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Management of Financial Services

Mini Project Interviewing managers in Banking, Insurance & Mutual Fund sectors
Project done by:

Under guidance of:

MFS Mini Project

Table of Contents

1. Introduction 2. Sector Overview 3. Insurance Company 4. Mutual Fund Company 5. Bank 6. Conclusion

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1. Introduction
The theory what budding managers learn can only be applied in the industry. Any real scenario in the industry can only provide real time learning. The project is intended to provide an understanding of the industry and its working pattern.

Objective
The objective of the project is to understand the various aspects of Banking, Mutual funds and Insurance sectors including the products and services offered by each of the sectors.

Methodology
The methodology adopted was direct interview and company documentation to collect all the required information. The manager of the office visited was interviewed to collect maximum and accurate information. Details like the products and services offered were collected using company documentation.

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2. Sector Overview Mutual Funds


The mutual fund industry started in India in a small way with the UTI Act creating what was effectively a small savings division within the RBI. Over a period of 25 years this grew fairly successfully and gave investors a good return, and therefore in 1989, as the next logical step, public sector banks and financial institutions were allowed to float mutual funds and their success emboldened the government to allow the private sector to foray into this area. The initial years of the industry also saw the emerging years of the Indian equity market, when a number of mistakes were made and hence the mutual fund schemes, which invested in lesser-known stocks and at very high levels, became loss leaders for retail investors. From those days to today the retail investor, for whom the mutual fund is actually intended, has not yet returned to the industry in a big way. But to be fair, the industry too has focused on bringing in the large investor, so that it can create a significant base corpus, which can make the retail investor feel more secure. India has been amongst the fastest growing markets for mutual funds since 2004 witnessing a CAGR of 29 Percent in the five-year period from 2004 to 2008 as against the global average of4 percent. The increase in revenue and profitability, however, has not been commensurate with the AUM growth in the last five years. Low share of global assets under management, low penetration levels, limited share of mutual funds in the household financial savings and the climbing growth rates in the last few years that are amongst the highest in the world, all point to the future potential of the Indian mutual fund.

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Challenges and Issues Challenges and issues faced by the sector are mentioned below. Low customer awareness levels and financial literacy pose the biggest challenge to channelizing household savings into mutual funds. Further, fund houses have shown limited focus on increasing retail penetration and building retail AUM. Most AMCs and distributors have a limited focus beyond the top 20 cities that is manifested in limited distribution channels and investor servicing. The Indian Mutual fund industry has largely been product- led and not sufficiently customer focused with limited focus being accorded by players to innovation and new product development. Further there is limited flexibility in fees and pricing structures currently. Distributors and the mutual fund houses have exhibited limited interest in continuously engaging with customers post closure of sale as the commissions and incentives have been largely in the form of upfront fees from product sales. Limited focus of the public sector network including public sector banks, India Post etc on distribution of mutual funds has also impeded the growth of the industry. Further multiple regulatory frameworks govern different verticals within the financial services sector, such as differential policies pertaining to the PAN card requirement, mode of payment (cash vs. cheque), funds management by insurance companies and commission structures, among others.

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Banking Sector
Banking in one form or another was in existence even in ancient times. As early as 2000 B.C Babylonians had developed a system of banks. The writings of Manu (he maker of Hindu Law) and Kautilya (the minister of Chandragupta Maurya) and the teachings of Christ contained references to banking. However modern banking came into existence only after the industrial revolution. There was a need for the formation of financial institutions that could collect the surplus funds of the people on terms acceptable to them and make them available to the needy for productive purposes. Accordingly a large number of such financial institutions called joint stock banks were set up after the industrial revolution The banking system in India is significantly different from that of other Asian nations because of the countrys unique geographic, social, and economic characteristics. India has a large population and land size, a diverse culture, and extreme disparities in income, which are marked among its regions. There are high levels of illiteracy among a large percentage of its population but, at the same time, the country has a large reservoir of managerial and technologically advanced talents. Between about 30 and 35 percent of the population resides in metro and urban cities and the rest is spread in several semi-urban and rural centers. The countrys economic policy framework combines socialistic and capitalistic features with a heavy bias towards public sector investment. India has followed the path of growthled exports rather than the export led growth of other Asian economies, with emphasis on self-reliance through import substitution. These features are reflected in the structure, size, and diversity of the countrys banking and financial sector.

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The banking system has had to serve the goals of economic policies enunciated in successive five year development plans, particularly concerning equitable income distribution, balanced regional economic growth, and the reduction and elimination of private sector monopolies in trade and industry. In order for the banking industry to serve as an instrument of state policy, it was subjected to various nationalization schemes in different phases (1955, 1969, and 1980). As a result, banking remained internationally isolated (few Indian banks had presence abroad in international financial centers) because of preoccupations with domestic priorities, especially massive branch expansion and attracting more people to the system. Moreover, the sector has been assigned the role of providing support to other economic sectors such as agriculture, small-scale industries, exports, and banking activities in the developed commercial centers (i.e., metro, urban, and a limited number of semi-urban centers).The banking systems international isolation was also due to strict branch licensing controls on foreign banks already operating in the country as well as entry restrictions facing new foreign banks. A criterion of reciprocity is required for any Indian bank to open an office abroad. These features have left the Indian banking sector with weaknesses and strengths. A big challenge facing Indian banks is how, under the current ownership structure, to attain operational efficiency suitable for modern financial intermediation. On the other hand, it has been relatively easy for the public sector banks to recapitalize, given the increases in nonperforming assets (NPAs), as their Government dominated ownership structure has reduced the conflicts of interest that private banks would face. About 92 percent of the countrys banking segment is under State control while the balance comprises private sector and foreign banks. The public sector commercial banks are divided into three categories such as State Bank group, nationalized banks and Regional Rural Banks.
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Porters 5 forces analysis Banking Sector Threat of New Entrants The average person can't come along and start up a bank, but there are services, such as internet bill payment, on which entrepreneurs can capitalize. Banks are fearful of being squeezed out of the payments business, because it is a good source of fee-based revenue. Another trend that poses a threat is companies offering other financial services. What would it take for an insurance company to start offering mortgage and loan services? Not much. Also, when analyzing a regional bank, remember that the possibility of a mega bank entering into the market poses a real threat.

Power of Suppliers The suppliers of capital might not pose a big threat, but the threat of suppliers luring away human capital does. If a talented individual is working in a smaller regional bank, there is the chance that person will be enticed away by bigger banks, investment firms, etc.

Power of Buyers The individual doesn't pose much of a threat to the banking industry, but one major factor affecting the power of buyers is relatively high switching costs. If a person has a mortgage, car loan, credit card, checking account and mutual funds with one particular bank, it can be extremely tough for that person to switch to another bank. In an attempt to lure in customers, banks try to lower the price of switching, but many people would still rather stick with their current bank. On the other hand, large corporate clients have banks wrapped around their little fingers. Financial

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institutions - by offering better exchange rates, more services, and exposure to foreign capital markets - work extremely hard to get highmargin corporate clients.

Availability of Substitutes As you can probably imagine, there are plenty of substitutes in the banking industry. Banks offer a suite of services over and above taking deposits and lending money, but whether it is insurance, mutual funds or fixed income securities, chances are there is a non-banking financial services company that can offer similar services. On the lending side of the business, banks are seeing competition rise from unconventional companies.

Competitive Rivalry The banking industry is highly competitive. The financial services industry has been around for hundreds of years and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competitor banks. They do this by offering lower financing, preferred rates and investment services. The banking sector is in a race to see who can offer both the best and fastest services, but this also causes banks to experience a lower ROA. They then have an incentive to take on high-risk projects. In the long run, we're likely to see more consolidation in the banking industry. Larger banks would prefer to take over or merge with another bank rather than spend the money to market and advertise to people.

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INSURANCE SECTOR
The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 1520 per cent annually. Together with banking services, it adds about 7 per cent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many changes .The competition LIC started facing from these companies were threatening to the existence of LIC .since the liberalization of the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.

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India had the nineteenth largest insurance market in the world in 2003. Strong economic growth in the last decade combined with a population of over a billion makes it one of the potentially largest markets in the future. Insurance in India has gone through two radical transformations. Before 1956, insurance was private with minimal government intervention. In 1956, life insurance was nationalized and a monopoly was created. In 1972, general insurance was nationalized as well (endnote 1). But, unlike life insurance, a different structure was created for the industry. One holding company was formed with four subsidiaries. As a part of the general opening up of the economy after 1992, a Government appointed committee recommended that private companies should be allowed to operate. It took six years to implement the recommendation. Private sector was allowed into insurance business in 2000. However, foreign ownership was restricted. No more than 26% of any company can be foreign-owned. In what follows, we examine the insurance industry in India through different regulatory regimes. A totally regulation free regime ended in 1912 with the introduction of regulation of life insurance. A comprehensive regulatory scheme came into place in 1938. This was disabled through nationalization. But, the Insurance Act of 1938 became relevant again in 2000 with deregulation. With a strong hint of sustained growth of the economy in the recent past, the Indian market is likely to grow substantially over the next few decades.

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Porters 5 forces analysis Insurance Sector Threat of New Entrants The average entrepreneur can't come along and start a large insurance company. The threat of new entrants lies within the insurance industry itself. Some companies have carved out niche areas in which they underwrite insurance. These insurance companies are fearful of being squeezed out by the big players. Another threat for many insurance companies is other financial services companies entering the market. In some countries, regulations prevent banks and other financial firms from entering the industry.

Power of Suppliers The suppliers of capital might not pose a big threat, but the threat of suppliers luring away human capital does. If a talented insurance underwriter is working for a smaller insurance company (or one in a niche industry), there is the chance that person will be enticed away by larger companies looking to move into a particular market.

Power of Buyers The individual doesn't pose much of a threat to the insurance industry. Large corporate clients have a lot more bargaining power with insurance companies. Large corporate clients like airlines and pharmaceutical companies pay millions of dollars a year in premiums. Insurance companies try extremely hard to get high-margin corporate clients.

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Availability of Substitutes This one is pretty straight forward, for there are plenty of substitutes in the insurance industry. Most large insurance companies offer similar suites of services. Whether it is auto, home, commercial, health or life insurance, chances are there are competitors that can offer similar services. In some areas of insurance, however, the availability of substitutes are few and far between. Companies focusing on niche areas usually have a competitive advantage, but this advantage depends entirely on the size of the niche and on whether there are any barriers preventing other firms from entering. Competitive Rivalry The insurance industry is becoming highly competitive. The difference between one insurance company and another is usually not that great. As a result, insurance has become more like a commodity - an area in which the insurance company with the low cost structure, greater efficiency and better customer service will beat out competitors. Insurance companies also use higher investment returns and a variety of insurance investment products to try to lure in customers. In the long run, we're likely to see more consolidation in the insurance industry. Larger companies prefer to take over or merge with other companies rather than spend the money to market and advertise to people.

3. Insurance Company BIRLA SUN LIFE INSURANCE Company profile


Established in 2000, Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla Group, a well known and trusted
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name globally amongst Indian conglomerates and Sun Life Financial Inc, leading international financial services organization from Canada. The local knowledge of the Aditya Birla Group combined with the domain expertise of Sun Life Financial Inc., offers a formidable protection for its customers' future. With an experience of over 10 years, BSLI has contributed significantly to the growth and development of the life insurance industry in India and currently ranks amongst the top 6 private life insurance companies in the country. Known for its innovation and creating industry benchmarks, BSLI has several firsts to its credit. It was the first Indian Insurance Company to introduce "Free Look Period" and the same was made mandatory by IRDA for all other life insurance companies. Additionally, BSLI pioneered the launch of Unit Linked Life Insurance plans amongst the private players in India. To establish credibility and further transparency, BSLI also enjoys the prestige to be the originator of practice to disclose portfolio on monthly basis. These category development initiatives have helped BSLI be closer to its policy holders' expectations, which gets further accentuated by the complete bouquet of insurance products (viz. pure term plan, life stage products, health plan and retirement plan) that the company offers. Added to this, the company has extensive reach through its network of 600 branches and 1, 47,900 empanelled advisors. This impressive combination of domain expertise, product range, reach and ears on ground, helped BSLI cover more than 2.4 million lives since it commenced operations and establish a customer base spread across more than 1500 towns and cities in India. To ensure that our customers have an impeccable experience, BSLI has ensured that it has lowest outstanding claims ratio of 0.00% for FY 2010-11. Additionally, BSLI has the best Turn Around Time according to LOMA on all claims Parameters. Such services are well supported by sound

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financials that the Company has. The AUM of BSLI stood at 19725 crs as on April 30, 2011. The various products are categorized into: Protection solutions Children's future solutions Wealth with protection Health and wellness Retirement solutions

The Aditya Birla Group


The Aditya Birla Group is one of India's largest business houses. Global in vision, rooted in Indian values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. The Group operates in 26 countries India, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Australia, USA, Canada, Egypt, China, Thailand, Laos, Indonesia, Philippines, UAE, Singapore, Myanmar, Bangladesh, Vietnam, Malaysia, Bahrain and Korea. A US $29 billion corporation in the League of Fortune 500, the Aditya Birla Group is anchored by an extraordinary work force of 130,000 employees, belonging to 40 different nationalities. Over 60 per cent of its revenues flow from its operations across the world. The Aditya Birla Group is a dominant player in all its areas of operations viz; Aluminium, Copper, Cement, Viscose Staple Fibre, Carbon Black, Viscose Filament Yarn, Fertilisers, Insulators, Sponge Iron, Chemicals, Branded Apparels, Insurance, Mutual Funds, Software and Telecom. The Group has strategic joint ventures with global majors such as Sun Life (Canada), AT&T (USA), the Tata Group

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and NGK Insulators (Japan), and has ventured into the BPO sector with the acquisition of TransWorks, a leading ITES/BPO company.

Sun Life Financial


Sun Life Financial Inc is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial Inc and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda.

Products and Solutions


Protection solution Group solution Individual solution NRI solution

Protection solution
1. Protection Solution- Birla Sun Life Insurance Protection Solutions help to meet the need for financial security for loved ones. The plans are designed to give a life cover as per need at a reasonable premium. 2. Children future plan- Birla Sun Life Insurance Childrens Future Solutions are designed to help build a corpus that allows to meet the major expenses of child in future. Besides providing life cover to ensure that your childs dream is secured, they also offer the choice

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of guaranteed returns or the flexibility to manage fund options to make money grow as per needs. 3. Wealth with protection scheme- Offer flexible plan suited to ones goal. 4. Health and wellness solution- Birla Sun Life Insurance Health & Wellness Solutions ensure that the insurer never lack the funds to go in for quality treatment in case of medical emergencies. The plans help you insure yourself and your family for an adequate sum, against major illnesses and injuries. Insurer even has a choice of plans that offer the cashless facility. 5. Retirement solution- During retirement, income stops but the expenses dont. With inflation increasing the cost of basic essentials, your savings today might not suffice meeting the cost of necessities throughout the retired life. It is therefore important to start saving early and in a planned manner for a comfortable, stress-free retired life. What is also important is to determine your goal for the retirement corpus basis your projected needs during retired life. Birla Sun Life Insurance Retirement Solutions ensure that insurer enjoys a secure and happy retired life. The retirement plans that help insured build a corpus that lasts throughout ones retired life. So, whether one wish to retire early and start their own business or lead a leisurely retired life, can be sure of the funds that make it the best years of their life. 6. Rider- Riders are the additional benefits that you may buy and add to your policy at a nominal cost. They allow you to enhance your insurance cover, qualitatively and quantitatively.

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GROUP SOLUTION
BSLI believe that employee benefit plans provided by employers to their employees play a very important role in increasing employee loyalty and productivity. Birla Sun Life uses its vast expertise in helping organizations and groups design customized solutions to their employees. 1. Retirement Solution - BSLI employee benefit solutions are designed to enable organizations and groups to offer superior benefits to their employees to meet both statutory requirements like gratuity and retirement solutions. (1) Gratuity solution- While Gratuity is a statutory obligation it is also a very important tool today to create employee loyalty. A comprehensive gratuity plan can help organizations reduce both business costs and corporate tax. Birla Sun Lifes gratuity solution manages your gratuity liability effectively and also helps you release resources for other business activities. (2) Super Annuation- Today while there is a high awareness of the impact of inflation and its affect on retirement savings among employees, very few would have adopted a systematic and disciplined savings plan to counter its effect. Organizations can play a key role in helping employees to build the desired retirement corpus while at the same time increasing employee loyalty. Birla Sun Lifes solutions can be customized to effectively meet both employer and employee requirements. (3) Leave Encashment- Leave encashment liabilities for organization keep growing with time thus straing the organizations resources. These liabilities can bee effectively met through the management of

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a dedicated fund for leave encashment. Birla Sun Life vast experience in effectively managing funds and delivering superior returns can help organizations effectively manage these liabilities. 2. Protection Solution - Birla Sun Life Insurance Group Protection Solutions provide the benefit of an insurance cover to an entire group of people as a single unit. (1) Employer-Employee- At Birla Sun Life Insurance (BSLI), the goal is to help client ensure your employees well being so that they can enhance their performance & potential. BSLI protection solutions combine new innovations in organizational benefits with the traditional strength of employee assistance to help you. Protect your investment in your people Reduce the liability, cost and negative impact of mental reassures in the work place Maintain your position as employer of choice; and Incorporate employer protection & wellness into your core business practices. (2) Affinity- An affinity group is a group consisting of persons who assemble together with a commonality of purpose or engaging in a common economic activity. In Insurance parlance Non-employeremployee groups like employee welfare associations, borrowers of a bank, professional associations or societies may also be treated as affinity groups provided the president/ secretary/ manager/ group organizer in his capacity as organizer of the group has an authority from majority of the members of the group to arrange insurance on their behalf. 3. Rural Insurance

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A large population of India lives in the rural areas. The impact of risks associated with life and health are far more severe on this population as compared to the urban population with higher levels of income. Birla Sun Life launched its rural program in 2001 to provide insurance to the rural populace of India. This includes the endowment product that provides life cover and guarantees returns to the insured on maturity. By virtue of the benefits it provides, this product has been very well accepted and has gone on to become the most popular product in the rural areas. With changing times and with increasing disposable incomes in rural areas, BSLI improved their solutions to the rural population and launched two Micro Insurance Products in 2008 which include a pure term and return of premium products. One of the unique features of these products is that they provide a grace period of 180 days as opposed to 30 days for other similar plans in the market. This gives policyholders the flexibility to pay premiums. 4. NRI Solutions Birla Sun Life's unique NRI solutions can help client ensure that dreams and aspirations are not compromised even while you stay away from your family. BSLI solutions can help you plan and fulfil all your goals like planning for your child's education, planning for your retirement, building a house, caring for your parents back home and more.

MARKETING OF BSLI PRODUCTS AND SERVICES


Marketing of their product is usually done by intermediaries called Agents and Brokers. Agency manager and assistant agency manager monitor the business performance of agents. Agents are known as insurance advisor.

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The company has a marketing department which looks after the marketing activities of the company. The entire marketing plan is prepared and implemented by the marketing department. The marketing and finance department collectively identify the target for each individual agents, assistant agency manager and the agency manager usually based on the geography. The functions of the agent include: Collecting database of prospect Meeting the client and explaining about the product and services based on client requirements Negotiating with the client Assisting client in paying the premium Assisting in documentation process etc.

INTERVIEW EXCERPT
Person: Mr. Ambu S G Position: Senior Agency Manager Birla Sun Life Insurance is one of the leading insurance companies in India. Its a joint venture between Aditya Birla Group and Sun life financials. Insurance industry is one of the fastest growing industries in India. There is ample opportunity for MBA graduates in BSLI. Fresh MBAs are recruited in two posts; Agency Manager There should be at least 12 agents under him The annual target is minimum of 24 lakh per annum.
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Should have to get at least 100 policies Will get an initial salary of 2.17 lakh per annum Assistant Agency Manager There should be at least 6 agents working under him The annual target is minimum 6 lakh per annum Should have to get at least 50 policies Will get an initial salary of 1.85 lakh per annum. Sales Supportive Executive (SSE) Will have to do advisory recruitment Enact reward and recognition policy Enacting policy related to commission payable Account Management etc Branch Operation Executive (BOE) Will have to ensure smooth operation of the branch and formulate branch operational policies. To become an insurance agent IRDA certification is mandatory

About job profile and job security in insurance business Insurance job is one of the risky and high pressure jobs. Here only the fittest will survive. Job security and career development is solely based on the performance of the employee. If an employee is not performing up to the
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mark, he cannot sustain in this field. If the employee is not able to meet the target, he is asked why? As the disparity between actual and expected target increases the number of why is also increased and finally he is forced to quit the job. To what extend recession has effected BSLI Recession has definitely affected our business but we were in a much better position compared to many peers and other international insurance company. The lowering of business was due to psychological fear more than technical. But at the same time this was the period when we saw maximum growth in our unit linked insurance plan (ULIP). There were educated clients who took this as an opportunity to invest and pooled in lots of money.

4. Mutual Fund Company HDFC ASSET MANAGEMENT COMPANY LTD Company Profile
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. The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai - 400 020. In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset Management Company Limited to manage the Mutual Fund. HDFC Mutual Fund is one of the largest mutual funds and well-established fund house in the country with

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consistent and above average fund performance across categories since its incorporation on December 10, 1999. HDFC Mutual Fund has been one of the best performing mutual funds in the last few years. HDFC Asset Management Company Limited (AMC) functions as an Asset Management Company for the HDFC Mutual Fund. AMC is a joint venture between housing finance giant HDFC and British investment firm Standard Life Investments Limited. It conducts the operations of the Mutual Fund and manages assets of the schemes, including the schemes launched from time to time. As of Aug 2006, the fund has assets of Rs.25,892 crores under management. In 2003, following a decision by the Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, to divest its asset management business in India, AMC had entered into an agreement with ZIC to acquire the asset management business. Consequently, all the schemes of Zurich Mutual Fund in India had been transferred to HDFC Mutual Fund and renamed as HDFC schemes

Products Offered
Childrens Gift Fund - Children's Gift Fund with an objective to obtain long term capital appreciation Debt/Income Fund - Invest in money market and debt instruments and provide optimum balance of yield. Fund of Fund Schemes - Invests primarily in other scheme(s) of the same mutual fund or other mutual funds Equity/Growth Fund - Invest primarily in equity and equity related instruments Fixed Maturity Plan - Invest primarily in Debt / Money Market Instruments and Government Securities.
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Exchange Traded Funds - Invest primarily in equity and equity related instruments Liquidity funds - Provide high level of liquidity by investing in money market and debt instruments. Quarterly Interval Fund - Generate regular income through investments in Debt / Money Market Instruments.

INTERVIEW EXCERPT
HDFC Mutual Fund, Kollam, located near the Andamukkam bus stand, is headed by Mr. Manoj Mathew. An interview with Branch Manager, Mr. Manoj Mathew and head in charge, Mr. Manoranj S.C helped us to understand better the functioning of the organization and also the marketing of mutual funds. What are the main role & activities of HDFC-AMC? There are eight branches of HDFC AMC in Kerala and every branch act as an Investor Service Center (ISC). The main purpose of Investor Service Centers is to provide services and to communicate with the existing and potential investors within and outside India, about the performance of the schemes, ownership details, finding new customers, disclosures made on an ongoing basis and answers to frequently asked questions etc. How does HDFC Mutual fund differentiated from other mutual funds? HDFC follows a unique investment policy that ensures maximum return with less return. The investment philosophy relies extensively on fundamental research. It is driven by the belief that over time stock prices reflect a

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business underlying intrinsic values and its long-term prospects. Some of the basic principles for equity schemes include focus on long term, managing risk and maintaining balanced outlook on the market. Similarly other schemes also have such unique investment philosophy. How is mutual funds marketed in HDFC-AMC? HDFC Mutual Fund is one of the largest mutual funds in India with an investor base of over 25lakh which is serviced primarily by their wide network of distributors. HDFC AMC markets their products through channel sales like all other asset management companies. Thus no direct sales are involved in mutual fund marketing. HDFC Mutual Fund considers their distributors as the most important link between the investors and them. To help distributors to advise and service their clients better, the AMC together with the registrar (CAMS) offer a range of facilities to the distributors. The main distributors of mutual fund include broking firms, banks and individual financial advisors. HDFC AMC mainly focuses on banks for their distribution. Countrys top banks like HDFC bank, IndusInd Bank, Axis Bank, ICICI Bank, SBI Bank are in the list. By partnering with banks for distribution, mutual funds expect to reverse the distributor-induced portfolio churning by investors. Also, banks charge a lower distribution fee compared with national distributors and some independent financial advisors. By partnering with the banks HDFC has an advantage of widening the reach of mutual funds in India. What are the activities conducted to widen mutual fund reach? Association of Mutual Funds in India (AMFI) has introduced many programmes for the promotion of mutual funds in India. One among them is Investor Awareness Programme, where a free training is to be given to the interested investors and meet their queries, which is to be done every month
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as per AMFI guidelines. Similarly, Distributors Training is conducted to have a good rapport with the distributors, so that they can boost up the sales.

Conclusion
For HDFC AMC customers always comes first. Operations and Customer Service are our key focus area and play an instrumental role in our success. The organisation is dedicated towards customer satisfaction and work hard to cater to their unique requirements. HDFC-AMC was the first AMC to be assigned Fund House Level 1 Rating by Crisil. The rating reflects highest fund governance levels and fund management practices at HDFC AMC.

5. Banking Company
STATE BANK OF TRAVANCORE Company Profile The bank was established in 1945 as the Travancore Bank Ltd, at the initiative of C. P. Ramaswami Iyer, then Divan of Travancore. Although the Travancore government put up only 25% of the capital, the bank undertook government treasury work and foreign exchange business, apart from its general banking business. Its registered office was at Madras. In 1960, it became a subsidiary of State Bank of India under the SBI Subsidiary Banks Act, 1959, enacted by the Parliament of India. SBT is now headed by Mr. Pradip Chaudhuri as Chairman and Mr. P Nanda Kumaran as the Managing Director. Products and Services

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The bank offers various products and services. The banking services are mainly catered through three heads, Personal banking, NRI banking and Business banking. Bank also actively take part in Financial Inclusion measures as well as Social and Rural banking. The services mainly include epayment facility for paying income tax, service tax and customs and duties; remittance of money to and from other nations; insurance; mutual funds; demat services; custodial services; international debit card; pilgrim service centers and Viswa yatra card. INTERVIEW EXCERPT Manager: Mr Satisan M Position: Assistant General Manager

Your association with SBT I am with SBT for the past 33 years. I joined SBT as a clerk in the year 1978 and I am extremely satisfied with the association with SBT. What are the normal functions of your branch? As every bank we basically perform three functionso Accepting Deposit o Lending Money o Facilitating Fund Transfer Do you believe increasing interest rate is solution for controlling inflation? I am not the right person to talk about this but I personally believe that rising interest rate is not the right way to go. The current inflation is due to
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rising demand and the major contributor to increasing demand is raising consumption by lower income group. Many programs like Mahatma Gandhi Rural Employment Program of central government has increased the living standard of rural population drastically this in turn has resulted in increasing demand. So we cannot complain about this. Another two factors which are adding fuel to the fire are Low production level Poor supply chain management Low production level and poor supply chain management has resulted in high inflation. Therefore increasing the interest rate beyond a saturation point is not going to help. To what extend the recent recession affected SBT Recession has affected the entire country as whole. But we are proud to say that in the banking sector, we were the least affected. Why SBT employees are opposing the proposal of merger with SBI The reluctant to merger is purely because of personal reasons. Few middle and top level management people believe that if the merger happens they will lose their power. They will come under the direct discretion of SBI officials. There is no chances of job lose at all but there will be a reshuffle and nobody wants to lose their power. Its completely because of personal gain that they are reluctant to merger. But merger will happen in the next 2 or 3 years. Difference between nationalized bank and new generation private bank New generation private bank pays much more than the nationalized bank but the output they expect from there employee is much more. Working
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in a new generation bank is like a pressure cooker, the employee has to deliver otherwise will be shown the doors. There is no job security in private banks. In contrast the basic pay given in nationalized bank is less but when we compare the amenities and other benefits it comes out to be par with what is paid in private bank, moreover your job is secured here. Nationalized bank is much better than private bank. Working in SBT provides ample opportunity. A person joined as PO can reach up to the position of General Manager. Moreover one may get an opportunity to work in any of the SBT branch from Osaka to Alaska. So one can also get international assignment during his tenure. Nationalized bank perform both mass banking and class banking where as private bank performs only class banking. Entry options for MBAs in SBT The only way to get into SBT is through bank exam. The post for which MBAs can look for areProbationary Officer (PO) Specialist Officer (SO) The basic qualification required for PO is graduation with knowledge in computer. A PO today is considered as blue eyed boy. The basic qualification required SO is post graduation preferably MBAs, CAs etc. Now the role of a bank employee has changed drastically, its no more a monotonous job. A PO need to perform multitask. So he should be extremely versatile. They are also allowed to do Cross selling business. Views about resent downgrading of banking industry by credit rating agencies
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MFS Mini Project

The downgrading of Indian banking industry is not at all going to affect the banking sector in India. Our policies are much better and are at par with international standard. Our profit margin is extremely good, also our economy is expected to grow at the rate of 7.5% which is much better compared to many developed and developing country, given the current scenario. So, we are in a much stable position. Concerns regarding NPA NPAs will be there, be it any bank in the world. But our policies are so stringent that our NPAs will not affect our financial stability. We have a well laid down procedure in place for recovering NPAs. NPA and pension commitment are not at all going to affect as in the coming future.

6. Conclusion
The project has given immense exposure in the various sectors such as

Banking, Insurance and Mutual Funds. The managers have shared much information and shared their experiences.

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