Adarsh Srivastav
Adarsh Srivastav
Adarsh Srivastav
MBA 2022-2024
Renaissance University,
Indore – 452015
DECLARATION
This is to certify that Summer Internship Report entitled " Bricksoin Financial
Services " which is submitted by Adarsh Srivastav in partial fulfillment of the
requirement for the award of degree MBA, at Renaissance University, Indore,
comprises only my original work and due acknowledgement has been made in the text
to all other material used.
Date:
I wish to express my deep sense of gratitude to all those who helped me in the
completion of this project report. At the outset, I would take this opportunity to
express my sincer gratitude to the Director, CA. Swapnil Kothari Chancellor
Renaissance University, Indore, for giving me the opportunity to undertake and
accomplish this project.
Compiling a project would never have been possible without valuable help of
few persons under whom I worked. I would like to express my immense
gratitude to HOD. Mr.Mridul Dadhich sir for their constant support and
motivation that had encouraged me to learn and come up with the results.
I am also thankful to my faculty mentor. Mr. Mridul Dadhich sir and all the
other college authorities who have rendered their whole hearted support at all
times for successful completion of the Summer Internship Project.
.....................................
Enrollment no. RU2203010286
CERTIFICATE
01.Introduction and meaning of financial services
05.Significant factors
a.Bank
b.Insurance company
d.Stock markets
e.Mutual funds
f.Debt markets
h.Conglomerates
12.Portfolio management
13.Case study
14.Conclusion
FINANCIAL
SERVICES
INTRODUCTION
7
The financial services sector plays a predominant role in stimulating and
sustaining the economic growth of a nation. Till recently, the public sector
institutions have been showing dominance in all the areas of financial
services like banking, insurance, term lending, housing finance, etc in the
Indian financial system.
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Dealing in foreign exchange market activities.
Arrangements of funds from financial institutions for the clients project cost
or his working capital requirements.
Planning for mergers and acquisitions and assisting for their smooth
carryout.
Promoting credit rating agencies for the purpose of rating companies which
want to go for public issues of debt instruments.
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The Indian financial services industry has experienced significant growth in
the last few years. There has been a considerable broadening and deepening
of the Indian financial markets due to various financial market reforms
Undertaken by the regulators, the introduction of innovative financial
instruments in the recent years and the entry of sophisticated domestic and
international players. Sectors such as banking, asset management and
brokerage have been liberalised to allow private sector involvement, which
has contributed to the development and modernisation of the financial
services sector. This is particularly evident in the non-banking financial
services sector, such as equities, derivatives and commodities brokerage,
residential mortgage and insurance services, where new products and
expanding delivery channels have helped these sectors achieve high growth
rates
2.Too many controls over the prices of securities under the erstwhile controller of
capital issues
5.Strict regulation of the foreign exchange market with too many restrictions on
foreign investment in Indian companies.
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THE FINANCIAL SYSTEM IMPLIES A SET OF COMPLEX AND CLOSELY
CONNECTED INSTITUTIONS, AGENTS, PRACTICES AND MARKETS. THE
FOLLOWING IS A TYPICAL STRUCTURE OF FINANCIAL SYSTEM IN
ANY ECONOMY.
FINANCIAL SYSTEM
FINANCIAL
FINANCIAL FINANCIAL FINANCIAL
INSTITUTIONS SERVICE
INSTRUMENT S
MARKETS
FINANCIAL INSTITUTIONS.
FINANCIAL INSTRUMENTS
FINANCIAL SERVICES
MEMBERSHIP REGISTRATION
MEMBERSHIP EXIT
MEMBERSHIP TRANSFER
FINANCIAL MANAGEMENT :
ACCOUNT PAYABLE
FIXED ASSETS
REPORTING SYSTEM :
SERVICE MANAGEMENT
Teller functions – Tellers, Head tellers, Cash Drawer and Strong room cash
Management
The finance industry provides a number of services to the clients. There are
different types of financial services company to provide these services to
different commercial sectors as well as to the individuals. There are
different types of financial services like lending money for different
purposes, insurances, depository services, mortgage services, investment
services, credit rating services and many more. The different types of
financial services company jointly create one of the largest industries of the
world. There are a number of financial services companies in the world.
Bank
Insurance company
Intermediation or advisory services company
Conglomerates
Asset management - the term usually given to describe companies which run
collective investment funds.
Hedge fund management - Hedge funds often employ the services of "prime
brokerage" divisions at major investment banks to execute their trades.
2.BANKS
Issuance of checkbooks so that bills can be paid and other kinds of payments can
be delivered by post
Provide personal loans, commercial loans, and mortgage loans (typically loans to
purchase a home, property or business)
Issuance of credit cards and processing of credit card transactions and billing
Provide wire transfers of funds and Electronic fund transfers between banks
Facilitation of standing orders and direct debits, so payments for bills can be made
automatically
Provide overdraft agreements for the temporary advancement of the Bank's own
money to meet monthly spending commitments of a customer in their current
account.
Provide Charge card advances of the Bank's own money for customers wishing to
settle credit advances monthly.
Provide a check guaranteed by the Bank itself and prepaid by the customer, such as
a cashier's check or certified check.
Private banking - Private banks provide banking services exclusively to high net
worth individuals. Many financial services firms require a person or family to have
a certain minimum net worth to qualify for private banking services. Private banks
often provide more personal services, such as wealth management and tax
planning, than normal retail banks.
Capital market bank - bank that underwrite debt and equity, assist company deals
(advisory services, underwriting and advisory fees), and restructure debt into
structured finance products.
Bank cards - include both credit cards and debit cards. ICICI bank is the largest
issuer of bank cards.
Credit card machine services and networks - Companies which provide credit card
machine and payment networks call themselves "merchant card providers".
BANK CARDS
AMERICAN EXPRESS
MASTER CARD
VISA
The Indian banking sector, despite the global crisis, is still fuelling the economy.
The total asset base of the 77 scheduled commercial banks (SCBs) added up to
91.8 per cent of India’s GDP (at current market prices) through the financial year
2008.
According to a study report by Dun and BradStreet, around 80 per cent of the
overall assets of SCBs were accounted for by 22 leading banks with a balance
sheet size of above US$ 11.83 billion each. This included 16 Public Sector Banks
(PSBs), 3 Private Sector Banks and 3 Foreign Banks.
Deposits of private sector banks increased at a CAGR of 26 per cent during fiscal
year 2004–2008, compared to the total CAGR growth of 20.5 per cent by all SCBs.
Advances of private sector banks increased at a CAGR of 32 per cent against a
CAGR of 30.1 per cent by all SCBs for the same period.
Public sector banks accounted for above 66 per cent of the collective total income
(including interest income and non-interest income) of all SCBs.
Retail banking accounted for a 41 per cent share of the overall revenue generated
by PSU banks while it was 36 per cent for private sector banks, and for foreign
banks the share of retail banking also stood at around 36 per cent.
As per figures released by the Reserve Bank of India (RBI), bank credit increased
by 24 per cent till January 2, 2009, compared to the 21 per cent growth in the
previous year. Credit to industry increased by 30.2 per cent till December 19, 2008,
against 24.9 per cent in the same period in the previous year.
Further, according to RBI data, lending by banks increased by more than 76 per
cent during April-November 2008, as compared to the same period an year ago.
With the credit growth, leading Indian banks are likely to increase their earnings
by around 40 per cent y-o-y in the December 2008 quarter.
Public sector banks are going in for a major image overhaul. With global banks
getting pressurised under the economic downturn, several companies and
individuals are digressing from private banks to state-owned banks. To make the
most of this situation, they are adopting new strategies and technologies to attract
more customers.
State-owned banks are now offering services like Internet banking and
personalised cheque books, and evaluation of loan proposals within a specific
period. Many such banks run processing centres and back offices. The State Bank
of India has even introduced two-faced ATMs.
Whereas, the Indian Bank has introduced wealth management services for its high
networth (HNI) clients providing various types of financial advisory and wealth
management services.
HSBC Bank was founded in 1865 to serve the needs of the merchants
of the China coast and finance the growing trade between China, Europe and
the United States. The origins of HSBC Bank in India can be traced back to
October 1853 when the Mercantile Bank of India, London and China was
founded in Bombay.
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In 1959, The Hong Kong and Shanghai
Banking Corporation (HSBC) acquired the
Mercantile Bank of India and the head office
of the HSBC Bank was established in
Bombay (Mumbai). In 1987, HSBC Bank
gave India its first ATM.
Through the 1990s, HSBC Bank blossomed into one of the leading
banking and financial services organizations of the world. As on June 30
2004, the Bank has over 110 million customers worldwide with assets over
US$1,154 billion. HSBC Bank has about 10,000 offices in 76 countries and
territories in Europe, the Asia Pacific region, the Americas, the Middle East
and Africa.
Foreign exchange services are provided by many banks around the world. Foreign
exchange services include:
Currency Exchange - where clients can purchase and sell foreign currency bank
notes
Wire transfer - where clients can send funds to international banks abroad from
India.
The insurance sector is one of the most promising sectors in India today.
INSURANCE UNDERWRITING
Among the most common investment strategies in private equity include leveraged
buyouts, venture capital, growth capital, distressed investments and mezzanine
capital. In a typical
leveraged buyout
transaction, the private
equity firm buys
majority control of an
existing or mature firm.
This is distinct from a
venture capital or
growth capital
investment, in which
the private equity firm
typically invests in
young or emerging
companies, and rarely obtain majority control.
Private equity (PE) players see are bullish on investing in India as a profitable
destination, expecting the inflows to be around US$ 5 billion-US$ 8 billion in the
coming year.
Industry experts feel that long-term investing in India is a profitable option.
According to a survey by Deloitte during the last six months, sectors driven by
domestic consumption and infrastructure are expected to witness a lot of activity.
Sandeep Gill, managing director of Deloitte corporate finance, said, "We have
observed two key points, the competitive environment for investment opportunities
for PE houses is expected to ease during 2009, as smaller PE firms and hedge
funds exit the market. Second, the volume of PE deals in the market will be
dependent on how quickly promoters are willing to accept lower valuations."
The total number of PE deals during the first five months of 2008 stood at 170,
with an announced value of US$ 6.39 billion as against 159 deals amounting to
US$ 4.97 billion during the corresponding period in 2008. India is among the top
10 countries in terms of value of private equity deals across the world, according to
the global deal tracking firm, Zephyr. The sector is going to see a flurry of activity
and investments in the coming months.
Many companies have ambitious plans to enter the private equity (PE) business
and raise funds.
Other bigwigs planning fund raisings are the Tata and Aditya Birla groups with
plans to raise US$ 350 million and US$ 250 million, respectively. In August 2008,
Reliance Capital had announced setting up a US$ 1 billion PE fund.
Private equity firm, Actis has raised a US$ 2.9 billion private equity fund ‘Actis
Emerging Markets 3 (AEM3)’ for the emerging markets of China, India, Africa,
Latin America and South-east Asia. The fund will be pumping in US$ 1 billion as
investments in India over the next 3-4 years.
US-based Apollo Management, with an asset base of more than US$ 20 billion,
will be soon setting up shop in India. The PE firm has plans to spend around US$
800 million in investments in Indian and the US markets.
Tata Capital Ltd is planning to float a US$ 350 million private equity (PE) fund.
EMERGENCE OF PRIMARY EQUITY MARKETS
Since 1940, there have been three basic types of investment companies in the
United States: open-end funds, also known in the U.S. as mutual funds; unit
investment trusts (UITs); and closed-end funds. Similar funds also operate in
Canada. However, in the rest of the world, mutual fund is used as a generic term
for various types of collective investment vehicles, such as unit trusts, open-ended
investment companies (OEICs), unitized insurance funds, and undertakings for
collective investments in transferable securities (UCITS).
The growth momentum of the mutual fund industry continues in the new fiscal
year (2008–09). Fund mobilisation has increased by a whopping 77.4 per cent to
US$ 327.93 billion during April–June 2008, compared to US$ 184.81 billion in
April–June 2007. Consequently, average Assets Under Management (AUM) of the
mutual fund industry has increased to US$ 132.33 billion for June 2008, against
US$ 99.86 billion in the corresponding period in 2007.
Further, at approx. US$ 96 billion–US$ 98 billion in assets for February 2009, the
mutual funds (MF) industry has seen a sharp increase of about 8.7 per cent in
AUM since the previous month. This is also the third consecutive monthly rise in
assets for the industry as a whole.
As per SEBI, the mutual fund industry made an overall investment of US$ 2.14
billion in equities between January-September 2008. According to market sources,
the mutual funds industry has mustered an estimated US$ 1.24 billion during the
same period. In September 2008, the AUM totalled to US$ 1.10 trillion.
To improve the capital market, the government is likely to remove the restriction
on profit-making Navratna and mini-Ratna public sector undertakings (PSUs) from
investing in mutual funds.
Life Insurance Corporation of India (LIC) has put in over US$ 2.75 billion into
liquid funds of different fund houses. The amount was more than three times its
similar investments made in 2008.
Looking ahead, the Indian mutual funds market is estimated to grow at a CAGR of
18 per cent in the next five years, with the country's mutual funds assets expected
to more than double to US$ 298.73 billion by 2012, according to a report by US-
based financial services research and consulting firm, Cerulli Associates.
7.DEBT MARKET
Financial analysts and stock market quotes will generally not include other
types of liabilities, such as accounts payable, although some will make adjustments
to include or exclude certain items from the formal financial statements.
Adjustments are sometimes also made to, for example, exclude intangible assets,
and this will affect the formal equity; debt to equity (dequity) will therefore also be
affected.
Financial economists and academic papers will usually refer to all liabilities as
debt, and the statement that equity plus liabilities equals assets is therefore an
accounting identity (it is, by definition, true). Other definitions of debt to equity
may not respect this accounting identity, and should be carefully compared.
Due to the high volatility in the equity markets, Indian investors are choosing debt
market and mutual funds over equities.
According to an ASSOCHAM
report, around US$ 333.27
million was invested in the
debt market against US$
249.89 million in equities, as on
the third week of June 2008. The
report revealed that investors
favoured corporate bonds,
particularly debentures
issued by leading companies. The
debt market in India included
segments like government securities, corporate bond market, PSU (public sector
undertaking) bonds, and fixed deposits among others.
Significantly, the non-government sector is expected to grow from US$ 100 billion
in 2006 to US$ 575 billion in 2016, increasing its share in GDP from 10 per cent to
22 per cent.
The person who draws the bill is called the drawer. He gives the order to pay
money to third party. The party upon whom the bill is drawn is called the drawee.
He is the person to whom the bill is addressed and who is ordered to pay. he
becomes an acceptor when he indicates his willingness to pay the bill. (Sec.62) The
party in whose favor the bill is drawn or is payable is called the payee.
The parties need not all be distinct persons. Thus, the drawer may draw on himself
payable to his own order.
A bill of exchange may be endorsed by the payee in favour of a third party, who
may in turn endorse it to a fourth, and so on indefinitely. The "holder in due
course" may claim the amount of the bill against the drawee and all previous
endorsers, regardless of any counterclaims that may have disabled the previous
payee or endorser from doing so. This is what is meant by saying that a bill is
negotiable.
10.CONGLOMERATES
CASE STUDIES
ICICI BANK
I have a account with ICICI
bank because it’s our salary account,
and we are kind of forced to use ICICI
Bank. And since we have a salary
account, we get a decent service. But
yes, the credit card department, and the
call centre sucks big time. That’s my
personal experience.
They put you on hold for 5 to 10 mins. (just imagine listening to the
same junk music/tone/adverts continuously), and then there is no guarantee
that you will get to speak to someone or your problem would be solved.
Infact, today I was put on hold for around 7 mins, and after that the call as
abruptly disconnected! Next time I call the call center, I get to speak to a
totally new person, and start from scrap describing the problem. The people
at the call center just promise to do things, and nothing actually happens. If
it happens, then you are really your luck.
HSBC BANK
Two days back RBI had put on its website guidelines for the bank’s
recovery agents and in it has warned the banks about strict actions would be
taken against them and even penalize the license of the bank but it seems
still the warning is falling on deaf ears. Again an incident of unruliness by
recovery agent of the bank has come into limelight. It is HSBC bank in
news. This time the victim is a professor of a reputed engineering college,
Prof J.S. Kalra. He has charged a multinational bank which allegedly sent a
pack of intimidating loan recovery agents to hound him. Kalra had taken a