Sie sind auf Seite 1von 19

Mutual funds in ICICI Bank

Final Project Project


Bachelor of Management Studies


Neha Singh
Enr no.1504103010

Under the guidance


Ms. Shipra Goel

( Assistant Professor)

SOB, GU, Gautam Budh Nagar (GBN)

July 2017
Mutual Funds in ICICI Bank


Neha Singh

JULY, 2017
Mutual Funds in ICICI Bank


Neha Singh

Under the guidance of

Mr Pradeep Srivastava Ms. Geetika Puri

Associate Executive Assistant Professor

ICICI Bank SOB, GU, Gautam Budh Nagar (GBN)

July, 2017
Appendix 4

Certificate of Approval

The following Final Project Report titled "WEALTH MANAGEMENT" is hereby approved as a
certified study in management carried out and presented in a manner satisfactory to warrant its
acceptance as a prerequisite for the award of Bachelor of Management Studies for which it has been
submitted. It is understood that by this approval the undersigned do not necessarily endorse or
approve any statement made, opinion expressed or conclusion drawn therein but approve the Summer
Internship Project Report only for the purpose it is submitted to the Summer Internship Project
Report Examination Committee for evaluation of Summer Internship Project Report

Name Signature

1. Faculty Mentor __Ms. Geetika Puri_______ ___________________

2. Industry Mentor _Mr. Pradeep Srivastava_ ___________________

Certificate from Summer Internship Project Guides

This is to certify that Ms. Neha singh, a student of the Bachelor of Management Studies has worked
under our guidance and supervision. This Summer Internship Project Report has the requisite standard
and to the best of our knowledge no part of it has been reproduced from any other summer Internship
project, monograph, report or book.

Ms. Geetika Puri Mr Pradeep Srivastava

Assistant Professor Associate Executive

SOB, GU, Gautam Budh Nagar (GBN) ICICI Bank

Date Address- Jansath road ,Jain

Building,Kambalwala Bagh,New
. Mandi, Muzaffarnagar

Executive Summary

This is an attempt to know how the classroom theories can be applied to the practical situation. As a
student of BMS, it is a part of study for everyone to undergo summer internship at some organization.
So for this purpose, I got an opportunity to do my summer internship at ICICI Bank. In this is
comprehensive report, I have discussed about every major aspect of the company which I have
observed and perceived during my internship tenure. The first part comprises the detail about the
company from the time of its incorporation to the current position. Along with its processes, policies
and procedures. During my internship programme i have mainly worked in retail banking, General
banking & Finance. All the departments have been discussed in detail. The main purpose of the
internship is to learn by working in practical environment and to apply the acquired during the studies
in a real world scenario in order to tackle the problems using the knowledge and skill learned during
the academic process. This report covers many important aspects which are related with operations
and financial aspect of the bank. In the end the learning and observations which I have undergone
during my internship project. This report also contains my perceptions, motivation level and the
working environment of the organization.


It is a matter of great satisfaction and pleasure to present this report on comparative study of various alternatives
available in the market for wealth management, taking The ICICI Bank as the basis of my study. I take this
opportunity to thank all those involved in my summer training.
This project report could not have been completed without the help and guidance of Mr Pradeep Srivastava,
Associate Executive , The ICICI BANK , New Mandi Muzaffarnagar . I am thankful to them for their able
guidance and encouragement at every step of my 6 week long summer training. I am also thankful to the staff
members of the bank for their support, guidance and cooperation.
I would like to express my sincere gratitude to my Project guide , Ms. Geetika puri for her continuous support
& guidance.
I would also like to thank my faculty members for there kind guidance towards analyzing the requirements of
the project to be developed. And last but not the least, I would like to thank the teaching staff of GU(galgotias
university), for making me capable enough to undertake this project independently and for broadening my
horizons. I would like to extend my thanks to everyone who has even remotely been associated with me, as the
old adage goes we, may not learn everything from someone but learn something from everyone.

Table of Contents

Sr.No. Title Page

I Acknowledgements
II Executive Summary
III Table of Contents
1. Company profile
1.1 Introduction
1.2 Company Logo & relevant picture
1.3 Company Mission & Vision.
2. Internship profile
2.1 Details of Industry mentor
2.2 Location of Internship
2.3 Detail of Task
2.3 Time Frame- Start Date, completion date, Gantt chart
3. Key Observations:
3.1 Work description
3.2 Practices followed
3.3 Key Challenges faced while doing the task
4. Learning & Value Addition

4.1 Major Learning during their SIP tenure

4.2 Difference between practical exposure
And theoretical concepts studied in classroom
4.3 Usefulness of internship with future perspective

5. Best practices and benchmark study

5.1 Major Companies in the respective industry sector.

5.2 Growth & Opportunities in the respective industry sector.

6. Recommendations & Suggestions

7. Bibliography

List of Figures

Figure No. Description Page

1 Major competitive industries in

wealth management sector
Mutual funds are pools of money that are managed by an investment company. They offer
investors a variety of goals, depending on the fund and its investment charter. Some funds,
for example, seek to generate income on a regular basis. Others seek to preserve an investor's
money. Still others seek to invest in companies that are growing at a rapid pace. Funds can
impose a sales charge, or load, on investors when they buy or sell shares. Many funds these
days are no load and impose no sales charge. Mutual funds are investment companies
regulated by the Investment Company Act of 1940. Related: open-end fund, closed-end fund.
Mutual funds are institutions that collect money from several sources - individuals or
institutions by issuing 'units', invest them on their behalf with predetermined investment
objectives and manage the same all for a fee. They invest the money across a range of
financial instruments falling into two broad categories – equity and debt. Individual people
and institutions no doubt, can and do invest in equity and debt instruments by themselves but
this requires time and skill on both of which there are constraints. Mutual funds emerged as
professional financial intermediaries bridging the time and skill constraint. They have a team
of skilled people who identify the right stocks and debt instruments and construct a portfolio
that promises to deliver the best possible 'constrained' returns at the minimum possible cost.
In effect, it involves outsourcing the management of money. More explicitly, the benefits of
investing in equities and debt instruments are supposedly much better if done through mutual
funds. This is because of the following reasons: Firstly, fund managers are more skilled. They
are trained to identify the best investment options and to assess the portfolio on a continual
basis; secondly, they are able to invest in a diversified portfolio consisting of 15-20 different
stocks or bonds or a combination of them. For an individual such diversification reduces the
risk but can demand a lot of effort and cost. Each purchase or sale invites a cost in terms of
brokerage or transactional charges such as demat account fees in India. The need to possibly
sell 'poor' stocks/bonds and buy 'good' stocks/bonds demands constant tracking of news and
performance of each company they have invested in. Mutual funds are able to maintain and
track a diversified portfolio on a constant basis with lesser costs. This is because of the
pecuniary economies that they enjoy when it comes to trading and other transaction costs;
thirdly, funds also provide good liquidity. An investor can sell her/his mutual fund
investments and 17 receive payment on the same day with minimal transaction costs as
compared to dealing with individual securities, this totals to superior portfolio returns with
minimal cost and better liquidity.
This can be represented with the following flow chart:


The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly he can expect higher returns and vice-versa if he pertains to lower risk
instruments, which would be satisfied by lower returns. For example, if an investors opt for
bank FD, which provide moderate return with minimal risk. But as he moves ahead 10 invest
in capital protected funds and the profit-bonds that gives us more return which is slightly
higher as compared to the bank deposits but the risk involved also increases in the same
Thus investors choose mutual funds as their primary means of investing, as Mutual funds
provide professional management, diversification, convenience and liquidity.
That doesn't mean mutual fund investments risk free.
This is because the money that is pooled in are not invested only in debts funds which are less
riskier but are also invested in the stock markets which involves a higher risk but can expect
higher returns. Hedge fund involves a very high risk since it is mostly traded in the
derivatives market which is considered very volatile.


The mutual fund was born from a financial crisis that staggered Europe in the early 1770s.
The British East India Company had borrowed heavily during the preceding boom years to
support its ambitious colonial interests, particularly in North America where unrest would
culminate in revolution in a few short years.
As expenses increased and revenue from colonial adventures fell, the East India Company
sought a bailout in 1772 from the already-stressed British treasury. It was the “original too
big to fail corporation” and the repercussions were felt across the continent and indeed
around the world.
At the same time, the Dutch were facing their own challenges, expanding and exploring like
the British and taking “copy-cat risks” in a pattern that has drawn parallels to the banking
crisis of 2008.


Against this backdrop, a Dutch merchant, Adriaan van Ketwich, had the foresight to pool
money from a number of subscribers to form an investment trust – the world’s first mutual
fund – in 1774. The financial risk to the mainly small investors was spread by diversifying
across a number of European countries and the American colonies, where investments were
backed by income from plantations, an early version of today’s mortgage-backed securities.
Subscription to the closed-end fund, which Van Ketwich called “Eendragt Maakt Magt”, was
available to the public until all 2,000 units were purchased. After that, participation in the
fund was available only by buying shares from existing shareholders in the open market. The
fund’s prospectus required an annual accounting, which investors could view if they
requested. Two subsequent funds set up in the Netherlands increased the emphasis on
diversification to reduce risk, escalating their appeal to even smaller investors with minimal
Van Ketwich’s fund survived until 1824 but the vehicle he created is still a hallmark of
personal investing more than two centuries later with an estimated $27.86 trillion US in
global assets in July 2013. In Canada alone, mutual funds represent $920 billion.
The early mutual funds spread were of the closed-end variety, issuing a fixed number of
shares. They spread from the Netherlands to England and France before heading to the U.S.
in the 1890s.
The first modern-day mutual fund, Massachusetts Investors Trust, was created on March 21,
1924. It was the first mutual fund with an open-end capitalization, allowing for the
continuous issue and redemption of shares by the investment company. After just one year,
the fund grew to $392,000 in assets from $50,000. The fund went public in 1928 and
eventually became known as MFS Investment Management.


The origin of mutual fund industry in India is with the introduction of the concept of by UTI
in the year 1963. Through the growth was slow, but it accelerated from the year 1987 when
non-UTI players entered in industry. The mutual fund industry goes through four phases:-
First phase 1964-87 (Establishment of UTI).
 Second phase 1987-93 (Entry of public sector funds).
 Third phase 1993-2003 (Entry of a private sector funds).
 Fourth phase since feb.2003 (Bifurcated of UTI).
FIRST PHASE – 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by
the Reserve Bank of India and functioned under the Regulatory and administrative control of
the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control in
place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988
UTI had Rs.6, 700 Crores of assets under management.
1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks
and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India
(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund
(Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund
in December 1990. 11 At the end of 1993, the mutual fund industry had assets under
management of Rs.47, 004 Crores.
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year
in which the first Mutual Fund Regulations came into being, under which all mutual funds,
except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged
with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and
revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI
(Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and acquisitions.
As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805
Crores. The Unit Trust of India with Rs.44, 541 Crores of assets under management was way
ahead of other mutual funds
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of
India with assets under management of Rs.29, 835 crores as at the end of January 2003,
representing broadly, the assets of US 64 scheme, assured return and certain other schemes.
The Specified Undertaking of Unit Trust of India, functioning under an administrator and
under the rules framed by Government of India and does not come under the purview of the
Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation
of the erstwhile UTI which had in March 2000 more than Rs.76,000 Crores of assets under
management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual

 A situational analysis
if their Current Account is with any other Bank. This is mainly because of the
huge network of ATMs and branches of ICICI.
WORKING HOURS: ICICI is the only bank which is having its working hours
from 8 to 8 which is one of the major strength of ICICI Bank with respect to
IT& ITES Industry. As most of the IT & ITES companies are global players and
their Parent company is in US, so they have to work according to their office
time. Thus some have their Office time in the morning and some have it in the
evening so if the working hour of the bank is 8 to 8 it is very convenient
TREASURY DEPARTMENT:ICICI is the only bank which is having its
treasury department especially for Hyderabad Customers. So customers can get
the best rates for foreign exchange.
AGGRESSIVE MARKETING: ICICI Bank is known for its aggressive
marketing of its products. Recent Endorsement of its product by AMITABH
BAHCHAN proves the same. This gives ICICI an edge over other banks.
TECHNOLOGY: From its inception, ICICI Bank has adopted a policy of
selecting internationally proven and specialized Packaged Systems for its
technology. ICICI bank ’s technology platform has been acknowledged
globally as one of the best in terms of robustness, flexibility and cost efficiency.
ICICI Bank is in a position to leverage this platform to further build cost and
service advantage.
TRANSACTION COST: ICICI Bank charges high cost for its
transactions. Through our data analysis we have find out that most of the
small companies prefer nationalized banks only because of this cost
factor. Also the group has found out that there are companies which are
going for multi bank system i.e. They are using only those facilities of
ICICI Bank which are provided at cheaper rates (read Salary Account)
and for other services they are going to nationalize banks and MNCs
(read Forex). So there exists a huge potential for ICICI Bank if they are
ready to make their transaction cost flexible.
FOCUS ONLY ON HIGH END CUSTOMERS: The bank targets only the top
bracket of clients and does not cater to the needs of small customers. Due to this
reason the bank may sometimes loose good clients.
approach in lending. Mainly to IT & ITES companies Bank do not provide loan
as these companies are not having collaterals so bank hesitate in giving loans to
them. Because of this policy companies prefer nationalized banks and ICICI
Bank in turn sometimes loose potential customers.
LITTLE PRESENCE OUTSIDE INDIA: ICICI Bank is having little presence
OutsideIndia, because of which companies are preferring MNC Bank, mainly
Citibank.So if ICICI Bank tries to emerge outside India then it has a huge
potential ofcustomers.
POOR CUSTOMER CARE/SERVICE: With its aggressive marketing ICICI
Bank israpidly increasing its customer base. They are not however, increasing
thenumber of employees accordingly. This is leading to deterioration of
thestandard of customer service.
NEW IT & ITES COMPANIES: IT & ITES sector is on a boom in the
Indianmarket context, with new companies mushrooming in the market; it
opens thedoor for ICICI bank to capture the huge untapped market.
Dissatisfied Customers of Other Banks: The group from its survey and
analysisof IT companies have found out that there are many companies which
are notsatisfied with its current bank, so ICICI with its superior service quality
andlong working hours can capture those customers.
Remittances: From the analysis group has also found out that ICICI bank
hasvery little presence as far as the EEFC account is concerned. Companies
preferto bank with MNCs (which have greater presence in the foreign countries)
andnationalized banks (which according to the companies provide
lowertransaction rates) to get their inward remittances in spite of ICICI being

providing one of the most competitive rates. So the bank can promote its
EEFCaccount better and get the key to the door of huge potential market.
Business advising for smaller Players: The analysis has also indicated that
theconcept of business advising though very popular with the higher end players
isvirtually non existent in the lower end of the market. ICICI should take
thisopportunity to provide business advising to the smaller companies
atcompetitive rates and try to take the first mover advantage.
1) Advent of MNC banks: Large numbers of MNC banks are
mushrooming in theIndian market due to the friendly policies adopted by
the government. This canincrease the level of competition and prove a
potential threat for the marketshare of ICICI bank.
2) Dissatisfied Customers: The analysis indicated that though most of
thecompanies are satisfied with the products offered by ICICI bank but
the poorcustomer support/ service is creating a lot of dissatisfaction
among thecustomers, this can prove to be a serious problem as far as the
marketreputation of the bank is concerned and cane be a major threat in
futurebusiness acquisition.
3) Ever improving nationalized banks: With PSU banks like SBI going all
out tocompete with the private banks and government giving them a free
hand to doso, it can prove to be serious threat for banks like ICICI.

A literature review that provides the reader with an orientation to the general management
problem under consideration.
1. This can include exploratory research (experience surveys, case
studies, secondary data search, pilot studies, focus groups,
and/or depth interviews).
ii. Definition of the management problem/questions.
iii. Questions
1. General research questions
2. Specific research questions (hypotheses)
3. State expected relationships between variables.
4. Show the logic connecting the general questions with the
specific research questions or with the hypotheses.
iv. Research objectives
1. Derived from the research questions or hypotheses
2. Explain the purpose of the research in measurable terms
3. Define standards of what the research should accomplish.
4. It should be clear how the research is going to aid management
decision making.
b. Research Design and Methodology - the research strategy and plan.
i. Type(s) of research design(s) used (exploratory, descriptive, and/or
causal) and why chosen.
ii. Data collection method and forms.
1. A copy of the survey questionnaire should appear in an
2. The text in this section should discuss the logic of your choice
a. Data collection medium (phone, in-person, self-
b. The questions in your questionnaire
c. Sequencing of questions
d. Kinds of scales used.
iii. Sampling design and plan.
1. Target population,
2. sampling frame,
3. sample units used
4. methods for selecting sample units,
5. sample size,
6. Response rate.
iv. Fieldwork.
1. How and where the fieldwork was conducted.
2. Describe the pretesting phase and how this helped improve the
questionnaire (if at all) as well as the main study.
v. Data analysis procedure.
1. Outline and describe the data preparation and processing
2. Emphasize problems that required editing
3. General statistical methods used in the data analysis
4. Reasoning underlying your choice of statistical procedures
5. Assumptions and/or limitations.
c. Results
i. Includes analysis, interpretation, and discussion of the findings in light
of the research questions and hypotheses.
ii. Summary tables, graphs, and charts should be used in the report body
to aid the discussion
iii. Comprehensive or detailed charts should be saved for the appendix.
d. Limitations
i. Results should be discussed in light of the limitations and assumptions.
ii. You should at least briefly discuss the issues of validity and reliability
of your research procedures and results and any caveats you might like
to mention for management (e.g., the artificial limit of your small
sample size, possible sources of systematic error such as a non-
representative sample, nonresponse error, response bias, etc.).
iii. Problems encountered and efforts to overcome them can be included
iv. Lessons you’ve learned for higher-quality research in the future.
e. Conclusions and Recommendations
i. Conclusions: Opinions, implications, and insights for managerial
decisions based on results.
ii. Recommendations:
1. Suggestions for managerial action, supported by fact and
2. Suggestions for future follow-up research (if necessary or
f. Appendices - All technical and/or detailed material should appear here. These
can include:
i. data collection forms
ii. detailed calculations
iii. discussions of highly technical issues
iv. detailed tables of results
v. endnotes
vi. a bibliography
vii. Any other support material.