Promoters

Setting Up a Commercial BankGroup 8Aditya Nagpal 231013Amit Kaushik 231021Ankit Jain 231026Divyanshu Tripathi 231055Gursimran 231060

Porters Five Forces Analysis of Banking Industry in India

Buyer Power - High bargaining power of customers on account of banks renders uniform services to the clients. Supplier Power- Low bargaining power of suppliers on account of RBI regulatory benchmarks.Competitive Rivalry- High competition of account of number of prominent public, private, foreign along with cooperative banksAvailability of Substitutes - High menace from substitutes like NBFCs, Mutual funds, Government securities and T-billsThreat of new entrants - Low threat of new entrants on account of banking regulations. Challenges Faced in Starting a new BankRegulatory requirements Financial inclusion and priority sector lending Consolidation of existing financial services operations Capital investment Human resources IT infrastructure Regulatory reporting and compliance automation A highly competitive marketplace Customer loyalty

Summary of BusinessClients Participants in infrastructure development Focus energy, transportation and the telecommunications and information technology sectorsSupport IT HR Legal Risk Mgmt PurposeThis bank has been created with a view to serve the Small and Medium Enterprises (SME) primarily in the special economic zones of India with retail banking andfinancial assistance to corporate as its secondary objectives.

Promoters

About the Promoter GroupProfile of Board of DirectorsEducationGraduate in engineering from Manipal University Experience Over three decades of experience in managing businesses operating in the field of financial services MembershipsNational Executive Committee Member of the Federation of Indian Chamber of Commerce and Industry (FICCI) Current Chairman of FICCI Kerala State Council Member of the Managing Committee of the Malankara Orthodox Syrian Church for over three decades and currently its Lay Trustee Awards Several Awards from Rotary International and Ys Mens International for Community Development and Social Service Conferred with the Mahatma Gandhi National Award for social service for 2001 by the Mahatma Gandhi National Foundation Received the HH Baselios Mathew I Award by Catholicate of the Syrian Orthodox Church Mathews the First Foundation for 2008 that recognized his services to the Church M.G George MuthootProfession Businessman by profession Experience Over 30 years of experience in managing businesses operating in the field of financial services Awards Received the Sustainable Leadership Award 2014 by the CSR Congress in the individual category.George Thomas MuthootEducation Degree in civil engineering from Manipal University Experience Over three decades of experience in managing businesses operating in the field of financial services Memberships Trivandrum Management Association The Confederation of Real Estate Developers Association of India (Trivandrum) The Trivandrum Agenda Task Force Rotary Club, Trivandrum (South)Finance Committee Member of Mar Diocese College of Pharmacy, Althara, Trivandrum Recipient of Mar Gregorious Orthodox Christian Mercy Fellowship, Trivandrum Awards Business Excellence Award 2012 from Trivandrum Chamber of CommerceGeorge Jacob MuthootEducation A gold medallist from Kerala University in the Bachelors degree in Commerce Experience Over 30 years of experience in managing businesses operating in the field of financial services Memberships Served as the Chairman of the Kerala Non-banking Finance Companies Welfare Association from 2004 to 2007 and is currently its Vice ChairmanHas been a founder-member of The Indus Entrepreneurs International, Kochi Chapter Currently the President of Association of gold loan Companies in India Awards He was awarded the CA Business Leader Award under Financial Services Sector from The Institute of Chartered Accountants of India for 2013. George Thomas MuthootProfile of Board of DirectorsEducation Certified Associate of Indian Institute of Banking and Finance Ranked first in the commerce stream in graduation from Kerala University Experience Over 39 years of experience in the banking sector Former Chairman and Managing Director of Syndicate Bank. Joined Syndicate Bank as an Executive Director on 1st April, 2006 and was elevated to the post of Chairman and Managing Director on 2nd August, 2008; subsequently retired from office on 30th April, 2009 Employed with Canara Bank for almost four decades before joining the Syndicate BankGeorge JosephEducation Graduate in law from the Government Law College, Ernakulam Experience Retired judge of the High Court of Kerala Served as the Chairman of the Cochin Stock Exchange Was a SEBI Nominee Director of the Cochin Stock Exchange from 2002 to 2007 Membership Serves currently as the President of the Peoples Council for Social Justice, KeralaK. John MathewProfile of Board of DirectorsLocationSetting up a branch is a crucial factor for any Bank since:It involves an investment in Fixed assets which cannot be reversed It plays a crucial role in attracting target customers.

Factors affecting the decision of selecting the locations:Industrial and Trade activities DemographicsSector of EmploymentBanking

PHASE IClassification of CityName of CityNo.of BranchesTier-1Bangalore2Tier-1Mumbai2Tier-1Chennai2Tier-1Hyderabad2Tier-2Kochi1Tier-2Ahmedabad1Tier-2Gandhinagar1Tier-2Coimbatore1Tier-2Trivendrum1Tier-2Surat1Tier-2Kochi1Tier-3Nagram Villages1Tier-3Godavari District1Tier-3Vakalapudi Village1Tier-3Chittoor1Tier-3Mandal1Phase I :

Initially we will start with 20 branches across India and 25% of these should be in rural(RBI GUIDELINES) and Split of these branches are as follows:

Tier-1: 8 City :: 8 BranchesDelhi, Mumbai, Chennai, KolkataTier-2: 7 City :: 7 BranchesChandigarh, Ahmedabad, Indore, Pune, Ludhiana, Surat, KochiTier 3:: 5 Branches(Rural and Semi Urban )

PHASE II: Expansion In this phase additional cities and branches will be covered and 25 new branches will be there:

Tier 1 : 2 cities ::10 BranchesBangalore, Hyderabad, Delhi

Tier 2 : 8 cities ::10 BranchesAhemdabad, Trivendrum, Surat, Kochi, Bhubaneswar Tier 3 ::6 BranchesNagram Villages, Godavari District, Chittoor.Mylasandra Village, Kundalahalli Village.

Classification of CityName of CityNo.of BranchesTier-1Bangalore2Tier-1Mumbai2Tier-1Chennai2Tier-1Hyderabad2Tier-1Delhi1Tier-1Kolkata1Tier-2Ahmedabad1Tier-2Gandhinagar1Tier-2Coimbatore1Tier-2Trivendrum2Tier-2Surat1Tier-2Kochi2Tier-2Bhubaneswar1Tier-2Chandigarh1Tier-3Nagram Villages2Tier-3Godavari District1Tier-3Vakalapudi Village1Tier-3Mylasandra Village1Tier-3Kundalahalli Village1PHASE IIPHASE IIIPHASE III: Penetration

Number of branches to be added: 30

Tier 1: 11 Branches

Tier 2: 15 Branches

Tier 3: 8 BranchesClassification of CityName of CityNo.of BranchesTier-1Bangalore2Tier-1Mumbai2Tier-1Chennai2Tier-1Hyderabad2Tier-1Delhi2Tier-2Kolkata1Tier-2Ahmedabad2Tier-2Gandhinagar1Tier-2Coimbatore1Tier-2Trivendrum2Tier-2Surat1Tier-2Kochi2Tier-2Bhubaneswar2Tier-2Chandigarh1Tier-2Visakhapatnam2Tier-2Madurai1Tier-2Bharatpur(Ujjain )1Tier-2Perur (Tirupati)1Tier-2Janki (Siliguri)1Tier-2Nagram Villages2Tier-2Godavari District1Tier-3Mylasandra Village1Tier-3Kundalahalli Village1PHASE III ContinuedOrganizational Structure Committees of a BankTo review the internal audit system with special emphasis on its quality and effectiveness.Oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Compliance with listing and other legal requirements relating to financial statements Reviewing, with the management, the quarterly financial statements before submission to the board for approval. Audit CommitteeTo review organization health through feedback from employee surveys conducted on a regular basisTo review the performance of the MD & CEO and other Whole Time Directors at the end of each yearTo recommend to the Board the compensation payable to the Chairman of the Bank.To review appointments, promotions and exits of senior managers one level below the MD & CEOHR CommitteeCommittees of a BankThe Shareholders / Investors Grievance Committee was constituted to look into among other terms of reference redressal of complaints of investors such as transfer or credit of shares, non-receipt of dividend/ notices/annual reports etc.Shareholders / Investors Grievance CommitteeTo perform the role of Risk Management in pursuance of the Risk Management Guidelines issued periodically by RBI and BoardTo advise the Board on all high level risk mattersTo provide to the Board with such additional assurance as it may require regarding the quality of risk RISK MANAGEMENT COMMITTEECommittees of a BankOverseeing the functioning of the Banks internal committee set-up for customer service.To review the level of customer service in the Bank including customer complaints and the nature of their resolution.Provide guidance in improving the customer service level.CUSTOMER SERVICE COMMITTEEApproving IT strategy and policies.Ensuring that the IT organizational structure serves business requirements and direction.Assessing if IT architecture has been designed to derive maximum business value.Reviewing IT performance measurement and contribution to businessesIT STRATREGY COMMITTEE PHASE I:Classification of CityNo.of EmployeesTier-1200Tier-2140Tier-375TOTAL415PHASE II:Classification of CityNo. of EmployeesTier-1275Tier-2300Tier-3120TOTAL695PHASE III:Classification of CityNo. of EmployeesTier-1150Tier-2500Tier-3100TOTAL750No of employees in T1 No of employees in one branch - 15 Total :: 25*29=

No of employees in T2 No of employees in one branch - 25 Total :: 20* 175

No of employees in T3 No of employees in one branch - 10 Total :: 15*5+50

Manpower PlanningAdvertising Electronic Media- With the help Of TV Commercials, we will be able to create awareness about the bank. Print Media - Publishing advertisements in business newspapers and entrepreneurial magazines as that would help us capture our target segment.Events and experiences setting up stalls at exhibitions to communicate about our products and service to the potential clients.Personal Selling-A group of sales team would be trained to interact with the prospective customers face-to-face to handle the doubts about the banks & also about the products & services offered by the bank.Interactive website which tells us if we are eligible for business loans in 1 minute

Marketing StrategiesOpen 1000 SME loan accounts by the end of the year.Create a total value of commercial loans of more than 250cr. by the end of the quarter.Improve community awareness about bank's services

Marketing ObjectivesSmall and medium industries in SEZ areasBusiness ProfessionalAgricultural EntrepreneurRetail CustomerTarget CustomersICICIIndiabullsBajaj FinservKotak MahindraTATA CapitalFullerton Financial Holdings Pvt. LtdCompetitionPAYMENT SERVICESCredit cards, debit cards, Online money transfer

DEPOSITSTerm deposits and recurring depositsAccepting deposits from customers & lending these funds to borrowers

LOANSHousing loan, Car loan, Educational loan, Gold loan, Personal loan

SERVICESNet banking, Mobile Banking, Phone Banking, ATMsMiddle Income GroupProducts and ServicesDEPOSITSSalary accounts, fixed deposits, demat account, recurring accountLOANSPersonal loans, housing loans etc

SERVICES

Insurance covers, investment advisory services, net banking, mobile banking, phone banking, ATMs

Big Corporate HousesProducts and ServicesDEPOSITSSalary accounts, fixed deposits, demand account, recurring accountLOANSMuthoot Unnati -Itis a financing proposition designed to meet the requirements of businesses engaged in trading, manufacturing and services.(2 Crore - 3 Crore)Muthoot Sambhav - Itis aimed at providing a comprehensive solution for the financing requirements for SMEs engaged in manufacturing and trading and professionals like Doctors, Chartered Accountants, Engineers and Architects.(20 Lakhs 1 Crore)

Muthoot Suyog - Itis aimed at providing a comprehensive solution for the financing requirements of SMEs engaged in manufacturing, trading and services.(20 Lakhs 2 Crore)SERVICESInsurance covers, investment advisory services, net banking, mobile banking, phone banking, ATMsSmall and Medium EnterprisesProducts and ServicesSavings AccountAccounts maintained by retail banks that payinterest but cannot be used directly as money These accounts let customers keep liquid assets while still earning a monetary returnReturns are around 7%. Current AccountAccounts created for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channelsAs a competitive advantage, we are giving interest at a rate of 1% to attract more depositsTerm DepositsA money deposit at a banking institution that cannot be withdrawn for a preset fixed 'term' or period of timeWhen the term is over it can be withdrawn or it can be rolled over for another termWe are providing at 9.1% average rateProduct Portfolio - DepositsFinancials for the BankProvisions as per RBI GuidelinesAsset duration under doubtful categoryProvision RequirementUpto One Year25%One two three years40%More than three years100%Provisions for Standard AssetsProvisions RequirementAdvances to SME0.25 %Commercial real estate1%Commercial real estate Housing0.75%Housing Loans1%All other Loans and Advances0.40%Capital StructureShareholdersCapital Invested(Rs)Muthoot Finance Ltd500CrDepositsYearAmount(Cr)First year600Second year750Third year1000Lending Money AvailabilityFinancial YearsMoney available for Lending( Capital + Deposits)First Year500 + 600 = 1100Second Year 500 + 750 = 1250Third Year500 + 1000 = 1500Money available for Lending (Rs. Cr)Advances Made (Rs. Cr)Percentage110050045.45125057546150080053.33Advances: First YearAMOUNT(cr.) RATE AVG. SIZE(lakh) SME Loan16012.25%40Home loan 1009% 25 Auto loan 80 10% 5 Personal loan 6011.25% 2 Educational loan 70 10.5% 5 Credit cards 3017%1 Deposits: First YearAMOUNT(cr.) RATE AVG. SIZE No of Account Holding SAVINGS A/C 2007.00% 8000 250000CURRENT A/C 3001% 25000 120000TERM DEPOSITS 1009.1% 45000 22223Provisions and LiabilitiesAdvances (in Cr)Provisions & Liabilities (%) Total amount(cr)5001.758.755751.7510.068001.7514 AssumptionHere we have assumed that every year around 1.75% of that year advances will be kept as provisionsOperating expenses: First YearOperating Expenses = 2% of 600Cr = 12 Cr

AssumptionOperating expenses are assumed to be 2% of year end deposits

Fixed Assets: First YearFixed Asset value = 25 CrIncome StatementParticularsYear1Year2Year 3IncomeInterest earned52.558.937582Other Income1517.2536Total 67.576.18118ExpenditureInterest Expended394562.5Operating Expenses202134Provisions and Contingent8.7510.0614Miscellaneous34.58Total Expenditure68.7581.56118.5Profit before tax-2.25-2.38-0.5Income TaxNilnilNilPAT P&L Appropriations-2.25-2.38-0.5Statutory Reserve (25%)nilnilNilBalance in P&LnilnilNilTotal ReservesnilnilNilBalance SheetCAPITAL AND LIABILITIESFor year 1For year 2For year 3Capital500500500Reserves and surplus000Deposits6007501000Borrowings000Other Liabilities and Provisions16.6252129.75Total1116.62512711529.75ASSETSCash and Balances with Reserve Bank Of India280.5318.75382.5Cash and Balances with banks and money at call 37.87542.2532.25Investments270300250 Advances.500575800Fixed Assets253050Other Assets3.25515Total1116.62512711529.75Thank You