Objectives of the study:

1. To review types of non banking financial and agency services.

2. To review non banking and agency services provided by HDFC
bank.
3. To review non banking and agency services provided by AXIS
bank.
4. To make a comparative study between AXIS bank and HDFC
bank.

1
Observations and Bank visit:

I visited two banks as a part of my project enquiry. It was totally

new experience, as I was visiting that bank for the first time.
Amongst two banks one was private sector banks and another
public sector bank.
Private sector bank: HDFC bank.
Public sector bank: Axis bank.

HDFC bank: I went to HDFC bank on 12th of October and sought

information regarding the non banking services, provided by their
bank. I am thankful to branch manager Mr. Darryl Pinto and
assistant manager Mr. Mahesh Singh for assisting me on my topic.

Axis bank: I went to union bank of India on 14th of October and

sought information on the kind of non banking services provided
by their bank. I am thankful to branch manager Mrs. Shilpa
Mehendekar other employees to help me in my topic.

2
Introduction:
Financial system refers to conduit between savers and investors or
lenders and borrowers. It is an important catalytic agent for
economic development. It promotes Capital formation and
economic growth. According to S.B.Gupta, financial system is an
institutional arrangement through which financial surpluses
available in the economy are mobilized.

Components of Financial System:

Following are the components of financial system:

a) Financial institutions: are responsible for mobilizing and

allocating resources and comprises of:
Banking institutions.
Non banking institutions.
Apex and intermediaries.
Further intermediaries comprises of:
Institutional and non Institutional.

b) Financial market: is an institutional arrangement that supports

financial transaction. They create or transfer financial assets and
claims and comprises of:
Money market.
Capital market.
Foreign exchange market.
Derivative market.

c) Financial instruments refer: to the assets or mechanism for

carrying out financial transaction and comprises of:
Tradable and non tradable instruments.
Primary and secondary securities.

3
d) Financial services refer: to satisfying specific requirement of
savers as well as investors and comprises of:
Banking and non banking services.
Fund based and fee based services.

Meaning of Non-Banking Financial Company:

Non banking financial companies are financial institution that
provide banking services but do not hold a banking license. NBFC
do all sorts of banking services such as loans and credit facilities,
retirement planning, money market, underwriting and merger
activities. The above services are provided by NBFC. They
provide all similar kind of services as banks do, but they are not
entitled to accept deposit from public.

They are recognized as complimentary to banking sector due to

their customer oriented services, simplified procedures, attractive
rate of return on deposits, flexibility and timeliness in meeting the
credit needs of specified sectors.

Post 1996, Reserve Bank of India has set in place additional

regulatory and supervisory measure that demand more financial
discipline and transparency of decision making on the part of
NBFCs. NBFCs regulations are being reviewed by the RBI from
time to time keeping in view the emerging situations

Definition of Non-Banking Financial Company:

A Non-Banking Financial Company (NBFC) is a company
registered under the Companies Act, 1956 and is engaged in the
business of loans and advances, acquisition of
shares/stock/bonds/debentures/securities issued by Government or
local authority or other securities of like marketable nature,
leasing, hire-purchase, insurance business, chit business but does
not include any institution whose principal business is that of

4
agriculture activity, industrial activity, sale/purchase/construction
of immovable property.

Registration of Non-Banking Financial Company:

With the amendment of RBI act, 1934 in January, 1997, (section
45 IA) all non bank finance companies have to mandatorily
register with the reserve bank of India. A NBFC requires
compulsory registration with reserve bank to commence or carry
on any financial business. Auditors of all NBFCs are required to
report directly to reserve bank for non compliance by any company
of these statutory provisions. The reserve bank has also powers to
reject the Registration or cancellation of the registration of NBFCs.
During the period 1991 and 1971 many finance companies were
registered and raised capital from the market. However, most of
these companies have been disappeared today. Some of these
companies were also listed on the stock exchange.

Difference between banking and non banking finance

company:
Non banking companies are allowed to accept or renew
public deposit (which they mobilize into different sectors) for
minimum period of 12 months and maximum 60 months.
While banking companies are not required to follow such
regulation they can accept deposits for any amount of time
depending on their schemes.
Non banking finance companies cannot accept deposits
which are repayable on demands.
While banks can accept such deposits i.e. repayable on
deposits infact these is main function of banks.
Non banking companies before issuing securities or bonds
are required to get them rated by credit rating agencies.
While banking company does not need to rate their securities
before issuing in the market.

5
 In banking company their deposits are insured by deposit
insurance scheme.
While no such criteria is followed by non banking company.
In banking company deposits are guaranteed by RBI upto
certain limit.
While non banking companys deposits are not guaranteed by
RBI.

6
Types of Financial Services and other support services:
Following are the types of non banking financial services:
1. Hire purchase finance.
2. Equipment leasing finance.
3. Loans and advances.
4. Investments.(mutual funds)
5. Venture capital finance.
6. Chit funds.
7. Insurance.

Following are the other customer support services:

1. Bill payment
2. Bill collection.
3. Demat account services.

Following are the brief information of non banking

financial services:
1. Hire purchase finance.
Hire purchase finance is a method of selling goods. In a hire
purchase transaction the goods are let out on hire by a finance
company (creditor) to the hire purchase customer (hirer). The
buyer is required to pay an agreed amount in periodical
installments during a given period. The ownership of the property
remains with creditors and passes on to hirer on the payment.

Definition:
The hire purchase act, 1972 defines a hire purchase agreement as
an agreement under which goods are let on hire and under which
the hirer has an option to purchase them in accordance with the
terms of agreement under which:
Payment is to be made in installments over a specific period.
The possession is delivered to the purchaser at the time of
entering into a contract.

7
 The property in the goods passes to the purchaser on payment
of last installments.
Each installment is treated as hire charge so that if default is
made in payment of any one installment, the seller is entitled
to take away the goods.
The hirer/purchaser is free to return the goods without being
required to pay any further installments falling due after the
return.

Hire purchase agreement:

There is no prescribed form for a hire purchase agreement, but it
has to be in writing and signed by both parties to the agreement.
A hire purchase agreement must contain the following particulars:
The description of goods in manner sufficient to identify
them.
The hire purchase price of goods.
The date of commencement of the agreement.
The number of installments in which hire purchase price is to
be paid, the amount, and the due date.

Features of hire purchase transaction:

Under hire purchase system, the buyer takes possession of
goods immediately and agrees to pay the total hire purchase
price in installments.
Each installment is treated as hire charges.
The ownership of the goods passes from buyer to seller on
the payment of the installments.
In case the buyer makes any default in the payment of any
installment the seller has right to repossess the goods from
the buyer and forfeit the amount already received treating it
as a hire charge.
The hirer has the right to terminate the agreement any time
before the property passes. he has the option to return the
goods in this case he need not pay installments falling due

8
 thereafter. However, he can recover the sums already paid as
such sums legally represent hire charge on the goods in
question

Companies which are involved in providing hire purchase finance:

Akansha Finvest
Alagendran finance.
Anjani finance.
Apple Credit Corporation.
Ankush Finstock.

9
2. Equipment leasing finance:

Introduction of equipment leasing:

Traditionally firm acquires productive assets and use them as
owners.
The sources of finance to a firm for finance for procuring
assets may be internal or external.
Over the years there has been a declining trend in the
internally generated resources of Indian companies due to
low profitability.
The financial institutions experience paucity of funds at their
disposal to meet the increasing needs of borrowers.
Further, modern business environment is becoming more and
more complex.
To succeed in the situation, the firms aim at the growth with
stability.
To accomplish this objective, firms are required to go for
massive expansion, diversification and modernization.
Essentially such projects involve a huge amount of
investments.
High rate of inflation, severe cost escalation, heavy taxation,
etc forced many companies to look for alternative means of
financing the projects.
Leasing has emerged as a new source of financing capital
assets.

Concept of leasing finance:

Leasing as financing concept, is an arrangement between two
parties, the leasing company or lessor and the user or the
lessee, whereby the former arranges to buy capital equipment
for the use of the latter for agreed period of time in return for
the payment of rent.

10
 The rentals are predetermined and payable at fixed intervals
of time, according to the mutual convenience of both the
parties. However, the lessor remains the owner of the
equipment over the primary period.

Definition:
A contract between lessor and lessee for the hire of a specific
asset selected from a manufacturer or vendor of such assets
by the lessee.
The lessor retains the ownership of the asset. The lessee has
the possession and use of the asset on payment of specified
retain over the period.
Thus in a contract of lease there are two parties involved that
is lessor and lessee.
The lessor can be a company, a co-operative society, a
partnership firm or an individual in manufacturing or allied
activities.
The lessee can be even a doctor or any other specialists who
use costly equipment for the practice of his profession.

Steps involved in leasing transaction:

Steps involved are as follows:
First, the lessee has to decide the asset required and select the
supplier. He has to decide about the design specifications, the
price, the warranties, the terms of delivery, servicing, etc.
The lessee then enters into a lease agreement with the lessor.
The lease agreement contains the terms and conditions of the
lease such as ,
a) The basic lease period during which the lease is
irrecoverable.
b) The timing and the amount of periodical rental
payment during the lease period.
c) Details of any option to renew the lease or to
purchase the asset at the end of the period.

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 d) Details regarding payment of cost maintenance
and repairs, taxes, insurance and other expenses.
After the lease agreement is signed the lessor contacts the
manufacturer and requests him to supply the asset to the
lessee. The lessor makes the payment to the manufacturer
after the asset has been delivered and accepted by the lessee.

Types of lease financing :

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

Companies that offer leasing finance:

Shriram investments limited.
Atharv enterprises.
Ashirwad capital.
Mahan industries.
Majestic enterprises.

12
3. loans and advances:

Non banking financial companies also provide loans and

advances to the people.

They have their own deposits, which they use by lending

to the customers.

They also mobilize funds from the people who have

surplus portions to the people who are seeking funds.

The interest rate at which they lend is high then banks.

They may or may not ask for co-lateral security.

They provide medium and long term loans.

They provide loans to big corporates and sometimes to

banks.

13
4. Mutual funds:

Introduction to mutual funds:

Off late, mutual funds have become favorite of millions of
people all over the world.
The driving force of mutual funds is the safety of the
principalguranteed, plus the added advantage of capital
requirement together with the income earned in the form of
interest or dividend.
People prefer mutual funds to bank deposits, life insurance
and even bonds because with a little money, they can get into
investment game.
One can own string of blue chips like ITC, TISCO, reliance,
etc.through mutual funds. Thus, a mutual fund acts as a
gateway to enter into big companies hitherto inaccessible to
ordinary investors with his small investments.
To state in simple words, mutual funds collect the saving
from all investors, invest them in government and other
corporate securities and earn income through interest and
dividends, besides capital gains.
It works on the principal of small drop of water makes a big
ocean. For instance, if one has Rs 1000 to invest, it may not
fetch much on its own. But, when its pooled with Rs 1000
each from a lot of other people, then, one could create a big
fund large enough to invest in a wide variety of shares and
debentures.

Definition:
The securities and exchange board of India(mutual fund)
regulations, defines a mutual fund as a fund established
in the form of trust by a sponsor, to raise moneys by the
trustees through the sale of units to the public, under one
or more schemes, for investing in securities in accordance
with these regulations.

14
 Thus, mutual funds are corporations which pool funds by
selling their own share and reduce risk by diversification.

Types of funds/classification of funds:

In the investment market, one can find a variety of
investors with different needs, objectives and risk
taking capacities. For instance a young businessman
would like to get more capital appreciation for his
funds and he would be prepared to take greater risks
than a person who is just on the verge of his retiring
age.
So, it is very difficult to offer once fund to satisfy all
the requirements of investors. Just as one shoe is not
suitable for all the legs, one fund is not suitable to
meet the vast requirement of all the investors.
Therefore, many types of funds are available to the
investors. It is completely left to the discretion of
investors to choose any of them depending upon his
requirement and his risk taking capacity.
Mutual fund schemes can be classified into many
types, they are as follows:

1) On the basis of the execution and operation:

Close-ended funds.
Open-ended funds.

2) On the basis of income:

Income funds.
Pure growth funds.
Balanced funds.
Specialized funds.
Money market mutual funds.
Taxation funds.
Leveraged funds.

15
 Dual funds.
Index funds.
Bond funds.
Aggressive growth funds.
Off-shore mutual funds.
Property fund.
Fund of funds.

16
5. Venture capital:

Introduction to venture capital:

The term venture capital is understood in many ways.
In a narrow sense, venture capital refers to, investment in
new and tried enterprise that are lacking a stable record of
growth.
In a broader sense, venture capital refers to the the
commitment of capital as shareholding, for formulation and
setting up of small firms specializing in new ideas or new
technologies.
It is not merely an injection of funds into a new firm, it is a
simultaneous input of skill needed to set up the firm, design
its marketing strategy and organize and manage it.
It is a an association with successive stages of firms
development with distinctive types of financing appropriate
to each stage of development.

Meaning of venture capital:

Venture capital is a long term risk capital to finance high
technology projects which involve risk but at the same time has
strong potential for growth.
Venture capitalist pools their resources including managerial
abilities to assist new entrepreneurs in the early years of the
project.
Once the project reaches the stage of profitability, they sell
their equity holdings at high premium.

Definition:
A venture capital is defined as a financing institution which
joins an entrepreneur as a co-promoter in a project and shares
the risks and rewards of the enterprise.

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Features of venture capital:
Some of the features of venture capital financing are as follows:
Venture capital is usually in the form of an equity
participation. It may also take the form of convertible debt or
long term loan. Investment is made only in high risk but high
growth potential projects.
Venture capital is available only for commercialization of
new ideas or new technologies and not for enterprise which are
engaged in trading, booking, financial services, agency, liaison
work or research and development.
Venture capitalist joins the entrepreneur as a co-promoter
in projects and shares the risks and rewards of the enterprise.
There is continuous involvement in business after making
an investment by the investor.
Once the venture has reached the full potential the venture
capitalist disinvests his holding either to the promoters or in the
market.
The basic objective of investment is not profit but capital
appreciation at the time of disinvestment.

Scope of venture capital:

Development of an idea (seed finance): In the initial stage
venture capitalists provide seed capital for translating an idea
into business proposition. At this stage investigation is made
in-depth which normally takes a year or more.
Implementation stage (start up finance): when the firm is set
up to manufacture a product or provide a service, start up
finance is provided by the venture capitalists. The first and
second stage capital is used for full scale manufacturing and
further business growth.
Fledging stage (Additional finance): in the third stage, the
firm has made some headway and entered the stage of
manufacturing a product but faces teething problems. It may
not be able to generate adequate funds and so additional

18
 round of financing is provided to develop the marketing
infrastructure.
Establishment stage (establishment finance): At this stage the
firm is established in the market and expected to expand at a
rapid pace. It needs further financing for expansion and
diversification so that it can reap economies of scale and
attain stability.

Method of venture capital financing:

Venture capital is available in 4 forms in India:
1) Equity participation.
2) Conventional loan.
3) Conditional loan.
4) Income notes.

Following is the explanation for the same:

1) Equity participation:
Venture capital firms participate in equity through direct
purchase of shares but their stake does not exceed 49%.
These shares are retained by them till the assisted project
making profit. These shares are sold either to the promoter at
the negotiated price under buy back agreement or to the
public in the secondary market at the profit.

2) Conventional loan:
Under this form of assistance, a lower fixed rate of interest is
charged till the assisted units become commercially
operational, after which the loan carries normal or higher
rate of interest. The loan has to be repaid according to a
predetermined schedule of repayment as per terms of loan
agreement.

3) Conditional loan:

19
 Under this form of finance, an interest free loan is provided
during the implementation period but it has to pay royalty on
sales. The loan has to be repaid according to a predetermined
schedule as soon as the company is able to generate sales and
income.

4) Income notes:
It is a combination of conventional and conditional loans.
Both interest and royalty are payable at much lower rates
than in case of conditional loans.

Companies providing venture capital finance:

Gujarat venture finance ltd.
Credit capital venture fund ltd.
Indus venture capital fund.

6. Chit fund finance:

20
 Chit fund finance is the oldest form of non banking financial
services having their origin in south India.
The word chit means a written note on a small piece of
paper.
In these, companies collect small amount of money from
their members regularly and finance the same to the members
for their business or personal requirements.
They were voluntary organization and unregistered with the
government.
But nowadays chit funds are required to be registered as per
law, so that the members get the legal protection.

Following is the classification of chit funds in three categories:

Simple chit: Under this category all the members pay equal
amount of funds regularly, or monthly, and this fund is given
to one member without deduction or the numbers can be
drawn by lots or chits.
Prize chit: This is like a lottery. The amount is collected from
all the members regularly or monthly and a random number
is selected by lottery to which the funds are advanced. Thus,
the lucky person will get the amount early and the last person
will get the amount later. Thus, the last persons/members are
not benefited much.
Business chit: under this method all the members collect a
fixed amount per month to the common fund. The number of
members in a group and the number of draws are equal. The
draws are held regularly. At the time of the draw the total
collections of the month are distributed by drawing lots or
conduction of an auction. If the auction is made the bidder
will get the amount after deducting the bid amount. The
amount thus left, may be distributed equally among the
remaining members or carried forward to next draw. The
member whose auction is accepted will not be allowed in the
next draw. The members whose draw is over or the member

21
 whose auction is accepted will not be allowed in the next
draw or auction, but they have to contribute the fund till the
completion of all the draws.

7. Insurance:

22
Introduction to insurance:

The meaning of insurance is important to understand for anybody

that is considering buying an insurance policy or simply
understanding the basics of finance. Insurance is a hedging
instrument used as a precautionary measure against future
contingent losses. This instrument is used for managing the
possible risks of the future.

Insurance is bought in order to hedge the possible risks of the

future which may or may not take place. This is a mode of
financially insuring that if such a incident happens then the loss
does not affect the present well-being of the person or the property
insured. Thus, through insurance, a person buys security and
protection.

LifeInsurance
It insures the life of the person buying the Life Insurance
Certificate. Once a Life Insurance is sold by a company then
the company remains legally entitled to make payment to the
beneficiary after the death of the policy holder.
MedicalInsurance
This is also known as mediclaim. Here, the policy holder is
entitled to receive the amount spent for his health purposes
from the insurance company.
GeneralInsurance
This insurance type involves insuring the risks associated
with the general life such as automobiles, business related,
natural incidents, commercial and residential properties, etc.

Following is the brief knowledge of life insurance:

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 1) Life insurance:
Human life is subject to risks of death and disability due to
natural and accidental causes.
When human life is lost or a person is disabled permanently
or temporarily, there is a loss of income to the household. The
family is put to hardship.
Sometimes, survival itself is at stake for the dependants.
Risks are unpredictable. Death/disability may occur when one least
expects it.
An individual can protect himself or herself against such
contingencies through life insurance.
Life insurance is insurance on human beings. Though Human
life cannot be valued, a monetary sum could be determined which
is based on loss of income in future years. Hence in life insurance,
the Sum Assured (or the amount guaranteed to be paid in the event
of a loss) is by way of a benefit in the case of life insurance.
Life insurance products provide a definite amount of money
to the dependants of the insured in case the life insured dies during
his active income earning period or becomes disabled on account
of an accident causing reduction/complete loss in his income
earnings.
An individual can also protect his old age when he ceases to
earn and has no other means of income by purchasing an annuity
product.
There are a number of life insurance products which offer
protection and also coupled with savings.
A term insurance product provides a fixed amount of money
on death during the period of contract.
A whole life insurance product provides a fixed amount of
money on death.
An Endowment Assurance product provided a fixed amount
of money either on death during the period of contract or at the
expiry of contract if life assured is alive.
A money back assurance product provides not only fixed
amounts which are payable on specified dates during the period of

24
contract, but also the full amount of money assured on death
during the period of contract.
An annuity product provides a series of monthly payments on
stipulated dates provided that the life assured is alive on the
stipulated dates.
A linked product provides not only a fixed amount of money
on death but also sums of money which are linked with the
underlying value of assets on the desired dates.
There are a variety of life insurance products to suit to the
needs of various categories of peoplechildren, youth, women,
middle-aged persons, old people; and also rural people, film actors
and unorganized laborers.
Life insurance products could be purchased from registered
life insurers notified by the IRDA.
Insurers appoint insurance agents to sell their products.
Public who are interested to buy life insurance products should
receive proper advice from insurance agents/insurer so that a right
product could be chosen to suit particular financial needs.
Thus life insurance policies offer protection and security to
families and provide happiness to society.

2) Medical insurance:
Insurance is considered a form of long-term savings for
senior citizens.
This money provides financial stability and also helps them
in times of need.
Medical insurance enables senior citizens to pay for health
checkups, emergency medical costs and long-term treatment.
The income tax benefit on insurance premiums is up to Rs.
15,000 under Section 80 D of the Income Tax Act, as on
March 31, 2007.
Medical insurance is provided through several private
insurance companies and four public sector general insurance
companies.

25
 Medical Insurance also known as health insurance is a
protection to individuals and their families against unforeseen
expenses.
In the process there are two parties namely the insurer and
the insured.
The party that undertakes to pay a benefit if a pre-specified
loss occurs is called the insurer.
The organization or agency acting as the insurer may be
private or government owned.
On the other hand the policy holder whose interests are
protected by an insurance policy is called the insured.
The insurer reimburses the medical costs of the insured in
case of unforeseen but specified medical expenditures arising
from illness, injury or accidents.
All this comes for a cost known as insurance premium which
is to be paid to the insurer at certain intervals. Nowadays this
can be done online also.

Categories of medical insurance:

There is the flip side to medical insurance too. Medical insurance
cost has risen manifold in last few years and the services provided
are imitation of one another thus making choice difficult.

Individual Medical Insurance: These types of medical

insurance plans provide protection and indemnity on an
individual basis. Insurance premium for individual plans are
higher than that for a group policy.
Group Medical Insurance: These medical insurance plans
usually available through an employer or society or union are
written on a number of people under a single master policy.
Medical and Health insurance does not prevent illness or
disease, but rather it helps to cover the costs incurred when
you have medical treatment.

26
 In return for your fixed monthly payments, the medical
insurance company agrees to pay your future medical bills.
The amount paid toward each bill by the medical insurance
company varies by several factors.
The primary factors that influence how much your medical
insurance pays towards your medical bills include the
premiums, the type of policy, and the deductible.
One problem faced by many medical insurance companies is
that unhealthy people tend to buy it and use it.
Certain healthy people see insurance as an unnecessary cost.
The healthy people may prefer to pay a few hundred dollars
for a couple of doctor visits each year, rather than paying that
amount each month for a medical insurance policy.
These so-called healthy people are gambling with their
health, because a sudden accident or illness could strike at
any time. Then it is too late to obtain reasonable medical
insurance.
Benefits paid to you by your health insurance policy are
influenced by how much you pay monthly to the insurance
company and how high your deductible is.
Your willingness to pay higher premiums generally means
the medical insurance company is willing to pay higher
benefits when you submit claims.
Policies with higher monthly premiums tend to cover more
illnesses and other specific health related problems.
Therefore insurance customers willing to pay higher monthly
premiums can expect to regain some of their medical
insurance investment through higher claim payments.
The type of policy you have also determines how much you
are reimbursed when you make a health claim. Basic policies
may cover a strict list of medical procedures and illnesses.
More expensive medical insurance programs offer wider
coverage for illnesses and medical procedures. Some policies

27
 cover additional things such as vision and dental problems,
which are often not available from the lower priced policies.
Medical insurance covering a spouse, dependents, or a whole
family costs much more than an individual policy, but is
likely much cheaper than insuring each person individually.
Your deductible is another major factor in how much your
health benefits pay you after a claim.
The deductible is the amount that you pay out of your own
pocket before the medical insurance takes effect.
Choosing a large deductible means that your monthly
premiums will be less, but you will pay much more of your
own money in order to make use of your medical insurance.
Conversely, a small deductible can often be met by a single
doctor or emergency room visit, although the resulting
premiums will be higher.
Many factors can influence the medical benefits paid by
insurance.
A good insurance agent will balance your insurance needs as
well as your budget to create a medical insurance plan that is
right for you.

3) General insurance:

Insurance other than Life Insurance falls under the category

of General Insurance.
General Insurance comprises of insurance of property against
fire, burglary etc, personal insurance such as Accident and
Health Insurance, and liability insurance which covers legal
liabilities.
There are also other covers such as Errors and Omissions
insurance for professionals, credit insurance etc.
Non-life insurance companies have products that cover
property against Fire and allied perils, flood storm and
inundation, earthquake and so on.

28
 There are products that cover property against burglary, theft
etc. The non-life companies also offer policies covering
machinery against breakdown, there are policies that cover
the hull of ships and so on.
A Marine Cargo policy covers goods in transit including by
sea, air and road. Further, insurance of motor vehicles against
damages and theft forms a major chunk of non-life insurance
business.
In respect of insurance of property, it is important that the
cover is taken for the actual value of the property to avoid
being imposed a penalty should there be a claim.
Where a property is undervalued for the purposes of
insurance, the insured will have to bear a ratable proportion
of the loss. For instance if the value of a property is Rs.100
and it is insured for Rs.50/-, in the event of a loss to the
extent of say Rs.50/-, the maximum claim amount payable
would be Rs.25/- ( 50% of the loss being borne by the
insured for underinsuring the property by 50% ).
This concept is quite often not understood by most insured.
Personal insurance covers include policies for Accident,
Health etc.
Products offering Personal Accident cover are benefit
policies.
Health insurance covers offered by non-life insurers are
mainly hospitalization covers either on reimbursement or
cashless basis.
The cashless service is offered through Third Party
Administrators who have arrangements with various service
providers, i.e., hospitals.
The Third Party Administrators also provide service for
reimbursement claims. Sometimes the insurers themselves
process reimbursement claims.
Accident and health insurance policies are available for
individuals as well as groups.

29
 A group could be a group of employees of an organization or
holders of credit cards or deposit holders in a bank etc.
Normally when a group is covered, insurers offer group
discounts.
Liability insurance covers such as Motor Third Party
Liability Insurance, Workmens Compensation Policy etc
offer cover against legal liabilities that may arise under the
respective statutes Motor Vehicles Act, The Workmens
Compensation Act etc.
Some of the covers such as the foregoing (Motor Third Party
and Workmens Compensation policy) are compulsory by
statute. Liability Insurance not compulsory by statute is also
gaining popularity these days. Many industries insure against
Public liability. There are liability covers available for
Products as well.
There are general insurance products that are in the nature of
package policies offering a combination of the covers
mentioned above.
For instance, there are package policies available for
householders, shop keepers and also for professionals such as
doctors, chartered accountants etc.
Apart from offering standard covers, insurers also offer
customized or tailor-made ones.
Suitable general Insurance covers are necessary for every
family.
It is important to protect ones property, which one might
have acquired from ones hard earned income.
A loss or damage to ones property can leave one shattered.
Losses created by catastrophes such as the tsunami,
earthquakes, cyclones etc have left many homeless and
penniless. Such losses can be devastating but insurance could
help mitigate them.
Property can be covered, so also the people against Personal
Accident.

30
 A Health Insurance policy can provide financial relief to a
person undergoing medical treatment whether due to a
disease or an injury.
Industries also need to protect themselves by obtaining
insurance covers to protect their building, machinery, stocks
etc.
They need to cover their liabilities as well. Financiers insist
on insurance.
So, most industries or businesses that are financed by banks
and other institutions do obtain covers.
But are they obtaining the right covers? And are they
insuring adequately are questions that need to be given some
thought.
Also organizations or industries that are self-financed should
ensure that they are protected by insurance.
Most general insurance covers are annual contracts.
However, there are few products that are long-term.
It is important for proposes to read and understand the terms
and conditions of a policy before they enter into an insurance
contract.

Other Customer support services which are provided are as

follows:
1) Bill payment:
Bill payment is the kind of service provided by many
financial institutions.

31
 In case of bill payment, the customer has to just give standing
instruction to the financial institution and also produce all the
bills timely to the financial institutions.

In bill payment, the customer does not need to take any

tension regarding bills which are to be paid by him as that
work will be get done on behalf on him by financial
institution.

The financial institution accepts all type of bill which is

actually to be paid.

The institution obviously charges some of the amount for

their services.

Nowadays they are providing this service through internet

banking, as e-bill pay.

The customer can log in and make the payment through any
credit or debit card on his own.
They can also ask the same to financial institution to do the
same for them.

32
2) Bill collection:

Bill collection is some what same to the bill payment with

some differences.
In case of bill collection, the customer has to same, provide
the standing instruction to financial institution regarding
collection of payment from various sources.
The institution does provide this service where they collect
payment on behalf of the customers.
For rendering this service, they do charge from the
customers.
This is tension free service provided, where in customer is no
longer on full of tension end as he has lost all his tensions of
collecting payment to institution.
The institution collects the payment from any which places
all over India; they may or may not provide services for the
same to be done from country other than India.

3) Demat account services:

Demat account means dematerialization of shares.
i. e. It is the process by which your physical share certificates
are converted to equivalent number of securities in electronic
from and are credited to your Demat Account.
Demat account is the account in which securities (shares,
bonds, units) are kept in electronic form and related
transaction are performed through accounts.
Shares in demat are more safe as compare to physical or
paper form. They are safe from loss of theft. We are also
protected from loosing any of the shares. They are protected
from ill delivery.
These services are provided by selected financial institution.
Whereby this services are mostly provided by banks. Almost
every bank provides this demat services.

33
 Nowadays banks have also started providing online trading
system where in the customer can log in and facilitate the
trading of shares services.
The banks have tie-ups with selected brokers and with the
help of that brokers, customer can make good of their
transaction.

All these were the list of financial and agency services provided by
Financial institution.

The private sector bank which is selected for the study is as

follows:

HDFC bank
HDFC Bank Ltd. (BSE: 500180, NYSE: HDB) is a commercial
bank of India, incorporated in August 1994, after the Reserve Bank
of India allowed establishing private sector banks. The Bank was
promoted by the Housing Development Finance Corporation, a
premier housing finance company (set up in 1977) of India. HDFC
Bank has 1,412 branches and over 3,295 ATMs, in 528 cities in
India, and all branches of the bank are linked on an online real-
time basis. With its aggressive tectics and strategy, the bank has
asked for criticism for being one of the worst employers despite
being a top notch brand among customers. As of September 30,
2008 the bank had total assets of INR 1006.82 billion .For the
fiscal year 2008-09, the bank has reported net profit of Rs.2,244.9
crore, up 41% from the previous fiscal. Total annual earnings of

34
the bank increased by 58% reaching at Rs.19, 622.8 crore in 2008-
09.

Following are the financial and Customer support services

provided by HDFC bank.
1) Mutual funds.
2) Equipment leasing.
3) Insurance.
4) Bill payment.
5) Demat account services.

Brief information regarding the above said services:

1. mutual funds:
HDFC Asset Management Company Ltd (AMC) was incorporated
under the Companies Act, 1956, on December 10, 1999, and was
approved to act as an Asset Management Company for the HDFC
Mutual Fund by SEBI vide its letter dated July 3, 2000.

In terms of the Investment Management Agreement, the Trustee

has appointed the HDFC Asset Management Company Limited to
manage the Mutual Fund. The paid up capital of the AMC is Rs.
25.161 crore.

The present equity shareholding pattern of the AMC is as follows :

Particulars % of the paid up

equity capital

35
Housing Development Finance 60
Corporation Limited
Standard Life Investments Limited 40

Products which are offered by HDFC mutual funds:

a) equity/growth funds:
It invests primarily in equity and equity related instruments.
Schemes included :
HDFC mid-cap opportunity fund.
HDFC prudence fund.
HDFC index fund.
HDFC capital builder fund.
HDFC infrastructure fund.
HDFC long term advantage fund.
HDFC index fund.
HDFC core and satellite fund.
HDFC growth fund.
HDFC tax saver.
HDFC arbitrage.
HDFC equity fund.
HDFC balanced fund.

b) Liquid funds:
It provides high level of liquidity by investing money in money
market and debt instruments.
Schemes included:
HDFC cash management fund saving scheme.
HDFC cash management fund call plan.
HDFC liquid premium plus plan.
HDFC liquid fund.
HDFC liquid fund premium plan.

c) Childrens gift fund:

36
Schemes included:
HDFC childrens gift saving plan.
HDFC childrens gift investment plan.

d) Debt/income fund:
Invest in money market and debt instruments and provide optimum
balance of yield.
Schemes included:
HDFC Floating Rate Income Fund - Long Term Plan.
HDFC Gilt Fund - Long Term Plan.
HDFC High Interest Fund - Short term Plan.
HDFC High Interest Fund.
HDFC Multiple Yield Fund.
HDFC Income Fund.

e) Quarterly interval fund:

HDFC quarterly interval fund.

2. Equipment leasing:
HDFC bank is involved in the service providing of equipment
leasing. They are involved in the service providing of medical
equipment leasing.

Following is the information for the same:

The Product finances Individual Doctors, Diagnostic Centers,
Nursing Homes, Hospitals, and Clinics towards purchase of
Medical Equipments.

HDFC bank has a dedicated team of Relationship Managers

to understand your financing needs and offer solutions
accordingly.

37
 They provide this service at selected branches; they have
made leasing finances in some of the areas, and will take
some time to develop as a leasing finance provider in the
areas other than medical.

3. Insurance
Insurance include three types of insurance:
a) Health insurance.
b) General insurance.
c) Life insurance.

HDFC bank is providing the service of insurance through two of

its subsidiaries.
General and health insurance: HDFC ERGO.
Life insurance: HDFC standard life.

a) Health insurance: It includes two policies and they are as

follows:

38
Health suraksha:
With medical costs spiraling out of control and the increase in shift
to lifestyle diseases, healthcare today is at its all-time-high in terms
of treatment costs. In the event of an unforeseen illness, you may
have no option other than to utilize your hard - earned savings,
built over throughout your life time. Finally, whats more
important than your health? But now, no more!

With HDFC ERGOs Health Suraksha, a plan designed to provide

optimum coverage for treatments including the pre and post
hospitalization costs and much more. Ensures complete peace of
mind with minimum out-of-pocket expenses. Now, make sure that
you use your hard-earned savings for the real reasons Be it your
childs higher education or his dream wedding, a well deserved
family vacation or just about anything you dreamt of all your life.

Features:
Optimum Coverage at an affordable price.
Option to cover on Individual or Family Floater Basis.
Option to for an annual or two year policy.
Cumulative Bonus for each claim free year.
Provides Cost of Health Check up after 4 claim free years.
Cashless Claims Service across India at 4,200+ network
hospital.
Income Tax Benefit Under Section 80D of the Income Tax
Act.
Hassle free Claims Process with minimum documentation
and turn around time

Critical illness:
A diagnosis of a critical illness for you or your loved one may
get your life to a stand still, literally. What could worsen the
situation would be the unavailability of the requisite funds for

39
 treatment costs and associated expenses. Its a known fact that
medical treatment costs for critical illnesses are really high.

HDFC ERGOs Critical Illness Insurance Policy is designed

specifically to cater to the needs of the high costs of associated
treatments. Moreover, it provides a lump sum payment, on the
very first diagnosis, to ensure that you can avail the best-in-class
treatment and coupled with easy and hassle free claims process,
so that you spend your precious time with your loved one, than
running around arranging for funds.

Features:
Covers individuals in the age group from 5 years to 45 years
(Children would be covered only if both the parents are also
covered).
No medical check-up up to 45 years of age. In case of pre-
existing disease, a pre policy check-up may be required.
Provides a lump sum benefit which can pay for:
Costs for the care and treatment;
Recuperation aids;
Debts pay off;
Any lost income due to a decreasing ability to earn;
Fund for a change in lifestyle.
Income Tax Benefit Under Section 80D of the Income Tax
Act

b) General insurance:
General insurance is the wider concept and it includes three main
items in this topic and they are as follows:
Motor insurance:
In motor insurane there are two policies to cover your vehicle and
they are as follows:
Private car insurance:

40
You can trust HDFC ERGO Motor Insurance to protect your
vehicle, your most prized possession. It ensures you to get back in
the driver's seat quickly, no matter what happens to your vehicle.
We ensure that you not only get Motor Insurance but also package
post-accident assistance, when you need it.

With a focus on Package policies for Private cars, HDFC ERGO

General Insurance offers you the convenience, professionalism and
understanding you want.

Features:
Cashless Claim Service over 750+ authorized network of
garages across India.
Avail a host of discounts No Claim Bonus, Discount for
Automobile Association Members, Discount based on Age
and Profession
Comprehensive customer support through our 24*7 Toll Free
Helpline
Say No to lengthy procedures BUY & RENEW ONLINE

Commercial vehicles:
To keep your business going, it is imperative to have the vehicles
owned by you, insured. HDFC ERGO offers package commercial
vehicle insurance policies which protect your business from a
financial loss arising out of accidental loss or damage to your
vehicle, your legal liability towards third parties for personal
injury, death and property damage on account of any accident
involving your vehicle.

HDFC ERGO offers package policies for Commercial Vehicles

across the various classes of vehicles like Goods Carrying vehicles
- Private and Public Carrier, Trailers, Passenger Carrying Vehicles,

41
Miscellaneous and Special Types of vehicles Mobile Rig,
Shovels, Grader, Tipper, Tractor, and Excavator etc.

Features:
Superior service levels and Standardized processes.
Cashless Claim Service over 750+ authorized network of
garages across India.
Recognized as one of the fastest claims settling Insurance
Companies among private insurers
Comprehensive customer support through our 24*7 Toll Free
Helpline.

Travel insurance:
A long drawn vacation, an official tour or a trip to study...whatever
your reason, traveling abroad, is full of exciting times. And why let
anything come between you and your trip abroad. Be it a loss of
passport or a sudden ailment or even loss/delay of your baggage...
leave all your worries to us at HDFC ERGO and explore a whole
new destination with complete peace of mind!

With HDFC ERGO travel insurance, there is a plan to suit every

need. And with a range of plans covering pleasure and business
travel, you will find adequate coverage for a premium that is much
lower than you ever expected.

Features:
Plan ahead. Buy Today, Fly Tomorrow
Entry Age:
Single Trip: 6 months to 70 years
Annual Multi Trip: 18 years to 70 years
Family Floater: 3 months to 60 years
Single Trip Asia Excluding Japan: 6 months to 70 years
Rest assured on our international travel assistance provider
on call 24*7

42
 Optimum Coverage at Low Costs
Online purchase option available

Home insurance:
Few things in life matter as much to you as your home. After all,
its at the Heart of Your Family, your possessions, your priceless
investment and your memories

With HDFC ERGO Home Insurance policy , you can ensure for
your Home the trusted protection it deserves and benefit from
affordable coverage for your property and possessions against
almost any eventuality.

Features:
Safeguard your priceless property and possession with HDFC
ERGO
Protection for both your home structure and the household
contents
Low Cost Optional Cover for Burglary including Theft and
Larceny
Avail up to 15% premium discount for Security Features

c) Life insurance:
HDFC bank carries out the banc assurance business of its own
subsidiary company known as HDFC standard life.
HDFC Standard Life Insurance Company Limited. is one of India's
leading private insurance companies, which offers a range of
individual and group insurance solutions. It is a joint venture
between Housing Development Finance Corporation Limited
(HDFC Limited), India's leading housing finance institution and a
Group Company of the Standard Life Plc, UK. As on February 28,
2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius
Holding) 2006, Ltd. holds 26.00% of equity in the joint venture,
while the rest is held by others.

43
Our Key Strengths
Financial Expertise
As a joint venture of leading financial services groups, HDFC
Standard Life has the financial expertise required to manage your
long-term investments safely and efficiently.
Range of Solutions

We have a range of individual and group solutions, which can be

easily customized to specific needs. Our group solutions have been
designed to offer you complete flexibility combined with a low
charging structure.
Products offered by HDFC standard life are as follows:
Protection plans:
Protection Plans help you shield your family from uncertainties in
life due to financial losses in terms of loss of income that may
dawn upon them incase of your untimely demise or critical illness.
Securing the future of ones family is one of the most important
goals of life. Protection Plans go a long way in ensuring your
familys financial independence in the event of your unfortunate
demise or critical illness. They are all the more important if you
are the chief wage earner in your family. No matter how much you
have saved or invested over the years, sudden eventualities, such as
death or critical illness, always tend to affect your family
financially apart from the huge emotional loss.

Schemes offered in protection plan:

HDFC Term Assurance Plan.
HDFC loan cover term assurance plan.
HDFC home loan protection plan.

Childrens plan:
Childrens Plans helps you save so that you can fulfill your childs
dreams and aspirations. These plans go a long way in securing

44
your childs future by financing the key milestones in their lives
even if you are no longer around to oversee them. As a parent, you
wish to provide your child with the very best that life offers, the
best possible education, marriage and life style.

Schemes offered in childrens plan:

HDFC Children plan.
HDFC unit linked young star.
HDFC unit linked young star plus.
HDFC unit linked young star champion.

Retirement plans:
Retirement Plans provide you with financial security so that when
your professional income starts to ebb, you can still live with pride
without compromising on your living standards. By providing you
a tool to accumulate and invest your savings, these plans give you
a lump sum on retirement, which is then used to get regular income
through an annuity plan. Given the high cost of living and rising
inflation, employer pensions alone are not sufficient. Pension
planning has therefore become critical today.

Schemes offered in retirement plan:

HDFC personal pension plan.
HDFC unit linked pension.
HDFC unit linked pension maximiser.
HDFC immediate annuity.

Saving and investment plans:

You have always given your family the very best. And there is no
reason why they shouldnt get the very best in the future too. As a
judicious family man, your priority is to secure the well-being of
those who depend on you. Not just for today, but also in the long
term. More importantly, you have to ensure that your familys

45
future expenses are taken care, even if something unfortunate were
to happen to you.
Schemes offered in Saving and investment plan:
HDFC simple life.
HDFC unit linked endowment.
HDFC unit linked endowment plus.
HDFC unit linked wealth multiplier.
HDFC endowment assurance plan.
HDFC money back plan.
HDFC assurance plan.
HDFC savings assurance plan.

Health plans:
Health plans give you the financial security to meet health related
contingencies. Due to changing lifestyles, health issues have
acquired completely new dimension overtime, becoming more
complex in nature. It becomes imperative then to have a health
plan in place, which will ensure that no matter how critical your
illness is, it does not impact your financial independence.
Schemes offered in health plans:
HDFC critical care plan.
4. Bill payment services:
Bill payment services provided by HDFC bank:

Online Bill Payment

Now, you have the luxury of paying your telephone and electricity
bills at your convenience through the Internet, ATMs or your
telephone - using BillPay, a comprehensive bill payments solution.

What's more you can check the bill amount before you make any
payments ensuring you always pay the right amount. BillPay has
made all your bill payments easy.

46
Benefits offered:
Convenience at best: No queuing up at collection centers or
writing any cheques.
Variety of payment models available: ATMs, NET banking
and Phone banking.
Payment can be made right up to date.
It also checks the bill amount ensuring you to pay the exact
amount.
If payment is made through us to some billers namely
Reliance energy, maha nagar gas, MTNL, will also make you
receive discounts.
Mobile phone bill, Insurance premium, Electricity bills,
renewal/subscription of VSNL internet account.

5. Demat account services:

HDFC BANK is one of the leading Depository Participant (DP) in
the country with over 8 Lac demat accounts.

HDFC Bank Demat services offers you a secure and convenient

way to keep track of your securities and investments, over a period
of time, without the hassle of handling physical documents that get
mutilated or lost in transit.

HDFC BANK is Depository participant both with -National

Securities Depositories Limited (NSDL) and Central Depository
Services Limited (CDSL).

47
Benefits offered:
Settlement of Securities traded on the exchanges as well as
off market transactions.
Shorter settlements thereby enhancing liquidity.
Pledging of Securities.
Electronic credit in public issue.
Auto Credit of Rights / Bonus / Public Issues / Dividend
credit through ECS.
Auto Credit of Public Issue refunds to the bank account.
No stamp duty on transfer of securities held in demats form.
No concept of Market Lots.
Change of address, Signature, Dividend Mandate, registration
of power of attorney, transmission etc. can be effected across
companies held in demat form by a single instruction to the
Depository Participant (DP).
Holding / Transaction details through Internet / email.

Another private bank which is included in the study is as follows:

Axis bank.

Axis Bank, previously called UTI 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), General Insurance
Corporation Ltd., National Insurance Company Ltd., The New
India Assurance Company, The Oriental Insurance Corporation
and United Insurance Company Ltd. UTI-I holds a special position
in the Indian capital markets and has promoted many leading

48
financial institutions in the country. The bank changed its name to
Axis Bank in April 2007 to avoid confusion with other unrelated
entities with similar name.

Following are the selected financial services provided by axis

bank:
1) Mutual funds.
2) Insurance.
3) Bill payment services.
4) Demat account services.

Brief information for above said services are as follows:

1) Mutual funds:
Axis bank has not yet started with asset management company
operations. While they have got the permission from all the
required authorities and is going to start its operations by later end
of this year as claimed by the speakers of the company.

Presently, company is carrying out its operations by having tie-ups

with other asset management companys.

Products which are offered by Axis bank are as follows:

a) Equity schemes:
Equity schemes primarily invest in shares. Based on the objective
investments could be in growth stocks where earnings growth is

49
expected to be high or value stocks where the view of the fund
manager is that current valuations in the markets do not reflect the
intrinsic value. Various kinds of equity schemes are:
Equity diversified.
Mid caps.
Thematic.
Sector specific.
Flexi caps.

b) Debt or income schemes:

Such a fund invests in interest bearing securities mainly
government securities and corporate bonds. This fund earns returns
for its investors from interest income on its investments and profits
on trading securities. In terms of risk, this type of fund is the least
risky.

c) Money market schemes:

These schemes invest in short term debt instruments issued by the
government, corporate or banks. These are typically investments in
short term papers like the CPs and CDs etc.

d) Hybrid schemes: This point consists of two schemes and is as

follows:
Balanced schemes.
Monthly income plans.

50
2. Insurance: Axis bank is involved in insurance business but as a
distributor not as a manufacturer.
Following are the products which are offered by axis bank with
reference to insurance business:
a) Health insurance.
b) General insurance.
c) Life insurance.

Axis bank provides the insurance service as a distributor of the

other insurance company:
a) Health insurance: Bajaj allianz general insurance company ltd.
b) General insurance: Bajaj allianz general insurance company ltd.
c) Life insurance: Met life India company ltd.

51
Following is the brief information regarding the above said topics:
a) Health insurance:
Safe guard:
Axis Bank and Bajaj Allianz General Insurance present you the
'Safe Guard' personal Accident Insurance cover. A unique policy
that offers you insurance coverage at premiums that is extremely
competitive and exclusively meant for Axis Bank customers.
The above plan covers certain things:
Accidental death.
Accidental permanent total disability.
Accidental permanent partial disability.
Childrens education bonus.

Critical illness:
A critical illness plan means you can insure yourself against the
risk of serious illness in much the same way as you insure your car
and your house. It will give you the same security of knowing that
a guaranteed cash sum will be paid if the unexpected happens and
you are diagnosed with a critical illness.
Features:
Very competitive premium rates.
Insured can opt for sum assured from Rs 100000 to Rs
50000.
Premium paid is exempt under income tax section 80d.

Family health:
Only Axis Bank offers you the advantage of insuring not just
yourself but your entire family with one policy. Our Family Health
insurance programme provides a comprehensive health insurance
that covers you, your spouse and 3 dependent children up to the
age of 18 years. Thanks to our association with Bajaj Allianz
General Insurance, now you don't have to pay multiple premiums
to insure all the members in your family.

52
Features:
Hospital re-imbursement.
Hospital cash payouts.

Silver health:
Health care costs are high and getting higher. As the age of an
individual increases the health care costs increase manifold and
become a burden on the individual. Senior citizens have to pay out
of their hard earned savings to meet the expenses. Bajaj Allianz's
Silver Health Plan for senior citizens protects you and your spouse
in case you need expensive medical care. You get cashless benefit
or medical reimbursement for hospitalization expenses due to
illness or accidents.
The above plan covers the following:
Hospitalization expenses and an amount equivalent to 3% of
admissible hospitalization expenses in respect of any and all
pre and post hospitalization expenses.
Ambulance charges in an emergency subject to a limit of
Rs 1,000.
The company's liability in case of any pre-exiting illness
from the second year of the policy would be restricted to 50%
of the limit of indemnity in a policy year.
The policy has a lifetime indemnity limit of three times the
limit of indemnity specified in the earliest senior citizen plan,
if the policy is renewed continuously.

b) General insurance:
Home insurance:
Safe home:
We at Axis Bank realize your need to make your home as secure in
reality, as it is in your mind, which is why we, in association with
Bajaj Allianz General Insurance bring you - Safe Home, an
insurance policy exclusively designed for Axis Bank customers,

53
which provides protection for your property and valuables at your
home.
Safe home place.:
Home is a dream, which you have turned into reality with your
sweat, pain, happiness, energy and time. Axis Bank helps you to
protect this dream against unforeseen calamities.

Travel insurance:
Travel companion:
Whether you travel for business or pleasure, international travel
involves risk. Medical treatment abroad can be expensive and one
never knows when one would require it. Having to spend for
medical bills in foreign currency can be expensive proposition.
There are other difficult situations also, that one might face like
loss of passport or baggage. Bajaj Allianz's Travel Companion is
specially designed to help you deal with such situations while
overseas travel.

Coverage of above plan:

Personal Accident
Medical Expenses and Reparation
Loss of checked baggage
Delay in checked baggage
Loss of Passport
Personal Liability
Cash Less Service
Hospitalization Allowance
Golfer's Hole-in-one
Emergency Cash Advance

Business advantage insurance:

54
You have built your business by investing so much hard work,
time, energy and money. You could face heavy losses if your
business premises are burgled or if machinery breaks down.
Therefore it's essential to safeguard your investment with an
insurance cover that protects against losses due to unforeseen
calamities.
Features:
Complete risk cover for your business needs.
Cover against loss due to terrorism.
Competitive rates.
Simple documentation.
Easy payment options.

Jewellery insurance:
Jewellery forms an integral part of our culture & our lives, be it
any occasion or even a regular day. However, these valuables need
to be safeguarded against various risks, which may not be covered
under other policies. Jewellery Insurance safeguards this asset for
you, securing it against all risks. The only product of its kind in the
industry, Jewellery Insurance provides complete security for gold /
jewellery, when it is worn by the policyholder in person or while
being carried to the bank lockers. Absolute security & coverage is
given against burglary & fire, in respect of items kept at home /
bank locker.
Result: Complete peace of mind.
Features:

55
 No list of items to be insured required.
Worldwide coverage 24x7.
All risks covered.
Protection against loss of jewellery due to Burglary or Fire
while at home or being carried to the bank locker.
Minimum documentation.

Motor insurance:
Technology has made our daily life simpler in various ways.
Motor vehicle is an invention which has made daily commuting
easy. It is convenient, fast and saves our time. Though it is easy
to own a vehicle it is expensive maintaining a motor vehicle
especially in case of damage caused to your vehicle due to some
unavoidable circumstances or accidents. Bajaj Allianz's Motor
Vehicle Policy helps you in maintaining your vehicle in such
situation.

Coverages:
Undertake to reimburse the expenses incurred for repair or
replacement of parts of the vehicle.
To pay the market value of the vehicle in case of a total
loss, provided that the originating cause of such damage is
an accident, including theft.
It covers the legal liability to third party personal injury
and property damage arising out of an accident involving
the insured vehicle.

c) Life insurance:
Axis bank operates in the stream of life insurance with the help of
tie-up with Met life India ltd. MetLife India offers you a wide

56
choice of life insurance plans that help you take care of your varied
needs like protection, wealth accumulation & long term savings for
children's education, children's marriage, retirement, tax savings
etc. MetLife India, through their trained & certified Financial
Planning Consultants will help you in ascertaining your protection
and investment needs.
Products which are offered by Axis bank are as follows:
Met monthly income plan :
'Met Monthly Income Plan' a participating endowment plan which
guarantees you and your family a monthly regular income for 15
years and ensures you live life your way.

Met growth:
'Met Growth' a Unit Linked solution to provide financial security
for your retirement years.

Met advantage plans:

Met Advantage Plus is a Unit Linked Pension Plan that helps you
build wealth while you are working and gives you a pension for
life when you stop working.
Met bhavishya:
Met Bhavishya is a guaranteed money back insurance plan that
provides funds to meet education and career milestones of your
child.

Met Magic:
Met Magic is a unit linked plan which helps you secure your
child's future.

Met easy:
Met Easy is a simplified unit-linked Insurance plan that provides
you the benefit of insurance protection for your family and the

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opportunity to systematically build wealth for your key long- term
financial milestones.

Met smart plus:

Met Smart Plus is a regular premium unit linked life insurance that
provides life cover up to age 100 years and also helps you build
wealth for all your needs.

Met smart gold:

Met Smart Gold is a unit-linked wealth creation cum protection
plan designed to plan for your financial needs.

Met suvidha:
Met Suvidha is a Flexible Endowment Plan that combines savings
and security.
Met smart premier:
Met Smart Premier is a regular premium unit linked life insurance
plan that provides life cover up to age 100 and also helps you build
wealth for all your needs.

Met sukh:
Met Sukh is a guaranteed Money-Back plan that offers 10%
guaranteed additions on Sum Assured for every policy year.

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2. bill payment service:
Axis Bank's Bill Pay service enables you to make secure payments
from the comfort of your home or office. So its time to say
goodbye to late payment fines, long queues, lost bills, and
commissions paid to local errand boys.

Features:
Pay bills without stepping out of your home or office.
Link multiple bills to your account.
View and Pay bills anytime, anywhere.
Fast, convenience and hassle-free.

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 Access to all major utility billers.
Get updates for pending bills.

3. Demat account services:

Axis Bank is a registered member (Depository Participant) of
NSDL. In this system, physical security holdings are converted
into electronic (or in other words, dematerialized) holdings. Axis
Bank has been enrolled as a Depository Participant by the NSDL -
India's first depository. You can avail of all the depository-related
services by just opening an account with NSDL through Axis
Bank.
Benefits offered:
Transfers of shares and settlements.
Receipt of corporate benefits.

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 Dematerialization of shares.
Rematerialization.
Pledge hypothecation.
Freezing or locking of accounts.
Tele-depository services.
I-connect depository services.

Comparison between services provided by HDFC Bank and AXIS

bank.
1. Mutual funds:
HDFC bank: This bank provides variety of funds to their
customers and operates through its own subsidiary which is HDFC
mutual funds. It is one of biggest fund and it is the fund on which
the customer can rely easily. HDFC bank apart from dealing in its
own subsidiary company it also deals in all remaining asset
management companies which are present in the market. Again
this is the customer friendly move of the HDFC bank.

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AXIS bank: This bank as compared to HDFC bank is on the
developing stage. This bank was previously known as UNIT
TRUST OF INDIA. The bank has rechristened as AXIS bank. This
bank is presently concentrating on its core business but they dont
want their customer to feel in this way so they have taken a
customer friendly move of tieing up with all other asset
management company. They are on the talks to widen in this
particular area by floating their own mutual fund company in later
end of this year.

2. Equipment leasing:

HDFC bank: This bank provides or is involved in this type of

financing. They are not involved in providing leasing for all the
capital assets. They are yet to grow on that area. Presently, they are
providing services with reference to this topic in the area of
medical equipments. They are providing finance to all the
hospitals, clinics, nursing homes, etc to purchase all the
equipments. There is a team which is full of mangers that
understand the need of hospitals and accordingly extend the
leasing finance.

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AXIS bank: This bank is has not yet entered this field. They are
still on the developing stage and are concentrating on their core
business of providing banking products to their customers.

3. Insurance:
Insurance is the very wider concept as this term comprises of three
headings and they are as follows:
a) General insurance.
b) Health insurance.
c) Life insurance.

HDFC bank: This bank operates through its subsidiary company.

As these bank has developed its own subsidiary company, which is
a tie-up with the foreign company. The bank has developed in all
the avenues of insurance streams. The bank with respect to Life
insurance and Health insurance has its entity called HDFC
standard life and is providing variety of customized products

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according to the wants of the customers. There is a product of
every age of the customer.
In respect of general insurance they operate from other subsidiary
called HDFC ERGO ltd. They have very limited plans in the aspect
of general insurance as compared to the AXIS bank. They have
plans limited to vehicle insurance, home insurance and travel
insurance.

AXIS bank: This bank does not operate through any subsidiary.
They have tie-ups with different companies for insurance. They
have tie-up with MET life India ltd with reference to life insurance
and health insurance. There are limited plans with the AXIS bank
as compared to HDFC. They are yet to excel in this area. In the
recent interview of top official of AXIS bank claimed that they are
not concentrating on developing any subsidiary of insurance.
In respect of the general insurance, AXIS bank operates through a
tie-up with bajaj allianz general insurance company ltd. But they
have much to offer to their customer as compared HDFC. They are
providing all the common products in addition to them they are
providing products called as business advantage insurance,
jewellery insurance. So here they are one up to HDFC bank.

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4. Bill payment service:
Both of the banks have something different to offer in this facility.

HDFC bank: In addition to all the other services provided by

HDFC bank, they also provide the service of Bill payment. Where
they on behalf of their customer will pay the bill. There is some
amount charged to the customers as against this service. The
customer has to be account holder of the banks. The customer can
provide the detail of billers to the HDFC bank. Maximum a per
customer can opt for 5 billers. The charges which will be debited
from the account of the holder which will be Rs 25 and that will be
quarterly irrespective of the services used by customer.

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AXIS bank: This bank also provide the facility of paying the bill.
In this bank, account holder can avail this facility. Where in the
customer can by sitting in their house can pay their bills on their
own. They are required to avail the I-connect facility, which is
nothing but internet banking, where the customer can operate the
account and pay their bills as and when required by debiting their
account. They are not charged for this service.

Demat account service:

HDFC bank: The facility of demat account is provided only to

existing customers where as the bank offers different benefits to
their customers if they avail this facility.
The charges which are levied on the customers are as follows:
1st year of maintenance is free of cost that means they would
not be charged for their services.
From 2nd year onwards they will be charged Rs 499 annually.

AXIS bank: The facility of demat account is provided to any

customer irrespective of he being the customer. Any person can

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avail this facility by just filling the demat account form and
requirements will be as follows:
Pan card.
Address proof.
Photograph.

Charges which will be levied are as follows:

Charges are levied annually and that is Rs 550.

Annexure:

Following are the question which is asked in study:

1. Selected financial services provided by HDFC and AXIS bank.

2. How are they offering these services? Whether they have

formed subsidiaries for providing services or they are mere
distributors?

4. How is it that we can approach their subsidiaries or the

operation?

5. Requirements for availing the services?

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6. What are the customer support services provided by HDFC
bank and AXIS bank.

7. What are charges for bill payment services?

8. What are charges for demat account services?

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