much-improved lifestyles that remittance money allows some families to suddenly have.
INWARD REMITTANCE
1. Demand Draft 2. Incoming Payment Advice 3. Purchase of Foreign Currency Cheques 4. Cheques Sent for Collection
1. Demand Draft
A cheque payable to particular beneficiary drawn on our Bank An inexpensive and simple method of funds transfer
2. Incoming Payment Advice
Money is remitted from overseas countries to Hong Kong by Mail Transfer or Telegraphic Transfer with details for payment A secure and convenient way to collect funds from abroad
3. Purchase of Foreign Currency Cheques
Travellers cheques, bank drafts or money orders may be purchased and credited into account at branch manager's discretion Usually the funds will be available only after a certain period (upon clearance of cheque) To enable encashment of travellers cheques or first class bank drafts with minimum formalities
To facilitate customers to draw against their own foreign currency account abroad
4. Cheques Sent for Collection Cheques not purchased by us will be sent for collection and charges will be levied for service rendered Customer's account will be credited with the net proceeds upon receipt of payment An inexpensive method for the customer to obtain the fund due to him
OUTWARD REMITTANCE
1. Demand Draft 2. Telegraphic Transfer 3. Payment Order (Local)
1. Demand Draft
A cheque payable to particular beneficiary drawn on our correspondent bank In any major currency for any amount Payment guaranteed by the issuing bank An inexpensive and simple methods of funds transfer A secure form of payment as the demand draft is payable to the specified payee Re-purchasable and refundable if lost To facilitate payments on a regular basis by means of a standing instruction
2. Telegraphic Transfer
The most efficient means with the payment instruction transmitted by telex/SWIFT In any major currency for any amount A fast and accurate way to transfer funds abroad A secure way of remitting funds of substantial amounts payable to a specific beneficiary
To facilitate payments on a regular basis by means of a standing instruction
3. Payment Order (Local)
The issuance of a local payment order to the recipient Bank either by SWIFT or by mail A fast way to expedite the receipt of funds To facilitate payments on a regular basis by means of a standing instruction
TYPE OF COMPANIES
Others, 11% Softwares, 3% Cloth Mfg., 2%
Logistics, 15%
Jewellers, 69%
WHAT ARE MAJOR COUNTRIES THROUGH WHICH YOU DO IMPORT / EXPORT TRANSACTIONS
Others, 15% , Japan, 55%
Germany., 70% China, 20%
FOR YOUR FOREIGN EXCHANGE TRANSACTIONS WHICH FORM OF FACILITIES YOUR USE
, Others, 15%
Bank Guarantee, 40% Letter of Credit, 25%
Remittances, 25%
BANK GUARANTEES
WHAT IS THE TENURE OF YOUR BANK GUARANTEE?
0-2 years 21%
8 years & above 44%
2-5 years 16%
5-8 years 19%
WHAT IS TYPE OF YOUR BANK GUARANTEE?
0% Perfomance 43%
Financial Guarantee 57%
REMITTANCES
WHICH FORM OF REMITTANCES ARE YOU INVOLVED IN?
Outward 48%
Inward 52%
WHEN AN INWARD REMITTANCE IS RECEIVED WHAT IS THE AMOUNT YOU CONVERT IT TO INDIAN RUPEES
EEFC 24%
100% Conversion 47%
INR 29%
LETTER OF CREDIT DO YOU UTILIZE L. C. FACILITY?
0%
No 46% Yes 54%
WHICH TYPE?
Import Operation under L.C. Revocable 13% 22% Standby 17%
Transferable Irrevocable 7% Confirmed 24% 17%
HOW DO YOU FIND TRADE PRODUCTS PROVIDED BY KOTAK BANK?
Poor Good 0% 12% 28% Satisfactory 24%
Very Good Excelled 20% 16%
WHAT ARE AREA OF IMPROVEMENT
Product Updates 14% 0% 13% Technology 11%
Service 37% RM 25%
FINDING
People are looking out for faster trade transaction
Customers are fairly satisfied with the service of the bank and service provided by the Relationship Manager.
Bank Guarantees and letter of credit are the major products that are used.
CONCLUSIONS & RECOMMENDATIONS
The customer of Kotak Mahindra Bank is highly satisfy with the products and service of the bank means bank have done good work on that.
The very first thing that Kotak Mahindra Bank required to increase the infrastructure means bank needs to open new branches across the India.
Now Kotak Mahindra Bank is well known brand in the financial market so bank have to enter in mass banking.
Apart from premier banking Kotak Mahindra Bank have to increase the reach and come on lower segment.
Urban Market is saturated now bank have to focus on to the rural market.
REFERENCES
In order to obtain more information regarding the present study and to substantiate it with theoretical proof, the following references were made.
WEBSITE VISITED: www.kotak.com www.rbi.org.in www.google.com www.icicibank.com www.hewittasia.com
MAGAZINES
Business Today
ANNEX URE
QUESTIONNAIRE
1. Type of Companies
2. What are major countries through which you do Import / Export transactions
3. For your foreign exchange transactions which form of facilities your use
BANK GUARANTEES
4. What is the tenure of your Bank Guarantee?
5. What is type of your Bank Guarantee?
6. Which form of remittances are you involved in?
7. When an inward remittance is received what is the amount you convert it to Indian rupees
LETTER OF CREDIT
8. Do you utilize L. C. facility?
9. Which type?
10. How do you find trade products provided by Kotak Bank?
11. What are areas of improvement