Description
Kotak insurance
KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
EXECUTIVE SUMMARY
Kotak Mahindra Bank is one of India's leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a Private Financial Institution to a Bank The Bank stand alone had around 11,000 employees as of 31stMarch 2011. 102 employees employed throughout the year and 23 employees employed for part of the year were in receipt of remuneration of Rs, 60 lacs or more per annum
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KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
CHAPTER 1. REASEARCH METHODOLOGY
? DATA SOURCES
There are two types of data:-
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Primary Data,
The data that is collected first hand by someone specifically for the purpose of facilitating the study is known as primary data. Secondary data is the data which is published.
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Secondary Data.
For the purpose of this project Secondary data like brochures, web site of the company, magazines, newspaper, journals etc. were used.
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KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
CHAPTER 2. INTRODUCTION, HISTORY & SERVICE OF KOTAK MAHINDRA BANK
2.1) Introduction
Kotak Mahindra Bank is one of India's leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a private financial institution to a bank The Bank stand alone had around 11,000 employees as of 31stMarch 2011. 102 employees employed throughout the year and 23 employees employed for part of the year were in receipt of remuneration of Rs,60 lacs or more per annum. Kotak Bank was adjudged amongst top 25 in India’s Best Companies to work for in 2010 and continues to be amongst top 25 Best Employees in India consistently from 2007 till date as adjudged by the AON Hewitt Best Employers Survey.
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KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
2.2) History of Kotak Mahindra Bank
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that’s when the company changed its name to Kotak Mahindra Finance Limited. Since then it’s been a steady and confident journey to growth and success. 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market 1990 The Auto Finance division is started 1991 The Investment Banking Division is started. Takes over FICOM, one of India’s largest financial retail marketing networks 1992 Enters the Funds Syndication sector 1995 Brokerage and Distribution businesses incorporated into a separate company – Kotak Securities. Investment Banking division incorporated into a separate company-Kotak Mahindra Capital Company 1996 The Auto Finance Business is hived off into a separate company – Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The
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KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
launch of Matrix Information Services Limited marks the Group’s entry into information distribution. 1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company. 2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. Kotak Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.
2001 Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra Finance Ltd. converts to a commercial bank – the first Indian company to do so. 2004 Launches India Growth Fund, a private equity fund. 2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund 2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities
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KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
2.3) Services Provided by Kotak Mahindra Bank
The services of Kotak Mahindra Bank are wide spread. It's banking sector acts as a central platform for customer relationships across the entire Kotak Mahindra group's various businesses. The bank marks its presence in the commercial vehicles, retail finance, corporate banking and treasury and housing finance segments. It offers several facilities like personal banking, commercial banking, insurance and investment banking. Apart from traditional facilities like deposits accounts, savings account, current account, term deposits, personal loans, home loans the bank has spread its wing in the investment services by providing its customer facilities like Demat, mutual fund and insurance. The bank has also oprated for net banking, mobile banking and phone banking for convenience of its customers. ?
Kotak MahindraBank:- Branches and Business
Within a small span of 6 years, the bank has spread it wings in several sphere of finances. Presently, spread in 82 cities in India, the bank caters to the needs of its 5.9 million customers spread throughout the length and breadth of country and even abroad. By the end of FY 2007-2008, the Kotak Mahindra Bank had about 178 branches spread all over the country and it plans to Add some more branches by the end of FY 2010.
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Portfolio-Management Services (Page 6)
KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
Let Kotak Portfolio Management Experts manage customers investment portfolio and make sizable returns based on professional advice and sound investing in equities and more. Backed by extensive research and in depth analysis, Kotak Portfolio Management is equipped to tackle the unpredictable nature of the market with adequate safety. In the end it boils down to make the right move in the right direction at the right time. That’s where the expert comes in. Kotak Bank measures to success through the success of their clients. Whatever be their requirements, kotak Bank tailor customers portfolio to their specific investment need. At the very base of a financially sound portfolio lies the identification of one’s investment objective.
Kotak Bank helps you identify your investment objectives and also outline important requirements like liquidity, capital appreciation, current income, time span and fiscal implications and then suggest an appropriate scheme. Facts on Kotak Portfolio Management Services 1. One of India’s oldest and largest portfolio management companies 2. Over a decade of experience
3. Assets Under Management (AUM) of over Rs. 3300 Crores
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Benefits of Kotak Portfolio Management Services
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Get personalized portfolio management advice An Investment Relationship Manager
will ensure that their receive all the services related to your investment needs.
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Keep up with portfolio online or on call A dedicated website and a customer service desk
allows you to keep a tab on your portfolio’s performance.
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Entrust portfolio to experienced professionals An experienced team of portfolio
managers ensure your portfolio is tracked, monitored and optimised at all times.
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Rely on the experts for portfolio managemen
A customers portfolio is tailored after a thorough research backed by the expertise from the Kotak Securities Research team.
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KOTAK MAHINDRA BANK
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D.T.S.S.college of commerce
Check financial statements in inbox The personalised service also translates into zero paper
work and all financial statements will be e-mailed.
Custody Services
Kotak Group, a premier financial services provider and one of the leading private sector banks in India, proudly launches Custody Services as part of its diversified services portfolio in capital markets industry. A dedicated team of experienced professionals and emphasis on the latest state of the art technologies have culminated in Kotak Group being at the forefront of financial products and services in Indian capital markets. Custody Services, the latest offering from Kotak Mahindra Bank, provides a bouquet of tailor made solutions for overseas
and domestic investors. The Custody Services division at Kotak Mahindra Bank Ltd., (KMBL) is committed to delivering top of the line securities services to institutional investors, both foreign and domestic, that would be investing in the Indian capital markets across debt and equity instruments, derivatives, Depository Receipts and mutual fund units. A dedicated Account Manager would partner clients to help leverage our services and professional expertise that would best meet our clients' needs. Key Features
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Custody and Settlement Services Depository Receipts Broker Back office Escrow Accounts Foreign Direct Investment Internet Interface for Clients
Custody And Settlement Services
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Account Opening: Kotak Mahindra Bank would assist clients for the custody account opening documentation requirements and facilitate clients during the SEBI registration process These would include:1. Clarification on existing guidelines
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2. Providing assistance during the application process including vetting of application forms 3. Liaison with SEBI and feedback to client on application status
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Transaction Settlement: As a Clearing Member with the clearing houses of leading Indian Stock Exchanges (NSE & BSE), KMBL performs clearing and settlement of cash and securities on behalf of clients.
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Securities Safekeeping: Provides safekeeping services for securities held - both in electronic as well as physical forms Corporate Actions: KMBL custody tracks for corporate actions and does corporate actions processing for both voluntary and involuntary events on behalf of its clients. This involves application made to issuers on behalf of clients, income collection and following-up for corporate action events like dividend, interest, redemption, bonus, rights, etc.
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Standardized and Customized Reporting: Investors need meaningful information that offers insight to their investment portfolios. Apart from the very comprehensive standard suite of reports, KMBL provides customized reports to clients at various frequencies to enable clients to efficiently manage their securities portfolio, cash balances and take more informed investment decisions.
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Compliance Monitoring and Regulatory Reporting: KMBL would monitor compliance to existing guidelines by investors and facilitate reporting to regulators and local authorities on behalf of the client.
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Foreign Exchange Services: KMBL has a dedicated foreign exchange desk that takes care of client needs for currency conversions and risk management products. Proxy Services: KMBL would act on client instructions and participate and vote on their behalf in shareholders' meetings of companies.
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KOTAK MAHINDRA BANK Depository Receipts
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KMBL would coordinate with local custodians to ensure prompt receipt of underlying securities against cancelled depository receipts and report the same to clients on priority basis. DP Back office for Brokers KMBL manages the pay-in and pay-out of securities to / from clearing houses of Stock Exchanges on behalf of trading member brokers and does depository transfers of securities on behalf of trading members.
Escrow Accounts KMBL has expertise in customized solution for escrow arrangements. Foreign Direct Investment KMBL Custody facilitates in the following manner during FDI transactions undertaken by clients:
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Close co-ordination between company / counter-party and client for the date of transaction and movement of funds and shares on the transaction date. Compliance of transaction with regulations Follow-up with company for filing of necessary documents with regulators
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KMBL combines technology and a deep understanding of the investment process to transform data into information that our clients need to make investment decisions. KMBL provides one of its kind web enabled interface to its Custody Services clients. The web interface delivery system provides different types of information that clients need and in a manner that is most efficient. The web interface provides the following functionalities to its clients:
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Instruction input for market transactions Instruction input for voluntary corporate actions
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KOTAK MAHINDRA BANK
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D.T.S.S.college of commerce
Online generation of various standard reports and ad hoc reports
Kotak Bank maintains a strong commitment to the securities servicing business and technology plays a critical role in every thing they do. They invest extensively in the latest and most advanced technology solutions so they can in turn offer the most advanced solutions and the broadest range of value added services to our clients.
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Investment Options
The Scheme will be available in two options: a). Growth Option Under this option, there will be no distribution of income and the return to investors will be only by way of capital gains, if any, through redemption at applicable NAV of Units held by them. b). Dividend Option Under this option, the Trustee may distribute by way of dividend, the surplus by way of realised profit, dividends and interest, net of losses, expenses and taxes, if any, to Unit holders in the Dividend Option, if, in the opinion of the Trustee, such surplus is available and adequate for distribution. The Trustee’s decision with regard to such availability and adequacy of surplus, rate, timing and frequency of distribution shall be final. The dividend is paid to only those Unit holders whose names appear on the register of Unit holders of the Dividend Option on the record date, which will be announced in advance. The Unit holder in the Dividend Option will have the choice of receiving the dividend or having it reinvested. Dividend amounts will be reinvested in the Dividend Option at the Applicable NAV announced immediately following the record date. The dividend reinvested would be subject
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to lock-in period of three years, from the date of reinvestment. The NAVs of the above options will be different and separately declared; the portfolio of investments remaining the same. Please refer to sections on calculation of NAV for details. ? Investment Objective The investment objective of the scheme is to generate long term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. The Scheme’s performance will be measured against the benchmark S&P CNX 500.
? Services To Unit holders 1. Investor Services It is the endeavour of the Fund to provide consistently high quality service to its investors. This encompasses all interaction by the clients with the Fund. The Fund strives to upgrade the quality of services through implementation of technology and through ensuring quality consciousness amongst its service personnel and agencies associated with it. The Fund strives to provide a high degree of convenience for the investors’ dealings with itself and it is the constant endeavour of the Fund to increase this level of convenience. 2. Facilitating Enquiries and Transactions a) Investor Service Centres in important cities CAMS, which is the Registrar to the Fund, provides Investor Services through its ISCs. Unit holders’ enquiries and transactions during business hours are entertained at the ISCs at the addresses listed elsewhere in this Offer Document. b) Master Account
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KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
Unless otherwise requested by the Unit holder, one Master Account number is assigned for one entity investing in different Schemes of the Fund, provided while investing for a second time or any time thereafter, the Unit holder quotes his existing Account Number. In such a case, on specific request, one consolidated account statement is provided. c) Meeting in Person A responsible official of the Asset Management Company will be available every business day between 3.00 p.m. and 4.00 p.m. for a personal meeting with any Unit holder at the registered office of the AMC. The purpose of this facility is to discuss the investment needs of the client, address any queries on the Mutual Fund and to provide other services.
3. Finding Solutions to Problems The Fund will follow up with the Investor Service Centres and the Registrar on complaints and enquiries received from investors. The Fund will strive to speedily resolve investor complaints. 4. Unit holder Grievances Redressal Mechanism Investor grievances will normally be received at the AMC office or at any of the Investor Services Centre or directly by the Registrar. All grievances will then be forwarded to the
Registrar, if required, for necessary action. The complaints will closely be followed up with the Registrar to ensure timely redressal and prompt investor service.
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Deposits Service Provide By Bank
1). Savings Accounts A customer can choose the Account best suited to his needs the Savings Accounts are designed
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KOTAK MAHINDRA BANK
D.T.S.S.college of commerce
to ensure he receive the benefits of quick & convenient banking transactions along with options for his money to earn high returns. The savings account goes beyond the traditional role of savings, to provide you a range of services from funds transfer options to online payments of bills to attractive returns earned t hrough a comprehensive suite of investment options. Other Saving Accounts are :• • • • • •
Ace Savings Account Pro Savings AccountEdge Savings Account Nova Savings Account Classic Savings Account Easy Savings Account Corporate Salary Account
2). Current Accounts Accounts designed for small-mid size business or an enterprise Kotak Mahindra Bank offers a customer unparalleled advantages with its three Current Account offerings. Whether they have a small/ mid size business or an enterprise spread across multiple locations in the country, they would find a Current Account that's just designed for them. With features ranging from Free DDs, Free Cheque Collection, Free At -Par Cheque facility to Free Trading Account & free Demat Account, and more!
Other Current Accounts are:• • • • •
Neo Current Account Edge Current Account Pro Current Account Elite Current Account Ace Current Account
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KOTAK MAHINDRA BANK 3). Term Deposits
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Term Deposit with highly attractive interest rates Kotak Mahindra Bank brings you Term Deposit at highly attractive interest rates coupled with special facilities like Overdraft and Re-investment option. Other Term Deposite :• • • • •
Term Deposits Regular Term Deposits Senior Citizen Deposits Ace Deposits Tax Saving Deposits
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Safe Deposit Lockers
Be at peace when valuables are in lockers Kotak Mahindra Bank offers their customers Safe Deposit Locker facilities which can be utilized to safe keep their important documents, jewellery and other valuables.
Key Features
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Easy availability and access Convenient sizes
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Hassle-free payment Nomination for Safe deposit Lockers
Features & Benefits
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Easy availability and access plan totake visit and access locker on all working days during banking hours.
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KOTAK MAHINDRA BANK
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Convenient lockers that suit size, from a range of options - small, medium and large. Hassle-free payment one can set-up standing instructions on his Savings Account, to pay his annual locker rent. Our Locker Facility enables his to avail Locker in his home branch without the constraint of maintaining a linked deposit. He can also opt for Nomination facility.
1. Nomination facility is available to Individual/ Joint hirer/s of Safe Deposit Locker. 2. Nomination can be made in favour of only one individual. 3. Safe deposit lockers hired in the names of a minors, the nomination shall be made by the natural guardian/s or court appointed guardians. 4. In the event of the death of a locker-hirer/s for which there is a nomination on record the contents of the locker will be released to the nominee of the hirer, without insistence on a succession certificate or probate of the Will from the legal heirs of the deceased customer.
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Mahindra Bank Net banking
Kotak Mahindra bank is private nationalized bank. It has its branches in major cities of India. Advantages of net banking are very large in number. It will make their work easy to transfer money to others account etc. Kotak Mahindra Bank net banking will provide many facilities like online money transfer, online shopping etc. Net banking is possible due to the use of internet which has given this world many new changes in every field. It will save lot of time for them. He just need to fill Kotak Mahindra Bank net banking form with thier account number and facilities to need on their account and they will provide with Kotak Mahindra Bank net banking login username and password which he can change by customers self.
Services provided by Kotak Mahindra Bank Net banking:
• Check their balance through Kotak Mahindra Bank net banking login. • Check their statement of account through Kotak Mahindra Bank net banking. • Inquire about the status of their cheque. • Inquire about any information or get information on their account.
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• Get all the information about different schemes of the bank like fixed deposit, rate of
interest on saving, deposit.
• All the information is provided on the Kotak Mahindra Bank net banking form. • Get the demat account also with Kotak Mahindra Bank net banking. • Do their shopping online with the help of Kotak Mahindra Bank net banking login.
Kotak Mahindra Bank net banking forms available in the branch of bank. He can take this form fill it and avail all the services of net banking after he get the Kotak Mahindra Bank netbanking login on Kotak Mahindra Bank account. Net banking is available on all types of account.
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This rule is imposed by RBI (Reserve Bank of India). Some nominal charges after certain limit that is if transaction increases from 1 lakh he pay 2.50 INR per 1000 INR for this service to their bank. Maximum 20 INR is charged for the transaction not more than that.
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Kotak Mahindra Bank net banking log in ID is provided by the bank through confidential note. After filling the desired field in the Kotak Mahindra Bank net banking form he will be provided Kotak Mahindra Bank net banking. Kotak Mahindra Bank net banking form is easily available in all the branch of the bank. ?
Kotak Bill Pay
Bill Pay is a simple, secure, instant way of paying their utility bills, insurance premium, Direct Taxes, Visa Credit Card payments and much more. With AutoPay, he can schedule thier bills to be paid automatically. He can select an upper limit to be paid or even pay the entire bill amount. With the instant email and SMS alerts, he could keep track of their transactions, keeping you up to date on your bill payment status. He can even view their Bill and Payment History on Kotak Bill Pay. Reasons to Use BillPay
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Save Time - All your Bills paid in Minutes Pay off regular utility bills (telephone, electricity), mobile bills, insurance premiums etc. He can pay multiple bills in a single transaction using the 'Multiple Payments' option on Bill Pay.
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Schedule Regular Payment No need to remember due dates. Set Auto Pay to pay the bills automatically before the due date.
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Avoid Late Fees on your Credit Card Payment
Pay his domestic Visa Credit Cards bills absolutely free of cost!
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Instant Payments Anytime Use 'Instant Pay' to make instant payments for billers who accepts even partial or late payments for both registered and unregistered billers.
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Recharge He can now recharge their prepaid mobile and DTH account. Payment will get updated instantly. Receive alerts from Bank and also from mobile/DTH operator.
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Stay Updated with Email & SMS Alerts
Receive Email and SMS alerts for any biller addition/deletion, receipt of new bill, status of bill payments and even for AutoPay.
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KOTAK MAHINDRA BANK
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Paperless Bills
Get E-bills from registered billers in BillPay who electronically present bills to them. Against these presented bills, he can use the 'Pay Bill' option to make the payment or set Auto Pay to pay the bill automatically.
How to Start Using Kotak BillPay?
He can start using Kotak Bill Pay by login to Net Banking or calling up our 24-hour Customer Contact Centre or visiting the nearest Kotak Mahindra Bank branch. He can now even make the payments on Kotak Mobile Banking.
Follow these 6 simple steps to start using this facility on Net Banking. 1. Logon to their Kotak Net Banking account and click on 'Bill Pay' 2. To register a biller use 'Add Biller' 3. Enter the biller details and click 'Go' 4. On successful confirmation, his biller will send the bill electronically through Kotak Bill Pay 5. To set Auto Pay for registered billers, use the 'Set/Modify Auto Pay' option 6. Use the 'Instant Pay' option to make instant payments to billers which accept partial or late payments.
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Convinient Banking Service
1). ATM Network Customers constantly growing ATM network brings the bank within his easy reach. The ATM service is available to customers absolutely FREE Our strategically located and constantly growing ATM network brings the bank within their easy reach.
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The state of the art touch screen Kotak Mahindra Bank ATMs are part of the Visa/Plus and Cashnet ATM network. That means he can withdraw cash from his ATM Network with any International and Domestic Visa/Visa Electron/Plus Credit Cards/Debit Cards.
Key Features
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Access their account anytime anywhere State of the art Touch Screen ATMs Affiliated to the VISA network Access any ATM in the country absolutely free.
Services available
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24-hour access to cash Transfer funds between accounts View Account Balances and Mini Statement Pin Change option
2). Phone Banking 24hr customer service centre is at customers
service! At nearest Kotak Mahindra Bank branch is on customers phone. Bank have a 24hour Customer Contact Center to offer personalised service round the clock. Just pick up the phone and please call to 24-hour Customer Contact Center. Whether it is something as urgent as a stop payment or simply want to know thier balance just give us a call. his toll free number gives you access to their account, from anywhere... anytime. And what's more, this facility comes to absolutely free of cost!
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Key Features
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Quick and easy access from anywhere PIN based security Customer Care Officers available 24 x 7* Free Service
In addition to the existing services available over Phone Banking such as: In order to provide the convenience of carrying out most of their Banking transactions in just one call, we have added host of new services* and we are excited to bring them tocustomers.
These include:
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Enquire on thier account details - his balance, account activity, uncleared fund details and cheque status. Enquire on the latest interest and exchange rates. Request for fund transfer* betweenhis accounts at Kotak Mahindra Bank. Open a term deposit or get details of all their term deposits. Initiate standing instructions or place stop cheque payment instructions. Request a cheque book and account statements.
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Customers can give us financial instructions through thier Phone Banking service based on their account operating mandate, i.e. if they have a single or unconditional signing authority on their account, he can transact on their accounts through the phone.
Demat accountholders can avail of the following Services through Phone Banking
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Request for a Demat transaction or holding statement Enquire about their transaction or holding details Request for a Demat Instruction Slip booklet to be sent to customers
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Investment accountholders can avail of the following Services through Phone Banking
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Enquire on their account and transaction details Current NAV details of thier investments Request a statement of account Purchase and redeem investments online Check the status of your purchase and redemption requests Purchase / Redemption of Mutual Fund units Third Party Funds Transfer to other accounts within our Bank** Registration for Mobile Banking / Net Banking
CHAPTER 3. PRODUCTS OFFERED BY KOTAK MAHINDRA BANK
Kotak Mahindra Bank has extended its initial purpose of venturing into agricultural finance to meet RBI regulations by servicing banking customers with a range of solutions. Primarily started to provide banking services to customers involved both directly and indirectly in the agricultural sector or its allied activities, Agri Business Group identified suitable products to meet the needs of niche activities in the sector as a whole. By ensuring lower default rates and other such business centric aspects, the group has seen growth even in its priority sector lending a activities.
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3.1) Agri Corporate
Trade Finance:- Enjoy the perks of an efficient Transaction Banking system with Agri Business
Group. Our customized market information system (MIS) Trade Finance Meeting or day-
to-day business finances .Whether are exporter or importer, our trade finance solutions can add real value to your business: 1. Letters of Credit 2. Bank Guarantees 3. Collections
4. Remittances 5. Forward Contracts 6. Packing Credit 7. Post Shipment Finance 8. Invoice Discounting 9. Trade Advisory Services Structured Finance:- Managing cash flows with structured financial solutions. Customers can understand the challenges and complexities faced by corporations in managing cash flows. his solutions provide for the efficient management of cash flows, bridge cash flow mismatches and ensure enhanced returns/cost savings for the corporation. We can structure tailor-made solutions around specific cash flow streams and cash accruing assets to meet individual financial requirements. 1. Term Loans 2. Dealer finance 3. Supplier finance
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Working Capital Facilities:- Financing short term transactional finance needs With Agri Business Group, he can prepare for thier day to day business finance needs or as forecasted over fixed periods of time. Meet thier working capital needs with cash credit or loans. He can also schedule term finance to meet his supplier payments, upgrade machinery or other known costs across a long term with adequate planning. Customers can plan his finances and save on interest costs by optimizing cost allocation based on their payouts and receivables. 1. Cash credit 2. Overdraft 3. Working Capital Demand Loan 4. Working Capital Term Loan 5. Buyers credit 6. Letters of credit
7. Export packing credit 8. Securitization of receivables 9. Funding against warehouse receipts
3.2) Agri SMEs
Working Capital Finance Preparing to meet their seasonal business costs. The seasonal nature of the agricultural business leaves scope for unpredictability and requires a flexible financial solution. Agri Business Group helps them meet the challenges faced due to the seasonal nature of Agri businesses. The working capital solutions offered by Agri Business Group have been developed based on the financial and qualitative evaluation of specific businesses and working capital needs. The
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structure of working capital finance can be made either through cash credit or through loans. he can also avail of our working capital solutions as a multiple banking arrangement or as a sole banker. How working capital finance can be used 1. Short term supplier payments 2. To manage cash flow mismatches 3. Season dependent financial needs The range of products offered as working capital finance to 1. Cash credit 2. Overdraft
3. Short term loan 4. Working capital demand loan 5. Bill discounting / invoice discounting Project Finance (term loans)
Now receive long term financing for any land based Agriculture or allied activity from Agri Business Group. He can benefit from our Funding activities for long ter
m agricultural projects. Now receive long term financing for any land based Agriculture or allied activity from Kotak Mahindra Bank Agri Business Group. He can benefit from our innovative approach of developing financial solutions for each project based on in-depth analysis of the business need and growth objective. What type of agri projects do their finance 1. Financing for Land-based projects such as Horticulture, floriculture, vermiculture, cultivation of medicinal plants, mushroom cultivation, tissue culture, sericulture 2. Funding for other land related activities like farm mechanization, minor irrigation, crop loans, land development
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3. Allied Agri projects related to poultry, dairy, piggery, fishery, mushroom units, beekeeping 4. Finances for construction of rural godowns and cold storages A customer can receive funding for development of new projects backed by experienced promoters or also apply for a takeover or refinancing of partly/fully developed projects subject to terms. The range of products available under agri project finance includes: 1. Terms Loans 2. Dealer Finance 3. Supplier Finance 4. Business Loans to Promoters
Funding Against Warehouse Receipts
Agri Business Group extends farmers, traders, processors and aggregators in the agricultural sector Raise cash against thier warehoused commodities Agri Business
Group extends farmers, traders, processors and aggregators in the agricultural sector finance against their agri produce or commodity stocks by pledge of warehouse receipts.He can receive credit upto 80% amount for the agricultural commodity being warehoused as a security against the loan taken to meet their business needs. Ifhe trade in any of the commodities listed here, he can avail of funding from us based on location and other terms and conditions specified by the Bank. 1. Guarseed 2. Guargum 3. Wheat 4. Soybean 5. Black Pepper 6. Jeera
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KOTAK MAHINDRA BANK 7. Maize 8. Castorseed 9. Paddy (Approved varieties) 10. Rice (Approved varieties) 11. Cotton seed 12.
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3.3) Personal Loan
No matter what their financial needs are, our personal loans help to fulfill them his Personal Loans help to make a difference in thier life. No matter what their financial needs are unexpected expenses, school fees, wedding in the family, home improvement or that long awaited vacation. Whatever the occasion, his range of Personal Loans can help. The procedure is simple, documentation is minimal and approval is quick.
Key Features
• • •
Avail loans from Rs.50,000-50 lakh* Quick Approval & hassle-free processing Minimal paperwork
Features & Benefits
•
Avail loans from Rs.50,000 - 50 lakh*: customers can avail of a loan from Rs.50,000 - 50 lakh* for any purpose based on their income and repayment capacity and fulfill all your financial needs.
•
Quick approval: With a Kotak Mahindra Bank Personal Loan, he cannot far away from making customers dreams come true. In as less as 72 hours you can turn his dreams into reality.
3.4) Home Loan
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At Kotak Mahindra Bank, offer highly customized facilities of availing home loans. Importantly, appoint a dedicated manager who takes customers through the entire process, starting with the filling in of the application forms and culminating in the loan disbursement process. This otherwise seemingly difficult process is made simpler and more convenient for the customer. Sometimes, customers are unable to spare that extra time from their hectic schedules, and the Bank Doorstep Service makes the home buying process seamless and pleasurable. A relationship that is happy from the start is extended through the attention the customer gets through his loan repayment tenure and beyond. Customers believe that in order to succeed, He need to offer not only competitive products, but also the best possible service and value-added features and benefits. In a market where
the basic product is largely similar, the differentiator is our ability to understand the customer's need. completely and structure the value-adds appropriately. It is with this thought in mind that we innovate constantly, based on our interaction with the customer. Key Features
• • •
High Eligibility for Businessmen Doorstep Service\ Attractive Interest Rates
Features & Benefits The key advantages of Kotak Mahindra Bank Home Loans are:
• • •
High Eligibility for Businessmen Doorstep Service Attractive Interest Rates
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3.5) Business Loan
When customers are planning to grow thier business, it makes sense to talk to the experts. Kotak Mahindra Bank presents Business Loans Solutions - the single expert source for all thier financial needs. Customers are well suited and experienced in understanding thier business requirements as we have helped a lot of our clients grow their businesses, across various industries. So, if customers want to diversify thier business, fund thier next project, or take a personal loan, hecan now do it without disturbing his investments or taking multiple loans. With personalized solutions and service, we ensure it's all you need to make thier business dreams come true.
Key Features
• • •
Avail loans from Rs.1,00,000 - 75 lakh* Quick Approval & hassle-free processing Minimal paperwork
Features & Benefits
• • •
Avail loans from Rs. 1,00,000 - 75 lakh* Quick Approval & hassle-free processing Minimal paperwork
Who Can Apply
• • •
Self Employed Businessmen with an Annual Turnover of Rs. 2 Crores. Manufacturers with an Annual Turnover of Rs. 1 Crore. Service Providers with an Annual Turnover of Rs. 50 Lakhs.
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3.6) Private Equity Investment Strategy
KPEG's investment objective is to achieve long term capital appreciation through investments in privately negotiated equity and equity-related investments in growth oriented emerging corporates and mid-size enterprises for business expansions, acquisition financing, and buyout transactions. thier private equity investment strategy also involves selectively investing in start ups promoted by strong management teams and in certain cases listed companies as well. Our emphasis is on supporting talented entrepreneurs seeking exceptional growth opportunities and long term value creation. These opportunities may be found in recognized growth industries, emerging sectors (sunrise industries), consolidation play in fragmented industries and niche opportunities segmented by technology or delivery systems. In all cases, the nature and growth potential of the business opportunity is of fundamental importance to the investment decision. Customers private equity investment strategy involves seeking:•
A management team that demonstrates passion and the hunger/drive to create a world class enterprise; a team that brings in both credibility and capability and has a proven track record
•
A company with strong intellectual property, technology or a well differentiated market positioning A well articulated business plan coupled with strong execution skills that would give the company a sustainable competitive advantage
•
3.7) Kotak Gold Eternity
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Customer have years of experience helping people invest Kotak Mahindra Bank brings their Gold eternity, 24 Carat pure gold coins and bars, carrying a 99.99% Assay Certification, signifying the hiest level of purityas per international standards.
•
Manufactured in Switzerland by PAMP, one of the world's premier gold refiners and a brand recognized world wide as a guarantee of excellence and quality Certified by one of the top assayers in the world Tamper proof packaging to ensure the purity of the gold bar Unique number on every certicard, with records maintained in Switzerland Competitive pricing based on daily pricing in the international bullion market
• • • •
Kotak Gold Eternity come in varied denominations. Customers can choose from a range of coins and bars in 5gm, 8gm, 20gm, 50 gm and 100 gm.
Key Features
• •
24 carat pure gold coins and bars carrying a 99.99% Assay Certification Unique number on every certicard, with records maintained in Switzerland
Gold as an Investment
Gold is the oldest currency in the world and is coveted across continents and cultures for a variety of reasons.
•
Maintains long term value:- Market cycles have their ups and downs, but gold has maintained its long-term value. Paper currencies may rise and fall but gold always endures. Gold has demonstrated its capacity to store value for centuries
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Safe refuge:- During times of calamities like war or economic crisis, there may be a negative effect on investments like currencies, bonds and equities, but may have an
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opposite effect on the value of gold. Also gold is not a liability of any government or corporation and hence it does not run a risk of becoming worthless due to unexpected events.
•
Inflation Hedge:- The value of gold, in terms of real goods and services that it can buy, has remained remarkably stable whereas the purchasing power of many currencies has generally declined
CHAPTER 4. WORKING CAPITAL MANAGEMENT OF KOTAK MAHINDRA BANK
4.1) Introduction
Working Capital management is the management of assets that are current in nature. Current assets, by accounting definition are the assets normally converted in to cash in a period of one year. Hence working capital management can be considered as the management of cash, market securities receivable, inventories and current liabilities. In fact, the management of current assets is similar to that of fixed assets the sense that is both in cases the firm analyses their effect on its profitability and risk factors, hence they differ on three major aspects: 1. In managing fixed assets, time is an important factor discounting and compounding aspects of time play an important role in capital budgeting and a minor part in the management of current assets.
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The large holdings of current assets, especially cash, may strengthen the firm’s liquidity position, but is bound to reduce profitability of the firm as ideal car yield nothing.
3.
The level of fixed assets as well as current assets depends upon the expected sales, but it is only current assets that add fluctuation in the short run to a business.
To understand working capital better we should have basic knowledge about the various aspects of working capital. To start with, there are two concepts of working capital: ? Gross Working Capital ? Net working Capital
4.2) Gross Working Capital
Gross working capital, which is also simply known as working capital, refers to the firm’s investment in current assets: Another aspect of gross working capital points out the need of arranging funds to finance the current assets. The gross working capital concept focuses attention on two aspects of current assets management, firstly optimum investment in current assets and secondly in financing the current assets. These two aspects will help in remaining away from the two danger points of excessive or inadequate investment in current assets. Whenever a need of working capital funds arises due to increase in level of business activity or for any other reason the arrangement should be made quickly, and similarly if some surpluses are available, they should not be allowed to lie ideal but should be put to some effective use.
4.3) Net Working Capital
The term net working capital refers to the difference between the current assets and current liabilities. Net working capital can be positive as well as negative. Positive working capital refers to the situation where current assets exceed current liabilities and negative
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working capital refers to the situation where current liabilities exceed current assets. The net working capital helps in comparing the liquidity of the same firm over time. For purposes of the working capital management, therefore Working Capital can be said to measure the liquidity of the firm. In other words, the goal of working capital management is to manage the current assets and liabilities in such a way that a acceptable level of net working capital is maintained.
4.4) Importance of Working Capital Management
Management of working capital is very much important for the success of the business. It has been emphasized that a business should maintain sound working capital position and also that there should not be an excessive level of investment in the working capital components. As pointed out by Ralph Kennedy and Stewart MC Muller, the
inadequacy or mis-management of working capital is one of a few leading causes of business failure.
1. Size of business: It is another important factor in determining the working capital
requirements of a business. Size is usually measured in terms of scale of operating cycle. The amount of working capital needed is directly proportional to the scale of operating cycle i.e. the larger the scale of operating cycle the large will be the amount working capital and vice versa.
2. Business Fluctuations: Most business experience cyclical and seasonal fluctuations in
demand for their goods and services. These fluctuations affect the business with respect to working capital because during the time of boom, due to an increase in business activity the amount of working capital requirement increases and the reverse is true in the case of recession. Financial arrangement for seasonal working capital requirements are to be made in advance.
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3. Production Policy: As stated above, every business has to cope with different types of
fluctuations. Hence it is but obvious that production policy has to be planned well in advance with respect to fluctuation. No two companies can have similar production policy in all respects because it depends upon the circumstances of an individual company.
4.5) Circulation System Of Working Capital
In the beginning the funds are obtained by issuing shares, often supplemented by long term borrowings. Much of these collected funds are used in purchasing fixed assets and remaining funds are used for day to day operation as pay for raw material, wages overhead expenses. After this finished goods are ready for sale and by selling the finished goods either account receivable are created and cash is received. In this process profit is earned.
This account of profit is used for paying taxes, dividend and the balance is ploughed in the business. Working capital is considered to efficiently circulate when it turns over quickly. As circulation increases, the investment in current assets will decrease. Current assets turnover
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CHAPTER 5. RISK MANAGEMENT OF KOTAK MAHINDRA BANK
5.1) Credit Risk
Securities carry a Credit risk of repayment of principal or interest by the borrower. This risk depends on micro-economic factors such as financial soundness and ability of the borrower as also macro economic factors such as Industry performance, Competition from Imports, Competitiveness of Exports, Input costs, Trade barriers, Favourability of Foreign Currency conversion rates, etc. Credit risks of most issuers of Debt securities are rated by Independent and professionally run rating agencies. Ratings of Credit issued by these agencies typically range from “AAA”(read as “Triple A” denoting “Highest Safety”) to “D” (denoting “Default”), with about 6 distinct ratings between the two extremes. The highest credit rating (i.e. lowest credit risk) commands a low yield for the borrower. Conversely, the lowest credit rated borrower can raise funds at a relatively higher cost. On account of a higher
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credit risk for lower rated borrowers lenders prefer higher rated instruments further justifying the lower yields.
5.2) Sovereign risk
The Federal Government of a country (i.e. Central Govt. in case of India) is the issuer of the local currency in that country. The Government raises money to meet its Capital and Revenue expenditure by issuing Debt or Discounted Securities. Since payment of interest and principal amount has a sovereign status implying no default, such securities are known as securities with sovereign credit. For domestic borrowers and lenders, the credit risk on such Sovereign credit is near zero and is popularly known as “riskfree security” or “Zero-Risk security”. Thus Zero-Risk is the lowest risk, even lower than a security with “AAA” rating and hence commands a yield, which is lower than a yield on “AAA” security.
5.3) Price-Risk or Interest-Rate Risk
From the perspective of coupon rates, Debt securities can be classified in two categories, i.e., Fixed Income bearing Securities and Floating Rate Securities. In Fixed Income Bearing Securities, the Coupon rate is determined at the time of investment and paid/received at the predetermined frequency. In the Floating Rate Securities, on the other hand, the coupon rate changes – ‘floats’ – with the underlying benchmark rate, e.g., MIBOR, 1 yr. Treasury Bill. Fixed Income Securities (such as Government Securities, bonds, debentures and money market instruments) where a fixed return is offered, run price-risk. Generally, when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the prices is a function of the existing coupon, the payment frequency of such coupon, days to maturity and the increase or decrease in the level of interest rates. The prices of Government Securities (existing and new) will be influenced only by movement in interest rates in the financial system. nWhereas, in the case of corporate or institutional fixed income securities, such as bonds or debentures, prices are influenced not
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only by the change in interest rates but also by creditrating of the security and liquidity thereof. The following table indicates the likely impact of interest rate changes on prices of Government Securities. It will be seen that if interest rate rises by 1%, the prices of Government Securities fall in the range of 0.49% and 7.01% of the prices. On the other hand, if the interest rate declines by 1%, the prices rise in the range of 0.49% to 7.68% for respective maturities shown in the table.
5.4 ) Risk of Rating Migration
The following table illustrates the impact of change of rating (credit worthiness) on the price of a hypothetical AA ratedsecurity with a maturity period of 3 years, a coupon of 7.00%and a market value of Rs. 100. If it is downgraded to A category, which commands a market yield of, say, 8.00%, its market value would drop to Rs. 97.42 (i.e. by 2.58%). If the security is up-graded to AAA category which commands a market yield of, say, 6.00% its market value would increase to Rs. 102.67 (i.e. by 2.67%). The figures shown in the table are only indicative and are intended to demonstrate how the price of a security can be affected by change in credit rating. Rating Yield Market Value AA 7.00% 100.00 If upgraded to AAA 6.00% 102.67 If downgraded to A 8.00% 97.42
5.5) Basis Risk
During the life of floating rate security or a swap the underlying benchmark index may become less active and may not capture the actual movement in the interest rates or at times the benchmark may cease to exist. These types of events may result in loss of value in the portfolio.
5.6) Spread Risk
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In a floating rate security the coupon is expressed in terms of a spread or mark up over the benchmark rate. However depending upon the market conditions the spreads may move adversely or favourably leading to fluctuation in NAV.
5.7) Reinvestment Risk
Investments in fixed income securities may carry reinvestment risk as interest rates prevailing on the interest or maturity due dates may differ from the original coupon of the bond. Consequently the proceeds may get invested at a lower rate.
5.8) Currency Risk
Should the Schemes be permitted to invest in offshore securities, such investments run currency risk in addition to other risks faced by the investments, investments made in US
dollar or any other foreign currency denominated securities may lose in value if the Indian rupee appreciates with respect to the foreign currency or gain in value if the Indian rupee depreciates.
5.9) Liquidity Risk
The corporate debt market is relatively illiquid vis-a-vis the government securities market. There could therefore be difficulties in exiting from corporate bonds in times of uncertainties. Liquidity in the scheme therefore may suffer. Even though the Government Securities market is more liquid compared to that of other debt instruments, on occasions, there could be difficulties in transacting in the market due to extreme volatility or unusual constriction in market volumes or on occasions when an unusually large transaction has to be put through. Liquidity of the Scheme may suffer if the guidelines issued by RBI for dedicated Gilts Funds undergo adverse changes..
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CHAPTER 6. EVALUATION OF KOTAK MASHINDRA BANK
Kotak Bank added over half a million new customer this year across core banking products of saving and checking accounts, term deposits, overdraft and Non Resident Accounts. Kotak Bank maintained its ambition of becoming a bank of choice for the small and mid segment business enterprises and doubled the base of customers engaging in trade and foreign currency transactions. Lots of path breaking initiatives were rolled out for NIRs. Many alliances were signed with leading exchange houses across Gulf countries to provide channels for attracting inward remittances. Through the strategic partnership with OIFC(Overseas India Facilitation Center). Kotak Bank participated in 3 global meets in Dubai, London and Birmingham which has firmly established Kotak Bank as a key service provider with NRI community. This alliance further helped Bank to engage another 30 sub-alliance enabling the growth in business through NRIs. Kotak Bank also reached out to a larger canvass of NRI customer by launching
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a variant to saving account targeted for the mid-income segment, P.O. Box facility in USA & UK. Kotak Bank launched a new remittance solution under the brand name Click to remit. This is a multi currency platform and customers can send money into India from anywhere in world in8 different currencies. Kotak Bank also launched a credit card for the NRI customers and started the Home Loan product for NRIs in select markets. To provide higher convenience to the NRI customer your Bank launched a unique service called click2call & SMS2Call wherein the Bank calls back the customer within 30 minutes of receiving the intimation. Kotak Bank focused on the online space including social media engagement through a partner portal called NRI matters.com, NRI power podium campaign which got 13000 NRI signup in one month and found its way into India Book of records. The number of hits on the NRI website today stands at 150000 per month, up from 2000 per month last year. Kotak Bank implemented several initiatives aimed towards enhancing customer services and widening the product/service bouquet. Some of the key ones being
•
Annual combined Statement on net banking. Customers can now view and download their Annual combined statement for saving and current account, investment and Demat
•
holdings for the previous financial year. This help customers to file tax Returns, apply for loan etc. Card protection plan-Kotak Bank in association with CPP Assistant Service Pvt. Ltd. Offers card protection to protect all kotak customers card (Credit, Debit, ATM etc.) against loss and resultant fraud.
•
•
Multilingual ATMs-Multilingual (English, Hindi and Marathi) on all ATMs in Maharashtra has gone live. Other regional languages will get covered during the course of next fiscal year
•
Recharge Service – This enables customer to recharge their pre-paid mobile and DTH services through Kotak Net Banking using Kotak Bill pay. Statement registration on Net Banking – customers now have the option to register for their preferred statement frequencies and mode option on Net Banking.
•
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Kotak Bank has also to participate in the eco drive. An E-statement campaign was run through the year aiming to convert the customer who have registered for monthly physical statement & quarterly physical statement to registered for monthly E-statements with the theme of ‘Save Trees, Save the environment ! Say no to Physical Statements’.
•
Inter Bank mobile payment Service-This feature allows customer to transfer money instantly through mobile phone within own accounts & third party accounts within the IMPS member banks.
•
Kotak Stock Ace- This is loan (overdraft) against securities product. Under this product Kotak Bank provides an overdraft to customers against equity shares and mutual fund.
The last year saw several regulatory changes in the third party investment and insurance products space. While these regulatory interventions put a significant amount of revenue pressure Kotak Bank recognize the opportunity to create a well differentiated business if it is able to create a more robust platform to advice its customer. Hence significant focus was put to creating processes with an objective to bring maximum transparency in the Bank’s sales process of these product and to bring more internal accountability to ensure appropriateness of sales as per customer suitability and risk profile. Kotak Bank believes that its customer
will benefit from such stringent internal standards and in the long run it will be able to build a sustainable and robust business model around these processes.
Kotak Bank has always focused on its employees as the key to building a sustainable franchise and has in the past won several awards as one of the best employers. Continuing with this emphasis Kotak Bank launched an E-Learning platform for employees which again
won accolades in the IBA Technology Awards. This platform enabled Kotak Bank to introduce courses in real time. It also has features of individual learning plans, chat facilities to enable trainers and trainees to interact online, video streaming facility, online completion status tracking, etc. Kotak Bank believes this will improve the quality of training input and will result in raising the service standards. Kotak Bank took definitive steps towards risk control. These include set up of- N Vigil (Internal Cameras) in all the ATMs. This will ensure that the Bank has images of the customer who did the transaction at all times and can also facilitate during fraud investigation
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or customer contains. A dedicated risk Containment Unit has been put in place to do pre-onboarding checks and transaction level checks to ensure conformity to AML guidelines and fraud prevention etc. Kotak Bank continued its in-depth coverage and servicing of large and mid market corporate clients during the year. Kotak Bank was able to build significant franchise with many well known, reputed large corporate groups during this year while focusing on deepening existing clients through an array of customized and regular product offering. Keeping in with the strong underlying economic growth. Kotak Bank was able to tap this opportunity and increase its share of business by offering a variety of product and services. Kotak Bank added 160 new cash management service customer during the year by offering them technology driven working capital cycle enhancement & efficiency solution to effectively enrich and optimize their cash flows and liquidity through an entire suite of CMS products and services. This has been made possible through constant innovation. Continuous feedback sessions and a high degree of customization to cater to the dynamic and evolving industry scenario.
The commercial Vehicle and infrastructure sector continued the growth momentum through the year aided by the positive IIP (Index of Industrial Production) and Agriculture growth numbers. Commercial Vehicle operator margins improved as a result of higher freight realization, which offset the increase in diesel cost. The growth in the core sector and focus
on infrastructure led to a healthy growth in the order book position of contractor in the infrastructure space. As a result, disbursement numbers touched record levels as did the bottom line. The year also saw good growth in bank lines in both the sectors. However the impact of the growing economy and increasing purchasing power of the rural population has meant a steep rise in prices of all agro commodities. Riding this boom the Agro Business of Kotak Bank has shown a robust growth with the total portfolio a slated to cross Rs, 4300crore this year, up from last year’s portfolio of Rs, 3200crore. This is a growth of 35% year-on-year. Kotak Bank also ensured to reach the targeted norms for lending to the agro sector as laid out by the regulator for the second year running. The Agro business has also become the corner stone for Kotak bank’s targets for meeting financial inclusion and lending to the weaker sections of the society such as small and
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marginal farmers, Village artisans and other socially deprived sectors identified by the government. These advances now have crossed a level of 8% of Kotak Bank’s total advances. Kotak Bank is in the process of identifying more target segments in this sector to reach out to. In the home finance business while there was strong growth in first half of the year, the second half of the year saw stabilization and slight drop in demand from customers. Kotak Bank introduced innovative new products during the year such as part tenure fixed home loans and loan against property. Kotak Bank branches continued to play an important part evolved into a stable contributor month on month. There was an increased focus on existing Bank customers and their contribution among the secured asset products went up. The personal Finance business saw good growth and established Kotak Bank as one of the leading lenders of unsecured loans in the market. High-ticket products continued to be the focus and were the biggest contributor to the overall volumes. The personal Finance business also added new products to their existing bouquet of financial services for businessman. Working capital products in Rs, 50lacs to Rs, 1.5crore range(both fund based as well as nonfund based)were some of the new offerings. Kotak Bank resolved several NPA accounts
pertaining to stressed assets acquisition. Supreme Court upheld the NPA assignment between banks and other financial institutions. The landmark judgment will further help in resolving several NPA accounts, which were litigated in several courts for the past few years. The NPA portfolio sale by banks continued to be sluggish and serious pricing mismatch between the buyers and sellers continued, this year as well.
Kotak Bank continued to invest in large single assets transactions. with good prospect of turnaround in stressed companies. Further, Kotak Bank has diversified in buying large retail NPA loans from other banks. During the year, Kotak bank saw a robust growth in its overall advances portfolio. This was primarily driven by the overall growth of the corporate sector, spurred by strong domestic consumption demand for their products post the recessionary period. A robust NPA management practice and strong internal controls, aided by a strong economic growth, has led to a reduction in Kotak Bank’s gross/net NPAs On treasury side, Kotak bank has an active proprietary desk trading in all products such as Fixed income, Money Market, Derivatives, Foreign Exchange and bullion. The Treasury
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plays an important role in balance sheet management and implementation of funds Transfer price between various business units. In the area of Debt Capital Market (DCM) Kotak bank offered the following products; syndication of loans, bonds, mezzanine financing, promoter funding and acquisition financing and securitization. During the year, Kotak bank’s Treasury started Correspondent Banking Division to build and leverage on relationships offshore banks for improving quality and international reach for its customers. Kotak Bank credit card business has issued 1.5 lac cards and is in its third year of operations. The card design and product benefits have received overwhelming response from customers. The customer spends across all variants of cards have been amongst the top there in industry. The premium range of our products-VISA Platinum and VISA signature have driven the Spends growth in the portfolio and it contributes to34% of the Spends while accounting for 12% of customer base. This has reaffirmed the customer acceptability of the product. Credit Card business clocked Rs, 600crore of total spends in the year with a book size of Rs, 300crore. Industry Credit Cards Spends has shown sign of growth after last year’s recessionary economic conditions.
Kotak Bank entered into a strategic arrangement with PVR cinemas, one of the elite name in entertainment industry. To distribute credit card products aimed at up market customers. This partnership opens up the opportunity to new customer segment hitherto untapped by Kotak Bank.
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CONCLUSION
Kotak Mahindra Bank is worlds famous financial institute. Kotak Mahindra Bank is one of India's leading financial private banking institutions. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a private financial institution to a bank The bank stand alone had around 11,000 employees as of 31stMarch 2011. 102 employees employed throughout the year and 23 employees employed for part of the year were in receipt of remuneration of Rs, 60 lacs or more per annum.Kotak Bank was adjudged amongst Top 25 in India’s Best Companies to work for in 2010
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BIBLIOGRAPHY/REFERENCE
? AUDITORS REPORT :• Kotak Bank Auditors Report 2010-2011
? NEWSPAPERS:• • • The Times Of India Hindustan Times The Indian Express
?
WEBLOGRAPHY:•
Www.Google.Com Www.Investopedia.Com Www.Soople.Com
• •
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EXECUTIVE SUMMARY
Kotak Mahindra Bank is one of India's leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a Private Financial Institution to a Bank The Bank stand alone had around 11,000 employees as of 31stMarch 2011. 102 employees employed throughout the year and 23 employees employed for part of the year were in receipt of remuneration of Rs, 60 lacs or more per annum
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CHAPTER 1. REASEARCH METHODOLOGY
? DATA SOURCES
There are two types of data:-
•
Primary Data,
The data that is collected first hand by someone specifically for the purpose of facilitating the study is known as primary data. Secondary data is the data which is published.
•
Secondary Data.
For the purpose of this project Secondary data like brochures, web site of the company, magazines, newspaper, journals etc. were used.
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CHAPTER 2. INTRODUCTION, HISTORY & SERVICE OF KOTAK MAHINDRA BANK
2.1) Introduction
Kotak Mahindra Bank is one of India's leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a private financial institution to a bank The Bank stand alone had around 11,000 employees as of 31stMarch 2011. 102 employees employed throughout the year and 23 employees employed for part of the year were in receipt of remuneration of Rs,60 lacs or more per annum. Kotak Bank was adjudged amongst top 25 in India’s Best Companies to work for in 2010 and continues to be amongst top 25 Best Employees in India consistently from 2007 till date as adjudged by the AON Hewitt Best Employers Survey.
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2.2) History of Kotak Mahindra Bank
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that’s when the company changed its name to Kotak Mahindra Finance Limited. Since then it’s been a steady and confident journey to growth and success. 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market 1990 The Auto Finance division is started 1991 The Investment Banking Division is started. Takes over FICOM, one of India’s largest financial retail marketing networks 1992 Enters the Funds Syndication sector 1995 Brokerage and Distribution businesses incorporated into a separate company – Kotak Securities. Investment Banking division incorporated into a separate company-Kotak Mahindra Capital Company 1996 The Auto Finance Business is hived off into a separate company – Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The
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launch of Matrix Information Services Limited marks the Group’s entry into information distribution. 1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company. 2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. Kotak Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.
2001 Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra Finance Ltd. converts to a commercial bank – the first Indian company to do so. 2004 Launches India Growth Fund, a private equity fund. 2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund 2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities
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2.3) Services Provided by Kotak Mahindra Bank
The services of Kotak Mahindra Bank are wide spread. It's banking sector acts as a central platform for customer relationships across the entire Kotak Mahindra group's various businesses. The bank marks its presence in the commercial vehicles, retail finance, corporate banking and treasury and housing finance segments. It offers several facilities like personal banking, commercial banking, insurance and investment banking. Apart from traditional facilities like deposits accounts, savings account, current account, term deposits, personal loans, home loans the bank has spread its wing in the investment services by providing its customer facilities like Demat, mutual fund and insurance. The bank has also oprated for net banking, mobile banking and phone banking for convenience of its customers. ?
Kotak MahindraBank:- Branches and Business
Within a small span of 6 years, the bank has spread it wings in several sphere of finances. Presently, spread in 82 cities in India, the bank caters to the needs of its 5.9 million customers spread throughout the length and breadth of country and even abroad. By the end of FY 2007-2008, the Kotak Mahindra Bank had about 178 branches spread all over the country and it plans to Add some more branches by the end of FY 2010.
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Portfolio-Management Services (Page 6)
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Let Kotak Portfolio Management Experts manage customers investment portfolio and make sizable returns based on professional advice and sound investing in equities and more. Backed by extensive research and in depth analysis, Kotak Portfolio Management is equipped to tackle the unpredictable nature of the market with adequate safety. In the end it boils down to make the right move in the right direction at the right time. That’s where the expert comes in. Kotak Bank measures to success through the success of their clients. Whatever be their requirements, kotak Bank tailor customers portfolio to their specific investment need. At the very base of a financially sound portfolio lies the identification of one’s investment objective.
Kotak Bank helps you identify your investment objectives and also outline important requirements like liquidity, capital appreciation, current income, time span and fiscal implications and then suggest an appropriate scheme. Facts on Kotak Portfolio Management Services 1. One of India’s oldest and largest portfolio management companies 2. Over a decade of experience
3. Assets Under Management (AUM) of over Rs. 3300 Crores
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Benefits of Kotak Portfolio Management Services
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Get personalized portfolio management advice An Investment Relationship Manager
will ensure that their receive all the services related to your investment needs.
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Keep up with portfolio online or on call A dedicated website and a customer service desk
allows you to keep a tab on your portfolio’s performance.
•
Entrust portfolio to experienced professionals An experienced team of portfolio
managers ensure your portfolio is tracked, monitored and optimised at all times.
•
Rely on the experts for portfolio managemen
A customers portfolio is tailored after a thorough research backed by the expertise from the Kotak Securities Research team.
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KOTAK MAHINDRA BANK
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Check financial statements in inbox The personalised service also translates into zero paper
work and all financial statements will be e-mailed.
Custody Services
Kotak Group, a premier financial services provider and one of the leading private sector banks in India, proudly launches Custody Services as part of its diversified services portfolio in capital markets industry. A dedicated team of experienced professionals and emphasis on the latest state of the art technologies have culminated in Kotak Group being at the forefront of financial products and services in Indian capital markets. Custody Services, the latest offering from Kotak Mahindra Bank, provides a bouquet of tailor made solutions for overseas
and domestic investors. The Custody Services division at Kotak Mahindra Bank Ltd., (KMBL) is committed to delivering top of the line securities services to institutional investors, both foreign and domestic, that would be investing in the Indian capital markets across debt and equity instruments, derivatives, Depository Receipts and mutual fund units. A dedicated Account Manager would partner clients to help leverage our services and professional expertise that would best meet our clients' needs. Key Features
• • • • • •
Custody and Settlement Services Depository Receipts Broker Back office Escrow Accounts Foreign Direct Investment Internet Interface for Clients
Custody And Settlement Services
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Account Opening: Kotak Mahindra Bank would assist clients for the custody account opening documentation requirements and facilitate clients during the SEBI registration process These would include:1. Clarification on existing guidelines
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2. Providing assistance during the application process including vetting of application forms 3. Liaison with SEBI and feedback to client on application status
•
Transaction Settlement: As a Clearing Member with the clearing houses of leading Indian Stock Exchanges (NSE & BSE), KMBL performs clearing and settlement of cash and securities on behalf of clients.
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Securities Safekeeping: Provides safekeeping services for securities held - both in electronic as well as physical forms Corporate Actions: KMBL custody tracks for corporate actions and does corporate actions processing for both voluntary and involuntary events on behalf of its clients. This involves application made to issuers on behalf of clients, income collection and following-up for corporate action events like dividend, interest, redemption, bonus, rights, etc.
•
•
Standardized and Customized Reporting: Investors need meaningful information that offers insight to their investment portfolios. Apart from the very comprehensive standard suite of reports, KMBL provides customized reports to clients at various frequencies to enable clients to efficiently manage their securities portfolio, cash balances and take more informed investment decisions.
•
Compliance Monitoring and Regulatory Reporting: KMBL would monitor compliance to existing guidelines by investors and facilitate reporting to regulators and local authorities on behalf of the client.
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Foreign Exchange Services: KMBL has a dedicated foreign exchange desk that takes care of client needs for currency conversions and risk management products. Proxy Services: KMBL would act on client instructions and participate and vote on their behalf in shareholders' meetings of companies.
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KOTAK MAHINDRA BANK Depository Receipts
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KMBL would coordinate with local custodians to ensure prompt receipt of underlying securities against cancelled depository receipts and report the same to clients on priority basis. DP Back office for Brokers KMBL manages the pay-in and pay-out of securities to / from clearing houses of Stock Exchanges on behalf of trading member brokers and does depository transfers of securities on behalf of trading members.
Escrow Accounts KMBL has expertise in customized solution for escrow arrangements. Foreign Direct Investment KMBL Custody facilitates in the following manner during FDI transactions undertaken by clients:
•
Close co-ordination between company / counter-party and client for the date of transaction and movement of funds and shares on the transaction date. Compliance of transaction with regulations Follow-up with company for filing of necessary documents with regulators
• •
KMBL combines technology and a deep understanding of the investment process to transform data into information that our clients need to make investment decisions. KMBL provides one of its kind web enabled interface to its Custody Services clients. The web interface delivery system provides different types of information that clients need and in a manner that is most efficient. The web interface provides the following functionalities to its clients:
• •
Instruction input for market transactions Instruction input for voluntary corporate actions
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Online generation of various standard reports and ad hoc reports
Kotak Bank maintains a strong commitment to the securities servicing business and technology plays a critical role in every thing they do. They invest extensively in the latest and most advanced technology solutions so they can in turn offer the most advanced solutions and the broadest range of value added services to our clients.
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Investment Options
The Scheme will be available in two options: a). Growth Option Under this option, there will be no distribution of income and the return to investors will be only by way of capital gains, if any, through redemption at applicable NAV of Units held by them. b). Dividend Option Under this option, the Trustee may distribute by way of dividend, the surplus by way of realised profit, dividends and interest, net of losses, expenses and taxes, if any, to Unit holders in the Dividend Option, if, in the opinion of the Trustee, such surplus is available and adequate for distribution. The Trustee’s decision with regard to such availability and adequacy of surplus, rate, timing and frequency of distribution shall be final. The dividend is paid to only those Unit holders whose names appear on the register of Unit holders of the Dividend Option on the record date, which will be announced in advance. The Unit holder in the Dividend Option will have the choice of receiving the dividend or having it reinvested. Dividend amounts will be reinvested in the Dividend Option at the Applicable NAV announced immediately following the record date. The dividend reinvested would be subject
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to lock-in period of three years, from the date of reinvestment. The NAVs of the above options will be different and separately declared; the portfolio of investments remaining the same. Please refer to sections on calculation of NAV for details. ? Investment Objective The investment objective of the scheme is to generate long term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. The Scheme’s performance will be measured against the benchmark S&P CNX 500.
? Services To Unit holders 1. Investor Services It is the endeavour of the Fund to provide consistently high quality service to its investors. This encompasses all interaction by the clients with the Fund. The Fund strives to upgrade the quality of services through implementation of technology and through ensuring quality consciousness amongst its service personnel and agencies associated with it. The Fund strives to provide a high degree of convenience for the investors’ dealings with itself and it is the constant endeavour of the Fund to increase this level of convenience. 2. Facilitating Enquiries and Transactions a) Investor Service Centres in important cities CAMS, which is the Registrar to the Fund, provides Investor Services through its ISCs. Unit holders’ enquiries and transactions during business hours are entertained at the ISCs at the addresses listed elsewhere in this Offer Document. b) Master Account
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Unless otherwise requested by the Unit holder, one Master Account number is assigned for one entity investing in different Schemes of the Fund, provided while investing for a second time or any time thereafter, the Unit holder quotes his existing Account Number. In such a case, on specific request, one consolidated account statement is provided. c) Meeting in Person A responsible official of the Asset Management Company will be available every business day between 3.00 p.m. and 4.00 p.m. for a personal meeting with any Unit holder at the registered office of the AMC. The purpose of this facility is to discuss the investment needs of the client, address any queries on the Mutual Fund and to provide other services.
3. Finding Solutions to Problems The Fund will follow up with the Investor Service Centres and the Registrar on complaints and enquiries received from investors. The Fund will strive to speedily resolve investor complaints. 4. Unit holder Grievances Redressal Mechanism Investor grievances will normally be received at the AMC office or at any of the Investor Services Centre or directly by the Registrar. All grievances will then be forwarded to the
Registrar, if required, for necessary action. The complaints will closely be followed up with the Registrar to ensure timely redressal and prompt investor service.
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Deposits Service Provide By Bank
1). Savings Accounts A customer can choose the Account best suited to his needs the Savings Accounts are designed
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to ensure he receive the benefits of quick & convenient banking transactions along with options for his money to earn high returns. The savings account goes beyond the traditional role of savings, to provide you a range of services from funds transfer options to online payments of bills to attractive returns earned t hrough a comprehensive suite of investment options. Other Saving Accounts are :• • • • • •
Ace Savings Account Pro Savings AccountEdge Savings Account Nova Savings Account Classic Savings Account Easy Savings Account Corporate Salary Account
2). Current Accounts Accounts designed for small-mid size business or an enterprise Kotak Mahindra Bank offers a customer unparalleled advantages with its three Current Account offerings. Whether they have a small/ mid size business or an enterprise spread across multiple locations in the country, they would find a Current Account that's just designed for them. With features ranging from Free DDs, Free Cheque Collection, Free At -Par Cheque facility to Free Trading Account & free Demat Account, and more!
Other Current Accounts are:• • • • •
Neo Current Account Edge Current Account Pro Current Account Elite Current Account Ace Current Account
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KOTAK MAHINDRA BANK 3). Term Deposits
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Term Deposit with highly attractive interest rates Kotak Mahindra Bank brings you Term Deposit at highly attractive interest rates coupled with special facilities like Overdraft and Re-investment option. Other Term Deposite :• • • • •
Term Deposits Regular Term Deposits Senior Citizen Deposits Ace Deposits Tax Saving Deposits
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Safe Deposit Lockers
Be at peace when valuables are in lockers Kotak Mahindra Bank offers their customers Safe Deposit Locker facilities which can be utilized to safe keep their important documents, jewellery and other valuables.
Key Features
• •
Easy availability and access Convenient sizes
• •
Hassle-free payment Nomination for Safe deposit Lockers
Features & Benefits
•
Easy availability and access plan totake visit and access locker on all working days during banking hours.
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KOTAK MAHINDRA BANK
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Convenient lockers that suit size, from a range of options - small, medium and large. Hassle-free payment one can set-up standing instructions on his Savings Account, to pay his annual locker rent. Our Locker Facility enables his to avail Locker in his home branch without the constraint of maintaining a linked deposit. He can also opt for Nomination facility.
1. Nomination facility is available to Individual/ Joint hirer/s of Safe Deposit Locker. 2. Nomination can be made in favour of only one individual. 3. Safe deposit lockers hired in the names of a minors, the nomination shall be made by the natural guardian/s or court appointed guardians. 4. In the event of the death of a locker-hirer/s for which there is a nomination on record the contents of the locker will be released to the nominee of the hirer, without insistence on a succession certificate or probate of the Will from the legal heirs of the deceased customer.
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Mahindra Bank Net banking
Kotak Mahindra bank is private nationalized bank. It has its branches in major cities of India. Advantages of net banking are very large in number. It will make their work easy to transfer money to others account etc. Kotak Mahindra Bank net banking will provide many facilities like online money transfer, online shopping etc. Net banking is possible due to the use of internet which has given this world many new changes in every field. It will save lot of time for them. He just need to fill Kotak Mahindra Bank net banking form with thier account number and facilities to need on their account and they will provide with Kotak Mahindra Bank net banking login username and password which he can change by customers self.
Services provided by Kotak Mahindra Bank Net banking:
• Check their balance through Kotak Mahindra Bank net banking login. • Check their statement of account through Kotak Mahindra Bank net banking. • Inquire about the status of their cheque. • Inquire about any information or get information on their account.
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• Get all the information about different schemes of the bank like fixed deposit, rate of
interest on saving, deposit.
• All the information is provided on the Kotak Mahindra Bank net banking form. • Get the demat account also with Kotak Mahindra Bank net banking. • Do their shopping online with the help of Kotak Mahindra Bank net banking login.
Kotak Mahindra Bank net banking forms available in the branch of bank. He can take this form fill it and avail all the services of net banking after he get the Kotak Mahindra Bank netbanking login on Kotak Mahindra Bank account. Net banking is available on all types of account.
• •
This rule is imposed by RBI (Reserve Bank of India). Some nominal charges after certain limit that is if transaction increases from 1 lakh he pay 2.50 INR per 1000 INR for this service to their bank. Maximum 20 INR is charged for the transaction not more than that.
•
Kotak Mahindra Bank net banking log in ID is provided by the bank through confidential note. After filling the desired field in the Kotak Mahindra Bank net banking form he will be provided Kotak Mahindra Bank net banking. Kotak Mahindra Bank net banking form is easily available in all the branch of the bank. ?
Kotak Bill Pay
Bill Pay is a simple, secure, instant way of paying their utility bills, insurance premium, Direct Taxes, Visa Credit Card payments and much more. With AutoPay, he can schedule thier bills to be paid automatically. He can select an upper limit to be paid or even pay the entire bill amount. With the instant email and SMS alerts, he could keep track of their transactions, keeping you up to date on your bill payment status. He can even view their Bill and Payment History on Kotak Bill Pay. Reasons to Use BillPay
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Save Time - All your Bills paid in Minutes Pay off regular utility bills (telephone, electricity), mobile bills, insurance premiums etc. He can pay multiple bills in a single transaction using the 'Multiple Payments' option on Bill Pay.
•
Schedule Regular Payment No need to remember due dates. Set Auto Pay to pay the bills automatically before the due date.
•
Avoid Late Fees on your Credit Card Payment
Pay his domestic Visa Credit Cards bills absolutely free of cost!
•
Instant Payments Anytime Use 'Instant Pay' to make instant payments for billers who accepts even partial or late payments for both registered and unregistered billers.
•
Recharge He can now recharge their prepaid mobile and DTH account. Payment will get updated instantly. Receive alerts from Bank and also from mobile/DTH operator.
•
Stay Updated with Email & SMS Alerts
Receive Email and SMS alerts for any biller addition/deletion, receipt of new bill, status of bill payments and even for AutoPay.
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•
Paperless Bills
Get E-bills from registered billers in BillPay who electronically present bills to them. Against these presented bills, he can use the 'Pay Bill' option to make the payment or set Auto Pay to pay the bill automatically.
How to Start Using Kotak BillPay?
He can start using Kotak Bill Pay by login to Net Banking or calling up our 24-hour Customer Contact Centre or visiting the nearest Kotak Mahindra Bank branch. He can now even make the payments on Kotak Mobile Banking.
Follow these 6 simple steps to start using this facility on Net Banking. 1. Logon to their Kotak Net Banking account and click on 'Bill Pay' 2. To register a biller use 'Add Biller' 3. Enter the biller details and click 'Go' 4. On successful confirmation, his biller will send the bill electronically through Kotak Bill Pay 5. To set Auto Pay for registered billers, use the 'Set/Modify Auto Pay' option 6. Use the 'Instant Pay' option to make instant payments to billers which accept partial or late payments.
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Convinient Banking Service
1). ATM Network Customers constantly growing ATM network brings the bank within his easy reach. The ATM service is available to customers absolutely FREE Our strategically located and constantly growing ATM network brings the bank within their easy reach.
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The state of the art touch screen Kotak Mahindra Bank ATMs are part of the Visa/Plus and Cashnet ATM network. That means he can withdraw cash from his ATM Network with any International and Domestic Visa/Visa Electron/Plus Credit Cards/Debit Cards.
Key Features
• • • •
Access their account anytime anywhere State of the art Touch Screen ATMs Affiliated to the VISA network Access any ATM in the country absolutely free.
Services available
• • • •
24-hour access to cash Transfer funds between accounts View Account Balances and Mini Statement Pin Change option
2). Phone Banking 24hr customer service centre is at customers
service! At nearest Kotak Mahindra Bank branch is on customers phone. Bank have a 24hour Customer Contact Center to offer personalised service round the clock. Just pick up the phone and please call to 24-hour Customer Contact Center. Whether it is something as urgent as a stop payment or simply want to know thier balance just give us a call. his toll free number gives you access to their account, from anywhere... anytime. And what's more, this facility comes to absolutely free of cost!
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Key Features
• • • •
Quick and easy access from anywhere PIN based security Customer Care Officers available 24 x 7* Free Service
In addition to the existing services available over Phone Banking such as: In order to provide the convenience of carrying out most of their Banking transactions in just one call, we have added host of new services* and we are excited to bring them tocustomers.
These include:
• • • • •
Enquire on thier account details - his balance, account activity, uncleared fund details and cheque status. Enquire on the latest interest and exchange rates. Request for fund transfer* betweenhis accounts at Kotak Mahindra Bank. Open a term deposit or get details of all their term deposits. Initiate standing instructions or place stop cheque payment instructions. Request a cheque book and account statements.
•
Customers can give us financial instructions through thier Phone Banking service based on their account operating mandate, i.e. if they have a single or unconditional signing authority on their account, he can transact on their accounts through the phone.
Demat accountholders can avail of the following Services through Phone Banking
• • •
Request for a Demat transaction or holding statement Enquire about their transaction or holding details Request for a Demat Instruction Slip booklet to be sent to customers
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Investment accountholders can avail of the following Services through Phone Banking
• • • • • • • •
Enquire on their account and transaction details Current NAV details of thier investments Request a statement of account Purchase and redeem investments online Check the status of your purchase and redemption requests Purchase / Redemption of Mutual Fund units Third Party Funds Transfer to other accounts within our Bank** Registration for Mobile Banking / Net Banking
CHAPTER 3. PRODUCTS OFFERED BY KOTAK MAHINDRA BANK
Kotak Mahindra Bank has extended its initial purpose of venturing into agricultural finance to meet RBI regulations by servicing banking customers with a range of solutions. Primarily started to provide banking services to customers involved both directly and indirectly in the agricultural sector or its allied activities, Agri Business Group identified suitable products to meet the needs of niche activities in the sector as a whole. By ensuring lower default rates and other such business centric aspects, the group has seen growth even in its priority sector lending a activities.
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3.1) Agri Corporate
Trade Finance:- Enjoy the perks of an efficient Transaction Banking system with Agri Business
Group. Our customized market information system (MIS) Trade Finance Meeting or day-
to-day business finances .Whether are exporter or importer, our trade finance solutions can add real value to your business: 1. Letters of Credit 2. Bank Guarantees 3. Collections
4. Remittances 5. Forward Contracts 6. Packing Credit 7. Post Shipment Finance 8. Invoice Discounting 9. Trade Advisory Services Structured Finance:- Managing cash flows with structured financial solutions. Customers can understand the challenges and complexities faced by corporations in managing cash flows. his solutions provide for the efficient management of cash flows, bridge cash flow mismatches and ensure enhanced returns/cost savings for the corporation. We can structure tailor-made solutions around specific cash flow streams and cash accruing assets to meet individual financial requirements. 1. Term Loans 2. Dealer finance 3. Supplier finance
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Working Capital Facilities:- Financing short term transactional finance needs With Agri Business Group, he can prepare for thier day to day business finance needs or as forecasted over fixed periods of time. Meet thier working capital needs with cash credit or loans. He can also schedule term finance to meet his supplier payments, upgrade machinery or other known costs across a long term with adequate planning. Customers can plan his finances and save on interest costs by optimizing cost allocation based on their payouts and receivables. 1. Cash credit 2. Overdraft 3. Working Capital Demand Loan 4. Working Capital Term Loan 5. Buyers credit 6. Letters of credit
7. Export packing credit 8. Securitization of receivables 9. Funding against warehouse receipts
3.2) Agri SMEs
Working Capital Finance Preparing to meet their seasonal business costs. The seasonal nature of the agricultural business leaves scope for unpredictability and requires a flexible financial solution. Agri Business Group helps them meet the challenges faced due to the seasonal nature of Agri businesses. The working capital solutions offered by Agri Business Group have been developed based on the financial and qualitative evaluation of specific businesses and working capital needs. The
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structure of working capital finance can be made either through cash credit or through loans. he can also avail of our working capital solutions as a multiple banking arrangement or as a sole banker. How working capital finance can be used 1. Short term supplier payments 2. To manage cash flow mismatches 3. Season dependent financial needs The range of products offered as working capital finance to 1. Cash credit 2. Overdraft
3. Short term loan 4. Working capital demand loan 5. Bill discounting / invoice discounting Project Finance (term loans)
Now receive long term financing for any land based Agriculture or allied activity from Agri Business Group. He can benefit from our Funding activities for long ter
m agricultural projects. Now receive long term financing for any land based Agriculture or allied activity from Kotak Mahindra Bank Agri Business Group. He can benefit from our innovative approach of developing financial solutions for each project based on in-depth analysis of the business need and growth objective. What type of agri projects do their finance 1. Financing for Land-based projects such as Horticulture, floriculture, vermiculture, cultivation of medicinal plants, mushroom cultivation, tissue culture, sericulture 2. Funding for other land related activities like farm mechanization, minor irrigation, crop loans, land development
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3. Allied Agri projects related to poultry, dairy, piggery, fishery, mushroom units, beekeeping 4. Finances for construction of rural godowns and cold storages A customer can receive funding for development of new projects backed by experienced promoters or also apply for a takeover or refinancing of partly/fully developed projects subject to terms. The range of products available under agri project finance includes: 1. Terms Loans 2. Dealer Finance 3. Supplier Finance 4. Business Loans to Promoters
Funding Against Warehouse Receipts
Agri Business Group extends farmers, traders, processors and aggregators in the agricultural sector Raise cash against thier warehoused commodities Agri Business
Group extends farmers, traders, processors and aggregators in the agricultural sector finance against their agri produce or commodity stocks by pledge of warehouse receipts.He can receive credit upto 80% amount for the agricultural commodity being warehoused as a security against the loan taken to meet their business needs. Ifhe trade in any of the commodities listed here, he can avail of funding from us based on location and other terms and conditions specified by the Bank. 1. Guarseed 2. Guargum 3. Wheat 4. Soybean 5. Black Pepper 6. Jeera
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KOTAK MAHINDRA BANK 7. Maize 8. Castorseed 9. Paddy (Approved varieties) 10. Rice (Approved varieties) 11. Cotton seed 12.
D.T.S.S.college of commerce
3.3) Personal Loan
No matter what their financial needs are, our personal loans help to fulfill them his Personal Loans help to make a difference in thier life. No matter what their financial needs are unexpected expenses, school fees, wedding in the family, home improvement or that long awaited vacation. Whatever the occasion, his range of Personal Loans can help. The procedure is simple, documentation is minimal and approval is quick.
Key Features
• • •
Avail loans from Rs.50,000-50 lakh* Quick Approval & hassle-free processing Minimal paperwork
Features & Benefits
•
Avail loans from Rs.50,000 - 50 lakh*: customers can avail of a loan from Rs.50,000 - 50 lakh* for any purpose based on their income and repayment capacity and fulfill all your financial needs.
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Quick approval: With a Kotak Mahindra Bank Personal Loan, he cannot far away from making customers dreams come true. In as less as 72 hours you can turn his dreams into reality.
3.4) Home Loan
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At Kotak Mahindra Bank, offer highly customized facilities of availing home loans. Importantly, appoint a dedicated manager who takes customers through the entire process, starting with the filling in of the application forms and culminating in the loan disbursement process. This otherwise seemingly difficult process is made simpler and more convenient for the customer. Sometimes, customers are unable to spare that extra time from their hectic schedules, and the Bank Doorstep Service makes the home buying process seamless and pleasurable. A relationship that is happy from the start is extended through the attention the customer gets through his loan repayment tenure and beyond. Customers believe that in order to succeed, He need to offer not only competitive products, but also the best possible service and value-added features and benefits. In a market where
the basic product is largely similar, the differentiator is our ability to understand the customer's need. completely and structure the value-adds appropriately. It is with this thought in mind that we innovate constantly, based on our interaction with the customer. Key Features
• • •
High Eligibility for Businessmen Doorstep Service\ Attractive Interest Rates
Features & Benefits The key advantages of Kotak Mahindra Bank Home Loans are:
• • •
High Eligibility for Businessmen Doorstep Service Attractive Interest Rates
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3.5) Business Loan
When customers are planning to grow thier business, it makes sense to talk to the experts. Kotak Mahindra Bank presents Business Loans Solutions - the single expert source for all thier financial needs. Customers are well suited and experienced in understanding thier business requirements as we have helped a lot of our clients grow their businesses, across various industries. So, if customers want to diversify thier business, fund thier next project, or take a personal loan, hecan now do it without disturbing his investments or taking multiple loans. With personalized solutions and service, we ensure it's all you need to make thier business dreams come true.
Key Features
• • •
Avail loans from Rs.1,00,000 - 75 lakh* Quick Approval & hassle-free processing Minimal paperwork
Features & Benefits
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Avail loans from Rs. 1,00,000 - 75 lakh* Quick Approval & hassle-free processing Minimal paperwork
Who Can Apply
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Self Employed Businessmen with an Annual Turnover of Rs. 2 Crores. Manufacturers with an Annual Turnover of Rs. 1 Crore. Service Providers with an Annual Turnover of Rs. 50 Lakhs.
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3.6) Private Equity Investment Strategy
KPEG's investment objective is to achieve long term capital appreciation through investments in privately negotiated equity and equity-related investments in growth oriented emerging corporates and mid-size enterprises for business expansions, acquisition financing, and buyout transactions. thier private equity investment strategy also involves selectively investing in start ups promoted by strong management teams and in certain cases listed companies as well. Our emphasis is on supporting talented entrepreneurs seeking exceptional growth opportunities and long term value creation. These opportunities may be found in recognized growth industries, emerging sectors (sunrise industries), consolidation play in fragmented industries and niche opportunities segmented by technology or delivery systems. In all cases, the nature and growth potential of the business opportunity is of fundamental importance to the investment decision. Customers private equity investment strategy involves seeking:•
A management team that demonstrates passion and the hunger/drive to create a world class enterprise; a team that brings in both credibility and capability and has a proven track record
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A company with strong intellectual property, technology or a well differentiated market positioning A well articulated business plan coupled with strong execution skills that would give the company a sustainable competitive advantage
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3.7) Kotak Gold Eternity
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Customer have years of experience helping people invest Kotak Mahindra Bank brings their Gold eternity, 24 Carat pure gold coins and bars, carrying a 99.99% Assay Certification, signifying the hiest level of purityas per international standards.
•
Manufactured in Switzerland by PAMP, one of the world's premier gold refiners and a brand recognized world wide as a guarantee of excellence and quality Certified by one of the top assayers in the world Tamper proof packaging to ensure the purity of the gold bar Unique number on every certicard, with records maintained in Switzerland Competitive pricing based on daily pricing in the international bullion market
• • • •
Kotak Gold Eternity come in varied denominations. Customers can choose from a range of coins and bars in 5gm, 8gm, 20gm, 50 gm and 100 gm.
Key Features
• •
24 carat pure gold coins and bars carrying a 99.99% Assay Certification Unique number on every certicard, with records maintained in Switzerland
Gold as an Investment
Gold is the oldest currency in the world and is coveted across continents and cultures for a variety of reasons.
•
Maintains long term value:- Market cycles have their ups and downs, but gold has maintained its long-term value. Paper currencies may rise and fall but gold always endures. Gold has demonstrated its capacity to store value for centuries
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Safe refuge:- During times of calamities like war or economic crisis, there may be a negative effect on investments like currencies, bonds and equities, but may have an
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opposite effect on the value of gold. Also gold is not a liability of any government or corporation and hence it does not run a risk of becoming worthless due to unexpected events.
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Inflation Hedge:- The value of gold, in terms of real goods and services that it can buy, has remained remarkably stable whereas the purchasing power of many currencies has generally declined
CHAPTER 4. WORKING CAPITAL MANAGEMENT OF KOTAK MAHINDRA BANK
4.1) Introduction
Working Capital management is the management of assets that are current in nature. Current assets, by accounting definition are the assets normally converted in to cash in a period of one year. Hence working capital management can be considered as the management of cash, market securities receivable, inventories and current liabilities. In fact, the management of current assets is similar to that of fixed assets the sense that is both in cases the firm analyses their effect on its profitability and risk factors, hence they differ on three major aspects: 1. In managing fixed assets, time is an important factor discounting and compounding aspects of time play an important role in capital budgeting and a minor part in the management of current assets.
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The large holdings of current assets, especially cash, may strengthen the firm’s liquidity position, but is bound to reduce profitability of the firm as ideal car yield nothing.
3.
The level of fixed assets as well as current assets depends upon the expected sales, but it is only current assets that add fluctuation in the short run to a business.
To understand working capital better we should have basic knowledge about the various aspects of working capital. To start with, there are two concepts of working capital: ? Gross Working Capital ? Net working Capital
4.2) Gross Working Capital
Gross working capital, which is also simply known as working capital, refers to the firm’s investment in current assets: Another aspect of gross working capital points out the need of arranging funds to finance the current assets. The gross working capital concept focuses attention on two aspects of current assets management, firstly optimum investment in current assets and secondly in financing the current assets. These two aspects will help in remaining away from the two danger points of excessive or inadequate investment in current assets. Whenever a need of working capital funds arises due to increase in level of business activity or for any other reason the arrangement should be made quickly, and similarly if some surpluses are available, they should not be allowed to lie ideal but should be put to some effective use.
4.3) Net Working Capital
The term net working capital refers to the difference between the current assets and current liabilities. Net working capital can be positive as well as negative. Positive working capital refers to the situation where current assets exceed current liabilities and negative
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working capital refers to the situation where current liabilities exceed current assets. The net working capital helps in comparing the liquidity of the same firm over time. For purposes of the working capital management, therefore Working Capital can be said to measure the liquidity of the firm. In other words, the goal of working capital management is to manage the current assets and liabilities in such a way that a acceptable level of net working capital is maintained.
4.4) Importance of Working Capital Management
Management of working capital is very much important for the success of the business. It has been emphasized that a business should maintain sound working capital position and also that there should not be an excessive level of investment in the working capital components. As pointed out by Ralph Kennedy and Stewart MC Muller, the
inadequacy or mis-management of working capital is one of a few leading causes of business failure.
1. Size of business: It is another important factor in determining the working capital
requirements of a business. Size is usually measured in terms of scale of operating cycle. The amount of working capital needed is directly proportional to the scale of operating cycle i.e. the larger the scale of operating cycle the large will be the amount working capital and vice versa.
2. Business Fluctuations: Most business experience cyclical and seasonal fluctuations in
demand for their goods and services. These fluctuations affect the business with respect to working capital because during the time of boom, due to an increase in business activity the amount of working capital requirement increases and the reverse is true in the case of recession. Financial arrangement for seasonal working capital requirements are to be made in advance.
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3. Production Policy: As stated above, every business has to cope with different types of
fluctuations. Hence it is but obvious that production policy has to be planned well in advance with respect to fluctuation. No two companies can have similar production policy in all respects because it depends upon the circumstances of an individual company.
4.5) Circulation System Of Working Capital
In the beginning the funds are obtained by issuing shares, often supplemented by long term borrowings. Much of these collected funds are used in purchasing fixed assets and remaining funds are used for day to day operation as pay for raw material, wages overhead expenses. After this finished goods are ready for sale and by selling the finished goods either account receivable are created and cash is received. In this process profit is earned.
This account of profit is used for paying taxes, dividend and the balance is ploughed in the business. Working capital is considered to efficiently circulate when it turns over quickly. As circulation increases, the investment in current assets will decrease. Current assets turnover
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CHAPTER 5. RISK MANAGEMENT OF KOTAK MAHINDRA BANK
5.1) Credit Risk
Securities carry a Credit risk of repayment of principal or interest by the borrower. This risk depends on micro-economic factors such as financial soundness and ability of the borrower as also macro economic factors such as Industry performance, Competition from Imports, Competitiveness of Exports, Input costs, Trade barriers, Favourability of Foreign Currency conversion rates, etc. Credit risks of most issuers of Debt securities are rated by Independent and professionally run rating agencies. Ratings of Credit issued by these agencies typically range from “AAA”(read as “Triple A” denoting “Highest Safety”) to “D” (denoting “Default”), with about 6 distinct ratings between the two extremes. The highest credit rating (i.e. lowest credit risk) commands a low yield for the borrower. Conversely, the lowest credit rated borrower can raise funds at a relatively higher cost. On account of a higher
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credit risk for lower rated borrowers lenders prefer higher rated instruments further justifying the lower yields.
5.2) Sovereign risk
The Federal Government of a country (i.e. Central Govt. in case of India) is the issuer of the local currency in that country. The Government raises money to meet its Capital and Revenue expenditure by issuing Debt or Discounted Securities. Since payment of interest and principal amount has a sovereign status implying no default, such securities are known as securities with sovereign credit. For domestic borrowers and lenders, the credit risk on such Sovereign credit is near zero and is popularly known as “riskfree security” or “Zero-Risk security”. Thus Zero-Risk is the lowest risk, even lower than a security with “AAA” rating and hence commands a yield, which is lower than a yield on “AAA” security.
5.3) Price-Risk or Interest-Rate Risk
From the perspective of coupon rates, Debt securities can be classified in two categories, i.e., Fixed Income bearing Securities and Floating Rate Securities. In Fixed Income Bearing Securities, the Coupon rate is determined at the time of investment and paid/received at the predetermined frequency. In the Floating Rate Securities, on the other hand, the coupon rate changes – ‘floats’ – with the underlying benchmark rate, e.g., MIBOR, 1 yr. Treasury Bill. Fixed Income Securities (such as Government Securities, bonds, debentures and money market instruments) where a fixed return is offered, run price-risk. Generally, when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the prices is a function of the existing coupon, the payment frequency of such coupon, days to maturity and the increase or decrease in the level of interest rates. The prices of Government Securities (existing and new) will be influenced only by movement in interest rates in the financial system. nWhereas, in the case of corporate or institutional fixed income securities, such as bonds or debentures, prices are influenced not
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only by the change in interest rates but also by creditrating of the security and liquidity thereof. The following table indicates the likely impact of interest rate changes on prices of Government Securities. It will be seen that if interest rate rises by 1%, the prices of Government Securities fall in the range of 0.49% and 7.01% of the prices. On the other hand, if the interest rate declines by 1%, the prices rise in the range of 0.49% to 7.68% for respective maturities shown in the table.
5.4 ) Risk of Rating Migration
The following table illustrates the impact of change of rating (credit worthiness) on the price of a hypothetical AA ratedsecurity with a maturity period of 3 years, a coupon of 7.00%and a market value of Rs. 100. If it is downgraded to A category, which commands a market yield of, say, 8.00%, its market value would drop to Rs. 97.42 (i.e. by 2.58%). If the security is up-graded to AAA category which commands a market yield of, say, 6.00% its market value would increase to Rs. 102.67 (i.e. by 2.67%). The figures shown in the table are only indicative and are intended to demonstrate how the price of a security can be affected by change in credit rating. Rating Yield Market Value AA 7.00% 100.00 If upgraded to AAA 6.00% 102.67 If downgraded to A 8.00% 97.42
5.5) Basis Risk
During the life of floating rate security or a swap the underlying benchmark index may become less active and may not capture the actual movement in the interest rates or at times the benchmark may cease to exist. These types of events may result in loss of value in the portfolio.
5.6) Spread Risk
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In a floating rate security the coupon is expressed in terms of a spread or mark up over the benchmark rate. However depending upon the market conditions the spreads may move adversely or favourably leading to fluctuation in NAV.
5.7) Reinvestment Risk
Investments in fixed income securities may carry reinvestment risk as interest rates prevailing on the interest or maturity due dates may differ from the original coupon of the bond. Consequently the proceeds may get invested at a lower rate.
5.8) Currency Risk
Should the Schemes be permitted to invest in offshore securities, such investments run currency risk in addition to other risks faced by the investments, investments made in US
dollar or any other foreign currency denominated securities may lose in value if the Indian rupee appreciates with respect to the foreign currency or gain in value if the Indian rupee depreciates.
5.9) Liquidity Risk
The corporate debt market is relatively illiquid vis-a-vis the government securities market. There could therefore be difficulties in exiting from corporate bonds in times of uncertainties. Liquidity in the scheme therefore may suffer. Even though the Government Securities market is more liquid compared to that of other debt instruments, on occasions, there could be difficulties in transacting in the market due to extreme volatility or unusual constriction in market volumes or on occasions when an unusually large transaction has to be put through. Liquidity of the Scheme may suffer if the guidelines issued by RBI for dedicated Gilts Funds undergo adverse changes..
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CHAPTER 6. EVALUATION OF KOTAK MASHINDRA BANK
Kotak Bank added over half a million new customer this year across core banking products of saving and checking accounts, term deposits, overdraft and Non Resident Accounts. Kotak Bank maintained its ambition of becoming a bank of choice for the small and mid segment business enterprises and doubled the base of customers engaging in trade and foreign currency transactions. Lots of path breaking initiatives were rolled out for NIRs. Many alliances were signed with leading exchange houses across Gulf countries to provide channels for attracting inward remittances. Through the strategic partnership with OIFC(Overseas India Facilitation Center). Kotak Bank participated in 3 global meets in Dubai, London and Birmingham which has firmly established Kotak Bank as a key service provider with NRI community. This alliance further helped Bank to engage another 30 sub-alliance enabling the growth in business through NRIs. Kotak Bank also reached out to a larger canvass of NRI customer by launching
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a variant to saving account targeted for the mid-income segment, P.O. Box facility in USA & UK. Kotak Bank launched a new remittance solution under the brand name Click to remit. This is a multi currency platform and customers can send money into India from anywhere in world in8 different currencies. Kotak Bank also launched a credit card for the NRI customers and started the Home Loan product for NRIs in select markets. To provide higher convenience to the NRI customer your Bank launched a unique service called click2call & SMS2Call wherein the Bank calls back the customer within 30 minutes of receiving the intimation. Kotak Bank focused on the online space including social media engagement through a partner portal called NRI matters.com, NRI power podium campaign which got 13000 NRI signup in one month and found its way into India Book of records. The number of hits on the NRI website today stands at 150000 per month, up from 2000 per month last year. Kotak Bank implemented several initiatives aimed towards enhancing customer services and widening the product/service bouquet. Some of the key ones being
•
Annual combined Statement on net banking. Customers can now view and download their Annual combined statement for saving and current account, investment and Demat
•
holdings for the previous financial year. This help customers to file tax Returns, apply for loan etc. Card protection plan-Kotak Bank in association with CPP Assistant Service Pvt. Ltd. Offers card protection to protect all kotak customers card (Credit, Debit, ATM etc.) against loss and resultant fraud.
•
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Multilingual ATMs-Multilingual (English, Hindi and Marathi) on all ATMs in Maharashtra has gone live. Other regional languages will get covered during the course of next fiscal year
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Recharge Service – This enables customer to recharge their pre-paid mobile and DTH services through Kotak Net Banking using Kotak Bill pay. Statement registration on Net Banking – customers now have the option to register for their preferred statement frequencies and mode option on Net Banking.
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Kotak Bank has also to participate in the eco drive. An E-statement campaign was run through the year aiming to convert the customer who have registered for monthly physical statement & quarterly physical statement to registered for monthly E-statements with the theme of ‘Save Trees, Save the environment ! Say no to Physical Statements’.
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Inter Bank mobile payment Service-This feature allows customer to transfer money instantly through mobile phone within own accounts & third party accounts within the IMPS member banks.
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Kotak Stock Ace- This is loan (overdraft) against securities product. Under this product Kotak Bank provides an overdraft to customers against equity shares and mutual fund.
The last year saw several regulatory changes in the third party investment and insurance products space. While these regulatory interventions put a significant amount of revenue pressure Kotak Bank recognize the opportunity to create a well differentiated business if it is able to create a more robust platform to advice its customer. Hence significant focus was put to creating processes with an objective to bring maximum transparency in the Bank’s sales process of these product and to bring more internal accountability to ensure appropriateness of sales as per customer suitability and risk profile. Kotak Bank believes that its customer
will benefit from such stringent internal standards and in the long run it will be able to build a sustainable and robust business model around these processes.
Kotak Bank has always focused on its employees as the key to building a sustainable franchise and has in the past won several awards as one of the best employers. Continuing with this emphasis Kotak Bank launched an E-Learning platform for employees which again
won accolades in the IBA Technology Awards. This platform enabled Kotak Bank to introduce courses in real time. It also has features of individual learning plans, chat facilities to enable trainers and trainees to interact online, video streaming facility, online completion status tracking, etc. Kotak Bank believes this will improve the quality of training input and will result in raising the service standards. Kotak Bank took definitive steps towards risk control. These include set up of- N Vigil (Internal Cameras) in all the ATMs. This will ensure that the Bank has images of the customer who did the transaction at all times and can also facilitate during fraud investigation
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or customer contains. A dedicated risk Containment Unit has been put in place to do pre-onboarding checks and transaction level checks to ensure conformity to AML guidelines and fraud prevention etc. Kotak Bank continued its in-depth coverage and servicing of large and mid market corporate clients during the year. Kotak Bank was able to build significant franchise with many well known, reputed large corporate groups during this year while focusing on deepening existing clients through an array of customized and regular product offering. Keeping in with the strong underlying economic growth. Kotak Bank was able to tap this opportunity and increase its share of business by offering a variety of product and services. Kotak Bank added 160 new cash management service customer during the year by offering them technology driven working capital cycle enhancement & efficiency solution to effectively enrich and optimize their cash flows and liquidity through an entire suite of CMS products and services. This has been made possible through constant innovation. Continuous feedback sessions and a high degree of customization to cater to the dynamic and evolving industry scenario.
The commercial Vehicle and infrastructure sector continued the growth momentum through the year aided by the positive IIP (Index of Industrial Production) and Agriculture growth numbers. Commercial Vehicle operator margins improved as a result of higher freight realization, which offset the increase in diesel cost. The growth in the core sector and focus
on infrastructure led to a healthy growth in the order book position of contractor in the infrastructure space. As a result, disbursement numbers touched record levels as did the bottom line. The year also saw good growth in bank lines in both the sectors. However the impact of the growing economy and increasing purchasing power of the rural population has meant a steep rise in prices of all agro commodities. Riding this boom the Agro Business of Kotak Bank has shown a robust growth with the total portfolio a slated to cross Rs, 4300crore this year, up from last year’s portfolio of Rs, 3200crore. This is a growth of 35% year-on-year. Kotak Bank also ensured to reach the targeted norms for lending to the agro sector as laid out by the regulator for the second year running. The Agro business has also become the corner stone for Kotak bank’s targets for meeting financial inclusion and lending to the weaker sections of the society such as small and
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marginal farmers, Village artisans and other socially deprived sectors identified by the government. These advances now have crossed a level of 8% of Kotak Bank’s total advances. Kotak Bank is in the process of identifying more target segments in this sector to reach out to. In the home finance business while there was strong growth in first half of the year, the second half of the year saw stabilization and slight drop in demand from customers. Kotak Bank introduced innovative new products during the year such as part tenure fixed home loans and loan against property. Kotak Bank branches continued to play an important part evolved into a stable contributor month on month. There was an increased focus on existing Bank customers and their contribution among the secured asset products went up. The personal Finance business saw good growth and established Kotak Bank as one of the leading lenders of unsecured loans in the market. High-ticket products continued to be the focus and were the biggest contributor to the overall volumes. The personal Finance business also added new products to their existing bouquet of financial services for businessman. Working capital products in Rs, 50lacs to Rs, 1.5crore range(both fund based as well as nonfund based)were some of the new offerings. Kotak Bank resolved several NPA accounts
pertaining to stressed assets acquisition. Supreme Court upheld the NPA assignment between banks and other financial institutions. The landmark judgment will further help in resolving several NPA accounts, which were litigated in several courts for the past few years. The NPA portfolio sale by banks continued to be sluggish and serious pricing mismatch between the buyers and sellers continued, this year as well.
Kotak Bank continued to invest in large single assets transactions. with good prospect of turnaround in stressed companies. Further, Kotak Bank has diversified in buying large retail NPA loans from other banks. During the year, Kotak bank saw a robust growth in its overall advances portfolio. This was primarily driven by the overall growth of the corporate sector, spurred by strong domestic consumption demand for their products post the recessionary period. A robust NPA management practice and strong internal controls, aided by a strong economic growth, has led to a reduction in Kotak Bank’s gross/net NPAs On treasury side, Kotak bank has an active proprietary desk trading in all products such as Fixed income, Money Market, Derivatives, Foreign Exchange and bullion. The Treasury
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plays an important role in balance sheet management and implementation of funds Transfer price between various business units. In the area of Debt Capital Market (DCM) Kotak bank offered the following products; syndication of loans, bonds, mezzanine financing, promoter funding and acquisition financing and securitization. During the year, Kotak bank’s Treasury started Correspondent Banking Division to build and leverage on relationships offshore banks for improving quality and international reach for its customers. Kotak Bank credit card business has issued 1.5 lac cards and is in its third year of operations. The card design and product benefits have received overwhelming response from customers. The customer spends across all variants of cards have been amongst the top there in industry. The premium range of our products-VISA Platinum and VISA signature have driven the Spends growth in the portfolio and it contributes to34% of the Spends while accounting for 12% of customer base. This has reaffirmed the customer acceptability of the product. Credit Card business clocked Rs, 600crore of total spends in the year with a book size of Rs, 300crore. Industry Credit Cards Spends has shown sign of growth after last year’s recessionary economic conditions.
Kotak Bank entered into a strategic arrangement with PVR cinemas, one of the elite name in entertainment industry. To distribute credit card products aimed at up market customers. This partnership opens up the opportunity to new customer segment hitherto untapped by Kotak Bank.
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CONCLUSION
Kotak Mahindra Bank is worlds famous financial institute. Kotak Mahindra Bank is one of India's leading financial private banking institutions. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a private financial institution to a bank The bank stand alone had around 11,000 employees as of 31stMarch 2011. 102 employees employed throughout the year and 23 employees employed for part of the year were in receipt of remuneration of Rs, 60 lacs or more per annum.Kotak Bank was adjudged amongst Top 25 in India’s Best Companies to work for in 2010
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BIBLIOGRAPHY/REFERENCE
? AUDITORS REPORT :• Kotak Bank Auditors Report 2010-2011
? NEWSPAPERS:• • • The Times Of India Hindustan Times The Indian Express
?
WEBLOGRAPHY:•
Www.Google.Com Www.Investopedia.Com Www.Soople.Com
• •
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