INTRODUCTION

The HSBC group is one of the largest banking and financial

services organisation in the world. The group has around 10,000 offices in

82 countries and territories in Europe, Asia pacific region, Americas the

middle east and Africa, serves over 125 million customers has assets of US $

1.861 billion. HSBC Rank’s fifth largest as a company in Forbes Global

2000; it also has the distinction of being one of the leading companies in

banking. HSBC headquarters is located in the London's Canary Wharf on the

HSBC tower. The founding member of HSBC is The Hongkong and

Shanghai Banking Corporation, which was established by Thomas

Sutherland, a Scot, in 1865.

HSBC origins in India date back to 1853, when the mercantile

bank of India was established in Mumbai. The bank has since steadily grown

in reach and services offerings, keeping pace with the evolving banking and

financial needs of its customers.

In India the bank offers a comprehensive suite of world class

product and services to its corporate and commercial banking clients as also

to a fast growing personal banking customer base.

HSBC has a history of helping millions of customers globally to

meet their financial goals. They have understood the importance and

functioning of different markets through their experience in international

trade. As a result, HSBC has grown into a company or banking institution

that has the deepest respect for different cultures and people connected to

these cultures. Their motto is to look at their customers as individuals and

strive towards providing them with a personalized service that will fit each

of their specific needs.

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COMPANY HISTORY

A GLOBAL PEDIGREE

HSBC Investments draws upon a long history of serving clients

of the HSBC Group, tracing its roots back to the foundation of the

Hongkong and Shanghai Banking Corporation in 1865. The HSBC Group

has identified asset management as a key constituent of the HSBC Group’s

wealth management strategy and at HSBC Investments; we have been

dedicated to managing assets on behalf of our clients for more than 30 years.

In 1994 the HSBC Group recognised the increasingly global nature of

financial markets, would create the need for a credible global asset

management organisation to ensure delivery of the best possible solutions

for clients. In response, the separate regional asset management businesses

of HSBC were unified to create a single powerful investment manager aimed

at delivering global investment capabilities combined with significant local

expertise.

In 2001, following the integration of CCF and its investment

businesses into HSBC, a new global strategy was launched for asset

management. The strategy aimed to create a core proprietary global

investment management business – HSBC Asset Management, operating

alongside a series of Specialist investment businesses, namely: Sinopia for

quantitative and structured products, HSBC Specialist Investments for

property and infrastructure investments, and HSBC Multimanager for best-

in-class ‘open architecture’ investments and HSBC Alternative Investments

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for single-manager hedge fund strategies. More recently, in 2004, following

a strong period of growth in HSBC’s investment businesses, a new strategy

was announced for the investment businesses of HSBC. The strategy is

intended to position HSBC for market leadership in the provision of

investment solutions that meet client needs and involved a reorganisation of

HSBC’s investment businesses including HSBC Asset Management and

HSBC Investment Management, leading to the creation of: HSBC

Investments.

A CONCISE HISTORY

1973 HSBC forms Hong Kong based Wardley as a wholly owned

merchant banking subsidiary.

1986 The European arm of HSBC Asset Management is conceived with

the purchase of James Capel, a leading and well established

international securities company.

The addition of New York based Marinvest establishes the US arm

of HSBC Asset Management.

1992 Consolidation in Europe with the acquisition of the Midland Bank

Group.

1994 Regional companies are brought together under the name HSBC

Asset Management, a single investment manager offering global

investment capability combined with significant local expertise.

2000 HSBC Group purchases CCF Bank, France Capital Management in

Paris joins HSBC Asset Management.

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2001 The market for asset management solutions has grown rapidly and

investors’ requirements have become ever more sophisticated. In

response to this, the asset management business of HSBC was re-

organised at the end of 2001 to provide a full range of sophisticated

services under the name Asset Management Services, comprising

the core business, HSBC Asset Management and several specialist

companies offering complementary investment management

services.HSBC Asset Management completed its acquisition of

China Securities Investment Trust Corporation, Taiwan's premier

asset management company, in August.HSBC Asset Management

(India) Private Limited is incorporated in December 2001.

2002 New investment and marketing office established in India. Co-

operation with HSBC Trinkaus Capital Management and its parent

HSBC Trinkaus & Burkhardt.HSBC Asset Management (India)

Private Limited, the Investment Manager to HSBC Mutual Fund

launches its first four schemes in December 2002.

2003 Integration of Bital's fund management business in Mexico

following its purchase by HSBC.

2004 Integration and development of investment management activity in

Bermuda following the acquisition of Bank of Bermuda.

On 1st December HSBC announces a reorganisation of its

investment management businesses as part of a new strategy

designed to drive further growth.

2005 HSBC Asset Management is replaced by HSBC Investments and

HSBC Halbis Partners during 2005

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BOARD OF DIRECTORS

S K Green, Group Chairman

Age 58. An executive Director since 1998; Group Chief Executive from

2003 to May 2006. Joined HSBC in 1982. Chairman of HSBC Bank plc,

HSBC North America Holdings Inc. and HSBC Private Banking Holdings

(Suisse) SA. A Director of HSBC France and the Hongkong and Shanghai

Banking Corporation Limited. Group Treasurer from 1992 to 1998.

Executive Director, Corporate, Investment Banking and Markets from 1998

to 2003. Chairman of the British Bankers' Association.

D J Flint, CBE Group Finance Director

Age 52. Joined HSBC as an executive Director in 1995. Non-executive

Chairman of HSBC Finance Corporation. A non-executive Director of BP

p.l.c. and a member of the Consultative Committee of the Large Business

Advisory Board of HM Revenue & Customs. Chaired the Financial

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Reporting Council's review of the Turnbull Guidance on Internal Control.

Served on the Accounting Standards Board and the Standards Advisory

Council of the International Accounting Standards Board from 2001 to 2004.

A former partner in KPMG.

KG Morgan

Age 61. A non-executive Director since October 2006. A member of the

Remuneration Committee. Non-executive Chairman of SNC-Lavalin Group

Inc. A member of the Board of Trustees of the Fraser Institute and the

Energy Advisory Board of Accenture Limited. A non-executive Director of

HSBC Bank Canada from 1996 to April 2006. Founding President and Chief

Executive Officer of EnCana Corporation until December 2005 and Vice

Chairman from December 2005 to October 2006.

D J Shaw, Adviser to the Board

Age 61. An Adviser to the Board since 1998. . A Director of the Bank of

Bermuda Limited and HSBC Private Banking Holdings (Suisse) SA. A non-

executive Director of Kowloon development Company Limited and Shui On

Land Limited.

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IMPORTANCE AND SIGNIFICANCE OF HSBC

PRODUCTS AND SERVICES

The banking industry has changed from a conventional banking to a new age

modern banking. Now a customer doesn’t walk into a bank just for

depositing the cash or withdrawal. They go to a bank to avail entire financial

planning services ranging from investing into a equity fund to reducing there

tax liability.

HSBC was one of the first bank to understand the ever enhancing need of its

customers, hence HSBC came of with its various products and services

which are focused on providing solutions to there valuable customers.

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Products and Services offered by HSBC

Bank Accounts

Bank accounts can be majorly classified into four categories:

a) SAVINGS ACCOUNT : This account is suited to those who want to

deposit their small savings in bank, which they need to withdraw only

occasionally. The interest rate on savings account is lower than that allowed

on fixed deposits, but higher than that allowed in current accounts. It is

calculated on the lowest balance kept during a month. The rate of interest to

be paid by banks to depositors on saving account is prescribed by the

Reserve Bank of India. At present the rate of interest on savings account is

3.5 %.

HSBC saving accounts make planning for your regular expenses convenient,

accommodating your financial needs when making big purchases or meeting

unexpected expenses.

Savings accounts with HSBC can further be classified into 3 categories:

i) Premier Accounts – Any relationship (one or more customers usually of

the same family) where the cumulative relationship value is Rs. 2.5 million

or more is eligible for ‘Premier’. Premier is a relationship-managed

proposition. All wealth management needs of Premier customers are

serviced by dedicated Premier Relationship Managers, who typically

manage 150-200 such relationships. High-end Premier relationships where

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the cumulative relationship value is Rs. 25 million or more are also referred

to as ‘Private clients’. Private clients are serviced by Senior PRMs, who

typically manage 60-70 such relationships.

ii) Power Vantage Accounts – Any customer whose cumulative deposit

value is Rs. 0.1 million or more is eligible for ‘PowerVantage’.

PowerVantage customers are serviced by PowerVantage Officers for their

banking needs.

iii) Mass-market Accounts – Any customer who is not Premier or

PowerVantage is referred to as ‘Mass-market’. Mass-market customers are

serviced by Customer Services Officers for their banking needs. The

minimum balance required for this account is Rs 25,000.

Key Feature:

1) You can automatically transfer extra savings from your savings account to

a fixed deposit, through a standing instruction, to enable you to earn higher

interest.

2) You are also eligible for a fee waiver on HSBC credit card.

3) Introducing card-to-card transfer facility – a funds transfers service

that enables you to transfer money in an easy, fast convenient and

safe manner using the visa Money Transfer service from visa.

4) HSBC Demat Account services with wavier on account opening charges.

5) Keep track of your account with free quarterly account statements.

6) Free personalized cheques book.

7) Buy mutual fund products offered by select mutual fund houses.

8) Choose from a range of Insurance products offered by TATA AIG.

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9) Manage your account, make transactions, and pay your bills and much

more by taking advantage of HSBC free internet banking facility.

Service Charges

Minimum Average Quarterly Balance (AQB)

Resident Savings Account Rs. 25,000

NRO Savings Account Rs. 10,000

Non-Resident Savings (NRE) Rs. 25,000

Non maintenance of AQB Rs. 750 per quarter

Account not operated for more than 2 years Rs. 150 per quarter

Statement of Accounts each quarter

(mailed to account holders)

Free

Duplicate Statements Rs.150 per statement

Standing Instructions

(out of pocket expenses will apply)

Setting up Free

Amendments Free

Transactions charges

(Charges for drafts/couriers, etc. will be as applicable.)

Free

All transactions Free

Account closure in less than 6 months Rs. 500

b) CURRENT ACCOUNT

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It is usually opened for customers who are into business and requires lot of

transaction to be done. In the case of current accounts the bank incurs the

obligation of paying all cheques drawn against him as long as there is

enough money to the credit of his customer.

The customer is allowed to deposit or withdraw money as and when he likes

no interest is payed on current accounts.

c) FIXED DEPOSITS ACCOUNT

The term fixed deposits means deposits repayable after the expiry of a

certain period. They are also known as time deposits. When it comes to

assured returns choosing the right type of savings scheme makes all the

difference. HSBC fixed deposits lets you make the most of value added

benefits as you create wealth at low risk.

Key Features

1) You can now open a fixed deposit with Rs 10,000 only.

2) Enjoy high rate of returns on your HSBC fixed deposits.

3) Choose from a wide range of tenure as per your convenience.

4) Avail of our special rates for select tenures.

d) DEMAT ACCOUNTS

Manages your securities portfolio at your own convenience. As someone

who is interested in regular trading you need a well resourced account to

match your needs in a dynamic market scenario. As a leading depository

participant, we offer you HSBC Demat accounts, armed with an entire range

of convenience specially designed to make your money work harder.

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Key Features:

1) You can purchase, hold and sell shares in electronic form.

2) Get your holding statement every three months, showing current portfolio

of shares.

3) Avail of a overdraft up to Rs 20, 00,000 available against demat shares

through asset link.

4) As an NRI, you can easily dematerialize your portfolio of shares in India

with HSBC.

5) If you already hold an HSBC current or saving accounts there will be no

account opening charges and no minimum balance requirement for your

demat account.

6) You can save on transaction cost with quick transfers.

7) Say good bye to risk of loss, theft and mutilation of shares.

8) Now, stop worrying about bad deliveries, forgeries and duplicate shares

certificate.

Service Charges

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SERVICE CHARGES

Annual Charges Rs. 750 per annum for

Customer who maintain a

Market Trade/Off Market Trade/

Inter Depository Transaction

Purchase Nil

Sale Upto 10 ISIN sale transactions

per month

per transaction thereafter

Nil; Rs. 100 per ISIN

Custody Fee Nil

Pledge

(a) HSBC

Creation Nil

Closure Nil

Invocation Nil

(b) Third Party

Creation Rs. 50 per instruction

Closure Rs. 50 per instruction

Invocation Rs. 50 per instruction

Dematerialization Nil

Rematerialisation Rs. 100 per certificate

Ad hoc Statements Mailed Abroad Rs. 50 per statement

Ad hoc Statements Rs. 25 per statement

Personalised Delivery Instruction book Nil

HOME LOAN

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Buying a home for the first time can be daunting to any person but in

today’s time bank like HSBC is lending a helping hand to the people to

purchase their dream house. Thus people look forward towards choosing a

home loan. The primary concern of bank is to determine the loan amount

that the borrower is comfortably able to repay. The most popular method of

financing a home purchase is with a mortgage. This is a loan that is secured

over the home. As it easier for you to move in as soon as possible without

putting a strain on your wallet.

Feature and Benefits of Home Loan

1) Loan Requirement –We offer loan ranging from Rs 5 lakhs up to Rs 3

crore.

2) Property types –We offer loans to Resident Indians and NRI’s for ready

property, under construction property, self-construction and home

improvement.

3) Loan tenure –Loans are available for tenure up to 25 years.

4) Repayment options – Choose fixed and floating rate home loans. You

also have the option of switching from a floating rate home loan to a fixed

rate home loan once a year at no extra cost.

5) No penalty option – You can opt to pre-pay up to 25% of your loan

every year. Pre- payment is permitted after a minimum of 6 months

following loan disbursal.

6) Free Gold credit card – On approval of your Home Loan. You get a

Gold credit card, Free for the first year with annual charges being waived.

PERSONAL LOANS

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Never stop chasing your dreams whether it is renovating your home or your

shop, buying a computer for your child, or celebrating a wedding in family.

You can now get a loan for any need.

Feature and Benefits:

1) Personal loans from Rs 10,000 to Rs 50,000.

2) Flexible repayment period between 12 months to 48 months.

3) No guarantor required.

4) Easy documentations and quick disbursal.

5) Easy monthly repayment through equated monthly installments.

Personal Loan can be used for:

1) Home renovation or other home related expenses.

2) Marriage expenses in the family.

3) Education expenses.

4) Medical expenses.

5) Purchasing consumer durables or equipments.

6) Retiring other debts.

7) Any other personal need or contingencies.

CREDIT CARD

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Different people look at our credit cards differently with special money

saving features and time saving services, it could mean the perfect way to

save money for all the precious things you all ways desired or a convenient

way to make time to do more. Get ready to enjoy more. Two major credit

cards that HSBC offers are Gold Card and Classic Card.

Features and Benefits:

1) Cash advance: Get instant access to cash, round the clock, at close to one

million ATM’S world wide.

2) Additional credit cards: Gift your loved ones the freedom of spending

by availing of two or three additional cards.

3) Zero Loss Credit Card Liability Benefit: Credit card holders have zero

lost credit card liability after the loss of the credit card has been reported to

the bank in writing or to the visa / master. Card global emergency assistance

helps lines. However, you will liable for all the charges incurred on your

credit card before you report the loss of credit card.

4) Credit Shield extensions: This feature provides a life insurance cover for

an amount of Rs 40,000 for gold credit card holders with Tata Aig Life

Insurance Co. Ltd in the event of death due to non accidental causes.

5) Global access:

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a) Get a cash advance at close to one million ATM’S in India and overseas

b) Withdraw cash from your HSBC account from any visa plus

or Master card in India or overseas. You can also enquire about your

balance, transfer funds from any HSBC ATM’S in India or overseas.

c) The HSBC visa credit card is accepted at over 18 Million establishments

over 100,000 establishments in India

DEBIT CARDS

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HSBC debit card makes shopping a whole lot more convenient, by enabling

you to do much more than your ATM card. Get electronic access to up to

three HSBC savings /current accounts, wherever and whenever you need the

money. Your card is internationally valid and combines the benefit of

domestic and overseas usage in one card.

Features and benefits :

1) Banking cum Shopping Card: Your HSBC debit card can be used as an

ATM card at any HSBC or visa/plus ATM across the world, as well as for

making purchases at merchant locations. This card is accepted over 3,

20,000 merchants in India. You can also withdraw cash from any of the

20,000 HSBC /visa/plus ATM’S in India.

2) More safety more convenience: Your HSBC card is extremely versatile

and easy to use it. It allows you the convenience of paying for your

purchases directly from your bank account, without having to carry any cash

beside there is no worry of tracking and making payments for bills every

month.

3) Internationally valid and very handy when you are traveling abroad. Get

access to over 1 million ATM’s 14 million merchant establishments,

worldwide.

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4) Widely accepted: Your HSBC debit card is accepted widely in India and

around the world. Just look out for the Visa/Visa electron logo at ATM’s

and merchant establishments.

5) Itemized Billing; Your HSBC debit card allows you to track your

purchases on a regular basis. The details of the purchases made on your card,

long with the date, merchant name and amount are mentioned in your bank

statement.

6) Lost Card Insurance: If your HSBC debit card gets lost or stolen, you

are protected against fraudulent purchase transaction from the moment you

report the loss to HSBC in India or the visa global assistance help lines, if

overseas.

7) Unlimited free ATM transactions at non HSBC Visa ATM’s in India

(Power Vantage and Premier Customers only)

8) Two free ATM transactions at other bank Visa ATM’s in India (debit card

plus customers only)

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INTERNET BANKING

In today’s demanding world you need instant solution for a better life style.

HSBC presenting online@hsbc, HSBC‘s internet banking service that gives

you complete control over your accounts. Now bank from the comfort of

your home or office anywhere, anytime.

Features and Benefits:

1) View your bank account/credit card balances and transaction at your

convenience.

2) Transfer funds online to account with HSBC and other banks in India.

3) Create and manage fixed deposits.

4) Say good bye to queues and miss dates. Pay your credit card and utility

bills and insurance premiums online.

5) Get cashiers orders and demand drafts free.

6) Request for E- Statements for your bank account and credit card.

7) Manage your investments buy, redeem and switch between mutual funds

online.

8) You can also stop cheques, order new cheques books, redeem bonus

rewards points and more.

I) Security Device: The security device, one of the latest technological

innovations from HSBC, takes online security two even higher levels. To

log on to your account on internet banking, you need to enter your existing

user name and password or as usual, followed by the unique security code

generated by the security device. The security device provides you an

enhanced level of security. Since the security device is in your possession

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and the user name and password is known only to you, only you can access

your account online. Simple to use and easy to carry, the security device

ensure you can access your financial information online in a completely

secure environment.

II) Bill Payments: No more bill queues, no more missed due dates, you can

now use HSBC’s convenient and flexible bill payment service to pay your

bills. You can pay your mobile, telephone, gas, electricity bills and

insurance premiums.

III) Mobile Alerts: HSBC introduces mobile alerts a service that allows you

to stay updated on your banking transactions. Just register for your free

mobile alert service to receive SMS alerts for select banking transactions,

SMS reminders for your payment dues dates and term deposits maturity

dates, and even your mini statement.

Features and Benefits:

1) Keep track of your accounts, loans and investments with HSBC even

while you are on the move.

2) Fast, easy and convenient - no need to visit your branch or call customer

service.

3) No more forgetting due dates. Reminder alerts can be scheduled for

payments due dates on your HSBC loans and business overdrafts.

4) You never need to send us an SMS. On your register, mobile alerts will be

sent to you automatically as per your preferences.

5) What’s more, all this comes to you absolutely free.

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VI) PHONE BANKING: Phone Banking is yet another banking service

offered by HSBC under this system, like in ATM card, a secret code number

is provided to each account holder. A customer wanting to know his bank

balance or any other information relating to his account should dial up a

particular phone number indicated by the bank. When the number is dialed,

a recorded voice will ask you to identify yourself with your account number

and code number. If the numbers are tallied, you will get all the information

you want to know about your account. Presently many foreign banks

provide this service. You cannot draw cash or deposit cash through phone

banking. It is basically an information service.

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FOREIGN EXCHANGE

The term foreign exchange may be defined as a means of payment of an

instrument of short – term credits for various countries with different

monetary units, when looked at from the point of view of their purchase or

sale against the national money, or that of their holdings or reserves. It refers

to foreign money which includes notes, cheques, bills of exchange, bank

balances and deposit in foreign currencies. It is often used to denote the

process or system by which the currency of country is converted into that of

another country.

Foreign exchange transaction arises mainly from trade transactions among

residents of different countries. The foreign exchange is the clearing house

through which the purchase and sale of foreign exchange are offset against

each other. The main link between the buyers and sellers of foreign

exchange in the foreign exchange market is the bank

Foreign Facilities for Resident:

1) Foreign exchange up to U$$ 10,000 in any calendar year for tourism or

private travel to any country other than Nepal and Bhutan on the basis of self

–certification. For travel to Nepal and Bhutan Indian currency can be taken

without limit except Indian currency notes of denominations of Rs 500 and

above.

2) Foreign exchange up to U $ $ 100,000 on the basis of self certification.

For students the limit of $ 100,000 is applicable for each academic year. For

medical treatment in addition to U$$ 25,000 can be taken for meeting

boarding/lodging/travel expenses of the patient and also the accompanying

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attendant on self – certification. Amounts in excess of the limits can be

released on basis of documentary evidence of requirement.

INTERNATIONAL CREDIT CARDS

1) Meeting expenses/making purchases while abroad without any limit.

2) Making payment in foreign exchange for purchase of books and other

items through internet.

Resident holding a foreign currency account in India or with a bank

overseas is also free to obtain ICC’s issued by overseas banks and other

reputed agencies.

REMITTANCE FOR MISCELLANEOUS PURPOSES UPTO US$

5000

Remittance can be made upto US$5000 for any miscellaneous purpose with

out that production of any document.

GIFTS AND DONATIONS

Gifts/ Donation can be made to any body upto US$5000 every year per

remitter on self certification.

OTHER CURRENT ACCOUNTS TRANSACTION

Foreign can be freely drawn for all other bonafied current account

transaction (other than those which are restricted or are subject to specified

limits) on production of documentary evidence to the satisfaction of the

authorized dealer.

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SURRENDER OF FOREIGN EXCHANGE ON RETURN

Foreign exchange up to US$2000 in the form of foreign currency notes or

traveller’s cheques (TC’S) can be retained indefinitely for future use.

Amounts in excess of US$ 2000 have to be surrendered to a bank with in 90

days and TC’s with in 80 days of return or credited to RFC [D] account.

Foreign coins can be retained indefinitely without any limit.

RESIDENT FOREIGN CURRENCY ACCOUNT

Resident can open Resident Foreign Currency Account with bank in India

for crediting:

1) Unspent balances after travel abroad.

2) Currency, TC s, bank drafts received as gifts from or for services rendered

to non resident while in India.

3) Foreign exchange earnings received, through banking channel, royalty,

for any service or towards exports of goods.

RFC [D] accounts are NOT interest bearing and there is no ceiling on the

balances that can be built up in these accounts. The balances held in these

accounts can be used for any purpose for which foreign exchange can be

bought from a bank in India.

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THE USERS OF HSBC SERVICES

We find two types of customers using the services of banks, such as general

customers and the industrial customers as given below:

General users: persons having an account in the bank and using the banking

facilities at the term and conditions fixed by a bank are known as general

users of the banking services. Generally they are found to be small sized

customers.

Industrial users: the industrialists, entrepreneurs having an account in the

bank and using the credit facilities and other services for the establishment

and expansion of their business are known as industrial users. Generally they

are found to be large sized.

Prospects: it is also essential to clarify the term, prospects. The general or

industrial prospects do not use the banking services at the present but they

have the potentials to become a customer if induced or motivated in a right

fashion.

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Wealth Management Services

HSBC Investments develops appropriate investment solutions using

investment management expertise from within and outside of the HSBC

Group. Our approach is to present the appropriate combination of investment

capabilities, dependent on the requirements of the client.

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HSBC is able to do this by working in partnership with clients and their

advisers, tailoring solutions to their specific requirements without a bias to

in-house active investment capabilities, drawing on our own investment

capabilities when appropriate and external managers when required:

A full range of investment solutions to meet the needs of clients around

the world

A focus on what is right for the client rather than what we manage in-

house

Multimanagement from our Multimanager team is a core option for

active investments

Investment & Insurance (I&I) Services is a part of the Wealth Management

thrust of the Bank. The various Investment & Insurance products made

available to customers include mutual funds, fixed income securities

(bonds), direct equities and insurance products – the former three are made

available both under advisory as well as non-advisory basis while insurance

products are available only on a non-advisory basis.

Wealth Management Services is spearheaded by the Wealth Management

Unit headed by the Head of Wealth Management who in turn reports into the

Senior Manager Personal Financial Services (SMPFS). The Head of Wealth

Management is assisted by a central team that supports the sales of I&I

products to various customer segments.

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The various units in the central team are:

1. INVESTMENT ADVISORY UNIT

The centralized Investment Advisory Unit (IAU) is responsible for:

a) Maintaining research on investment products. Their views are expected to

be uniformly disseminated to customers by the front office teams.

b) Providing customized investment proposals and advice to advisory

customers. The advice broadly covers equities, mutual funds, debt products

and tax-planning investment alternatives.

c) Maintaining proposal templates for standardized client profiles

ascertained through client responses through the KYC. The IAU updates

these templates for the front offices on a monthly basis – these updates

incorporate relevant changes pertaining to markets, product developments

and product ideas.

d) Maintaining the list of approved and recommended investment products.

The approved funds are reflected in the monthly newsletter Fundamental

that is prepared by IAU.

e) Supporting the wealth management salespeople with sales material and

periodic updates on investment products.

Investment Research and Advisory

The unit significantly draws upon the knowledge and research that resides

within other arms of the Group - mainly HSBC Securities and HSBC

Treasury.

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APPROVED AND RECOMMENDED INVESTMENT PRODUCTS

HSBC does not distribute all mutual fund schemes available in the market.

The Investment Advisory Unit (IAU) tracks suitable schemes and selects

them for distribution after a fairly rigorous due diligence process. These

schemes are then placed on what is commonly referred to as the “white list”

and are open for distribution by Front Office Staff, subject to sales franchise

limits. “White-listed” schemes are also referred to as approved schemes (or

as schemes distributed on an approved basis). Updates on “white list” are

communicated to sales staff and customers through the monthly newsletter

Fundamental

Products classified as ‘recommended funds’ may be recommended to

customers by advisory salespersons (only). The recommended mutual funds

are a subset of the white-listed funds and are identified on the basis of the

scheme level due diligence process on the past performance. In case post

discussions, the customer chooses to invest in non white-listed mutual funds;

the transactions must be categorized as customer-directed transaction. The

recommended equity shares are a part of model portfolio that is maintained

by IAU. The model portfolio also gives an indication of the recommended

relative allocations.

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SALES SUPPORT

IAU is also responsible for the production of sales support products like

market commentaries, event impact notes, equity recommendation notes and

updates, newsletters and model equity portfolios and themes. Extensive use

is also made of information from electronic databases like Capitaline and

Bloomberg in the equity research maintenance effort.

Direction, updates and queries pertaining to markets, products and client

portfolios are provided to front office staff though product notes, updates,

conference calls and telephonic discussions.

Some of the regular updates provided to the frontline are:

Market Morning – Collection of newspaper articles (business

dailies), synopsis of overseas markets, ADRs etc. Frequency: Daily

Market Evening – Summary of what happened in equity, debt and

forex markets during the day. Frequency: Daily

MF Trac – Worksheet providing returns of all open-ended schemes

over various time frames. Frequency: Daily

Weekly Report on equity and debt markets over the week.

Fundamental – A monthly newsletter containing the entire white list,

market commentary for the month and usually an interview with a

known face from the industry. Fundamental is mailed to the front

offices and select Premier customers.

Fact sheets – Summary of actions / activities done by the fund

managers in schemes in the white list during the month.

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2. INSURANCE PRODUCTS UNIT

The Insurance Products unit is the main driver of the insurance business of

the Bank. It is responsible for liaison with the underwriters, development of

suitable products for Bank customers and follow-up on operational issues

with the underwriters.

HSBC is the corporate agent for Tata AIG Life Insurance Limited (TAIG).

However, we do not distribute all life insurance products from TAIG. The

Insurance product team, as part of its mandate, designs, studies and selects

suitable insurance products for distribution.

3. CUSTOMER SEGMENTS

PFS customers

The PFS customer base primarily comprises of individuals (including

minors) and HUFs holding bank accounts and is segmented as below:

Premier – Any relationship (one or more customers usually of the

same family) where the cumulative relationship value is Rs. 2.5

million or more is eligible for ‘Premier’. All wealth management

needs of Premier customers are serviced by dedicated Premier

Relationship Managers (PRMs), High-end Premier relationships

where the cumulative relationship value is Rs. 25 million or more are

also referred to as ‘Private clients’. Private clients are serviced by

Senior PRMs (SPRMs).

Power Vantage – Any customer whose cumulative deposit value is

Rs. 0.1 million or more is eligible for ‘PowerVantage’ .PowerVantage

customers are serviced by PowerVantage Officers (PVRM) for their

banking needs.

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Mass-market – Any PFS customer who is not Premier or

PowerVantage is referred to as ‘Mass-market’. Mass-market

customer is serviced by Customer Services Officers (CSOs) for their

banking needs.

Non-PFS customers

Non-PFS bank customers such as Proprietorships, Partnerships, Companies,

Trusts, Clubs, Associations, Societies etc. may also require I&I services.

These entities are classified as below:

Substantial – Entities with turnover (or total revenue) of INR 5,000

M or more.

Large – Entities with turnover of INR 1,000 M or more

Small – Entities with turnover (or total revenue) of less than INR

1,000 M

These entities may include existing SME, CMB or CIB relationships.

Regulation and Guidelines

33

& I salespersons must act in accordance with the laws of India. The

finance Ministry through the RBI, SEBI, IRDA, AMFI, Company Law

Board, Department of Company Affairs, Registrar of Companies oversees

the various segments of the financial services industry. In addition there are

other entities, as well as various legislations, which may affect the sales of

I&I products. I&I salespersons should ensure that they have the necessary

knowledge and skills to render such services and are properly licensed to

conduct sales of various financial products. This section is designed to

provide me&me salespersons with an overview of certain legal terms and

regulations that impact their business.

I

The section covers the following guiding principles

Contracts

Law of Torts

Regulatory requirements for Mutual Fund distributors

Regulatory requirements for sale of insurance policies by corporate

agents

SEBI Insider dealing regulations and Staff dealing rules

AFP Professional Standards

Group Guidelines including Cross-border marketing guidelines,

vulnerable customers, inherently-risky sales and blank or partially filled

documents.

Contracts

The law of contracts in India is governed by the Indian Contract Act 1872. A

contract entails an agreement between the parties – i.e. one party makes a

34

proposal or an offer – and the other accepts the same. The ‘agreement’ may

be to do or to refrain from doing a particular act or thing. This ‘agreement’

may be verbal or in writing and may even be inferred from conduct. So far

as a legally binding contract exists – a court may find either party guilty in

the event of a breach of terms of the contract. This may result in financial

damages or other punishment for the guilty party.

The provision of I&I services to customers is a contractual arrangement.

This being the case, it is vital to set out the bank’s responsibilities and

liabilities so that the customer is clear about the same and consequently

disputes are minimized. The sales process prescribes standard

documentation such as Services Guide, Mutual Fund disclaimer, Investment

Services Agreement etc. which communicate the terms and conditions of the

business and the bank’s responsibilities and liabilities. It is vital that such

documentation is completed as prescribed in the sales process.

As the terms of a contract can also be inferred from verbal communication

or from conduct, salespersons should ensure that all interactions with

customers are in line with the terms of business that have been

communicated. Any default in doing so will result in the bank being liable

for breach of contract.

Applicability to HSBC

The banker-customer relationship is a fiduciary one and the banker

significantly influences the customers’ decisions relating to his finances.

With increasing consumer awareness, financial industry representatives will

35

also become liable for negligence and malfeasance. Care should be

exercised in the following aspects:

Bankers should ensure that they in fact possess the skill and

knowledge that they purport to possess – salespersons should

ensure that they have undergone all training prescribed for their

channel and are appropriately certified or licensed.

Where a banker provides advice (under a advisory proposition)

as to specific investments, it is his duty to ensure that due

diligence has been carried out before arriving at the

recommendation – it is vital that salespersons rely on the

central FPS team for any recommendation that is provided to

the customer. At the same time, where ‘information’ is given

during a brief impromptu meeting with regard to a company

that a client was contemplating investing in, it was held that the

banker’s duty was limited.

Bankers should not indulge in mis-selling i.e., promoting or

suggesting financial products, which are either unsuitable for

the customer or which the does not fully comprehend, merely

for their own selfish reward.

Duties and Responsibilities

Every salesperson has a responsibility to Customers to act within the scope

of their authority from the Group and ensure that the customer relationship is

managed in accordance with appropriate regulatory requirements,

professional standards and acceptable industry practices set out above. Every

36

salesperson should be mindful of the Group’s Key Business Values of the

highest personal standards of integrity at all levels and commitment to truth

and fair dealing. The following, although not exhaustive, outlines such

responsibilities:

Honest and Fair Dealings

Salespersons should be honest and fair in all dealing with customers, staff

members, intermediaries and third parties. This includes all interactions with

potential, existing and previous customers, as well as those customers who

have contractual arrangements, transactions and other forms of trade via

other branches of HSBC and/or other Distributors.

Client Confidentiality

All information gathered in the course of a salesperson’s duty and functions

is confidential and salespersons are responsible for protecting the

confidentiality of their Customers. This includes the collection, use, storage

and distribution of the following:

Identity of the Customers, including documents pertaining to the

same;

Details regarding their personal, family, financial, health and other

information;

Details regarding the recommendations made to them;

Computer records regarding the Customer;

All information held on the Customer files;

All customer files must be maintained in a secure location at the HSBC

branch where their accounts are held or where the salesperson is

predominantly located. Access to customer files and confidential records

37

must be limited to those staff directly involved in the provision of these

services. All staff must be aware of the Privacy requirements.

As per Group and RBI guidelines, confidential customer information should

be transmitted over the Internet strictly using secure encrypted mode of

communication. It should be noted that the Lotus Notes system cannot be

used for secure encrypted transmission to external email Ids. Salespersons

should ensure that if any confidential customer information is required to be

transmitted (inward or outward) over the internet, the secure email facility of

Internet Banking should be used (with help from the email management

team at CAS).

Acting on Behalf of the Company

Please note that no salesperson can sign contracts, agreements or

arrangements for services on behalf of the bank unless authorized by the

bank by way of a Power of Attorney in favour of the salesperson. In the

absence of such a power of attorney, PRMs and SPRMs can only sign

correspondence to clients or service providers. Copies of all correspondence

to Clients, whether for the purpose of prospecting, marketing, financial

planning or the provision of services, must be maintained on file. FPMs are

not authorized to sign correspondence.

Stationery, business cards, leaflets, brochures and all other documents

displaying the Group logo must be approved by the Manager Public Affairs

and be presented in line with the Group’s directives. In the first instance,

documents requiring approval should be forwarded to INM FPS for seeking

approval from GPA. Non-approved forms, stationary and other

documentation must not be used under any circumstances.

Integrity

38

Salespersons have a personal and professional responsibility for maintaining

the integrity of the Group. Whenever a salesperson becomes aware or

suspects that any of the following breaches have taken place, they must

immediately report the details to their superior. The superiors would in turn

follow the laid down procedures (stated in Local Compliance Officers

Handbook of the Bank) for reporting such breaches.

Instances where the applicable codes of conduct have not been

followed;

Sales which are not in the best interest of the Client;

Knowledge of a Client being disadvantaged, misinformed, tricked or

manipulated;

Conduct that has been driven purely to generate or increase any bonus

or incentive;

Sales that shows any unfair and unwarranted bias;

Sales which have been done without following the due sales process;

Appearance and Behavior

To our clients, the salespersons are representatives of the Group. They are

thus required to project a professional, well-groomed image and conduct

themselves appropriately at all times. This includes dress, punctuality and

honoring of commitments and promises made to customers.

39

Ongoing Professional Development

As part of continued professional development, salespersons and their

superior’s salespersons are required to ensure that their knowledge of I&I

Services is relevant, current and accurate. All I&I salespersons should

undergo refresher training once every six months.

Selling to family, friends and staff members

When selling to family, friends and staff members we should afford the

same professionalism and courtesy we do to all other customers. It is not

acceptable to short circuit the established sales processes in these

circumstances.

Annexure I: Financial Planning Services

The Hongkong and Shanghai Banking Corporation Limited (the Bank) shall

offer financial planning services – details of which are mentioned below:

40

1) Financial planning services entail the preparation of a Financial Plan

based upon the mapping of financial goals and resources

available and expected as specified by the customer.

2) The Customer shall complete the Personal Financial Review – which

shall provide HSBC with the requisite information on the Customer’s

financial goals, available / expected resources and risk profile. The

Customer certifies that the information provided in the Personal Financial

Review shall be complete and accurate in all respects.

3) The Bank may use a financial planning calculator that will arrive at the

rate of return required to achieve the Customer’s financial goals. The

assumptions made regarding various economic parameters and the expected

returns on various asset classes are indicative in nature and may change

based on market conditions.

4) The Bank may suggest an asset allocation for the Customer – using the

risk profiling software that has been internally developed for the purpose.

Based on the asset allocation, the Bank may make available to the Customer

model portfolios that have been constructed based on a ranking of mutual

funds (derived from a quantitative analysis of the funds’ performance) and

the Bank may also suggest other securities.

5) The Bank may also make available to the Customer insurance products

for the Financial Plan.

41

6) The Financial Plan is not an agreement but a summary of the details

provided by the Customer in the Personal Financial Review and the asset

allocation derived from the risk profile of the Customer. The Bank cannot be

held liable for the achievement/non achievement of the financial goals

identified by the Customer and the Financial Plan cannot be construed as

security for ensuring the achievement of the Customer’s financial goals.

7) The Bank will review the details provided by the Customer in the

Personal Financial Review, including information on the Customer’s

financial goals, available / expected resources and risk profile, once a year.

8) The Bank will not provide tax advice and the Customer should consult the

Customer’s own tax advisor as appropriate.

42

Survey Report 1) How would you rate the value received for our banking services? Very Good – 50% Good – 30% Fair – 10% Poor – 7% Very Poor – 3%

Very good

Good

Fair

Poor

Very poor

43

2) Would you recommend our banking services to your relatives and

friends?

Yes – 65%

May be – 27%

No -7%

Yes

May be

No

44

3) How would you rate the following services?

Bank Account

Personal Loan

Home Loan

Credit Card

Debit Card

Internet Banking

Foreign Exchange

Wealth Management Service

Very good

Good

Fair

Poor

Very poor

45

Questioners

Q1) What is a debit card?

Ans- A debit card makes shopping for goods and services a whole lot easier

by providing an on-line electronic payment facility from your HSBC

Savings / Current Accounts, for purchases of goods and services at merchant

establishments in India and overseas. It provides access to ATMs for cash

withdrawals and enquiries.

Q2) How does the HSBC debit card work?

Ans- Your debit card functions like a regular ATM card at ATMs, whilst at

merchant establishments it works in the same way as a credit card, except

that the transacted amount is directly debited from your savings/current

deposit account.

Look for a VISA / VISA Electron sign at the point-of-sale merchant

establishment

The merchant must have an electronic point-of-sale card-swiping terminal

Present your debit card after making your purchase

Present your debit card after making your purchase

After a successful authorization, a hold for the transacted amount will first

be placed on your account. Subsequently, your account will be debited for

the transacted amount

Check and sign the charge slip. Your signature must match with that on the

reverse of the card

Ensure your card is returned to you

46

In case of purchase transactions, the debit card can only be used at merchant

outlets with electronic terminals. Please do not try and use your card at

Merchants with "paper imprinters".

Also, since signature verification is essential for debit card transactions, you

need to be physically present along with your card at the time of purchase

i.e. the debit card cannot be used for Mail order, Telephone order or Internet

transactions.

Q3) How does HSBC’s secure online payment service work?

Ans- Register the secure online payment services with HSBC's personal

credit cards by creating your password and personal message.

Shop online at participating merchants and pay with your HSBC's personal

credit cards which you have registered* for the secure online payment

services.

Verify that the authentication screen is genuine by checking that the personal

message is the one you created at the time of registration.

Enter your password to authenticate the transaction and complete your

online purchase.

Q4) What type of loan should I choose?

Ans- The type of loan you choose is generally based on two factors:

1. The reason for the loan.

2. Your financial circumstances.

Most people who borrow money have a good reason for doing so, and most

banks are sympathetic to their customers' needs. Here is a list of common

reasons for borrowing:

47

Furnishing a new home

Buying a car

Paying tax

Getting married

Going on a holiday

Taking advantage of a sale

Emergencies

Shortage of cash

Education

Making a timely investment

Buying appliances/durables

Q5) How much should I borrow?

Ans- The amount of your loan depends largely on:

1. How much you need.

2. Whether you can afford to repay it without leaving yourself short of

money each month.

Normally, we advise that you borrow only what you actually need. It is

unwise to spend more than 30% of your gross monthly income on loan

repayments (in the case of a home mortgage, it can be up to 50%). But you

must also calculate your other commitments.

Q6) What should I do before I start investing?

Ans- Know your current financial situation. Before you begin to think about

investing your money, you should know how much you can spare each

month. Naturally, the more you can put aside now, the better it will be for

48

your future. It's up to you to achieve a balance between your current lifestyle

and your expectations.

Use our handy planning tool to find out how much you can invest. Or take a

look at the example below.

Calculate your income and expenses taking into account the following:

Mortgage repayments

Personal tax

Loans and overdrafts

Living expenses

Emergency funds

Car expenses

Entertainment

Holidays

School fees

Family commitments

Service Features

Insurance Protection for your family and your property.

People have saved $100s of dollars per year on their insurance. Want to

know how? By shopping around.

Compare plans, get side-by-side quotes and apply - in minutes!

Investing HSBC Securities (USA) Inc. offers a range of investment products

and services to help you meet your long-term objectives.

Retirement at HSBC we offer a wide array of products and services to help

you save on taxes today and plan for a comfortable future.

Q7) How safe is Internet Banking?

49

Ans- HSBC takes every precaution to keep your online experience safe. In a

continued effort to safeguard online banking transactions, HSBC requires

full 128-bit encryption for Personal Internet Banking use. Encryption is a

process that transforms sensitive information into a string of unrecognizable

characters before they are sent over the Internet and helps keep your

information private between the bank's computer system and your Internet

browser. The following are HSBC-supported browsers that offer this highest

level of encryption:

Internet Explorer - versions 5.5 and 6.0

Netscape - versions 7.1 and 7.2

Safari version 1.2

Mozilla/FireFox version 1.0

If you use an older browser that supports 128-bit encryption, it’s

recommended that you upgrade to one of the HSBC-supported browsers

listed above. Click on our Browser Check to verify that your browser

supports 128-bit encryption. If your browser does not support 128-bit

encryption, you will need to download the latest version in order for you to

use Personal Internet Banking.

In addition to encryption, your unique Customer ID and password will

authenticate your access each time you use the service. And, all Personal

Internet Banking customers are covered by HSBC's $0 Liability, Online

Guarantee to help keep your online experience safe. Learn more through

HSBC's Security Site.

Q8) Banks do not have a good reputation when it comes to customer service.

What are you doing about that?

50

Ans -There is a tendency to see all banks as the same in terms of

performance and customer service. Nevertheless, there is good evidence

from the product and service awards that we win in many parts of the world,

and from customer surveys, that HSBC is trying to be different and is

succeeding. However, we are not complacent and continue to focus strongly

on defining HSBC through the quality of service we give to our customers.

We remain strongly committed to putting our customers at the heart of

everything we do and, in so doing, create long-term mutual value.

Conclusion

51

I hope that this project has stimulated the reader’s interest in the term

“Products and Services” as a Bank. I have certainly found the task of

organizing my own knowledge of the subject and more of the information

from the secondeary sources to make this Project report, a rewarding one.

New instruments are being developed at an exciting pace ‘there

can be little double that important. New ideas and new result will continue to

emerge from this Project. I had come to know about Bank Products and

Services such as various Bank Account and different types of loans and

cards. Banks are providing services to attract Customers and to stay in the

Competition.

Bibliography

52

Websites

www.google.com

www.HSBCIndia.com

Books

Banking Theory & Practices

(Dr.P.K, SRIVASTAVA)

53