INDUSTRY GUIDE
FACULTY GUIDE
Chief Manager,
Associate Professor,
Commercial Banking,
CERTIFICATE OF REPORTING
This is to certify that Mr. RAJA GUPTA, a student of Post Graduate Degree in
MBA ( FINANCE), Amity International Business School, Noida has worked in
the KOTAK MAHINDRA BANK LTD, under the able guidance and
supervision of Mr.MANAS MEHRA, designation CHIEF MANAGER,
Company KOTAK MAHINDRA BANK ( COMMERCIAL BANKING).
The period for which he/ she was on training was for 8 weeks, starting from 6 th
MAY to 6th JULY. This Summer Internship report has the requisite standard for
the partial fulfillment the Post Graduate Degree in International Business. To
the best of our knowledge no part of this report has been reproduced from any
other report and the contents are based on original research.
Signature
Signature
(Faculty Guide)
(Student)
ACKNOWLEDGEMENT
Mr.
Manas
Mehra
Chief
Dr.Shailender Singh
TABLE OF CONTENT
Chapter No. Subject
1
2
Executive Summary
Research Methodology
Primary Objective
Research Design
6
7
8
9
Limitation
Critical Review of Literarure
Industry Profile
4.1 Company Profile
4.2 Swot Analysis
10
11
13
52
78
86
86
87
87
89
91
92
1.0
2.0
2.1
2.2
3
4
Page No
6
7
8
9
10
Synopsis
EXECUTIVE SUMMARY
5
96
107
This Project report has been prepared for the Commercial Banking as to see the
need and wants of the Companies by the bank, As the company starts the
company has to deal with the bank, so our major target was to approach the
companies consult to the finance team and fix the meeting with Chief Manager.
Each and every company requires a number of banking transaction and also
need other financial services. For catering the services to their financial as well
as other monitory needs banks have a separate working department known as
Commercial Banking.
Second Part of my Project was to approach the new companies By finding them
from Ministry Of Corporate Affairs (NAC 21),and to Consult their head team
by fixing the meeting with our Chief manager. As the companys total
transaction, Inward outward remittance, how much lesser conversion margins
the bank can provide to them.
My main Project was to approach as much companies I can , n prepare the
question year and collect the data according to the question ,and analyze the
situation and condition of the companies that what kind of better services they
require from the bank.
Banks are involve in two types of banking
1. Retail Banking
2. Commercial Banking
The topic of my internship was Commercial banking. It is done under the name
of Transaction Banking Group (TBG)
INTRODUCTION
Objective
My Objective was to Study the need of financial companies required by
banking sector for providing financial services to the industrial sector.and to
know their services which they are using from banks, and to understand their
current banking arrangement.
The Kotak Mahindra Group:
Kotak Mahindra is one of India's leading financial organizations, offering a
wide range of financial services that encompass every sphere of life. From
commercial banking, to stock broking, to mutual funds, to life insurance, to
investment banking, the group caters to the diverse financial needs of
individuals and corporate.
The group has a net worth of over Rs. 6,799 cr and has a distribution network of
branches, franchisees, representative offices and satellite offices across cities
and towns in India and offices in New York, London, San Francisco, Dubai,
Mauritius and Singapore. The Group services around 6.4 million customer
accounts.
As far as commercial banking is concerned it is the significant segment of a
bank to handle the company accounts, trade, export, import, foreign exchange,
corporate finance, corporate lending etc. Banks provide different services to the
corporate entities to make their banking functions easy and feasible.
The objective of an internship is to get the insight knowledge of the topic you
have selected for the internship and to learn corporate culture of that
company with the development of common skills of the entire corporate world.
7
RESEARCH METHODOLOGY
Research Design
This banking requirements Sample design was prepared According to the
questionnaire filled by the Company, and to analyse the data according to their
requirements, research design is mainly prepared to identify and to analyse the
situation of the research that we are conducting,
The research design should be very much clear ase we are going to analyse
from our research design and the sample design which we have prepared.
Limitations
Time constraint: The duration of the project limited the in-depth understanding of
every
aspect
involved
in
Finding
the
Banking
Requirements
for
the
Company.according to the time duration I have to cover the at most companies but
due to lack of time I was able to complete few companies.
Limited scope: The project was carried out within the scope of the company. The
predetermined guidelines given by the corporate office should be strictly adhered to.
The efficacy of the methods followed is still debated in the academic arena.
As the questioner was prepared but the finding was not up to the mark as manyof the
companies where not disclosing their financial matter.
Technicality: The proposals put forward by the technical department of the Banks, to
look forward for the Companies according to their needs, so that the Banks could
launch the new products according to their Organisation
Chapter-3
Review of Literature
10
While Sturm and Williams (2004) reported similar TFP change of foreign and
domestic banks in Australia during the post-deregulation period (1988-2001),
Isik and Hassan (2003) indicated that in Turkey private banks, especially
foreign banks, showed the great efficiency improvement form the more liberal
and competitive environment than state-owned banks during 1981-1990. A
more impressive increase of TFP growth of foreign banks compared to the
domestic group was also captured by Leightner and Lovell (1998) in the study
of Thai banks for
1989-1994.
Although there is a concern about the adverse effect of deregulation on the risktaking behaviour of market participants, the connection between deregulation
and risk-taking has not been systematically jointly investigated in literature. A
few related studies did warn that deregulation has the potential to deteriorate
banks risk position. Demirguc Kunt and Detragiache (1999) reported that
financial liberalization exerts an independent negative effect on the stability of
the banking based on a study covering 53 countries, Claessens et al., (2001)
also found the evidences that domestic banks were forced to take on less
creditworthy customers with foreign entry based on a 80-country sample.
Moreover, experiences coming from Columbia (Barajas et al., 2000) and
Philippines (Unite and Sullivan, 2003) reported result consistent with Claessens
et al., (2001). The policy implication is that if deregulation induces more risk
taking, it could harm the process of economic growth in the medium- and longrun. There is a need for governments to carefully design the entire deregulation
process and put a strong institutional setting in place to curb the possible system
negative effect of deregulation on the stability of the banking system (Demirguc
Kunt and Detragiache, 1999).
Chapter-4
INDUSTRIES PROFILE
12
The TBG offers cash, liquidity, trade and supply chain solutions to clients who
are spread across all the segments/Channels Corporate banking, financial
institutions, emerging corporate group, business banking, retail liabilities and
even agriculture to optimize their working capital cycle.
13
Security Services
It consist
1- Custody and Settlement Services
2- PCM Services
3- Fund Accounting
Commercial Banking has been very profitable for the banks because here one
client shares a significant portion of profit. Separate operations and utmost care
of this function have proved an efficient tool to satisfy all the banking and
financial need of the companies. Banks are specially focusing on building the
good corporate relations with the existing clients to retain the client as well as
the business provided by them.
Commercial Banking operations are very important and should be manage with
utmost care because any irregularity, ignorance or mistake can result in a big
loss for the bank. The reason of this big loss is that companies deposit and
invest huge amount of money in the banks that would be probably equals to
hundreds of retail customers. It is very important to retain rather than create the
customer. On the basis of my knowledge and experience, i recommend skilled
14
State-owned banks
The public sector banks have overseas operations with Bank of Baroda topping
the list with 51 branches, subsidiaries, joint ventures and representative offices
outside India, followed by SBI (45 overseas branches/offices) and Bank of
India (26 overseas branches/offices). Indian banks, including private sector
banks, have 171 branches/offices abroad.
Private sector banks India has 29 private sector banks including nine new banks
which were granted licenses after the government liberalized the banking sector.
Some of the well known private sector banks are ICICI Bank, HDFC Bank and
Indusland Bank. Yes Bank is the latest entrant to the private sector banking
industry.
15
In terms of reach the private sector banks with an asset of over Rs 5,700 billion
(about US$124 billion) operate through a network of 6,500 branches and over
7,500 ATMs.
Foreign banks As many as 29 foreign banks originating from 19 countries are
operating in India through a network of 258 branches and about 900 ATMs.
With total assets of more than Rs 2,000 billion ( about 44 billion US dollars)
they are present in 40 centers across 19 Indian states and Union Territories.
Some of the leading international banks that are doing brisk business in India
include Standard Chartered Bank, HSBC Bank, Citibank N.A. and ABNAMRO Bank. In addition, 31 foreign banks (as on September 15, 2006)
belonging to 14 countries were operating in India through their representative
offices.
16
17
Regional banks
Rural areas in India are served through a network of Regional Rural Banks
(RRBs), urban cooperative banks, rural cooperative credit institutions and local
area banks. Many of these banks are not doing well financially and the
government is currently engaged in restructuring and consolidating them. Local
area banks were of recent origin and as on March 31, 2006 four such banks
were operating in the country.
Bank of India (SIDBI), National Bank for Agriculture and Rural Development
(NABARD) and National Housing Bank (NHB). These institutions provide
term loans and arrange refinance. There are also specialised institutions like the
Power Finance Corporation (PFC), Indian Railway Finance Corporation
(IRFC), Infrastructure Development Finance Company (IDFC) and state-level
financial corporations. Non banking financial companies.
India also has a vibrant NBFC sector comprising 13,000 NBFCs that are
registered with the RBI and fund activities like equipment leasing, hire
purchase etc. Out of the total about 450 NBFCs are allowed by the RBI to
collect funds from the public. Large NBFCs have an asset base of about Rs
3,000 billion (about 65 billion US dollars).
18
Recent developments:
State Bank of India has acquired 76 per cent stake in Giro Commercial Bank, a
Kenyan bank for US$7 million.
Bank of Baroda is planning to acquire a bank in Africa to consolidate its
presence in the continent.
Canara Bank is helping Chinese banks recover their huge non-performing assets
(NPA).
ICICI bank is in the process of taking over Sangli Bank, a private sector bank
based in Maharashtra.
The RBI has recently allowed the Commonwealth Bank of Australia, Banche
Popolari unite S.c.r.l. (based in Italy), Vneshtorgbank (Russian trade bank),
Promsvyazbank (Russian commercial bank), Banca Popolare di Vicenza (Italian
bank), Monte Dei Paschi Di Siena (Italian bank) and Zurcher Kantonalbank
(Swiss bank) to set up representative offices in India.
GOVERNMENT REGULATIONS:
Although the banking companies are registered under the Companies Act, 1956
they are regulated by the RBI which grants licence to companies for operating a
bank, opening branches and off site ATMs, fixes statutory liquidity ratio (SLR)
and cash reserve ratio (CRR), and lays down other conditions for day-to-day
operations. The RBI permission is also needed for board level appointments in
banks.
With regard to interest rates, individual banks are free to fix rates with the
exception of savings bank rate which is decided by the RBI. The individual
banks are free to fix lending rates...
19
New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.
20
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase
II and Phase III.
21
In the Indian Banking Industry some of the Private Sector Banks operating are
IDBI Bank, ING Vyasa Bank, SBI Commercial and International Bank Ltd,
Bank of Rajasthan Ltd. and banks from the Public Sector include Punjab
National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank
among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express
Bank Ltd, Citibank are some of the foreign banks operating in the Indian
Banking Industry.
Subsidiaries
22
23
24
Treasury
Group Structure
25
Funded Products
Working Capital Structured Products
Trade Finance
Exports - Imports Bank Guarantee
Treasury Products
Foreign Exchange Money Market Benchmark PLR
26
Investment Products
Term Deposits, Mutual Funds, Bancassurance
Current Account
Fixed Income Products
Sales & Distribution Research Case Studies
Transaction Banking
Custody Services
Retail Assets
Key Features
Minimum Account Balance required is Nil
2 Way Sweep for liquidity and higher
returns
Free-up country cheque collection for 13
locations
Personalised Cheque book
27
Documentation
Service
Charges
At Kotak Mahindra Bank, we know how critical it is for your business to have
quick and timely access to funds. We also understand how important smooth
and seamless banking transactions are for business relationships.
Our Current Accounts have been designed to help you compete effectively in
the contemporary business environment. They include a 2 Way Sweep feature
that delivers liquidity combined with higher returns.
Documentation
All attestations to be done by Company Secretary/2 Directors/ existing
banker/ registered Chartered Accountant.
Latest (not more than 3 months old) list of all Directors with their Addresses.
Certified "True and Updated" Copy of Certificate of Incorporation.
Certified "True and Updated" Copy of Certificate of Commencement of
Business (In case of Public Ltd. Co.).
Certified "True and Updated" Copy of Memorandum and Articles of
Association.
Extract of Board Resolution, signed by 2 Directors or Company Secretary with
mode of operation & list of authorised signatories with designated powers.
Existing Banker's Verification required, if the Certifying director and authorised
signatory is same (In case of Pvt. Ltd. Co.).
Proof of Form 32 filed along with ROC acknowledgement/Latest printed
Balance Sheet giving the names of existing directors, in case of change of
Director/s.
28
Transaction Banking
29
Collection
We collect funds on your behalf from your debtors, such as Retail Investors,
Corporate, Institutions etc. These funds can be in the form of Cash, Cheques,
Demand Drafts or Pay Orders. The instruments are sent to the appropriate
clearing houses and the funds are collected. All the collected funds are
subsequently deposited into a central account, the 'Brokers Pooling Account'.
Payments
We provide you a payable At-Par Cheque Book, which enables you to issue
local cheques at all branch locations of Kotak Mahindra Bank. Our At-par
cheque facility helps you to eliminate the hassels of obtaining demand drafts or
opening current account at each location. Through our other disbursement
30
solutions, you can also carry out bulk disbursement either through a fax or an
email instruction in the form of:
Export
Key Features
31
Pre-Shipment
Credit
Post-Shipment
Credit
focuses on client requirements
Leverage our global network of
correspondent banks
Bills &
Collection
Inward
Remittances
32
Pre-Shipment Credit
Post-Shipment Credit
33
We have a strong, experienced trade finance team that focuses on client traderelated requirements, whether domestic or international. This team advises and
guides clients on documentation and transactions ensuring:
Quick turnaround times through smooth document processing
Faster payments through constant follow-ups with correspondent banks for
timely recovery of funds
Cost effectiveness
Better reach
Excellent trade support
34
Inward Remittances
Export
Key Features
Tailor made solutions to suit all your
import needs
Experienced trade finance team that
focuses on client requirements
Letter of Credit
Bills &
Collection
Outward
Remittances
Letter of Credit
35
Cost effectiveness
Better reach
Excellent trade support
Outward Remittances
Our services in this area include:
Payment of direct Import Bills: Processing and remittances for Import Bills
directly received by importers in India.
36
Bank Guarantee
Key Features
Experienced trade finance team that focuses on client
requirements
Reduces your risks
Domestic Trade
37
Key Features
Bills Discounting
Bill Discounting
Our experienced and dedicated trade finance team is focused on structuring bill
discounting products to meet customer needs be it short term or medium term
finance.
Invoice Discounting
Invoice discounting entails discounting an accepted invoice bill for the sale of
goods to provide working capital. We offer our clients the dual advantage of
simple documentation and absence of collateral requirements. Finance is
38
Foreign Exchange
39
Key Features
A state-of-the-art dealing room
Forex Rates
Products:
Spot foreign exchange transactions (for value up to two business days)
Forward foreign exchange transactions (for value greater than two business
days)
Inward/outward remittances
Derivatives such as Options, Currency Swaps, etc.
Services:
Active dealings in the inter-bank market for major currencies, spot and forwards
Quick and competitive dealing in prices in major currencies
Customised solutions for specific client exposures
40
Money Market
Key Features
We cater to the treasury requirements of clients across the
Inter-Bank, Co-operative bank, Corporate, Pension Fund
and Trust sectors.
We also offer the entire spectrum of services involved in the
origination and placement of corporate debt.
Our Money Market and Fixed Income Desk is an active player in the Rupee
markets and caters to the treasury requirements of clients across the Inter-Bank,
Co-operative bank, Corporate, Pension Fund and Trust sectors.
With an active sales force in Mumbai, Delhi, Kolkata, Chennai, Bangalore and
Ahmedabad we are equipped to meet client requirements across the country. We
also offer the entire spectrum of services involved in the origination and
placement of corporate debt.
Distribution Needs:
Placement of Debt Issues
Depository Needs:
Constituent SGL Facility
Retail Needs:
Purchase/Sale of instruments in smaller lots is also offered.
Derivative Solutions
Hedging Needs: Market Maker in the Rupee interest Rate swap market in tenors
upto 5 years
42
Corporate Investments
Term Deposits
Mutual Funds
Bancassurance
43
Term Deposits
Key Features
Safe and stress-free way to make your money
grow
Interest
Rates
44
Mutual Funds
Key Features
Assistance at every step of the investment process
An experienced research team to analyse and research the
Mutual Funds available in the market
Portfolio assistance
We work closely with our clients to help them establish a robust framework for
treasury solutions and laying down parameters for investment products within
the risk/return parameters laid down by the each treasury.
45
Our experienced research team analyses and researches the various Mutual
Funds available in the market, helping clients make more informed decisions.
Our recommendations take into account all relevant factors including the
investment philosophy of the Asset Management Company, portfolio quality,
risk-adjusted returns and market insights.
46
Key Features
Entire range of product offerings
Customised solutions & advisory
services
Documentation
Relationship banking
Product Offerings
Business Banking Group caters to the entire trade & financial requirements of
small & medium businesses through comprehensive product offerings. Our
individual exposure ranges from Rs 50.00 Lakhs to Rs 30.00 Crores.
Working Capital
Cash Credit / Overdraft
47
Relationship Banking
48
Our dedicated team of Relationship Managers (RMs) located across the country
act as ONE POINT CONTACT for our clients. Our RMs maintains a
continuous interaction with the clients to understand their immediate and future
financial needs.
Awards
2009
Kotak Mahindra Bank was awarded Hewitt Best Employers in India 2009
Kotak Mahindra Bank was ranked in the top 5 of companies with Best
Corporate Governance Practices in Asia/Pacific - IR Global Rankings 2009.
Kotak Mahindra Bank and Oracle Siebel won the Best CRM/Applications
Project Award 2009 at the IT Implementation Awards 2009 by The Asian
Banker.
Kotak Mahindra was adjudged Indias overall the Best Private Banking
Services award by Euro money 2009.
Kotak Credit Cards- Kotak Royal Signatures card is chosen Product of the
Year by Nielsen who surveyed 40,000 consumers.
49
Kotak Life Insurance plans were rated amongst the best in the industry for a
second year in a row in the annual ULIP Ranking carried out by Outlook
Money.
Outlook Money awarded the 1st Rank to Kotak Platinum Advantage Plan in
Type II ULIPs category.
Outlook Money awarded 4th Rank to Kotak Long Life Wealth Plus plans in the
Type I ULIPs category, concluding that Kotak Life has a product portfolio
which delivers what customers want.
Kotak Life Insurance plans were rated amongst the best in the industry for a
second year in a row in the annual ULIP Ranking carried out by Outlook
Money.
Kotak Securities- Best Brokerage Firm in India - Asia money, 2008
Kotak Securities- Selected Business Super brand India 2008
Kotak Securities - India Equity House of the Year 2008 award from IFR Asia
Kotak Securities - Best Equity House in India by Finance Asia in 2008
Kotak Securities - Best Equity House in India by Asia money in 2008
Kotak Securities - Best Brokerage and Best Analyst (Sanjeev Prasad) in India
in the Asia money 2008 Brokers Poll
Kotak Investment Banking was awarded the Best Domestic Investment Bank
2008 by Triple A Asset Asian Awards
50
CHAPTER-4
COMPANY PROFILE
Our Story
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.
1985
The company was incorporated on 21st November 1985 under the name Kotak
Capital Management Finance Ltd. The Company has been promotedby Mr
Uday S Kotak, Mr S.A.A Pinto and Kotak & Company. The company obtained
the certificate of commencement of business on 11th February
1986 and the Existing promoters were joined by Mr Harish Mahindra and Mr
Anand Mahindra. The company's name was changed on 8th April 1986 to its
present name Kotak Mahindra Finance Ltd.
51
The Company deals in Bill discounting, leasing and hire purchase, corporate
finance, management of fixed deposit mobilisation, financing against
securities, money market operations, consumer finance, investment banking
and clients' money management.
1990
1991
An application was made to SEBI for approval for setting up a Mutual Fund
trust and an asset management company. The newly set up Corporate
Advisory Services Group received several mandates for advice on mergers and
acquisitions and re-structuring.
The Company's newly established Foreign Exchange Risk Management Service
carters to the vast potential demand for price risk management.
The Company established itself as a major leasing and hire-purchase company
and as a source of finance for purchasers of automobiles.
1992
52
In January, the Company offered and allotted 15,50,000 - 14% secured partly
convertible debentures of Rs 90 each for a total value of Rs 13.95 crores in the
following manner:
(i) 2,00,000 debentures to promoters, directors, etc.
(ii) 77,500 debentures to employees (including working directors)/workers on
preferential basis
(iii)12,72,500 debentures to Indian public through prospectus.
1993
53
(ii)
1994
54
The Company has received the approval of Securities and Exchange Board of
India (SEBI) for setting up a Mutual Fund.
1995
The Company entered into a joint venture agreement with Ford Credit
International Inc. (FCI), a subsidiary of Ford Motor Credit Co., USA.
It was proposed to finance all non Ford Passenger cars.
Kotak Mahindra Capital company became a subsidiary of the Company.
1996
The Company's operations were affected by the liquidity crunch, scarcity of
resources, sluggishness in the capital markets and the overall deceleration of
economic growth.
55
The Company has entered into a MOU with the Chubb Corporation, New
Jersey, U.S.A., one of the largest American Insurance firms, to develop a Joint
Venture dedicated to the conduct of causality and property insurance business in
India.
The Company has invested a sum of about Rs 200 lacs in Matrix Information
Services private Ltd. (Matrix), a company formed for providing comprehensive
value added information to business and general users. Matrix is a wholly
owned subsidiary of the company.
The Company has divested its entire holding of 20,00,070 No. of equity shares
of Rs 10 each of Kotak Mahindra Securities Ltd. (KMSL) and 20,00,000
ordinary shares of US $ 1 each of Kotak Mahindra International Ltd.
1997
Kotak Mahindra Finance Ltd., has decided to venture into health insurance
business.
56
Kotak Mahindra Finance has launched a new consumer finance product called
Kotak Mahindra K-Value.
The company has diversified into various activities for which it has set up
subsidiaries including broking, capital market activities, auto finance, etc.
1998
The Company it would launch its mutual fund with two schemes -1- KGilt
2- Unit Scheme and K30 Unit Scheme.
Kotak Mahindra Finance, is a joint venture with Goldman Sachs.
1999
The `FAA' (pronounced `F double A') rating assigned to the fixed deposit
programme of Ford Credit Kotak Mahindra (FCKM) has been reaffirmed.
57
With the allotment to the Company of 50,000 equity shares of Rs. 10 each by
Kotak Mahindra Trustee Company Limited (KMTCL) on 12th May.
2000
Kotak Mahindra Finance Ltd (KMFL) and Chubb Corporation of the US have
decided to call off their joint venture for entering the general insurance
business in India.
The Company has decided to set up a venture capital fund with an initial
corpus of Rs. 100 crore.
The Company Issue of 9,182,500 No. of Equity Shares of Rs. 10/- each for
cash at a premium of Rs. 90/- per share aggregating Rs. 918,250,000 to the
Equity Shareholders of the Company on Rights basis in the ratio of one equity
share for every our equity shares held on 15th February.
58
Kotak Mahindra Finance is in talks with foreign insurers for a joint venture in
the life insurance business.
The Company has proposed to start-up capital of Rs 150 crore in its life
insurance joint venture with Old Mutual, the UK based financial services
group.
The Company proposes to make the necessary applications to the RBI and the
Insurance Regulatory and Development Authority for entering the life
insurance business.
Kotak Mahindra Finance Ltd has been assigned Ind AAA rating (indicating
highest credit quality) for its Rs.510 million medium term borrowing
programme.
Fitch India has assigned a rating of Ind AAA to the Rs 51-crore medium term
borrowing program of Kotak Mahindra Finnance Ltd for high credit quality
and negligible risk factor.
2001
59
The Bharath Petroleum Corporation Ltd (BPCL) has decided to part ways with
Kotak Mahindra, one of the leading domestic financial services company, in its
convenient store venture In & Out.
2002
KMFL's business has seen a fast growth with the total disbursement of
commercial vehicle loan of the company in the last fiscal was tuned to Rs.
250cr.
RBI has given in-principle approval to Kotak Mahindra Finance Ltd to convert
itself into a bank, thereby becoming the first ever non-banking finance
company converted into a bank.
Mr Uday Kotak says, there won't be any fish capital infusion in the bank in the
near future.
60
Mr.Uday Kotak has been appointed as the Executive Vice Chairman and
Managing Director of the company.
Mr.C Jayaram and Mr. Dipak Gupta are appointed as whole time Directors on
the Board of Kotak Mahindra Finance Ltd.
2003
61
Madison Communications has won the Rs.30cr Kotak Mahindra's media AOR
account.
The proposal of changing the name from 'Kotak Mahindra Finance Ltd' to
'Kotak Mahindra Bank Ltd' and the proposal to change the authorized capital
from 100,00,00,000 divided into 10,00,00,000 equity shares of Rs.10 each has
been approved by the company shareholders.
RBI has granted licence to Kotak Mahindra Finance Ltd to embark on its
banking business.
O & M has got the creative account of Kotak Mahindra Bank, and has said to
be working professionally.
Kotak Mahindra Bank has received a lot of interest from portfolio investors,
private equity investors and potential strategic investors.
Kotak Mahindra Bank has entered into an ATM sharing agreement with UTI
Bank, which would allow KMB's customer free access to around 800 ATM's.
Kotak Mahindra Bank has started its operations in New Delhi by inaugurating a
branch Cannaught place office.
The Board of Kotak Mahindra Bank Ltd accepts the resignation of Mr.S.A.A
Pinto and Mr.M.R Punja as the Directors of the Bank.
Kotak Mahindra bank has unveiled several home finance products options
which includes Home loan, Home equity Loan, Home loan transfer and Home
improvement loans.
In response to the repo rate cut by the RBI, the Kotak Mahindra Bank has
reduced its lending rates in home loans.
Kotak Mahindra Bank Limited has informed that the equity shares of the Bank
have been delisted from the Delhi Stock Exchange Association Ltd w.e.f
December 10, 2003.
2004
Kotak Mahindra Bank Limited has informed that the Bank's equity shares will
be delisted from The Stock Exchange, Ahmedabad with effect from January 20,
2004.
63
2006
64
In October 2005, Kotak Group acquired the 40% stake in Kotak Prime held by
Ford Credit International (FCI) and FCI acquired the stake in Ford Credit Kotak
Mahindra (FCKM) held by Kotak Group.
In May 2006, Kotak Group bought 25% stake held by Goldman Sachs in Kotak
Capital and Kotak Securities.
65
Kotak Securities
Kotak Securities Ltd. is one of India's largest brokerage and securities
distribution houses. Over the years, Kotak Securities has been one of the
leading investment broking houses catering to the needs of both institutional
and non-institutional investor categories with presence all over the country
through franchisees and coordinators. Kotak Securities Ltd. offers online
(through www.kotaksecurities.com) and offline services based on wellresearched expertise and financial products to non-institutional investors.
66
67
Share Price
68
BSE
Currency: Rs. 2-08-2013 00:00
Price
652.45
Day High
672.00
Bid
0.00
Day Low
645.10
Offer
0.00
52 Week High
804.00
Change On Day
14.00
52 Week Low
544.15
Percentage Change
668.00
Daily Volume
36,895
Prev. Closing
666.45
NSE
Currency: Rs. 2-08-2013 00:00
Price
653.50
Day High
672.30
Bid
0.00
Day Low
645.00
Offer
0.00
52 Week High
807.35
Change On Day
12.80
52 Week Low
544.05
Percentage Change
662.25
Daily Volume
749253
666.30
Share Chart
69
Prev. Closing
Exchange: BSE
Start Date: 1-02-2013 End Date : 2-08-2013
20012-13
Performance at a Glance
70
Rs Crore
Rs Crore
71
Consolidated Earnings
per Share (Diluted)
Rs Crore
Quarter 1
Kotak Credit Cards launched.
Kotak Investment Banking awarded Best Investment
Bank in India by Global Finance in 2008.
Kotak Mahindra Bank rated Best Workplaces in India
2008 (study by The Great Places to Work Institute India).
Kotak Investment Banking acts as the exclusive financial
advisor to Mahindra & Mahindra Ltd for preferential
allotment to Goldman Sachs PIA, investment involving
issuance of FCDs during turbulent and volatile market
conditions.
Kotak Investment Banking & Kotak Securities jointly
awarded Best Equity House in India by Asiamoney in
2008.
Kotak Investment Banking is lead manager for the KSK
Energy Ventures Ltd Rs 8.3 billion IPO.
72
Quarter 2
Quarter 3
October 2008 |
Kotak Mahindra Bank:
200 branches and growing.
Money.
Kotak Long Life Wealth Plus Plans awarded 4th rank in the
Type I ULIPs category by Outlook Money, concluding that
Kotak Life has a product portfolio which delivers what
customers want.
Kotak Investment Banking wins India Equity House of
the Year 2008 award from IFR Asia.
Kotak Group raises Kotak India Realty Fund Ltd with
commitments of US$281 million.
QUARTER 4
75
76
SWOT ANALYSIS
Strength
1. Innovative financial products of diverse categories
2. Kotak Mahindra Finance Ltd. is the first company in the Indian
banking history to convert to a bank.
3. Comprehensive Cash Management System
4. Has over 20,000 employees
5. Customer account base of over 2.7 million
Weakness
1. Lesser penetration as being late entrants
2. Low publicity and marketing as compared to other premium banks
in the urban areas
77
78
Opportunity
1. Increase in Industry banking
2. Explore opportunities abroad by International
banking
3. Increase more and more Branches across India
and worldwide.
4. Expansion Into New Segments
Threat
1. Economic slowdown
2. Highly competitive environment
3. Stringent Banking Norms
4. Changing Interest Rates
5. Global Economic Condition
79
GRAPH 5A
GRAPHS
GRAPH 5 A
As Per the Survey I Have found that Employees in 11 Companies are above 40
Employees in 23 companies are between 30-40
Employees in 16 companies are between 20-30
80
GRAPH 5 B
GRAPH 5 C
As per the Companies survey Regarding Loan Facility Taken from any Bank
46 Companies said they have taken Loan Facility
4 Companies said they have not taken any loan Facility
82
GRAPH 5 D
As Per the Companies survey the bank which are been used by the companies
are
3 Companies where using Kotak Mahindra Bank
16 Companies where using HDFC bank
9 Companies where using ICICI Bank
7 Companies where using City Bank
83
GRAPH 5 E
As per the Company Survey Types of Payments which are been used by the
Company
All the companies mainly uses all types of payments,very few companies uses
only cheques and online payments.
All the vendor payments , Employees Salary, and other transaction are done
through all the modes of payments.
84
GRAPH 5 F
85
GRAPH 5 G
As per the companies survey regarding Problem they are facing from their
current bank
Only 2 Companies said that they are facing problem ,and the remaining 48
Companies said that they are very much happy with their bank, and their
services.
86
CHAPTER 5
DATA COLLECTION
Data collection for the organization was according to the questioner prepared by
the Kotak Mahindra Bank, according to the requirements of the company and
the problem they are facing from the Current banks, the question was mainly to
find out the problem of the banks,
As I have distributed 70 questioner out of which 50 where filled and returned
back to me , as I have covered the Gurgaon part during my Internship as we can
see that most the companies are in Gurgaon region,as the time was two month,
but I tried to collect as much data I can.
PRIMARY DATA
Primary data was the questioner which was been made by the Bank and it
contain 10 question which was been asked by them to analyze the data,
There where around 50 questioner which was been distributed,
Data was mainly related to their organization which deals with the finance , and
the questioner where been filled by the finance team of the organization.
After the collection of the primary data I did the analysis by making the pie
chart.
87
SECONDARY DATA
At the outset of the chapter a strong case is made for studying secondary data
before engaging in primary research. The potential benefits of beginning any study
with secondary data are outlined, including the prospect that in some cases
possession of relevant secondary data may obviate the need for primary research to
be undertaken at all.
This discussion is followed by an overview of the questions that should be asked
when evaluating secondary sources and data in terms of their validity and accuracy.
Thereafter, the principal internal and external sources of secondary data are
described.
The final section of this chapter briefly points towards future developments in the
storage and retrieval of secondary data. Mention is made of electronic systems like
the Internet and CD-ROMs
Secondary data may be available which is entirely appropriate and wholly adequate to
draw conclusions and answer the question or solve the problem. Sometimes primary
data collection simply is not necessary.
It is far cheaper to collect secondary data than to obtain primary data. For the same
level of research budget a thorough examination of secondary sources can yield a great
deal more information than can be had through a primary data collection exercise.
The time involved in searching secondary sources is much less than that needed to
complete primary data collection.
Secondary sources of information can yield more accurate data than that obtained
through primary research. This is not always true but where a government or
international agency has undertaken a large scale survey, or even a census, this is likely
to yield far more accurate results than custom designed and executed surveys when
these are based on relatively small sample sizes.
It should not be forgotten that secondary data can play a substantial role in the
exploratory phase of the research when the task at hand is to define the research
problem and to generate hypotheses.
Secondary sources help define the population. Secondary data can be extremely
useful both in defining the population and in structuring the sample to be taken. For
instance, government statistics on a country's agriculture will help decide how to stratify
a sample and, once sample estimates have been calculated, these can be used to
project those estimates to the population
88
CHAPTER 6
FINDINGS AND ANALYSIS
Findings was on the basis of questioner which was been prepared according to
know the problem the companies are facing.
Finding was mainly done on the primary basis ,by asking them the question , as
50 questioner where distributed to different companies of Gurgaon region
As we have to know in what type of business the company was into, turnover of
the company, which banks they are using and whether they are satisfied with
the banks or not.
Our main focus was on the Remittance and the conversion margin the foreign
exchange the how much they charge for the conversion of the currency. And the
taken by the bank to convert the currency.
Analysis was that I analyze the questioner through pie chart and I found that the
organization are already dealing with some other bank, and related to Kotak
Mahindra Bank they replied as it is a very small bank, and do not have much
branches. And they are dealing with other banks like HDFC, ICICI,
AMERICAN EXPRESS, CITY BANK, etc., but I found that very few
companies are dealing with Kotak Mahindra bank, as they are not doing any
advertisement, they are unable to approach the companies, and for some of the
companies who are dealing with Kotak Mahindra bank they are not happy with
the client handling, and the feedback.
Kotak Mahindra should look over for expanding their branches, and should
approach the new companies, because if the companies are already dealing with
some other banks they do not want to shift to some other banks
As I have visited the new companies and approached them for the meetings
they were happy and ready to fix meetings with our chief manager.
Bank should approach the new ventures and the medium and small scale
companies also.
89
CHAPTER 7
Recommendations
90
Mar '13
Mar '12
Mar '11
Mar '10
Mar '09
12 mths
12 mths
12 mths
12 mths
12 mths
373.30
370.34
368.44
348.14
345.67
373.30
370.34
368.44
348.14
345.67
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
34.82
36.92
0.00
0.00
14,894.03
12,530.70
10,594.51
7,617.60
6,268.78
0.00
0.00
0.00
0.00
0.00
Net Worth
15,267.33
12,935.86
10,999.87
7,965.74
6,614.45
Deposits
49,389.14
36,460.73
27,312.98
21,819.18
13,822.78
Borrowings
36,171.96
29,194.69
22,073.32
13,885.70
11,059.98
Total Debt
85,561.10
65,655.42
49,386.30
35,704.88
24,882.76
208.72
160.06
107.21
80.86
62.86
10,077.27
9,011.53
8,145.20
6,371.07
3,738.04
Reserves
Revaluation Reserves
Minority Interest
Policy Holders Funds
Group Share in Joint Venture
0.00
0.00
0.00
0.00
0.00
4,720.24
4,586.52
5,042.56
4,992.25
4,935.72
115,834.66
92,349.39
73,681.14
55,114.80
40,233.83
Mar '13
Mar '12
Mar '11
Mar '10
Mar '09
12 mths
12 mths
12 mths
12 mths
12 mths
2,220.76
2,030.63
2,114.86
2,094.08
1,007.03
2,297.49
1,545.20
879.40
412.73
430.47
Advances
66,257.65
53,143.61
41,241.95
29,724.29
22,497.62
Investments
40,907.24
31,658.43
26,048.99
19,484.78
13,313.03
619.90
1,419.85
1,281.77
1,166.42
794.62
Total Liabilities
Assets
Gross Block
Accumulated Depreciation
Net Block
Capital Work In Progress
Other Assets
0.00
807.97
681.35
552.59
452.86
619.90
611.88
600.42
613.83
341.76
0.00
3.42
0.00
0.00
0.00
3,531.63
3,356.22
2,795.51
2,785.10
2,643.94
Minority Interest
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
115,834.67
92,349.39
73,681.13
55,114.81
40,233.85
37,509.95
36,055.94
33,223.43
35,690.18
59,590.51
Total Assets
Contingent Liabilities
91
6,470.50
5,812.25
0.00
3,063.64
1,205.41
204.49
174.18
148.78
228.81
191.35
CHAPTER 8
BIBLIOGRAPHY
http://www.kotak.com
http://www.treasurer.ca.gov/news/speeches/sustainable.htm.
http://www.federalreserve.gov/pubs/bulletin/1999/0299lead.pdf.
http://wikipedia.org
www.investowords.com
www.mca.gov.in
http://www.mca.gov.in/MCA21/
http://www.federalreserve.gov/FOMC/BeigeBook
http://www.pdfsearchengine.org
Annual Report, Kotak Mahindra Bank- 2011-12
92
CHAPTER - 9
ANNEXURE
Chapter 1- Defination
Chapter 2- Executive Summary
Chapter 3- Research Methodology
3.1 -Primary Objective
3.2 -Research Design
3.3 -Sample Design
3.4 -Scope of the study
3.5 -Chapter Limitation
Chapter 4- Critical Review of Literarure
Chapter 5- Company Profile
5.1 Industry Profile
5.2Swot Analysis
Chapter 6-Data Collection
6.1Primary Data
6.2Secondary Data
Chapter 7- Finding And Analysis
Chapter 8- Recommendations
Chapter 9- Bibliography
Questionnaire
93
Graphs
Profit and Loss Account
Balance Sheet
Pre
Mar '12
Mar '11
Mar '10
12 mths
12 mths
12 mths
12 mths
Interest Earned
8,042.49
6,180.24
Other Income
1,160.66
848.42
Total Income
9,203.15
7,028.66
4,811.12 3,676.59
Interest expended
4,836.82
3,667.75
2,058.49 1,397.48
Employee Cost
1,075.14
902.36
783.83
583.48
Income
4,303.56 3,255.62
507.56
420.97
Expenditure
0.00
542.71
487.82
648.07
132.53
116.76
98.27
90.00
1,797.95
714.03
564.53
396.47
0.00
0.00
0.00
0.00
2,209.73
1,754.66
1,528.58 1,447.42
795.89
521.20
7,842.44
5,943.61
Mar '13
Mar '12
Mar '11
Mar '10
12 mths
12 mths
12 mths
12 mths
1,360.72
1,085.05
818.18
561.11
0.00
0.00
0.00
2.01
2,162.79
1,494.52
965.91
648.94
Total
3,523.51
2,579.57
0.00
0.00
0.00
0.00
52.38
44.49
36.88
29.66
7.29
7.22
4.37
0.00
18.23
14.65
11.10
16.12
14.00
12.00
10.00
8.50
Total Expenses
Preference Dividend
Equity Dividend
Corporate Dividend Tax
405.87
270.60
3,992.94 3,115.50
1,784.09 1,212.06
94
126.77
107.75
92.74
130.40
379.20
310.81
207.41
188.43
68.04
54.26
40.91
28.06
Appropriations
Transfer to Statutory Reserves
Transfer to Other Reserves
Proposed Dividend/Transfer to Govt
59.67
51.71
41.25
29.66
3,016.60
2,162.79
1,494.52
965.91
Total
3,523.51
2,579.57
1,784.09 1,212.06
QUESTIONNAIRE
1. WHAT TYPE OF BUSINESS YOUR COMPANY IS INTO?
Please Specify
2. WHAT IS YOUR TOTAL EMPLOYEES STRENGTH?
20-30
30-40
Above 40
3. WHAT IS YOUR COMPANIES TURNOVER?
0-200cr
200-500cr
500-1000cr
Above 1000 Specify.
ICICI
CITY BANK
IF Other Specify
5. DOES YOUR COMPANY HAS ANY LOAN ?
YES
NO
YES
NO
10.WHAT IS YOUR VOLUME OF REMITTANCE IN EXPORT AND IMPORT?
CHAPTER- 10
CASE STUDY
Case study on Kotak Mahindra bank.
The onset of the global financial crisis had interrupted Indias growth
momentum. After clocking an annual average growth of 8.9% over 2003-2008,
India headed into a cyclical downturn in 2008-09.
The recovery of the Indian economy started in the 1st quarter of 2009-10 when
the GDP growth bounced back to around 6.1% from the previous quarters
5.8%. The recovery strengthened significantly especially from the 2nd quarter
of 2009-10, driven by a strong momentum in the industrial output and a better
performance of the service sector. The monsoon was erratic with June
September 09 period showing a significant shortfall, but despite the widespread
drought and relatively poor agriculture production in 2009-10, the Indian
economy is expected to grow at 7.2% in 2009-10 as per the advance estimates
released by the Central Statistical Organization.
The recovery story of the Indian economy is also evident from the side of the
Index of Industrial Production (IIP), which was led by the manufacturing sector
with the average growth at 10.5% in April 2009 to February 2010 compared to
3.1% in the similar period last year. A sharp recovery in the capital goods
segment is also indicative of rising investment demand.
97
hardening bias on the back of lack of OMO purchase auctions in the second half
of the FY; consequently the 10-year G-sec yield was at 7.72% by mid-January
2010 and also increased to above 8.0% in early March, 2010. 10-year yield
softened to close the FY10 at around 7.85% The weighted average yield of
dated securities in H1 of 2009-10 was at 7.18% which increased to 7.72% in
H2, bringing the average for the year at 7.36%. The higher weighted average
yield in H2 was due to the lengthening of the borrowing maturity in H2 to 11.70
years compared to 10.93 years in H1. For the full year 2009-10 the weighted
average maturity was at 11.16 years.
In 2008-09, the adverse impact of the global financial market turmoil was felt in
the form of a reversal of FIIs inflows and decline in long-term and short-term
debt flows. As the global financial markets stabilized, flows into the Indian
economy through FII, FDI and most of the debt categories improved. Further,
the outcome of the general elections created positive market sentiments on
reforms and disinvestments, leading to a sharp move up in the equity markets.
These led to an appreciation for the rupee against USD, from around Rs. 51 per
USD in end-March 2009, ending the FY10 at around Rs. 44.92 per USD.
consolidated Financial Performance
The improvement in the economic environment in India was more rapid than
the developed world. This improvement led to an upturn in the financial
services sector and capital markets in India. The Bank and its subsidiaries
continue to grow and are progressing well in adding customers, products and
reach.
Consolidated profit after tax grew 100% to Rs. 1,307 crore. This is the highest
yearly profit for the group. As on March 31, 2010, the Group has a distribution
network of branches, franchisees, representative offices and satellite offices
across 473 cities and towns in India and offices in New York, London, San
Francisco, Dubai, Mauritius and Singapore. The group services around 7 mn
customer accounts.
MDNA.indd 69 5/31/2010 9:04:01 PM
70 Kotak Mahindra Bank Limited
During the year the Bank won the following awards: Adjudged amongst the
Top 25 Best Employers in India 2009 by Hewitt Associates IDRBTS
Special award for IT Governance & Value Delivery Awarded Best
Companies to Work For in 2009 by Great Places to Work Institute India.
IDG Indias CIO 100 Ingenious 100 award and the CIO 100 Storage
Virtualization award. Ranked No. 2 in India and among top 30 globally for
99
the Group. The banking business model is directed towards maximising revenue
generation from customers by offering a wide range of products and services to
address all their banking needs. The Bank has four broad business segments:
Lending Retail liabilities and branch banking
Corporate banking
(including small and medium enterprises SME)
Treasury and
investments
MDNA.indd 70 5/31/2010 9:04:01 PM
Kotak Mahindra Bank Limited 71
The profit before tax of the Bank for FY 09-10 was Rs. 811. 10 crore and Rs.
426.06 crore in FY 08-09. The profit after tax of the Bank was Rs. 561.11 crore
in FY 09-10 and Rs. 276.10 crore in FY 08-09. The break up of segmental
results is as follows: Rs. crore
Segment 31-Mar-10 31-Mar-09 Treasury and BMU 367.46 129.29 Corporate /
Wholesale Banking 385.46 225.34 Retail Banking 61.05 71.28 Sub-total 813.98
425.91 Unallocated Income / (expense) (2.87) 0.15 Profit before tax 811.10
426.06
As per BASEL II Capital adequacy ratio of the Bank as at 31st March 2010 was
18.35% (31st March 2009 20.01%). Tier I ratio was 15.42%. The advances of
the Bank as at 31st March 2010, stood at Rs. 20,775.05 crore (Rs. 16,625.34
crore as at 31st March 2009), showing a growth of 25%. As at 31st March 2010,
the net NPAs of the Bank excluding the acquired stressed assets portfolio were
at 1.25% of net advances (1.26% as at 31st March 2009). The Net NPAs of the
Bank including stressed assets portfolio were at 1.73% of net advances as at
31st March 2010 (2.39% as at 31st March 2009). As at 31st March 2010, the
deposits of the Bank were Rs. 23,886.47 crore (Rs. 15,644 crore as at 31st
March 2009), showing a growth of 53%. As at 31st March 2010, total deposits
comprised of Rs. 4992.13 crore of current account deposits (Rs. 3417.22 crore
as at 31st March 2009), Rs. 2,471.00 crore of savings deposits (Rs. 1,700.91
crore as at 31st March 2009) and Rs. 16,423.33 crore of term deposits (Rs.
10,525.86 crore as at 31st March 2008).
Advances The break up of the advances of the Bank is given below:
Rs. Crore
Segment 31-Mar-10 31-Mar-09 A. Lending Commercial Vehicles &
construction equipment 3,693.47 3,334.54 Mortgage Loans 4,711.63 3,300.17
Agriculture Finance 3,088.62 2,365.02 Personal Loans 1,314.98 2,261.60 B.
Corporate Banking 6,476.13 3,697.11 C. Others 1,490.22 1,666.90 Total
Advances 20,775.05 16,625.34
101
retail Assets commercial lending Commercial lending during the year showed
impressive growth on the back of robust growth in the sales of commercial
vehicles (CV), construction equipments (CE) and tractors. Commercial lending,
specifically CV and CE typically follow a lead and lag effect with GDP growth
figures. CV industry for instance, started showing signs of growth in Q3 of 0809 and continued to gain momentum with better than expected GDP numbers.
As a result of these growth trends, disbursements gained momentum. Operator
margins improved through growth in freight rates and contractor order books
showed growth. The strain on collections witnessed through last year, has
gradually eased as a consequence and is expected to improve further. The
tractor industry has also shown impressive growth with total tractor sales
expected to touch 4 lacs vehicles for the year 2009-10 as against 3.03 lacs last
year. The primary driver has been the increased disposable income of the
farmers arising out of the revision in minimum support price of commodities,
overall food inflation and better yield despite the delayed monsoon.
construction Equipment Infrastructure development has been given a boost in
the current year. With the overall project investments increased during this
period by over 26% while project implementation improved to 44% from 41%.
This has improved sentiments in the Construction Equipment sales. During the
last quarter of the year, most of the construction equipment majors have
improved their sales across segments. Despite improved sentiments, the
payment cycle continued to be long and based on this most of the retail and
mid-size operators faced financial crunch. The delinquency in the industry is
still continuing as the operators are facing difficulties in bridging the Gap
created during the recession period although they are paying their current EMIs.
MDNA.indd 71 5/31/2010 9:04:01 PM
72 Kotak Mahindra Bank Limited
Personal Finance and Mortgage business For Personal finance and Mortgage
business, the year started cautiously, with focus on leveraging the existing base
and cross sell opportunities. The mortgage business started seeing growth
because of an upsurge in demand. Lower cost of borrowing has helped in
pricing competitively as compared to previous years. Further, the existing
liability branch network was also used as an active channel with the
contribution from the channel has grown to about 30% of overall
disbursements. For personal finance business, there was an opportunity for
lenders to capitalise on the latent loan demand in the market, with most lenders
still being wary of the low-ticket unsecured segments. In addition, lenders have
strengthened and revamped their underwriting norms so that they align with the
102
103
equity products and insurance penetration. The key initiatives that the Branch
Banking business undertook this year can be summarized as under:
customer service Launched a nation wide project titled SPIRIT aimed at
improving the overall service levels cutting across all delivery channels
branch, net, contact centre, mobile and ATM. Successfully launched best in
class CRM package covering all Service and Sales roles across entire branch
network and Contact Centre. Launched two commercial branches in Mumbai
on a pilot basis to handle trade transactions. This move is aimed at driving
substantial increase in the throughput of the system with reduced times and
improved customer service. Product Distribution Launched Privy Program
aimed at HNI customers of the bank. This program has several enhanced and
enriched features which makes it one of the unique product offering in the
market. A comprehensive Private Banking System was launched which shall
enable us to offer comprehensive financial planning and advisory services to
customers which balances customers financial goals with their risk profile.
Revised RBI guidelines on ATM usage provided with an opportunity of
increasing acquiring income. Capitalizing on this opportunity bank adopted a
strategy of almost doubling its off site ATM network. This change also
benefited us in improving overall utilization of our ATM network.
MDNA.indd 72 5/31/2010 9:04:01 PM
Kotak Mahindra Bank Limited 73
significant Alliances Kotak Bank was appointed as a sole Financial Advisor
by Overseas Indian Facilitation Centre (OIFC). This provided us an opportunity
to partner the Government of India and CII in presenting its product bouquet to
NRI / PIOs community across the globe. Succeeded in empanelling itself
with Government of Goa, Gujarat and Karnataka for sourcing government
business. Succeeded in getting ourselves empanelled with some of the best
known names in the country for providing Corporate Salary Product to their
employees.
Productivity & control Enhanced 2 factor authentication, using SMS / Email,
for net banking access significantly increased the customer confidence in using
net banking platform offered by the bank on net. Launched bank wide
initiative EUREKA seeking suggestions from employees aimed at improving
productivity, enhancing customer experience, Saving Cost and improved
control (HR section). Availability of the Comprehensive Data warehousing
and analytic tool (RELIABILITY) across all field roles ensured timely
availability of information for decision making.
104
their heightened vigil on liquidity, counterparty and sovereign risks. During the
year, the focus of the treasury was also on up-gradation of technology platform
and re-engineering of various treasury operating processes.
kotAk MAHInDrA PrIME lIMItED (car finance, other lending) Kotak
Mahindra Prime Limited (KMP) is primarily into car finance, engaged in
financing of retail customers of passenger cars and multi-utility vehicles and
inventory and term funding to car dealers. In addition to car finance, KMP also
carries out other lending activities. Other lending activities include financing
against securities, securitization / assignment transactions, purchase of nonperforming assets and other loans / services. There was a upsurge in the
automobile industry and it registered a healthy growth of 24.89% during FY 0910 as compared to a decline of 1.7% for FY 08-09. Total unit sales of cars and
MUVs were around 18.6 lac units in FY 09-10 versus 14.9 lac units during FY
08-09. KMPs advances grew 49% to Rs. 8,379 crs in FY 09-10 from around
Rs. 5,615 crs in FY 08-09. KMP continued to focus on maintaining margins in
the retail car finance business, fee based income, controlling costs and credit
losses, while improving its positioning in the car finance market by scaling up
business. KMP has been a part of the car finance industry since more than 19
years. Over this period, it has carved out a niche for itself and is considered a
leader in the industry. It has strong relationship with key stake holders in the
industry viz. manufacturers, dealers and customers has helped its growth.
MDNA.indd 73 5/31/2010 9:04:01 PM
74 Kotak Mahindra Bank Limited
Financial Highlights
The financial position of KMP for the current and previous financial year is
given below:
Rs. crore Particulars 2009-10 2008-09 Gross Income 992.06 982.21 Profit
before tax 258.87 243.21 Profit after tax 166.41 157.00
kotak securities Post the General Election results in the month of May 2010,
there was a pick up in the Capital Markets and average daily volumes in FY 0910 were 57% higher than the year FY 08-09 in cash segment and 27% in
derivative segment. This resulted in an increase in the companys revenues. The
national outlet network stood at 1,113 (up from 783) due to the introduction of
new Sub-Brokers and new branches. The number of trading accounts added
during the year was 66,000. The AUM of portfolio management services funds
under management stood at Rs. 2,302 crore as at 31st March, 2010 (Rs. 2,237
crore as at 31st March, 2009). Primary market issuances were back in the
Capital Markets. KS was able to maintain its leadership position in mobilization
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Bank in India by FinanceAsia, 2009 for the fourth year in a row. Best
Domestic Equity House by Asiamoney, 2009 for the second consecutive year.
In the capital markets, in FY2010, Kotak Investment Banking was the lead
manager to thirteen out of the twenty Initial / Follow on Public Equity Offerings
(above Rs. 2.5 billion) accounting for ~85% of the total money raised in these
Offerings. We have helped companies raise more than Rs. 500 billion in the
domestic markets during FY2010.
entation.
SYNOPSIS
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