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A Project
On
Analyse the acquisition strategy for popular banking products at operationallevel with specific focus on Sales process, Sales team organisation, and Sales
incentive structure
Project report submitted in partial fulfilment of the requirements for
The award of the degree of
MASTER OF BUSINESS ADMINISTRATION
BY
K.Nageshwar Rao(Reg. No. 08E11E0018)
DEPARTMENT OF MANAGEMENT STUDIES
Bharat Institute Of Engineering & Technology
(Affiliated To Jawaharlal Nehru Technological University)
Hyderabad
2008-2010
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DECLARATION
I hereby declare that the project entitled A Study on Analyse the acquisition strategy for
popular banking products at operational level with specific focus on Sales process, Sales
team organisation, and Sales incentive structure is the work done by me at Somajiguda during
the year 2010 ad is submitted in the partial fulfilment of the requirement for the award of Master of
business Administration. I also declare that this project work is original and I have not copied from
any other research project work or other source.
Place: Hyderabad K.Nageshwar Rao
Date: 08E11E0018
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ACKNOWLEDGEMENT
The satisfaction and exhilaration that accompanies the successful completion of all my
tasks would be incomplete without mentioning the people who made it possible, whose constant
guidance and encouragement, crowned all my efforts with success.
I express my sincere gratitude to my faculty guide Mr. SAURABH SHANKAR and
organisation guides MR. GUNTUR CHAKRAPANI (B.M) and MR. ATHUKURI MADHU
CHAKRAVARTHY (Senior Manager-Retail Liabilities ) for extending their continuoussupport, guidance and encouragement in completion. The project would not have been possible
without their support.
I also take opportunity to thanks CIMS, Hyderabad, for extending the guidance and co-
operation in completion of the report
K.NAGESHWARRAO
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CHAPTER- I INTRODUCTION
INTRODCUTION
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1.0 Acquisition Strategy
Acquisitions have always been a fundamental component of Sages growth strategy. Through
acquisition, we have increased our customer base and expanded our business internationally.
Sages acquisition strategy is based on three objectives:
To broaden the portfolio of our existing products and services we can offer our customers
To enter new geographic regions
To add new industry-specific applications to our product lines
Acquisitions also contribute to our customer base, with new customers who can migrate to the
broad Sage product range.
1.1 SALES PROCESS
A sales process is a systematic approach to selling a product or service. A growing body of
published literature approaches the sales process from the point of view of an engineering
discipline (see sales process engineering).
Sales process includes seller and buyer risk management, standardized customer interaction in
sales, and scalable revenue generation. A major advantage of approaching the subject of sales froma "process point of view" is that it offers a host of well-tested design and improvement tools from
other successful disciplines and process oriented industries. In turn, this offers potential for quicker
progress. Quality expert Joseph Juran observed, "There should be no reason our familiar principles
of quality and process engineering would not work in the sales process". A sales team's
fundamental job is to move a greater number of larger deals through the sales process in less time.
Specific steps or stages in a sales process vary from company to company but generally include the
following elements:
From a seller's point of view, a sales process mediates risk by stage-gating deals based on
collection of information or execution of procedures that gate movement to the next step. This
controls seller resource expenditure on non-performing deals. Ideally this also prevents buyers
from purchasing products they don't need though such a benefit requires ethical intentions by the
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seller.
An effective sales process can be described through steps that walk a salesperson from meeting the
prospect all the way through closing the sale. Often a bad sales experience can be analyzed and
shown to have skipped key steps. This is where a good sales process mediates risk for both buyerand seller. A solid sales process also has the dramatic impact of forecasting accuracy and
predictability in revenue results.
1.2 Sales Incentive
Remuneration offered to a salesperson for exceeding some predetermined sales goal. Salesincentives are offered by manufacturers as part of a promotion for the sale of their goods. The
incentive may be in cash, or it may take the form of a special prize, such as a trip to an exotic or
exciting vacation place.
Program design considerations
If programs are to be effective, all the factors that affect behavior must be recognized, including:
motivation, skills, recognition, an understanding of the goals, and the ability to measure progress.
Often companies turn to incentive programs to counter failures in meeting targets, poor behaviors
or performance, unengaged employees, poor morale or attitude, high turnover or loss of talent, or
increases in expectations from management.
Many companies mistakenly assume that what works for one organization will work well for all
organizations. Companies often attempt to create incentive programs without thinking in detail
about how each program feature will best suit their targeted audience.
A successful incentive program requires clearly defined rules, suitable rewards, efficient
communication strategies, and measurable success metrics. By adapting each element of the
program to fit the target audience, companies are better able to engage program participants and
enhance the overall program effectiveness.
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An incentive program represents a substantial investment to most organizations. Receiving a
sufficient return on that investment requires the full participation of the program participants.
Incentive programs are based upon the concept that effort increases as people perceive themselves
progressing towards their goal. Therefore programs should offer participants a variety of products
and services based on their unique interests and diverse needs. Successful programs need to
carefully develop their reward methods to keep participants eager to approach a new goal once
they have achieved a reward.
Once the program goals have been determined, every aspect of the program must be measured
against this goal in order to ensure the program's success in goal achievement. If successful,
objectives should provide measurable results allowing the organization to track performance and
measure the overall success of the program.
Points-based incentive programs are a type of program where participants collect and redeem
points for awards. Depending on the program type and the organizational objectives, points can be
awarded on a number of criteria including positive employee behavior, the demonstration of
organizational values, repeat customer purchases, the sale of new products, increased overall sales,
or even the use of proper safety precautions. In addition to point awarding, the levels at which
points can be redeemed can be customized by the organization and set at virtually any level. Points
programs are a way for organizations to motivate behavior over time while improving the
organizations overall performance.
Motivation
Employee incentive programs are programs used to increase overall employee performance.
Employee programs are often used to reduce turnover, boost morale and loyalty, improveemployee wellness, increase retention, and drive daily employee performance.
These programs are primarily used to drive sales, reduce sales costs, increase profitability,
develop new territory, and enhance margins. Sales incentive programs have the most direct
relationship to outcomes.
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A Sales Incentive Plan (SIP) is a business tool used to motivate and compensate a sales
professional (or sales agent) to meet goals or metrics over a specific period of time, usually broken
into a plan for a fiscal quarter or fiscal year
Selecting the appropriate rewards is vital to any programs success. The goal in choosing rewards isto select items tha t will spark the participants interest or feelings, and support the programs
objectives. Effective rewards will both motivate short-term behavior and provide motivation over
time. There are several types of rewards.
Gift cards/certificates
Gift cards/certificates are prepaid retail cards or certificates which are redeemed at a later time at
checkout. In general, they are available in two types: (1) cards which carry a major credit card
brand, commonly referred to as universal gift cards (UGC), and are redeemable at all merchants
accepting the credit card brand; and (2) retailer-specific cards, issued by well-known merchants,
redeemable only through the issuing retailer. In the 2005 Incentive Federation Study of Motivation
and Incentive Applications, gift cards were ranked as the most frequently used type of corporate
reward.
Experiential
Experiential rewards provide program participants with an experience. This form of reward gives
organizations the ability to offer their employees and customers interesting experiences as
incentives. Examples might include a seaplane flight and lunch, a two hour horse ride on the
beach, a day of sailing for two, a chance to meet a star athlete, or the use of a party planner for an
occasion of the recipients choice. Experiential rewards allow participants to share their
experiences with others and reinforce the reward and the behavior that led to the giving of the
reward.
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1.3 Sales team organisation
Working as a team
Although distinct from each other, the roles which are to work together to ensure world class
customer service is delivered. Every team member becomes fully immersed in working with their
Sales team Their combined efforts create exceptional results, which is why our clients continue to
enjoy all the benefits bank.
Planners
Planners are integral to each sales operation. They work closely with team members, using various
data sources to construct the most effective sales team. Planners are also heavily involved in the
research sales Co-ordinators.
Sales Co-ordinators are the driving force who ensure that campaigns and promotions run smoothly,
in order to provide our clients with the best possible results. Sales Co-ordinators liaise with their
targets ensure that campaigns, promotions are executed as planned. Sales Co-ordinators develop
close relationships with a range of different people with whom relationship has to be build.
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CHAPTER- II LITERATURE REVIEW
LITERATURE REVIEW
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2.0 Literature review
The money and the goodies were not my primary motivation. My philosophy was simple; "If you
win all the incentives there are to win, you couldn't help but be at or near the top every time."
Corporations use incentive programs to drive behaviour and I agreed to play the game and conform
to their wishes; what gets rewarded, gets done. The problem, from the vendors' point of view, is
that not all salespeople are motivated the same way. Consequently, not all incentive programs
work. Why is that? From my experience, I'll make the following observations:
1) The 80-20 Rule: Twenty percent of the salespeople make eighty percent of the sales and
profits. Too often, sales incentives - perhaps in an effort to be fair - are geared to the entire sales
force or VAR channel. The risk in a program like this is that the glove that fits everyone, in theend, fits no one. Enlightened marketing strategists know that the top twenty percent are already
motivated. Simply put, a strategy that's geared to light a fire under the next twenty percent - the
next logical group - doubles the business in a more cost efficient manner.
2) The KISS Theory: Salespeople by nature are like electricity. They naturally take the path of
least resistance. That's not to say they are lazy or untoward. In fact, it's just the opposite. Good
salespeople look to simplicity to make things happen.
Often, incentive programs fail miserably because of innate complexities either in their recording
and reporting systems or in how rewards are won. If you put the salesperson in a position where he
or she is forced to assess "To get this, I first have to sell this, plus these and not these and they
must include these," you are creating a recipe for confusion, sales frustration and failure. In the
end, the incentive program becomes a disincentive! The remedy? Manufacturers must keep the
incentive program sweet and simple and attainable. There can be no ambiguity. Anything less will
result in a lack of interest, as well as a waste of time and money that can sometimes spill over intoother departments whose task it is to administer and account.
An Article from http://sbinfocanada.about.com/cs/marketing/a/incentiveprogps.htm
http://sbinfocanada.about.com/cs/marketing/a/incentiveprogps.htmhttp://sbinfocanada.about.com/cs/marketing/a/incentiveprogps.htmhttp://sbinfocanada.about.com/cs/marketing/a/incentiveprogps.htm -
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2.1 Sales Process
The A stands for Attitude, B for Behaviour and C for Competency. Each of the A, B and C
components has three sub sets. In Attitude and Behaviour the three subsets are:
1. You
2. The Organization
3. The Market
In C, Competency, the three subsets are: Building Relationships, Qualifying prospects, and
prescribing solutions.
Each of these subsets breaks down into another three subsets. This leads to a sales process which is
as simple as the following eight steps, particularly when it applies to face to face selling B2B or
B2C.
1. Build Rapport
This 1st step in the sales process is most important in order to build the required trust necessary to
move forward. Without rapport, you might as well pack up and leave. Through the use of advanced
NLP techniques and the asking of open ended questions, the prospect feels comfortable and starts
to open up. The job of the sales person is to make their prospects comfortable and to initiate
conversation. The more they talk, the more you listen, the more you learn and the more they like
and trust you.
http://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.htmlhttp://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.html -
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2. Set Parameters
Parameters or ground rules in the sales process are set once rapport has been established. The
parameters are set around the amount of time required for the meeting, and what the prospect's
objectives are for that time frame, followed by your objectives.
You must request permission to ask questions and to take notes, then, ensure the customer is
comfortable with the fact you may not be able to help them in the end. Remember you cannot
solve everyone's problem. A simple statement like, "I may or may not be able to help you. If I
can't, are you ok with me telling you that I cannot help? If I'm able to help, I will inform youimmediately... Are we comfortable this honest approach with each other and working on a "yes or
no" basis? "
3. Uncover buying motivators
Buying motivators are the reason people buy and they are usually emotional reasons. Your job is to
ask questions during this part of the sales process in order to uncover the buying motivators.
Without buying motivators, there is no reason to buy. No pain, no gain.
4. Uncover financial:
Ability in this step of the sale process, you summarize the buying motivators and uncover the
extent of their budget by asking a question such as, "Do you have a budget set aside for these
issues?"
http://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.htmlhttp://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.htmlhttp://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.htmlhttp://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.html -
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If the answer is no, ask, "How do you intend to proceed?" However, if the answer is yes, ask, "Can
you share it with me in round numbers?" If not, use bracketing techniques. It is your job not to
quote a price but to get them to quote their budget.
5. Uncover decision making
This step follows summarizing buying motivators and financial ability. You need to ask, "When
will you be making a decision?" and "Who, other than yourself, is involved in the decision making
process?" If you don't ask these questions, you don't get it!Remember this is a step by step sales process and each step has to be fully completed before
moving onto the next step.
6. Summarize
In this step of the sales process, you summarize all that you have learned with regard to the buying
motivators, the financial ability and the decision makers. You have now qualified the prospect and
should be in a position to know if you can help them or not.
If not, tell them honestly just as you mentioned earlier in setting the parameters. If you can help
them, tell them you can and ask this question, "As discussed earlier, I believe I have a solution to
your needs. Are you still ok with giving me a yes or no answer subsequent to my presentation?"
http://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.html#ixzz0v4NF1tmX
http://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.html#ixzz0v4NF1tmXhttp://www.articlesbase.com/business-articles/8-specific-simple-sales-process-that-works-for-b2b-and-b2c-881868.html#ixzz0v4NF1tmX -
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2.0 RESEARCH METHODOLOGY
As the title of the project suggests the purpose T o study the Analyze Acquisition Strategy for
popular banking products at operational level with specific focus on Sales process, Sales team
organization& Sales incentive structure Research comprise defining and redefining problems,formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making
deductions and reaching conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating Hypothesis .
In short, the search for Knowledge through Objective and Systematic method of finding solutions to
a problem is Research.
2.1 SOURCES OF DATA
Data is collected from primary as well as secondary source. For primary data customer were
personally intervened and for secondary data. Annual report, journals,
2.2 METHODOLOGY:
The methodology adopted in conducting this survey was quite simple. First there was collection of
data from various sources including personal interview. Then after scanning and properly
analyzing and interpreting the information available on hand, a final report was prepared.
1. PRIMARY DATA : Primary data was collected from the sample by a self-administered
2.questionnaire in presence of the interviewer.
2. SECONDARY DATA: The chief sources of secondary data were magazines, newspaper,
journals etc.
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2.3 RESEARCH DESIGN
Type of Research: - Descriptive research
Descriptive research is also called Statistical Research. The main goal of this type of research is to
describe the data and characteristics about what is being studied. The idea behind this type of
research is to study frequencies, averages, and other statistical calculations. Although this research
is highly accurate, it does not gather the causes behind a situation.
The regular interaction with the Employees and the Line Managers revealed about the various
strategies involved in performing business activities and gathering data using various techniques
and software applications.
Descriptive research includes Surveys and fact-finding enquiries of different kinds. The maincharacteristic of this method is that the researcher has no control over the variables;
2.4 DATA SOURCES
There are two types of data:
A. PRIMARY DATA
The data that is collected first hand by someone specifically for the purpose of facilitating the study
is known as primary data. So in this research the data is collected from respondents through
questionnaire.
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B. SECONDARY DATA.
For the company information I had used secondary data like brochures, web site of the company
etc.
The Method used by me is Survey Method as the research done is Descriptive Research.
2.5 RESEARCH INSTRUMENTS
Selected instrument for Data Collection for Survey is Questionnaire.
2.6 SAMPLE SIZE:
The survey is conducted among 25 Employees.
Simple statistical tools have been used in the present study to analyze and interpret the data
collected from the field. The study has used percentile method and the data are presented in the
form of diagrams.
2.7 SCOPE OF THE STUDY
This study helps Analyze Acquisition Strategy for popular banking products at operational level
with specific focus on Sales process, Sales team organization& Sales incentive structure of Kotak
Mahindra Bank.
The study provides knowledge of various products& investment services of Kotak Mahindra
Bank
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The study helps to learn of work culture of organization. The study of also helps to learn Operations of the Bank.
2.8 OBJECTIVES OF THE STUDY
(a) To Study Sales Process at operational level of Kotak Mahindra Bank.
(b) To study Sales Incentive Structure of Kotak Mahindra Bank.
(c) To study Sales Team Organisation Structure of Kotak Mahindra Bank.
2.9 LIMITATIONS
The study could not be made that comprehensive due to time constraints. Some customers feel
uncomfortable to reveal some personal information relating to income etc. it might have happened
that some more essential information could have been collected.
The proposed study has been organized with reference to Kotak Mahindra Bank atHyderabad city (Somajiguda branch) only, which limited the universe of the study.
The bank officials have their own limitations to provide the information, particularly meant
especially for the internal use and unpublished; which also diluted the quality of the project
work.
As the present work is the output of efforts made by the single person, therefore it may be
suffered from some sort of personal limitations.
As the project work contains limited sample size of 25 employees so, it has also created
certain limitations.
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CHAPTER- III COMPANY PROFILE
COMAPNY PROFILE JOURNEY SO FAR BOARD OF DIRECTORS AWARDS
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3.0 Company Profile
Think Investment Think Kotak
Kotak Mahindra is one of India's leading financial
institutions, offering complete financial solutions 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 financial needs
of individuals and corporate.
The group has a net worth of over Rs.1, 800 crore andemploys over 4,400 employees in its various businesses. With a presence in 82 cities in India and
offices in New York, London, Dubai and Mauritius, it services a customer base of over 5, 00,000.
Kotak Mahindra has international partnerships with Goldman Sachs (one of the world's largest
investment banks and brokerage firms) and Old Mutual (a large
insurance, banking and asset management conglomerate).
The Kotak Mahindra Group was born in 1985 as Kotak Capital
Management Finance Limited. This company was promoted by
Uday Kotak , Sidney A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand
Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra
Finance Limited. Since then it's been a steady and confident journey to growth and success.
Established in 1984, The Kotak Mahindra Group has long been o ne of Indias most reputed
financial organizations. In Feb 2003, Kotak Mahindra Finance Ltd., the groups flagship company
was given the license to carry on banking business by the Reserve Bank of India (RBI).Thisapproval creates banking history since Kotak Mahindra Finance Ltd is the first company in India to
convert to a bank. The license authorizing the bank to carry on banking business has been obtained
from the RBI in tune with Section 22 of the Banking Regulation Act 1949.
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KMBL was promoted by Mr. Uday.S.Kotak, Kotak and Company Ltd and Mr. Sidney &A.A.Pinto
under the name of Kotak Capital Management Finance Ltd on 21st Nov 1985 and obtained a
Certificate of Commencement of Business on 11 th Feb 1986.
The bank customers have access to entire VISA netw ork of 4500 ATMS in India and800000ATMS worldwide accepted in more than 56000 establishments across India and 10 million
worldwide. The customer also has access to over 800 ATMs with sharing arrangements with UTI
BANK, of these 125 are in the NCR.
3.1 Journey So far
1986 : Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987 : Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market 1990 : The Auto Finance division is started 1991 : The Investment Banking Division is started. Takes over FICOM, one of Indias
largest financial retail marketing networks
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1992 : Enters the Funds Syndication sector 1995 : Brokerage and Distribution businesses incorporated into a separate company -
Kotak Securities. Investment Banking division incorporated into a separate company -
Kotak Mahindra Capital Company
1996 : The Auto Finance Business is hived off into a separate company - Kotak
Mahindra Primus Limited. Kotak Mahindra takes a significant stake in Ford Credit Kotak
Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services
Limited marks the Groups entry into information distribution.
1998 : Enters the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.
2000 : Kotak Mahindra ties up with Old Mutual plc. For the Life Insurance business.
Kotak Securities launches kotakstreet.com - its on-line broking site. Formal
commencement of private equity activity through setting up of Kotak Mahindra Venture
Capital Fund.
2003 : Kotak Mahindra Finance Ltd. Converts to bank 2004 : Launched India Growth Fund, a private equity fund.
2005 : Kotak Group realigned joint venture in Ford Credit; their stake in
Kotak Mahindra Prime was bought out (formerly known as Kotak Mahindra
Primus Ltd) and Kotak groups stake in Ford credit Kotak Mahindra was sold.
Launched a real estate fund. Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital
Company and Kotak Securities.
Launched a Pension Fund under the New Pension System.
Kotak Mahindra Bank Ltd. opened a representative office in DubaiEntered Ahmadabad Commodity Exchange as anchor investor.
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3.2 Key group companies and their businesses
Kotak Mahindra Bank
The Kotak Mahindra Group's flagship company, Kotak Mahindra Finance
Ltd which was established in 1985, was converted into a bank- Kotak
Mahindra Bank Ltd in March 2003 becoming the first Indian company to convert into a Bank. Its
banking operations offer a central platform for customer relationships across the group's various
businesses. The bank has presence in Commercial Vehicles, Retail Finance, Corporate Banking,
Treasury and Housing Finance.
Kotak Mahindra Capital Company
Kotak Mahindra Capital Company Limited (KMCC) is India's premier
Investment Bank. KMCC's core business areas include Equity Issuances,
Mergers & Acquisitions, Structured Finance and Advisory Services.
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 investorcategories with presence all over the country through franchisees and coordinators. Kotak
Securities Ltd. offers online and offline services based on well-researched expertise and financial
products to non-institutional investors.
Kotak Mahindra Prime
Kotak Mahindra Prime Limited (KMP) (formerly known as Kotak Mahindra
Primus Limited) has been formed with the objective of financing the retail
and wholesale trade of passenger and multi utility vehicles in India. KMP
offers customers retail finance for both new as well as used cars and wholesale finance to dealers
in the automobile trade. KMP continues to be among the leading car finance companies in India.
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3.3 BOARD OF DIRECTORS
Dr. Shankar Acharya, Non-Executive Part-time Chairman Mr. Uday Kotak, Executive Vice-Chairman and Managing Director
Mr. Uday Kotak, B.Com, MMS (Masters in Management Studies), aged 50
years, is the Executive Vice-Chairman and Managing Director of the Bank and its principal
founder and promoter. Over the past 23 years, he has built a team of professionals who have
been given independent charge of various businesses in Kotak Mahindra group. He was
responsible for starting the business as a start-up venture in a limited range of activities and
then building it up into a full financial services group, many of the constituents of which are
among the leading players in their respective fields. He is also a Member on the Board of
Governors of the Indian Council for Research on International Economic Relations (ICRIER),
Governing Member of The Mahindra United World College of India and Member of the
Executive Board of Indian School of Business.
Mr. Anand Mahindra Mr. Cyril Shroff Mr. Shivaji Dam Mr. C. Jayaram, Executive Director Mr. Dipak Gupta, Executive Director Mr. Asim Ghosh Dr. Sudipto Mundle
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Creating Banking History
Established in 1985, the Kotak Mahindra Group has long been one of Indias most reputed
financial organizations. In February 2003, Kotak Mahindra Finance Limited, the groups
flagship company was given the license to carry on banking business by Reserve Bank of India (RBI). This approval creates banking history since Kotak Mahindra Finance Limited is
the first company in India to convert to a bank.
3.4 Awards
1. 10 th Best Employer in India.
Best Employers in India Study had started as early as October 2006 .Out of several companies
from diverse business backgrounds who applied, a total of 230 companies were invited to
participate in the Best Employers Study. The views of over 10, 60,000 employees have been
represented by over 44,000 employees across India, making this one of the largest employee
Research Study conducted in the country.
As a participating organization, the Bank went through a series of screening processes
including service documentation of HR processes and practices, focus group discussions and
on-site audit with the HR team.
At the end of the study, Hewitt released the list of top 25 Best Employers in India. On 13 th
April 07, in an Award ceremony held in Mumbai, Kotak Mahindra Bank Ltd. was declared asThe 10 th Best Employer in India.
It was the only Bank in the top 10 Banking and Youngest Entrant in the entire list of Top 25.
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2. Kotak Mahindra Bank limited on 20 th July was awarded The Best Private Bank award in
Southern Asia.
3. In April 2006 Kotak Mahindra Bank get Kotak Mutual Fund bagged The Lipper India Fund
Award for Best Bond Fund.
4. Mr. Uday S Kotak won the award in the service category for Kotak Mahindra Bank.
5. Kotak Mahindra Bank wins F&S Voice of Customer Award in 2007.
3.5 Competitors
ICICI Bank
HSBC
HDFC Bank
Standard Chartered Bank
Citibank
ABN Amro Bank
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3.6 Kotak Current Accounts
Key Highlights of Our Current Account Products
Free Demand Drafts! Free at-par cheque books! Free RTGS & NEFT! Free out-station cheque collection! Free Cash deposits at home branch location! Free Home banking service! Free debit card with flexible card limits & usage at any VISA ATM!
Free Outward cheque returns! Active Money! Charges Reversal Offer!
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ACE: Minimum AQB- 2, 50,000
Key Features of Ace Account
Active Money interest on idle current account balances! Credit Access unsecured overdraft up to Rs. 10 lakhs! Free unlimited DDs payable at branch locations! Free DDs up to Rs. 30 lakhs p.m. payable at non-branch locations! Free NEFT & RTGS! Free payable at par cheque book! Free cheque collection at branch locations! Free Business Debit Card! Free access at all VISA ATMs anywhere in the world!
Free cash deposit up to 5 times of avg balance maintained p.m.! Free Home Banking service! Free Beat Cheque Pick-up service!
Elite: Minimum AQB- 1, 00,000
Key Features of Elite Account
Active Money interest on idle current account balances! Credit Access unsecured overdraft up to Rs. 10 lakhs! Free 100 DDs p.m. payable at branch locations! Free DDs up to Rs. 10 lakhs p.m. payable at non-branch locations! Free NEFT & RTGS! Free payable at par cheque book! Free cheque collection at branch locations! Free Business Debit Card!
Free access at all VISA ATMs anywhere in India! Free cash deposit up to Rs. 10 lakhs p.m.! Free Home Banking service! Free Beat Cheque Pick-up service! AQB Rs. 1 Lakh!
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Pro Account : Minimum AQB- 50,000
Key Features of Pro Account
Active Money interest on idle current account balances! Credit Access unsecured overdraft up to Rs. 10 lakhs! Free 50 DDs p.m.! Free NEFT & RTGS! Free payable at par cheque book! Free cheque collection at branch locations!
Free Business Debit Card! Free access at all VISA ATMs anywhere in India! Free cash deposit up to Rs. 5 lakhs p.m.! Free Home Banking service! Free Beat Cheque Pick-up service! AQB Rs. 50,000!
Edge Account: Minimum AQB- 25,000
Key Features of Edge Account
Active Money interest on current account! Credit Access unsecured overdraft up to Rs. 10 lakhs! Free 25 DDs p.m.! Free NEFT & RTGS!
Free payable at par cheque book! Free cheque collection for cheques above Rs. 1 lakh! Free Business Debit Card! Access at all VISA ATMs anywhere in India! 5 Free Txns per month at non-Kotak ATMs!
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Free cash deposit up to Rs. 3 lakhs p.m.! Home Banking service!
NEO: Minimum AQB- 10,000
Key Features of Neo Account
50% charge reversal offer! Credit Access - unsecured overdraft up to Rs. 10 lakhs! Free NEFT & RTGS through Net Banking!
Free payable at par cheque book! Free Business Debit Card! Access at all VISA ATMs anywhere in India! 5 Free Txns per month at non-Kotak ATMs! Free cash deposit up to Rs. 2 lakhs p.m.! Home Banking service! AQB Rs. 10,000!
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CHAPTER- III INDUSTRY PROFILE
INDUSTRY PROFILE HISTORY OF BANKING IN INDIA
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4.0 Industry Profile
Definition: Banking is one of the key drivers of the U.S. economy. Banking provides a safe place
to save excess cash, known as deposits. It also supplies liquidity to the economy by loaning this
money out to help businesses grow and to allow consumers to purchase homes, cars and consumer
products. Banks primarily make money by charging higher interest rates on their loans than they
pay for deposits.
The essential function of a bank is to provide services related to the storing of value and the
extending of credit. The evolution of banking dates back to the earliest writing, and continues in the
present where a bank is a financial institution that provides banking and other financial services.
Currently the term bank is generally understood an institution that holds a banking license. Banking
licenses are granted by financial supervision authorities and provide rights to conduct the most
fundamental banking services such as accepting deposits and making loans. There are also financial
institutions that provide certain banking services without meeting the legal definition of a bank, a
so called non-bank. Banks are a subset of the financial services industry.
The word bank is derived from the Italian banca, which is derived from German and means bench.
The terms bankrupt and "broke" are similarly derived from bancarotta, which refers to an out of
business bank, having its bench physically broken. Money lenders in Northern Italy originally did
business in open areas, or big open rooms, with each lender working from his own bench or table.
Typically, a bank generates profits from transaction fees on financial services and on the interest it
charges for lending.
Type of Banks
There are several different types of banks including:
Central banks usually control monetary policy and may be the lender of last resort in the
event of a crisis. They are often charged with controlling the money supply, including
printing paper money. Examples of central banks are the European Central Bank and
the U.S. Federal Reserve Bank.
http://useconomy.about.com/od/glossary/g/liquidity.htmhttp://www.wordiq.com/definition/Credithttp://www.wordiq.com/definition/Financial_institutionhttp://www.wordiq.com/definition/Financehttp://www.wordiq.com/definition/Banking_licensehttp://www.wordiq.com/definition/Financial_supervisionhttp://www.wordiq.com/definition/Deposithttp://www.wordiq.com/definition/Loanhttp://www.wordiq.com/definition/Non-bankhttp://www.wordiq.com/definition/Financial_serviceshttp://www.wordiq.com/definition/Italian_languagehttp://www.wordiq.com/definition/Bankruptcyhttp://www.wordiq.com/definition/Central_bankhttp://www.wordiq.com/definition/Monetary_policyhttp://www.wordiq.com/definition/Lender_of_last_resorthttp://www.wordiq.com/definition/European_Central_Bankhttp://www.wordiq.com/definition/Federal_Reservehttp://www.wordiq.com/definition/Federal_Reservehttp://www.wordiq.com/definition/European_Central_Bankhttp://www.wordiq.com/definition/Lender_of_last_resorthttp://www.wordiq.com/definition/Monetary_policyhttp://www.wordiq.com/definition/Central_bankhttp://www.wordiq.com/definition/Bankruptcyhttp://www.wordiq.com/definition/Italian_languagehttp://www.wordiq.com/definition/Financial_serviceshttp://www.wordiq.com/definition/Non-bankhttp://www.wordiq.com/definition/Loanhttp://www.wordiq.com/definition/Deposithttp://www.wordiq.com/definition/Financial_supervisionhttp://www.wordiq.com/definition/Banking_licensehttp://www.wordiq.com/definition/Financehttp://www.wordiq.com/definition/Financial_institutionhttp://www.wordiq.com/definition/Credithttp://useconomy.about.com/od/glossary/g/liquidity.htm -
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Investment banks "underwrite " (guarantee the sale of) stock and bond issues and advise on
mergers. Examples of investment banks are Goldman Sachs of the USA or Nomura
Securities of Japan.
Merchant banks were traditionally banks which engaged in trade financing. The moderndefinition, however, refers to banks which provide capital to firms in the form of shares
rather than loans. Unlike Venture capital firms, they tend not to invest in new companies.
Private Banks manage the assets of the very rich. An example of a private bank is the
Union Bank of Switzerland.
Savings banks traditionally just did savings and mortgages, and have special charters, but at
present there is nothing inherently distinct about a savings bank.
Offshore banks are banks located in jurisdictions with low taxation and regulation, such as
Switzerland or the Channel Islands. Many offshore banks are essentially private banks.
Commercial bank, is the term used for a normal bank to distinguish it from an investment
bank. Since the two no longer have to be under separate ownership, some use the term
"commercial bank" to refer to a bank or a division of a bank that mostly deals with
corporations or large businesses.
Retail banks primary customers are individuals. An example of a retail bank is Washington
Mutual of the USA.
Universal banks, more commonly known as a financial services company, engage in
several of these activities. For example, Citigroup, a large American bank, is involved in
commercial and retail lending; it owns a merchant bank (Citicorp Merchant Bank Limited)
and an investment bank (Salomon Smith Barney); it operates a private bank (Citigroup
Private Bank); finally, its subsidiaries in tax-havens offer offshore banking services to
customers in other countries.
http://www.wordiq.com/definition/Investment_bankhttp://www.wordiq.com/definition/Underwritehttp://www.wordiq.com/definition/Goldman_Sachshttp://www.wordiq.com/definition/USAhttp://www.wordiq.com/definition/Nomura_Securitieshttp://www.wordiq.com/definition/Nomura_Securitieshttp://www.wordiq.com/definition/Japanhttp://www.wordiq.com/definition/Merchant_bankhttp://www.wordiq.com/definition/Venture_capital_firmhttp://www.wordiq.com/definition/Private_bankhttp://www.wordiq.com/definition/Switzerlandhttp://www.wordiq.com/definition/Savings_bankhttp://www.wordiq.com/definition/Offshore_bankhttp://www.wordiq.com/definition/Channel_Islandshttp://www.wordiq.com/definition/Commercial_bankhttp://www.wordiq.com/definition/Financial_serviceshttp://www.wordiq.com/definition/Citigrouphttp://www.wordiq.com/definition/Citigrouphttp://www.wordiq.com/definition/Financial_serviceshttp://www.wordiq.com/definition/Commercial_bankhttp://www.wordiq.com/definition/Channel_Islandshttp://www.wordiq.com/definition/Offshore_bankhttp://www.wordiq.com/definition/Savings_bankhttp://www.wordiq.com/definition/Switzerlandhttp://www.wordiq.com/definition/Private_bankhttp://www.wordiq.com/definition/Venture_capital_firmhttp://www.wordiq.com/definition/Merchant_bankhttp://www.wordiq.com/definition/Japanhttp://www.wordiq.com/definition/Nomura_Securitieshttp://www.wordiq.com/definition/Nomura_Securitieshttp://www.wordiq.com/definition/USAhttp://www.wordiq.com/definition/Goldman_Sachshttp://www.wordiq.com/definition/Underwritehttp://www.wordiq.com/definition/Investment_bank -
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4.1 History of Banking in India
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of
the country. This is one of the main reasons of India's growth process.
The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalisation of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for
withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank
transferred money from one branch to other in two days. Now it is simple as instant messaging or
dials a pizza. Money has become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are asmentioned below:
Early phase from 1786 to 1969 of Indian Banks Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.
Phase1
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
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(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which started
as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India,
Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set
up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the
functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in India as the Central Banking Authority.
During those days public has lesser confidence in the banks. As an aftermath deposit mobilisation
was slow. Abreast of it the savings bank facility provided by the Postal department was
comparatively safer. Moreover, funds were largely given to traders.
Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent
of RBI and to handle banking transactions of the Union and State Governments all over the
country.
Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July,
1969, major process of nationalisation was carried out. It was the effort of the then Prime Minister
of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were nationalised.
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Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with seven
more banks. This step brought 80% of the banking segment in India under Government
ownership.
The following are the steps taken by the Government of India to Regulate Banking Institutions in
the Country:
1949: Enactment of Banking Regulation Act. 1955: Nationalisation of State Bank of India. 1959: Nationalisation of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalisation of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalisation of seven banks with deposits over 200 crore.
After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M.Narasimham , a committee was set up by
his name which worked for the liberalisation of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put to give
a satisfactory service to customers. Phone banking and net banking is introduced. The entire
system became more convenient and swift. Time is given more importance than money.
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The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries suffered.
This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account
is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.
From Wikipedia, the free encyclopaedia
Currently, India has 96 scheduled commercial banks (SCBs) - 27 public sector banks (that is with
the Government of India holding a stake), 31 private banks (these do not have government stake;
they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a
combined network of over 53,000 branches and 49,000 ATMs. According to a report by ICRA
Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking
industry, with the private and foreign banks holding 18.2% and 6.5% respectively.
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The Bank of Bengal, which later merged with the Bank of Bombay and the Bank of Madras to
form the Imperial Bank of India in 1921.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881
in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in
1895, which has survived to the present and is
now one of the largest banks in India.
Around the turn of the 20th Century, the Indian
economy was passing through a relative period of
stability. Around five decades had elapsed since
the Indian Mutiny, and the social, industrial and
other infrastructure had improved. Indians had established small banks, most of which served
particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks and a
number of Indian joint stock banks. All these banks operated in different segments of the economy.
The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian
joint stock banks were generally undercapitalized and lacked the experience and maturity to
compete with the presidency and exchange banks. This segmentation let Lord Curzon toobserve, "In respect of banking it seems we are behind the times. We are like some old fashioned
sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by
the Swedish movement. The Swedish movement inspired local businessmen and political figures
to found banks of and for the Indian community. A number of banks established then have
survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of
Baroda, Canara Bank and Central Bank of India.
The fervour of Swedish movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South Canara (
South Kanara ) district. Four nationalised banks started in this district and also a leading private
sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".
http://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Faizabadhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Lahorehttp://en.wikipedia.org/wiki/Indian_rebellion_of_1857http://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Swadeshihttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Corporation_Bankhttp://en.wikipedia.org/wiki/Indian_Bankhttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Canara_Bankhttp://en.wikipedia.org/wiki/Central_Bank_of_Indiahttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Udupi_districthttp://en.wikipedia.org/wiki/Udupi_districthttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Central_Bank_of_Indiahttp://en.wikipedia.org/wiki/Canara_Bankhttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Indian_Bankhttp://en.wikipedia.org/wiki/Corporation_Bankhttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Swadeshihttp://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Indian_rebellion_of_1857http://en.wikipedia.org/wiki/Lahorehttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Faizabadhttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bengal -
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From World War I to Independence
The period during the First World War (1914-1918) through the end of the Second World
War (1939-1945), and two years thereafter until the independence of India were challenging for
Indian banking. The years of the First World War were turbulent, and it took its toll with bankssimply collapsing despite the Indian economy gaining indirect boost due to war-related economic
activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following
table:
Years Number of banks
that failed
Authorised capital
(Rs. Lakhs)
Paid-up Capital
(Rs. Lakhs)
1913 12 274 35
1914 42 710 109
1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209 1
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Post-Independence
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralyzing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play anactive role in the economic life of the nation, and the Industrial Policy Resolution adopted by the
government in 1948 envisaged a mixed economy. This resulted into greater involvement of the
state in different segments of the economy including banking and finance. The major steps to
regulate banking included:
In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and
it became an institution owned by the Government of India.
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India."
The Banking Regulation Act also provided that no new bank or branch of an existing bank
could be opened without a license from the RBI, and no two banks could have common
directors.
However, despite these provisions, control and regulations, banks in India except the State
Bank of India, continued to be owned and operated by private persons. This changed with the
nationalisation of major banks in India on 19 July 1969.
Nationalization
The RBI was nationalized on January 1, 1949 in terms of the Reserve Bank of India (Transfer to
Public Ownership) Act, 1948 (RBI, 2005b).[Reference www.rbi.org.in]
By the 1960s, the Indian banking industry had become an important tool to facilitate the
development of the Indian economy. At the same time, it had emerged as a large employer, and a
debate had ensued about the possibility to nationalise the banking industry. Indira Gandhi, the-
then Prime Minister of India expressed the intention of the GOI in the annual conference of the All
India Congress Meeting in a paper entitled Stray thoughts on Bank Nationalisation." The paper
was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI
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issued an ordinance and nationalised the 14 largest commercial banks with effect from the
midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as
a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the
Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August 1969.
A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason
for the nationalization was to give the government more control of credit delivery. With the second
dose of nationalization, the GOI controlled around 91% of the banking business of India. Later on,
in the year 1993, the government merged New Bank of India with Punjab National Bank. It was
the only merger between nationalized banks and resulted in the reduction of the number of
nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace
of around 4%, closer to the average growth rate of the Indian economy.
The nationalised banks were credited by some, including Home minister P. Chidambaram, to have
helped the Indian economy withstand the global financial crisis of 2007-2009.
Liberalisation
In the early 1990s, the then Narasimha Rao government embarked on a policy
of liberalization, licensing a small number of private banks. These came to be known as New
Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation
banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank( earlier
as UTI Bank) , ICICI Bank and HDFC Bank. This move, along with the rapid growth in
the economy of India, revitalized the banking sector in India, which has seen rapid growth with
strong contribution from all the three sectors of banks, namely, government banks, private banks
and foreign banks.
The next stage for the Indian banking has been setup with the proposed relaxation in the norms for
Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which
could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were used to
the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave
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ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led
to the retail boom in India. People not just demanded more from their banks but also received
more.
Currently (2007), banking in India is generally fairly mature in terms of supply, product range andreach-even though reach in rural India still remains a challenge for the private sector and foreign
banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have
clean, strong and transparent balance sheets relative to other banks in comparable economies in its
region. The Reserve Bank of India is an autonomous body, with minimal pressure from the
government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without
any fixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some time-especially in its
services sector-the demand for banking services, especially retail banking, mortgages and
investment services are expected to be strong. One may also expect M&as, takeovers, and asset
sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak
Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed
to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any
stake exceeding 5% in the private sector banks would need to be vetted by them.
In recent years critics have charged that the non-government owned banks are too aggressive
in their loan recovery efforts in connection with housing, vehicle and personal loans. There are
press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide.
Current situation of Banking
Currently, India has 96 scheduled commercial banks (SCBs) - 27 public sector banks (thatis with the Government of India holding a stake), 31 private banks (these do not have government
stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have
a combined network of over 53,000 branches and 49,000 ATMs. According to a report by ICRA
Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking
industry, with the private and foreign banks holding 18.2% and 6.5% respectively
http://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Retail_banking -
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Current Recession: How far, How deep?
The ongoing recession in economies worldwide that were supposed to be immune to such
downturns is becoming a serious threat to both the industrialized nations like the US and China
and nations constituting the third world countries like India. No doubt, analysts including
economists laureates have began to expect unusual consequences as they eye every stock going
down and witness market acquiring more instability. Fear of
stakeholders losing their stock values have only added to the
decline. Go by Barack Obama who said in a speech that it
will take another year for the situation to get better,
although added that the worse is yet to come before the
situation gets better.
Recession, in all three forms viz. financial, credit and banking, is not new. Over 150 financial
steeps we have seen since past 50 years of financial history. But the current situation is a far than
similar.
Most financial instabilities and economic crises of past used to originate in developing
nations earlier and G7 (industrialized) nations were then used to assist the victim economies by
providing all suggestions and solutions to break it. Effects on developed nations then were not a
major issue, or comparatively, not an issue at all. But this time, the reverse has happened with the
only difference being that both sides are affected. The current financial crises began in the US and
travelled slowly to affect EU and the eastern and Asian regions.
Dr. D. Subba Rao, RBI General in an interview said that the model of banking that the EU
nations has followed since long is been identified as insufficient and prone to give jerks in case of
instabilities like the current scenario. Privatizations seem to be replaced by the model of banking
we follow here in India. Specifically, India is giving inspiration to EU to adopt Nationalization of
Banking industry and other such industries that govern the economic fulcrum of a nation by larger
proportion.
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The Indian economy has posted an average growth rate of more than 7% in the decade
since 1997, reducing poverty by about 10 percentage points. India achieved 8.5% GDP growth in
2006, 9.0% in 2007, and 7.3% in 2008, significantly expanding production of manufactures. No
doubt, India is capitalizing on its large numbers of well-educated people skilled in the English
language to become a major exporter of software services and software workers. Due to our
liberalization policy that began in 1992 with Dr. Manmohan Singh, the then finance minister, our
economic expansion has helped New Delhi continue to make progress in reducing its federal fiscal
and trade deficit.
What hampers our growth and worries all income groups is the rising scale of inflation.
Besides controlling price and financial stability, enterprises and regulatory bodies such as the SEBI
and autonomous authorities like RBI have to ensure that enough credit goes to the developingsectors such as real estate and inflation is supremely checked. Targeting low and stable inflation is
not easy if fiscal policy is poorly maintained so to devise an optimum fiscal policy is also an
urgent need.
Dr. Subbarao assures in an interview that in India, job cut would never be an issue, however,
companies who are largely dependent on FII and FDI would suffer. What is happening with the
Guangdong province of China is a wide scale consequence of this. The province that account for
over 1/3rd of Chinas international trade has seen a shut of over 2000 factories recently largely
because of no or a bare minimum export.
Of course we would not face a situation like the US as far as job cut is concerned, but there s
nothing to rejoice upon. We also need to turn to Small- and medium-scale enterprises (SMEs)
occupy an important and strategic place to vision an equitable economic growth and development.
Innovation and Entrepreneurship hold the key to enhancing the role of SMEs in improving the
Indian economy.
Enough liquidity into the banking sector has been the first step RBI has rightly taken,
followed by a cut in the Repo rate. What can augment to further stabilize the system would be a
comprehensive stimulus package for the banking sector so that investors may not loose enough
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confidence to worsen the situation. Focus on improving the scale of foreign investment would only
mark a figure into the box. In a situation like the current, when domestic investors themselves are
refraining themselves from real investing or buying a new share, relaxing ECB norms in a hope to
provide a greater foreign investment window only adds a trifling point.
What is needed in context of foreign investment is to building strong measures first to attract
knowledge, innovation and investments from the overseas Indians including NRIs, PIOs and
Overseas Corporate Bodies (OCBs) on same parallels as we invite expect other foreign
investments according to the Foreign Exchange Management Act (FEMA) and Foreign Direct
Investment (FDI) policy.
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CHAPTER-IV
OBJECTIVE-I
OBJECTIVE-II OBJECTIVE-III
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OBJECTIVE - I
SALES PROCESS AT OPERATIONAL LEVEL KNOW YOUR CUSTOMER
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SALES PROCESS
KNOW YOUR CUSTOMER (KYC)
Reserve bank of India has since issued guidelines on KNOW YOUR CUSTOMER & CASH
TRANSACTIONS under section 35(A) of the Banking Regulation Act, 1949 for implementation
by all banks. While existing instructions of RBI would continue to be implemented, new
provisions included in the KYC guidelines have been implemented with effect from 01.11.2002.
Care should be taken that the customers are not inconvenienced in this exercise .
Introduction
KNOW YOUR CUSTOMER (KYC) is the platform on which the banking system operates to
help control financial frauds, identify money laundering and suspicious activities, and for scrutiny
and monitoring of large value transactions. RBI has issued several guidelines for identification of
customers and monitoring of cash transactions.
Various guidelines in this regard are being consolidated here under:
Objective is to establish procedures / system:
To verify the bona-fide identification of individuals / corporate opening an account To monitor high value transactions and transactions of suspicious nature in
accounts.
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The focus of the KYC is on back to basics & adopting an elaborate the
standard for obtaining comprehensive information regarding new (as well as old) customers at the
initial stage.
Sales Process Approach
Every team member will have his own way of doing business or getting his customers.
However there are 4 broad ways which are imperative and should never be ignored. They are:-
Cold Calling
References Tele-Calling Promotions
A right mix will help you get your right customer. This mix can also be called your Sourcing
plan. There has to be a mix of all elements in your strategy of getting a customer. Keep in mind
Cold Callings40%
Promotions10%References
25%
Tele 25%MIX
Cold calling
Promotion
References
Tele
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regular cold calling only helps you build a data base which would help you in getting more
business in the future.
Have a Target for yourself. Keep a few hours away, each day just for cold calling and tele calling.
This will become a part of your routine and you will soon see how you get business with much
more ease than before.
Dont ignore any element of the mix..... Customize it according to your style and convenience.
Steps on a call
The sales call has certain defined steps. Keeping these steps in mind will help us in developing astructured call giving a professional edge to it. These are the following steps:-
Pre call preparation
Its very important to be prepared before call. Depending on the profile of the customer we
are meeting, information on following lines need to be kept in mind.
About his industry
How the transactions are conducted in his| her type of business.
Proprietorship\Partnership
About the product youll want to offer
Approach
Appointmen t: Good morning/Good after noon (greeting) Sir, I am Nagesh (First
name only) from Kotak Mahindra Bank. Thank you for the appointment. I would
like to share/discuss & offer our bank products with /to you.
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Cold calling: Good morning/ Good after noon (greeting) Sir, I am Nagesh (First
name only) from Kotak Mahindra Bank. I would like to share? Discuss our products
with you.
Visiting card
- Offering: Always keep visiting card in the front right pocket. Offer your
card to the customer, preferably with both your hands with the written side
facing him/her.
- Receiving: On receiving the customers card read it, never place it down
without reading it.
Diagnosing
Diagnosing helps us to get to know the customer better. Here we use the strategy of BBF Business
- What type of business he/she is in?(manufacturing, trading, retail etc)
- Nature of business (are you dealing in garments etc)
- How long have he/she has been in this business?
- Is it a partnership or a self-proprietorship?
- What is the turnover of the company?
- Number of employees
- Any other branches if yes where all?
Banking
- What facilities is He /she enjoying?
- What are his/her expectations from the bank?
- How he/she makes his payment?
- Which other places outside Delhi does he/she transact with?
Family
- Where is he/she putting up?
- How many family members does he/she have?
- Who all are there in the family?
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Call process
Dos
- Be very confident while talking to a customer.
- Confidence can only come from experience or preparation.
- If you are new then experience can be replaced by preparation
A. Analysis of Sales process
Sales Process on
1. Personal Loans.
2. Home Loans.
3. Loans against Property.
1. Personal loan sales process
No matter what your financial needs are, our personal loans help you fulfil them.
Our Personal Loans help to make a difference in your life. No matter what your financial needs are
- unexpected expenses, school fees, wedding in the family, home improvement or that long
awaited vacation? Whatever the occasion, our range of Personal Loans can help.
The procedure is simple, documentation is minimal and approval is quick.
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Key Features
Avail loans from Rs.50,000-50 lakh*
Quick Approval & hassle-free processing
Minimal paperwork Flexible repayment options
Repay with easy EMIs
Convenience of service at your doorstep
Features & Benefits
Avail loans from Rs.50, 000 - 50 lakh*: You can avail of a loan from Rs.50, 000 - 50 lakh*
for any purpose based on your income and repayment capacity and fulfil all your financial
needs.
Quick approval: With a Kotak Mahindra Bank Personal Loan, you are not far away from
making your dreams come true. In as less as 72 hours you can turn your dreams into reality.
Minimal paperwork & hassle free processing: Our minimal document requirements leave
you tension and hassle free. Additionally, worries are kept at bay, as no security or
collateral is required.
Flexible repayment options: Our flexible loan tenors range from 12 - 60 months for salariedcustomers and from 12- 36 months for businessmen / professionals, which don't
overburden you with a worry to pay heavy EMIs.
Convenience of service at your doorstep: Our Loans are just a phone call away; you can fix
an appointment with any of our representatives and they could assist you in all your loan
formalities.
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Documentation
Salariedindividuals Professionals Businessmen
Profile
Must be workingfor a Public
Ltd co./
MNC/ large
Pvt Ltd co.
Must be a Doctor (MS, MD,MBBS, BDS) , C.A.,
Architect,
Consultant, Interior
Designer
Must have clean payment
track record of
more than 1 year
of a previous loan.
Age
23 - 58 years 23 - 58 years 23 - 58 years
resident Indian resident Indian resident Indian
Income
Net monthly salary
of Rs.
10,000/-
with no
loans
outstanding
.
Filed IT returns of
Rs.75,000/- or more for the
last 2 years.
Filed IT returns of
Rs.75,000/- or
more for the last 2
years
Minimum
educati
on Graduate Professional degree Graduate
Residence
telepho
ne Required Required Required
Years in city Min 1 year Min 1 year Min 1 year
Total workexperie
nce Min 1 year Min 5 years Min 5 years
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2. Home loan Sales process
Designed to suit your requirements
At Kotak Mahindra Bank, we offer highly customized facilities of availing home loans.
Importantly, we appoint a dedicated manager who takes customers through the entire process,
starting with the filling in of the application forms and culminating in the loan disbursementprocess. This otherwise seemingly difficult process is made simpler and more convenient for the
customer. Sometimes, customers are unable to spare that extra time from their hectic schedules,
and the Bank Doorstep Service makes the home buying process seamless and pleasurable. A
relationship that is happy from the start is extended through the attention the customer gets through
his loan repayment tenure and beyond.
We believe that in order to succeed, we need to offer not only competitive products, but also the
best possible service and value-added features and benefits. In a market where the basic product islargely similar, the differentiator is our ability to understand the customer's need completely and
structure the value-adds appropriately. It is with this thought in mind that we innovate constantly,
based on our interaction with the customer.
Home buying is an emotional decision and one must find the right partner to guide you
through the course.
Key Features
High Eligibility for Businessmen
Doorstep Service
Attractive Interest Rates
Simplified Documentation
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Quicker Turnaround time
Features & Benefits
The key advantages of Kotak Mahindra Bank Home Loans are:
High Eligibility for Businessmen
Doorstep Service
Attractive Interest Rates
Simplified Documentation
Insurance Options to cover your home loans at attractive premium
Quicker Turnaround time
3. Loan against property
Unlock the potential in your property and - benefit with lower interest rates
Unlock the potential in your property by availing a Loan Against Property (LAP). A LAP is a loan
given against the security of your existing property. The benefit is that interest rates on LAP are
generally lower than rates on other consumer loans
Key Features
High loan eligibility for businessmen
Loans amounts ranging from Rs.10 lakh - Rs.3 crore!
Loans against residential as well as commercial properties
Features & Benefits
Funds for all your needs
One can use this loan for a variety of purposes, like funding existing business, debt
consolidation, emergencies, education etc.
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High loan eligibility for businessmen
If you are a businessman, at Kotak we do not evaluate your loan eligibility on the basis of
your financial statements alone. We put our trust in you and your entrepreneurial
judgement, while understanding the nature of your business and related aspects. This
overall understanding helps us work out a financial solution that will match your needs.
And not just that, you can also avail of Kotak Commercial Property Loans that help your
business grow- literally! Our loans help you get that opportunity to expand your business
and develop it to its full potential.
Kotak Commercial Property loans
You can also avail of Kotak Commercial Property loans - that help your business grow- in
the literal sense! Our loans help you get that Commercial space that with provide you the
opportunity to expand your Business and develop it to its full potential.
Loans against residential as well as commercial properties
Loan against property facility is available against your residential as well as commercial
properties, for loan amounts ranging from Rs.10 lakh to Rs.3 crores.
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OBJECTIVE-II SALES INCENTIVE STRUCTURE
SALES INCENTIVE STRUCTURE
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Sales Incentive Structure
Profile of Kotak team member
Kotak team member should be perceived out
standing in teams of skills, knowledge, experience
and personal characteristics
SKILLS
Listening Written and verbal communication Persuasion Analytical Resolute Negotiations Time Management Skills
A team member is not only a sales executive but is a representative of the bank. When he meets a
customer he is representing the bank. He is Kotak to the customer. What a customer thinks about
Kotak would be related to how the sales person has dealt with him/her.
Sales Force Loyalty Program
What is Kotak Race?
Kotak Program aims to have a Time Bound, Automatic, Transparent, Structured, Performance
Based, and Plan which will recognize and Reward consistent performers and Offer them Career
Enhancements Opportunities within the Organization
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Kotak RACE Motto
RACE is targeted at the Sales Team Members and is a Recognition and Career Enhancement
program which works on four basic principles of
Passion, Pride, Prosperity & Progress.
Passion to Perform Pride in belonging to a winning team Path to Progress in your career Prosperity in your life through attractive rewards and growth
The RACE Objectives
To lay down the expected Standards of Perform