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A STUDY ON RISK PROFILING AND
WEALTH MANAGEMENT
STANDARD CHARTERED BANK
SUBMITTED BY:AAKASH KAMRA
PGDM 2010-2012
Roll no: 2010001
Specialization: Finance & International Business
UNDER THE GUIDANCE OF:
INDUSTRY GUIDE: FACULTY GUIDE:
Mr. AMIT GUPTA Mrs. Ritu Srivastava
RELATIONSHIP MANAGER NIILM-CMS,
STANDARD CHARTERED BANK GREATER NOIDA.
PREET VIHAR, DELHI.
SUMMER INTERNSHIP REPORT IN PARTIAL FULFILLMENT OF THE AWARD OF FULL TIME
POST GRADUATE DIPLOMA IN MANAGEMENT (2010-12)
NIILM CENTRE FOR MANAGEMENT STUDIES,
GREATER NOIDA, U.P.
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Certificate of Completion from Faculty Guide
This is to certify that Summer Project Report on Risk Profiling and Wealth
Management prepared by Aakash Kamra, student of PGDM Batch 2010-12 is his
genuine effort under my guidance and supervision.
Signatures of the Faculty Guide Signatures of the Student
Ritu Srivastava Aakash Kamra
======================================================
==
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UNDERTAKING
This is to certify that Mr. Aakash Kamra, a student of Post GraduateDiploma in Management, NIILM-CMS, Greater Noida has worked
in Standard Chartered Bank, under the guidance and supervision of
Mr. AMIT GUPTA, Relationship Manager, Standard Chartered
Bank, Preet Vihar, Delhi. The period of training was of 8 weeks,
starting from 14th
May 2011 to 9th
July 2011. This summer internship
report has the requisite standard for the partial fulfillment of Post
Graduation Diploma. To the best of their knowledge no part of this
report has been reproduced from any other report and the contentsare based on original research.
RITU SRIVASTAVA AAKASH KAMRA
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ACKNOWLEDGEMENT
I take this opportunity to thank all those people who have helped me
in completing this project. The satisfaction that accompanies the
success of any work would be incomplete without the people who
made it possible by constant encouragement and guidance.
I express my sincere gratitude to MR. NIRMALENDU MISHRA,
Branch Manager who provided me the opportunity to undertake the
activity and my Industry Guide MR. AMIT GUPTA, Relationship
Manager, Standard Chartered Bank, Preet Vihar, Delhi. Under his
able guidance, continuous support and cooperation throughout my
project, without which the present work, would not have been
possible.
I am also thankful to my Faculty Guide Mrs. Ritu Srivastava of my
institute, for her continued guidance and invaluable encouragement.
AAKASH KAMRA
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PREFACE
Education is continuous process of learning it covers theoretical as well as behavioral
aspect. Every study is incomplete without having well planned and concrete exposure
to its students. So far management is no exception. This project report was made
during the summer training in partial fulfillment requirement for the Post Graduate
Diploma in Management.
India is a developing country and they all know that banking sector plays a very
important role. In development with the increasing use of banking and finance inevery field, new trends in their technology and modern use are being evolved day
after day to meet the requirements. In fact BANKING has become the need of
today.
The purpose of PROJECT REPORT is to expose the students in the market and in the
field of banking, finance and investments and to develop the ability in the students to
deal with all types of customers.
Preparing project report in the summer vacations and undergoing the summer training
is the indispensable part of the college period. It provides the opportunity to review
what they have gained in the training period and also provides the way to convey the
knowledge and ideas to others.
The present project provides the information on STANDARD CHARTERED
BANK.
Learning is not possible in solitude and has to have the support and able guidance of
some people around us in various roles and capacities. The satisfaction and euphoria
that accompanies the successful completion of any task would be incomplete without
the mention of the people who made it possible because success is the epitome of hardwork, undeterred missionary zeal, fast determination, and consideration.
Therefore, they consider it a pleasant duty to express their heartiest appreciation,
gratitude, and indebtedness to their project guide for his keen interest, sincere
extortion, invaluable and pain taking excellent guidance, continuous calm endurance,
inspiration and encouragement during each phase of the present project.
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TABLE OF CONTENTS
S. No. CONTENTS PAGE NO.
1 EXECUTIVE SUMMARY 7
2 OBJECTIVE OF THE REPORT 10
2
Chapter 1: INTRODUCTION
SIGNIFICANCE OF THE TOPIC
ITS BACKGROUND
SCOPE AND OBJECTIVES
12-36
3
Chapter 2: INDUSTRY PROFILE
ORGANISATION STRUCTURE
ITS PRODUCT AND FEATURES
BUSINESS ENVIRONMENT
ACHEIVEMENTS AND AWARDS
SWOT ANALYSIS etc.
37-65
4
Chapter 3: PESENTATION OD DATA
RESEARCH METHODOLY
ANALYSIS OF THE DATA
66-91
5 FINDINGS 92
6 CONCLUSIONS 93
7 ANNEXURE: QUESTIONAIRE & CURRICULAM
VITAE
94
8 BIBLOGRAPHY 96
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EXECUTIVE SUMMARY
EXCELLENCE ALWAYS SHOWS..
A Leader is one who knows the way, goes the way and shows the way
-John C Maxwell
Expertise is a skill acquired through years of experience, understanding and depth of
knowledge
When they are at the highest echelons of success it is that much more important to
have the right financial partners, who assist us in maintaining and building wealth.
The challenge of navigating complex and unpredictable capital markets can only be
met with the utmost focus, planning and discipline.
Standard Chartered Bank, using over 150 years of expertise, promises to guide us
through the world of exciting new investment opportunities in India. From shortest
term deployment of funds to planning your retirement, they pledge to go the extra
mile to help you reach your choose financial goals.
In India, there has been significant growth in income and wealth levels over past few
years. Financial services industry players have begun to recognize the potential of
wealth management as a profitable business. The wealth management industry,
though at a nascent phase, is experiencing rapid growth in terms of the member of
providers, clients and assets under management.
Wealth management as an organized industry is growing in terms of both the numbers
of players as well as the number of high net worth individuals in India. Wealth
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managers are aggressively marketing their services to the existing clients; wealth
managers are ramping up their capabilities to manage growing volume of assets. India
is both attracting foreign wealth managers to set up business and domestic banks to
set up wealth management businesses. Going forward this is a trend that is likely to
continue, with Indias key advantages attracting more and more competitors.
In the view of many in the industry there is a challenge of client education that must
be addressed going forward. The primary area of concern is in equity investment and
the need to invest long-term rather than short-term. This is not a problem that is
confined to India; many other countries around the globe have similar problems.
The basic idea of wealth management is to help the individual investors get a
complete perspective of their wealth. A wealth manager is more objective. He first
analyses ones portfolio, finds out the long-term and short-term goals of the investor
and decides on the asset mix that will fetch the best desired returns after being given
the investors risk profile.
According to a study unveiled by IBM Business Consulting Services, the wealth
management industry in India is poised for tremendous growth. The study also
revealed that successful wealth managers with a clear vision and strategy and
equipped with supporting people, processes and systems, will reap significant gains.
The study, Indian Wealth Management and Private Banking Survey 2003-04, predicts
that increased customer demand for sophisticated products will drive wealth managers
to offer a wider array of more complex products and services. Technology tools will
be critical for both enabling revenue generation as well as achieving operational
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effectiveness. Furthermore, increasing deregulation will enable customers to diversify
their wealth locally and globally.
Through this dissertation, I have tried to analyze the problems affecting the wealth
management industry in India with special focus on the High Net-Worth Individuals
(HNWI) segment. A further study of the scope and future of wealth management,
which is somewhat synonymous with Investment Banking, has been attempted for a
better understanding.
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OBJECTIVE OF THE REPORT
The project report is prepared to analyze the functions of wealth managers. How well
financial managers help their investors in investing into various companies.
There is common saying on the bourses: Bears make money, bulls make money and
pigs get slaughtered.
The richer one gets, the less sure he becomes of his investments. The options
for saving have multiplied today. The need of the hour is more informed investment
decisions. As personal net worth increases, the financial issues and challenges become
increasingly complex. Protecting and distributing ones asset with maximum tax
advantages requires sophisticated planning strategies and professional advice.
THE FOLLOWING ARE THE OBJECTIVES
Understanding Wealth Management Services in Banking Industry. Understanding Mutual Fund Industry in particular. Recommending financial planning strategies to investors. Analyzing various products offered by Mutual Fund companies. Need based selling to investors. Recommending model portfolios and selecting the right funds.
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In this project, I have to study the most important products of banking
industry i.e. Savings account, Insurance and Mutual Funds. After gaining
appropriate knowledge of these products, I have to promote the products of
Standard Chartered to the customers and try to convince them to buy the products
via explaining them its benefits. I also have to prepare a questionnaire in order to
understand the customer psychology of investments and also get relevant
information required in the project.
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CHAPTER 1
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WEALTH MANAGEMENT
Wealth management is an investment advisory discipline that incorporates financial
planning, investment portfolio management and a number of aggregated financial
services. High Net Worth Individuals (HNWIs), small business owners and families
who desire the assistance of a credentialed financial advisory specialist call upon
wealth managers to coordinate retail banking, estate planning, legal resources, tax
professionals and investment management. Wealth managers can be independent
certified financial planners, MBAs, CFA Charter holders or any credentialed
professional money manager who works to enhance the income, growth and tax
favored treatment of long-term investors. One must already have accumulated a
significant amount of wealth for wealth management strategies to be effective and is
also one of the key areas that are growing at a tremendous rate. Wealth management
can be provided by large corporate entities, independent financial advisers or multi-
licensed portfolio managers whose services are designed to focus on high-net worth
customers. Large banks and large brokerage houses create segmentation marketing-
strategies to sell both proprietary and non-proprietary products and services to
investors designated as potential high net-worth customers. Independent wealth
managers use their experience in estate planning, risk management, and their
affiliations with tax and legal specialists, to manage the diverse holdings of high net
worth clients. Banks and brokerage firms use advisory talent pools to aggregate these
same services.
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The events of 2008 in the financial markets caused investors to address concerns
within their portfolios. "The past 18 months have challenged traditional thinking
about investing and asset allocation, diversification, and correlation. For individual
investors, risk tolerances have been tested, investment assumptions have been
overturned, and fundamental truisms have been questioned." For this reason wealth
managers must be prepared to respond to a greater need by clients to understand,
access, and communicate with advisers regarding their current relationship as well as
the products and services that may satisfy future needs. Moreover, advisors must have
sufficient information, from objective sources, regarding all products and services
owned by their clients to answer inquiries regarding performance and degree of risk-at
the client, portfolio and individual security levels. "This state of affairs poses a
dilemma for wealth managers, who, for a generation, have adhered to the core
principles of asset allocation and earned their keep by preaching the mantras of 'buy
and hold', 'invest for the long term', and when things get tough, 'stay the course'.
Today wealth management advisors must have access to an objective content.
Wealth accumulation: The clients wealth should grow.
Wealth preservation: The clients wealth should be well protected.
Wealth transfer: Smooth transfer of clients assets to his legal heirs at a minimum
cost.
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WEALTH MANAGEMENT AT
STANDARD CHARTERED BANK
STANDARD CHARTERED BANK offers a team of expert and experiencedinvestment advisors who are wholly dedicated to studying financial markets and
investment opportunities just for you.
With years of investment experience to draw from, combined with their intimate
understanding of the Indian environment, they can help you make the best investment
choices customized just for customers.Here is 4 step financial planning process:
RISK PROFILING:Through a simple, easy-to-answer questionnaire, they try to gauge their risk appetite.
Your investment decisions should be dominated most heavily by how much risk you
are willing to take. Depending on their risk appetite, the specific instruments required
to fulfill all their needs across various time periods will be identified.
NEED ANALYSIS:
It identifies all their prospective financial requirements and liabilities. These may
range from buying a car to sending their kid for education abroad.
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MAPPING YOUR RISK PROFILE WITH NEEDS:
To fulfill the needs, the right asset allocation mix has to be identified. Investments
have to be embarked for their needs, depending on risk profile. It aims for right asset
allocation mix for your investment through this exercise.
IDENTIFYING THE RIGHT INVESTMENT INSTRUMENTS:
It provides a wide variety of investment instruments like MUTUAL FUNDS, FIXED
INCOME BONDS, RBI BONDS, PRINCIPAL PROTECTION PLAN, etc. Bank has
tie ups with a variety of mutual funds for investment suitable for us. Their unique
proprietary research cherry-picks the best mutual funds in various funds in various
risk categories to enable us to take an informed decision.
WEALTH MANAGEMENT is important because you have a lotmore to manage than just your wealth
It's time to throw out your notions of what you can talk about with your Financial
Advisor.
Maybe you're worried that the lifestyle you've worked for is becoming the
lifestyle your children will feel entitled to
Maybe you long ago made a decision to retire by 62, and then you turned 58and found out that decision may be up to somebody else
Maybe your friends are about to stop asking why you waited to start a family,and start asking what in the world you are going to do with triplets
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Wealth management can help you determine what's really important to you, then
develop actionable strategies to help you realize your most cherished hopes and
defend against the things that might undo them.
Income and Lifestyle
Through an in-depth discovery process your Financial Advisors will work with you to
understand and document what you want to do in this lifetime, from now until
retirement and from then on. They'll then map out a course to help you seek the
returns you'll need for how you intend to live and to achieve the income you'll need to
do exactly what you want one year at a time and, if they like, strategies to guarantee
that income.
Borrowing
They view borrowing as a strategy an array of ways to unlock value in assets you
own, without compromising the ability of those assets to continue to work for you
over time.
If such talk of strategy sounds like how most firms talk about investing, it should.
They believe how people invest and how they borrow is inextricably linked both
sides of one balance sheet, one plan.
Asset Protection
By understanding the lifestyle you enjoy, and the one you're building toward, your
Financial Advisor can see the threats against ittaxes, inflation, volatility, creditors,
lawsuits, identity thieves, tragedyand help you deal with them using everything in
the arsenal of one of the world's largest financial services firms.
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Wealth Transfer
Your Financial Advisor will approach your plan for wealth transfer from a wider
angle than a traditional estate plan. They work with you to understand your definition
of a rich life, and then craft a plan to help you lead it and pass on what you see as
most important to the next generation.
Your advisor will approach your plan for wealth transfer from a wider angle than a
traditional estate plan. They work with you to understand your definition of a rich life,
then craft a plan to help you lead it and pass on what you see as most important to the
next generation.
This might mean a passion for education, or a sense of obligation for each generation
to help give the one that follows a leg up in life or both. It could mean protecting a
work ethic and thirst for accomplishment, or protecting your family's bonds of
affection toward one another. Whatever it is, it should start with your definition of a
rich life.
Investment Management
They believe that your plan for your life is the most important part of investing. Little
things...like when you plan to retire and when you secretly hope to retire. The
business you'll open when you do. How much you'd like to travel. And the aging
parent who will need to move in with you in the next few years.
Investing with a Financial Advisor is based on the simple yet potheyrful premise of
wealth management: Your investments and your life are uniquely intertwined.
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Whether by design or by accident, they are all part of one plan. they advise that it be
by design.
Business Strategies
As you lead your business toward its next stage whatever that stage may be
you'll be pleased to learn that your Financial Advisor understands the connection
between your business and your life. They are one and the same.
Their clients tell us that seeing this bigger picture makes all the difference between us
and what they used to expect from a financial firm in how they think, how they
plan and in the scope of what they do. From their standpoint, it's simply a matter of
treating your business like it's the biggest investment of your life, if for no other
reason than that it is.
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WEALTH MANAGEMENT IN INDIA
Wealth Management in India covers the recent trends in the industry, global market
and its trend, estimates of the future market, growth drivers, critical success factors,
issues and challenges, regulatory environment, and profiles of major players and their
products offerings. The report will be useful for industry research analysts, banks and
other non-banking financial companies, and wealth management service companies.
Wealth management is classified as a type of financial planning tool that provides
corporate and their families with private banking, asset management, legal resources,
real estate planning, investment management and portfolio management with the goal
of sustaining and growing long-term wealth. Wealth management service providers
have segmented the Indian market into four categories: the mass market (investible
surplus USD 5,000 to 25,000); the mass affluent (USD25,000 to 1 million); the high-
net-worth (USD1 million to 30 million) and the ultra-high net worth (greater than
USD30 million).
Key Findings and highlights
- During the second half of 2007, there was a contrasting difference between the
matured and emerging economies where emerging market captured the major portion
of wealth management.
- In 2007, the global economy grew by 5.1%, down slightly from the 5.3% global
growth in 2006.
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- The United States had one of the worlds lowest savings rates in 2007
- The population of HNWIs reached 10.1 trillion in 2007
- The Indian market has outperformed global markets significantly and formed new
highs coincided with a continuous increase in derivatives position which peaked at
over Rs1 trillion.
OBJECTIVES:
Investment planning: assists you in investing your money into various investmentmarkets, keeping in mind your investment goals.
Insurance planning: assists you in selecting from various types of insurances, selfinsurance options and captive insurance companies.
Retirement planning: is critical to understand how much funds you require in yourold age.
Asset protection: begins with your financial advisor trying to understand yourpreferred lifestyle and then helping you deal with threats, such as taxes, volatility,
inflation, creditors and lawsuits, to maintaining this lifestyle.
Tax planning: helps in minimizing tax returns. This might include planning forcharity, supporting your favorite causes while also receiving tax benefits.
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Estate planning: helps in protecting you and your estate from creditors, lawsuits and
taxes. This service is critical for every person whose net worth is high.
Business planning: This service aims at optimizing the tax free advantages ofrunning your own business.
Business succession planning: assists in planning for the inevitable to maximizereturns.
Wealth transfer: helps you pass on your wealth to your dependents.
But so many advantages will make the process of understanding Wealth Management
will make it very complicated rather than simplifying the process of Wealth
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GRAPHICAL PRESENTATION
Dig 1: Wealth Management Cycle
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WEALTH MANAGEMENT-PRODUCTS AND SERVICES
They provide you with new investment opportunities and investment advice which
allows you to choose from a broad spectrum of products and services. Standard
Chartered Wealth Management by your side, you can be rest assured that you will
have access to only the most viable wealth management products and solutions. With
a well planned wealth consolidation strategy they ensure a lasting legacy for you and
your loved ones.
PRODUCTS:
DIRECT INVESTMENT IN THE EQUITY MARKET
Equity investment generally refers to buying and holding of shares of stock on the
stock market by individuals and funds in anticipation of income from dividends and
capital gains as the value of the stock rises. It also sometimes refers to the acquisition
of equity participation in private company or start up. When the investment is in
infant companies, it is referred to as venture capital investing and is generally
understood to be higher risk then investment in listed and going concern situations.
MUTUAL FUNDS
A mutual fund is a corporation that pools the savings, which are then invested in
money market, debt market and capital market instruments such as shares, debentures
and other securities. Thus the mutual fund serves as a link between the public and the
capital markets so as to mobilize savings from the investors and invest them in the
capital markets to generate to access to well defined equities, bonds and other
securities. Each share holder participates in the gain or the loss of the fund. Units are
issued according to the:
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Money put in by the investor Type of equity or bond chosen NAV of the security prevailing in the market
NAV is the main performance indicator. A funds NAV is calculated as total assets
minus all the expenses and divided by the number of its total outstanding units.
Mutual funds are financial intermediaries. They are companies set up to receive your
money and then having received it, make investments with the money Via an AMC. It
is an ideal tool for people who want to invest but dont want to be bothered with
deciphering the numbers and Number of stocks from various markets and industries.
Depending on the amount you invest, you own part of the overall fund.
TWO TYPES OF MUTUAL FUND ARE:
1. STRUCTURED BASED
2. INVESTMENT BASED
STRUCTURED BASED MUTUAL FUNDS ARE:
(a)OPEN ENDED FUNDS: An open ended fund is that kind of fund that isavailable for subscription all through the year. These not have fixed maturity.
(b)CLOSE ENDED FUNDS: A close ended fund has a stipulated maturityperiod, which generally ranges from 3 to 15 years. The fund is open forsubscription only during a specified period. Investors can invest in the scheme
at the time of the initial public issue and thereafter they can buy or sell the
units of the scheme on the stock exchanges, if they are listed, The market price
at the stock exchange could vary from the schemes NAV on account of
demand and supply situation, unit holders expectations and other market
factors.
INVESTMENT BASED MUTUAL FUNDS ARE:
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(a)GROWTH FUNDS: Growth funds are to provide capital appreciation overthe medium to long term. Growth schemes are ideal for investors who have a
long-term outlook and are seeking growth over a period of time.
(b)INCOME FUNDS: The aim of income funds is to provide regular and steadyincome to investors. Such schemes generally invest in fixed income securities
such as bonds, corporate debentures and Government securities. Income funds
are ideal for regular income and capital stability.
(c)BALANCED FUNDS: The aim of balanced fund is to provide both growthand regular income. Such schemes periodically distribute a part of their
earning and invest both in equities and fixed income securities in the
proportion indicated in their offer documents. This proportion affects the risks
and the returns associated with the balanced fund in case equities are allocated
a higher proportion, investors would be exposed to risks similar to that of the
equity market.
(d)MONEY MARKET FUNDS: The aim of money market funds is to provideeasy liquidity, preservation of capital and moderate income. These schemes
generally invest in safer short-term instruments such as Treasury Bills,
Certificates of Deposit, Commercial Paper and inter-Bank Call Money.
Returns on these schemes may fluctuate depending upon the interest rates
prevailing in the market.
These are ideal for corporate and individual investors as a means to park their surplus
funds for short periods.
ADVANTAGES OF MUTUAL FUND
PORTFOLIO DIVERSIFICATION/RISK REDUCATION: An investor holdsa diversified portfolio even with a small amount of investment, which would
otherwise require a big capital. Further, the fund invests in diverse portfolios,
hence reducing the riskiness of the investments.
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REDUCTION OF TRANSACTION COSTS: While investing through thefunds and investor has the benefit of economies of scale; the funds incur lesser
costs because of larger volumes, a benefit passed on to its investor.
PROFESSIONAL MANAGEMENT: Mutual funds are managed byprofessional management who has requisite skills and resources to analyze the
various investment options in these fast-moving, global and sophisticated
markets.
LIQUIDITY: Often, investors hold shares or bonds they cannot directly, easilyand quickly sell. If they invest in the units of a fund, they can generally cash
their investment any time, by selling their units to the fund if open-ended, or
selling them in the market if the fund is close-end.
CONVENIENCE AND FLEXIBILITY: Investors have the option oftransferring their holding from one scheme to the other; get updated market
information and so on.
FIXED DEPOSITS
Fixed deposits is made for those investors who want to deposits a lump sum
amount of money for a fixed period of time say a minimum of 15 days to 5
years and above there by earning a higher rate of interest in return. Investors
get a lump sum amount at the maturity at the deposit.
Banks fixed deposits are one of the common saving scheme open to an
average investor. Fixed deposits are one of the most common savings schemes
open to an average investor. Fixed deposits also give a higher rate of interestthan a savings bank account. The facilities vary from bank to bank. Some of
the facilities offered by banks are overdraft (loan) facility on the amount
deposited, premature withdrawal before maturity period (which involves a loss
of interest) etc.
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ULIP
ULIP stands for unit linked insurance plan. It is a kind of the life insurancewhere the policy value at any time varies according to the underlying assets at
that time. It is a kind of the policy which provides the benefit of protection
with the flexibility in the investment. The investment is denoted as units and is
represented by the value that it has attained called as net asset value (NAV).
ULIP came into play in 1960 and soon became popular in many in many
countries in the world. The reason for the wide popularity was because it is a
very transparent scheme and the flexibility it offers and investments.
ADVANTAGE OF ULIP:
Simple, clear and easy to understand Easy in decision for investors Flexible and adaptable Puts the policyholder in control Policyholder gets the entire upside on the performance of his fund\
SIP
SIP is termed as Systematic Investment Plan. In this the investor has the
option of managing his investments on the periodic basis and thus inculcates
the regular saving habit. Investor has to issue post dated cheques in favor of
the fund and then gets the no. of units on the date of the cheque. The number
of units depends on the amount, the kind of fund and the NAV of that date.
SIP allows the investor to invest a prefixed amount with the scheme at set
intervals and derive the benefit of fluctuating share prices and NAV. SIP
works on the concept rupee cost averaging. So if the NAV is high the entire
investment is valued.
Derivative:
A derivative can be defined as something which derives its value from an
underlying product being, stock currency, commodity or anything that carries
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a market price. The market price of a product is subject to fluctuations due to
various factors effecting its demand and supply thereby associating itself to
various risk factors. So derivatives are a byproduct of the care product which
can be used to hedge, separate & also undertake arbitrage activities.
IPOs:
An initial public offering, or IPO, is the first sale of stock by a company to the
public. A company can raise money by issuing either debt or equity. If the
company has never issued equity to the public, it's known as an IPO.
STRUCTURED PRODUCTS-
They offer customized investment solutions to access various asset classes. Most
structures will offer principal protection with returns based on performance of an
associated asset class. Based on your preference, returns can be linked to a variety of
asset types such as equity indices, basket of stocks, commodities.
ALTERNATIVE ASSET PRODUCTS-
Through their distribution tie-ups, they offer a wide range of Private Equity Funds,
which invest in the unlisted securities, to give you the opportunity of investing in the
growing Indian economy. Access to these types of products and strategies can support
a variety of investor objectives including capital preservation, risk protection,
leverage, and diversification e.g. Private Equity Funds. So, if you are looking beyond
the stock market, you will find us there too!
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REAL ESTATE-
They offer niche property investment services. They bring in a combination of in-
depth market knowledge and real estate industry experience to offer a range of
specialized real estate investment services. According to the analysis of the needs and
objectives of the investor, they provide expert advice and innovative real estate
solutions to their clients.
LONG AGAINST SECURITIES AND MUTUAL FUNDS-
Their tie up with Finance will allow investors to use their investments in shares as
security for their borrowing, which in turn can fund the purchase of additional
investments. In this way clients are able to invest more and increase the size of their
total portfolio.
GOLD-
A healthy portfolio is about the diversification and management of risk. Holding gold
in a portfolio can provide distinct benefits, its most valuable contribution to a
portfolio lies in the fact that it is not correlated with most other assets. They offer
multiple avenues of investing in gold so that you can benefit from effective portfolio
diversification
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LIFE INSURANCE-
While offering solutions for building and preserving capital, Relationship Manager
will offer you comprehensive advice on how best to protect yourself and your family
against all the most serious risks that you face. Their affiliation with Birla Sun Life
Insurance provides the opportunity to obtain more favorable offers, which can result
in lower costs and greater benefits. Their Policy Analyst review ensures that the
planning youve previously done remains competitive and current.
SERVICES:
RESEARCH-
Their quality research provides clients with the information they need to make
informed investment decisions. Wealth Management Research team is dedicated to
keep you updated with an access to these publications and to a wide range of research
tools including market depth, breaking commentary, long-term forecasts to detailed
daily updates and the latest financial news.
HIGHLY PROACTIVE SERVICES-
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They deliver a fast, effective and friendly service that often exceeds their client's
expectations. The service includes daily Market Update, Weekly Update on MF,
Event Based SMS; you will be kept fully informed on the markets.
ONLINE PORTFOLIO ACCESS-
Wherever you are, their network works for you. This process is simple yet efficient,
and ensures that you are always aware of every detail regarding your investments.
You can constantly monitor the composition of your portfolio as well as all
transactions, which will enable you to see if you can meet your long term objectives.
FINANCIAL PLANNING-
To complement your investment strategy they offer comprehensive financial
planning. This planning session will be followed by a complimentary personalized
report containing specific recommendations on the actions you need to take to achieve
your financial goals.
REGULAR PORTFOLIO REVIEWS-
Periodic reviews to ensure the integrity of the portfolio and continued viability of
assets within the portfolio. They believe in diversification and are committed to
providing sound and conservative investment acumen.
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SERVICES, ADVANTAGES AND DISADVANTAGES OF
PRIVATE WEALTH MANAGEMENT IN INDIA
Private Wealth Management is the management that deals with the sophisticated
financial solutions and highly customized investment management. They provide the
financial planning session to the people that include the advices on the use of trusts
and other estate planning vehicles, the use of hedging derivatives for large blocks of
stock and business succession or stock option planning.
Private Wealth Management-
It offers product and service on the demand of the wealthiest retail clients of
investment firms. As the number of affluent investors had increased, so demand for
sophisticated financial solutions and expertise throughout the world has been
increased.
ICICI bank and Axis-Bank are very reputed and well known banks in the field of
wealth management In India. ICICI Bank is using the services of global players like
City group, Merrill Lynch and UBS for attracting and catching the customers for their
Wealth Management business. Axis bank, one of Indias leading private sector bank
also combined with Banque Privee Edmond de Rothschild, which is the Europe
based wealth management expertise institution and is going to make new standard for
the NRI people wealth management. In India, the Axis Bank is the fifth largest bank
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by market capitalization that provides payroll services to over 12000 corporate across
2.8 million salary accounts.
Services of Private Wealth Management Institutions:
1) Retirement Plan Services:
Defined Contribution Plans IRAs Custodian Or Trustee Defined Benefit Plans
2) Custodian Services:
Income collection from Securities Securities Safekeeping Settlement of Securities trades as directed Timely settlement delivery Payment of fund when directed
3) Trust Services:
Revocable Trust Charitable Trust Irrevocable life Insurance Trust Institutional Trust Special Need Trust
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Advantages of Private Wealth Management are:
The customer can easily know the investment strategy and analyze return andrisk with the help of wealth management professional.
The Private wealth management professional provides the good service of taxplanning like how customers can minimize save and the tax more money.
Customer can also manage their estate with the help of wealth management professional. Estate management provides protection of customers overall
estate.
Those Banks which are engaged in business of wealth managementprofessional are earning revenues from the foreign countries that mean
outsourcing for economy.
Wealth management professional helps the customer in future planning forestate.
Disadvantages of Private Wealth Management are:
The big limitation of Wealth management is that they do not show their actualposition to the customers. So, there may be chances of fraud and forgery with
customers.
As they know that wealth management is now only related with the richpeople and is not having any plans and solutions for poor, middle and lower
class of people of society.
Thus wealth management reduces the scope of Management.
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Mostly customers do not know the actual position of market because
everything is done by some Wealth management professional. So, that results
in inflation and also there may be chances that the customers are in risk but
they are showing the false return etc.
So, they can say that Private wealth management has various aspects in which some
are favorable and some are very dangerous for the Indian economy. So, people should
aware of this.
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CHAPTER 2
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COMPANY PROFILE
STANDARD CHARTERED BANK (LSE: STAN, SEHK: 2888, OTCBB: SCBFF)
is a British Bank headquartered in London with operations in more than seventy
countries. It operates a network of over 1,700 branches and outlets (including
subsidiaries, associates and joint ventures) and employs 73,000 people.
Despite its British base, it has few customers in UNITED KINGDOM and 90% of
profits come from Asia, Africa, and the Middle East. Because the banks history is
entwined with the development of the British Empire its operations lie predominantly
in former British colonies, though over the past two decades it has expanded into
countries that have historically had little British influence. It aims to provide a safe
regulatory bridge between these developing economies.
The Standard Chartered Group was formed in 1969 through a merger of two banks:
the Standard Chartered Bank of British South Africa founded in 1863 and the
Chartered Bank of India.
It now focuses on customer, corporate, and institutional banking, and on the provision
of treasury services- areas in which the Group had particular strength and expertise.
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Standard Chartered is listed on the London Stock Exchange and the Hong Kong Stock
Exchange and is a constituent of the FTSE 100 Index. Its largest shareholder is Tease
Holdings.
The name Standard Chartered comes from the two original banks from which it was
founded and which is merged in 1969- The Chartered Bank of India, Australia and
China, and the Standard Bank of British South Africa.
Australia and China, founded in 1853.
HISTORY
Founded by James Wilson following the grant of a Royal Charter by QueenVictoria in 1853.
Chartered opened its first branches in Mumbai (Bombay), Calcutta , andShanghai in 1858 followed by Hong Kong and Singapore in 1859.
Played a major role in the development of trade with the East which followedthe opening of the Suez Canal in 1869 and the extension of the telegraph to
China in 1871.
In 1957 Chartered Bank bought the Eastern Bank together with the IonianBanks Cyprus Branches. This established a presence in Gulf.
In 1969, the decision was made by Chartered and by Standard to undergo a friendly
merger. All was going well until 1986, when a hostile takeover bid was made for the
Group by Lloyds Bank of the United Kingdom. When the bid was defeated, Standard
Chartered entered a period of change. Provisions had to be made against third world
debt exposure and loans to corporations and entrepreneurs who could not meet their
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commitments. Standard Chartered began a series of divestments notably in the United
States and South Africa, and also entered into a number of asset sales.
From the early 90s, Standard Chartered has focused on developing its strong
franchises in Asia, the Middle East and Africa using its operations in United Kingdom
and North America to provide customers with a bridge between these markets.
Secondly, it would focus on consumer, corporate and institutional banking, and on the
provision of treasury services- areas in which the Group had particular strength and
expertise.
In the new millennium they acquired Grindlays Bank from the ANZ Group and the
Chase Consumer Banking operations in Hong Kong in 2000.
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STANDARD CHARTERED-LEADING THE WAY
Standard Chartered PLC is listed on both the London Stock Exchange and Hong
Kong Stock Exchange and is consistently ranked in top 25 among FTSE-100
companies by market capitalization.
Standard Chartered has a history of over 150 years in banking and operates in many
of the worlds fastest-growing markets with an extensive global network of over
1,400 branches (including subsidiaries, associates, and joint ventures0 in 50 countries
in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom
and the America.
As one of the worlds most international banks, Standard Chartered employs almost
60, 000 people, representing over 100 nationalities, worldwide. This diversity lies at
the heart of the Banks values and supports the Banks growth as the world
increasingly becomes one market.
With strong organic growth supported by strategic alliances and acquisitions and
driven by its strengths in the balance and diversity of its business, products,
geography and people, Standard Chartered is well positioned in the emerging trade
corridors of Asia, Africa and the Middle East.
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RECENT ALLIANCES AND ACHEIVEMENTS
2005 and 2006 were historic years for Standard Chartered as they achieved several
milestones with a number of strategic alliances and acquisitions that will extend their
customer or geographic reach and broaden their product range.
They completed, rebranded and successfully integrated SC First Bank in Korea,
which to date is the biggest acquisition in their history.
They completed full integration between Standard Chartered Bank
Thailand and Standard Chartered Nakornthon Bank in October.
They formed strategic alliances with Fleming Family & Partners to expand private
wealth management in Asia and the Middle East.
They acquired stakes in ACB Vietnam and Travelex.
They acquired the business operations of American Express Bank in
Bangladesh.
They acquired a stake in Bahia Bank in Tianjin, China, making us the first foreign
bank to be allowed a stake in a local bank in China.
They acquired a 25% stake in First Africa Group Holdings in June
2006.
They acquired an additional 26% stake in Permata Bank through consortium with
PT Astra International, thus giving the consortium a total stake of 89%.
They acquired Union Bank in Pakistan in September 2006 and have successfully
rebranded all branches.
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PETER SANDS BECOMES CEO OF STANDARD CHARTERED
BANK
It was announced today that Peter Sands (LLL, LON 88-02) will become the new
CEO of Standard Chartered Bank, effective immediately.
Sands have been with the bank since 2002, and were most recently serving as Group
Finance Director. Previously, he was a Director at McKinsey & Company.
Standard Chartered plc is a British bank headquartered in London, with operations in
many countries, especially Asia, Africa and the Middle East.
Priorities at Standard Chartered
Standard Chartered believes that their future success depends on their ability to
deliver a sustainable business. Their building a sustainable business strategy will
help them long-term view of the implications of everything they do. This means
taking responsible decisions that benefit their business, the economy, society and the
environment-and build the trust of all stakeholders.
Their building a sustainable business strategy explicitly reorganizes seven areas
where them and their stakeholders believe that they are most likely to make greatest
contribution to sustainability.
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They are:
Sustainable lending- making sure when they lend money they are aware ofthe environmental, social and governance risks attached to such decisions and
that they take steps to address them
Tackling financial crimemaking sure that they have the right systems inplace to detect such things as fraud and money laundering and exceed, rather
than simply meet, increasingly stringent legal requirements in this field
Access to financial servicesmaking sure they develop new ways forthose deprived of banking services to get proper access to finance so that
they can improve their standard of living and economic independence
Responsible selling & marketingmaking sure they treat customersfairly and set the highest standards in service and transparency
Protecting the environmentmaking sure they not only minimize theirown direct impact on the environment but support others, such as customers,
to do the same. They also want to support the development and
commercialization of technologies and schemes that tackle environmental
threats like climate change
Great place to workmaking sure that with their people, who representover 100 nationalities from over 50 countries, feel valued, included and
engaged. They're determined to attract, develop and retain the best people
and to leverage the strength the diversity of their people brings, which is an
incomparable advantage
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Community investmentmaking sure they involve their employees andutilize their core expertise and networks to help communities develop and
economies to grow
GOVERNANCE:
The governance structure they have set up for Sustainability provides strategic
direction for the Bank and ensures they continue to make progress with their approach
to sustainable development.
The Corporate Responsibility and Community Committee sit at the top of this
structure alongside the Remuneration, Audit and Risk, and Nomination Committees
of their Board. It is supported by a Group Sustainability team, steering groups for
specific programmes and their branches and offices in each country they operate in.
The Committee is chaired by Mervyn Davies, the Group Chairman, and meets
quarterly. It drives the Sustainability agenda at Standard
Chartered and is responsible for responding to issues coming out of new
Sustainability legislation, regulation, stakeholder guidance and reporting and for
making sure their activities are aligned with their overall business strategy. It also
ensures they publish a Sustainability report, supported by accurate data, each year, in
line with best practice.
A dedicated Sustainability team, based in the London office, supports the Committee,
the Business and other Group functions. The role of the team is to talk with
stakeholders, monitor good practice and flag up potential trends and emerging issues.
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It co-ordinates the collection of data and is responsible for their annual Sustainability
Review and web site, participating in thought leadership events and raising their
Sustainability profile outside the Bank
INVESTMENTS STRATEGIES AND PORTFOLIO
MANAGEMENT
About Investment
It is the money that you save and channelize into sources that gives you return i.e. use
of money in hope of making more money.
One needs to invest to:
Earn returns on idle resources
Generate a specified sum of money for a specific goal in life
Make a provision for a uncertain future
To meet the cost of inflation
The aim of investment should be to provide a return above the inflation rate and also
to ensure that the investment does not decrease in value.
There are various options available for of investment:
Physical assets like real estate, gold/jewelers, commodities etc Financial assets like fixed deposits with banks, small saving
instruments with post offices, insurance/provident/pension fund, securities
market related instruments like shares, bonds, debentures etc.
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TYPES OF INVESTMENTS (PERIOD SPECIFIC)
1) Short Term Investments- The investment period is usually less than a year and it
provides liquidity to investor.
Saving Bank Account- It is most often the first banking product that people use. This
offers them interest (4%-5%p.a.) which is better than idle money.
Money Market of Liquid Fund-These are specialized form mutual funds that invest
in extremely short-term fixed income instruments and also provide liquidity. It
focuses on protecting your capital and then making returns. These are better sources
of investment than savings account but lower than fixed deposits.
Fixed Deposit with Banks-Also known as term deposits and the minimum
investment period with banks FD is 30 days. It is for those investors who are risk
averse and it provides higher rate of return than money market instruments.
2) LONG TERM INVESTMENT- The investments period is more than a year and
the returns are much higher than short term investments. Long term instruments are
less liquid than short term investments.
Post office Savings-The post office monthly income scheme is a risk saving
instrument, which can be availed through any post office. It provides an interest rate
8%per annum, which is paid monthly, minimum amount, which can be invested is Rs.
1,000 and maximum is Rs. 3, 00,000. It has a maturity period of 6 years, premature
withdrawal is permitted if deposit is more than one year old. A deduction of 5% is
levied from the principle amount if withdrawn prematurely
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Public Provident Fund- A long term savings instrument with a maturity of 15 years
and interest payable at 8% per annum compounded annually. A PPF account can be
opened through a nationalized bank at anytime during the year and is open all through
the year for depositing money, tax benefits can be availed for the amount invested and
interested accrued is tax free.
Company Fixed Deposits- These are short- term [six months] to medium- term [three
to five years] borrowings by companies at a fixed rate of interest which is payable
monthly, quarterly, semiannually or annually, there can also be cumulative fixed
deposits where the entire principal along with the interest is paid at the end of the loan
period, the rate of interest varies between 6- 9 % per annum for company FDs, the
interest received is after deduction of taxes
Bonds- It is a fixed income [debt] instrument issued for a period of more than one
year with purpose of raising capital, the central of state government corporations and
similar institutions sell bonds. A bond is generally a promise to repay the principal
along with a fixed rate of interest on a specified date called the maturity date.
MUTUAL FUNDS-These are funds operated by an investment company which arises
money from the public and invests in a group of assets (shares, debentures etc.) in
accordance with a stated set of objectives. It is a substitute for those who are unable to
invest directly in equities or debt because of resource, time or knowledge constraints.
Benefits include professional money management, buying in small amounts and
diversification. Mutual fund units are issued and redeemed by the fund management
company based on the funds Net Asset Value [NAV], which is determined at the end
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of each trading session. Mutual funds are usually long terms investment vehicle
though there are some categories of mutual funds, such as money market mutual
funds which are short term instruments.
Products of Standard Chartered
1. SAVINGS ACCOUNT
a. AXcess Plus
Get instant cash at over 20,000 ATMs across India and over 10,00,000 ATMs across
the world through the Visa network. And get a globally valid Debit Card that lets
you shop at over 3,26,000 outlets in India and at over 14 million outlets across the
world.
FREE Unlimited Visa ATM transactions* (Cash withdrawal andBalance enquiry)
FREE Standard Chartered Bank branch access across the county FREE Doorstep Banking* FREE Demand Drafts/Pay Orders* (drawn at SCB locations) FREE Payable at Par Chequebook
Other features available are:
International Debit Card Phone Banking Net Banking and Extended Banking Hours
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b. Parivaar
Parivaar is much more than a regular Savings Account. It allows you maintain your
individual identity while allowing you to tap your family's financial strength. It also
offers attractive insurance options to protect against unforeseen events and the
facility of Systematic Investment Plan (SIP), a unique long-term wealth building
tool.
Your family can maintain individual savings accounts with the benefit ofclubbing balances in grouped accounts.
Anytime, anywhere access to accounts through ATMs, Phone Banking andInternet Banking.
Option of Systematic Investment Plan (SIP), a well known long term wealthbuilding tool that allows you to invest a fixed amount of money every month in
specific mutual funds. This comes with a direct debit facility and avoids the need
to remember dates and write cheques every month.
Globally valid ATM-cum-debit card can be used at 55,000merchant outlets inIndia and 12 million outlets worldwide
c. No Frills Account
You can now open an account with Standard Chartered Bank, with an average
quarterly balance of as low as Rs. 250. Whats more you can avail of Anywhere
Banking, by which you can access your account from any branch of Standard
Chartered Bank in India.
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Quarterly Average Balance, as low as Rs. 250.
ATM card & Debit Card available 4 free transactions per month at any Standard Chartered Bank channel
(Internet banking, Phone Banking, ATM & Branch)
Anywhere bankingAccess your account from any branch of StandardChartered Bank.
Access to Phone Banking and Internet Banking Free Cheque deposit at anySCB Branch or ATM.
d. AaSaan
No Minimum Balance requirement Free unlimited access to any SCB branch across the country for
Customer in-person
Unlimited Free across to SCB ATMS Up to 4 free cash withdrawal transactions per month at other domestic VISA
ATMs
Nominal quarterly fee of Rs. 100 (reversed if Average Balance in the quarteris Rs. 10, 000 or more)
OTHER FACILITIES:
International Debit Card Phone Banking Extended banking hours
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Locker facility
Doorstep banking
To open an aaSaan account, you have to initially fund the account with Rs.
10,000.
2. ULIP- Unit Linked Insurance Plan
LIFE INSURANCE is a guarantee that your family will receive financial support,
even in your absence. Put simply, life insurance provides your family with a sum of
money should something happen to you. It thus permanently protects your family
from financial crises.
In addition to serving as a protective cover, life insurance acts as a flexible money-
saving scheme, which empowers you to accumulate wealth-to buy a new car, get your
children married and even retire comfortably.
Life insurance also triples up as an ideal tax-saving scheme. To know more, read the
Key Benefits of Life Insurance.
Key Benefits of Life Insurance
Life insurance, especially tailored to meet financial needs
Need for Life Insurance
Today, there is no shortage of investment options for a person to choose from.
Modern day investments include gold, property, fixed income instruments, mutual
funds and of course, life insurance. Given the plethora of choices, it becomes
imperative to make the right choice when investing your hard-earned money. Life
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insurance is a unique investment that helps you to meet your dual needs - saving for
life's important goals, and protecting your assets.
Asset Protection
From an investor's point of view, an investment can play two roles - asset appreciation
or asset protection. While most financial instruments have the underlying benefit of
asset appreciation, life insurance is unique in that it gives the customer the
reassurance of asset protection, along with a strong element of asset appreciation.
The core benefit of life insurance is that the financial interests of ones family remain
protected from circumstances such as loss of income due to critical illness or death of
the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth
creation proposition. The customer therefore benefits on two counts and life insurance
occupies a unique space in the landscape of investment options available to a
customer.
Goal based savings
Each of us has some goals in life for which they need to save. For a young, newly
married couple, it could be buying a house. Once, they decide to start a family, the
goal changes to planning for the education or marriage of their children. As one grows
older, planning for one's retirement will begin to take precedence.
Clearly, as your life stage and therefore your financial goals change, the instrument in
which you invest should offer corresponding benefits pertinent to the new life stage.
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Life insurance is the only investment option that offers specific products tailor-made
for different life stages. It thus ensures that the benefits offered to the customer reflect
the needs of the customer at that particular life stage, and hence ensures that the
financial goals of that life stage are met.
The table below gives a general guide to the plans that are appropriate for different
life stages.
Life Stage Primary Need Life Insurance Product
Young & Asset creation Wealth creation plans
Single
Young & Just Married Asset creation Wealth creation and
Mortgage protection plan
Married with Children's Education insurance
Kids Education, Asset Mortgage protection
Creation and protection and wealth creation plans
Middle aged Planning for Retirement
with grown retirement and Solutions & mortgage
up kids asset protection protection
Across all Life-stages Health plans Health Insurance
Standard chartered Bank has a tie up with Bajaj Allianz Life Insurance to sell their
insurance plans.
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Some of the key Life Insurance plans available are:
Max Gain: A product that offers the opportunity to get upside benefit of
units price with complete downside protection from the fall in the equity
market
o Guarantee to encash units at maturity at the highest unit price achievedby the fund over the 10 year term of the policy
o Guaranteed Addition at maturity : Up to 350% of total allocationcharges
o No surrender charge after 3rd policy yearo Continuance of life cover even if premiums are not paid in the first 3
years
o Flexibility to increase / decrease regular premiums to suit changingneeds
Invest plus: A product that offers a guaranteed investment return and an
insurance wrap
o Investment return is declared at the beginning of the year. It will beapplicable on the entire policy value and not just on the premium paid
o Investment returns once declared are guaranteedo The policy value is enhanced by adding Additional Bonus @ 10% on
Net Premiums paid after 10th year till policy term
o Regular Premium allocation is 95% while top-up premium allocation isup to 121%
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o Refund of up to 100% of the cost of life insurance cover at maturity
Shield plus: A unit linked single premium endowment plan that offers the
dual advantage of Guarantee Return and Capital Preservation
o It gives a Guaranteed minimum 170% of unit price at maturityo Option to choose Life Cover (1.1 or 5 times of the Single Premium )o Up to 100% allocation of the Single Premium paido Flexibility to decrease Sum Assured and avail Partial Withdrawalso No Surrender Charge from 6th Policy Year onwards
Young Care II & Young Care Plus II: A unit linked regular premium
plan specially designed to secure your childs future
o Option to choose from two additional rider benefits.o The Product has a WOP feature where in on the death of Life assured,
the policy continues with premiums paid into the policy by the
insurance company till the end of term
o Provides loyalty additions starting from 6th Policy Year to enhance thefund value
o Sum Assured is paid on Death and WOP is triggered. Nomineereceives the fund value at the end of the term
o In case of financial constraint, there is an option to decrease thepremium
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New Unit Gain II: New Unit Gain is a regular premium Unit-Linked
Endowment Plan
o Your investment, apart from normal allocation, receives Loyalty Unitsequivalent to 0.35% p.a. of the regular premium fund value at the end
of each policy year starting from 6th year till maturity provided all due
regular premiums have been paid
o Choice of 7 investment funds, with complete flexibility to switchmoney from one fund to the other
o The policy continues to participate in investment performance of thefund(s) even if one is unable to pay the premium for 3 full years
o Flexibility: 1) To increase / decrease regular premium 2) To availPartial withdrawals at any time after 3 years from commencement of
the policy 3) To avail Unlimited free switches every year under
Investor Selectable Portfolio Strategy
Future Secure II : Enjoy your retirement years with this pension plan
o This pension plan with 2 options - with a life cover & without a lifecover
o The allocation to funds starts from 80% and keeps reducing dependingon the premium size
o Future Secure has an Unlimited Top-up facilityo Loyalty Units get infused from Year 6 onwards as a % of fund value
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MRTA: Mortgage Reducing Term Insurance Plan: An offering for customers
with a home loan or loan against property
o The policy is a stand-alone policy and continues even if the loan isforeclosed or transferred.
o The product provides valuable life cover at an attractive benefit-to-premium ratio
o The life cover amount paid is TaxFree.o Insurance Premium can be structured as a part of the loan EMIo In the event of untimely death of any member, the borrowers family is
relieved from the burden of financial debt.
INVESTMENTS:
MUTUAL FUND
Mutual Funds are a pool of funds to diversify risk. These are funds operated by an
investment company which raises money from the public and invests in a group of
assets [shares, debentures etc] in accordance with a stated set of objectives .It is a
substitute for those who are unable to invest directly in equities or debt because of
resource, time or knowledge constraints. Benefits include professional money
management, buying in small amounts and diversification. Mutual fund units are
issued and redeemed by the fund management company based on the funds Net
Asset Value [NAV], which is determined at the end of each trading session. Mutual
funds are usually long terms investment vehicle though there some categories of
mutual funds, such as money market mutual funds which are short term instruments.
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Benefits
The reason that mutual funds are so popular is that they offer the ability to easily
invest in increasingly more complicated financial markets. A large part of the success
of mutual funds is also the advantages they offer in terms of diversification,
professional management and liquidity
In MFs, the risk involved decreases and the return increases because of diversified
pool of funds.
It is the cheapest of all investments. But if you invest through broker then you have
to any 2.5% of the total investment but if you invest directly into the company no
entry charges will be taken.
There is no lock in period in case of MFs but if you divest your investment within
a period of 1year then you will have to pay an exit load between 1%- 2%.
Tax saving is another benefit given to the investors.
Flexibility - Mutual Fund investments also offers you a lot of flexibility with features
such as systematic investment plans, systematic withdrawal plans & dividend
reinvestment.
Affordability - They are available in units so this makes it very affordable. Because
of the large corpus, even a small investor can benefit from its investment strategy.
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Liquidity - In open ended schemes, you have the option of withdrawing or redeeming
your money at any point of time at the current NAV.
Diversification - Risk is lowered with Mutual Funds as they invest across different
industries & stocks.
Professional Management - Expert Fund Managers of the Mutual Fund analyze all
options based on experience & research
Potential of return -The fund managers who take care of your Mutual Fund have
access to information and statistics from leading economists and analysts around the
world. Because of this, they are in a better position than individual investors to
identify opportunities for your investments to flourish.
Low Costs - The benefits of scale in brokerage, custodial and other fees translate into
lower costs for investors.
Regulated for investor protection - The Mutual Funds sector is regulated to
safeguard the investor's interests.
If the market price decreases, the no. of units held by the investor increases and vice
versa.
APPROACH AND PROGRESS
2011 priorities
Drive performance through continued focus on engagement and retention.
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Develop deeper leadership pipelines by ensuring delivery of personal
development plans, mentoring and networking for their high performing
talent.
Build depth in local talent pools especially in key, high growth markets. Use the new brand positioning for the Bank and the Customer Charter to
further embed their differentiated culture and values.
A workforce is more than a group of individuals; it is what brings an organization to
life. Operating in 71 markets and representing 125 nationalities, their employees
immediately demonstrate their diverse nature.
Seven years ago they articulated five values: International, Courageous, Responsive,
Creative and Trustworthy. These are the values that they live by. They are what stand
us apart from their competitors and create a culture that truly makes Standard
Chartered a great place to work.
From Peter Sands, their Group Chief Executive, to the most junior people in their
branches, they ask their staff to live their values. Their senior managers lead by
example. They bring their values to life every day in the way that they treat their
employees, interact with customers and become involved in their local communities.
They strive to ensure every employee is very clear on what they expect of them. In a
new development this year, objectives are now online, making them easily accessible
to each employee and their manager. This will help raise the bar on performance and
place it at the heart of their business. They expect every employee to perform strongly
from a business point of view, and to do so in a way that is consistent with their
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values. Decisions on performance related remuneration are determined based on what
people achieve as well as how it is achieved.
At its best their culture fosters loyalty and creates an environment in which their
employees thrive, which is fundamental to sustained high performance.
Their reward structures inevitably play a role in creating sustainable performance.
They remain committed to paying for performance and, as always, aim to align their
remuneration policy with regulatory requirements and best practice while ensuring
that reward is appropriate and competitive. These policies support and drive their
business strategy and help reinforce their values.
They have an illustrious history and an enviable future operating in markets, such as
Asia, Africa and the Middle East, where the pace of change and development is
unprecedented.
Building a sustainable business is critical. Their success will depend on the efforts of
their employees. It is vital that their culture engenders loyalty and creates an
environment in which their employees thrive.
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PRESENCE OF STANDARD CHARTERED IN INDIA
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SWOT ANALYSIS
STRENGTHS-
Strong presence in India-150 years of banking in India.
Provides variety of convenience of online banking to access information about
various accounts and also transfer money.
Strong Brand Name- Worldwide presence
Variety of services offered.
WEAKNESS-
ATM coverage not as good as other private banks.
Service does not cater to the mass.
Advertising is not aggressive
Credit cards facilities not good as other private banks.
Not many branch networks.
OPPORTUNITIES-
Government removing restrictions on foreign banks on 2009,
Would allow those banks to open shop in India. Standard Chartered has an
opportunity to increase its branches in India, and further utilize its good image here.
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Scope for more effective use of their Brand Name.
THREATS-
Emergence of Indian private banks.
Nationalization of Banks- these banks has many more branches networks than foreign
banks.
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CHAPTER 3
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PRESENTATION OF DATA
OJECTIVE- To understand the basics of investment and various alternatives that is
available with the investor.
Also to understand the customer psychology of investments and what are thevarious objectives behind the investment.
TYPES OF RESEARCH
DESCRIPTIVE IN NATURE-
The descriptive research design is one that describes the things such as the market
potential for a product or the demographics and attitudes of customers who buy the
product. It includes questionnaire survey and fact finding inquiry.
SAMPLE DESIGN
SAMPLE UNIT: DELHI/NCR REGION
SAMPLE SIZE: 50
SAMPLE SELECTION: RANDOM, CONVENIENT
SOURCES OF DATA COLLECTION
PRIMARY DATA COLLECTION:
Primary data was collected through questionnaires. Refer to the appendix for the data.
SECONDARY DATA COLLECTION:
Secondary sources through
Internet Papers
Articles and Books
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ANALYSIS AND INTERPRETATIONS
Q1. What is your age group?
Dig 2.Distribution according to Age Group
According to the survey, maximum number of people belongs to the age group of 18-
25 years. So they can say that most of the respondents will be willing to take risk and
make investments in the market instruments with moderate risk.
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Q2. What is your Occupation?
Graph 1: Distribution According to their Occupation
The above graph shows the occupation of the sample respondents.
50% of the respondents belong to the category of salaried employees.
16% of the respondents are into Business.
14% of the responds are self employed and the rest 20% into other occupation
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3. Under which range your Household Income falls?
Dig 3: Household Income Range
The graph above depicts the household income range of the respondents.
The income range of the maximum respondents lie in the 5-10 lakhs category whereas
only 4% i.e. only 2 respondents income falls in the category of < 2 lakhs.
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Q4. What is your objective behind Investments?
Graph 2: Proportion of Objectives
According to the graph, the basic objective of most of the people behind investments
in Tax benefits followed by good returns.
It is really important for the investor to get good amount of profits on his investment.
The next possible reason for investment is future plans for themselves and their
family. Various other reasons for investments include safety and security of capital
and managing uncertainties.
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Q5. How do you take financial decision?
Dig 4. Financial Decisions
According to the survey, 29% i.e. maximum no. of respondents take their financial
decisions based on others opinion i.e. word of mouth.
22% of the total respondents take their financial decision independently. They take
this decision based on their own interpretation and calculations.
19% of the respondents take their financial decisions with the help of financial
advisors.
12% of the respondents take their financial decision based on the interpretation of the
broker.
Remaining respondents take their financial decisions either with the help of the bank
or from the CA.
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Q6. How much Risk are you willing to take?
Dig. 5: Risk Ability
According to the graph above, 70% of the respondents are willing to take moderate
risk i.e. 35 respondents take moderate risk while taking investments decisions.
12% of the respondents i.e. 6 people out of 50 surveyed are willing to take high risk.
18% of the respondents i.e. 9 people are risk averse so they make investments in those
securities which have less risk involved.
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Q7. What do you have presently in your portfolio in form of investment?
Graph 3: Various Financial products for Investments
According to the survey, most of the respondents have insurance policies in their
portfolio followed by fixed deposits. These two are those instruments which involve
low risk. Those who can moderate risk have invested in property, mutual funds and
equity. Some of the people have also invested in ULIP and gold which involved low
risk
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Q8. How would you rate the satisfaction level with your current portfolio?
Dig. 6: Distribution of Satisfaction level
The above chart shows the satisfaction level of the sample population.
Majority of the sample population rate their current portfolio as Good which
constitutes to 70%.
18% of the sample population i.e. 9 respondents out of 50 rate their current portfolio
as Very Good.
6% of the respondents are not much satisfied with their portfolio so they rate it asAverage.
Out of the total sample size of 50, only 4% of the respondents i.e. 2 people rate their
portfolio as Excellent as they must be getting good returns from their investment.
Remaining 2% of the total population do not have much idea about the investment
strategies so may not be getting much returns so they rate their portfolio as Poor.
ANALYSIS BASED ON THE AGE GROUP OF THE
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RESPONDENTS
A)Age Group 18-25 years
i) Occupation
.
Graph 4: Distribution of Occupation for the Age Category 18-25 yrs
In this age group, maximum no. of the res Out of the total sample population, 7
respondents out of 27 is neither into job, nor business. They have either invested into
the share or commodity markets or they are students.
Out of 27, 4 respondents are self employed i.e. they have joined their family business.
Remaining 2 respondents out of 27 in this age group are into business respondents are
salaried employees.
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ii) Income
Graph 5: Graph of distribution of Income
Dig. 7: Diagramof distribution of Income
The above graph shows the income level of the respondents in the age group of 18-25
years.
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In this age group, maximum no. of respondents has an income in the range of 2-5
lakhs.
10 of out of 27 respondents in this age group have an income range between 5-10
lakhs.
Around 20% of this age group has an income above 10 lakhs and the remaining 10%
are below 2 lakhs.
iii) RISK
Dig 8: Risk Ability
According to the graph, 66% of the respondents i.e. 17 respondents out of 27 can take
moderate risk and invest in both the stock market and the government bonds. These
people can have a portfolio with large as well as small cap funds.
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Those who take low risk invest in liquid funds, debt funds and in some of the
government bonds.
The remaining 15% of the respondents take high risk which means that they invest in
equity, mutual funds and other risky instruments.
This graph shows a correlation betwe
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