PRIVATE BANKING

SUBMITTED BY: 010-FI-103 Gurpreet Kaur Popli 010-FI-105 Dapbiang Lyngkhei

010-FI-106 Gaurav Gopal

010-FI-118 Vaibhav Agrawal 010-FI-120 Vijendra Rawat

banking is a term for banking, investment and other financial services provided by banks to private individuals investing sizable assets. The term "private" refers to the customer service being rendered on a more personal basis than in massmarket retail banking, usually via dedicated bank advisers. It should not be confused with a private bank, which is simply a nonincorporated banking institution .

Private

The TEN largest global private banking branch in 2011

Bank of America Merrill Lynch $1,944.74 Morgan Stanley Smith Barney $1,628.003. UBS $1,559.904. Wells Fargo $1,398.005. Credit Suisse $865.066. Royal Bank of Canada $435.157. HSBC $390.008 .

Deutsche Bank $368.559 .

BNP Paribas $340.4110. JP Morgan Chase $284.00

INTRODUCTION

The expression 'private banking' is now-a-days more to be seen as a gateway into investment management in the broader sense than as offering a confidential, almost family relationship with a man to whom you entrust your money. Those relationships still exist in the traditional places, but they apply more to extremely rich people than to moderately wealthy or well-off people who want more personalised treatment than they can get from their high street branch, or their regional 'personal banker.

Banking services, including lending and investment management, for wealthy individuals. Private banking primarily is a credit service, and is less dependent on accepting deposits than retail banking.

Private banking doesn't just mean investment: banks like to lend money, and especially to richer people. This raises the question of how a private banker is going to get rewarded. Depositing money with a bank is reward enough, of course, whether into the bank or into one of its financial products, but private banking when it has an advisory nature and is not accompanied by lending or borrowing may be fee-based. Provided the sum involved is large enough to justify the fee costs, an advisory private banking relationship is probably a good way to go. The bank will get the benefit from time to time of being able to offer bridging finance, or of holding large amounts in transit etc. It can hope for more substantial involvement with you in future. But the immediate relationship is between financial adviser and client. Private banking is now a central element in the financial planning of many individuals. Private Bankers offer a wide range of innovative wealth management services from their team of well trained professional personnel.

BRIEF HISTORY

The first banks were the merchants of the ancient world that made loans to farmers and traders that carried goods between cities. The first records of such activity dates back to around 2000 BC in Assyria and Babylonia. Later in ancient Greece and during the Roman Empire lenders based in temples would make loans but also added two important innovations: accepted deposits and changing money. During this period there is similar evidence of the independent development of lending of money in ancient China and separately in ancient India. Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy, to the rich cities in the north like Florence, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe. Perhaps the most famous Italian bank was the Medici bank, set up by Giovanni Medici in 1397.

The development of banking spread through Europe and a number of important innovations took place in Amsterdam during the Dutch Republic in the 16th century and in London in the 17th century. During the 20th century developments in telecommunications and computing resulting in major changes to way banks operated and allowing them dramatically increase in size and geographic spread. The Late-2000s financial crisis saw significant number of bank failures, including some of the world's largest banks, and much debate about bank regulation.

ORIGIN IN INDIA

Private banking in India was practiced since the beginning of banking system in India. The first private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is one of the fastest growing Bank Private Sector Banks in India. IDBI ranks the tenth largest development bank in the world as Private Banks in India and has promoted a world class institutions in India. The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited, to set up a bank in the private sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995.

ING Vysya, yet another Private Bank of India was incorporated in the year 1930. Bangalore has a pride of place for having the first branch inception in the year 1934. With successive years of patronage and constantly setting new standards in banking, ING Vysya Bank has many credits to its account.

HNIS

Private banking is personalized financial and banking services offered to a bank's high net worth individuals (HNIs). In India, it is offered by foreign banks and a few private sector banks. Banks like Citibank, Standard Chartered, HSBC, HDFC, ICICI and the likes offer such services. The main advantage of private banking is that a dedicated relationship manager is assigned to the customer who takes care of all his/her banking and financial needs. Be it a simple thing like wanting cash delivered at your doorstep, or complex financial planning for your kids, or your retirement, drafting a will, investing short-term surplus money, or buying a complex structured product - all of it is taken care of by the private banker. Private banking is offered to high net worth customers. Depending on the perception of your financial wealth, the bank would offer you these services.

For whom private and personal banking services suitable for?

Individuals who seek high service standards and would like to be treated with the respect and courtesy that they deserve

Individuals who do not wish to be kept on hold in call queuing systems or deal through automated telephone system
Individuals who seek an enhanced experience from their bank and quality products which offer excellent value Individuals who require funds to be received and sent in a range of currencies Individuals who require tax planning structures Foreign resident, non-domicile individuals who particularly benefit from the flexibility of our offering, both onshore and offshore Individuals who require hard currency holdings Expatriates who are not liable for taxation in their country of origin Contract workers who travel extensively and earn income overseas

Individuals who are at a stage of their life where they intend spending extended periods outside their country of origin
Individuals who seek an innovative and professional approach to their money management.

ADVANTAGES

Banking simplicity. Your Private Banker is the one person who will serve as your point of access to the wide spectrum of premier products and services we offer throughout the TD Bank north financial services network. Time savings. Your Private Banker will come to you. Whether your signature is required, or you request an analysis of products and services, we will do whatever it takes to ensure your convenience. In short, we'll make the bank operate on your schedule. A powerful partnership. We'll work closely with you and your staff. We'll also work with your attorney, accountant, insurance specialist and investment advisor to coordinate services. We have an extensive array of in-house business partners at your disposal to provide their expertise in these areas as necessary. Access to special benefits. As a Private Banking client, you will also enjoy special benefits such as exclusive rights to purchase tickets to events at the TD Banknorth Garden in Boston.

DISADVANTAGES

Surplus employees: The defect of the system is that some of the workers are declared surplus. There is an increase in the rate of unemployment. The unemployed workers commit crimes in this society. No of branches in rural areas: The private bank owners do not like to setup there branches in rural areas. The banking facilities remain confined to cities where sufficient deposits are available. A large part of population will be deprived of banking facilities. Unbalanced growth: The management of privatized banks provides credit in specific areas and people. As a result, there is unbalanced growth in the country; especially rural areas may remains under developed where credit facilities do not exist. Jobs for relatives: The management of privatized banks may provide jobs to their friends and relatives. The deserving persons are ignored. Loans for few persons: The management of privatized bank can extend loans of their favored persons. In this way only few persons are benefited. Owners association: The aim of privatized banks is to earn profit. For these purpose owners associations are made which enter into agreement of earning high profit. The bank can increase the rate of service charges. Such associations may not care for customer's welfare.

CUSTOMER PROFILING

Customer profiling is a useful concept that helps in establishing a relationship with the customer. It helps in figuring out the financial personality of the customer. While customer within each profile may be dissimilar, they can be broadly identified as following types:
Relationship Fear-based Curious Greedy

Customers

Customers

Customers

Customers

Relationship Customers- These people want to form a bond with someone whom they trust. They tend to be easy to talk to at the initial meeting. Much of the interaction is informal and conversational. Getting to know these customers as individuals is of utmost importance. They want to feel comfortable. They tend to be very good, long-term customers and very nice to work with.

Fear-based Customers- these people tend to have very little financial experience or have had bad financial experiences. These customers are also reliant upon private bankers. They often need educating , although they may seemingly not want it. The private banking system is not to take care with them but rather to work with them.

Curious Customers- They are knowledgeable customers. They take a great interest in what facilities and wealth management plan a private banker gives. These customers would have informed their opinions through what they have read or heard. They often will continue to focus on items that validate their thinking. Greedy Customers- These are Often the customers who are only interested in some inarticulated and ever-changing objectives, usually measured by short-term results. They may appear to be charming initially because they are often marked by high energy and a quick mind.

FINANCIAL GOALS & UNIQUE NEEDS

For many of our customers, time is a precious asset. Dedicated to meeting the demands of business, and determined to enjoy the pleasures of family and friends, customers look for all opportunities to make the most of every minute of every day. Customer look for a trusted advisor who can help them effectively manage your finances to free up more of your time. For any customized credit solutions or have other similar complex banking needs, private banking is the best option. Private Banker plays a proactive role in helping to manage finances, cultivate and preserve assets, and transfer wealth across generations. Also this will give us the peace of mind of knowing that a skilled and knowledgeable professional is keeping a close eye on your financial well-being.

Private Banker works with their customers to understand their unique personal, family, and business circumstances and bring together a team of experts within Private Client Services in the areas of banking, investment, trust and estate.

To implement financial plan, Private Banking offers a wide range of borrowing, investment and banking solutions that recognize that business and personal finances are often interconnected, including: Deposit services Credit management services Investment services Estate planning services Private Banking can provide individually structured borrowing designed to manage and build your assets and enhance long-term liquidity and tax effectiveness.

In addition, private bankers can work with your lawyers, accountants and other advisors at customers special request. Private Bankers provide you with the highest level of personal service and the benefits of sound management of banking and other financial needs. They offer products that are simple to use and have services that help people manage their finances. Also when one becomes a customer of a bank, the bank provides a unique identification code, known as Customer Relationship Code. Whenever that customer deals with the bank, he/she is recognized by that same unique code.

SERVICES OFFERED

The advice that a private banking give is as unique as a customer need. It is based purely on customers appetite for risk, time horizons and need for liquidity. So at the very inception, private banking work intensively towards understanding the customers. Clients requirements and profile is agreed upon and then documented through a consultative process. Private banking take cognizance of the fact that the profile of the customer is likely to change with time and they follow this process on a continual basis.

Allocation A time tested fundamental principle of investment

A lot of emphasis is laid on the mechanics of asset allocation, as this is the basic tenet of portfolio optimization. This involves allocating portfolio across various asset categories - essentially debt, equity and cash. Deciding upon asset allocation is a synthesis of science, art and investment discipline.

Portfolio analysis and financial planning Private banking analyze existing portfolio allocation and recommend changes in line with current opportunities, your profile and cash flows, risk appetite and financial requirements. A comprehensive investment plan is drawn out to meet long and shortterm financial goals across multiple asset categories.

Portfolio review and tracking Your portfolio is tracked on an ongoing basis to monitor the portfolio returns, cash flows and asset allocation. We continually advice you on appropriate rebalancing of your portfolio on the basis of performance of each asset category and analysis of future expectations. All portfolios are approved by our research desk on an ongoing basis.

Advice across asset categories

Private Banking offers research-based advice across asset categories like mutual funds, equity and its derivatives, insurance and more. Hence, service provided by private banking is a one-stop-shop for ones entire portfolio need saving valuable time. Also, a holistic view of portfolio across all asset categories helps them advice people better and offer a consolidated wealth statement.

Dedicated investment advisor

In today fast moving and competitive world, time is priceless, which is why a trained personal advisor is assigned to the customers as a one-point contact, guiding them and attending to all their investment related needs. The advisor on an ongoing basis helps to restructure and monitor the portfolio based on research desk's recommendations as well as provides procedural assistance, both through online and offline modes.

Value added services

Private Banking also offers value added services that help the portfolio like transaction audit for transactions done through the bank, tax guidance and opinions in related areas.

Various other services offered are:

Personal Investments Personal Retirement Plans Insurance Estate Planning

Other Financial Planning

Whatever your wealth goals might be, we can help you protect and grow your wealth, so that you can enjoy it and pass it on
Private Banking wealth advisors can help to make informed decisions about the financial future. They will work with the customers to build a tailored financial plan based on their financial goals and needs and help them to put that plan into action.

Saving for retirement Advisors can help you design a strategy to help you build up the funds you'll need to enjoy your retirement years to the full. Pension consolidation If you hold multiple pension plans, advisors can help you avoid potential problems and lost opportunities by consolidating them into one. Income planning By using our specialist knowledge, expertise and experience, advisors can help you develop and execute an investment strategy for income generation. Family and business protection The right protection plan can protect you and your family from unnecessary hardship. Advisors can help you choose the right protection plan for your situation.

SERVICES AT GLANCE

Keeping money safe while also allowing withdrawals when needed. Issuance of checkbooks so that bills can be paid and other kinds of payments can be delivered by post Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, property or business) Issuance of credit cards and processing of credit card transactions and billing Issuance of debit cards for use as a substitute for checks Allow financial transactions at branches or by using Automatic Teller Machines (ATMs) Provide wire transfers of funds and Electronic fund transfers between banks

Facilitation of standing orders and direct debits, so payments for bills can be made automatically
Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account. Provide internet banking system to facilitate the customers to view and operate their respective accounts through internet. Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly. Provide a check guaranteed by the Bank itself and prepaid by the customer, such as a cashier's check or certified check. Notary service for financial and other documents.

Wealth Management & Private Banking

Wealth Management:

financial services provided to wealthy clients, mainly individuals and their families , typically with $100,000+ investable assets

Private banking:

an important, more exclusive, subset of wealth management, typically with $1 million + of investable assets.

Private banking traditionally consisted of banking services (deposit taking and payments), discretionary asset management, brokerage, limited tax advisory services and some basic concierge-type services, offered by a single designated relationship manager. On the whole, private banking relationships were mainly passive Wealth management is broader and typically deals with managing both the assets & liabilities side of clients balance sheets

Wealth Management Products

While asset management is a key feature, wealth management has a greater emphasis on financial advice and is concerned with gathering, maintaining, preserving, enhancing and transferring wealth. Products include:

Brokerage. Core banking-type products Lending products, such as margin lending, credit cards, mortgages and private jet finance. Insurance and protection products, such as property and health insurance, life assurance and pensions. Asset management in its broadest sense: discretionary and advisory, financial and non-financial assets (such as real estate, commodities, wine and art), conventional, structured and alternative investments. Advice in all shapes and forms: asset allocation, wealth structuring, tax and trusts, various types of planning (financial, inheritance, pensions, philanthropic), family dispute arbitration even psychotherapy to children suffering from affluenza. A wide range of concierge-type services, including yacht broking, art storage, real estate location, and hotel, restaurant and theatre booking.
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Wealth Management Pool by Product

Non-cash investments may account for no more than c.36% of the global wealth management revenue pool

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