SRI RAMAKRISHNA ENGINEERING COLLEGE

[Educational Service : SNR Sons Charitable Trust]

[Autonomous Institution, Accredited by NAAC with ‘A’ Grade]
[Approved by AICTE and Permanently Affiliated to Anna University, Chennai]
[ISO 9001-2015 Certified and all eligible programmes Accredited by NBA]
VATTAMALAIPALAYAM, N.G.G.O. COLONY POST, COIMBATORE – 641 022.

DEPARTMENT OF MANAGEMENT STUDIES

MERCHANT BANKING AND FINANCIAL SERVICE

(18BA1E14)

TERM PAPER
On
A STUDY ON THE FUNCTIONS OF MERCHANT BANKING
AND FACTORING SERVICE

Submitted
by
KAVYA C
(1891025)

Marks
Date of Submission:

Signature of the Student Faculty Signature

S.NO INDEX PAGE NO
MERCHANT BANKING

1 MUTHOOT FINANCE 1-12

 INTRODUCTION
 COMPANY PROFILE
 PRODUCT PROFILE
 CONCLUSION
TATA CAPITAL FINANCIAL SERVICES LIMITED

2  INTRODUCTION 13-30
 COMPANY PROFILE
 PRODUCT PROFILE
 CONCLUSION

HDFC

31-39
 INTRODUCTION
3  COMPANY PROFILE
 PRODUCT PROFILE
 CONCLUSION
 MERCHANT BANKING

Merchant banking can be defined as a skill-oriented professional service provided by

merchant banks to their clients, concerning their financial needs, for adequate
consideration, in the form of fee.

Merchant banks are a specialist in international trade and thus, excel in transacting with
large enterprises.

Services offered by Merchant Banks

Merchant Banks offers a range of financial and consultancy services, to the customers,
which are related to:

 Marketing and underwriting of the new issue.

 Merger and acquisition related services.

 Advisory services, for raising funds.

 Management of customer security.

 Project promotion and project finance.

 Investment banking

 Portfolio Services

 Insurance Services.

Merchant banking helps in reinforcing the economic development of the country, by

acting as a source of funds and information to the business entities.
 MUTHOOT FINANCE
INTRODUCTION

This is an art of preparing an educative project report offers to provide some

aspects and details regarding to Analytical Study of Various Financial Products with
the special reference to Muthoot finance. In this project report, the details regarding the
financial services

In this project report an attempt is made to bring out the details regarding the
history and achievements for the dynamic growth of the Muthoot finance. The era of
finance which has been taken a talkative role has also been described.

As we know finance plays a vital role in the market and development of

economy. Financial services are needed for every organization to run the business
efficiently. It is required in all sectors of the market i.e., education, Govt, business,
trading, agriculture small scale business etc. Finance plays a main role in day to day life.
Finance includes money, financial policy, financial services and financial consultants.
Finance is considered as ‘life blood of an organization’. It is important in development of
economy. Finance increases the savings and mobilization of funds. It is very useful in
new innovations in service sector.

COMPANY PROFILE

COMPANY BACKGROUND:

The Muthoot Group is a 123 years old business based in India and interested in
financial services, Information technology, Media and Entertainment, Health care,
Education, Power generation, Infrastructure, Plantations, Precious metals and Hospitality.
The Group takes its name from the Muthoot Family based in Kerala. The Company was
set up by Muthoot Ninan Mathai in 1887 at Kozhencherry , a small town in the erstwhile
Kingdom of Travancore (Kerala). It was then later taken over by his son M John Muthoot
who incorporated the Finance division of the group which was till then primarily involved
in wholesale of grains. The company is now managed by the third and fourth generation
of its family members.
Muthoot Fincorp Limited (MFL) the flagship Company of the 20,000 Crore
Muthoot Pappachan Group . A market leader in the gold loan business Muthoot Fincorp
has over 1280 branches spread across the cities, towns and villages of India, the Company
serves an average of 45,000 customers a day. Muthoot Fincorp’s long-standing
experience, expertise and stronghold in the semi urban and rural areas have enabled the
Company to provide quick, customized finance options and investment products,
maximizing returns to the population. The loan products of Muthoot Fincorp are uniquely
structured to serve people who do not have easy access to mainstream commercial banks.

MFL counts the satisfaction and long-service of its people as a cornerstone of its
success. Fostering teamwork, nurturing creativity and rewarding dedication to
commitment are systematically and professionally managed. Excellence and innovation
are encouraged and rewarded. Ensuring MFL’s people remain at the competitive edge,
best practice in the area and unique motivational programs are regularly carried out by the
Training and HR departments.

The company recently announced plans for an IPO (Initial Public Offering) before
the year 2014. In addition there are plans to implement an ESOP (Employee Stock
Ownership Plan) before 2012

Muthoot Fincorp is a subsidiary of Muthoot Groups was established in 1939 and

primarily involved in financial sector of the country. Muthoot Fincorp falls under the
category of Non Banking Financial Company (NBFCs) of the RBI guidelines. Muthoot
Fincorp limited is a finance company catering to the financial needs of retail and
institutional customers. It is registered with the Reserve Bank of India as a systemically
important non-deposit taking non-banking finance company (NBFC) with a paid up
capital of Rs. 60 crores and a Net Owned Fund of Rs. 403 cores. It has a diverse mix of
retail offerings in the areas of Consumer loan products and investment advisory services.
These include Gold loans, Home loans, Auto loans, Business loans, Loans against
Property, Investment products and Advisory Services, Secured Debentures etc.
 Muthoot Finance a subsidiary of Muthoot Group was established in 1939, and is
primarily involved in the financial sector of the country. We are the largest gold financing
company in India in terms of loan portfolio. We provide personal and business loans
secured by gold jewellery, or Gold Loans, primarily to individuals who possess gold
jewellery but could not access formal credit within a reasonable time, or to whom credit
may not be available at all, to meet unanticipated or other short-term liquidity
requirements. Our Gold Loan portfolio as of March 31, 2010 comprised approximately
2.8 million loan accounts in India that we serviced through 1,605 branches across 20
states and two union territories in India.

PROFILE OF FOUNDER OF MUTHOOT GROUP

In 1887, in Kozhencherry a quiet hamlet surrounded by plantations in the Southern

state of Kerala, India, Mr. Ninan Mathai started a retail business along with his plantation
ventures.In time, his sons took over the reins and re-established the business. With their
youthful vision and combined strength it soon flourished. In 1939, the brothers
established the Muthoot Chit Fund Enterprises, providing small and medium loans to
farmers and merchants. In a short span of 10 years it became the largest business house of
its kind in Kerala.
They soon moved into full fledged banking operations. They specialised in gold
loans and advances to small enterprises and individuals on quick and easy terms. This
ensured rapid growth. The brothers then decided it was time to bifurcate and thus was
born the Muthoot Pappachan Group, founded by his youngest son Mathew M. Thomas or
Muthoot Pappachan as he is fondly known. Under his watchful eye the group has since
diversified into financial services, hospitality, flight catering, travel services, IT
infrastructure, property development, the automotive sector and alternate energy. A
simple and devout man Muthoot Pappachan espoused a nine point formula that stood by
him in realising his goals. They are love, peace, happiness, kindness, helpfulness,
patience, pleasantness, faithfulness, and self control.

These ethics have been a guiding light to the path of his successors and have
permeated every strata of the Muthoot Pappachan Group. The same values still govern
every decision in the Group. When asked for his formula to success he quipped,
“unflinching faith in the Almighty and unshakeable determination to face and overcome
challenges.”  In dire circumstances and sometimes in the face of loss he was heard to
quote that a debit on earth will be a credit in heaven. A man, known to adhere to his word,
he instilled these values throughout the organisation he nurtured. The Muthoot Pappachan
Group carries Muthoot Pappachan’s legacy on with his words in our hearts “I am because
God is with me.”

COMPETITORS
In gold loan market there are different players like banks, NBFC and local pawn
brokers and jewelries. In banking sector HDFC, Bank of India, Axis Bank, SBI, syndicate
Bank etc. are providing gold loan. In Non-Banking Financial Sector there more
competitions among the competitors and also there big competitors name like Muthoot
Finance, Mannapuram gold loan, Karvy Finance, Future capital gold loan, Reliance gold
loan, Mahindra Finance, and also some other players are involved. In India nearer about
70 per cent of market share is in the hands of local jewelries and pawn brokers. Muthoot
Fincorp objectives is to capture these 70 per cent market share and its biggest competitors
is Muthoot Finance and Mannapuram gold loan. Some of the new players like Karvy
Finance, Mahindra Finance gold loan, Future Capital comes into market which is a threat
for Muthoot Fincorp.

ACHIEVEMENTS
Muthoot Finance is the highest credit rated Gold Loan company in India, with a
credit rating of AA-(CRISIAL) for its long term debt and P1+ (CRISIAL) and A1+
(CRISIAL) for its short term debt Instrument. Its Mahila Mitra loan portfolio touches
10,000 women micro entrepreneurs. In last two months it successfully opened 200
branches in northern part of India.

PRODUCT PROFILE

The year 1939 saw the emergence of the present day corporate giant- “The
Muthoot Group”. It embarked on its unending mission of providing excellent services to
its customers by establishing its first unit in Kozhencherry.

The clear-cut vision and ideals of our founder patron late Shri. Ninan Mathai
Muthoot and Founder chairman late Shri. M George Muthoot has made the Muthoot
Group the Largest financial Group of its kind in India.

Undoubtedly the mission is to win the confidence of the customer through

unmatched, prompt and personalized service.

ADMINISTRATIVE SET UP OF MUTHOOT GROUP

The Registered Office of the group is situated at kozhenchenrry In kerala. The

Corporate Office (South) is in Kochi, Kerala and the Corporate Office: (North) is situated
at Lajpat Nagar New Delhi.
THE GROUP HAS FORTY FOUR REGIONAL OFFICE
Kerala Tamilnadu KARNATAKA ANDHRAPRADESH
Trivendrum north South tamilnadu Bangalore North Hyderabad
Trivendrum south Sivagangai Bangalore South Secunderabad
Kollam Trichy Hubli vijayawada
Kottarakkara Madurai Mangalore Kurnool
Kozhenchery Coimbatore Mysore Vishakapatanam
Ernakulam Chennai South Goa Thirupathi
Trichur Chennai north Rajamundry
Alleppey Pondichery
Idukki Salem
Calicut Theni
Thirunelveli
Thanjavur
KOLKATTA WESTBEGAL
KARNAL HARIYANA
MUMBAI MAHARASTRA
AHAMADABAD GUJRAT
DELHI DELHI
WEST DELHI DELHI
JAIPUR RAJASTHAN
VARIOUS DIVISIONS OF MUTHOOT GROUP

1. BANKING & FINANCE DIVISION (MFIN)

 Started in 1939
 ISO 9001-2000 Company
 Deals in Gold Bond (Deposits) , Gold Loan, & M Power Card

2. MUTHOOT PLANTATION DIVISION

  Since 1939
 Commitment of Muthoot Group to pollution free world
 Our Estates are St. Mathews Estate, Koodal & St. Mathews Estate, at
Kulasekharam Nagercoil;
 Muthoot Plantation boasts cloves, coconut and Rubber.

3. EDUCATION DIVISION
 Since 1962
 St. George’s School, Alakananda, New Delhi
 St. George’s School, Defence colony, New Delhi
 MGM Muthoot Nursing School, Kozhencherry, Pathanamthitta
 Staff Training Colleges at Ernakulam & New Delhi

4. MUTHOOT HOSPITALITY & HOTEL DIVISION

Cardamom County
 Started in 1978 & Our Group purchased this project in 2000
 Just 1 Km from famous Periyar Tiger Reserve
 “All Spice” the multi-cuisine restaurant offers finest international dishes
 “Ayura’-Ayurvedic center helps you for natural therapy.
 Green Leaf certificate from Dept. of Tourism Government of Kerala
 Company certified with 4 star classification and First ISO 9001-2000 Resort in
Kerala.

Muthoot Pampa Villa

 River side cottage at champakulam, Alleppey on the banks of Pampa river.

Muthoot Back Water Cruises

 Fleet of House boats at Alleppey

5. HEALTH CARE DIVISION

  Since 1988
 Mar Gregorios Memorial Muthoot Medical centre, Kozhenchery with ISO 9001
2000 Certification
 Mar Gregorios Memorial Muthoot Medical centre, Pathanamthitta
 Muthoot MRI Scan & Research Centre.

6. MUTHOOT VEHICLE & ASSET FINANCE DIVISION

 Since 1992
 Kerala’s largest I-lire Purchase & Leasing Finance Company
 Over Drive Car Loan Facility provides loans with lowest rates with easy and
flexible repayment.
 Loan also given to used Vehicles

7. MUTHOOT BUILDERS

Head quarters at Trivandrum.

Throughout its fifteen years of operation, Muthoot Builders have
built several meticulously planned residential, commercial, hospital and
hospitality buildings which are known for the quality of construction, utility value and
aesthetic beauty

8. MUTHOOT SYSTEMS AND TECHNOLOGIES PVT LTD. (EMSYNE)

IT Division of the Muthoot Group

 Since 1993
 Strong focus on custom application development
 Developing custom application ranging from medium to large-scale

9. MONEY TRANSFER DIVISION.

 Started in200l
 Facilities include (Inward Remittance)
 1) Trans Cash
2) Xpress Money
3) First Remit
4) Instant Cash
5) Money Gram

Outward Remittance
1) Wiremoney

10. MUTHOOT WEALTH MANAGEMENT SERVICES PVT. LTD.

 Life Insurance
 Mutual Funds
 General Insurance

11. MUTHOOT FOREIGN EXCHANGE DIVISION

 Since 2001
 All major currencies and travelers cheques accepted for encashment
 Commission free encashment
 Sale of major currencies and travelers cheques
 Possess Authorized Dealer Category II license from RBI

12. MUTHOOT PRECIOUS METALS CORPORATION

 Sale of 999.99 Pure Gold coin imported from Switzerland.

 Easy to buy and store

13. POWER GENERATION

The group has also ventured into power generation by tapping into non
conventional energy resources. The group in association with Suzlon Energy Corporation
has installed two wind power units at Thirunelveli
to generate electricity from wind.

14. MEDIA

Muthoot Group has made a grant entry into the world of media & broad casting by
setting up an FM radio station at Chennai.

15. MUTHOOT TRAVEL SMART

Helps the customers to book their national as well as international flight tickets. It
also helps people to have passport and visa, and also to book train tickets.

16. A. MUTHOOT SECURITIES LTD.

Muthoot Group has forayed into the market, helps the customers to multiply their
fortune in Share Trading.

(B) MUTHOOT COMMODITIES LTD.

Latest venture from the Muthoot Group, being a member of MCX, NCDEX and
NMCE Muthoot Commodities provides a platform for commodity future trading.

USP - GOLD LOAN

 High per gram rate offered

 Quick and fast service extended –
 Interest rate, monthly I Rupee on words.
 8 different schemes, suitable for various categories of customers
 Need to produce, only Identity proof and address proof
 Your assets (gold ornaments) are kept in out strong rooms under 100% insurance
protection.
  Interest only for the actual days
 Easily available - No need to maintain an account.

Super Bullet Points

 We provide instant cash loan in 5 minutes
 loan for any amount available any time, any where for any purpose.
 Simple hassle free loan with least documentation.
 unmatched safety of security of Gold pledged.
 Flexible payment option on easy installments.
1. USP - GOLD BOND

We mobilize resource, not through fixed deposits as in Banks, but through

Debenture called Gold-Bonds which are fully — secure, redeemable and non-convertible
instrument

1. The resources mobilized are given out as gold Loans to customers. This investors
money is guaranteed by 120% of gold kept in our strong rooms.

2. We offer the best rate of interest- up to 12%. In our Doubling Bond, We give 17%
interest and in 72 months the bond amount doubles.

3. The Bond holder is free to close the deposit at anytime. Investors in shares and
insurance do not have this facility.

4. Since it is a Debenture, it cannot be converted in to other instruments like shares etc.

5. Interest can be availed monthly or annually.

6. Higher interest rate is offered to senior citizens, Muthoot employees, Ex-service me

state and central government pensioners, freedom fighters and state and central award
winners.

7. Gold Bond investments can be shifted to any branch of the company.

8. Also you can avail interest from any branch

9. Customer can avail a loan up to 90% the Bond amount, through any of our branches.
10. You can suggest a nominee for your investment.

11. Closing of the gold Bond can be effected through any of our branches.

CONCLUSION

It helped me to find out the different factors responsible for the success of the
muthoot finance companies.

The major finding that can be concluded from this study is that Muthoot Finance
Limited is still the best gold financing company in India.
This experience has helped me gain knowledge about the business of gold loan financing
in India.

WEBSITES

 http://www.muthootfinance.com/

 http://www.thehindubusinessline.in/2010/11/27/stories/2010112751420600.htms

 http://www.theequitydesk.com/forum/forum_posts.asp?TID=2635&PN=1

TATA CAPITAL FINANCIAL SERVICES LIMITED

Tata Capital Financial Services Ltd

COMPANY PROFILE
Tata Capital Financial Services Limited ("TCFSL") is a subsidiary of Tata Capital
limited. The Company is registered with the Reserve Bank of India as a Systemically
Important Non Deposit Accepting Non Banking Financial Company (NBFC) and offers
fund and fee-based financial services to its customers, under the Tata Capital brand.

A trusted and customer- centric, one-stop financial services provider, TCFSL caters to the
diverse needs of retail, corporate and institutional customers, across various areas of
business namely the Commercial Finance, Infrastructure Finance, Wealth Management,
Consumer Loans and distribution and marketing of Tata Cards.

TCFSL has over 100 branches spanning all critical markets in India.

Vision: The most admired financial solution partner

Mission: We will only do what’s right - for all our stakeholders, including our employees,
customers and society at large.

History and Background of Tata capital Financial services Limited

The company was incorporated in 2010 and is headquartered in Mumbai, India. Tata
Capital Financial Services Limited is a subsidiary of Tata Capital Limited.  As of June 30,
2018, it operated 134 offices in 23 states. It has employee base of 2612 employees.

It operates through Financing Activity, Investment Activity, and Others segments. The
company offers loans for new and used cars. It also provides two wheeler, personal, and
consumer durable loans. In addition, the company offers loan against property and
securities; wealth products distribution services; and investment advisory services
comprising portfolio advisory, financial planning, retirement planning, estate planning
and trusteeship, and tax planning and advisory services. Further, it provides commercial
finance products and services consisting of term loans, channel finance, debt syndication,
structured finance, loan against securities, equipment finance, lease rental discounting,
working capital demand loan, bill discounting, letter of credit, and equipment finance and
lease solutions for large, medium, and small corporate customers. Additionally, the
company offers infrastructure finance; wealth management service; and Tata Card, a
white label credit card.

Product and Services of Finance Industry

MERCHANT BANKING

Merchant banking can be defined as a skill-oriented professional service provided by

merchant banks to their clients, concerning their financial needs, for adequate
consideration, in the form of fee.

Merchant banks are a specialist in international trade and thus, offers a range of financial
and consultancy services, to the customers, which are related to:

 Marketing and underwriting of the new issue.

 Merger and acquisition related services.
 Advisory services, for raising funds.
 Management of customer security.
 Project promotion and project finance.
 Investment banking
 Portfolio Services
 Insurance Services.

Merchant banking helps in reinforcing the economic development of the country, by

acting as a source of funds and information to the business entities.

Any person, indulged in issue management business by making arrangements with

respect to trade and subscription of securities or by playing the role of manager/consultant
or by providing advisory services, is known as a merchant banker.

LEASING

A lease can be defined as an arrangement between the lessor (owner of the asset) and the
lessee (user of the asset) whereby the lessor purchases an asset for the lessee and allows
him to use it in exchange for periodical payments called lease rentals or minimum lease
payments (MLP). Leasing is beneficial to both the parties for availing tax benefits or
doing tax planning.
At the conclusion of the lease period, the asset goes back to the lessor (the owner) in an
absence of any other provision in the contract regarding compulsory buying of the asset
by the lessee (the user). There are four different things possible post-termination of the
lease agreement.
 The lease is renewed by the lessee perpetually or for a definite period of time.
  The asset goes back to the lessor.
 The asset comes back to the lessor and he sells it off to a third party.
 Lessor sells to the lessee.

DISCOUNTING
Bill Discounting is a discount/fee which a bank takes from a seller to release funds before
the credit period ends. This bill is then presented to seller's customer and full amount is
collected. Bill Discounting is mostly applicable in scenarios when a buyer buys goods
from the seller and the payment is to be made through letter of credit.

When a buyer buys goods from the seller, the payment is usually made through letter of
credit. The credit period may vary from 30 days to 120 days. Depending upon the credit
worthiness of the buyer, the bank discounts the amount that needs to be paid at the end of
credit period. Bill Discounting is also known as Invoice Discounting.

It means that the bank will charge the interest amount for the credit period as an advance
from the buyer’s account. After that, the bill amount is paid as per the end of the time
span with respect to the agreed upon document between the buyer and seller.

Bill Discounting is a major trade activity. It helps the seller's get funds earlier on a small
fees or discount. It also helps the bank earn some revenue. The borrower or (seller's)
customer can pay money on the due date of the credit period.

FACTORING

Factoring is a financial service in which the business entity sells its bill receivables to a
third party at a discount in order to raise funds. It differs from invoice discounting. The
concept of invoice discounting involves, getting the invoice discounted at a certain rate to
get the funds, whereas the concept of factoring is broader. Factoring involves the selling
of all the accounts receivable to an outside agency. Such agency is called a factor.

The seller makes the sale of goods or services and generates invoices for the same. The
business then sells all its invoices to a third party called the factor. The factor pays the
seller, after deducting some discount on the invoice value. The rate of discount in
factoring ranges from 2 to 6 percent. The factor does not make the payment of all
invoices immediately to the seller. Rather, it pays only up to 75 to 80 percent of invoice
value after deducting the discount. The remaining 20 to 25 percent of the invoice value is
paid after the factor receives the payments from the seller’s customers.

FORFEITING

The terms forfeiting is originated from a old French word ‘forfait’, which means to
surrender ones right on something to someone else. In international trade, forfeiting may
be defined as the purchasing of an exporter’s receivables at a discount price by paying
cash. By buying these receivables, the forfeiter frees the exporter from credit and the risk
of not receiving the payment from the importer.

The forfeiting typically involves the following cost elements:

1. Commitment fee, payable by the exporter to the forfeiter ‘for latter’s’ commitment to
execute a specific forfeiting transaction at a firm discount rate within a specified time.

2. Discount fee, interest payable by the exporter for the entire period of credit involved
and deducted by the forfaiter from the amount paid to the exporter against the availised
promissory notes or bills of exchange.
 

SECURITIZATION

Securitization is a carefully structured process by which a pool of loans and other

receivables are packaged and sold in the form of asset-backed securities to the investors
to raise the required funds from them. Through this process relatively illiquid assets are
converted into securities. Securitization falls under the broad category termed as
structured finance transactions.

Structured finance refers to securities where the promise to repay the investors is backed
by the value of the underlying financial asset or the credit support of a third party to the
transaction or some combination of the two. Thus, securitization is nothing but liquefying
assets comprising loans and receivables of an institution through systematic issuance of
financial instruments.

MUTUAL FUNDS
A mutual fund is formed when capital collected from different investors is invested in
company shares, stocks or bonds. Shared by thousands of investors, a mutual fund is
managed collectively to earn the highest possible returns. The person driving this
investment vehicle is a professional fund manager.

A Mutual fund features

 Money pooled from various individuals (investors)

 Well-regulated (by SEBI)
 Access to large portfolios
 Professionally Managed
 Higher returns than conventional investing
 Allows to invest in small amounts

CREDIT CARDS

A credit card is a card issued by a financial company which enables the cardholder to
borrow funds. The funds may be used as payment for goods and services. Issuance of
credit cards has the condition that the cardholder will pay back the original, borrowed
amount plus any additional agreed-upon charges. The credit company provider may also
grant a line of credit (LOC) to the cardholder which allows the holder to borrow money in
the form of a cash advance.  The issuer pre-sets borrowing limits which have a basis on
the individual's credit rating.

Credit cards have higher annual percentage rates (APRs) than other forms of consumer
loans and lines of credit. Interest charges on the unpaid amount charged to the card
usually begin one month after making a purchase.

HIRE PURCHASE

Hire purchase is an arrangement for buying expensive consumer goods on credit, where
the buyer makes an initial down payment, with the balance being paid in instalments plus
interest. It is similar to an instalment plan, except unlike instalment plans, where the
buyer gets the ownership rights as soon as the contract is signed with the seller, the
ownership of the merchandise is not officially transferred to the buyer until all the
payments have been made.

Businesses where expensive machinery is required, such as construction, manufacturing,

plant hire, printing, road freight, transport, engineering and professional services
commonly use hire purchase agreements — as well as startups that have little collateral to
establish lines of credit. Like leasing, hire purchase allows companies with
insufficient working capital to deploy assets. 

VENTURE CAPITAL

It is a private or institutional investment made into early-stage / start-up companies (new

ventures). As defined, ventures involve risk (having uncertain outcome) in the
expectation of a sizeable gain. Venture Capital is money invested in businesses that are
small; or exist only as an initiative, but have huge potential to grow. The people who
invest this money are called venture capitalists (VCs). The venture capital investment is
made when a venture capitalist buys shares of such a company and becomes a financial
partner in the business.

Venture Capital investment is also referred to risk capital or patient risk capital, as it
includes the risk of losing the money if the venture doesn’t succeed and takes medium to
long term period for the investments to fructify.

Features of Venture Capital investments

 High Risk
 Lack of Liquidity

 Long term horizon

 Equity participation and capital gains

 Venture capital investments are made in innovative projects

 Suppliers of venture capital participate in the management of the company

CREDIT DERIVATIVES

Credit derivatives are financial instruments that transfer credit risk of an underlying

portfolio of securities from one party to another party without transferring the underlying
portfolio. Let's break this down to get a clearer picture.

When a lender lends money to a borrower, the lender is faced with the risk that the
borrower won't pay that money back. This is called the credit risk. It determines the credit
ratings of the bonds issued by companies to raise debt.

So, how is the credit risk transferred? The lender sells this loan to other parties who are
seeking to invest in debt securities. These buyers get interest payments from the lender.
Once the buyers purchase these special investment vehicles, the credit risk gets
transferred to them, but the loans remain on the books of the original lender. These
investment vehicles are what we call credit derivatives.

Products & Services of Tata Capital Financial Services Ltd

Two Wheeler Loans

Tata Capital offers Two Wheeler Loans at attractive interest rates. It provides two
wheeler for as low as Rs.43* per day along with quick processing and hassle free
documentation.

Key Features:

 Special reduced rates

 Up to 85% funding of the on-road price

 Hassle free documentation

 Speedy processing

High - End Bike Loans

TCFSL is presenting Two Wheeler Loans for super bikes with attractive payback options
to suit your needs.
Key Features:

 Flexible repayment options

 Loan upto Rs. 40 lakhs

 Hassle free documentation

 Attractive interest rates

Personal Loans

TCFSL provides loan for holiday abroad, a wedding in the family , a business need or any
personal need - with Tata Capital Personal Loans.

Key Features:

 Personal Loans up to Rs 15 lakhs

 Business Loans up to Rs. 50 lakhs

 Attractive interest rates

 No hidden charges

Loan against Property

Loans against Property are secured-term- loans, secured by the mortgage of property. The
end-use of this loan should be towards any declared legal purpose. The various types of
Loans against Property are as follows:

 Loan for personal/business/educational needs against existing property

 Loan for acquisition of commercial property

 Loan against future rental receivables

Key Highlights
 Loans from   5 Lakhs up to   5 Crores
  Simple documentation

 100% transparency

 Attractive interest rates

 Easy monthly repayment through ECS or PDCs

 Loan tenure of up to 15 years

Consumer Durable Loans

At Tata Capital, customers are the centre of our world and they offer a wide range of
products to make sure their world is both comfortable and secure.

They provide Tata Capital Consumer Durable Loans at 0% ^ Interest with EMI options to
suit your needs best, bringing your dreams within reach. And all you need is your PAN
card and residence proof.

Documents Required

 Photograph

 PAN Card

 Residence proof

Loan against Securities

Tata Capital introduces Loan Against Securities (LAS). LAS offering doubles the benefits
you can enjoy Equity or Mutual Fund investments - you can now get ready liquidity on
your securities, while continuing to earn returns on them. Now you can take care of your
financial needs without liquidating your investments.

Benefits of taking a loan against securities:

1. It helps you meet all your immediate financial needs without selling your
securities
 2. You can also enjoy all benefits of being a Share/ Mutual Fund/ Securities holder
like Bonus, Dividends etc.

3. Any time pre-payment

4. Interest calculated only on the amount withdrawn

5. Option to avail additional finance by pledging more Shares, Mutual Fund units or
Securities

6. Security swapping- Flexibility to swap securities as per your outlook on the stock
market while enjoying the benefits of Dividends, Bonus and Right Issues

Product offer:

 Loan facility offered on approved Scrips and Mutual Funds to the extent of 40-
70% of the market value/net Asset Value (NAV)

 Interest charged only on amount utilized

 Monthly repayment of only the Interest component, the Principal needs to be

repaid at the end of the term

 Loan amount available as an over draft facility

 Monthly interest payment by way of ECS or PDCs

Investment Advisory Services

Tata Capital Financial Services Limited is a SEBI registered Investment Adviser under
the (Investment Advisers) Regulations, 2013. Being governed by the regulations, one of
the most distinct features of our services are:

 Unbiased independent recommendations

 No obligation of investing through us;

Services includes:

1. Portfolio Advisory Services

2. Financial Planning Services

3. Retirement Planning Services

4. Estate Planning & Trusteeship Services*

5. Tax Planning & Advisory Services*

*This is a third party service offering where Tata Capital Financial Services is merely
acting as a referral agent.

Tata Card

A card that puts YOU first!

Tata Card* combines the benefits of a globally accepted Credit Card with the advantages
of a highly rewarding Empower program.

Empower is India’s first multi-brand loyalty program which offers you the option to earn
accelerated points on your Tata Card across a wide range of shopping categories and
brands. Further, the redemption of these points is made easy via the facility to redeem
against in-store purchases at our partner outlets.

Key Features:

 Higher value back of up to 5% when you shop at Partner Brands

 Instant redemption of Reward Points at participating outlets

 Convertibility of Reward Points to airline miles

 Reward Points: Faster build- up of Reward Points. Each point is worth Re. 1

*Tata Card is a White Label Credit Card issued, operated and serviced by the State Bank
of India (“SBI”) and marketed by TCSFL

Commercial Finance
The Commercial Finance from Tata Capital provides financial solutions for large,
medium & small Corporate. We also provide solutions for emerging business areas. Our
products and services are tailored to suit the business requirement, market conditions and
entity size, to ensure our clients achieve what they aspire for.

Our asset-based business loans are just one facet of our commercial finance solutions.

Our solutions also include business loans to help improve cash flow, debt consolidation,
working capital finance, debt restructuring and more.

Our experienced professionals work closely to understand your business and then,
structure for you the best financing solution.

Our range of offerings includes:

Term Loans

Term loans aid in providing finance for acquiring income producing assets (such as
machinery, equipment and inventory) in order to generate cash flows for the repayment of
loans.

Key Features

 Tata Capital Term loans act as ideal funding mechanisms for brownfield or
greenfield construction projects, major capital improvements, large capital
investments (such as machinery and working capital) and the purchase of existing
businesses.

 Loan tenure varies from 3 months to 5 years.

 Maximum funding upto 100% of value of asset

 Solutions oriented approach to structure products to match your every need

 Simple documentation and quick approvals

Working Capital Loans

Working Capital Loans from Tata Capital could provide you with a dependable source of
funding to continuously scale your business to new heights.

Key Features

 These loans can be used to pay your daily business running expenses such as rent,
utilities, marketing expenses, inventory, employee salaries or mortgage payments.

 We offer you working capital finance by way of WCTL or WCDL, after carefully
assessing your business needs and risk profile

 Our fund and non-fund based Product basket including Letters of Credit, Buyers
Credit

Bill Discounting:

TCFSL understands an entrepreneur's needs for short-term finances when it comes to

supplying to large corporate. Which is why, they offer Bill/Invoice discounting services
that gives access to funds at competitive rates. Additionally, minimal paperwork and
quick transaction makes this an ideal way to meet working capital needs.

The Tata Capital Advantage

 Quick Processing: With simple documentation and quick processing, you'll

receive your loan in no time.

 Paperless Transactions

 Payment Flexibility: They allow you to spread out payments over a flexible time
period, for your convenience.

Channel Finance:

Tata Capital's Channel Finance through its dealer financing services ensures timely
availability of finance at reasonable cost, which means a healthy and continuous growth
of your business.

The Tata Capital Advantage

  Flexible Tenure: They allow you to spread out payments over a flexible time
period, for your convenience.

 Quick Processing: With simple documentation and quick processing, you'll

receive your loan in no time.

Letter of Credit:

Tata Capital, through its relationships with multiple associate banks, offers a Letter of
Credit facility which arms you with a guarantee of payment. This is especially useful
while you navigate the complexities of overseas trading operations. They also offer you
LC discounting facility against a confirmed Bank LC, to enable you to instantly monetize
your credit receivables at attractive rates. Making your international business operations
run smooth.

Usance LC is deferred payment for 1-3 years and customers pay on the maturity date. In
case of Sight LC, Sight LC gets converted into BC for 3 years on LC Maturity date with
option of rollover at the end of every 6 months or 12 months and customers have options
to Repay and clear the foreign currency liability partially or fully.

Key Features

 Offers two types of Letters of Credit: Sight & Usance LC, both inland & foreign

 Financing up to 100% of LC value

 Convenience of payment as per LC terms

Lease Rental Discounting:

The Lease Rental Discounting solutions from Tata Capital allow you to secure financing
against future rentals on your commercial properties which are leased out.

Key Features

 Loan tenure varies from 12 months to 108 months.

  Customized Product offering

 Simple documentation

 Attractive interest rates

Equipment Finance:

Tata Capital provides Equipment Finance to allow you to purchase a wide range of
equipment from heavy machinery to office equipment. The knowledge of the Indian
business environment coupled with their associations with the major equipment
manufacturers would enable us to customize solutions for your business.

Key Features

 Can be structured as a Loan or Lease depending on your long term equipment

needs asset ownership requirements etc.

 Tenures vary between 3 to 5 years

 No need for additional security

 Monthly repayments can be structured as per cash flows or product cycle

 Helps preserve working capital and banks line of credit

Infrastructure Finance:

Tata Capital, undertake construction equipment financing and refinancing of used

construction equipment. They are leading financers of construction equipments of
original equipment manufacturers.

Apart from financing and refinancing of construction equipment, they also offer project
financing in India for various segments including roads, railways, warehousing, irrigation,
power and so on.
They have Tata capital mart a unique B2B & B2C e-commerce portal, Tata Capital Mart
connects the entire value chain and serves as a one-stop-shop for the Construction
Equipment industry.

Services offered through the Portal include:

 Listing of Assets and Contracts

 Uploading of used assets by Customers or Sellers for both Resale and Rental. Tata
Capital Mart also hosts repossessed assets for Sale/Rent. The Buyer gets access to
a single platform to view all assets with high resolution photos of the asset and
details of available documents thereby facilitating decision making and seller
negotiation.

 Posting of contracts available for sub contracting by Customers & Contractors and
interest shown by subcontractors.

 Details about new launches & schemes from OEMs

Lease solutions:

Tata Capital, in partnership with Century Tokyo Leasing Corporation (TC-Lease), brings
you comprehensive and innovative, solution-oriented asset financing solutions. Tata
Capital Leasing Solutions offer to acquire and manage your equipment and assets better,
by leveraging our financing knowledge and domain expertise accumulated through our
combined experience of diverse and changing businesses, processes and global
associations.

We offer customized leasing solutions for both manufacturers and resellers of equipment.

The Tata Capital Advantage

 Quick Processing: A pre-established credit line at Tata Capital allows you to

acquire the equipment in minimal turnaround time.

 Payment Flexibility: A lease can be structured to have variable payment terms to

match your cash-flow needs as well as the tax bracket of your company.
  Value Add-ons: Our leasing solutions provide further value-addition with options
to avail interim finance for technology-refreshes and support equipment.

 Customized Solutions: Our team works closely with you to accomplish the best
leasing solution for your asset life-cycle management.

Wealth Products Distribution:

Tata Capitals Wealth Management services gives you a strategic approach to managing
your wealth.

Wealth Product Distribution Services are based on your portfolio and risk tolerance.
Experienced professionals work with you to design an investment strategy to help meet
your current and future needs before allocating your resources.

Tata Capitals Wealth Product Distribution Services are not only designed to allow proper
allocation of funds, but also to secure your financial future for generations. Our offerings
include:

 Corporate Fixed Deposits

 Mutual Funds

 Portfolio Management Services (PMS)

 Alternate Investment Funds and Structured Products

 Real Estate Services

 Life Insurance
CONCLUSION

Finance Industry is wide industry wherein NBFC is a part of the huge industry.

Tata Capital Financial Services Limited, a one-stop financial service provider that caters
to the diverse needs of retail, corporate and institutional customers across businesses.

Tata Capital Financial services Limited provides a service of Research insights that helps
the investors to take informed decisions.

TCFSL has Tata Capital Mart a unique B2B & B2C e-commerce portal, it connects the
entire value chain and serves as a one-stop-shop for the Construction Equipment industry.
The ease of navigating through the site to search relevant equipments is assisted by
applying filters on the Asset category, Location of the asset, Manufacturer, Year and
Price range.

Consortium finance is a service which is available in finance industry but is not available
in case of NBFC. Consortium finance is used for providing huge loans. With NBFC
undertaking consortium finance the maximum ceiling level for loans shall be increased.

TCFSCL is a part of the Finance industry and is contributing in the growth of the
industry.
 HDFC

INTRODUCTION

COMPANY HISTORY: The Housing Development Finance Corporation Limited

(HDFC) was amongst the first to receive an 'in principle' approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's
liberalization of the Indian Banking Industry in 1994. The bank was incorporated in
August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai,
India. HDFC Bank commenced operations as a Scheduled Commercial Bank in
January 1995.

PROMOTER

HDFC is India's premier housing finance company and enjoys an impeccable

track record in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to remain
the market leader in mortgages. Its outstanding loan portfolio covers well over a million
dwelling units. HDFC has developed significant expertise in retail mortgage loans to
different market segments and also has a large corporate client base for its housing related
credit facilities. With its experience in the financial markets, a strong market reputation,
large shareholder base and unique consumer franchise, HDFC was ideally positioned to
promote a bank in the Indian environment.

BUSINESS FOCUS

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to

build sound customer franchises across distinct businesses so as to be the preferred
provider of banking services for target retail and wholesale customer segments, and to
achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank
is committed to maintain the highest level of ethical standards, professional integrity,
corporate governance and regulatory compliance. HDFC Bank's business philosophy is
based on four core values - Operational Excellence, Customer Focus, Product
Leadership and People.

CAPITAL STRUCTURE

The authorized capital of HDFC Bank is Rs550 crore (Rs5.5 billion). The paid-up
capital is Rs424.6 crore (Rs.4.2 billion). The HDFC Group holds 19.4% of the bank's
equity and about 17.6% of the equity is held by the ADS Depository (in respect of the
bank's American Depository Shares (ADS) Issue). Roughly 28% of the equity is held by
Foreign Institutional Investors (FIIs) and the bank has about 570,000 shareholders. The
shares are listed on the Stock Exchange, Mumbai and the National Stock Exchange. The
bank's American Depository Shares are listed on the New York Stock Exchange (NYSE)
under the symbol 'HDB'.

DISTRIBUTION NETWORK

HDFC Bank headquartered is in Mumbai. The Bank at present has an enviable

network of over 1229 branches spread over 444 cities across India. All branches are
linked on an online real-time basis. Customers in over 120 locations are also serviced
through Telephone Banking. The Bank's expansion plans take into account the need to
have a presence in all major industrial and commercial centers where its corporate
customers are located as well as the need to build a strong retail customer base for both
deposits and loan products. Being a clearing/settlement bank to various leading stock
exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and
active member base. The Bank also has a network of about over 2526 networked ATMs
across these cities. Moreover, HDFC Bank's ATM network can be accessed by all
domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and
American Express Credit/Charge cardholders.
TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms of information

technology and communication systems. All the bank's branches have online
connectivity, which enables the bank to offer speedy funds transfer facilities to its
customers. Multi-branch access is also provided to retail customers through the branch
network and Automated Teller Machines (ATMs). The Bank has made substantial efforts
and investments in acquiring the best technology available internationally, to build the
infrastructure for a world class bank. The Bank's business is supported by scalable and
robust systems which ensure that our clients always get the finest services we offer. The
Bank has prioritized its engagement in technology and the internet as one of its key goals
and has already made significant progress in web-enabling its core businesses. In
each of its businesses, the Bank has succeeded in leveraging its market position, expertise
and technology to create a competitive advantage and build market share.

HDFC BANK business strategy emphasizes the following:

Increase market share in India’s expanding banking and financial services industry
by following a disciplined growth strategy focusing on quality and not on quantity and
delivering high quality customer service. Leverage our technology platform and open
scaleable systems to deliver more products to more customers and to control operating
costs. Maintain current high standards for asset quality through disciplined credit risk
management.Develope innovative products and services that attract the targeted
customers and address inefficiencies in the Indian financial sector. Continue to develop
products and services that reduce bank’s cost of funds. Focus on high earnings growth
with low volatility.

PRODUCT SCOPE:

HDFC Bank offers a bunch of products and services to meet the every need of the people.
The company cares for both, individuals as well as corporate and small and medium
enterprises. For individuals, the company has a range accounts, investment, and pension
scheme, different types of loans and cards that assist the customers. The customers can
choose the suitable one from a range of products which will suit their life-stage and
needs. For organizations the company has a host of customized solutions that range from
funded services, Non-funded services, Value addition services, Mutual fund etc. These
affordable plans apart from providing long term value to the employees help in enhancing
goodwill of the company. The products of the company are categorized into various
sections which are as follows:

 Accounts and deposits

 Loans
 Investments and Insurance
 Forex and payment services
 Cards
 Customer center

PRODUCTS AND SERVICES

1. PERSONAL BANKING SERVICES
A. Accounts & Deposits
Savings Account

 Regular Savings Account

 Savings Plus Account
 Savings Max Account
 Senior Citizens Account
 No Frills Account
 Institutional Savings Account
 Payroll Salary Account
 Classic Salary Account
 Regular Salary Account
 Premium Salary Account
 Defence Salary Account
 Kid's Advantage Account
 Pension Saving Bank Account
  Family Savings Account
 Kisan No Frills Savings Account
 Kisan Club Savings Account
Current Account
 Plus Current Account
 Trade Current Account
 Premium Current Account
 Regular Current Account
 Apex Current Account
 Max Current Account
 Reimbursement Current Account
Fixed Deposit
 Regular Fixed Deposit
 Super Saver Account
 Sweep-in Account
Recurring Deposit
Demat Account
Safe Deposit Locker
B. Loans
 Personal Loans
 Home Loans
 Two Wheeler Loans
 New Car Loans
 Used Car Loans
 Overdraft against Car
 Express Loans
 Loan against Securities
 Loan against Property
 Commercial Vehicle Finance
 Working Capital Finance
 Construction Equipment Finance
C. Investments & Insurance
 Mutual Funds
 Insurance
 Bonds
 Financial Planning
 Knowledge Centre
 Equities & Derivatives
 Mudra Gold Bar

D. Forex Services
 Trade Finance
 Traveler’s Cheques
 Foreign Currency Cash
 Foreign Currency Drafts
 Foreign Currency Cheque Deposits
 Foreign Currency Remittances
 Forex Plus Card

E. Payment Services
 Net Safe
 Prepaid Refill
 Bill Pay
 Direct Pay
 Visa Money Transfer
 E-Monies Electronic Funds Transfer
 Excise & Service Tax Payment

F. Access Your Bank - One View

 Insta Alerts
 Mobile Banking
 ATM
 Phone Banking
  Branch Network

G. Cards
 Silver Credit Card
 Gold Credit Card
 Woman's Gold Credit Card
 Platinum plus Credit Card
 Titanium Credit Card
 Value plus Credit Card
 Health plus Credit Card
 HDFC Bank Idea Silver Card
 HDFC Bank Idea Gold Card

2. WHOLESALE BANKING SERVICES

 Funded Services
 Non Funded Services
 Value Added Services
 Internet Banking
 Clearing Sub-Membership
 RTGS – sub membership
 Fund Transfer
 ATM Tie-ups
 Commodities Business
 Trusts

3. NRI BANKING SERVICES

 Rupee Saving a/c
 Rupee Current a/c
 Rupee Fixed Deposits
 Foreign Currency Deposits
 Accounts for Returning Indians
  Payment Services
 Net Safe
 Bill Pay
 Insta Pay
 Direct Pay
 Visa Money
 Online Donation
 Remittances

MILESTONES IN THE HISTORY

HDFC Bank began its operations in 1995 with a simple mission to be a "World-class
Indian Bank". They realized that only a single-minded focus on product quality and
service excellence would help us get there. Today, they are proud to say that they are well
on our way towards that goal. It is extremely gratifying that their efforts towards
providing customer convenience have been appreciated both nationally and
internationally.

QUALITY POLICY

SECURITY: The bank provides long term financial security to their policy. The bank
does this by offering life insurance and pension products.

TRUST: The bank appreciates the trust placed by their policy holders in the bank. Hence,
it will aim to manage their investments very carefully and live up to this trust.

INNOVATION: Recognizing the different needs of our customers, the bank offers a
range of innovative products to meet these needs.
INTEGRITY CUSTOMER CENTRIC PEOPLE CARE “ONE FOR ALL AND ALL
FOR ONE” TEAM WORK JOY AND SIMPLICITY

OBJECTIVES
PRIMARY OBJECTIVES:
 To acquire new customer by convincing them and to promote the benefits of those
which are provided by the bank.
 To find the different way of convincing customers.
 To study brand image of the bank.
 To increase the business of the bank.

SECONDARY OBJECTIVES:

 To determine the need and purpose of a personal banker.

 To understand the deciding criteria for people to become a personal banker.
 To offer suggestions based upon the findings.

PRODUCT SCOPE:

Studying the increasing business scope of the bank. Market segmentation to find the
potential customers for the bank. To study how the various products are positioned in the
market. Corporate marketing of products. Customers’ perception on the various products
of the bank.

CONCLUSIONS:
HDFC Bank, the banking arm of HDFC is expected to go on stream. The bank already
has good number of employees on board and is recruiting personal banker heavily to take
the headcount to many more. It is on the brim of increasing its customers through its
attractive schemes and offer.

So, at last the conclusion is that there is tough competition ahead for the company from
its major competitors in the banking sector. Last but not the least I would like to thank
HDFC Bank for giving me an opportunity to work in the field of Marketing and
Operation. I hope the company finds my analysis relevant.