“study on changing scenario of investment in financial market” sumesh nair
TRANSCRIPT
TABLE OF CONTENTTABLE OF CONTENT
Sr. No. Topics Page No.
1. Executive Summary 5-8
2. Introduction 9-19
3. Objective & Scope 20-21
4. Industry Profile 22-29
5. Company Profile 30-36
6. Product Profile 37-48
7. Research Methodology 49-51
8. Data Analysis 52-66
9. Observation & Findings 67-68
10. Limitations 69-70
11. Recommendations 71-72
12. Conclusions 73-74
13. Bibliography 75-76
14. Annexure 77-79
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EXECUTIVE
SUMMARY
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EXECUTIVE SUMMARY
Title : RESEARCH ON CHANGING SCENARIO OF INVESTMENT IN FINANCIAL MARKET
Duration : Two Months
COMPANY : prudential ICICI AMC Ltd.
This is a project about trends of Investment which is
modernizing or modifying day by day in financial market. It was
because of changing the perception of people for investing their
money in Investment Plans.
OBJECTIVE
The main objective behind the market research is analysis the
market and find out suspects then convert into prospects and
motivate or promote them to invest their money in modern
investment plans instead of traditional plans.
RESEARCH METHODOLOGY
Research methodology which was use in market research
qualitative and quantitative techniques. The primary data was
collected by personal Interviews with the help of structured
questionnaire and Secondary data was collected by Internet, Journals,
Magazines etc.
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FINDINGS
Maximum people were not ready to investment because they
already invested their money in march due to tax benefit.
The second reason was due to political uncertainty stock
market is highly volatile hence people were very scared for
investment
Maximum people were interested in private sector for invest
their money.
LIMITATION
The unwillingness of the respondents to answer.
When I started my training that time Market scenario was in
declined Stage.
Due to declined stage people were not interested to do
investment.
Time Constraint.
RECOMMENDATION
The creation of awareness about the need and importance of
modern Investments is vital.
New product innovation, low money investment plans and
better service is crucial for the company to increase its market
share.
CONCLUSION
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Change is very important and one whose goes which the
changing environment always succeeds, that is what I have learnt
from the study. The competition has grown too much in the
Investment Sector with the opening of the sector. In this competition
those who will survive who will take actions quickly and smartly.
After Globalization plenty of Insurance & Investment related
MNC’s came in India and developed their business. Due to
globalization Competition increases day to day and every rival
exploring new innovative ideas in investment plans for sustaining in
Indian market. Today, Mutual Fund, Unit Linked Insurance Plan (ULIP)
and Systematic Investment Plan (SIP) is most popular for Investment
because they are fulfilling investors requirements as ULIP is a
combination of Modern + Traditional Insurance Plans and which
provides Tax benefit, Risk Cover and better growth to the people
whereas traditional Insurance plans are not consider as better growth
Plans.
Therefore, We can realize that Investment
scenario in market is totally change and every people want to invest
their money in modern Investment plans those are more attractive
and more flexible.
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INTRODUCTION
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INTRODUCTION
INVESTMENTS
What is Investment….??
The money you earn is partly spent and the rest saved for
meeting future expenses. Instead of keeping the savings idle you
may like to use savings in order to get return on it in the future which
helps to your unplanned expenses.
What is the need of INVESTMENTS…..??
We need to invest to generate a specified sum of money for a
specific goal in life and its make a provision for an uncertain future.
One of the important reasons why we need to invest wisely is to
meet the cost of Inflation. Inflation is the rate by which the cost of
living increases. The cost of living is simply what it costs to buy the
goods and services you need to live. Inflation causes money to lose
value because it will not buy the same amount of a good or a service
in the future as it does now or did in the past.
For example, if there was a 6% inflation rate for the next 20 years, a
Rs. 100 purchase today would cost Rs. 321 in 20 years. This is why it
is important to consider inflation as a factor in any long-term
investment strategy. Remember to look at an investment's 'real' rate
of return, which is the return after inflation. The aim of investments
should be to provide a return above the inflation rate to ensure that
the investment does not decrease in value.
When to start Investing?
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The sooner one starts investing the better. By investing early you
allow your investments more time to grow, whereby the concept of
compounding (as we shall see later) increases your income, by
accumulating the principal and 7 the interest or dividend earned on
it, year after year. The three golden rules for all investors are:
Invest early
Invest regularly
Invest for long term and not short term
What care should one take while investing?
Before making any investment, one must ensure to:
obtain written documents explaining the investment
read and understand such documents
verify the legitimacy of the investment
find out the costs and benefits associated with the investment
assess the risk-return profile of the investment
know the liquidity and safety aspects of the investment
ascertain if it is appropriate for your specific goals
compare these details with other investment opportunities
available
examine if it fits in with other investments you are considering
deal only through an authorized intermediary
see all clarifications about the intermediary and the investment
explore the options available to you if something were to go.
and then, if satisfied, make the investment.
(These are called the Twelve Important Steps to Investing)
What is meant by Interest?
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When we borrow money, we are expected to pay for using it – this is
known as Interest. Interest is an amount charged to the borrower for
the privilege of using the lender’s money. Interest is usually
calculated as a percentage of the principal balance (the amount of
money borrowed). The percentage rate may be fixed for the life of
the loan, or it may be variable, depending on the terms of the loan.
What factors determine interest rates?
When we talk of interest rates, there are different types of interest
rates -
rates that banks offer to their depositors, rates that they lend to their
borrowers, the rate at which the Government borrows in the 8
Bond/Government Securities market, rates offered to investors in
small savings schemes like NSC, PPF, rates at which companies issue
fixed deposits etc.
The factors which govern these interest rates are mostly
economy related and are commonly referred to as macroeconomic
factors. Some of these factors are:
Demand for money
Level of Government borrowings
Supply of money
Inflation rate
The Reserve Bank of India and the Government policies which
determine some of the variables mentioned above
What are various options available for investment?
One may invest in:
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Physical assets like real estate, gold/jewellery, commodities
etc. and/or
Financial assets such as fixed deposits with banks, small
saving
instruments with post offices, insurance/provident/pension fund etc.
or securities market related instruments like shares, bonds,
debentures etc.
Investment plan in the past scenario:
Bank Fixed Deposits Saving account Post office NSC Kisan vikas patra
Bank Fixed Deposits:
Bank Fixed Deposits are also known as Term Deposits. In a
Fixed Deposit Account, a certain sum of money is deposited in the
bank for a specified time period with a fixed rate of interest.
The rate of interest for Bank Fixed Deposits depends on the maturity
period. It is higher in case of longer maturity period. There is great
flexibility in maturity period and it ranges from 7days to 10 years. The
interest is compounded annually and is added to the principal
amount.
Savings Bank Account:
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Savings Bank Account is often the first banking product people
use, which offers low interest (4%-5% p.a.), making them only
marginally better than fixed deposits.
Post Office Savings:
Post Office Monthly Income Scheme is a low risk saving
instrument, which can be availed through any post office. It provides
an interest rate of 8% per annum, which is paid monthly. Minimum
amount, which can be invested, is Rs. 1,000/- and additional
investment in multiples of 1,000/-. Maximum amount is Rs. 3,00,000/-
(if Single) or Rs. 6,00,000/- (if held Jointly) during a year. It has a
maturity period of 6 years. A bonus of 10% is paid at the time of
maturity. Premature withdrawal is permitted if deposit is more than
one year old. A deduction of 5% is levied from the principal amount if
withdrawn prematurely; the 10% bonus is also denied.
National Savings Certificates:
National Savings Certificates (NSC) are certificates issued by
Department of post, Government of India and are available at all post
office counters in the country. It is a long term safe savings option for
the investor. The scheme combines growth in money with reductions
in tax liability as per the provisions of the Income Tax Act, 1961. The
duration of a NSC scheme is 6 years.
Kisan Vikas Patra:
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Kisan Vikas Patra (KVP) is a saving instrument that provides
interest income similar to bonds. Amount invested in Kisan Vikas
Patra doubles on maturity after 8 years & 7 months.
Kisan Vikas Patra can be purchased by the following:
An adult in his own name, or on behalf of a minor,
A minor,
A Trust,
Two adults jointly.
Kisan Vikas Patra are available in the denominations of Rs 100, Rs
500, Rs 1000, Rs 5000, Rs. 10,000 & Rs. 50,000. There is no
maximum limit on purchase of KVPs. Premature encashment of the
certificate is not permissible except at a discount in the case of death
of the holder(s), forfeiture by a pledgee and when ordered by a court
of law.
Investment plan in the present scenario:
Shares (NSE & BSE) Mutual Fund’s Insurance ULIP
National Stock Exchange (NSE):
The National Stock Exchange of India Limited was created on
the basis of the report of the High Powered Study Group on
Establishment of New Stock Exchanges, which recommended
promotion of a National Stock Exchange by financial institutions to
provide access to investors from all across the country on an equal
footing. In 1992, NSE was incorporated as a tax-paying company
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unlike other stock exchanges in the country. In April 1993, NSE was
recognized as a stock exchange under the Securities Contracts
(Regulation) Act, 1956 and it commenced operations in the Wholesale
Debt Market (WDM) segment in June 1994. The Capital Market
(Equities) segment commenced operations in November 1994 and
operations in Derivatives segment were started in June 2000.
In October 1995, National Stock Exchange became the largest
stock exchange in the country. NSE launched S&P CNX Nifty in April
1996. NSE is one of the largest interactive VSAT based stock
exchanges in the world. Presently, it supports more than 3000 VSATs.
The NSE- network is the largest private wide area network in India
and the first extended C- Band VSAT network in the world.
Bombay Stock Exchange (BSE):
Bombay Stock Exchange Limited is the oldest stock exchange
in Asia. Popularly known as BSE it was established as "The Native
Share & Stock Brokers Association" in 1875.
It is the first stock exchange in India to obtain permanent recognition
in 1956 from the Government of India under the Securities Contracts
(Regulation)Act,1956.
Bombay Stock Exchange played a pivotal role in the development of
the Indian capital market and its index, SENSEX, is tracked worldwide.
The Exchange has a nation-wide reach with a presence in 417 cities
and towns of India. BSE provides an efficient and transparent market
for trading in equity, debt instruments and derivatives.
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Mutual Funds in India:
Mutual Fund is an instrument of investing money. Nowadays,
bank rates have fallen down and are generally below the inflation
rate. Therefore, keeping large amounts of money in bank is not a wise
option, as in real terms the value of money decreases over a period
of time.
One of the options is to invest the money in stock market. But a
common investor is not informed and competent enough to
understand the intricacies of stock market. This is where mutual
funds come to the rescue.
A mutual fund is a group of investors operating through a fund
manager to purchase a diverse portfolio of stocks or bonds. Mutual
funds are highly cost efficient and very easy to invest in. By pooling
money together in a mutual fund, investors can purchase stocks or
bonds with much lower trading costs than if they tried to do it on their
own. Also, one doesn't have to figure out which stocks or bonds to
buy. But the biggest advantage of mutual funds is diversification.
Diversification means spreading out money across many different types of
investments. When one investment is down another might be up. Diversification
of investment holdings reduces the risk tremendously.
Insurance:
Life is a roller coaster ride and is full of twists and turns. You
cannot take anything for granted in life. Insurance policies are a
safeguard against the uncertainties of life.
Insurance is system by which the losses suffered by a few are spread
over many, exposed to similar risks. Insurance is a protection against
financial loss arising on the happening of an unexpected event.
Insurance policy helps in not only mitigating risks but also provides a
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financial cushion against adverse financial burdens suffered.
Insurance policies cover the risk of life as well as other assets
and valuables such as home, automobiles, jewelry et al. On the basis
of the risk they cover, insurance policies can be classified into two
categories.
Unit Linked Insurance Plans (ULIP):
Unit linked insurance plan (ULIP) is life insurance solution that
provides for the benefits of protection and flexibility in investment.
The investment is denoted as units and is represented by the value
that it has attained called as Net Asset Value (NAV). The policy value
at any time varies according to the value of the underlying assets at
the time.
ULIP provides multiple benefits to the consumer. The benefits include:
Life protection
Investment and Savings
Flexibility
Adjustable Life Cover
Investment Options
Transparency
Options to take additional cover against
Death due to accident
Disability
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Critical Illness
Surgeries
Liquidity
Tax planning
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OBJECTIVE &
SCOPE
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OBJECTIVE & SCOPE
Objective:
The primary objective was to analysis the market and find out
the potential customer and motivate or promote them to invest their
money in modern Investment plan rather than traditional Investment
plan.
The secondary objective were:
To do the comparative analysis of the two options and to bring
forth, thus to the potential customer.
To create awareness among the customer
To create marketing awareness of the Investment product and
also identify the potential for this product.
To analyze the marketing strategy of the competitors
To analyze Investment pattern.
Search Method:
The method used for research was descriptive method. It
involved collection of primary data and Secondary data. As far as
project was concerned primary data was obtained by market analysis
through field.
Contact Method:
Telephone Interview
Personal Interview
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INDUSTRY
PROFILE
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INDUSTRY PROFILE
OVERVIEW OF INVESTMENT:
Institutional investment
The rapid growth of stock markets in the world, to a significant extent
could be explained by the surge in the institutional investors
consisting of pension funds, insurance companies and mutual funds.
During the period 1995 and 2005, the assets under management of
the institutional investors doubled from US$21 trillion to US$53
trillion. A large number of institutional investors are moving away
from the home bias investing in outside world. Emerging markets
with higher economic growth and rapidly growing financial markets
became major centers of destination for the investments of
institutional investors. For instance in the US, in 1994, pension funds
invested 41% of their portfolio in domestic equity and 7% in
international equities, where as by 2005 that share rose to 48% in
domestic equities and 15% in international equities. The portfolio
allocation to bond markets during the same period reduced from 42%
to 32%. Emerging markets received sizeable portion of the
investments. In the US, the dedicated emerging markets mutual
funds rose from about US$27 bn in 2000 to US$ 230 bn in 2006.
International listings
On the back of the liberalization of cross border financial flows,
companies in several countries are seeking listing in international
exchanges to garner benefits from international investors as also
widen their investor base. The number of foreign companies listed in
the London Stock Exchange rose from 387 in 1970 to 553 in 1990 to
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636 in 2006. The number of foreign companies listed on the NYSE has
also risen rapidly in the 1990s. There is a keen competition across the
world’s leading stock exchanges to promote international listing and
gain greater influence. In the recent period, the US experienced a
slowdown in the listing of foreign companies. The decline is attributed
to stringent corporate governance norms that were applied following
the corporate abuses found in the beginning of the decade. The US is
now examining in greater detail measures to gain the prominence
once it enjoyed in the international listings. The Alternative
Investment Market of London Stock Exchange attracted huge interest
from SMEs from a large number of countries.
Emerging markets as an investment destination
Liberalization of capital flows led to surge in international investment
into emerging economies finding value on the back of huge prospects
for growth. The flow of net Foreign Direct Investment (FDI) into
developing countries increased from US$ 170 bn in 1998 to US$ 325
bn in 2006 and net portfolio equity flows increased from US$6 bn to
US$94 bn during the same period. Net debt flows during this period
are rather subdued with net debt flows from official creditors turning
negative. Net portfolio equity flows to China between the year 2000
and 2006 rose from US$6.9 bn to US$32 bn and in India from US$2.3
bn to US$8.7 bn. Other emerging markets such as Brazil, Mexico,
South Africa, Thailand and Russia too, showed surge in the net
portfolio equity flows. Emerging markets showed significant growth in
stock prices making them attractive investment destinations though
issues of valuations are beginning to become a concern now.
Currently, looking at the five most important asset classes - real
estate, equities, bonds, commodities, and art (including collectibles)
Admittedly, some assets have performed better than others, but in
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general every sort of asset has risen in price, and this is true
everywhere in the world.
In the early phases of all previous investment booms, investors
failed to recognize that the "rules of the game" had changed and
continued to play the asset class that had been the leader in the
previous investment mania. In the 1980s, every increase in gold and
silver prices was perceived to be the beginning of a new bull market
in precious metals (after silver prices collapsed in January 1980,
prices doubled three times between 1980 and 1990 - all within a
downtrend), while investors maintained a very skeptical view of
bonds. In the early 1990s, investors failed to recognize the
emergence of a high-tech sector uptrend, although, as explained
above, high-tech stocks were already performing extremely well
between 1990 and 1995. Global investors continued to believe in the
merits of Asian stocks right to the end and actually stepped up their
buying in early 1997!
Similarly, in the current asset inflation, investors have continued to
focus on the high-tech bull market and have largely missed out on
the huge increase in price of commodities, and of Indian, Latin
American, and Russian equities. At the end of each investment
mania, investors believed in some sort of "excess liquidity" that would
drive the object of the speculation forever higher.
After globalization many of MNC’s came here and set up their
business in India. Therefore, The competition would also increase and
every investment company provides better or adorable plans to the
potential customer and they also retain their existing customer
through providing better services.
ROLE OF INVESTMENT IN OUR LIFE:
Risk and uncertainties are part of life’s and they will
never stop like accident, illness, theft and other uncertainties
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they will happen in life suddenly and we can not manage our
expenses according to them. We will invest our money for
make a solution of big future expenses that can we never
change like higher education, marriage of our children and we
can also make easy of our future by taking pension plans.
INVESTMENT AS INSURANCE:
Investment assures your uncertain future and provides you
secure life. Insurance is an attractive option for investment. While
most people recognize the risk hedging and tax saving potential of
insurance, many are not aware of its advantages as an investment
option as well.
Today, Insurance Company promotes ULIP as investment
product which provides you good growth, tax benefit, risk cover and
short term plans. In fact, the premium you pay for an insurance policy
is an investment against risk. Thus, before comparing with other
schemes, you must accept that a part of the total amount invested in
ULIP goes towards providing for the risk cover, while the rest is used
for saving
ULIP is a unique investment avenue that delivers sound
returns in addition to protection.
Investment as “Tax Planning”:
Long term Investment serves as an excellent tax saving
mechanism too. The Government of India has offered tax incentives
to long term investment products in order to facilitate the flow of
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funds into productive assets. Under Section 88C and section
10(10D) of Income Tax Act 1961, an individual is entitled to a rebate
of 20 per cent on the annual premium payable on his/her life of
his/her children or adult children. The rebate is deductible from tax
payable by the individual or a Hindu Undivided Family. This rebate is
can be availed up to a maximum of Rs. 48000.
INVESTMENT AS FUTURE SOLUTION:
Investment work as solution of your uncertain future. Its also
helps to fulfill your future needs and demands. One of the important
reasons why one needs to invest wisely is to meet the cost of
Inflation. Inflation causes money to lose value because it will not buy
the same amount of a good or a service in the future as it does now
or did in the past Investment. Therefore, we can say that Investment
Of our money helps in future expenses.
TYPES OF INVESTMENT PLANS:
There are two types of Investment plans are exist. Most of the
products offered by Investment companies are developed and
structured around these “basic” plans and are usually an extension or
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a combination of these plans. So, what are these plans and how do
they differ from each other?
Short Term Investment Plan:
Broadly speaking, savings bank account, money market/liquid
funds and fixed deposits with banks may be considered as short-term
financial investment options:
Savings Bank Account:
Saving Bank Account is often the first banking product people
use, which offers low interest (4%-5% p.a.), making them only
marginally better than fixed deposits.
Money Market or Liquid Funds:
Money Market or Liquid Funds are a specialized form of mutual
funds that invest in extremely short-term fixed income instruments
and thereby provide easy liquidity. Unlike most mutual funds, money
market funds are primarily oriented towards protecting your capital
and then, aim to maximize returns. Money market funds usually yield
better returns than savings accounts, but lower than bank fixed
deposits.
Long Term Investment Plans:
Public Provident Fund:
A long term savings instrument with a maturity of 15 years and
interest payable at 8% per annum compounded annually. A PPF
account can be opened through a nationalized bank at anytime
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during the year and is open all through the year for depositing
money. Tax benefits can be availed for the amount invested and
interest accrued is tax-free. A withdrawal is permissible every year
from the seventh financial year of the date of opening of the account
and the amount of withdrawal will be limited to 50% of the balance at
credit at the end of the 4th year immediately preceding the year in
which the amount is withdrawn or at the end of the preceding year
whichever is lower the amount of loan if any.
Company Fixed Deposits:
These are short-term (six months) to medium-term (three to
five years) borrowings by companies at a fixed rate of interest which
is payable monthly, quarterly, semi10 annually or annually. They can
also be cumulative fixed deposits where the entire principal along
with the interest is paid at the end of the loan period. The rate of
interest varies between 6-9% per annum for company FDs. The
interest received is after deduction of taxes.
Bonds:
It is a fixed income (debt) instrument issued for a period of
more than one year with the purpose of raising capital. The central or
state government, corporations and similar institutions sell bonds. A
bond is generally a promise to repay the principal along with a fixed
rate of interest on a specified date, called the Maturity Date.
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COMPANY
PROFILE
ORGNISATIONAL PROFILE
About the organization:
ICICI Bank is India's second-largest bank with total assets of Rs.
3,997.95 billion (US$ 100 billion) at March 31, 2008 and profit after
tax of Rs. 41.58 billion for the year ended March 31, 2008. ICICI Bank
is second amongst all the companies listed on the Indian stock
exchanges in terms of free float market capitalization. The Bank has a
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network of about 1,308 branches and 3,950 ATMs in India and
presence in 18 countries. ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers
through a variety of delivery channels and through its specialized
subsidiaries and affiliates in the areas of investment banking, life and
non-life insurance, venture capital and asset management. The Bank
currently has subsidiaries in the United Kingdom, Russia and Canada,
branches in Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka,
Qatar and Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh,
Thailand, Malaysia and Indonesia. Our UK subsidiary has established
branches in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock
Exchange and the National Stock Exchange of India Limited and its
American Depositary Receipts (ADRs) are listed on the New York
Stock Exchange (NYSE).
VISION:
To make ICICI Bank dominant life and built on trust by world-
class people and service
This we hope to achieve by :
Understanding the needs of customers and offering them
superior products and service.
Leveraging technology to service customers quickly, efficiently
and conveniently.
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Developing and implementing superior risk management and
investment strategies to offer sustainable and stable returns to
our policy holders.
Providing an enabling environment to faster growth and learning for our employees.
And above all building transparency in all our dealing
The success of the company will be founded in its unflinching to 5
cores values-integrity, customer first boundary less, ownership and
passion. Each of the values describes what the company stands for,
the qualities of our people and the way we work. We do believe that
we are on the threshold of an exciting new opportunity, were we can
play significant role in redefine and reshaping the sector. Given the
quality of our percentage and the commitment of our team, there is
no limit to our growth.
Promoters:
ICICI Bank is a professionally managed entity that was created
post the merger of the erstwhile ICICI Limited with its subsidiary ICICI
Bank. Due to the merger with its parent, the shareholding of ICICI
Bank has changed significantly and foreign investors now have over
73% stake in the bank. Government controlled entities own over 15%
stake in ICICI Bank, while other Indian entities hold the rest of the
stake. This means that there is no defined promoters’ entity for ICICI
Bank and the functioning of the bank is in the hands of a professional
team of managers.
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Objects of the issue:
The objects of the issue are to provide capital for
Executing the bank’s business strategy, including growth in its
retail portfolio.
International Expansion,
Investment in its insurance subsidiaries, and
Other general corporate purposes.
Introduction of ICICI Bank
ICICI Group
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Overview :-
ICICI Bank was originally promoted in 1994 by ICICI Limited, an
Indian financial institution, and was its wholly-owned subsidiary.
ICICI's shareholding in ICICI Bank was reduced to 46% through a
public offering of shares in India in fiscal 1998, an equity offering in
the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation in
fiscal 2001, and secondary market sales by ICICI to institutional
investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at
the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to
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create a development financial institution for providing medium-term
and long-term project financing to Indian businesses. In the 1990s,
ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial
services group offering a wide variety of products and services, both
directly and through a number of subsidiaries and affiliates like ICICI
Bank. In 1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the
NYSE.
After consideration of various corporate structuring alternatives
in the context of the emerging competitive scenario in the Indian
banking industry, and the move towards universal banking, the
managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic
alternative for both entities, and would create the optimal legal
structure for the ICICI group's universal banking strategy. The merger
would enhance value for ICICI shareholders through the merged
entity's access to low-cost deposits, greater opportunities for earning
fee-based income and the ability to participate in the payments
system and provide transaction-banking services. The merger would
enhance value for ICICI Bank shareholders through a large capital
base and scale of operations, seamless access to ICICI's strong
corporate relationships built up over five decades, entry into new
business segments, higher market share in various business
segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries. In October 2001, the Boards of
Directors of ICICI and ICICI Bank approved the merger of ICICI and two
of its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank.
The merger was approved by shareholders of ICICI and ICICI Bank in
January 2002, by the High Court of Gujarat at Ahmedabad in March
2002, and by the High Court of Judicature at Mumbai and the Reserve
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Bank of India in April 2002. Consequent to the merger, the ICICI
group's financing and banking operations, both wholesale and retail,
have been integrated in a single entity.
ICICI Bank has formulated a Code of Business Conduct and
Ethics for its directors and employees.
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PRODUCT
PROFILE
PRODUCT PROFILE
The ICICI Bank advantages:
The salient points that you make like to keep in mind before
choosing on your strategic partnership.
Strong retail focus:
After the merger with parent ICICI, ICICI Bank is focusing
strongly on the retail segment in order to fuel its growth for the
future. The bank has been very aggressive in this segment, so much
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so that retail assets now make up nearly 48% of total advances of the
bank. ICICI Bank's market share in incremental retail loans disbursed
is close to 30%. This indicates the focus the bank has evinced in the
retail segment. ICICI Bank has also significantly pared its exposure to
the corporate segment in order to increase its presence in the retail
segment.
Wide reach:
ICICI Bank has been on an expansion spree in the last year and
in this period it has seen its branch size increase to around 540
branches. The bank is also leveraging on a large ATM network in
order to augment its reach further. At the end of FY03, the bank had
an ATM network of over 1,500 ATMs spread across the country. Due
to the aggressive branch and ATM network expansion, the bank has
been able to grow its retail assets significantly. Going forward, the
bank is in a good position to tap the retail market due to its extended
reach.
Benefits from the Securitization Act:
The erstwhile ICICI Limited had a significant amount of NPAs in
its books. The passing of the Securitization Act is likely to go a long
way in helping ICICI Bank recovering dues from defaulters. The bank
has already formed an Asset Recovery Company (ARC), in partnership
with entities like SBI and IDBI in order to take advantage of the
provisions of the act.
Restructuring operations:
In an effort to reduce its interest costs ICICI Bank undertook an
exercise to reduce its parent ICICI's high cost liabilities. In this effort,
the bank has met with significant success. ICICI Bank has paid back a
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large part of ICICI's long-term high cost borrowings and in its place
replace it with low cost deposits. This has helped the bank to improve
its interest spread to 1.5% (FY03) from 1.2% in FY02. Going forward
with further restructuring of borrowings and increased contribution
from retail deposits, ICICI Bank is likely to witness further
improvement in its spreads.
Today, if you check with any corporate distributor that tide up
with us, they will uniformly confirm that our distribution support is the
best in the industry. They feel these are the most important points for
the success of banc assurance model. We would be glad to discuss
more details with your team. Should you have any further
clarifications needed we also invite your team to interact with our
actuarial, underwriting, client servicing and IT teams to see for
themselves the high quality systems processes and skills the
company has.
ICICI Bank Provides Various Types of
Investments Plans are:
MUTUAL FUNDS:
Mutual Funds pool money of various investors to purchase a wide variety of securities while pursuing a specific goal. Selection of Securities for the purpose is done by specialists from the field. Returns generated are distributed to the Investors. At ICICI Bank NRI services, we will help you determine which types of funds you need to
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meet your investment goals. This may include the following types of funds:
1. Debt: Liquid schemes, Income schemes, G-sec schemes, Monthly Income Schemes etc.
2. Equity: Diversified Equity Schemes, Sector Schemes, Index Schemes etc.
3. Hybrid Funds: Balanced Schemes, Special Schemes - Pension Schemes, Child education Schemes etc.
We help you identify an appropriate mix of Mutual Fund schemes for your portfolio using asset allocation strategies. You can invest in various schemes of multiple mutual funds with decent performance record.
Why Invest in Mutual Fund?
Professional Money Management and Research:
Mutual funds are managed by professional fund managers who
regularly monitor market trends and economic trends for taking
investment decisions. They also have dedicated research
professionals working with them who make an in depth study of the
investment option to take an informed decision.
Risk Diversification:
Diversification reduces risk contained in a portfolio by spreading it. It
is about not putting all your eggs in one basket. As mutual funds have
huge corpuses to invest in, one can be part of a large and well-
diversified portfolio with very little investment.
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Convenience:
With features like dematerialized account statements, easy
subscription and redemption processes, availability of NAVs and
performance details through journals, newspapers and updates and
lot more; Mutual Funds are sure a convenient way of investing.
Liquidity:
One of the greatest advantages of Mutual Fund investment is
liquidity. Open-ended funds provide option to redeem on demand,
which is extremely beneficial especially during rising or falling
Markets.
Reduction in Costs:
Mutual funds have a pool of money that they have to invest. So they
are often involved in buying and selling of large amounts of securities
that will cost much lower than when you invest on your own.
Tax Advantages:
Investment in mutual funds also enjoys several tax advantages.
Dividends from Mutual Funds are tax-free in the hands of the investor
(This however depends upon changes in Finance Act). Also, capital
gain accrued from mutual funds investments for period of over one
year is treated as long term capital appreciation and is taxed at a
lower rate of 10% without benefit of indexation or 20% with benefit of
indexation.
Other Advantages:
Indian Mutual fund industry also presents several other benefits to
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the investor like: transparency - as funds have to make full disclosure
of investments on a periodic basis, flexibility in terms of needs based
choices, very well regulated by SEBI with very strict compliance
requirements to investor friendly norms.
Where to Invest?
ICICI Bank has tied up with several Mutual Funds so as to provide you
the convenience of Varied Investment.
You have a choice to invest with the top 17 AMCs in India offering
around 300 schemes
AMC offered
• Alliance Mutual Fund
• Cholamandalam Mutual Fund
• DSP Merrill lynch • Deutsche
• Franklin Templeton • HDFC • HSBC • ING Vysya
• JM Financial • Kotak mahindra • Principal • Prudential
• Reliance • Standard Chartered • Sundram • Tata
• Birla
Why invest with us?
NRI Services offers investment in Mutual Funds through Multiple
Channels. With ICICI Bank, you can invest in Mutual Funds through
following channels
- India Sales Team
- ETC Team (Email, Telephone & Chat Team)
- Wise Invest
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LIFE INSURANCE:
Being away from India doesn't mean you have to compromise the
safety and security of your loved ones. In fact, your savings from your
time overseas can be easily canalized to meet your family's needs -
now and in the future. So, whether its your dream to retire in your
hometown; to secure funds for your children's education; or to build
assets, ICICI Prudential has a range of solutions that can be
customized to meet your needs. Today, In Life Insurance ULIP(Unit
linked Insurance Plan) is most popular because it provides good
wealth creation and risk cover.
Broadly, insurance plans can be distinctly divided into ULIP (Unit
Linked Insurance Plans) and traditional plans. A brief detail of both
segments:
Unit Linked Insurance Product
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ULIPs have gained high acceptance due to attractive features they
offer. These include:
1. Flexibility
1. Flexibility to choose Sum Assured.
2. Flexibility to choose premium amount.
3. Option to change level of Premium /Sum Assured even
after the plan has started.
4. Flexibility to change asset allocation by switching
between funds.
2. Transparency
1. Charges in the plan & net amount invested are known to
the customer.
2. Convenience of tracking one’s investment performance
on a daily basis.
3. Liquidity
1. Option to withdraw money after few years (comfort
required in case of exigency).
2. Low minimum tenure.
3. Partial / Systematic withdrawal allowed
4. Fund Options
1. A choice of funds (ranging from equity, debt, cash or a
combination).
2. Option to choose your fund mix based on desired asset
allocation
There are some products of ULIP:
Investment and Saving Plans
Retirement Plans
Child Plans
Investment and Saving Plans:
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Endowment policies are a good way of putting aside your savings
today for a future goal - whether it's to buy a house in India or fund
your entrepreneurial vision. Our savings-oriented policies are
designed to make your savings grow and have them available to you
at the end of a fixed number of years or through the term of the plan.
Lifetime Gold
Lifetime Plus
Lifetime Super
Life Link Super
Retirement Plans:
Many of us picture ourselves enjoying the fruits of our labor after
retirement - going on a dream vacation, or helping our child's career
take wing. Financing all this will depend on our personal savings and
investments, so its important to save for the future from today. Our
retirement plans are designed to help you systematically save, so
that you can enjoy all the things you have dreamed of when you
retire.
Life Link Super pension
Life Time Super Pension
Life Time stage Pension
Forever Life
Premier Life Pension
Child Plans:
As a responsible parent, you want to ensure a hassle-free, successful
life for your child. However, life is full of uncertainties and even the
best-laid plans can go wrong. SmartKid Education Plans are designed
to provide flexibility and to safeguard your child's future education
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and lifestyle, taking all possibilities into account. SmartKid Child Plans
has a bouquet of three products which can help you secure your
child's
SmartKid New Unit-Linked Regular Premium
SmartKid New Unit-Linked Single Premium
SmartKid Regular Premium
COMPARISON BETWEEN ULIP AND MUTUAL FUNDS
ULIP MUTUAL FUND
Most plan offer more than three
free funds switches every year
Switching is costly. Exit and entry
load and can be as high as 3-4%
There is no tax implication when
switching between funds
Profit from equity funds taxed at
10% debt profits added to income
Top-ups come with 1% charge Top-ups carry 2.25% charge
Good only for long term investing
because of high initial charge
Good for short term and long
term investing time frame
Life cover is compulsoryPure investing and life cover is
optional
You need to contribute regularly
for the long term
Investor not under any
compulsion to invest year after
year
There are various funds in mutual fund and ULIP:-
1. Maximiser: High risk funds and these funds in 100% share
market related and it provides 25%-35% earning.
2. Balancer : Moderate risk funds and these funds in
40% Share Market
60% Share Market
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15%-20% Earning
3. Protector: Low risk funds and these funds in
Govt. Bonds
5%-8% Earning
4. Preserver: It also low risk funds and provides low earning too.
Call Money Market
4%-6% Earning
Best Performing ULIPs:
Name Return
ICICI Maximiser 29.80
KOTAK Growth 25.88
HDFC Growth 22.85
AVIVA Easy Life 22.26
BIRLA Enhance 13.38
(up to September 1,2007, figure in %)
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RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY
Achieving accuracy in any research requires in depth study
regarding the subject. As the prime objective of the project is
compare various Investment products available in the market with
the existing players in the market and the impact of entry of private
players in the market, the research methodology adopted was
basically based on primary data via which the most recent and
accurate piece of first hand information that could be collected from
all possible source. Secondary data was used to support primary data
wherever needed.
Primary data was collected using the following techniques:
Questionnaire method
Direct interview method
Observation method
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The main tool used was the questionnaire method. Further direct
interview method, where a face to face formal interview will be taken.
Lastly observation method was used continuously with the
questionnaire method, as one continuously observes the surrounding
environment he works in.
Procedure of Research Methodology:
To conduct this research the target population was the people
aware or not aware from modern Investment plan like: Mutual
Fund, Unit Linked Insurance Plan, Systematic Investment Plan
and Fixed Deposit and paying tax.
Target geographic area was Jaipur. Sample size of 90 people
was taken
To these 90 people a questionnaire was given, the
questionnaire was a combination of both open ended and
closed question.
Some people already have investment plan were also
interviewed to know their prospective.
Finally the collected data and information was analyzed and
compiled to arrive at the conclusion and recommendation
given.
Sources of Secondary Data:
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These source were use to obtain information on, ICICI Bank and
other competitors history, current issues, policies, procedures etc,
wherever required.
INTERNET
MAGZINES
NEWSPAPERS
JOURNALS
DATA
ANALYSIS
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DATA ANALYSIS
MARITAL STATUS NO.OF RESPONDANTS
MARRIED 65
UNMARRIED 25
SAMPLE SIZE 90
Graph No. 1
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OBSERVATIONS:
65 samples are married out of 90 samples and they were more
potential customer.
PROFILE BASIS NO. OF RESPONDANTS
GOVT. EMPLOYEE 17
PVT. EMPLOYEE 32
SELF EMPLOYEE 41
SAMPLE SIZE 90
Graph No. 2
No. of Respondents
65
25
0
10
20
30
40
50
60
70
MARRIED UNMARRIED
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OBSERVATIONS:
In during my summer internship I observed that Pvt. And Self employed were major prospective instead of govt. employee.
1. In which Sector do you prefer to invest your money?
PROFILE BASIS NO. OF RESPONDENTS
Private Sector 53
Government Sector 37
Total 90
Graph No. 3
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OBSERVATION:
I field in my during my field work 59% samples were private sector
whereas 41% samples were prefer to invest their money in
government sector. .
2. Which type of Investment plan do you prefer?
PROFILE BASIS NO. OF RESPONDENTS
a. Bank FD 16
b. ULIP(insurance products) 26
c. Mutual Fund 14
d. Stock Market 22
e. SIP(Systematic Investment Plan) 12
Graph No. 4
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OBSERVATION:
26 sample out of 90 were preferred ULIP that is ULIP is more
preferable Investment product
Secondly 22 sample out of 90 were preferred Invest in Stock
Market.
3. How much term of Investment Plans do you like most?
PROFILE BASIS NO. OF RESPONDENTS
a. 0-3 years 18
b. 3-6 years 35
c. 6-10 years 27
d. Above 10 years 10
Graph No. 5
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OBSERVATION:
39% of samples preferred 3-6 years Investment while 30%
people preferred 6-10 years Investment.
4. What do you see in long term Investment plans?
PROFILE BASIS NO. OF RESPONDENTS
a. Growth 11
b. Risk Cover 09
c. Tax Benefit 18
d. All of the above 52
Graph No. 6
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OBSERVATION:
I observed that in during the summer project more than half of
respondents which 58% were interested in all of the above
factors.
5. How much risk do you prefer in Investment Plans?
PROFILE BASIS NO. OF RESPONDENTS
a. High Risk 43
b. Moderate Risk 31
c. Low Risk 16
Graph No. 7
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OBSERVATION:
I found in during my training 48% preferred High risk whereas 34% samples preferred moderate risk while low risk sample were very low.
As I observed that max people are of below 30 they have willingness to achieve high growth for fulfill their dreams and therefore, they want to invest their money in pure equity market rather then debt or money market
6. Have you ever used Mutual Fund as an Investment
before?
PROFILE BASIS NO. OF RESPONDENTS
a. Yes 36
b. No 54
Graph No. 8
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OBSERVATION:
I observed in during my training 54 samples never invest their money
in MFs while 36 samples invested their money in MFs.
7. Do you consider Inflation a significant risk?
PROFILE BASIS NO. OF RESPONDENTS
a. Yes 69
b. No 21
Graph No. 9
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OBSERVATION:
I observed that people are not investing their money in market due to increasing inflation so 77% were said Inflation is significant risk.
8. Is a down period in the Stock Market a buying
opportunity?
PROFILE BASIS NO. OF RESPONDENTS
a. Yes 58
b. No 32
Graph No. 10
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OBSERVATION:
64% believe that down period of stock market is a buying
opportunity because that time they can get more units instead
of up period of stock market.
9. Is Private Life Insurance Company reliable for
Investment?
PROFILE BASIS NO. OF RESPONDENTS
a. Yes 51
b. No 39
Graph No. 11
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OBSERVATION:
I observed that more than samples preferred private companies rather than govt. for their better services.
10. What are the factors on which Private Life Insurance
Company differs from LIC?
PROFILE BASIS NO. OF RESPONDENTS
a. Service Quality 37
b. Flexibility 24
c. Maturity Period 13
d. Returns 16
Graph No. 12
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OBSERVATION:
Respondents PercentageService Quality 37 41%
Flexibility 24 27%Maturity 13 14%Returns 16 18%
Total 90 100%
11. Do you have any other Investment/Insurance policy?
PROFILE BASIS NO. OF RESPONDENTS
a. Yes 67
b. No 23
Graph No. 13
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OBSERVATION:
II observed that in during my training 81% has Investment plans already and many of people has their policy from private companies rather than govt. companies.
12. From which Company
PROFILE BASIS NO. OF RESPONDENTS
a. ICICI Prudential 33
b. HDFC Standard Life 23
c. Bajaj Alianz 16
d. Other 18
Graph No. 14
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OBSERVATION:
Respondents PercentageICICI Prudential 33 37%HDFC Std. Life 23 25%Bajaj Allianz 16 18%
Other 18 20%Total 90 100%
OBSERVATION &
FINDINGS
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Observation & Findings
Maximum people were not ready to investment because they
already invested their money in March due to tax benefit.
The second reason was due to political uncertainty stock
market is highly volatile hence people were very scared for
investment
Maximum people were interested in private sector for invest
their money.
The most of people made aware by Investment Promotion,
Financial Consultants and Agents.
Most of respondents admitted that they take plan or like to take
Investment plans because of its tax free nature.
Company is getting its most of business in Investment from
ULIP and Fixed deposit.
Respondents admitted that the product awareness which is
provided through intermediaries is high.
I observed that many of respondents agreed that down stock
period is a buying opportunity.
Product awareness of ICICI bank is very high.
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LIMITATION
6
LIMITATION
When I started my training that time Market scenario was in
declined Stage.
Due to declined stage people were not interested to do
investment.
Mostly people were opt Investment or insurance plans in march
due to tax saving because tax benefit is the most important
factor for opting Long term investment plans or insurance
policies.
Some of the people provide false data as they were scared
about providing actual data.
Getting appointments with the people was difficult as most of
the people were busy and it was difficult to contact them again
and again.
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RECOMMENDATIONS
6
RECOMMENDATIONS:
The creation of awareness about the need and importance of
modern Investments is vital.
New product innovation, low money investment plans and
better service is crucial for the company to increase its market
share.
Become more creative in capturing a wider range of customer
by using multiple distribution channels.
ICICI bank is giving more stress on employees and providing
more than enough target to employees which is very hard to
achieve so bank should give less stress and realistic target.
Bank should give speed to their market research process. For
this they should recruit young & enthusiast persons.
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CONCLUSION
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CONCLUSION
Change is very important and one whose goes which the
changing environment always succeeds, that is what I have learnt
from the study. The competition has grown too much in the
Investment Sector with the opening of the sector.
On the basis of the project I can conclude that today, the
market scenario is totally change because people becoming more
aware about new Investment plans which provides better growth and
more tax benefit. In earlier we invested our money in like FD, Kisan
Vikas Patra, Providend fund, Saving account and etc. but after some
time of globalization we want to invest our money in modern
investment plans like Stock market, ULIP, MFs, SIP, Commodities,
Real Estate and etc. So people are moved gradually into that financial
market because it is more attractive.
when I joined the Summer Internship project that time market
in the declined scenario and inflation rate was going up everyday so I
had to face some difficulties for convinced to people for taking
Investment because people were scared to invest their money in
financial market The another factor is most of the people invested
their money in march due to tax saving and some of the people were
not aware to ULIP and MFs.
However, It was a great experience for me because where I
could learn more about the banking culture and how the employees
are working and achieving the goal.
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BIBLIOGRAPHY
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BIBLIOGRAPHY
Reference Books
Marketing management : Philip Kotlar
Research and Methodology : C.K. Kothari
Direct Taxes : Dr. Vinod K. Singhania
&
: Dr. Kapil Singhania
Newspapers:
Times of India
Business Standard
Websites:
www.icicibank.com www.iciciprulife.com www.icicipruamc.com www.iloveindia.com www.stockmaster.com
Search Engine:
www.google.com www.wikipedia.com
Others:
ICICI Banks related products and manual
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ANNEXURE
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ANNEXURE
Name………………………………………….
Occupation……………………………………
Contact No…………………………………....
Marital Status…………………………………
1. In which Sector do you prefer to invest your money?a. Private Sector b. Government Sector
2. Which type of Investment plan do you prefer?f. Bank FDg. ULIP(insurance products)h. Mutual Fundi. Stock Marketj. SIP(Systematic Investment Plan)
3. How much term of Investment Plans do you like most?e. 0-3 yearsf. 3-6 yearsg. 6-10 yearsh. Above 10 years
4. What do you see in long term Investment plans?e. Growthf. Risk Coverg. Tax Benefith. All of the above
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5. How much risk do you prefer in Investment Plans?d. High Riske. Moderate Riskf. Low Risk
6. Have you ever used Mutual Fund as an Investment before?
b. Yesc. No
7. Do you consider Inflation a significant risk?c. Yesd. No
8. Is a down period in the Stock Market a buying opportunity?
c. Yesd. No
9. Is Private Life Insurance Company reliable for Investment?
c. Yes d. No
10. What are the factors on which Private Life Insurance Company differs from LIC?
e. Service Qualityf. Flexibilityg. Maturity Periodh. Returns
11. Do you have any other Investment/Insurance policy?a. Yesb. No
12. From which Companye. ICICI Prudentialf. HDFC Standard Life g. Bajaj Allianzh. Other………………………………………
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