A project report on INVESTMENT PRODUCTS AT KOTAK IN

SUBMITTED IN THE PARTIAL FULFILMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2010-2013

UNDER THE GUIDANCE OF: MRS. MONA KAWATRA FACULTY, MAIMS

SUBMITTED BY: NITIN HOODA BBA (B&I) III SEM 03414701810

MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

Affiliated to Guru Gobind Singh Indraprastha Univers Delhi PSP Area, Plot No. 1, Sector 22, Rohini Delhi 110041.
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DECLARATION CERTIFICATE
I hereby declare that the project on Investment Products at Kotak in Kotak Mahindra Bank Limited submitted to Maharaja Agrasen Institute Of Management Studies under the guidance of Mrs. Mona Kawatra towards the partial fulfillment for the award of the degree of Bachelor of Business Administration is my original work and is not copied or meant for any other degree/ diploma courses. I hereby declare that all the information provided in the project is valid and is based on immense research work done. All the data provided is factual and based on the information provided as per the website and the brochures of the organization. NITIN HOODA

CERTIFICATE
This is to certify that the project titled INVESTMENT PRODUCTS AT KOTAK is an academic work done by NITIN HOODA submitted in the Partial fulfillment of the requirement for the award of the degree of Bachelor of Business Administration from Maharaja Agrasen Institute of Management Studies, Delhi, under my guidance & direction. To the best of my knowledge and belief the data & information presented by him in the project has not been submitted earlier.

Mrs. Mona Kawatra

Project Guide

ACKNOWLEDGEMENT
I take due pleasure to thank all those who have helped & supported me for the completion of this project. At the outset I express my profound and sincere gratitude to Maharaja Agrasen Institute Of management Studies , New Delhi for providing me with the opportunity to explore the corridors of the corporate world and gather invaluable information and practical experience in the field of Finance and banking. I express my indebtness and deepest gratitude to Mrs. Mona Kawatra (project guide), who took great pains in going through each step of my project and made valuable comments and suggestions, which has helped me to prepare this project on time. My thanks to the entire unit of Kotak Mahindra including the bank and the life insurance, for their valuable guidance and the help given directly or indirectly due to which I have been able to make optimum utilization of my learning and knowledge into practice successfully. I express my sincere gratitude to my parents for their invaluable support and continuous encouragement for the successful completion of my project. Last but not the least, I would like to thank GOD without whose grace; I wouldnt have been able to complete this project. A project of this nature calls for intellectual nourishment, professional help & encouragement from various quarters. This report has naturally gained a number of ideas and theory from the books of this subject. I express our thanks to all these authors, too numerous to acknowledge. NITIN HOODA

EXECUTIVE SUMMARY
The project report is to acquaint the study with the real life situation of the organization. The report contains the corporate profile of Kotak Mahindra Bank, Kotak Mahindra Asset Management Company, Kotak mahindra life insurance Company. It also contains the list of all the products sold by Kotak mahindra bank. Further, mutual funds and unit linked insurance plans have been explained in details. The features of all the MF and ULIP products at Kotak have been mentioned. The best plans among these have been dealt in details. Then an analysis has been done about the best plans. At last a conclusion has been drawn on the basis of the whole study. The project makes aware of various things about mutual funds and ULIPs their types, features, procedure of issuance, parameters on which they are compared, customer preferences, etc. Besides this, it also makes familiar with the organization culture, the generally accepted behaviors in an organisation, and the internal environment.

CHAPTER SCHEME
CHAPTER-1: INTRODUCTION: - chapter 1 includes details of the banking business in India. It makes aware about how the whole banking business is carried in India. The central bank of the Indian Banking Business is RBI (Reserve bank of India).It controls all the banking business in India. It also includes a small description of Kotak Mahindra Bank. CHAPTER-2 COMPANY PROFILE:- chapter 2 consists of details of the Kotak Mahindra Bank Limited. Besides it also consists of the details of all the products sold by the bank under its name. There is a small picture of the companys financial results also. CHAPTER-3 RESEARCH METHODOLOGY:- chapter 3 contains details of the type of data which have been used while making the entire project. Basically the type of data which has been used in the project is secondary. CHAPTER-4 FINDINGS & ANALYSIS: - chapter 4 has the broad details of the findings and analysis of the entire project. There is a detailed analysis of the entire company on the basis of the products it offers in various sectors and also the companys financial results are kept in mind. CHAPTER-5 CONCLUSION: - finally the last chapter-5 has the conclusion of the detailed study of the project. The conclusion is drawn on the basis of the detailed study of the entire project. Various points have bee kept in mind while drawing the conclusion. CHAPTER-6 RECOMMENDATIONS: - this chapter has suggestions on how Kotak Mahindra enhance its business and compete in the corporate sector CHAPTER-7 LIMITATIONS OF THE STUDY: -this chapter states the limits of this project.

CONTENTS
CHAPTER-1 INTRODUCTION BANKING OVERVIEW COMMERCIAL & CO-OPERATIVE BANKS KMBL CHAPTER-2 COMPANY PROFILE INTRODUCTION TO KMBL MILESTONES OF KMBL CORPORATE IDENTITY OF KMBL KOTAK MAHINDRA BANK LIMITED AND ITS SUBSIDIARIES THE JOURNEY SO FAR GROUP STRUCTURE VISION STATEMENT PRODUCT PROFILE MUTUAL FUND PRODUCTS AT KOTAK INTRODUCTION TO INSURANCE INTRODUCTION TO ULIP FEATURES OF ULIP CORPORATE PROFILE OF KLI ULIP PRODUCTS AT KOTAK LIFE INSURANCE FINANCIAL RESULTS CHAPTER-3 RESEARCH METHODOLOGY RESEARCH METHODOLOGY OF STUDY PURPOSE OF STUDY CHAPTER-4 FINDINGS CHAPTER-5 CONCLUSION CHAPTER-6 RECOMMENDATIONS CHAPTER-7 LIMITATIONS OF THE STUDY BIBLIOGRAPHY GLOSSARY

INTRODUCTION

CHAPTER-1 INTRODUCTION
Banking Overview
The major participants of the Indian financial system are the commercial banks, the financial institutions (FIs), encompassing term-lending institutions, investment institutions, specialized financial institutions and the state-level development banks, Non-Bank Financial Companies (NBFCs) and other market intermediaries such as the stock brokers and money-lenders. The commercial banks and certain variants of NBFCs are among the oldest of the market participants. The FIs, on the other hand, are relatively new entities in the financial market place.

Historical perspective
Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in India on modern lines started with the establishment of three presidency banks under Presidency Bank's act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras. In 1921, all presidency banks were amalgamated to form the Imperial Bank of India. Imperial bank carried out limited central banking functions also prior to establishment of RBI. It engaged in all types of commercial banking business except dealing in foreign exchange. Reserve Bank of India Act was passed in 1934 & Reserve Bank of India (RBI) was constituted as an apex bank without major government ownership. Banking Regulations Act was passed in 1949. This regulation brought Reserve Bank of India under government control. Under the act, RBI got wide ranging powers for supervision & control of banks. The Act also vested licensing powers & the authority to conduct inspections in RBI. In 1955, RBI acquired control of the Imperial Bank of India, which was renamed as State Bank of India. In 1959, SBI took over control of eight private banks floated in the erstwhile princely states, making them as its 100% subsidiaries. RBI was empowered in 1960, to force compulsory merger of weak banks with the strong ones. The total number of banks was thus reduced from 566 in 1951 to 85 in 1969. In July 1969, government nationalized 14 banks having deposits of Rs.50 crores & above. In 1980, government acquired 6 more banks with deposits of more than Rs.200 crores. Nationalisation of banks was to make them play the role of catalytic agents for economic growth. The Narsimham Committee report suggested wide ranging reforms for the banking sector in 1992 to introduce internationally accepted banking practices. The amendment of Banking Regulation Act in 1993 saw the entry of new private sector banks.

COMMERCIAL & CO-OPERATIVE BANKS

The commercial banking structure in India consists of: Scheduled Commercial Banks Unscheduled Banks

Scheduled commercial Banks constitute those banks which have been included in the Second Schedule of Reserve Bank of India(RBI) Act, 1934.

RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (60 of the Act. Some co-operative banks are scheduled commercial banks albeit not all co-operative banks are. Being a part of the second schedule confers some benefits to the bank in terms of access to accommodation by RBI during the times of liquidity constraints. At the same time, however, this status also subjects the bank certain conditions and obligation towards the reserve regulations of RBI.

For the purpose of assessment of performance of banks, the Reserve Bank of India categorize them as public sector banks, old private sector banks, new private sector banks and foreign banks. This sub sector can broadly be classified into:

1. Public sector 2. Private sector 3. Foreign banks Public sector banks have either the Government of India or Reserve Bank of India as the majority shareholder. This segment comprises of:

State Bank of India (SBI)and its Subsidiaries Other Nationalized Banks

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CO-OPERATIVE BANKS

There are two main categories of the co-operative banks.

(a) Short term lending oriented co-operative Banks - within this category there are three sub categories of banks viz state co-operative banks, District co-operative banks and Primary Agricultural co-operative societies.

(b) Long term lending oriented co-operative Banks - within the second category there are land development banks at three levels state level, district level and village level.

The co-operative banking structure in India is divided into following main 5 categories :

1. Primary Urban Co-op Banks

2. Primary Agricultural Credit Societies

3. District Central Co-op Banks

4, State Co-operative Banks

5. Land Development Banks

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KMBL
Kotak Mahindra is one of India's leading financial conglomerates, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the diverse financial needs of individuals and corporate As on 31st March , 2007, the group had a net worth of over Rs. 3,200 crore, employing around 10,800 people in its various businesses and had a distribution network of branches, franchisees, representative offices and satellite offices across 300 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. The Group services around 2.6 million customer accounts

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COMPANY PROFILE

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CHAPTER-2 COMPANY PROFILE

INTRODUCTION TO KMBL
Kotak Mahindra is one of Indias leading institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, , to stock broking to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The group has a net worth of around Rs. 5,600 crore, employs around 17,100 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 300 cities and towns in India and offices in New York, London, Dubai and Mauritius. The group services over 3.6 million customer accounts.

CREATING BANKING HISTORY Established in 1985, the kotak Mahindra group has long been one of Indias most reputed financial organizations. In February 2003, kotak Mahindra finance ltd, the group flagship company was given the license to carry on banking business by the reserve bank of India (RBI). This approval creates banking history since kotak Mahindra finance ltd. It is the first company in India to convert to a bank.

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THE COMPLETE BANK At kotak Mahindra bank, they address the entire spectrum of financial needs for individuals and corporate. They have the products, the experience, the infrastructure and most importantly the commitment to deliver pragmatic, end -to end solutions that really work. A license authorizing the bank to carry on banking business has been obtained from the Reserve Bank of India in terms of Section 22 if the Banking Regulation Act, 1949. It must be distinctly understood, however, that in issuing the license, the Reserve Bank of India does not undertake any responsibility for the financial soundness of the bank or the correctness of any of the statements made or opinion expressed in this connection.

MILESTONES OF KMBL

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited. Since then it's been a steady and confident journey to growth and success.

1986 1987 1990 1991

Kotak Mahindra Finance Limited starts the activity of Bill Discounting Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market The Auto Finance division is started The Investment Banking Division is started. Takes over FICOM, one of Indias largest financial retail marketing networks

1992 1995

Enters the Funds Syndication sector Brokerage and Distribution businesses incorporated into a separate company - Kotak Securities. Investment Banking division incorporated into a separate company - Kotak Mahindra Capital Company
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1996

The Auto Finance Business is hived off into a separate company - Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Groups entry into information distribution.

1998

Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company.

2000

Kotak Mahindra ties up with Old Mutual plc. For the Life Insurance business. Kotak Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.

2001

Matrix sold to Friday Corporation Launches Insurance Services Kotak Mahindra Finance Ltd. converts to a commercial bank the first Indian company to do so.

2003

2004 2005

Launches India Growth Fund, a private equity fund. Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund

2006

Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities

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CORPORATE IDENTITY OF KMBL

The symbol of the infinite Ka reflects its global Indian personality. The Ka is uniquely Indian, while its curve forms the infinity sign which is universal. One of the basic tenets of economists is that mens needs are unlimited. The infinite Ka symbolizes that it has infinite number of ways to meet those needs.

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KOTAK MAHINDRA BANK LIMITED AND ITS SUBSIDIARIES

Kotak Mahindra Bank Ltd
Kotak Mahindra is one of India's leading financial conglomerates, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the diverse financial needs of individuals and corporate As on 31st March , 2007, the group had a net worth of over Rs. 3,200 crore, employing around 10,800 people in its various businesses and had a distribution network of branches, franchisees, representative offices and satellite offices across 300 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore. The Group services around 2.6 million customer accounts.

Subsidiaries of Kotak Mahindra Bank Ltd

Kotak Mahindra capital company ltd. Kotak securities ltd. Kotak Mahindra old mutual life insurance ltd. Kotak Mahindra prime ltd. Kotak Mahindra asset management ltd & kotak Mahindra trustee company ltd. Kotak Mahindra investments ltd.

International subsidiaries of Kotak Mahindra Bank Ltd

Kotak Mahindra securities ltd. Kotak Mahindra Trusteeship Services Ltd. Kotak Forex Brokerage Ltd.

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THE JOURNEY SO FAR

In October 2007, Kotak Group acquired the 40% stake in Kotak Prime held by Ford Credit International (FCI) and FCI acquired the stake in Ford Credit Kotak Mahindra (FCKM) held by kotak group. In May 2006, Kotak Group bought 25% stake held by Goldman Sachs in Kotak Capital and Kotak Securities.

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GROUP STRUCTURE

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VISION STATEMENT
THE GLOBAL INDIAN FINANCIAL SERVICES BRAND Our customers will enjoy the benefits of dealing with a global Indian brand that best understands their needs and delivers customized pragmatic solutions across multiple platforms. We will be a world class Indian financial services group. Our technology and best practices will be benchmarked along international lines while our understanding of customers will be uniquely Indian. We will be more than a repository of our customers savings. We, the group, will be a single window to every financial service in a customers universe.

THE MOST PREFERED EMPLOYER IN FINANCIAL SERVICES A culture of empowerment and a spirit of enterprise attracts bright mind with an entrepreneurial streak to join us and stay with us. Working with a home- grown professionally managed company, which has partnership with international leaders gives our people a perspective that is universal as well as unique.

THE MOST TRUSTED FINANCIAL SERVICES COMPANY We will create an ethos of trust across all our constituents. Adhering to high standards of compliance and corporate governance will be an integral part of building trust.

VALUE CREATION Value creation rather than size alone will be our business driver.

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PRODUCT PROFILE
personal products and services deposit accounts savings account current account term account loans personal loans home loans loan against property investment services demat mutual fund insurance kotak gold eternity convenience banking net banking mobile banking kotak payment gateway phone banking ATM network SMS banking Alerts NRI products and services Deposits NRE savings account NRO savings account NRE term deposits NRO term deposits FCNR deposits Rupee advantage plan Investments Demat Mutual funds Portfolio investment scheme MF on the net and call Remittances Funds to home Wire transfer Mail Remittances from the middle east Loans Home finance Convenience banking Net banking Phone banking Global debit card
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 Access India debit card(NRO card) Small businesses products and services Current accounts Edge current accounts Pro current accounts Ace current accounts Personal loans Jaldi loans Corporate products and services Funded products Working capital Structured products Treasury products Foreign exchange Money market Benchmark PLR Investments products Term deposits Mutual funds Bancassurance Fixed income products Sales and distributions Research Case studies Current account Transaction group on banking Corporate advisory services Custody services Retail assets

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MUTUAL FUND PRODUCTS AT KOTAK

MUTUAL FUND

INVESTMENT OBJECTIVE

AVAILABLE OPTIONS

CORPUS (IN CRORES)

MINIMUM INITIAL INVESTME NT

TOTAL EXPENSE RATIO

TYPE OF SCHEME

KOTAK 30

To generate capital appreciation from a portfolio of predominantly equity related securities. The portfolio will generally compromise of equity and equity related instruments of around 30 companies which may go up to 39.

DP, DR & G

705.67

5000

2.19%

Open ended equity scheme

KOTAK MID-CAP

To generate capital appreciation from a diversified portfolio of equity and equity related securities. To generate capital appreciation from a diversified portfolio of equity and equity related securities. To generate long term capital appreciation from a portfolio of equity and equity related securities, generally diversified across companies, which are likely to benefit by changing lifestyle and rising consumerism in India. To generate long term capital appreciation from a portfolio of equity and equity related securities to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and by investing the balance in debt and money market instruments.

DP, DR & G

167.26

5000

2.39%

Open ended equity growth scheme Open ended equity growth scheme Open ended equity growth scheme

KOTAK OPPORTU NITIES KOTAK LIFESTYE

DP, DR & G

859.61

5000

2.13%

DP, DR & G

172.19

5000

2.31%

KOTAK CONTRA

DP, DR & G

98.96

5000

2.49%

Open ended equity growth scheme Open ended equity growth scheme

KOTAK EQUITY ARBITRA GE

DP, DR & G

404.88

5000

1.10%

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KOTAK TAX SAVER

To generate long term capital appreciation from a portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. To generate capital appreciation from a portfolio of equity and equity related securities issued by globally competitive Indian companies. To generate capital appreciation from a portfolio of equity and equity related securities issued by multinational companies To generate capital appreciation from a portfolio of equity and equity related securities in technology, other technology enabled companies and related sectors as given in the investment strategy. To generate long term capital appreciation from a portfolio created by investing predominantly in open-ended diversified equity schemes of mutual funds registered with SEBI To achieve growth by investing in equity and equity related instruments, balanced with income generation by investing in debt and money market instruments. To enhance returns over a portfolio of debt instruments with a moderate exposure in equity and equity related I instruments To provide reasonable returns and high level of liquidity by investing in debt and money market instruments of different maturities, so as to spread the risk across different kinds of issuers in the debt market

DP, DR & G

452.71

500

2.28%

Open ended equity linked saving scheme

KOTAK GLOBAL INDIA

DP, DR & G

84.53

5000

2.46%

Open ended equity growth scheme Open ended equity growth scheme Open ended equity growth scheme

KOTAK MNC

DP, DR & G

30.46

5000

2.50%

KOTAK TECH

DP, DR & G

25.95

5000

2.25%

KOTAK EQUITY FOF

DP, DR & G

58.74

5000

.75%

Open ended equity Funds of Funds scheme

KOTAK BALANCE

DP & DR

78.00

5000

2.50%

Open ended balance scheme

KOTAK INCOME PLUS

DP, DR & G

28.00

5000

2.23%

Open ended income scheme

KOTAK BOND SHORT TERM PLAN

DR & G

246.35

5000

.60%

Open ended debt scheme

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KOTAK BOND

To create a portfolio of debt and money market instruments of different maturities so as to spread the risk across a wide maturity horizon and different kinds of issuers in the debt market. To generate risk free returns through investments in sovereign securities issued by the Central Govt and/or State Govts and/or reverse repos in such securities To maximise returns through an active management of a portfolio of debt and money market securities.

DP, DR & G

123.39

5000

2.25%

Open ended debt scheme

KOTAK GILT SAVING

DP, DR & G

6.05

5000

1.00%

Open ended dedicated gilt scheme

KOTAK FLEXI DEBT

DP, DR & G

7268.32

5000

.40%

Open ended debt scheme

KOTAK FLOATER LONG TERM

To reduce the interest rate risk associated with investments in fixed rate instruments by investing predominantly in floating rate securities, money market instruments and using appropriate derivatives.

DR & G

65.93

5000

1.00%

Open ended debt scheme

KOTAK FLOATER SHORT TERM

To reduce the interest rate risk associated with investments in fixed rate instruments by investing predominantly in floating rate securities, money market instruments and using appropriate derivatives.

DR & G

329.88

5000

.40%

Open ended debt scheme

Presently, there are three best working Mutual Funds at Kotak Mahindra Bank: KOTAK 3 KOTAK OPPORTUNITIES KOTAK TAXSAVER

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INTRODUCTION TO INSURANCE

What is Insurance?
The business of insurance is related to the protection of the economic value of assets. Every asset has a value. The assets would have been created through the effort of the owner. The assets are valuable to the owner, because he expects to get some benefit from it. The benefit may be an income or some thing else. It is a benefit because it meets some of his needs. In the case of factory or a cow, the product generated by them is sold and income is generated. In the case of the motorcar, it provides comfort and convenience in transportation. There is no direct income.

Every asset is expected to last for a certain period of time during which it will perform. After that the benefit may not be available. There is a lifetime for a machine in a factory or a cow or a motorcar. None of them will last forever. The owner is aware of this and he can so manage his affairs that by the end of that period or life time, a substitute is made available Thus, he make sure that the value or income is not lost. However the assets may get lost earlier. An accident or some other unfortunate event may destroy it or make it nonfunctional. In that case the owner and those driving benefit and the planned substitute there from, would be deprived of the benefit and the planned substitute would not have been ready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of such adverse situation.

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INTRODUCTION TO ULIP

Unit linked insurance plans, ULIPs, are distinct from the more familiar with profits policies sold for decades. With profits policies are called so because investment gains (profits) are distributed to policyholder in the form of a bonus announced every year. ULIPs also serve the same function of providing insurance protection against death and provision of long term savings, but they are structured differently. In with profits policies, the insurance company credits the premium to a common pool called the life fund, after setting aside funds for risk premium on life insurance and management expenses. Every year, the insurer calculates how much has to be paid to settle death and maturity claims. The surplus in the life fund left after meeting these liabilities is credited to policyholders accounts in the form of a bonus. In a ULIP too, the insurer deducts charges towards life insurance (mortality charges), administration charges and fund management charges. The rest of the premium is used to invest in the fund that invests money in stocks and bonds. The number of units represents the share of the policyholder in the fund. The value of the unit is determined by the total value of all investments made by the fund divided by the number of units. If the insurance company offers the range of funds, the insured can direct the company to invest in the fund of his choice. Insurers usually offer three choices-an equity (growth) fund, debt fund and a balanced fund, which invests in both. In both with profits policies as well as unit-linked policies, a large part of the first year premium goes towards paying the agents commissions.

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FEATURES OF UNIT LINKED INSURANCE PLAN

1) Unit linked policies are unbundled i.e. separate identification of parts is there like, Investment element, expenses, administration charges and benefits and charges etc. 2) Unit Linked Policies make use of linked funds 3) Client has choice of funds 4) Unit Linked Policies are linked i.e. value of property is linked to net assets. 5) Investment risk and rewards are transferred from insurer to the client. 6) Unit Linked Policies have explicit charges

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CORPORATE PROFILE OF KLI

Kotak Mahindra Old Mutual Life Insurance Limited was established in 2000 as a joint venture between Kotak Mahindra Bank Ltd. - KMBL (74%) and Old Mutual plc, London (26%) A total asset managed by the Kotak Mahindra Group is around USD 9.4 billion. It is amongst the few banks in India to have a non-profitable asset level of just 0.33% KMBL was the first non-banking financial company (NBFC) to receive a retail bank license in 2003 In the life insurance market, Kotak Life Insurance registered an adjusted premium (single premium: 1/10) growth of over 53% from financial year 2005-06 to financial year 2006-07 Kotak Life Insurance, with 100 branches in over 68 cities, and a work force of over 4,100 employees, is a company with a high level of brand awareness Kotak Life Insurance aspires to a spiraling growth with a strong focus on the customer, products, mapping of geographic distribution channels and fund performance Member of the Swiss Life Network since 2003 Website: www.kotaklifeinsurance.com

Management of KLI Mr. Gaurang Shah (Managing Director) Mr. G Murlidhar (Chief Financial Officer) Mr. Arun Patil (Vice President - Sales & Management Development)

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Registered office Kotak Mahindra old mutual life insurance ltd. 9th floor, Godrej Coliseum, Behind Everard Nagar, Sion (E), Mumbai-400 022 Tel: (022) 6621 5999 Fax: (02) 66215757, 66215858

Customer service centre Kotak Mahindra old mutual life insurance ltd. 8th floor, Godrej Coliseum, Behind Everard Nagar, Sion (E), Mumbai-400 022 Tel: (022) 6050 5000 Toll free number: 1800-22-8081 Fax: (022) 6621 5353, 6621 5454 Email id: clientservicedesk@kotak.com

SPECIAL ADVANTAGES
Market leader in brokerage, car finance & investment banking Dedicated to developing unique products with a special focus on product and service quality Among the first to offer group insurance products in the Indian market Extensive nationwide coverage through a direct sales force, brokers, spotters and frontline sales managers in more than 68 cities Kotak Life Insurance's value proposition is based on strong corporate relationships, superior products, extensive marketing skills and quality of service The objective of Kotak Life Insurance is to build long-term sustainable business under regular premium and sustain fund performance in the capital guaranteed segment

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ULIP Products at Kotak Life Insurance

Kotak Safe Investment Plan II Kotak Flexi Plan Kotak Smart Advantage Plan Kotak Retirement Income Plan Kotak Headstart Child Plans (Future Protect) Kotak Headstart Child Plans (Assure Wealth) Kotak Easy Growth Plan Kotak Platinum Advantage

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Kotak safe investment plan II

Name of the product Brief Product Description Features Investment Portfolio

KOTAK SAFE INVESTMENT II PLAN Regular or limited pay market linked plan with guaranteed maturity value and higher allocation rates. Guaranteed Maturity Value Guaranteed Growth, Guaranteed Balanced, Guaranteed Bond, Guaranteed Floating Rate, Guaranteed Gilt, Guaranteed Money Market

Max equity exposure Death Benefit Maturity Benefit

Maximum Equity Exposure - 40% to 80% Higher of Sum Assured or Fund Value. Guaranteed Maturity Value or market value of units in Main account, whichever is higher

Top Up Premiums Partial Withdrawal

Min - Rs. 10,000 Investment accessible after completion of 3 years, with no penalty charges from year 7 onwards (subject to retaining a minimum balance of one annualized basic premium)

Complete Surrender

No surrender allowed in the first 3 policy years. Thereafter surrender involves a charge till year 7

Riders

Term benefit; Preferred term Benefit; Critical illness; Accidental death; Permanent Disability; Life Guardian; Accidental Death Guardian.

Switching Option Revival period

4 free switches per year. Rs 500 additional charge per switch. 2 yrs
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Kotak flexi plan

Name of the product Brief Product Description Features Investment Portfolio

KOTAK FLEXI PLAN Regular or limited pay market linked plan with guaranteed maturity value. Guaranteed Maturity Value Guaranteed Growth, Guaranteed Balanced, Guaranteed Bond, Guaranteed Floating Rate, Guaranteed Gilt, Guaranteed Money Market

Max equity exposure Death Benefit Maturity Benefit

Maximum Equity Exposure - 40% to 80% Sum Assured Guaranteed Maturity Value or market value of units in Main account, whichever is higher

Top Up Premiums Partial Withdrawal

Min - Rs. 10,000 Investment accessible after completion of 3 years, with no penalty charges from year 7 onwards (subject to retaining a minimum balance of one annualized basic premium)

Complete Surrender

No surrender allowed in the first 3 policy years. Thereafter surrender involves a charge till year 7

Riders

Term benefit; Preferred term Benefit; Critical illness; Accidental death; Permanent Disability; Life Guardian; Accidental Death Guardian.

Switching Option Revival period

4 free switches per year. Rs 500 additional charge per switch. 2 yrs
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Kotak smart advantage plan

Name of the product Brief Product Description Features

KSAP Capital guarantee market linked plan with limited premium paying term. Limited premium paying term with capital guarantee with maximum exposure to equity

Investment Portfolio Max equity exposure Death Benefit

Advantage Multiplier Fund, Advantage Plus Fund Maximum Equity exposure - 0% to 100% An amount equal to life cover plus the value of units in the Main & and Supplementary Accounts.

Maturity Benefit Top Up Premiums

Fund Value or sum of premiums paid whichever is higher Min -Rs 25,000 /- .Max ( 25% of the total basic premiums paid to date)

Partial Withdrawal

In multiples of Rs 25,000/- subject to a maximum of 2 withdrawals per year (Withdrawals from the Supplementary account) Charges applicable after yr 3.

Complete Surrender

No surrender in the last 2 years of the term of the contract .Charges applicable after yr 3.

Riders Switching Option

NA 4 switches free per year. Every additional switch would be charged Rs 500 /-

Revival period

2 years
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Kotak retirement income plan

Name of the product Brief Product Description Features Investment Portfolio

KOTAK RETIREMENT INCOME PLAN regular or single premium market linked pension plan with guaranteed maturity value; with and without cover options Guaranteed Maturity Value for the regular premium mode Pension Balanced; Pension Bond; Pension Floating Rate; Pension Gilt; and Pension Money Market

Max equity exposure Death Benefit

Maximum Equity Exposure - 30% to 60% In case life cover has been opted, sum assured or market value of units, whichever is higher. Otherwise Fund Value. Can be taken as lump sum or pension.

Maturity Benefit

In case of life cover option, Basic Sum Assured or market value of units, whichever is higher? Otherwise Guaranteed Maturity Value or market value of units in Main account, whichever is higher.

Top Up Premiums Partial Withdrawal Complete Surrender

Min - Rs. 10,000 NA No surrender allowed in the first 3 policy years. Thereafter surrender involves a charge till year 6

Riders

Term benefit; Preferred term Benefit; Critical illness; Accidental death; Permanent Disability; Accidental Death Guardian.

Switching Option Revival period

4 free switches per year. Rs 500 additional charge per switch. 2 yrs
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Kotak Head start Child Plans (Future Protect)

Name of the product Brief Product Description Investment Portfolio

KOTAK HEADSTART CHILD PLANS(FUTURE PROTECT) Regular and Limited Pay unit linked plan, maximizes protection

Kotak Aggressive Growth, Kotak Dynamic Growth, Kotak Dynamic Balanced, Kotak Dynamic Floor, Kotak Dynamic Bond, Kotak Dynamic Floating Rate, Kotak Dynamic Gilt, Kotak Dynamic Money Market

Max equity exposure Death Benefit

Maximum Equity Exposure - 40% to 100% 100% of sum assured on death of life insured (on the second death, in case of joint life)

Maturity Benefit Top Up Premiums Partial Withdrawal

Fund Value paid (Withdrawal option, 5 years after maturity) 25% of cumulative premiums paid up to that date Allowed from year 4 onwards, No withdrawal charges after year 7. Withdrawal subject to a minimum fund balance of Rs. 25,000

Complete Surrender

Allowed only after completion of 3 years. No surrender charge from year 7 onwards.

Riders

Critical Illness Benefit, Permanent Disability Benefit, Accidental Death Benefit, Accidental Disability Guardian Benefit

Switching Option Revival period

4 switches free per year 2 yrs

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Kotak Headstart Child Plans (Assure Wealth)

Name of the product Brief Product Description Investment Portfolio

KOTAK HEADSTART CHILD PLANS(ASSURE WEALTH) Regular and Limited Pay unit linked, maximizes wealth

Kotak Aggressive Growth, Kotak Dynamic Growth, Kotak Dynamic Balanced, Kotak Dynamic Floor, Kotak Dynamic Bond, Kotak Dynamic Floating Rate, Kotak Dynamic Gilt, Kotak Dynamic Money Market

Max equity exposure Death Benefit

Maximum Equity Exposure - 30% to 100% Sum Assured (Life Cover) = Higher of (5 X Total Annual Premium) and (0.5 X Policy Term X Total Annual Premium). On death, higher of sum assured or fund value payable

Maturity Benefit Top Up Premiums Partial Withdrawal

Fund Value paid (Withdrawal option, 5 years after maturity) 25% of cumulative premiums paid up to that date Allowed from year 4 onwards, No withdrawal charges after year 7. Withdrawal subject to a minimum fund balance of Rs. 25,000

Complete Surrender

Allowed only after completion of 3 years. No surrender charge from year 7 onwards.

Riders

Critical Illness Benefit, Permanent Disability Benefit, Accidental Death Benefit

Switching Option Revival period

4 switches free per year 2 yrs

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KOTAK SAFE INVESTMENT PLAN II

Kotak safe investment plan II is a unit linked plan that combines the benefits of the insurance and the capital market returns into one. This plan from the stable of kotak life insurance is a true reflection of the companys essence; innovation that will benefit the investor. What makes investing in kotak safe investment plan II truly unique is that investor enjoys a guaranteed maturity value, with varying degrees of equity exposure depending on investors risk appetite. So, if the market value of investors units is higher, he/she will reap the benefits with the peace of mind that whilst in the bear market his/her investment is under-pinned by the guaranteed maturity value. And the added feature is that the returns are totally tax-free.

KEY FEATURES
Fund options
The capital market offers a spectrum of investment options. Similarly kotak safe investment II has an entire range of fund options. For the risk averse it has the Guaranteed Gilt Fund and for aggressive investors, it offers the Guaranteed Growth Fund. With the expertise of kotak backing your investment, it ensures that your risk profile and investment objectives are matched.

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INVESTMENT OPTIONS

EQUITY (HIGH RISK) 60%100%

Aggressive growth

DEBT CASH (MEDIUM AND RISK) MONEY MARKET 0%-40% 0%

RISKRETURN PROFILE Aggressive

OBJECTIVES

Guaranteed/dynamic 40%-80% 20%-60% growth

0%-20%

Guaranteed/dynamic 30%-60% 20%-70% balanced

0%-20%

Guaranteed/dynamic _ bond Guaranteed/dynamic floating rate

0%-100%

0%-20%

Guaranteed/dynamic _ gilt

80%-100%

0%-20%

Guaranteed/dynamic _ money market

100%

Aims for a high level of capital growth by holding a significant portion in equities Aggressive May experience high level of shorter term volatility Moderate Aims for moderate growth by holding a diversified mix of equities and fixed interest instruments May experience moderate levels of shorter term volatility Safe Returns will be in line with those of fixed interest instrument, and may provide little protection against unexpected inflation increases. Safe Will preserve capital and minimize downside risk, with investment in debt and government instruments. Conservative Will protect capital and not have downside risk.

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Guaranteed maturity value

Most investors who stay away from equity do so not because they do not want to earn higher equity linked returns but because they fear loss of capital. To protect their money from losses they invest in low return debt instruments. Kotak life insurance, having understood this concern of their investors and have developed a unique proposition of a guaranteed maturity value, underpinning their investment in equity. When the markets are in the bull phase, investors will enjoy the market linked returns delivered on their portfolio. However in a bear market, their investment is still safe as they are sure of getting the guaranteed maturity value. In a nutshell, Bulls You Win and Bears You Win. The Guaranteed Maturity Value applies where all premiums have been paid up-to-date at maturity and will fall away, where partial withdrawals have been made from the Main Account.

Death benefit
Life is uncertain and you would not want to take a chance when it comes to your loved ones. Depending on your existing life cover and the need you have, this plan allows you to choose your life cover-the sum assured on death.

Top-up premiums
Besides regular premiums, whenever you have excess money, you can invest it by way of top-up premiums, without any commitment to bring them in the coming year (subject to a maximum of 25% of the cumulative premiums paid till that date).

Partial withdrawals/surrender
Kotak safe investment plan II allows you early exit option through partial withdrawal of funds or complete surrender of the policy. With this plan, you can access the investment after completion of the 3rd policy year, with no surrender or partial withdrawal charges from year 7 onwards (subject to retaining a minimum balance of one annualized basic premium).

Limited premium payment

If any investor wishes to pay off all premiums over short period of time, instead of the full term, this plan has the limited premium payment option for him. This option allows you to pay off your premiums over tenure shorter than your policy term. Under this option, you can pay off your premiums over 3, 5, 6,7,10 or 15 years.
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Advantages
o Enjoy unlimited upside from capital market with a downside protection guarantee on your maturity value. o Flexibility in premium payment: limited premium payment option and full term payment option. o Tax free switching across fund categories. o Increase contribution at will by way of top up premiums o Easy exit option.

Tax benefit
Section 80(c), 10(10D) of the income tax act, 1961 would apply.

Eligibility
Entry age to the life to be ensured Term Min-0years, max-65years Min-10years or 18 minus age at entry for minors; whichever is higher, max-30years Maturity age Regular premium Limited premium payment Top-up premiums/partial withdrawals Max-75years Min-Rs 18,000 annually Min-Rs 50,000 annually Min- Rs 10,000, max 25% of the cumulative annualized premiums paid

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KOTAK HEADSTART FUTURE PROTECT

Your children are your joy, your pride and your world. And you strive to give your little one(s) the very best in life. You would like to provide your children with all the opportunities that could give them the extra edge over others. For this, you would require an investment and protection package that is specially designed to help you plan wisely for a financially secure and comfortable tomorrow, no matter what the uncertainty of life. Kotak headstart future protect is a unit-linked dual benefit plan to help secure your childrens future financial needs and ensure that plans do not go awry, given you may not always be there to help.

How does this plan benefit?

Double benefit on death In the event of the death of a parent, grandparent or a legal guardian, there would be an irreplaceable void in the life of their children, but headstart future protect can ensure that the financial loss is minimized. Under this plan, a lump sum amount of 100% of the sum assured would be paid out immediately on the life insureds death(on the second death in case of joint life), to assist in meeting unanticipated financial obligations. At the same time, it provides an additional boost (on death of the life insured) via a lump sum benefit which reduces over the term of the plan to compensate beneficiaries for the outstanding premiums that would have been payable had the policyholder survived the full term of the poll. Protection boosters You can opt for additional rider benefit payments should accidental death bring on your demise or, unfortunate events render you disabled or incapacitated. Should a critical illness befall you along the way, a portion of sum assured is immediately made available. Premiums waiver protection is also available on disability. These benefits will be charged for by way of additional unit deductions from the fund.

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Fund options

INVESTMEN T OPTIONS

EQUIT Y (HIGH RISK) 60%100% 40%80% 30%60%

DEBT (MEDIU M RISK)

CASH$ MONEY MARKE T 0%

Kotak Aggressive growth Kotak dynamic growth Kotak dynamic balanced

0%-40%

20%-60%

0%-20%

RISKOBJECTIVES RETUR N PROFIL E Aggressiv Aims for a high level of capital e growth by holding a significant portion in equities Aggressiv May experience high level of e shorter term volatility Moderate Aims for moderate growth by holding a diversified mix of equities and fixed interest instruments May experience moderate levels of shorter term volatility Cautious Aims to provide stable long term inflation beating growth over the medium to longer term and defend capital against short term capital shocks. Is likely to out perform traditional balanced or equity funds during sideways or falling markets and shadow the rising equity market. Conservat Returns will be in line with ive those of fixed interest instrument, and may provide little protection against unexpected inflation increases. Conservat Will preserve capital and ive minimize downside risk, with investment in debt and government instruments. Secure Will protect capital and not have downside risk.
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20%-70%

0%-20%

Kotak dynamic floor

0%75%

0%-100%

0%-20%

Kotak dynamic bond Kotak dynamic floating rate Kotak dynamic gilt

0%-100%

0%-20%

80%100%

0%-20%

Kotak dynamic money market

100%

In short, you can select over time which funds you would like to be in, based on your time horizon and views on market. Some suggestions on how you might allocate your savings are illustrated in the chart below:

Investment time horizon

Recommended fund options and allocations 75% in aggressive growth fund or dynamic growth fund and 25% in dynamic floor fund 50% dynamic growth fund 50% dynamic floor fund 100% in dynamic floor fund

If your child is below the age of 7, you will probably not require the money for another 15-20 years If your child is between the age of 8 and 12, you are likely to save for the next 10-15 years If your child is between the age of 13 and 15, you may require the amount within 7-10 years.

When there are about 2 or 3 years before you actually require he money, it is advisable to switch your money to the debt funds, dynamic bond funds, dynamic floating rate fund or the dynamic gilt fund, so that it is safe and accessible.

Flexible withdrawals With costs being different for every need, the financial requirements for your children would change from time to time and you require a child savings plan that is flexible. With this plan you can access the investment after completion of 3rd policy year, with no penalty charges from year 7 onwards. Alternatively, you can just let the amount multiply if the need is not immediate. You can also elect to receive a percentage at maturity proceeds in cash and the balance by way of pre-specified installments, for up to 5 years after maturity.

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FINANCIAL RESULTS

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31ST MARCH, 2009 Sr Quarter Ended Year Ended (Unaudited) Mar-08

Rs in lakhs

Nine

Months

Ended

No Particulars Mar-08 (Audited)

Dec-08 (Unaudited) 1 Interest earned (a+b+c+d) 326,211.15 110,445.19 110,424.39 436,656.34 364,838.80 (d) Others 3,695.87 835.16 3,191.75 4,531.03 9,154.17

(Unaudited) Mar-09 (a) Interest/discount on advances/bills 261,221.99 89,323.91 78,631.39 350,545.90 260,768.46 2 Other income (a+b) 174,939.75 113,321.67 75,826.44 288,261.42 390,100.32 3 Total income (1+2) 501,150.90 223,766.86 186,250.83 724,917.76 754,939.12 (b) Policy holders reserves, surrender

Mar-09 (Audited) (b) Income on investments 56,027.59 19,930.14 26,191.93 75,957.73 85,879.03 a) Profit/(Loss) on sale of investments

(c) Interest on balances with RBI & other

banks 5,265.70 355.98 2,409.32 5,621.68 9,037.14

including revaluation (insurance

business) (47,983.30) (3,829.36) (43,072.14) (51,812.66) 15,348.79 (a) Payments to and Provisions for

5 Operating expenses (a+b+c) 261,494.78 129,583.86 90,965.20 391,078.64 396,197.50 (c) Other operating expenses (see Note 3

b) Other income (see Notes 2 and 5) 222,923.05 117,151.03 118,898.58 340,074.08 374,751.53 employees 93,174.03 26,077.02 32,380.88 119,251.05 119,789.20 6 Total expenditure (4+5) (excluding

4 Interest expended 151,557.05 47,682.42 46,800.87 199,239.47 181,647.70 expense and claims 46,853.30 67,093.60 17,334.12 113,946.90 142,438.11 7 Operating Profit before Provisions and

and 5) 121,467.45 36,413.24 41,250.20 157,880.69 133,970.19

Contingencies (36) 88,099.07

8 Provisions (other than tax) and

Contingencies (see Note 1) 19,508.61

provisions and contingencies) 413,051.83 177,266.28 137,766.07 590,318.11 577,845.20 9 Exceptional Items - - - - -

10 Profit from Ordinary

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46,500.58 48,484.76 134,599.65 177,093.92 tax (7-8-9) 68,590.46 33,029.73 34,394.52 101,620.19 140,791.25 14 Profit from Ordinary activities after tax

11 Tax expense (see Note 7) 25,410.82 10,942.16 10,307.14 36,352.98 44,918.61 before Minority Interest (12 13) 43,179.64 22,087.57 24,087.38 65,267.21 95,872.64 Rs. 10 per share) 34,547.35 34,566.89 34,467.28 34,566.89 34,467.28 (i) Earnings per Share (before and

13,470.85 14,090.24 32,979.46 36,302.67 12 Profit from Ordinary activities after tax

Activities before

15 Less: Share of Minority Interest (658.52) 1,031.35 70.46 372.83 (1,868.75)

before Minority Interest (10 11) 43,179.64 22,087.57 24,087.38 65,267.21 95,872.64 16 Add: Share in Profit of associates 334.00 10.25 (6.88) 344.25 1,381.27

13 Extraordinary items (net of tax expense) - - - - -

18 Paid Up Equity Capital - (Face Value of

19 Group Reserves (excluding Minority

Interest) 617,687.52 547,923.35

17 Profit after tax (14-15+16) 44,172.16 21,066.47 24,010.04 65,238.63 99,122.66 20 Minority Interest 6,286.02 5,123.34

21 Analytical Ratios

after extraordinary items) (b) Net NPA 56,141.11 45,430.59 36,266.58 45,430.59 36,266.58 banks/ NBFCs) 1.91 2.44 0.85 2.44 0.85 annualised) 1.09 0.52 0.59 1.61 2.87

(ii) NPA Ratios

(e) % of Gross NPA/ Gross Advances banks/ NBFCs) 1.01 1.18 0.33 1.18 0.33

(a) Gross NPA 89,139.91 83,208.43 56,719.36 83,208.43 56,719.36 (excluding NPAs acquired from other (iii) Return on Assets (average) (not

(a) Basic (not annualized) Rs. 12.74 6.10 6.97 18.90 29.62 (c) % of Gross NPA/ Gross Advances 3.68 3.64 2.56 3.64 2.56

(b) Diluted (not annualized) Rs. 12.66 6.09 6.86 18.87 29.18 (d) % of Net NPA/ Net Advances 2.35 2.02 1.65 2.02 1.65

(f) % of Net NPA/ Net Advances

(excluding NPAs acquired from other

47

RESEARCH METHODOLOGY

48

CHAPTER-3 RESEARCH METHODOLOGY

Managers need information in order to introduce products and services that create value in the mind of the customer. But the perception of value is a subjective one, and what customers value this year may be quite different from what they value next year. As such, the attributes that create value cannot simply be deduced from common knowledge. Rather, data (information) must be collected and analyzed. The goal of Marketing Research (analysis) is to provide the facts and direction that managers need to make their more important marketing decisions. The analysis involves the following steps: Define the problem. Determine research design. Identify data types and sources. Determine sample plan and size. Collect the data. Analyze and interpret the data. Prepare the research report.

For the purpose of study, data from the in-house survey conducted by the marketing Department (secondary data) has been used and also for coming out with the recommendation. It was also felt that mere secondary data would not provide in-depth information for the analysis, hence it was decided that interactive discussions with the managers and the head of every department would help in an in-depth and true understanding of challenges faced by the department. The methodology adopted was to gather relevant information from the appropriate department, correlate the information obtained and to present the information in a logical and systematic manner.
49

PURPOSE OF STUDY

1: To identify the services offered by KOTAK MAHINDRA BANK.

2: To study and analyze the customer perception and preference about KOTAK MAHINDRA BANK.

3: Finally to draw the various conclusion and recommendation on the basis of study conducted.

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FINDINGS

51

CHAPTER-4 FINDINGS
Kotak Mahindra bank sells around 20 mutual funds. After analyzing these funds on the basis of their risk, return, NAVs, expenses etc., it was found that its three products i.e., Kotak 30, Kotak opportunities, and Kotak taxsaver are the most popular ones. These three funds give the highest returns. This is because they invest around 80% in equity and very less in debt instruments. Kotak 30 is an open-ended scheme which invests predominantly in large cap blue chip stocks which lend stability to the portfolio. It has a flexibility to take some exposure to some mid caps to potentially enhance returns. Kotak opportunities are an open-ended equity growth scheme. As market evolve and grow, new opportunities of growth keep emerging. Kotak opportunities are an aggressive scheme that endeavors to capture these opportunities to create wealth. Since inception, the scheme has been able to generate alpha by spotting opportunities from time to time. Kotak taxsaver is an equity linked saving scheme (ELSS) which allows investors twin advantage of capital appreciation and tax saving. It has a portfolio diversified across sectors.

52

KOTAK TAXSAVER
ABOUT THE SCHEME Kotak Tax saver offers the investor the dual advantage of potential capital appreciation as well as tax savings (as applicable). The portfolio offers a diversified mix across various sectors. As it is a close ended architecture, the investor has to compulsorily lock in ones fund for 3 years. ALLOTMENT DATE 22 NOVEMBER, 2008 CORPUS: - 452.71 Crore

FUND MANAGERS VIEW Indian economy is expected to sustain its growth momentum in the coming years on the back of growing consumption, demand for infrastructure and an increasing trend towards outsourcing. We expect the Indian economy to be resilient against any shocks in the global economy due to huge base of domestic consumption. The improving demographic profile of the country and growing urbanization are likely growth drivers. Focus of the fund is to capitalize on the investment opportunities in the economy with long-term perspective. The investors in this fund has to invest with a minimum of 3 years horizon, hence investment of the fund is made in companies which can create greater performance over longer period of time. The fund focuses on a bottom up style of investing. INVESTMENT OBJECTIVE To generate capital appreciation from a diversified portfolio of equity & equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. INVESTMENT PATTERN Equity & Equity related securities: 80% - 100% Debt & Money Market instruments: 0% - 20% INVESTMENT HORIZON
53

3 years & above INVESTMENT OPTIONS Growth, Dividend Payout, Dividend Re-Investment.

MINIMUM INVESTMENT Initial: Rs 500 and in multiples of 500. Additional: Rs 500 and in multiples of 500. Systematic: Rs 500 and in multiples of 500. BENCHMARK INDEX S&P CNX 500 ESTIMATED RECURRING EXPENSES 2.50%.

54

CONCLUSION

55

CHAPTER-5 CONCLUSION
Kotak Mahindra Finance Ltd is the first company in India to convert to a bank. In February 2003, the company was given the license to carry on banking business by the RBI. Since, then the company has achieved a very important place in the financial sector of the nation. The bank caters to different groups of customers by providing a variety of investment products. The bank brings a full range of mutual fund and ULIP products. The Kotak group caters to the financial needs of individuals and corporate. Kotak Mahindra bank has won many awards since its formation. The bank has achieved The Best Investment Bank in India award by Finance Asia continually each year since its inception. There has been a 100% growth in mutual fund industry in 6 years. Now, customers are more aware than earlier and different investment avenues are available to the investors. Mutual funds also offer good investment opportunities to the investors. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced in the MFs. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Thus, Mutual funds spread the risk among many different securities, limiting the potential of one companys performance from impacting the entire portfolio. It also reduces the emotion associated with watching individual equities rise and fall. During our summer training we made an analysis of mutual funds and unit linked products available at the bank. After making an analysis it is concluded that its three MF products i.e. Kotak 30, Kotak opportunities, and Kotak Taxsaver are the most popular ones and best selling products. These three MF schemes give high returns to the investors.

In the traditional plans, high risk and fewer returns are there because they invest more in debt market and less in equity market, which yield less returns and these plans are not flexible. Investors do not have choice to invest according to their need and risk appetite in the traditional investment plans. But the modern MF schemes and unit linked plans give more returns and less risk is associated with them. The companies disclose the performance of their ULIPs and MFs on daily basis in NAVs. The investment strategy, outlooks of the market and scheme related details are disclosed with reasonable frequency to ensure that transparency exist in the system. In this way the policyholder gets the entire
56

upside on the performance of his fund. Thus, ULIP investors have the opportunity to 'manage' their monies. ULIPs provide all the benefits of that of a mutual fund and top it up with an insurance cover. ULIP is a product which takes care of multiple needs. It offers flexibility, has a risk cover and provides long-term investment opportunity. Thus, it saves the hassle of investing in multiple products to take care of different needs. According to Vijay Sinha, asst director - agency, Tata AIG Life Insurance, "ULIP is ideal for someone who is looking for a long-term investment product, is underinsured and is averse to taking a traditional life insurance product. ULIP should be looked at from both an investment as well as insurance point of view and not in isolation." After making an analysis it is concluded that the two ULIP plans of Kotak are the high returns yielding plans. These two plans are Kotak safe investment plans II and Kotak headstart future protect. Kotak Mahindra banks USP is that it invests the investors money, more in equity and less in debt. This gives high returns but at the same time high risk is also associated with it. But, for compensating this high risk, the bank provides the Guaranteed Maturity Value on investment schemes to its customers. Unit linked insurance plans (ULIP) are all set to pose serious competition to mutual funds. In case of a mutual fund if one has to change the asset allocation, the scheme or a fund by itself has to be changed whereas a single ULIP might have five options in one and the investor sticks to the same life insurance. Also most insurance companies do not charge the investor for shifting plans. In case of ULIP there is no upper limit regarding expenses and are decided by the insurance company but in case of mutual fund there exists an upper limit to the expenses chargeable to investors and are set by the regulatory authority. Though, ULIP as an investment avenue are closest to mutual funds in terms of their structurse and functioning, since both the avenues meet different needs, comparing the products offered by them would be inappropriate.

57

RECOMMENDATIONS

58

CHAPTER-6 RECOMMENDATIONS
All categories of loans (other than the exceptions permitted by RBI) will henceforth be priced with reference to the revised Base Rate. The Reserve Bank of India (RBI) guidelines on Base Rate system requires banks to review the respective Base Rates at least once in a quarter. The ALCO of Kotak Mahindra Bank in its review on September 30, 2010 (in accordance with the Board approved Base Rate and Loan Pricing methodology) has revised the Base Rate upwards from 7.25% p.a. to 7.50% p.a. All categories of loans (other than the exceptions permitted by RBI) will henceforth be priced with reference to the revised Base Rate. Changes in the Base Rate from the current level of 7.50% p.a. will be conveyed from time to time. The Bank has also revised its Benchmark Prime Lending Rate [BPLR] upwards by 25 basis points The committee of Kotak Mahindra Bank in its meeting on 22 September 2010 has allotted 3,82,040 equity shares of Rs 5 each

59

LIMITATION OF THE STUDY

60

CHAPTER-7 LIMITATIONS OF THE STUDY

The limitations of this study is that it is secondary in nature that is it is obtained from secondary data present in magazines,newspapers,journals and on internet and is not 100%authentic No first hand research is done to determine the facts, figures and data. The facts, figures and performance are not of current year that is till last year and the study is not up to date. It may be possible that some changes or improvisation is missed out

61

BIBLIOGRAPHY
BOOKS
Retail Banking(Publisher: Macmillan Publishers India (2010) Tannans Banking Law and Practice in India(ML Tannan 2008) Banking Law and Practices(PN varshney 201)

WEBSITES www.kotakmahindra.com www.kotaklifeinsurance.com www.kotakmutual.com www.google.com www.amfiindia.com NEWS PAPERS: Economic Times Times of India MAGAZINES: Business India Business Today Banks Brochures and Manual

62

GLOSSARY
KMBL- Kotak mahindra bank limited KMMF- Kotak mahindra mutual fund KMAMC- Kotak mahindra Asset Management Company KMLI- Kotak mahindra life insurance NAV- Net asset value AUM- Asset under management MF- Mutual fund ULIP- Unit linked insurance products AMC- Asset Management Company

63