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A

PROJECT REPORT

ON

‘Identify the potentials for‘Charitable trusts’,

‘Co-operative societies’,‘Co-operative banks (for

CBLO).’

SUBMITTED BY

DIPTI VINCHHIM.B.A

SUBMITTED TO

AES POST GRADUATEINSTITUTE OF BUSINESS MANAGEMENT

ACKNOWLEDGEMENT

It is incomplete to submit this report without acknowledging the

people behind this endeavour & without whose support I would not

have been able to achieve this successful report.

It gives me immense pleasure to express my deep gratitude to

entire FIGBG (Financial Institutions & Government Business group)

of HDFC Bank – Navrangpura who share with me their precious time

and efforts during overall my project work.

I like to thank Mr. Rayomond Kavina , Senior manager ,FIG group

who guided me during my project. I am at a loss to find words to

express my extreme indebtedness to Mr. Manish Motwani and

Mr. Vijesh Vijayarajan for their invaluable help, support and

encouragement.

I also want to thank Dr. A.H.Kalro sir and Prof.Taral Pathak who

made me realize the importance of summer training.

Finally I wish to make devout supplication to The Divine Spirit for all the blessings showered.

DIPTI VINCHHI

M.B.A – PART I

AESPGIBM

TABLE OF CONTENTS

1. Main page …………………………………………………1

MBA Summer Training Report2

2. Acknowledgement …………………………………………………2

3. Preface ………………………………………………….4

4. Bank profile ………………………………………………….5

5. Business and services offered by bank ……………………………………7

6. Introduction (FIGBG) …………………………………………………12

(i) Financial Institutions…………………………………………………12

(ii) Trusts(PF,gratuity, superannuation)………………………………13

(iii) Bankers to issue(Right issue,IPO,NFO)…………………………..15

(iv)Deposit mobilization group(buybacks, takeovers)……………….16

7. Project work (Research methodology)……..................................................24

8. Charitable trusts ……………………………………......................26

(i) 8% taxable bonds

(ii) FCRA account

9. Other various organizations (research methodology)………………......42

(i) Schools ………………………………………………….42

(ii) hotels ………………………………………………….43

(iii) I.T. Companies…………………………………………………...44

10. Co-operative society ……………………………………………………45


(i) CMS with MIS report …………………………………………….47

(ii) Demat account ……………………………………………………54

11. Co-operative banks ……………………………………………………57

12. Conclusion ……………………………………………………68

13. Biblography ……………………………………………………69

PREFACE

In any field of education, the project gives students intellectual nourishment and encouragement. Project also play a significant role in testing how much the student have been able to imbibe from the learning, training given to them and how much have they been able to apply the learning practically. In fact projects are equally important for me since it provided me with a practical exposure to banks.

It gave immense pleasure to work in HDFC Bank under FIGBG group. I had a full learning exposure to basic banking and fruitful understanding of the activities undertaken in the bank. Banking is related in every field because for every day to day financial transactions are done through a bank. Banks play a useful from an individual account to a huge coporate account.

Under the financial institutions, banking provides services to various insurance companies offering various insurance schemes from medical claim to general insurance, and bank handles all the financial transactions of collections of premium and payment of the capital. It also sees the investment procedures like the Fixed deposits, mutual funds and today on edge IPOs. Similarly the collections and refunding of IPOs is also done.

I had a great exposure learning the various product offering by the bank i.e., appropriate products as per requirements of the trusts, co-operative societies, I.T.companies, schools and hotels.

Under the co-operative banks, which held surplus government securities which they can lend it as pledge to CCIL (Clearing Corporation of India) in a overnight market and in return get fund which they can invest in daily call/money market. Generally


studying various rate of repo/call money/ cblo rate , it shows more than 90% of the time the call money market rate exceed cblo rate, so it gives show margin benefit to the co-operative bank. The cblo rate is kept as per current market fluctuations i.e., after some haircuts.

Bank provides various facilities to the trusts, co-operative societies and other organizations for their faster collections and payments. Cash management services was such an product providing Management information system along with faster payment to more than 421 locations in India.

Thus , at last , I was able to get exposure to learn about public sector units bonds, government securities and RBI bonds. Also the personalized account opening like demat account, SGL (Subsidiary general ledger) account, current account, savings account and CSGL (constituent subsidiary general ledger) account for cblo product using

ORGANIZATION PROFILE

HDFC Bank was incorporated in August 1994, and, as of March 31, 2007, had an nationwide network of 684 branches and 1605 ATM's in 316 Indian towns and cities.

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 liberalisation 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 authorised capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion). The paid-up capital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of the bank's equity and about 19.4% of the equity is held by the ADS Depository (in respect of the bank's American Depository Shares (ADS) Issue). Roughly 31.3% of the equity is held by Foreign Institutional Investors (FIIs) and the bank has about 190,000 shareholders. The shares are listed on the 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".

TIMES BANK AMALGAMATION

In a milestone transaction in the Indian banking industry, Times Bank Limited (another new private sector bank promoted by Bennett, Coleman & Co./Times Group) was merged with HDFC Bank Ltd., effective February 26, 2000. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. The acquisition added significant value to HDFC Bank in terms of increased branch network, expanded geographic reach, enhanced customer base, skilled manpower and the opportunity to cross-sell and leverage alternative delivery channels.

DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 684 branches spread over 316 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 centres 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 centres where the NSE/BSE have a strong and active member base.

The Bank also has a network of about over 1695 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.

MANAGEMENT

Mr. Jagdish Capoor took over as the bank's Chairman in July 2001. Prior to this, Mr. Capoor was a Deputy Governor of the Reserve Bank of India.

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public policy, administration, industry and commercial banking. Senior executives representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry, the bank believes that its people are a significant competitive strength.

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. In terms of software, the Corporate Banking business is supported by Flexcube, while the Retail Banking business by Finware, both from i-flex Solutions Ltd. The systems are open, scaleable and web-enabled.


The Bank has prioritised 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.

BUSINESSES OFFERED BY THE BANK

HDFC Bank offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers. The bank has three key business segments:

HDFC Bank offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers. The bank has three key business segments:

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to small & mid-sized corporate and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. Based on its superior product delivery / service levels and strong customer orientation, the Bank has made significant inroads into the banking consortia of a number of leading Indian corporates including multinationals, companies from the domestic business houses and prime public sector companies. It is recognised as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock exchange members and banks.

Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The products are backed by world-class service and delivered to the customers through the growing branch network, as well as through alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been designed keeping in mind needs of customers who seek


distinct financial solutions, information and advice on various investment avenues. The Bank also has a wide array of retail loan products including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of Depository Participant (DP) services for retail customers, providing customers the facility to hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Mastercard Maestro debit card as well. The Bank launched its credit card business in late 2001. By September 30, 2005, the bank had a total card base (debit and credit cards) of 5.2 million cards. The Bank is also one of the leading players in the "merchant acquiring" business with over 50,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments.

TreasuryWithin this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the financial markets in India, corporates need more sophisticated risk management information, advice and product structures. These and fine pricing on various treasury products are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.

RATINGS

Credit Rating The Bank has its deposit programs rated by two rating agencies - Credit Analysis & Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents instruments considered to be "of the best quality, carrying negligible investment risk". CARE has also rated the bank's Certificate of Deposit (CD) programme "PR 1+" which represents "superior capacity for repayment of short term promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "tAAA ( ind )" rating to the Bank's deposit programme, with the outlook on the rating as "stable". This rating indicates "highest credit quality" where "protection factors are very high".

The Bank also has its long term unsecured, subordinated (Tier II) Bonds rated by CARE and Fitch Ratings India Private Limited and its Tier I perpetual Bonds and Upper Tier II Bonds rated by CARE and CRISIL Ltd. CARE has assigned the rating of "CARE AAA" for the subordinated Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)" with the outlook on the rating as


"stable". CARE has also assigned "CARE AAA [Triple A]" for the Banks Perpetual bond and Upper Tier II bond issues. CRISIL has assigned the rating "AAA / Stable" for the Bank's Perpetual Debt programme and Upper Tier II Bond issue. In each of the cases referred to above, the ratings awarded were the highest assigned by the rating agency for those instruments

Corporate Governance RatingThe bank was one of the first four companies, which subjected itself to a Corporate Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services of India Limited (CRISIL). The rating provides an independent assessment of an entity's current performance and an expectation on its "balanced value creation and corporate governance practices" in future. The bank has been assigned a 'CRISIL GVC Level 1' rating which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest

AWARD AND ACHIEVEMENTS – BANKING SERVICES

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian Bank". We realised that only a single-minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal.

It is extremely gratifying that our efforts towards providing customer convenience have been appreciated both nationally and internationally.

20072007The asian banker excellence in retail financial services awards

Best retail bank in India

Asian banker Managing director Aditya puri wins the leadership achievement award for India

Business Today Best Bank in IndiaForbes Magazine One of Asia pacific’s

Best 50 companiesBusiness world Best Listed Bank of

India The Asset Magazine’s Triple A country awards

Best Domestic Bank

Euromoney Awards “Best Bank” in India


2007

The asian banker excellence Retail banking Risk management Award in India

Asiamoney Awards Best Cash Management Bank – India

Asiamoney Awards Best Domestic Commercial Bank

There have been some other proud moments as well:

London-based Euromoney magazine gave us the award for "Best Bank - India" in 1999, "Best Domestic Bank" in India in 2000, and "Best Bank in India" in 2001 and 2002

Asiamoney magazine has named us "Best Commercial Bank in India 2002".

For our use of information technology we have been recognized as a "Computerworld Honors Laureate" and awarded the 21st Century Achievement Award in 2002 for Finance, Insurance & Real Estate category by Computerworld, Inc., USA

Our technology initiative has been included as a case study in their online global archives.The Economic Times has conferred on us The Economic Times Awards for Corporate Excellence as the Emerging Company of the Year 2000-01.

Leading Indian business magazine Business India named us "India's Best Bank" in 2000.

In the year 2000, leading financial magazine Forbes Global named us in its list of "The 300 Best Small Companies" in the world and as one of the "20 for 2001" best small companies in the world.


We are aware that all these awards are mere milestones in the continuing, never-ending journey of providing excellent service to our customers. We are confident, however, that with your feedback and support, we will be able to maintain and improve our services

CORPORATE GOVERNANCE

HDFC Bank recognizes the importance of good corporate governance, which is generally accepted as a key factor in attaining fairness for all stakeholders and achieving organizational efficiency. This Corporate Governance Policy, therefore, is established to provide a direction and framework for managing and monitoring the bank in accordance with the principles of good corporate governance.

CODE OF CORPORATE GOVERNANCE

The Bank believes in adopting and adhering to best recognised corporate governance practices and continuously benchmarking itself against each such practice. The Bank understands and respects its fiduciary role and responsibility to shareholders and strives hard to meet their expectations. The Bank believes that best board practices, transparent disclosures and shareholder empowerment are necessary for creating shareholder value.

The Bank has infused the philosophy of corporate governance into all its activities. The philosophy on corporate governance is an important tool for shareholder protection and maximisation of their long term values. The cardinal principles such as independence, accountability, responsibility, transparency, fair and timely disclosures, credibility etc. serve as the means for implementing the philosophy of corporate governance in letter and spirit.

SERVICES OFFERED BY THE BANK

HDFC Bank provides correspondent bank services to Co-operative Banks, Private Banks, Foreign Banks & RRB's. Banks can leverage HDFC banks branch network , technology and product capability. We have a wide range of products engineered to suit the needs of the banking sector this is backed up by a dedicated Relationship Management Team and dedicated servicing department

Clearing sub member ship

We have the privilege of being a direct member of the RBI clearing house. So we act as the sponsor bank of co-operative, private and foreign banks, which are not direct members of the RBI clearing


house. Accordingly, we professionally deal with the entire clearing and settlement processes for the sub-member banks.

RTGS – submemebership

RTGS ('Real Time Gross Settlement') is an electronic system for transfer of funds between banks. HDFC Bank is one of the pioneer banks for RTGS in India. By virtue of its advanced technology and network is well positioned to be your sponsor bank and is offering the above service in the form of RTGS Sub-membership for all those Banks who do not wish to become Direct RTGS member with RBI. Becoming sub-member saves you the capital expenditure and recurring expenses.

Cheque collection

Our wide network of branches across 240 cities, with new locations being added regularly, is an advantage. We have entered correspondent banking arrangements to cover locations where we do not have a direct presence. As a part of the correspondent banking services, we offer the facility of speedy collection of cheques for movement of funds across locations.

INTRODUCTION

I have undergone training for my MBA (Finance) course during summer for two months and during this tenure with HDFC Bank had a learning exposure under the group of FIGBG ( Financial institutions and Government Business Group) of HDFC Bank.Our group generalize below mentioned activities and handles this all activities by giving them satisfied banking facilities.

It generalize acitivities under follwing sections:


1) Financial Institutions

Institutions such as various insurance companies as listed below

General old insurance companies

LICOICNICUIIC

Private Insurance companies

Bajaj allianzHDFC standard life insuranceICICI PrudentialTata AIG Cholamandalam general insuranceBirla sun life insurance

It provides facilities such as : CMS i.e., through Cash management services, will bring customer a wide array of collection and payment services for improved liquidity through faster access to funds and total control on your fund movements through customised MIS reports. Our cash management services solutins include:

Collection service that offer local cheque collection(LCC) at more than 100 locations and upcountry cheque collection (UCC) for more than 800 locations

Payment/Disbursement service, whereby one can issue cheques payable ‘at par’ at 90 locations in the country, issue warrants payable ‘at par’ for dividend / interest payments at more than 500 locations and avail of ECS(Electronic Clearing Services)

Thus to avail this services from bank we offer a savings account to insurance companies to open in our bank. Which allow them following features.

Features and benefits

Cash delivery & Cash pick-up facility Cheque pick-up facility Structured Investment Program Payable at Par Cheque facility


Avail of Free Outstation Cheque Collection at HDFC Bank locations across the country.

Enjoy free DD's payable on HDFC bank locations up to a limit of Rs. 50,000/- per DD, per day.

2) Trusts

PF TrustsGratuity Superannuation Pension fundsProvide savings account, demat account and other investment procedures.

It also includes trusts listed under charity commission of India

i.e., provides banking facility to Trusts such as charity trusts, religious trusts, educational trusts & NGOs.

Study of investment pattern in PROVIDENT funds, SUPERANNUATION funds and GRATUITY funds.

The government of India had approved in the interest of providing wider avenues for investment by these funds.

Funds are permitted to invest in Term deposit receipts of the public sector banks up to three years as against the present limit of less than a year.

Further, the said funds can invest in the bonds of the public financial institutions and public sector companies if these are rated as investment grade by two credit rating agencies.

Also, been decided to invest in Collateral Borrowing and Lending Obligations(CBLO) issued by Clearing corporation of India limited and approved by Reserve bank of India.

An amount up to 5% of the total portfolio has been allowed to be invested in shares of companies that have an investment grade debt rating from two credit rating agencies and up to 10% in the debt instruments bearing investment grade rating and/or equity linked scheme of mutual funds regulated by Securities and Exchange Board of India.

The maximum exposure of any fund to investment in any gilt fund has been restricted to 5% of its portfolio at any point of time. The trustees would be enabled to use at least 10% of the total portfolio of government securities for active management, subject to marking the portfolio on marked to market basis.


A chart showing the pattern of investment

Instrument %(i) Central government and/or units of mutual funds set up as dedicated funds for investment in government securities and regulated by SEBI

25%

(ii) (a) State government and/or units of mutual funds set up as dedicated funds for investment in government securities and regulated by SEBI(b) Any other negotiable securities on the principal whereof and interest whereon is fully and unconditionally guaranteed by the central government/ any state government.

15%

(iii) (a) Bonds/securities of ‘public financial institutions’, ‘public sector companies’, ‘public sector banks’ (b) Term deposit receipts upto three years issued by public sector banks. (c) CBLO issued by Clearing corporation of India and approved by RBI

25%

(iv) To be invested in any of the three categories as decided by the trustees

30%

(v) shares of companies that have an investment grade debt rating from at least two credit rating agencies.

5%

Bank provide following services to trusts

The Retail Trust Account is beneficial for Trusts and Societies as it earns them a higher interest as compared to a conventional Current Account that offers no interest.

Features & Benefits

Enjoy free DD's payable on HDFC bank locations up to a limit of Rs. 50,000/- per DD, per day.

Avail of Free Outstation Cheque Collection at HDFC Bank locations across the country.

Payable at Par Cheque facility: At a nominal cost, you can avail a PAP cheque book of 25 leaves (Regular non-PAP cheque book come free of cost).


http://www.hdfcbank.com/personal/accounts/regularcc_acc.htm

Avail of Special discounts on Foreign exchange transactions and Forex rates at most branches across the country.

Access your account from any of the branches in the HDFC banking network. Avail of facilities like Safe Deposit Locker and Sweep-In facility on your account

Avail of facilities like Free 24-hour PhoneBanking and NetBanking and carry out banking transactions from the comfort of your office or home.

Cash delivery & Cash pick-up facility Cheque pick-up facility

Structured Investment Program: Avail of the facility for investing surplus funds lying in your account into Mutual Funds, RBI Bonds and other financial instruments through any of our branches across the country.

3) Bankers to Issue

Bankers to the issue, as the name suggests, carries out all the activities of ensuring that the funds are collected and transferred to the Escrow accounts. The Lead Merchant Banker shall ensure that Banker to the Issue are appointed in all the mandatory collection centers as specified in DIP Guidelines. The LM also ensures follow-up with bankers to the issue to get quick estimates of collection and advising the issuer about closure of the issue, based on the correct figures.

Initial Public Offerings (IPO)

IPO is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public.This paves way for listing and trading of the issuer’s securities. In a public offering, the issuer makes an offer for new investors to enter its shareholding family. The issuer company makes detailed disclosures as per the DIP guidelines in its offer document and offers it for subscription.We help individual and corporates in choosing the IPOs and genrally criterias as considered by SEBI Guidelines are shown.

Business Prospects and Competitive Position

I Industry prospects

II Company prospects

Financial Position Management Quality


http://www.hdfcbank.com/personal/investments/bonds.htm

http://www.hdfcbank.com/personal/investments/mutual_funds.htm

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http://www.hdfcbank.com/personal/access/netbanking.htm

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http://www.hdfcbank.com/personal/accounts/sweepin.htm

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Corporate Governance Practices Compliance and Litigation History New Projects—Risks and Prospects

Collections and Refund facility is provided by the bank.

To successfully place an IPO order, PAN numbers along with proof thereof for each holder of the selected demat account needs to be submitted to HDFC Securities Ltd.

Rights Issues

Rights Issue (RI) is when a listed company which proposes to issue fresh securities to its existing shareholders as on a record date. The rights are normally offered in a particular ratio to the number of securities held prior to the issue. This route is best suited for companies who would like to raise capital without diluting stake of its existing shareholders unless they do not intend to subscribe to their entitlements.

Mutual Funds (NFOs)

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unitholders.

The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

4) Deposit mobilization Group (DMG)


I.T. Companies

Dividend payments : During my training under HDFC Bank, I have also come across process relating to payment of dividend. It is found that there are some companies which allot works for distribution of Dividend Warrants to its share-holders, members, etc. In this work, the fund is transferred by the company in favour of the Bank and work of preparing and printing of dividend warrants (Bulk DDs) is made by the Bank and necessary actions for distribution thereof to the relevant members/shareholders are taken by the Bank. Naturally for all these works done by the Bank, necessary charges are recovered by the Bank and the Bank is also having necessary fund from the date of transfer by the Company to the Bank and till the said dividend warrants are encashed by the concerned members/shareholders. Thus, this is a profitable business for the Bank.

CORPORATE SALARY ACCOUNTS Corporate Accounts are opened by the Bank which is generally for a very huge amount. In that, we offer accounts of two major types, like (i) Current Account and (ii) Salary Account.

(i) Current Account which is operated regularly for daily payments and collections of instruments under which CMS service is provided by the Bank, which is exclusively provided by HDFC Bank and none else.

(ii) Salary Account : This kind of account is maintained by the Bank for the salary payments for the employees of the Corporate Company.All the services available under Saving Accounts are provided to the account holders.

When you open a HDFC Bank Corporate Salary Account you give your employees more than just an account. They get a host of e-Age Banking facilities such as Free NetBanking, PhoneBanking, MobileBanking, International Debit Card (valid in 140 countries) and BillPay. All that plus free Demand Drafts and preferential interest rates on Personal Loans.

All in all, you will be giving your employees an account that makes banking a pleasure for them. While you save time and money by directly crediting your employees' salary nation-wide at one go.

ADVANTAGES


Zero balance amount The employee does not have to maintain any minimum balance in the account.

Free Debit card The employees do not have to pay the annual fee for their

Debit Cards. Additionally, the first year annual fee is also waived for one additional account holder, as in the case of a savings account holder. This plus all the other Debit Card benefits are available to your employees

Free inter-city/branch banking

There is no cap on the transaction size for inter-branch/city transactions for your employees. The fees associated are also waived. They can perform the following transactions:

Cash withdrawal: Customer presence required. Cash deposit: Customer presence required DD/MC issuance: Customer presence required Cheque deposit: Customer presence not required Any other written instructions: Customer presence not required

This facility is not extended to premature withdrawal of Fixed Deposits

Free demand drafts

Your employees can avail of free Demand Drafts up to Rs 25,000 issued at any of the HDFC Bank branch locations. This offer can be availed of through PhoneBanking or NetBanking or at the branch. The amount of the Demand Draft will be debited to the salary account

Cash delivery

If there isn't a HDFC Bank that is easily accessible from your office, we will deliver cash against cheques from the employees once a week subject to a maximum of twice a week. Maximum amount of withdrawal per employee is Rs 10,000, minimum Rs 1,000/-. This service is currently available in Mumbai, Delhi, Chennai, Hyderabad, Bangalore, Pune and Ahmedabad.

Overdraft facility


You can avail of an overdraft against your salary if you have a corporate salary account with us with regular salary credits and your corporate is on our approved list for overdraft facility. For details on eligibility and norms, kindly contact your nearest branch.

Discount loans

Your employees can avail of the benefits of preferential pricing on our asset products, namely Loans against Securities , Car Loans and Personal Loans. All loans at discretion of the bank

EligibilityCorporate Salary Accounts programme is targeted at salaried employees. This programme offers a host of world class banking products & services to the salaried employee.

Zero balance savings account Free debit card Free inter-city/branch banking Free cash delivery/cheque pick up in the top 7

cities Temporary overdraft facility @ 18% p.a. Free demand drafts up to Rs. 25,000 at HDFC

bank branch location Discount on loan products offered by the bank Personalised cheque book Free netbanking Free mobilebanking Free phonebanking Free bill pay

Takeovers of Companies (Deals)

When an "acquirer" takes over the control of the "target company", it is termed as Takeover. When an acquirer acquires "substantial quantity of shares or voting rights" of the Target Company, it results into substantial acquisition of shares. The term "Substantial" which is used in this context has been clarified subsequently. A Target company is a listed company i.e. whose shares are listed on any stock exchange and whose shares or voting rights are acquired/ being acquired or whose control is taken over/being taken over by an acquirer.


An Acquirer means (includes persons acting in concert (PAC) with him) any individual/company/any other legal entity which intends to acquire or acquires substantial quantity of shares or voting rights of target company or acquires or agrees to acquire control over the target company

Buy-back deals

The company can buy back its shares in any of the following manners :

i. From the existing shareholders on a proportionate basis through the tender offer.

ii. From open market through:

a. Book building process b. Stock exchange,

i. From odd lot holders.

A company may buyback its shares without shareholders’ resolution, to the extent of 10% of its paid up equity capital and reserves. However, if a company intends to buyback its shares to the extent of 25% of its paid up capital and reserves/ then the same has to be approved by Shareholders Resolution as specified in Section 77 A of Companies Act, 1956.

Structured Corporate Deals

Takeovers (mergers & Acquistions)

Depository services for securities Escrow services for securities and monies

Buy Back of Securities

Depository services for securities Escrow for securities and monies Collection centers

Services offered for takeovers

To the Seller:

Opening a depository account Conversion of existing holdings to electronic form


Acting as an escrow agent for the securities and/or the funds

To the Buyer:

Opening a depository account Acting as an escrow agent for the funds and/or the

securities Release of securities / funds to the counter party on

receipt of instructions as per the Escrow agreement

Services offered for Buy Back

The Buyback could be done through Open market purchase Offer to existing share holders Book building route

Depository account to facilitate to Buy back Depository account in the name of the company Holders to transfer securities to this account Excess received from the holders if any, to be

returned For a open market purchase , securities bought

need to be credited to this account. Upon completion securities in this account to be

extinguished by the depository.

Funds Account to facilitate Buy back

Escrow account as laid down by SEBI to hold a portion of the buy back proceeds before the commencement of the buy back Remit buyback proceeds to the holders

Branch Network as collection centres

Accept the buyback forms submitted by the share holders at our branches Reporting on the buy back

Delisting Deals of securities

The term "delisting" of securities means permanent removal of securities of a listed company from a stock exchange. As a consequence of delisting, the securities of that company would no longer be traded at that stock exchange.Compulsory delisting refers to permanent removal of securities of a listed company from a stock exchange as a penalizing measure at the behest of the stock exchange for


not making submissions/comply with various requirements set out in the Listing agreement within the time frames prescribed. In voluntary delisting, a listed company decides on its own to permanently remove its securities from a stock exchange.

Employees Credit Societies

HDFC bank presents a unique savings account, specially designed to suit the needs of societies.

Advantage for societies

Now, for the first timesocieties can enjoy the opportunity of opening savings accounts that earn higher interest as compared to the conventional current accounts which offer zero interest..

Facilities for societies

Free Demand Drafts on HDFC Bank locations up to a limit of Rs. 50,000 per DD, per day Payable at Par (PAP) cheque book at a normal cost. Free Outstation cheque collection on HDFC bank locations Free Netbanking Free phonebanking

Other Attractive features

Demat account with preferred pricing Quarterly Statement of Accounts Intercity banking Cheque pick-up Structured cross-sell of Mutual funds/RBI bonds and other financial instruments

To open a societies account

Need to open a savings account with a minimum initial pay-in of Rs. 10,000.

Maintain an average quarterly balance of Rs. 10,000 Alternately, you can have a fixed deposit of Rs. 2 lakh ,

which gives you access to a zero balance savings account


Lending and Current Accounts

C urrent A ccounts :

A form of demand deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount.

It is general experience that Current Account is ideal for small funds transfer across various cities in the country. Whereas other account suitable for small businessman and transfer is known as `Trade Account’.

There is also one other kind of Current Account known as `Premium Current Account’. This kind of account carries benefits of both types of accounts. One important feature of this account is that free inter-city funds transfer across HDFC network up to Rs.10 lacs per month is available to the holder.

However, most popular current account is `Regular Current Account’ which requires average quarterly balance of a small sum of Rs.10,000/- only. However, it carries the facility of free ATM Card, easy accessibility, monthly statement, on-line real-time Net Banking and 24 hour Phone Banking.

Further some value added features are also attached with this account, viz., 1) CMS (collection from various locations, even non-branch locations), 2) Continuous stationery, 3) Bulk DDs, 4) cheque writing facility and 5) RTGS.

L E N D I N G :

Lending money is solely at the wish of the Bank as there are very clear and specific norms binding and to be followed by the Bank as well as the borrower.

Before lending money or increasing overdraft, credit card limit or other borrowing, Bank has to assess whether the borrower is able to repay.

Not only that, but Bank also encourage the guarantor to take independent legal advice to make sure for understanding the commitment and the possible consequences of the decision and also tell that by giving the guarantee or other security he may become liable instead of, or as well as, and should know about liability.


Further, Bank is also giving facility of Letter of

Credit (LC) for business requirements which is valued and accepted worldwide.

Moreover, Bank can also issue Bank Guarantee to fulfil the obligations under any business contract and help to grow the business.

This kind of banking business includes financial solutions of entrepreneurs. Business Banking caters to the financial requirements of small and medium industrialists. It is also found that expanding and growing of business to the heights of success is a dream of every businessman and to fulfil this dream, Bank has been kind enough to offer (1) Cash Credit 2) Overdraft (Secured / Unsecured) (3) Export Finance : (3.1) Pre Shipping Finance and (3.2) Post Shipping Finance(4) Bill Discounting (5) Term Loans.

Lending by Bank is also made under various heads for different purposes and requirements of the persons taking loan, which includes (1) Housing Loan (2) Education Loan (3) Personal Loan(4) Vehicle Loan (5)Jewellery Loan.

This kind of lending on personal segment side is thoughfully designed to suit personal needs of every person.

Housing Finance Companies, Builders Accounts (Banking) Housing Loan is availed to build / acquire / extend /renovate a house or a flat. If normal borrower standards with sufficient repaying capacity, Home Loan is available to the borrower at very attractive interest rates and a host of customozed options. Resident Indians and NRIs with regular income is provided with Home Loan. There are different quantum for loan considering the area like metro or urban centres and rural centres. This kind of Home Loan is repayable in easy EMI (Equated Monthly Instalments), maximum upto 300 months (25 years) and this loan is sanctioned against mortgage of the property financed.


This kind of Home Loan carries two different kind of rate of interest which is at the selection of the borrower. The one is known as `fixed rate’ whereas the other is known as `floating interest rate’. However, some of the Banks have also introduced a third type category known as `mixed rate’ which includes features of both the above said kind of loan, viz., `fixed rate’ and `floating rate’. Similarly, bank offers Escrow account to the builders under which guidelines, bank is required to see the right investment of loans provided by the bank.On demand of 1 crore loan by the builder it will pass only 20 lacs of loan for initial working/ construction. Next instalment will be passed after fruitful utilization of fund in construction work. Bank also regulates the collection from builder such as interest payments regularly basis and payment of loan as per time basis

THROUGH THE PROJECT WORK

Work mainly dealt with banking related aspects of all the government departments and other financial institutions. I worked in three types of institutions

1>charitable trusts2>co-operative societies3> co-operative banks

I was given training in all the three and worked with all banking related activities they all involve in.

Research methodology.

Scope: The main project looks into the collections of information about from the organizations about their necessary financial transactions during month and if the requirement matches with the bank to provide them appropriate product offering both beneficial to bank and the organization to make a further trustworthy relationship with bank.

Main objective: to identify the potentials for trusts, co-operative banks and co-operative societies


Subobjective:

to apply various tools and techniques in defining the questionnaire to get the financial idea of the trusts/society/banks to develop a appropriate strategy for collecting information and give better product offering to evaluate the potentials and match the requirements of the trust/ society/other co-op banks with bank’s services and products.

Data collection:

Primary data: to visit the trusts, schools , hotels, I.T. Companies and co-operative society for getting financial information and to identify their requirements with the services and business provided by bank.

Secondary data: telephonic interview of the co-operative banks to provide them a CBLO and if they been able to identify themselves to using this product and other trusts to let them know about TDS scheme implemented in the RBI bonds as explained as 8% taxable bonds.

Skills acquired while working with the bank

The banking exposure that I received while working with the HDFC Bank was a great learning opportunity. It gave me a new confidence. It also gave me a hand –on practical exposure of theories I had studied which in a way helped me grasp the financial concepts.I was basically a Engineering student so for me it took time to understand the basic banking concepts. But while counting the throughput after two months of learning and experience it doesn’t felt so.I was placed as a medium to trusts to convey the best facilities to decrease their work load and learn customer satisfaction. To prepare a documentation for trusts, societies and identify the potential of using CBLO by co-operative banks.

Applications of study


I was able t0 study the basic banking principles from the bank. As I had to visit various organizations like trusts, schools, hotel and I.T. companies I had exposure of their mode of working and their needs in financial transactions occurring with bank. I was able to study the investment pattern for the co-operative societies and co-operative banks.

So, a deep understanding of IPOs, NFOs, and various bonds and government securities and their collections and refunding associated with various individuals, corporates, and other institutions.

The study of YTM (yield to maturity) of calculations of Fixed deposits, IPOs, etc.

Start with the charitable trusts

CHARITABLE TRUSTS ( registered with charity commission of India)

TRUST ACCOUNTS

Private Trust Public Trust Private Trust- Opened in the name of trustees only. Public Trust- Registered under: Societies Registration act of 1850 Or Indian Public Trust act of 1950. Or


Indian Trust Act.

Other Categories of Trusts:

Company Retirement Trusts Company Provident Fund Trust. Company Pension Fund Trust Company Gratuity Fund Trust. Company Superannuation Trust

I was on the move to visit the various trusts within Ahmedabad locations with the prime objective of the topic of my project i.e., to identify the potentials of charitable trusts and bring in the form of primary data collection which helps bank to identify the requirements of the trust and provide them appropriate services as they needed. I was my own research methodology to prepare a questionnaire for identify the requirement of the trusts which are as listed below.

Research methodology [TRUSTS]

1) Name of trust

2) Name of trustee/main operating person

3) Type of trust ( Educational, community,

Religious, Hospital)


4) Activities ( welfare, education, religious,

etc)

5) Present bankers and their charges

6) Are trust issuing DDs, [how many] i.e.,

number of DDs issued /month and

approximately amount

7) Do trusts uses At par cheque books

8) Are the trusts availing Net banking facility?

9) Corpus funds

10) Yearly income/ Donation receivables

11) Investments (Fixed Deposits , Mutual

Funds, Public Sector Unit bonds,

Government Securities, etc) i.e., where do

they invest, frequency & what is their total

investment.

12) Payouts ( payments/ disbursements) [ no.

of person/cheques & amount]

13) Government grant [yes/no]

14) Does trust maintain FCRA Account [yes/no]

if yes , how much foreign donations are

received yearly & in which currency

If they don’t have a FCRA account, would

they be interested to open one with, if they

are to get any donations/ grant from foreign

entities.( which bank)


8% savings (Taxable ) bond

Types

You can choose from cumulative and non-cumulative bond options.

Nature

Bonds are issued in the form of Bond Ledger Account in denominations of Rs. 1000/- These bonds are not transferable. A nomination facility is available.

Tenure

The tenure of the bond is 6 years from the date of issue. No interest would accrue after the maturity of the bond.

No Limit

There is no upper limit for investment

Interest

Bonds will bear interest @ 8.00% p.a. and are payable half-yearly. The interest payment dates are February 1 and August 1 for non-cumulative investments. For investors who have chosen the cumulative option, the value of the investments at the end of 6 years would be Rs. 1601/- (being Principal and Interest) for every Rs. 1000/- invested. Interest on the Bonds is taxable under Income Tax Act 1961.

Tax

The interest income from the bonds is taxable. Presently, no TDS is deducted at the time of interest payment.

Eligibility

The following persons and institutions can apply for these bonds:

An Individual, not being a Non Resident Indian In his or her individual capacity or In individual capacity on joint basis or In individual capacity on anyone or survivor basis or On behalf of a minor as father/mother/legal guardian

A Hindu Undivided Family

A Charitable Institution "Charitable Institution" to mean a company registered under

Section 25 of Indian Companies Act 1956 or


An institution which has obtained Certificate of Registration as a Charitable institution in accordance with a law in force or

Any institution which has obtained a certificate from an Income Tax Authority for the purpose of Section 80 G of the Income Tax Act, 1961

Any institution notified by the Central Government under clauses (ii) or (iii) of Sub-Section (1) of Section 35 of Income Tax Act, 1961

"University". By university, it means a university established or incorporated by a Central, State or Provincial Act, and includes an institution declared under Section 3 of the UGC Act, 1956 (3 of 1956), to be a university for the purposes of that Act

Services provided by bank

The trust services at HDFC Bank provide trust with the dual

advantages of a secure depository and efficient administration of

your securities. Through our solutions we help you maximize

returns, meet fiduciary responsibilities, and improve operational

efficiency. In other words HDFC Bank provides complete

administrative and fiduciary support for a wide range of financing

and investing structures.

Services to Trusts

HDFC Bank to offer ...

CUSTODIAL SERVICES :

§ CSGL Account for investments in G-Secs and State Development Loans ( SDLs)

l Bid on your behalf various auctions/ flotation conducted by RBI

l Offer RBI’s Order Matching Trading System for purchase/ sale of G- Secs

§ Depository participant( Demat) account for Bonds / Equity

l Forecasting of interest/ maturity/ put/ call for your holdings

l Collection of benefits and credit to your accountl Follow up for interest/maturity/l Advices and MIS


l Documents – Resolution– Agreement– PoA

Foreign Contribution (Regulation) Act, 1976• Is an act to regulate the acceptance and utilization of

foreign contribution or foreign hospitality by certain persons or associations.

FEW FACTS AND FIGURES

Receipt of Foreign Contribution

Charter for followings stakeholders are available on MHA’s website

MBA Summer Training Report

1.171.175105.55105.52003-042003-04

3.583.585046.55046.5 2002-032002-03

7.427.424871.94871.92001-022001-02

% Increase % Increase over previous over previous Year Year

Amount Amount Rs/crores Rs/crores

YearYear

34

• Charter for NGOs/Associations applying for grant of Prior permission/Registration under the FCRA.

• Charter for NGOs/Associations granted Prior permission/Registration under the FCRA.

• Charter for the Chartered Accountants. • Charter for the Banks. • Programs permitted to be carried out by associations

having different nature are given on the website.[www.mha.nic.in]

• This list is illustrative and not exhaustive

Amount wise break-up of Foreign Contribution received by reporting Associations

Top Donor countries


5757838381881816187161872003-042003-04

6666767679879815650156502002-032002-03

5959777772172114761147612001-022001-02

AboveAbove Rs.10 cr.Rs.10 cr.

BetweenBetween Rs.5-10Rs.5-10

cr.cr.

Between Between Rs.1-5 cr.Rs.1-5 cr.

Below Below Rs.1 cr.Rs.1 cr.YearYear

35

Top DonorsForeign Contribution (Rs. in crores)

Top Recipient States/Union TerrotoriesForeign Contribution (Rs. in crores)


304.04304.04261.88261.88237.37237.37NetherlandsNetherlands

350.01350.01315.82315.82304.55304.55ItalyItaly

676.14676.14685.38685.38679.29679.29UKUK

757.13757.13715.04715.04702.33702.33GermanyGermany

1584.261584.261679.841679.841658.291658.29 USAUSA

2003-042003-042002-032002-032001-022001-02CountriesCountries

[Foreign Contribution (Rs. in crores)]

47.7847.7840.0340.0340.5740.57Missio, GermanyMissio, Germany

57.5657.5653.7353.7372.3772.37Foster Parents Plan Foster Parents Plan International, USAInternational, USA

73.5973.5975.1575.1544.2744.27Christian Children Fund, USAChristian Children Fund, USA

94.3694.3690.2490.2478.3378.33World Vision International, World Vision International, USAUSA

135.15135.1579.1679.1663.0663.06Foundation Vicent E Ferrer, Foundation Vicent E Ferrer, SpainSpain

2003-2003-0404

2002-2002-0303

2001-2001-0202

DonorsDonors

36

Top PurposesForeign Contribution (Rs. in crores)

Trends


480.61480.61505.13505.13464.35464.35MaharashtraMaharashtra

528.56528.56489.12489.12504.98504.98KarnatakaKarnataka

684.20684.20629.76629.76559.56559.56Andhra PradeshAndhra Pradesh

800.22800.22774.99774.99695.49695.49Tamil NaduTamil Nadu

857.12857.12880.77880.77794.42794.42DelhiDelhi

2003-042003-042002-032002-032001-022001-02States/UTsStates/UTs

181.58181.5849.0849.0825.8625.86Awareness about AIDS / Awareness about AIDS / Treatment of AIDS patientsTreatment of AIDS patients

221.38221.38176.13176.13187.30187.30Welfare of ChildrenWelfare of Children

221.63221.63275.74275.74242.24242.24Construction of Construction of School/CollegeSchool/College

494.64494.64486.50486.50464.61464.61Rural DevelopmentRural Development

639.31639.31673.77673.77859.00859.00Establishment ExpensesEstablishment Expenses

2003-2003-0404

2002-2002-0303

2001-2001-0202

PurposesPurposes

37

Purpose of FCRA

• Regulating foreign contribution meant for influencing elections or individuals or associations working in important areas of national life.

• Regulating receipt of foreign contribution for genuine purposes.

• Ensuring that foreign contribution is not used for activities detrimental to national interest.

Foreign Contribution• Means the donation, delivery or transfer, made by

any foreign source of any;• article, not given to a person as a gift, for personal

use, if the market value in India of such article exceeds one thousand rupees;

• currency, whether Indian or foreign;• foreign security.


5,105.465,105.4617,14517,14528,35128,3512003-20042003-2004

5,046.515,046.5116,59016,59026,40426,4042002-20032002-2003

4,870.524,870.5215,59815,59824,56324,5632001-20022001-2002

4,535.234,535.2314,59814,59822,92422,9242000-20012000-2001

3,924.633,924.6313,98613,98621,24421,2441999-20001999-2000

3,402.903,402.9013,77513,77519,83419,8341998-19991998-1999

2,864.512,864.5112,19812,19818,48918,4891997-19981997-1998

2,571.692,571.6912,13612,13617,72317,7231996-19971996-1997

2,168.852,168.8510,95010,95016,74016,7401995-19961995-1996

11,892.43,892.4311,42211,422 15,72315,7231994-19951994-1995

Amount of Amount of Foreign Foreign ContributioContributionn

n n

(Rs. in (Rs. in crores)crores)

No. of No. of ReportingReporting AssociationsAssociations

No. of No. of Registered Registered AssociationAssociations (as on 31s (as on 31stst

March of March of Financial Financial

Year)Year)

YearYear

38

NOTE : Contributions made by an NRI, from his/her personal savings, through the normal banking channels, is not treated as foreign contribution.

Foreign Source

• Government of foreign country or any agency of such Government.

• International agencies, not being of• United Nations or its specialized agencies• World Bank• International Monetary Fund• Such other agencies as so notified by the

Central Government.• Foreign company or Corporation incorporated in

foreign country• Trade Union in a foreign country • Foreign Trust or Foundation or Society or Club formed

or registered outside India• Company where more than half of shareholding held

by foreign Govt., foreign citizens, foreign corporations

• Citizens of foreign countries

Who cannot accept Foreign Contribution?

• Candidate for elections.• Correspondents, columnists, cartoonists, editor,

owner, printer.• Judge, Government servant or employee of any

corporation• Member of any Legislature• Political party or office-bearer thereof.

Types of permission

An association having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains the prior permission of


the Central Government, or gets registered with the Central Government.

Registration• Means permanent permission to accept foreign

contribution from any foreign source.

• Granted to associations which are in existence for more than 3 years and have spent over Rs.6 lakhs in last 3 years in chosen area of activities.

Prior Permission

When required• If the association is not eligible for registration;• Association is placed under prior permission category

under law;• If association is of political nature, not being a

political party.Essentials for prior permission• Specific to donor, amount and project;• Commitment letter from donor.

Penalties• Prohibition;• Placing in prior permission category;• Fine;• Seizure/confiscation of the foreign contribution /

created assets;• Imprisonment upto 5 years.

FILE PROCESSING OF OPENING ACCOUNTS

Depository Account Opening Unit

Documents Required for Opening; A) Trust Demat Account

B) Provident / Gratuity / Superannuation Trust C) Private Trust

Depository on Net ( DP @ Net ) Facility Change of Signature’s / Change of Address


Documentations Required for Opening Trust Demat Account

Demat account will be opened in the name of Trust if Trust is registed under Charity Commissioner or Indian Public Trust Act.

Documents Required :

Duly Completed Demat Account Opening Form.

Trust resolution duly signed

Copy of the Trust Deed duly Certified by the branch officer.

Photographs of authorised signatory duly signed across.

Photo identity of authorised signatories(PAN card, Driving

license, Passport

copy,Voter ID)

Proof of Correspondence Address.

Signatures of authorised signatory required on all places on

Demat Form

Bank Account number for Debit charges should be clearly

mentioned

Bank Account number for Crediting dividends should be

clearly mentioned

DP Agreement duly executed on Rs. 100 Stamp paper.

Rs 300/- stamp paper for fax indemnity agreement (optional)

In Case of Provident / Gratuity / Superannuation Trust :

Kindly note that in case the trust is a Provident Fund Trust,Gratuity

Fund Trust , Superannuation Fund Trust though being a private

trust , the demat account can be opened in the name of the trust

without the trust having a registration certificate from the

charity commissioner or despite the trust not registered under the

following acts Indian Public trust act of 1950 or Indian Trust Act , or

Society Registration act of 1850 )

In case of Private Trust :


If the trust is a private trust then the demat account is to be opened in the name of the trustees only. This will be a normal Resident ordinary account under the Individual category.

Documents Required :

Individual demat account opening form duly filled in the name

of the

Trustees

The account can be opened in the name of maximum three

trustees

only.

Type of account will be Individual.

Trust resolution stating to open an beneficiary account in the

name of

the trustees with HDFC Bank and the operating instruction will

be all

jointly (mandatory)

Original photographs of all operating trustees signed across

Photo identity of authorised signatories(PAN card, Driving

license, Passport

copy, Voter ID )

Proof of Correspondence Address

Signatures of trustees required on all places (i.e declaration

agreements,

tariff sheet, debit authorisation etc.) under the stamp of the

Trust

Bank Account number for debit charges

Bank Account number for Crediting dividends should be

clearly mentioned


DP Agreement duly executed on Rs. 100 Stamp paper.

Rs 300/- stamp paper for fax indemnity agreement (optional)

Depository on Net (DP @ Net )

DP@NET is the facility to view the demat holding through

net

banking on the internet.

The Trust has a Bank account with us in Finware

The Custid of the authorised signatories of the Trust

are registered for Net Banking .

The trustee / authorised signatory signing the DP@NET

form should also be the authorised signatory in the

demat account.

The DP@NET form is signed by the trustee / authorised

signatory of the demat account under the corporate

seal.

One Demat A/c can be linked to one Cust ID

One Cust ID can be linked to Multiple Demat A/c

BANKING AND PAYMENT SOLUTIONS :

Cash Management Services :


mailto:DP@NET

mailto:DP@NET

mailto:DP@NET

Collection services at all our 220 locations for efficient tracking and clearance of cheques.

For your monthly collections from your various branch office. - Interest / redemption cheques not payable Mumbai

Outstation Cheques received for employees that have transferred from other Cos.

Cheque received from outstation RPFCs

Process flow : § A separate Cash Management code will be allotted to each of

the trusts. § Cheques can be deposited ( on day zero ) in any HDFC Bank

branch through the CMS code.§ Credit will be given into your Mumbai account on a fixed day

based on the arrangement.

Payment Solutions:* For loan disbursements and final settlements across the country.

§ Payable at par cheques : At over 220 locations . Continues stationary an be provided

§ Bulk Demand drafts : Data to be submitted in soft form DD's can be printed and delivered to your office.

§ Cheque writing facility : Cheques will be printed by the bank with facmile signatures

§ Electronic Clearing System / Electronic Funds Transfer( EFT) : Funds are directly transferred into the respective bank a/c of the employee. The beneficiary account may be opened at any bank branch which participates in the clearing cycle.

INVESTMENT/ ADVISORY SERVICES:

§ Assistance in formulating your investment policy as per statutory pattern

§ Valuation of securities & investments

§ Provision of security quotations and primary & secondary market updates

§ Assistance in getting quotations for EDLI .

§ Presentations to board of trustees on a regular basis

Special Deposit Interest

§ Interest Payable on Jan 1, 2005


§ SDS Banker will l (a) Directly credit your bank account with them on 2nd

Janl (b) Issue cheques/ DDs towards the interest probably by

Dec 31, 2005§ How the SDS money be invested expeditiously

l Deposit a transfer cheque from SDS bank to HDFC Bank in MICR on Sat, 31/12/2005 or in high value Monday 2/1/2006

l RTGS tranfer from SDS bank to HDFC Bank on 2/1/2006. HDFC Bank ISFC code : HDFC0000060

l Provide HDFC Bank with authorisation letter. Cheque will be collected on your behalf deposited in MICR clearing on 31/12/05

Trust accounts opening procedure

The account is managed by a trustee for a beneficiary. Additional documentation required is a trust deed. This deed should be scrutinized to identify the rights & duties of the trustee & to ensure that no undue onus is placed on the bank.

How to open a Trusts Account

open a savings account with a minimum initial pay-in of Rs. 10,000

Maintain an average quarterly balance of Rs. 10,000 You can also have a Fixed deposit of Rs. 2 lakhs which gives

you access to a zero balance savings account

Unique savings account[specially designed to suit the needs of trusts and societies]

Advantage trusts Now, for the first time trusts and societies can enjoy the opportunity of opening savings accounts that earn higher interest as compared to the conventional current accounts which offer zero interest. Besides this, a host of other advantages so far available only on current accounts can now be enjoyed by Trusts.

Facilities for trusts

Free Demand Drafts on HDFC Bank locations up to a limit of Rs. 50,000 per DD, per day

Payable at Par (PAP) cheque book at a normal cost. Free Outstation cheque collection on HDFC bank locations Free Netbanking Free phonebanking

Other Attractive featuresMBA Summer Training Report45

Demat account with preferred pricing Quarterly Statement of Accounts Intercity banking Cheque pick-up Structured cross-sell of Mutual funds/RBI bonds and other

financial instruments

In a nutshell as shown in the flow diagram of

“ linkage of trusts and banking services”



TRUSTS

DONATIONS RECEIVABLES INDIVIDUALS COMMUNITIES CO-ORPORATE TRUSTEES FOREIGN DONORS WELFARE ORGANIZATIONS

COLLECTIONS MEDIUM

OUTSTATION CHEQUE CLEARANCEFCRA ACC. (FOR FOREIGN RECEIVABLES) COURIER PICK-UP E*NET TRANSFER

PAYMENT MEDIUM

BULK DD’S PRINTING CMS WITH MIS FACILITY PAYABLE’AT PAR’ CHEQUES E*NET TRANSFER

DONATED TO

COMMUNITY WELFARE HELP POOR ORGANIZATIONS EDUCATIONS PURPOSE HOSPITALS

BANK

47

OTHER VARIOUS ORGANIZATIONS

MAIN IDEA

Similarly as for the trust , there is an research methodology to identify the potential financial transactions for schools, hotels and I.T. companies visited by me as follows

Research methodology [schools]

1) application / admission time fees

2) standard wise fee structure

3) number of students

4) fees collections mode [cash/cheque]

5) fee collections schedule

[monthly/quarterly/semi-annually/annually]

6) fees collections/year

7) present bankers

8) services provided by the bankers

9) does bank provide fees collection directly into

bank dedicated branch

10) Does bank provide cash pick up facility

11) Does bank provide them Salary accounts

for the teachers


Research methodology [hotels]

1) collections available from [ banquets, restaurants,

rooms]

2) average collections in [cash/cheque/credit] in ratios

3) present bankers

4) payments against procurements

5) procurement of material [vegetable/

sheets/curtains/flowers.. etc]

6) other supplier payment options [ monthly/as on

delivery]

7) vendor payments [cash/cheque]

8) EDC machine for credit cards at all places in hotel

9) Charges for machine

10) Loans taken earlier/ or an on going loans

11) Number of employees/ mode of salary payments


Research methodology [i.t companies]

1) company involved in [software

development/software solutions/ hardware]

2) outsourcing software [yes/no]

3) how they handle collection/payments

4) present bankers

5) serviced provided and charges incurred by bankers

6) do they avail net banking facility

7) do they avail E*NET transfer facility

8) do they use CMS service

9) Swift – telex transfers

10) Mode of salary payments


Co-operative societies

Registration of Co-operative societies under the Act 1961 has given the HDFC bank permission to do banking transactions with Co-operative societies (except weak societies).

The Gujarat Co-operative Societies Act, 1961 has passed the notifications as below in form of synopsis :

i) Funds and their investment : A Co-operative society may keep the following funds in accordance with the provisions of this Act :

(i) Reserve Fund; (ii) Co-0perative Education and Training Fund; (iii) Fund to meet out losses;(iv) Fund to pay dividend to members;(v) Fund to pay incentives to members;(vi) Special Fund;(vii) Fund to pay donations or for causes dedicated

to public purposes.(viii) Bonus to employees fund.

By a Notification, the Government of Gujarat accorded permission to all the co-operative Banks (except weak co-operative Banks) of the Gujarat State to invest their surplus funds in the following Banks :

1) ICICI Bank Ltd.,2) HDFC Bank Ltd.,3) Indus Ind Bank;4) Development Credit Bank Ltd.

Where the society may invest the funds :


“The Registrar may with the approval of the State Co-operative Council permit the societies to invest their funds in the (1) Government Savings Bank of the Government of India, (2) Securities specified in section 20 of the Indian Trust Act, 1882, including Government Securities with the State Bank of India, or the Reserve Bank of India, (3) Nationalized Bank or person carrying on the business of banking approved by the Government, (4) Shares or securities of co-operative societies”.

Research methodology [Co-op. societies]

1) type of an co-op society [employee credit co-op

soc/housing co-op/agriculture co-op soc]

2) number of members of the society [ employees of

the company ‘s]

3) members mostly have account with which bank

4) present bankers of the society

5) monthly transactions of the bank

6) corpus funds

7) do they at-par cheque book facility

8) Dividend payment mode to the member monthly and

approximately amount

9) Investment [Fixed deposits, mutual funds,

government securities, public sector bonds]


10) Loans payment to the members as per

requirement.

CASH MANAGEMENT SERVICES

As studied in the introduction section of employees credit co-op society. I would like to clarify the best offering of the bank for both trusts and societies i.e., explained in detail as below

While matching up the potential and as per the requirement of the society and use of CMS feature , the bank offers them as means of proposal letter. Some of its parts and the advantages of CMS products are explained

The bank is pleased to outline the cash management services that we will be in a position to offer to your organization.

Presently the bank operate through a network of branch spread across over 200 locations and proposing to open up in 40 more cities in the near future. This wide network of branches allows to give you the benefit of extremely low costs of fund transfers at more locations as compared to other banks.

All branches of bank are on – line connected and you can operate your account from the branch location convenient to you. In addition to faster access to funds, CMS provides you with MIS, which will help improve your reconciliation.

The bank provide Internet based solutions to handle the Cash Management requirements and give value-based services to corporate like you.


This combination of cost savings and HDFC Bank’s considerable expertise in this business would make our Bank the ideal choice for your cash management requirements.


Cash Management

Services- PaymentWe understand your world


BY ORDER OF

Bajaj allianz general insurance co. Ltd

GE plaza, airport road,YerwadaPune - 411006

MAIL TO Cosmo films limited

Bajaj allianz General insuranceGround floor, ashoka plazaNext to weikfield companyPune 411014

A/c no 009845367000089

Rs. ****10,000.00

55

PAYMENT ADVICE Date : 12/06/2007 Reference : 1511801

Dear Sir/Madam,

HDFC Bank has attached a cheque 40812 in the amount or Rs. 10,000 payable to yourself as instructed by BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD.

Payment description : OC-07-1002-8207-00001927 B 14/9 , MIDC VALUJ, INDUSTRIAL AREA, BAJAJ NAGAR, AURANGABAD – 431136

Total : 10,000.00

PAY ---------COSMO FILMS LTD ----------------------------------------OR ORDERRUPEES ---------TEN THOUSAND ONLY------------------------------------------

For Bajaj allianz General insurance company LtdHDFC BANK LTDNetrali Apts, Opp bhandarkar InstLaw college road, pune – 411 004 Authorised signatory

--------

CMS Collection Products at HDFC Bank:

Local Cheque Collections

SPEED: Under this product your company deposits a local cheque drawn on the respective HDFC Bank location, the same is locally cleared and credit is passed onto the client into his central account with the bank.

E.g.: A Cheque drawn on Delhi Deposited at Delhi (Irrespective of where the central pooling account is- the pooling account can be at any HDFC Bank Location).

RAPID: This product is similar to Speed, it provides the same facility, but at designated locations of our correspondent bank. The total funds collected will be credited to the central account with HDFC Bank. This product is available at about 180 of correspondent bank locations (list attached).Eg: A cheque drawn on Baramati (Non HDFC Bank, Correspondent Bank location) Deposited with the Coordinator at Baramati, the same is locally cleared and credit is passed onto the client into his central account with the bank.

HDFCTRF: Under this product your company deposits a cheque drawn on HDFC Bank at any location, the same gets cleared through internal funds transfer and credit is passed onto the client into his central pooling account with the Bank.Eg: A cheque drawn on HDFC Bank Delhi branch is presented locally for credit to your account with HDFC Bank in Mumbai, the funds get transferred and credited into your Mumbai account.

Upcountry Cheque Collections

SPRINT: Under this product cheques drawn on one HDFC Bank locations are deposited at another HDFC Bank location. The cheques are sent for collection to the respective location and a central account held with the Bank is credited with the total funds collected.


EXPRESS: This product is similar to Sprint, it provides the same facility covering over 4000 locations of our correspondent bank which can be utilized for upcountry cheque collection facility. The total funds collected will be credited to the central account. The day of credit depends on the arrangement with the correspondent bank.

CLEAN: This product is for cheques drawn on locations where we don’t even have a correspondent bank and instrument is drawn on these locations. The day of credit is on clear funds basis.


CMS Process Flow:

-Client can open only one corporate current account with HDFC Bank. Society can also use the existing corporate current account with the Bank for this CMS facility.

-A CMS Client code is provided to your company at the time of setup. All the deposits in the CMS account are to be made with reference to this unique client code. All the cheques can be collected from the designated client’s office through a courier service.

-If the courier facility is not availed, the cheques are to be deposited with the designated HDFC Bank branch or a coordinator along with a specific CMS deposit slip for that product before the cutoff time.

-Daily MIS is provided with the collections in the account for that particular day in a soft copy at the Email IDs given at setup by the client. We can customise the MIS in the format as desired by your company.

-E-Net viewing : Under this facility you can view all the details that are required. The details are provided under 2 heads : -The Account Viewing where you can see the account statement,

balance, etc.-The CMS module where you can view the deposits on that day, the day of credit

for these cheques.

CASH MANAGEMENT SERVICES -- Collections

PRODUCT FEATURES

CMS offers you the facility of clearing of local / outstation instruments favoring your organisation deposited at our various branch locations with pooling of funds at Mumbai on very competitive terms. CMS does not require opening of Current Account / Collection Account at any of the centers. CMS eliminates the inherent delays of a traditional funds transfer mechanism. CMS enhances liquidity and ensures optimum planning and utilization of funds. In addition to faster access to funds, CMS provides you with MIS, which will help improve your reconciliation.


LOCAL CHEQUES & FUNDS TRANSFER –

Product

Business locations

Funds flow mechanismService charges

Speed

High value

DAY 0 – Instruments deposited at the respective locations before 10 : 30 a. m

DAY 1 - Funds pooled at Mumbai** by credit to your account with our Bank for deposits made Non

high value

DAY 0 – Instruments deposited at the respective locations before 01: 30 p. m.

DAY 2 - Funds pooled at Mumbai** by credit to your account with our Bank for deposits made at the locations.

Rapid

( Co-orinators )

Local chqs collection at Corr

Day 0 - Instruments deposited at any of non HDFC Bank locations before


bank Location

the prescribed cut-off time.

Day 4 - Funds pooled at Mumbai** by credit to your account with our Bank.

OUTSTATION CHEQUES & FUNDS TRANSFER –

PRODUCT BUSINESS LOCATIONS

FUNDS FLOW MECHANISM SERVICE CHARGES

Sprint HDFC Bank locations for outstation cheques collection

DAY 0 – Instruments drawn on these locations but deposited at Mumbai before the prescribed cut-off time for clearing.

DAY 5 – Funds pooled at Mumbai** by credit to your account with our Bank.

Express

(Correspondent Banks)

Non HDFC Bank locations- Corr bank location for outstation chqs collection

DAY 0 – Instruments deposited at the respective locations before the prescribed cut-off time for clearing.

DAY 12 – Funds pooled at Mumbai** by credit to your account with our Bank

Clean Collection

Non HDFC Bank and Non Express location

DAY 0 – Instruments deposited at the respective locations before the prescribed cut-off time for clearing.

Clear Funds – Funds pooled at Mumbai** by credit to your account with our Bank


HBTRF HDFC Bank cheques

DAY 0 – Instruments deposited at the respective locations before 10 : 30 a. m

DAY 1 - Funds pooled at Mumbai** by credit to your account with our Bank for deposits made at the locations.

PAYMENT CHEQUES:

RTGS : Funds can be transferred to Non HDFC banks across the

country having RTGS code getting credit on same day

towards which charges of Rs.25/- per transaction applies.

E-Net : [ Viewing & Paying ]

With viewing facility Accounts can be viewed. For paying either through cheques/DD/payorders.

Charges of Rs 3/- per instrument will apply.

Funds can be made available by issue of High Value pay orders favoring your consortium Bank account.

OTHER CHARGES:

1) Rs.100/- flat per return instrument PLUS interest at our prevailing PLR for the period our Bank is out of funds on account of such instruments.


2) Courier can be organized on behalf of the company for picking up the checks from your branches at Rs.400/- per pick-up location per month.

3)Courier charges of Rs.25/- per packet per location per day for Express and Sprint products.

4)The bank will reverse the entries after 30 days from the day the credit was given as per the arrangement, for cheques returned unpaid.

5)Interest @ PLR per annum will be charged for Express products from the next calendar day from the day of credit arrangement.

VALUE ADDITIONS:

1) Daily report on location wise collections/returns.2) Monthly report on total collections and service charges. 3)Monthly report on total payouts and service charges. 4)Enet facility to check / validate cheque collection across location

at one central place through deposit and instrument query.5)Any additional report, in mutual consultation which the company

may be requiring from time to time.

DOCUMENTATION:

1) The company to execute an Application-cum-Agreement / Fax indemnity.2) To provide a board resolution for availing the Cash Management Services from our Bank.3) To provide a list of signatories who are authorized to give instructions to the bank for operating the services.

OTHER TERMS:

1) The above services are demand facilities, subject to our ongoing review and the terms, conditions, pricing etc. may be modified or services recalled without notice at the banks absolute discretion.

2) The process flow is exclusive of intervening bank holidays for clearing purposes.

3) There is no high value clearing on Saturdays, hence the process flow will change accordingly. 4)Sundays & other bank holidays have been excluded for the

purpose of calculation of the above referred days.

DEMAT ACCOUNT

What is Dematerialisation ?


The process of converting the shares from the physical

form to electronic form.

Shares are held in electronic form as an account balance

and have no distinct characters like DNR, CERT, FOLIO NO.

Physical certificates cease to exist.

NEED FOR DEMAT

Reduction in huge volumes of paper and doing away with the

evils associated with paper.

Faster settlement cycles.

SEBI has made it mandatory for all investors to trade only in

the demat form for 2,221 companies.

DEMAT PROCESS


R&T AGENT/ COMPANY

Process the shares and gives credit thru NSDL

FLOW OF SHARES

Shares received at the counter

Shares received from the Branches


NSDLForwards e request. to

R&TIntimates

credit to DP HDFC BANK

Processes & forwards to NSDL/Company / R&T

64

INVESTORGives the shares

with a DRF

Shares are checked and a acknowledgement given.

Shares counted and checked

Receipt date, stamped on the DRF

Receipt marked on the system - HO Receipt.

Entry authorised - Scram Authorisation

Entry authorized on the system before export - HO Authorization.

Despatch marked on the system - Branch Despatch

Export & Import of data from debos server to DPM and vice versa.

MERITS OF DEMAT DEMERITS OF PHYSICALS

I Eliminates Bad-Deliveries. I Lots of bad

deliveries II Effects Transfer of Secur II usually two taken for transfer ities immediately.III No stamp duty for transfer III Stamp duty of 0.5% applicable of shares.IV No handling of huge paper IV Lots of paper like cert., T/D, volumes. (Paperless trading) photocopies, etcV Eliminates risks associated with V Highly,unsafe , prone to a lot of physical certificates like loss, evils associated with paper theft, mutilation, forgery, etc.VI Reduces transaction costs VI higher brokerage and transactVII Moving towards faster & smoother ion cost settlement cycles. VII longer settlement cycle usualyVIII Facilitates easy Lending & borrow take 15 days for payment ing on Securities as it eliminates VIII bank reluctant to bank & int paper related risks. Erest rates are are high due unsafe nature of p


CO-OPERATIVE BANKS

In the past, there was restrictions for all the co-operative banks to open their account only with the respective district co-operative banks. As the district co-operative banks of Gujarat shown as per below.But as due to new regulations and number of co-operative banks going on default, it was by notification of Government of Gujarat accorded permission to all co-operative bank (except weak co-operative banks) to do banking transactions with schedule banks including HDFC bank.

Description of CBLO Product

Collateralised Borrowing and lending obligations (CBLO) is a unique money market instrument offering the possibility of operating in the Indian money markets through an anonymous electronic screen based order mat5ching platform. Basically a repo variant, it enhances its usefulness through its tradability features and ability to unwind positions relatively swifts thus overcoming the limitations of the traditional repo product.

The extension of coverage of this product to include entities who do not maintain their current accounts and SGL Accounts with Reserve Bank of India provides an ideal opportunity to such entities to directly manage their liquidity by anonymously interfacing with a liquid and efficient platform without seeking the intermediation of another wholesale intermediary. In doing so, CBLO seeks to further the process of financial disintermediation by affording an opportunity for all eligible market participants to operate seamlessly on a level playing field.

Its efficient price discovery mechanism, increased operational efficiency enhanced transparency and vibrant liquidity has ensured


that CBLO rates today serve as a benchmark for rates in other money market instruments such as call & Notice money and Repo markets. Consequently, CBLO has been very well received and accepted by the wholesale financial market players reposing the confidence of a similar response from the other market players also to whom the coverage is now being extended through an internet based front end.

Research methodology [Co-op. banks (for cblo)]

1) main requirements for using the product CBLO by Co-

op bank

I NPA (non performing assets) of the bank should

less than 10%

II Grade rating by RBI must be CLASS A

III Audit rating must be A

IV Bank must be profit making since last 3 year


2) do they have surplus government securities to invest

in daily call money market

3) do they have broadband internet facility

The salient features of the system are outlined as below:

BENEFITS TO MEMBERS

ORDER DRIVEN The System operates on a strict yield/time priority. Orders are matched automatically keeping the system transparent, objective and fair.

ANONYMOUS It provides full anonymity by accepting orders big or small from members without revealing their identity, thus improving the depth and liquidity of the market and at the same time providing equal access to everybody. CCIL is the central counter party for all trades concluded on the dealing system.

REAL-TIME INFORMATION The dealing system facilitates faster and complete real time dissemination of market information which


is very crucial for prudent decision making. Detailed information on the total order depth in a CBLO the best buys and sells available in the market, the quantity traded in a security, the high, the low and the last traded prices areavailable through the various market inquiry screens at real time resulting in increased transparency.

STRAIGHT THROUGH PROCESSING The system provides STP enabled environment viz., seamless integration of the different parts of the dealing processes, starting from displaying pretrade information to clearing and including settlement and risk management. Trades done on the systems are treated as confirmed.

SETTLEMENT OF TRADES The funds settlement of all trades concluded on the dealing system shall take place at the respective settlement banks.

LOWER OPERATIONAL COST The dealing system is expected to significantly reduce transactions costs currently associated with the telephone market.

ORDER MATCHING PRINCIPLE

Dealing on the system is based on a market model where orders are entered into a central order book. During continous trading, orders entered into the system are executed against the best available bid or offer rates. A time-stamp is used to prioritize orders with the same yields (yield-time priority principle). An automatically updated order book that is visible to all participants ensures trading transparency. Aggregated volumes are shown for the five best bid and offer quotes. Time condition can be “ Good-till-day” which are automatically deleted by the system after the close of session or ‘immediate or cancel’ which are deleted by the system on failure of a match. Market participants can also specify quantity conditions like ‘All or None’ or ‘Disclosed Quantity’.

FEATURES

The system has been built on proven screen based dealing technology and is designed to meet dealer requirement in a fast moving market. Some of the main features are :

TRADING PARAMETERSThe system currently supports outright dealing in CBLOs for various maturities for a T+0 or T+1 settlement. The session timings are 9.00 a.m. to12.30 p.m. for T+0 trades and 9.00 a.m. to 5.30 p.m. for T+1 trades on weekdays an 9.00 am to 10.30 am for T+0 trades and 9.00 am to 2.00 pm for T+1 trades on Saturday.

ORDER MANAGEMENT


The dealing system enables a dealer to place a bid or offer, modify outstanding orders, cancelall outstanding orders in a particular instrument or cancel all outstanding orders across instruments. The system supports special order conditions like :

1) QUANTITY CONDITIONS

a) All or None (AON) A dealer can specify that all of the order amount should be traded in full i.e., no partial amount trades, should be allowed.

b) Disclosed Quantity (DQ) Disclosed quantity is the part of order amount which the dealer is willing to disclose to the market. A minimum disclosed amount of 25% is mandatory for DQ orders.

2) TIME CONDITIONS

a) Immediate or Cancel (IOC) If an IOC condition is selected, the ord-er is removed from the system immediately. If it finds a partial match, the remaining quantity is removed from the system.

b) Day In day condition, the order remains in the system till it is Cancelled or till end of session for (T+0 trades) and end of day for (T+1) trades when it is automatically cancelled by the system.

MARKET QUERY

MARKET WATCH – The market watch screen allows a dealer to continuously track all the CBLOs in the market. Information such as the best bid yield, best offer yield, last traded yield, last traded quantity and total traded quantity for a particular instrument are available on a real time basis to the dealer. The market watch allowseasy navigation to other market query screens like market inquiry, market by yield, market by order and dealer query screens like outstanding orders and previous trades.

TICKER – The online ticker (separate for T+0 and T+1 settlement) displays the instrument description, traded yield, traded time and settlement type of each CBLO instrument. The tickers change colors indicating market movements (green if price moves up, red if price moves down and white if there is no change).

MARKET BY YIELD (MBY) AND MARKET BY ORDER(MBO) MBY shows the best five bids and offer sorted by yield. Orders at the same yield are aggregated. MBO shows the best five individual bids and offer sorted time priority wise.


MARKET OUTSTANDING ORDERS(MOO) – MOO displays the CBLO instruments against which orders are outstanding in the market. MOO screen also facilitates members to navigate to MBY or MBO screen for the selected CBLO. The system also has a snap quote facility which enables a dealer to track instruments not specified in his market watch.

DEALER QUERY

OUTSTANDING ORDER An outstanding order is an order remaining unmatched either fully or partially. The outstanding order screen enables a dealer to view outstanding offers/bids for a particular CBLO and to modify or cancel orders if required. The all outstanding order screen gives the dealer the facility to look at all his outstanding orders across instruments at one go.

PREVIOUS TRADES The dealer can view details of trades executed for a selected security. Information is available on real time. The dealer has the facility to reprint deal tickets from this screen.

ACTIVITY LOG The screen displays all activities associated with an order like placed/modified/cancelled/traded fully or partially.

DEAL TICKET Every time when order is matched, a deal ticket gets automatically printed.

YIELD CALCULATORThe yield Calculator facilitates pre-order analysis by dealers for instruments available for dealing. The yield (annualized) is calculated based on the maturity date or CBLO ID and the price as indicated by the dealer.

PRICE CALCULATORThe price calculator computes the discounted price per Rs. 100 for the selected maturity date or CBLO ID and for the given yield.

FACE VALUE CALCULATORThe face value calculator computes the face value of the order quantity for the selected maturity date or CBLO ID, consideration amount (discounted) and for the given yield.

USER FRIENDLY FEATURESThe system provides for easy navigation to various dealer and market query screens. T+0 and T+1 contract are displayed in different colors for better visibility.


NOTIFICATION MESSAGE WINDOWThe notification message window enables a dealer to view the status of his order placed, modified, cancelled, rejected and trades executed.

INTERFACE WITH DEALER’S SYSTEMThe dealing system automatically generates flat files (.CSV files) for deal tickets, previous trades and activity log. These files can be used for inputs into member’s treasury software thus avoiding manual input of data.

Eligibility

The Members are required to open Constituent SGL (CSGL) Account with CCIL for depositing securities which are offered as collateral / margin for borrowing and lending of funds.

Associate Members are also required to open a current account with a Settlement Bank designated by CCIL for settlement of funds.

Eligible securities are Central Government securities including Treasury Bills.

Borrowing Limit and Initial Margin

Borrowing limit for the members is fixed everyday after marking to market and applying appropriate hair-cuts on the securities deposited in the CSGL account Initial Margin of Rs 1,00,000 needs to be compulsorily in cash after which G – Secs can be provided as the collateralAll borrowers would require to place a margin amounting 100.5 % of the total amount borrowedAll lenders need to place a margin of 0.5% of the total amount lent.

Normal Market

The Normal market can be accessed for borrowing funds to the extent of their available borrowing limit, besides members can sell CBLOs held by them to meet their funds requirement instead of waiting till maturity


Members intending to sell CBLOs (borrow funds) place their offers directly on the market watch screen indicating the amount and rate for a specific CBLO The matching of bids and offers takes place on Best Yield – Time Priority basis. Market timing range from 9:00 A.M. to 12:00 noon on a weekday & 9:00 A.M. to 10:30 A.M. on a weekend

Settlement Procedure

The net fund obligation for non-NDS members in respect of their deals in the Normal market is sent electronically to the respective Settlement Banks by 12:30 for effecting debits and credits in the members’ Current accounts through the settlement account

For Lenders & Repayment by Borrowers:

All members should ensure that funds to the extent of their obligations are available in their current account before 12:30 with HDFC Bank on the day of Trade

For Borrowers & Repayment to Lenders:

Funds are credited to the respective beneficiary’s account by 1:00 p.m.

Default handling:

Shortfall in funds can take place when the members fail to meet funds obligation as lenders, and borrowers unable to redeem CBLOs on maturityIn such cases, CCIL meets the shortage by utilising the lines of credit extended by the member banks / Settlement Banks and complete the settlement.In case of eventual default, CCIL liquidates the underlying securities/CBLOs and adjust the proceeds towards the shortfall and other charges. 5 basis point per day on the amount of shortage/default shall be charged by CCIL till the shortage/default is fully met; (Minimum charges would be Rs. 100/-)

Fees and Charges

CCIL :A one time membership fee of Rs.50, 000/- shall be payable Rs. 10/- per crore of face value per deal per Member subject to minimum of Rs. 10/- and a maximum of Rs. 1000/- per deal


for each member to be charged on the value date of each trade.

HDFC Bank:A one time membership fee of Rs.10, 000/- shall be payableRs. 25/- per crore of face value per deal per Member

Advantages

Market Rate of interest which is comparable to the call money and repo market.Easier and cost effective means of borrowingSmall lot size i.e. a minimum of Rs. 5 lacs widens the platform to even smaller Co operative BankMinimal risk of default on the part of borrowerFunds can be lent for very short durations even for a day

CRR & SLR:

CRR: In order to develop CBLO as a money market instrument, it has been decided to give a special exemption from CRR for transactions in CBLO subject to the bank maintaining minimum CRR of 3 per cent.SLR: Securities lodged in the Gilt Account of the bank maintained with CCIL under CSGL facility remaining unencumbered at the end of any day will be reckoned for SLR purposes. CCIL will provide a daily statement to banks/RBI listing the securities lodged/utilized/remaining unencumbered.

Documentation

With ccil:

Step 1: download the application form from ccilindia.com


Along with the application, a cheque of Rs. 50,000 needs to be submitted

Step 2: A letter of Approval is given by CCIL which has the format of POA & Indemnity Bond. These need to be signed & submitted.Step 3: A letter of membership is given by CCIL. This needs to be acknowledged & the initial cash margin of Rs. 1,00,000 needs to be given to CCIL by way of Fund Transfer.

DocumentationWith HDFC Bank:

Open a Settlement account which shall be a no frill accountSign the Service Level AgreementSign the Debit MandateSign the Charges Letter

CBLO membership procedure

As we studied the co-operative will require to operate through directly to CCIL and the bank will remain as the settlement bank.CBLO is a discounted instrument available in electronic book entry form for the maturity period ranging from one day to ninety Days (can be made available up to one year as per RBI guidelines).


In order to enable the market participants to borrow and lend funds, CCIL provides the Dealing System through Indian Financial Network (INFINET), a closed user group to the Members of the Negotiated Dealing System (NDS) who maintain Current account with RBI and through Internet for other entities who do not maintain Current account with RBI.

For the other group of entities using the internet, HDFC Bank can act as a settlement Bank. For this purpose, it would be essential for your company to do the following :-

# Make an application to CCIL for membership through HDFC bank.

The application form shall be available on the website www.ccilindia.com

# After the submission of the above mentioned documents, CCIL shall confirm to your company whether or not its application has been accepted. If accepted, a board resolution, membership fees & other relevant documents will have to be submitted to them. A format of a board resolution is attached for your reference.

# Simultaneously, your company would also need to do the following :-

Open a seperate settlement current account with HDFC Bank for which account opening form & relevant documents can be submitted

Sign a service level agreement with HDFC Bank (copy attached)

Sign a debit mandate in favour of CCIL (copy attached)

Sign an acceptance letter for charges (once we have been finalised as your settlement bank !)

# Your account with CCIL shall now be opened. You have to place the required amount of security with CCIL so that your trading limits are set up

# CCIL shall then arrange to install the required software on your system via NSE-IT. A proper demonstration of the entire trading procedure on your system shall now take place.

# Once you start trading, You can either be a Lender or a Borrower

# In case you are a Lender, you need to ensure that the requisite amount is credited in your Settlement A/C( which you have opened with our Bank) by 12:00 noon. This can be done by way of RTGS or by Funds Transfer (in case you have an existing HDFC Bank A/C)


# In case you are a Borrower, your Settlement A/C will be Credited by CCIL by 1:00 p.m. You can then transfer this amount to your normal banking a/c either by way of RTGS or Funds Transfer(in case you have an existing a/c with HDFC Bank).

The charges for the purpose of CBLO with HDFC Bank acting as your settlement Bank are as under.

Upfront One Time charge of Rs.10000/- Transaction charge of Rs. 25/- per Crore.

THE CLEARING CORPORATION OF INDIA LIMITED

NOTIFICATION

CBLO Segment

No. RMD/CBLO/ES&H/06/18 12-Jul-2007

Eligible Securities for Collateral Deposits for Borrowing Limit & Haircut Rates

.ISIN No. Security Coupon Maturity Date HaircutIN0020060102 8.40% GOI SB 2026 8.40 29-Mar-26 25.00IN0020060095 8.15% GOI SB 2022 8.15 16-Oct-22 25.00IN0020020189 6% GOI BONDS 2010 6.00 14-Jan-10 25.00IN0020020239 6.4% UTI SEC 2010 6.40 28-Mar-10 25.00IN0020050053 7.47% GOI BOND 2012 7.47 7-Mar-12 25.00Sd/- (Risk Management)Also, it has been decided to change the haircut rates of certain Eligible Securities with effect from 20-Jul-2007.

Government of India SecuritiesBased on a quarterly review of the list of Eligible Securities and their haircut rates, it has been decided to include first 2 securities as eligible securities for deposit as collateral with effect from 20th July '07.Also, it has been decided to exclude next 3 securities as eligible securities for deposit as collateral with effect from 20th July '07.


TRADE FINANCE SERVICES

Co-operative banks can avail of the following services:

Collection of Export Bills

HDFC Bank handles collection of export bills both in Foreign Currency and Indian Rupees. The FEDAI rates plus out of the pocket expenses form the basis of the pricing. Commission sharing depends mainly on the volume and value of transactions.

Import Collection Documents

The bank can process import collection documents of the client bank's customers. The commission applicable to these transactions will be as prescribed by FEDAI and can be shared on a mutually agreed basis.

Collection of Foreign Currency Instruments

We have strong tie-ups with some of the leading overseas banks which enable us to handle collection of cheques / Drafts / TCs / Money Orders of different currencies drawn on various countries which in turn provides faster realisation of the instruments.

The pricing will be as per the FEDAI rules. The above credits are with recourse to the client's account. Any cheque returned subsequent to the above credit period, will be recovered by way of a debit to the client's account maintained with us at the prevailing exchange rate. An additional cheque return charge of Rs. 100/- will also be levied.

Foreign Inward Remittances

Customer remittances can be effected through our various correspondent banks which can be converted into INR with direct credit to the account. The bank has an arrangement to receive online balances from our correspondent banks overseas which enable us to provide immediate credit to our client's accounts


CONCLUSION:

Working with the bank was an enriching experience to learn each day and each day was a learning expertise in itself. Like all, I had a lot of expectations from summer project, I am glad to say that I truly benefited from it.

Visiting a list of charitable trusts, NGOs and societies gave full exposure in the field of banking by learning the financial transactions of the various organizations visited.Also it was a learning of tools and techniques for research methodology and evaluate the questionnaire in form of providing good product offering to the organizations.

I was able to apply concepts, tools and techniques studied in the first year of MBA. It was learning and deep understanding of concepts and procedure followed in real time like right issues, IPOs handling , their collections and refund done through banks.

Various facilities given by bank to trusts, societies and co-operative bank in form of account opening , investments, collections and payments. Some of the products like CMS, ‘at par’ cheques, bulk DD’s printing, courier pick-up, govt securities , RBI bonds , etc.


BIBLOGRAPHY:

1.www.ccilindia.com

2.www.mha.nic.in

3.www.sebi.gov.in

4. banking manual of HDFC bank

5.www.google.com/district co-operative

banks

6. user guide envelopes

7. www.hdfcbank.comMBA Summer Training Report80

http://www.google.com/district