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A Project On Analysis of Banking Sector
A Project On Analysis of Banking Sector
A Project On Analysis of Banking Sector
BANKING SECTOR
CERTIFICTE OF APPROVAL
The following Summer Project Report Title Sector Analysis is hereby approved as certificate
studies in management carried out in a manner satisfactory to warrant its acceptance as a
prerequisite for the award of PGDBM for which they have been submitted. It is understood that
by this approval the undersigned do not necessarily endorse or approve any statement made,
opinion expressed or conclusion drawn therein but approve the summer Project only for the
purpose it is submitted. Summer Project Report Examination Committee for evaluation of
Summer Project Report.
Name
Signature
1. Faculty Examiner
_________________
_________________
2. Summer Project
__________________
_________________
Co. coordinator
Project Guide
Project Guide
Date:
Date:
ACKNOWLEDGEMENT
It gives me immense pleasure, having done a project on an interesting and knowledgeable topic
like Sector Analysis.
This project has not only widened my horizon as far as academics are concerned but also helped
me to enlarge my knowledge bank. Marketing Management and Human resources are not topics,
which could be handled with certain amount of casualty. It requires a deep study and hard work,
which is a key to success. There are many people associated with this project without which this
project would not have been possible.
I thank my Institute who has given me an opportunity to show my skills. I also thank all my
nearer and dearer ones without whose support this project would not been possible.
I would like to thank ______________, who allowed me to do this project in Max New York
Life successfully.
Table of contents
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47
An endowment policy covers risk for a specified period, at the end of which the sum
assured is paid back to the policyholder, along with the bonus accumulated during the term
of the policy.
2. Unit Linked Insurance Plan
Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits
of risk protection and flexibility in investment.
Unit linked insurance plan (ULIP) is life insurance solution that provides for the
benefits of risk protection and flexibility in investment.
8. Joint Life Policy
Joint life insurance policies are similar to endowment policies as they too offer maturity
benefits to the policyholders, apart from covering risks like all life insurance policies.
9. Whole Life Policy
A whole life policy runs as long as the policyholder is alive. As risk is covered for the
entire life of the policyholder, therefore, such policies are known as whole life policies.
10. Money-back Policy
Money back policy provides for periodic payments of partial survival benefits during the
term of the policy, as long as the policyholder is alive.
2.3 History & background of Insurance industry:The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed in
primitive men also. They too sought to avert the evil consequences of fire and flood and loss
of life and were willing to make some sort of sacrifice in order to achieve security. Though
the concept of insurance is largely a development of the recent past, particularly after the
industrial era past few centuries yet its beginnings date back almost 6000 years.
Ancient Indian history has preserved the earliest traces of insurance in the form of marine
trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing
from other countries, England in particular. The changes in life insurance industry in India is
seen in four different phases
2.4 Benefits of Insurance:-
Life Insurance Policy is a form of security for the person who insures his life and his
family. Life insurance policies have helped trade and other economic activities to flourish in
a great manner. It has generated lots of job opportunities. It is looked upon as a lucrative
career option.
Benefits of Client:A life insurance policy vouchsafes security for your dependents after your demise. They
can seek out their living even at the absence of other active source of income. Moreover the
amount that you are going to get at the end of the policy period in a term life policy also
makes it a rewarding investment. The following reasons substantiate benefit of a life
insurance policy for an individual.
Early Deaths
The mortality rate is experiencing a declining trend in many parts of the world. However
it is also important to note that the age at which People die is also ever decreasing. Some
reasons for this include unhealthy living style, stress, pollution, and some natural calamities.
This necessitates people to make adequate measures to yield income for their family and
dependents. This could be a serious concern if the insured happens to be the sole bread
winner. Some individuals see this as an option to plan their retirement.
partly responsible for this. Individuals incur many unexpected expenses due to the growing
needs. Insurance comes in handy to meet such an unexpected expense. It also makes sure that
an individual is able to meticulously plan his finances.
Insurance option is more or less an interest free loan. An individual can cancel his insurance
policy and obtain a huge amount if it is imperative in meeting an urgent expenses and he does
not have alternative sources for finance. Life insurance companies therefore do the needful to
consumers.
Tax Concessions
Income tax concessions are available to individuals and corporate houses who adopt
insurance policies. Many have been making investments in Insurance with the sole aim of
enjoying tax benefits. This naturally increases spending power. Since the investments
increases the economic activities in the country automatically increases.
Best Option for Salaried Youth
Insurance is by and large regarded as one of the savings scheme. Students who earn while
studying and those who take up full time employment after their studies see insurance as a
profitable scheme to regulate their savings. Apart from tax concessions life insurance entails
individuals to enjoy more benefits as they have special and attractive schemes for this
segment.
Supports a social cause, and hence sometimes looked up as social responsibility by the
Corporate.
Provides coverage and safeguard against potential loses.
Insurance of Risk gives higher flexibility to Business.
Phase I [1800-1900]
Life Insurance in its modern came to India from England in the year 1818. The advent of
life insurance business in India can be seen with the establishment of the Oriental Life
Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras
Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw
the enactment of the British Insurance Act and in the last three decades of the nineteenth
century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were
started in the Bombay Residency. This era, however, was dominated by foreign insurance
offices which did good business in India, namely Albert Life Assurance, Royal Insurance,
Liverpool and London Globe Insurance and the Indian offices were up for hard competition
from the foreign companies.
Phase II [1900-1955]
In 1914, the Government of India started publishing returns of Insurance Companies in
India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to
regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable
the Government to collect statistical information about both life and non-life business
transacted in India by Indian and foreign insurers including provident insurance societies. In
1938, with a view to protecting the interest of the Insurance public, the earlier legislation
was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions
for effective control over the activities of insurers. The Insurance Amendment Act of 1950
abolished Principal Agencies. However, there were a large number of insurance companies
and the level of competition was high. There were also allegations of unfair trade practices.
The Government of India, therefore, decided to nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and
Life Insurance Corporation came into existence in the same year. The LIC absorbed 154
3.2 Values:Knowledge:
Knowledge leads to expertise; and our expertise is in helping people protect themselves.
Perfectly combining global expertise with local knowledge, we are India's life insurance
Specialist. Max New York Life believes that for knowledge to be of value it must be focused,
Current, tested and shared.
Excellence:
Excellence at Max New York Life implies the ability to perform at a consistently high
level. Focused on the value of continuous improvement in people, processes and the
organization, the company strives for the highest standards of quality in every aspect of its
business.
Honesty:
Honesty is the heart of the life insurance business. It is all about trust. Transparency,
integrity And dependability from the cornerstones of the Max New York Life experience. The
Company ensures that everyone who represents the brand carries a promise: we care in word
as well as deed.
Caring:
Max New York Life is redefining the life insurance paradigm by focusing on customers
first. The service process is responsive, personalized, humane and empathetic. Every
individual who represents the company is for us our brand champion.
3.3 Company Profile:Max New York Life Insurance Company Ltd. is a joint venture between New York Life; a
Fortune 100 company and Max India Limited; one of India's leading multi-business
corporations. The company has positioned itself on the quality platform. In line with its
vision to be the Most Admired Life Insurance Company in India, it has developed a strong
corporate governance model based on the core values of excellence, honesty, knowledge,
caring, integrity and teamwork. The strategy is to establish itself as a Trusted Life Insurance
Specialist through a quality approach to business.
3.4 Products:Max New York Life brings to you specially customized products and services that are
flexible and can be customized to suit your needs. It now has 30 life insurance products
and health insurance including 8 riders that can be customized to over 800 combinations
enabling customers to choose the policy or plan that best fits their need. Max New York Life
also offers 6 products and 7 riders in group insurance business. The company has a plan for
every need, designed as to meet your long term financial goals & aspirations. They help you
fulfilling your dreams & commitments. The list of few plans provided by Max New York
Life Insurance Company Limited is given below:
1. Individual Insurance:
Protection Plan (including Whole Life Plan, Life Protector, Life Protector Plus, Life
Partner Plus).
Children Plan (Children Endowment Plan, Stepping Stones).
Savings Plan (Life Gain Endowment Plan, Life Pay Money Back Plan, Life Gain Plus, 20
Year Endowment).
Retirement (Easy Life Retirement Plan, Endowment to age 60 Plan).
Unit Linked (Life Maker Investment Plan, Life Maker Pension Plan).
Riders.
2. Group Insurance:
Group Term Life.
Group Gratuity.
Employee Deposit Linked Insurance.
Credit Shield.
Unit-Linked Group Gratuity.
3. Max Assure:
Max Assure Bonus Builder.
Max Assure Business Builder.
Max Assure Future Builder.
Max Assure Family Money Back.
Max Assure secure returns builder.
4. Rural insurance:
Max Suraksha.
Easy Term.
Max Mangal Endowment Plan.
Max Vriksha Money Back Plan).
5. NAV:
Life Maker Investment.
Life Maker Pension Plan.
Life Maker Premium.
Smart Steps.
3.5 Promoters:-
Founded in 1985, Max India Limited is a Public Limited company listed on the NSE and
BSE of India with over 26,000 shareholders. Today, Max India Limited is a multi-business
corporate, driven by the spirit of Enterprise, focused on Knowledge, People and Service
oriented businesses of:
Healthcare (Max Healthcare)
Life Insurance (Max New York Life Insurance)
Clinical Research (Neeman Medical International)
Till 1999, The Companys Main Interests and Partnerships were the following:
Business
Bulk Active Pharmaceuticals.
Electronic Component Distribution,
Mobile Telephony.
V-SAT Communications.
Plating Chemicals.
Information Technology.
In 2000, the Company reinvented and restructured itself to focus on the businesses of Life
under the theme, LifeOur Focus. Max New York Life Insurance, founded as a Joint
Venture between Max India Limited and New York Life, a Fortune 100 company, is one of
the leading private life insurers in India.
Max Healthcare, a subsidiary of Max India Limited is Indias first provider of
comprehensive, standardized, seamless, and integrated world-class healthcare services.
3.6 Mission: Become one of the top quartile life insurance companies in India.
Be a national player.
Be the brand of first choice.
Be the employer of choice.
Become principal of choice for agents.
3.7 Vision:To become the most admired life Insurance company in India.
The insurance agents employed at Max New York Life Insurance Co Ltd are trained inhouse with a rigorous training program of over 152 hrs, much higher than the standard 100
hrs of mandatory training laid down by the IRDA. Around 345 Max New York Agent
Advisors qualified for Million Dollar Round table (MDRT) membership in 2006.
It is an internationally renowned congregation of world's top insurance agents.
3.8 Board of Directors:Mr. Analjit Singh,
Chairman, Max India Limited.
Mr. Anuroop (Tony) Singh,
Vice Chairman, Max New York Life Insurance.
Mr. Rajesh Sud,
CEO & Managing Director, Max New York Life Insurance
Mr. Rajit Mehta,
Executive Director, & Chief Operating Officer, Max New York Life Insurance.
Mr. John Harrison,
Director, Max New York Life Insurance
Mr. Richard Mucci,
Director, Max New York Life Insurance
Dr. Omkar Goswami,
Director, Max New York Life Insurance
Mr. Rajesh Khanna,Director, Max New York Life Insurance.
3.9 Management of Company:Rajesh Sud,
Rajit Metha,
East and South Asia at ANZ Grindlays Bank. He has been responsible for Risk Management and
Product
Sunil Kakar,
Ajay Seth,
Debashis Sarkar is responsible in strengthening and steering the Max New York Lifes marketing
programme with a vision towards building Indias most admired life insurance company. He was
also instrumental in establishing additional channels of distribution across the country.
John Poole,
Appointed Actuary
John Poole is the Chief Actuary at Max New York life and is also the Appointed Actuary for
the Company in terms of Indian insurance Regulations.
John joined MNYL in early 2005 following an 18th month sabbatical at his home town in
Cairns, Far North Queensland, during which time he was studying at James Cook University
and working on a contract basis for Sydney based Citicorp Life the reinsurer for all
Citibank generated business in Asia.
M.
Vice
Associate Vice
Regional
Partn
Associate
Assistant Sales Manager &Sales
Advisor &
Max New York Life Insurance FACT SHEET As of September 30th, 2008
Founded
Started Operations
Headquarters
World Wide Web Address
Chairman
Managing Director & CEO
2000
April 2001
New Delhi, India
http://www.maxnewyorklife.com
Analjit Singh
Rajesh Sud
Paid-Up Capital
Employees
14,568
35
Over 800
(Individual)
Number of Products (Group)
4
443
Business
Number of Cities
277
MDRTs
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of
country.
The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are as
mentioned below:
Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
BengaThe East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and
Bank of Madras (1843) as independent units and called it Presidency Banks.l BaIn 1865
Allahabad Bank was established and first time exclusively by Indiansnk.
Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In 1955
The following are the steps taken by the Government:
After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800%
Phase III
In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which
worked for the liberalisation of banking practices.
The gross and net non-performing assets of 13 private banks have increased by a 36.5 percent
and 36.1 percent respectively during the financial year 2008-09.
PSBs with a major share of corporate borrowings have been able to work around the norms. SBI,
major public sector lender, restructured nearly 50,000 small and medium enterprise loans. Dena
Bank and Bank of India restructured loans worth Rs 5,350 crore and Rs 4,800 crore respectively.
Amongst the private banks, Yes Bank has shown the highest growth in NNPA, followed by South
Ind Bank. The NNPA(National Newspaper Publishers Association) of the major private lender,
ICICI Bank increased to Rs 4,554 crore during FY2008-09.
Rates of bank
CRR
: 5.00%
SLR
: 24.0%
Bank Rate
: 6.0%
Repo Rate
: 4.75%
Repo Rate
: 4.75%
: 3.25%
INR / 1 USD
: 48.1300
INR / 1 Euro
: 67.0300
INR / 1 Euro
: 67.0300
: 49.6900
: 49.6900
: 78.6637
: 12.75%-13.25%
: 3.5%
: 3.5%
Deposit Rate
: 7.50%-9.60%
ICICI Bank
Despite the headwinds, ICICI has continued to invest in its branch network. ICICI has 1,438
branches across India, up from 755 branches two years ago, and says it is in the process of
opening 580 more.12% year-on-year increase in operating profit for the year ended March
31,2009.14% year-on-year reduction in costs due to cost rationalization measures Increase of Rs.
5,286 crore in CASA deposits in quarter ended March 31, 2009
Study
This table shows an investment and growth of company. Rate of bank before two year was down
as compare to present year but as we can see the graph that Bank has made its investment in
smart manner so it had touch the high rate but due to some reasons (rumors) it had came down
and now these script is moving good if a person wants to invest in these script for long term than
a investor will earn a handsome amount of profit.
Balance Sheet
Share capital of bank had being increased of almost 46% from past five year and pulse point of
this bank is that it provide best service to its all costumers so bank had gain revenue of almost
320% as compared to year 2005 which is very good for any company as it attract more and more
costumer as well as investors towards the bank. Along with revenue deposits, borrowing, and
other liabilities & provision had also shown a good face to investor and costumes because of all
this bank had became a no.1 bank and costumer also started trusting the bank.
About P/L
Total income of bank had increased by more than 200 % but it has taken a stop in 2008 due to
some of the major reason (rumors) total income of bank had came down by 3 % as compared to
previous year along with these expenditure, intrest expand and operating expenses had also saw a
small fall but all over icici bank had moved good. While PBT of bank had increased this shows a
posetive mark in market.
On other hand bank had shown a good EPS(Earning Per Share) it has almost growth of 20% but
2008-09 was a turning point of its profit it has faced a of loss of 11% but all over it has saw a
good profit. So, to buy this share for long-term is good.
If a person, investor or any layman wants to know his/her profit than he can find it easily by
calculating EPS of his share.
Union bank
Union Bank of India was inaugurated by Mahatma Gandhi eight decades ago. Union Bank of
India is having more than 600 branches and extension counters all over the country. Nearly 351
ATMs are installed. Union Bank of India is a Public Sector Unit with 60.85% Share Capital held
by the Government of India.
Today there are more than 26,000 employees in Union Bank of India
Key Performance figures of Union Bank of India for March 2005
Operating profit
For the year ended March 2005 was Rs.1, 573 crores showing a growth of 6.07%
Cost of Deposits has come down from 5.64% in March'04 to 4.97% in March 05.
Yield on Advances which was 9.03% in the year 2004 fell to 8.33% in the year 2005
Yield on Investment declined from 9.00% in March 2004 to 8.20% in the year under
report.
The Ratio of Net NPA to Net Advances has improved from 2.87% in 2004 to 2.64% in
2005
Graph
Study
This graph shows a progress in the script so to invest as a long term investor is good opportunity
as from past two years its facing a Bull market. This script has shown almost a change of 75m
so its good to enter in market to buy a script .
Black line shows an AVERAGE of a script.
Balance Sheet
successful that it has faced 100% growth as compared to financial year 2005 04. As
well as total income had also saw a growth of 100%.
As income had increased side by side expenses (operating expenses) had also increased.
PBT (Profit before Tax) has saw a hick of more than 380% as compared to financial year
2004 05 .Taxes were negative in financial year 2004 05.As bank had moved good in
that year so it came in profit and had able to pay tax .In financial year 2004 05 tax
amount was -2149.40, but in financial year 2008 09 bank had paid tax of 12600 which
is a big amount of tax to pay.
Total Profit & Loss had also increased 150% .while EPS had become 2.5 times of
financial year 2004 05.
Net profit for the fourth quarter (January-March) of 2008-09 increased 45.62 percent to
Rs.2,742 crore from Rs.1,883 crore in the corresponding quarter of 2007-08, SBI chairman O.P.
Bhatt told reporters here.
The net non-performing asset (NPA) ratio for 2008-09 stood at 1.76 percent, compared to 1.78
percent in 2007-08. The total amount restructured during the year was Rs.8,310 crore .SBIs
total income for the fiscal rose 33 percent to Rs.76,479.2 crore from the
previous years Rs.57,645.2 crore. Consolidated net profit was at
Rs.10,955.2 crore, a 22 percent increase from Rs.8,960.6 crore in 2007-08.
The groups consolidated net income crossed the trillion rupee mark to
Rs.113,093 crore (Rs.1.1 trillion) in 2008-09, 25 percent up from the
previous fiscals Rs.90,218.8 crore. The bank is already present in 33
countries. SBI has plans to increase its Singapore operations from the
present five branches to 12 this year and to 20 next fiscal.
in these bank from long term as we know that Foreign investor play a VITAL role to move
script so we should invest it as a long term investor. Among all three banks insurance company
had invested the major amount among all. As insurance company had invested an good amount
so if a normal investor wants to invest in it can earn a good profit in the investment of bank there
is a investor like TRUST which is a good sign for bank
Graph of SBI
Study
The banks price is volatile throughout its journey. It has shown a change of 10m from 215 225
only. During this period it has touch 290 as the highest and 150 as the lowest. So, this script has a
good movement. If an investor wants to invest in this script than he should invest for short term
may be as intraday investor
Balance Sheet
Bank had earned 100% more interest in terse five finance year. Other Income, Total Income,
Interest Expended, Operating Expenses, Operating Profit, Provisions and Contingencies has also
shown a positive response. While PBT had moved good in five years .But, it has not given a
good response as compare to past financial year 2007 2008, it has fall by 9.20%
Again if will see on Total Expenditure, Profit & Loss, Reported Net Profit, Equity Dividend %,
Earnings Per Share, Book Value per Share all of them had given a good profit.
Ratios
Conclusion:Above compression made of all three banks I came to Conclusion that ICICI Bank is the most
preferred bank by many costumers as it provides the best service among all the banks and its the
most TRUSTED BRAND amongst private bank and all private insurance, due to lot of efforts
made by bank it had lead bank to No.1
There was an major fall in the share price of ICICI bank in financial year 2008 2009 because
some of the rumors in the market ,as bank has its wide arms of network it has large numbers of
branches ,1,438 branches across India, up from 755 branches two years ago, and says it is in the
process of opening 580 more and also has a numbers of ATMS through with the help of his arms
and trusted costumers bank was again able to stand on its position by doing these bank had
proved its value to its costumer in market.
Today the world is suffering through crisis but as the demand improves than we can see its
benefit on the stock price, bank had proved him in the crisis market all because of its trust whicw
his costumers has on bank
Any countries Economy can be said developed or developing by its infrastructure and Banking,
bank are the hidden face of any country. India is a developing country so if economy wants to
regains than country needs money which will be lead by banks, banks are backbone of country
and ICICI bank is backbone of all banks.
Banking is the booming sector in country like India which is on the egad to fly needs lot of
support to country which will open million of doors of jobs and numbers of opportunity for many
people which will all lead to the growth of country.
Recommendation:-
Its great opportunity for all investor and for all intraday traders as insurance company, FII, and
many traders has invested for long term. So, its easy to get profit and come with full handed.
As EPS of bank is 34 which were 27 in finance year 2004 05 .Bank has good returns in all
banks had moved smoothly in given graph ICICI had shown a fast take off and gives a good
return.
If will see at present scenario rate of ICICI bank is 628.65 with a fall of 13 %( 8.25) but if will
have an watch on SBI than rate of bank is 1543.54 with an fall of 40 % (60.40) and all others
bank had an fall of more than 10 %. So would like to suggest that share of ICICI bank is green
for long term expected with an return of almost 30%.