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COMPANY PROFILE

BRIEF OUTLINE OF THE COMPANY:-

Kotak Mahindra is number 10 on the list of India’s best employers according to the Hewitt
Best Employers Survey 2007. It is the only financial services brand in the top 10.The
company was incorporated on 21st November 1985 under the name of Kotak Capital
Management Finance ltd. The company has been promoted by Mr. Uday S. Kotak, Mr.
S.A.A. Pinto and Kotak & Company. In 1986 the existing promoters were joined by Mr.
Harish Mahindra and Mr. Anand Mahindra and then the company’s name changed to its
present name Kotak Mahindra Finance Ltd.

In 2003, Kotak Mahindra Finance Limited obtained license from the Reserve Bank of India
(RBI) and converted into Kotak Mahindra Bank, the first company to do so in India.

Kotak Mahindra Bank Ltd. is presently one of the finest banking services providers in
India. The specialized products by Kotak Mahindra Bank India that drive mass interest
among the customers are Kotak Mahindra Life Insurance and other insurance products,
Kotak Mahindra Mutual Fund, and Kotak Mahindra Securities, Kotak Mahindra Bank Credit
Cards, Kotak Mahindra Bank Home Loan products, Kotak Mahindra Bank personal loan,
Kotak Mahindra Bank Visa Cards and many more products.

PERFORMANCE:-

The Bank is the central platform for customer relationships across 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:

• Retail lending
• Retail liabilities and branch banking
• Corporate banking (including small and medium enterprises – SME) and
• treasury
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Retail Lending
The Bank continues to leverage its experience in the field of retail lending business and has
shown a robust growth in disbursements and advances in this area. The total advances of the
Bank increased by 58% from Rs. 4,017.14 crore in 2004-05 to Rs. 6,348.54 crore in 2005-06.
Retail advances grew 61% from Rs. 3,115.01 crore in 2004-05 to Rs. 5,012.71 crore in 2005-
06. The Bank has witnessed significant traction in some of the newer products like home
finance, agri-finance and Saral. The Bank has a widespread geographical distribution
network to distribute its retail lending products.

Commercial vehicles advances recorded a growth of 9% to Rs. 1,873.07 crore in 2005-06.

Saral loans which are essentially targeted at asset backed lending to customers, where
organized credit does not reach easily, expanded its scope during 2005-06 to prime category
of customers through business loans with or without asset backed security.

In 2005-06, personal loans grew by 86% to Rs. 1,006.95 crore and the Bank improved its
presence across newer geographies. The Bank had launched home loans in 2003, which has
grown 142% YoY to Rs. 970.72 crore.

Asset reconstruction business is one of the key focus areas of the Bank, and the Bank has a
pre-eminent position in the industry. The Bank purchases distressed assets and portfolios
from other banks and financial intermediaries and helps in the resolution of the non-
performing loans. The Reserve Bank of India published guidelines for sale of NPAs, which
further added impetus to the business.

The profit before tax for the retail lending segment was up 41% from Rs. 81.58 crore in
2004-05 to Rs. 114.61 crore in 2005-06.

Retail Liabilities and Branch Banking

As on March 31, 2006, the Bank had 65 full-fledged (including 21 semi urban / rural)
branches across 43 towns and cities (38 branches across 25 cities as on March 31, 2005).

The Bank offers a very wide range of products and services targeted at retail customers,
delivered through a state of the art technology platform. In addition to branch banking, the
convenience banking facilities offered by Kotak Mahindra Bank include telephone banking,
internet banking, mobile banking, direct pay services, payment gateway for online shopping,
a “Global Debit Card” which allows certain customers free access at any Visa ATM in India
or abroad, and “Kotak Visa Money Transfer”, which permits the transfer of funds to all Visa
debit and credit cards in India. As a part of its platform, Kotak Mahindra Bank offers
depository services that allow customers to hold equity shares, Government securities, bonds
and other securities in electronic or dematerialized format. Another product offered by Kotak
Mahindra Bank is the “Best Compliments Card”, a prepaid spending card accepted at over
150,000 merchant establishments in India, at all establishments which accept Visa credit
cards.
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Corporate Banking
Corporate banking provides a broad range of financial services to domestic and international
corporations, financial institutions, and government entities. The Bank’s services include
working capital, trade services, transaction banking, money market and foreign exchange
services offered to corporate and small and medium enterprises (SMEs).

The Bank offers the entire range of debt and fixed income products with a team of
experienced and highly qualified professionals who structure products to suit the dynamic
and varied needs of customers across segments. The Bank offers a variety of products from
plain vanilla debt issuance to Asset Backed Securities (ABS), Mortgage Backed Securities
(MBS), structured products and loan syndication. The Bank’s strength lies in its ability to
customize instruments/ structures develop innovative products and then deliver these through
high level of execution capabilities and a wide distribution network across the country.

In spite of intense competition, the Bank witnessed a significant growth in corporate bank
advances (including SME). The total advances of this segment grew 48% from Rs. 902.13
crore as on 31st March, 2005 to Rs. 1,335.83 crore as on 31st March, 2006. The profit

before tax for the Corporate Banking segment was up 54% from Rs. 25.19 crore in 2004-05
to Rs. 38.66 crore in 2005-06.

Treasury
The financial markets witnessed considerable volatility in 2005-06. The more liquid 8.07%
GS2017 bond witnessed large swings with yields dipping to a low of 6.86% during the
financial year but rising to 7.55% by end-March 2006. The Bank had anticipated a secular
uptrend in the interest rates in 2005-06 on the back of monetary policy tightening by the RBI.
Consequently, the modified duration of the banking book was restricted to an average of
marginally over one year through the year.
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CORPORATE STRUCTURE:-

Uday Kotak (Vice Chairman & MD)

Deepak Gupta (Executive Director)

Venkattu Srinivasan (Group Head)

Sudhir Khanna (Executive Vice president)

Dandapani Brahma (Senior Vice President & Business Head)

Prabhu Swami (HR Manager)

Sanjay Kumar (Manager, Retail ARD)

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NPA (Non-performing Assets):-

MEANING:-

An asset becomes non-performing when it ceases to generate income for the bank.
Earlier an asset was considered as non performing asset based on the concept of “past
due”.

DEFINITION:-

A NPA was defined as credit in respect of which interest and/or instalment of principal
has remained “past due” for a specific period of time. The specific period of time was
reduced in a phased manner as under:

Year ended March,31 Specific Period

1993 4 Quarters
1994 3 Quarters
1995 2 Quarters
2004 1 Quarters

An amount is considered as past due, when it remains outstanding for 30 days beyond the
due date. However, with effect from March31, 2001 the “past due” concept has been
dispensed with and the period is reckoned from the due date of payment.

NORMS FOR IDENTIFICATION OF NPA:-

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With an intense to use the international best practice and to ensure greater transparency, “90
days” overdue norms are accepted for the identification of NPA from the year ended March
31, 2004.

With effect from March 31, 2004, a NPA shall be counted on loan and advances where:

A. Interest and / or instalment of principal remain overdue for a period of more than 90
days in respect of a term loan.
B. The account remains out of order for a period of 90 days, in respect of an Overdraft/
Cash Credit (OD/CC).
C. The bill remains overdue for a period of more than 90 days in the case of bills
purchased and discounted.
D. Any amount to be received remains overdue for a period of more than 90 days in
respect of any other accounts.

FACTORS RESPONSIBLE FOR NPA:-

©. Improper selection of borrower’s activities

©. Weak credit appraisal system

©. Industrial problem

©. Inefficiency in management of borrower

©. Slackness in credit management & monitoring

©. Lack of proper follow up by bank

©. Recession in the market

©. Due to natural calamities and other uncertainties

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INDIAN ECONOMY AND NPA:-

Gross NPAs (non-performing assets) in Indian banking sector have declined sharply to
close to 3.0 per cent in 2006 (15.7 per cent at end-March 1997). Net NPAs of the banking
sector are now at close to one per cent and the gap between the gross and net NPAs has
narrowed over the years. Recovery of dues is also more than the fresh slippages.

The decline in NPAs is particularly significant as income recognition, asset

classification and provisioning norms were tightened over the years. For instance, banks now
follow 90-day delinquency norm as against 180-day earlier. Banks are also required to make
general provisioning (0.40 per cent) for standard advances.

According to Reserve Bank of India, improved profitability, underpinned by robust

macroeconomic environment and upturn in interest rate cycle, has enabled banks to reduce
the backlog of NPAs.

RETAIL ARD:-

ARD stands for Asset Reconstruction Division. It generally converted non-performing

assets into performing assets.

CREDIT CARDS:-
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Today credit card has become the status symbol for each and every individual. The number
of card in his pocket determines the strength of his pocket. But today credit card in India is in
declining phase. The first credit card in India was launched by Andhra bank way back in the
year 1981. After that there was no looking back for this product, which brought a
revolutionary change in the purchasing power for any individual. But still credit card remains
as an alien to some people in India as it carries a wrong notion along with it.

WHAT IS CREDIT CARD?

A credit card is a small plastic card issued to users of a system of payment. It allows its
holder to buy goods and services based on the holder's promise to pay for these goods and
services.[1] The issuer of the card grants a line of credit to the consumer (or the user) from
which the user can borrow money for payment to a merchant or as a cash advance to the
user. Usage of the term "credit card" to imply a credit card account is a metonym.

A credit card is different from a charge card: a charge card requires the balance to be paid in
full each month. In contrast, credit cards allow the consumers a continuing balance of debt,
subject to interest being charged. Most credit cards are issued by banks or credit unions, and
are the shape and size specified by the ISO/IEC 7810 standard as ID-1. This is defined as
85.60 × 53.98 mm (3.370 × 2.125 in) (33/8 × 21/8 in) in size.

CREDIT CARD

HOW CREDIT CARD WORKS?

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Credit cards are issued after an account has been approved by the credit provider, after which
cardholders can use it to make purchases at merchants accepting that card.

When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder
indicates consent to pay by signing a receipt with a record of the card details and indicating
the amount to be paid or by entering a personal identification number (PIN). Also, many
merchants now accept verbal authorizations via telephone and electronic authorization using
the Internet, known as a 'Card/Cardholder Not Present' (CNP) transaction.

Electronic verification systems allow merchants to verify in a few seconds that the card is
valid and the credit card customer has sufficient credit to cover the purchase, allowing the
verification to happen at time of purchase. The verification is performed using a credit card
payment terminal or Point of Sale (POS) system with a communications link to the
merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on
the card; the latter system is called Chip and PIN in the United Kingdom and Ireland, and is
implemented as an EMV card.

For transactions at which the buyer is not present and the card not shown (e.g., ecommerce,
mail order, and telephone sales), merchants additionally verify that the customer is in
physical possession of the card and is the authorized user by asking for additional
information such as the security code printed on the back of the card, date of expiry, and
billing address.

Each month, the credit card user is sent a statement indicating the purchases undertaken with
the card, any outstanding fees, and the total amount owed. After receiving the statement, the
cardholder may dispute any charges that he or she thinks are incorrect (see Fair Credit
Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined
minimum proportion of the bill by a due date, or may choose to pay a higher amount up to
the entire amount owed. The credit issuer charges interest on the amount owed if the balance
is not paid in full (typically at a much higher rate than most other forms of debt). Some
financial institutions can arrange for automatic payments to be deducted from the user's bank
accounts, thus avoiding late payment altogether as long as the cardholder has sufficient
funds.

BENEFITS TO CUSTOMERS:-
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The main benefit to each customer is convenience. Compared to debit cards and checks, a
credit card allows small short-term loans to be quickly made to a customer who need not
calculate a balance remaining before every transaction, provided the total charges do not
exceed the maximum credit line for the card. Credit cards also provide more fraud protection
than debit cards. In the UK for example, the bank is jointly liable with the merchant for
purchases of defective products over £100.

Many credit cards offer rewards and benefits packages, such as offering enhanced product
warranties at no cost, free loss/damage coverage on new purchases, and points which may be
redeemed for cash, products, or airline tickets. Additionally, carrying a credit card may be a
convenience to some customers as it eliminates the need to carry any cash for most purposes.

DETERMINANTS TO CUSTOMERS:-

High interest and bankruptcy

Low introductory credit card rates are limited to a fixed term, usually between 6 and 12
months, after which a higher rate is charged. As all credit cards charge fees and interest,
some customers become so indebted to their credit card provider that they are driven to
bankruptcy. Some credit cards often levy a rate of 20 to 30 percent after a payment is missed;
in other cases a fixed charge is levied without change to the interest rate. In some cases
universal default may apply: the high default rate is applied to a card in good standing by
missing a payment on an unrelated account from the same provider. This can lead to a
snowball effect in which the consumer is drowned by unexpectedly high interest rates.
Further most card holder agreements enable the issuer to arbitrarily raise the interest rate for
any reason they see fit.

Inflated pricing for all consumers

Merchants that accept credit cards must pay interchange fees and discount fees on all credit-
card transactions. In some cases merchants are barred by their credit agreements from
passing these fees directly to credit card customers, or from setting a minimum transaction
amount. The result, at least in the United States, is that merchants may charge all customers
(including those who do not use credit cards) higher prices to cover the fees on credit card
transactions. In the United States in 2008 credit card companies collected a total of $48
billion in interchange fees, or an average of $427 per family, with an average fee rate of
about 2% per transaction.

Grace period
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A credit card's grace period is the time the customer has to pay the balance before interest is
assessed on the outstanding balance. Grace periods vary, but usually range from 20 to 50
days depending on the type of credit card and the issuing bank. Some policies allow for
reinstatement after certain conditions are met.

Usually, if a customer is late paying the balance, finance charges will be calculated and the
grace period does not apply. Finance charges incurred depend on the grace period and
balance; with most credit cards there is no grace period if there is any outstanding balance
from the previous billing cycle or statement (i.e. interest is applied on both the previous
balance and new transactions). However, there are some credit cards that will only apply
finance charge on the previous or old balance, excluding new transactions.

Benefits to merchants

An example of street markets accepting credit cards. Most simply display the logos (shown
in the upper-left corner of the sign) of all the cards they accept.

For merchants, a credit card transaction is often more secure than other forms of payment,
such as checks, because the issuing bank commits to pay the merchant the moment the
transaction is authorized, regardless of whether the consumer defaults on the credit card
payment (except for legitimate disputes, which are discussed below, and can result in charges
back to the merchant). In most cases, cards are even more secure than cash, because they
discourage theft by the merchant's employees and reduce the amount of cash on the premises.

Prior to credit cards, each merchant had to evaluate each customer's credit history before
extending credit. That task is now performed by the banks which assume the credit risk.
Credit cards can also aid in securing a sale, especially if the customer does not have enough
cash on his or her person or checking account.

For each purchase, the bank charges the merchant a commission (discount fee) for this
service and there may be a certain delay before the agreed payment is received by the
merchant. The commission is often a percentage of the transaction amount, plus a fixed fee
(interchange rate). In addition, a merchant may be penalized or have their ability to receive
payment using that credit card restricted if there are too many cancellations or reversals of
charges as a result of disputes. Some small merchants require credit purchases to have a
minimum amount to compensate for the transaction costs.
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In some countries, for example the Nordic countries, banks guarantee payment on stolen
cards only if an ID card is checked and the ID card number/civic registration number is
written down on the receipt together with the signature. In these countries merchants
therefore usually ask for ID. Non-Nordic citizens, who are unlikely to possess a Nordic ID
card or driving license, will instead have to show their passport, and the passport number will
be written down on the receipt, sometimes together with other information. Some shops use
the card's PIN for identification, and in that case showing an ID card is not necessary.

Costs to merchants

Merchants are charged several fees for the privilege of accepting credit cards. The merchant
is usually charged a commission of 1%-3%+ of the value of each transaction paid for by
credit card. The merchant may also pay a variable charge, called an interchange rate, for each
transaction. In some instances of very low-value transactions, use of credit cards will
significantly reduce the profit margin or cause the merchant to lose money on the

transaction. Merchants must accept these transactions as part of their costs to retain the right
to accept credit card transactions. Merchants with very low average transaction prices or very
high average transaction prices are more averse to accepting credit cards. In some cases
merchants may charge users a "credit card supplement", either a fixed amount or a
percentage, for payment by credit card.

In certain countries, merchants are required to pay the acquiring banks a monthly terminal
rental fee if the terminals are provided by the acquiring banks. Merchants can apply to the
acquiring banks for waivers of the fees, which the banks usually agree to for merchants with
a high volume of sales, but not for smaller ones.

TRANSACTIONS STEPS:-

• Authorization: The cardholder pays for the purchase and the merchant submits the
transaction to the acquirer (acquiring bank). The acquirer verifies the credit card
number, the transaction type and the amount with the issuer (Card-issuing bank) and
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reserves that amount of the cardholder's credit limit for the merchant. An authorization
will generate an approval code, which the merchant stores with the transaction.

• Batching: Authorized transactions are stored in "batches", which are sent to the
acquirer. Batches are typically submitted once per day at the end of the business day.
If a transaction is not submitted in the batch, the authorization will stay valid for a
period determined by the issuer, after which the held amount will be returned back to
the cardholder's available credit (see authorization hold). Some transactions may be
submitted in the batch without prior authorizations; these are either transactions falling
under the merchant's floor limit or ones where the authorization was unsuccessful but
the merchant still attempts to force the transaction through. (Such may be the case
when the cardholder is not present but owes the merchant additional money, such as
extending a hotel stay or car rental.)

• Clearing and Settlement: The acquirer sends the batch transactions through the credit
card association, which debits the issuers for payment and credits the acquirer.
Essentially, the issuer pays the acquirer for the transaction.

• Funding: Once the acquirer has been paid, the acquirer pays the merchant. The
merchant receives the amount totalling the funds in the batch minus either the

• "discount rate," "mid-qualified rate", or "non-qualified rate" which are tiers of fees the
merchant pays the acquirer for processing the transactions.

• Chargeback’s: A chargeback is an event in which money in a merchant account is

held due to a dispute relating to the transaction. Chargeback’s are typically initiated by
the cardholder. In the event of a chargeback, the issuer returns the transaction to the
acquirer for resolution. The acquirer then forwards the chargeback to the merchant,
who must either accept the chargeback or contest it. A merchant is responsible for the
chargeback only if she has violated the card acceptance procedures as per the merchant
agreement with card acquirers.

DIFFERENT TYPES OF KOTAK CREDIT CARDS:-

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Kotak Mahindra Bank Ltd. Generally deals with 4 types of credit cards. Those are:

Kotak trump Gold Card Kotak Fortune Gold Card

Kotak Royal Signature Card Kotak League Platinum Card

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KOTAK TRUMP GOLD CARD:-

ELIGIBILTY:-

 Primary Card holder should be in the age bracket of 21 years to 65 years. Add-on Card
holder should be 18 years and above
 Location – Ahmadabad, Bangalore, Chandigarh, Chennai, Delhi (including Gurgaon
and Noida), Hyderabad, Kolkata, Mumbai, Navi Mumbai and Pune
 Income – Rs. 3lakh and above per annum
 For Salaried Executives
 Should be a resident of India

CHARGES:-

CHARGES COMPLICATED FEES KOTAK FLAT FEES

Late payment Charges Range from Rs.400/- to Rs.500/-
Rs.700/-
Over limit Charges 2.5% on over limit amount Rs. 500/-
(subject to a minimum of Rs.
500/-)
Cheque Bounce Payment 2.5% of amount or Rs. 250/- Rs. 500/-
whichever is lower
Cash Withdrawal / 2.5% or Rs. 250/- to Rs. Rs. 300/-
Call a Draft / 300/- whichever is higher
Fund Transfer
(Per Rs. 10,000/- or part
thereof)
Foreign Currency Mark Up 3% to 3.5% 3.50%
Interest Charges 3.30% 3.30%
Add-on Card Bank dependent Rs.299/-
Joining fee Bank dependent Waived

* Service tax & education cess would be charged as per statutory regulations on the interest
& fees and other charges charged on your Credit Card.
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KOTAK FORTUNE GOLD CARD:-

ELIGIBILITY:-

 Primary Card holder should be in the age bracket of 21 years to 65 years. Add-on Card
holder should be 18 years and above
 Location – Ahmadabad, Bangalore, Chandigarh, Chennai, Delhi (including Gurgaon
and Noida), Hyderabad, Kolkata, Mumbai, Navi Mumbai and Pune
 Income - Rs. 3lakh and above per annum
 For Businessmen Only
 Should be a resident of India

CHARGES:-

CHARGES COMPLICATED FEES KOTAK FLAT FEES

Late payment Charges Range from Rs.400/- to Rs.500/-
Rs.700/-
Over limit Charges 2.5% on over limit amount Rs. 500/-
(subject to a minimum of Rs.
500/-)
Cheque Bounce Payment Range from Rs.250/-to Rs. 500/-
Rs.500/-
Cash Withdrawal / 2.5% or Rs. 250/- to Rs. Rs. 199/-
Call a Draft / 300/- whichever is higher
Fund Transfer
(Per Rs. 10,000/- or part
thereof)
Foreign Currency Mark Up 3% to 3.5% 3.50%
Interest Charges 3.30% 3.30%
Add-on Card Bank dependent Rs.299/-
Joining fee Bank dependent Waived

* Service tax & education cess would be charged as per statutory regulations on the interest
& fees and other charges charged on your Credit Card.
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KOTAK ROYAL SIGNATURE CARD:-

ELIGIBILITY:-

 Primary Card holder should be in the age bracket of 21 years to 65 years. Add-on Card
holder should be 18 years and above
 Location – Ahmadabad, Bangalore, Chandigarh, Chennai, Delhi (including Gurgaon
and Noida), Hyderabad, Kolkata, Mumbai and Pune
 Income - Rs. 25lakh and above per annum
 Should be a resident of India
 By invitation only

CHARGES:-

CHARGES COMPLICATED FEES KOTAK FLAT FEES

Late payment Charges Range Rs. 300/- to Rs. 600/- Rs.350/-
with 30% of Minimum
Amount Due
Over limit Charges 2.5% on over limit amount Rs. 500/-
(subject to a minimum of Rs.
500/-)
Cheque Bounce Payment 2.5% of amount or Rs. 250/- Rs. 300/-
whichever is lower
Cash Withdrawal / 2.5% or Rs. 250/- to Rs. Rs. 300/-
Call a Draft / 300/- whichever is higher
Fund Transfer
(Per Rs. 10,000/- or part
thereof)
Foreign Currency Mark Up 3% to 3.5% 3.50%
Interest Charges 3.10% 3.10%
Add-on Card Bank dependent Waived
Joining fee Bank dependent Rs. 25,000/-

* Service tax & education cess would be charged as per statutory regulations on the interest
& fees and other charges charged on your Credit Card.

KOTAK LEAGUE PLATINUM CARD:-

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ELIGIBILITY:-

• Primary Card holder should be in the age bracket of 21 years to 65 years. Add-on Card
holder should be 18 years and above
• Location – Ahmadabad, Bangalore, Chandigarh, Chennai, Delhi (including Gurgaon
and Noida), Hyderabad, Kolkata, Mumbai, Navi Mumbai and Pune
• Income - Rs. 15lakh and above per annum
• Should be a resident of India

CHARGES:-

CHARGES COMPLICATED FEES KOTAK FLAT FEES

Late payment Charges Range Rs. 300/- to Rs. 600/- with Rs.350/-
30% of Minimum Amount Due
Over limit Charges 2.5% on over limit amount Rs. 500/-
(subject to a minimum of Rs.
500/-)
Cheque Bounce Payment 2.5% of amount or Rs. 250/- Rs. 300/-
whichever is lower
Cash Withdrawal / 2.5% or Rs. 250/- to Rs. 300/- Rs. 300/-
Call a Draft / whichever is higher
Fund Transfer
(Per Rs. 10,000/- or part thereof)
Foreign Currency Mark Up 3% to 3.5% 3.50%
Interest Charges 3.10% 3.10%
Add-on Card Bank dependent Waived
Joining fee Bank dependent • Rs. 3,000/-
OR
Rs. 8,500/-
OR
Rs. 12,000/-

* Service tax & education cess would be charged as per statutory regulations on the interest
& fees and other charges charged on your Credit Card.

RESEARCH OBJECTIVES
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OBJECTIVE 1:-
Establish a reason for non-payment

OBJECTIVE 2:-
Find out the bad-debt customers

OBJECTIVE 3:-
Negotiate with the defaulting customers to arrange for negotiated
payments.

RESEARCH METHODOLOGY
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1. All the survey and data analysis has been passed on primary
data base which was provided the company itself.

2. After that we have prepared a structured questionnaire

3. After preparing questionnaire, we have collecting data from

the defaulter customers of the company.

4. Population of this study is 298 i.e. company provided us total

298 no. of customers database.

5. We have surveyed a total number of 131 customers out of

these 298 customers in those 2 months.

6. Our sampling technique was convenient sampling.

7. After collected the data we have tabulated all the data in the
Microsoft excel and prepare a master sheet.

8. Then we analyze and interpret all the data.

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GRAPHICAL ANALYSIS OF THE DATA

Now we like to do some data analysis from the data we have collected from the survey
through our questionnaire. We have put a table as well as a graphical analysis in respect of
each and every question. Those are:-

PROFILE OF DEFAULTER CUSTOMERS

TYPES OF CARD

TYPES OF NO. OF PERCENTAGE

CARD DEFAULTERS

KOTAK 27 21%
TRUMP
GOLD CARD

KOTAK 104 79%

FORTUNE
GOLD CARD

TOTAL 131 100%

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Earlier, we have discussed that Kotak Mahindra provides 4 types of credit cards.
Those are: - Kotak Trump gold card, Kotak Fortune gold card, Kotak League Platinum
card and Kotak Royal Signature card. But 1st two types of card generally issued to low
and middle class people and rest of the cards are generally issued to high income class
people. In our survey, we found that most of the defaulter customers are generally
belongs to low and middle class people. That why we took 1st two types of card for our
data analysis.

Here the highest percentage is 79% i.e. 104 out of 131 which is belongs to Kotak
Fortune Gold Card and 21% i.e. 27 out of 131 belongs to Kotak Trump Gold Card.

From this analysis we can conclude that most of the defaulter customers i.e. 79% are
using Kotak Fortune Gold card.
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TIME OF USING KOTAK CREDIT CARD

TIME OF NO. OF PERCENTAGE

USING CUSTOMERS
KOTAK
CREDIT
CARD

1-2 YEARS 42 32%

MORE 89 68%
THAN 2
YEARS

TOTAL 131 100%

From these table we can see that, here two types of time criteria are available. Those are:-
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1. 1-2 years

2. More than 2 years

89 out of 131 i.e. 68% of the defaulter customers have been using their card more than 2
years and 42 out of 131 i.e. 32% have been using their card for 1-2 years.

From this analysis we can conclude that most of the defaulters have been using their card
more than 2 years. That means most of the card had been issued in the year of 2007-2008.

MEMBERS OF FAMILY USING CREDIT CARD

NO. OF NO.OF PERCENTAGE

FAMILY DEFAULTERS
MEMBERS

1 71 54.2%

2 58 45.27%

MORE 2 0.53%
THAN 2

TOTAL 131 100%

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Here 3 types of criteria in no. of family members using their card. Those are:- 1, 2and more
than 2.

Here, 71 out of 131 i.e. 54% defaulters are single user of their own card. 58 out of 131 i.e.
45% defaulters one family member along with the defaulter using their card and just 2 out of
131 i.e. 0.53% defaulters two family members using their card along with the defaulter.

EDUCATIONAL QUALIFICATION

EDUCATIONAL NO. OF PERCENTAGE

QUALIFICATION DEFAULTERS

10TH STANDARD 2 1.52%

12TH STANDARD 8 6.11%

GRADUATE 103 78.53%

POST-GRADUATE 18 13.75%

TOTAL 131 100%

 26

Here 4 criteria of educational qualification. Those are 10th standard, 12standard, graduate and
post-graduate.

From these table we can see that 103 out of 131 i.e. 79% customers are graduate, 18 out of
131 i.e. 14% are post graduate, 8 out of 131 i.e. 6% are higher secondary passed and 2 out of
131 i.e. 1% are 10th class passed.

So from this table, we can conclude that most of the defaulter customers are well-educated
people.
 27

REASON FOR NON PAYMENT

REASONS CUSTOMERS PERCENTAGE

INTETNTIONAL 63 49%

UN- 68 51%
INTETNTIONAL

TOTAL 131 100%

When we doing our survey, we have found that, there are two types of defaulters:-

1. Intentional defaulters
 28

2. Un-intentional defaulters

Intentional customers are 63 out of 131 i.e. 49% and unintentional customers are 68 out of
131 i.e. 51%.

Now we like to do some data analysis for both types of customers individually.

ANNUAL INCOME OF THE CUSTOMER

Intentional

INCOME CUSTOMER PERCENTAGE

LESS THAN 2,00,000 24 38.10%

2,00,000-4,00,000 12 19.05%

MORE THAN 4,00,000 27 42.85%

 29

From our table we can see that there are 3 types of income. Those are less than 2,00,000,
2,00,000-4,00,000 and more than 4,00,000.

Here 27 out of 63 i.e. 43% of intentional customers income is more than Rs. 4,00,000 , 24
out of 63 i.e. 38% of intentional customers income is Rs. 2,00,000-4,00,000 and 12 out of 63
i.e. 19% customers income is less than Rs. 2,00,000. Here the highest percentage is 43% and
most of the intentional customers income is more than Rs. 4,00,000.
 30

Unintentional

INCOME CUSTOMER PERCENTAGE

LESS THAN
2,00,000 26 38.23%

2,00,000-4,00,000 19 27.94%

MORE THAN
4,00,000 23 33.83%
 31

Here 26 out of 68 customers i.e. 38% of unintentional customers income is less than
Rs.2,00,000 , 23 out of 68 i.e. 34% of unintentional customers income is more than Rs.
4,00,000 and 19 out of 68 i.e. 28% of unintentional customers income is Rs. 2,00,000-
4,00,000.

Here we can conclude that most of the unintentional customers income is less than Rs.
2,00,000.

PROFESSION OF CUSTOMERS

INTETNTIONAL

Profession Customers Percentage

Salaried 11 17

Self occupied business 52 83

Total 63 100
 32

Here two types of professions are there. Those are salaried and self employed business.

From these table, we can say that highest percentages of intentional customers are self
employed business man which is 52 out of 63 i.e. 83% and 11 out of 63 i.e. 17% intentional
customers are salaried.

Unintentional

Profession Customers Percentage

Salaried 18 26

Self occupied business 50 74

Total 68 100
 33

Here also we can say that highest percentages of unintentional customers are self employed
business man which is 50 out of 68 i.e. 74% and 18 out of 68 i.e. 26% customers are salaried.

CREDIT LIMIT OF THE CUSTOMERS

INTETNTIONAL

CREDIT LIMIT CUSTOMER PERCENTAGE

LESS THAN 25000 3 4.76%

25000-75000 29 47.58%

75000-150000 13 20.85%

ABOVE 150000 15 23.81%

 34

Here 4 types of credit limit are available there. Those are less than 25000, 25000-75000 and
above 150000. From this table we can see that out of 63 intentional customers 29 customers
credit limit is Rs. 25000-75000 i.e. 48% , 15 customers credit limit is above Rs.150000 i.e.
25% , 13 customers credit limit is Rs.75000-150000 i.e. 22% and 3 customers credit limit is
less than Rs 25000 i.e. 5%. Here highest percentage is 48%. So, most of the intentional
customers credit limit is Rs.25000-75000.

Unintentional

CREDIT LIMIT CUSTOMERS PERCENTAGE

LESS THAN 25000 7 10.29%

25000-75000 29 42.65%
75000-150000 17 25%
ABOVE 150000 15 22.06%
 35

Out of 68 unintentional customers 29 customers credit limit is Rs25000-75000 i.e. 43%, 17

customers credit limit is Rs75000-150000 i.e. 25%, 15 customers credit limit is above
Rs.150000 i.e. 22% and 7 customers credit limit is less than Rs.25000 i.e. 10%. Here the
highest percentage is 43%. So, most of the unintentional customers credit limit is also
Rs25000-75000.

FAMILY MEMBER
 36

Intentional

FAMILY MEMBERS CUSTOMERS PERCENTAGE

1 8 13

2 24 38

3 22 35

4 9 14

TOTAL 63 100

Here total number of unintentional customer is 63. 24 customers have 2 family members, 22
customers have 3 family members, 9 customers have 4 family members and 8 customers
have 1 family member. Here the highest percentage is 38% which is 2 family members.

Unintentional
 37

FAMILY MEMBERS CUSTOMERS PERCENTAGE

1 8 13

2 22 33

3 32 47

4 6 7

TOTAL 68 100

Out of 68 unintentional customers 32 customers family member is 3, 22 customers family

member is 2, 8 customers family member is 1 and 6 customers family member is 6. Here the
highest percentage is 47% which is 3 family members.

OBJECTIVE WISE DATA ANALYSIS

OBJECTIVE 1
 38

REASONS FOR UN-INTENTIONAL NON PAYMENT

In our survey we have find out two types of defaulters. They are intentional and un-
intentional. Our first objective is to establish a reason for non-payment. In case of intentional
customers they are not ready to pay under any circumstances. That’s why there is no
meaning to find out their reason for non-payment. So we concentrated on mainly to the
reasons for the unintentional customers which is given bellow in the following table.

REASONS CUSTOMERS PERCENTAGE

JOB
PROBLEM 34 50%

FAMILY
PROBLEM 16 23.53%

SOME
OTHER
ISSUES 18 26.47%

TOTAL 68 100%
 39

From our survey we find that there are three types of problem generally arise among the un-
intentional customers. Those are Job Problem, Family Problem and some other issues. Total
unintentional customers are 68. Out of which 34 customers have a job problem i.e. 50%, 18
customers have some other problem 24% and16 customers have a family problem i.e. 26%.
Main reasons for non-payment of unintentional customers are the job problem. Earlier we
have discussed that most of the cards have been issued in the year of 2007-2008. On that
time recession was going all over the country. That’s why job problem might be a big reason
for those un-intentional customers.

Whether our observation is right or wrong, we would like to do a proportion test based on the
data we have collected.

From the above table we could see that most of the un-intentional customers i.e. 50% have
been suffering from the job problems. So here our sample proportion is 50% i.e. 0.5.

Our population proportion is 0.33 because there are 3 reasons for unintentional non-payment.
If we take it whole as a 100% and divided it by 3, we get 33.33%.

And our sample size is 68 which is the total number of un-intentional customers.

So here our null hypothesis is 33% of the total un-intentional defaulters have been suffered
from job problems.
 40

So,

H01: PH01 = 0.35

H1: PH01 > 0.35

α = 0.05, n = 6

As because here n>30, we can apply z proportion test

Z= P-p/√PQ/n

Z (observed) Z critical conclusion

( one tailed)

1.64 2.5934 H01: PH01 is

rejected

After applying z test we have find out

Z observed or z tabulated value is 1.64.

Z critical or z computed value is 2.5934.

As because z computed value is greater than z tabulated value, so null hypothesis is rejected
and alternative hypothesis is accepted.

So, from applying this test we can conclude that more than 33% i.e. 50% of the total un-
intentional defaulters have been suffered from job problem.
 41

OBJECTIVE 2

IDENTIFIES BAD DEBT CUSTOMERS

REASONS CUSTOMERS PERCENTAGE

WRITE AWAY 9 14%

DECLINE

NOT 41 65%
TRACEABLE

LITIGATION 13 21%

TOTAL 63 100%
 42

Total no of intentional customers is 63. From our survey we find three types of intentional
customers. They are write away decline, not traceable and litigation. Write away decline
means those customers who are very much straight forward. They said to us, they will not
pay under any circumstances. Whatever the company can do against them, company can do.
Not traceable means those types of customers who are not traced out at their stated address.
Litigation means some legal cases are going on against those customers. Here 65%
customers are not traceable, 21% customers are under litigation and write away decline is
14% customers. Here we find that most of the intentional customers are not traceable.

OBJECTIVE 3

NEGOTIATE WITH THE DEFAULTING CUSTOMERS TO

ARRANGE FOR THE PAYMENTS
 43

Type of No. of the Interested to Negotiated Percentage of

defaulters defaulters negotiate negotiation

Intentional 63 0 0 0%

Unintentional 68 35 12 18%

Total 131 35 12 9%

From this table we can show that, none of the intentional customers are interested to
negotiate. It is quite obvious that they are intentionally doing it, that’s why they are not
intending to do any kinds of negotiation.

On the other hand, in case of un-intentional customers 35 out of 131 have been showing their
interest to negotiate with the bank. But only 12 out of them have been successfully
negotiated i.e. only 9% which is very low.

Whether our observation is right or wrong, we would like to do a proportion test based on the
data we have collected.

From the above table we could see that, very low percentage un-intentional customers i.e.
only 9% have been negotiated. So here our sample proportion is % i.e. 0.09.

Our population proportion is 0.30.

And our sample size is 68 which is the total number of un-intentional customers.

So here our null hypothesis is, 30% of the total un-intentional defaulters have been
negotiated.

So,
 44

H01: PH01 = 0.30

H1: PH01 < 0.30

α = 0.05, n = 68

As because here n>30, we can apply z proportion test.

Z= P-p/√PQ/n

Z (observed) Z critical conclusion

( one tailed)

-1.64 -2.1594 H01: PH01 is

rejected

After applying z test we have find out

Z observed or z tabulated value is -1.64.

Z critical or z computed value is -2.5934.

As because z computed value is greater than z tabulated value, so null hypothesis is rejected
and alternative hypothesis is accepted.

So, from applying this test we can conclude that less than 30% i.e. 9% of the total un-
intentional defaulters have been negotiated.
 45

FINDINGS

 The most common reason for un-intentional defaulters is job

problem, which is 50%.

 Most of the un-intentional defaulters are in age group of 35-50

years, their annual income lies lower than 2, 00,000 and most of
them are businessman.

 Most of the intentional defaulters i.e. 65% are not traceable.

 46

 Most the intentional defaulters are young people i.e. Their ages
lies between 20-35 years, their annual income is high i.e. More
than 4,00,000 and most of them are businessman

 Only 9% negotiation has been done throughout this last 2 months

among the unintentional defaulters.

RECOMMENDATION

 Job problem is the main reason for non-payment. So next

time, when issuing a card, the company must check out the
customer’s job profile more intensely.

 Most of the defaulters has been belongs to 35-50 years and

most of them are self-employed businessman. So when ever
issuing a card, these factor can’t be ignored.
 47

 Very low percentage of the unintentional customers is

intended to negotiate with the company. So the company
should go for more flexible negotiation process.

CONCLUSION

Now a day’s Kotak Mahindra is one of the finest banking service

providers in India. We are lucky enough to get e opportunity to do
a project in a company like Kotak Mahindra.
It provides us a great corporate exposure as well as gives us a brief
idea how to do a project in a real competitive marketing world.
In those last 2 months, we have learned so many things about
Kotak Mahindra, how is the working culture of the company, how
the company deals with their customers.
 48

Lastly we can say that, might be there are some loop holes of the
company regarding dealing with the credit card defaulters. We are
not mature enough to giving you suggestions. We can just suggest
you some information as per our limited knowledge concern.

APPENDICES

QUESTIONNAIRE

Name:
Address:
Age:

1. How long the customer is using Kotak credit card?

 49

a. Less than 1year b. 1-2 years c. more than 2 years

2. Family members:

3. How many members of your family using Kotak card?

a. 1 b. 2 c. more than 2

4. What type of card you are using?

a. Kotak trump gold card

b. Kotak fortune gold card

c. Kotak league platinum card

d. Kotak royal signature card

5. How much is your credit limit?

a. Less than 25,000

 50

b. 25,000-75,000

c. 75,000-1,50,000

d. Above 1,50,000

6. What is your educational qualification?

a. 10 b. 12 c. graduate d. post-graduate

7. What is your profession?

a. Salaried b. self-employed business

8. What is your annual income?

a. Less than 2,00,000

b. 2,00,000-4,00,000

c. More than 4,00,000

9. What is the reason for non-payment?

 51

a. Intentionally b. unintentionally

10. If unintentionally what is the reason?

a. Job problem

b. Family problem

c. Some other personal issues

11. Are you interested in settlement with Kotak?

a. Yes b. no

12. If yes, then what percentage of amount due?

a. 30% b. 40% c. 50% d. others

 52

13. Mode of repayment

a. EMI b. onetime payment

BIBLIOGRAPHY

 www.scribed.com
 www.kotak.com
 www.wikipedia.org
 www.authorstreams.com