A 37 Ashwin Satra

8/3/2019 A 37 Ashwin Satra

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NCRDs Sterling Institute of Management Studies

NCRDs Sterling Institute of Management Studies

Presented to : Prof. Mayur M. & Prof. Aradhana T.

Presented to : Prof. Mayur M. & Prof. Aradhana T.

Div A Ashwin R. Satra Roll No.37

Div A Ashwin R. Satra Roll No.37

Summer Project

On

Depository Services

at

Dena BankMMS 2010-12, Semester III

Faculty Guide : Prof.Rakhi Shrivastava Company Guide : Mr.Ratan K. Khanna


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Depository Services

Depository Services

Purpose of Project

Purpose of Project

The purpose of this project was to understand the

current Depository Services in India with special

reference to Dena Bank and then suggest an improvedand viable business model for the Depository

department of Dena Bank


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Understanding Banking Sector

Understanding Banking Sector

Indian Banking Sector

Indian Banking Sector

Sector Comprises 26 State Sector banks, besides a number of private as well as co-

operative sector players.

Assets size of the banking industry - US$ 1.3 trillion

A Compound Annual Growth Rate (CAGR) of 18 per cent compared to the average

GDP growth of 7.2 per cent during the last decade.

Nationalized banks accounted for 52.2 per cent of the aggregate deposits, with State

Bank of India (SBI) and its Associates accounting for 22.1 per cent.

Potential to become third largest banking sector by 2050 after China & US


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Dena Bank

Dena Bank

Introduction

Introduction

Dena Bank was founded on 26th May, 1938 by the family of Devkaran Nanjee

under the name Devkaran Nanjee Banking Company Ltd.

Dena Bank was nationalized in July 1969 with 13 other major banks and is now a

public sector bank.

The logo of Dena Bank depicts Goddess Lakshmi, the Goddess of Wealth,

according to Hindu mythology.

It was the desire of the founding fathers of the Bank that the Bank should be a

symbol of prosperity for all its clients, and the logo represents this promise.


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Dena Bank

Dena Bank

Services offered by Dena Bank

Services offered by Dena Bank

Core Banking Solution

Dena ATM Services

Internet Banking

Dena e-Tax Pay

Mobile Banking

Phone Banking

Inbound Remittances

Direct Tax Collection

Indirect Tax

Demat Services

Dena BillPay

RTGS/NEFT

DEPOSITORY

SERVICES


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Introduction to Depositories

Introduction to Depositories

Meaning

Meaning

Depository is used to refer to any place where something is deposited for storage or

security purposes.

More specifically, it can refer to a company, bank or an institution that holds and

facilitates the exchange of securities.

Or

An Organisation that holds securities of investor in electronic format at the request of

the investor through a registered depository participant.


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Depositories In IndiaDepositories In India

NSDL & CDSLNSDL & CDSL

Two Depositories in India

1) National Securities Depository Limited

2) Central Depository Securities Ltd

Dena Bank is depository participant of NSDL

Depository Participant :Intermediaries which perform action on behalf of their client are

known as Depository Participants


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Introduction to DepositoriesIntroduction to Depositories

Bank & NSDL-An Analogy & DifferenceBank & NSDL-An Analogy & Difference

BANKS NSDL

Holds funds in accounts Holds securities in accounts

Transfers funds between accounts Transfers securities between accounts

Transfers without handling cash Transfers without handling physical

securitiesSafekeeping of money Safekeeping of securities

BANKS NSDL

Either of holders can sign instructions All joint holders to sign instructions

Entitled for interest Interest can be earned only by

participating in Stock Lending Scheme

Uses balances in accounts Does not move balances in account

without account holders

authorizationMinimum balance to be maintained No minimum balance required


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Depositories In IndiaDepositories In India

Functions of DepositoryFunctions of Depository

Maintenance of beneficiary holdings through DPs

Dematerialisation

Re-materialisation

Off-market Trades

Distribution of corporate benefits

Pledging and hypothecation facilities

Freezing/locking of investor's account

Stock lending and borrowing facilities

Settlement in dematerialised securities

Receipt of allotment in the dematerialised form


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Depository services In Dena BankDepository services In Dena Bank

Dena Laxmi Demat AccountDena Laxmi Demat Account

Dena Bank apart from normal banking services also offers the capital market oriented

product in the form of Demat account called -Dena Laxmi Demat Account.

Dena Bank is Depository participant of National Securities Depository Limited

(NSDL).since 1997 and is extending Depository services to the Demat Account holdersof the Bank.

Dena Bank provides hassle free transactions in the securities through the Dena Laxmi

Demat Account .


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Depository services In Dena BankDepository services In Dena Bank

Functions & FacilitiesFunctions & Facilities

Opening and maintaining of Demat Accounts.

Dematerialisation

Rematerialisation

Instant transfers / deliveries of shares / securities

Settlement of transactions done on the Stock Exchanges

Affecting changes in Addresses / Bank account details for the investments in various

companies with a single request.

Pledging of Security

Freezing and unfreezing of account / only specific security or a specific quantity of a

particular security


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Competitive Benchmarking of Dena Bank with PeersCompetitive Benchmarking of Dena Bank with Peers

Nationalized BanksNationalized Banks

Nationalized Bank with Depository services

State Bank of India

Canara Bank

Bank of Maharashtra

Central Bank of India

Dena Bank

Bank of India

Bank of Baroda

Union Bank of India

For the purpose of study, top 4 public banks have been selected having depository

services. I visited the following banks, referred their website etc and gathered

information about their products and charges for our study.


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Competitive Benchmarking of Dena Bank with PeersCompetitive Benchmarking of Dena Bank with Peers

Statement of chargesStatement of charges

Activity

Canara Bank

(NSDL)

State Bank of

India

(NSDL & CDSL)

Bank Of

Maharashtra

(CDSL)

Central bank of

India

(CDSL)

Account Opening Charges Nil Nil Nil Nil

Annual Maintenance Charges Rs.200/- Rs.400/- Rs.300/- Rs.200/-

Demat Charges Rs.2/- Rs.2/- Rs.2/- Rs.2/-

Remat Charges Rs.25/- Rs.25/- Rs.15/- Rs.25/-

Pledge (Creation) Rs.50 per ISIN Rs.30 per ISIN Rs.50 per ISIN Rs.25 per ISIN

Account Closure Charges Nil Nil Nil Nil

Online Trading facility ? Yes Yes No No


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Recommendations & SuggestionsRecommendations & Suggestions

1.Recommendations & Suggestions1.Recommendations & Suggestions

Web Site Improvement

Capital Market Indicator

Approach to Ex-Customers

Online Trading Facility to be made available at the earliest

ASBA Facility to be made available

Improvements in Clients Delivery Instruction Slip (DIS)

Monthly & Quarterly Statements


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2. System Support2. System Support

2. Enter ID and Password 3. Select Demat from Services Menu

The screen should like as follows:

4. Monitor your Portfolio Performanceyourself SelectEquity PortfolioLife Insurance PortfolioNon-Life Insurance Portfolio etc

On selecting specific portfolio relatedscreen should appear, tentatively asfollows:

1. Log in to www.denabank.com


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2. System Support2. System SupportName : Ashwin Satra Client ID No. : 10073244

Portfolio Type: Equities and Equity Diversified Mutual Funds

Name of Script Date of Purchase Quantity Purchased Acquisition Cost Current Value Over all Gain Gain % Current Value

RIL 15.05.10 100 1520.00 1640.00 12000.00 7.89 164000.00

TATA

RIIL

BAYER

Total

Pru Ici-Power 15.05.10 10000 20.00 20.80 8000.00 4.00 208000.00

MF2

--

MF_N

Total

Average Holding Period Holding Period

Return


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3. Training & other requirements for Depository Services3. Training & other requirements for Depository Services

Skill building programme both in-house as well as external programmes. Skill

building will be required for product awareness, USPs of the product, sales and

marketing techniques.

Statutory requirements like necessary approval from NSDL and NCFM for employeeswho will have to clear some basic level examination.

Equity Research/ Insurance and Mutual Funds Updates to be published and made

timely available to Front officers.

Periodical workshops by the third parties.

Special customer awareness camps (like ICICI Bank) for online trading, sharing

research reports, detailing products of third parties which can be availed by them.


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Specific steps required by Dena Bank in addition to above, once new products are

launched:

It should have separate structure right from corporate level to branch level forDepository services, activity based costing be done to establish the viability and

breakeven.

Dedicated staff catering exclusively to the Depository products, services and

customers.

Offering free advisory service to their customers and later adding to their business

fold.


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Specific steps required by Dena Bank in addition to above, once new products are

launched:

Creation of distinct brand names like Dena Demat Lounge, Dena Depository Services,etc. This will further strengthen the brand image and enhance customer loyalty.

Periodical customer awareness campaigns like seminars for nominal fee educating

them about current market trends, activity in specific equities, on-line dealing and

trading, etc.


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Limitations of studyLimitations of study

Although the research has reached its aims, there are some unavoidable limitations,

which are as follows:-

A time constraint was one of the major problems.

Study excludes CDSLs role in Depository Services.

Small sample size i.e. only 4 banks were taken into consideration for survey.

Survey restricted only to nationalized bank providing depository services.

Difficulty in collection of the data.


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Scope for future studyScope for future study

The review of the past studies and the experience from this present study make me

offer the following areas for further study in this field.

Study may be conducted among different sectors.

Scope for future study would be more, if study includes CDSLs role in Depository

Services.

Sample Size for survey purpose can be increase to at least 10 companies from

different sectors.

Also there is further scope for conducting this study in other areas, as this study

covers only limited areas.


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ConclusionConclusion

Depositories is a wide aspect to talk about with new services coming up and each one

having a different view about it.

Doing this project was a colossal experience and in great deal I found out the

importance of depositories in Indian banking sector.

All in all, to sum things up, this project stands out to be an eye opener in real terms

for me towards a broader vision in understanding the interdependence of the economy,

banks, business and technology within the economy.


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A 37 Ashwin Satra

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