L . N.

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT &

RESEARCH

IV SEMESTER PROJECT

BY BIDVI JAYDEEP ARUN

HPGD / JA21 / 0490

 Introduction
 Financial products are, in a nutshell, contracts that are bought and sold on a
marketplace. This is a very general definition as financial products, also called
financial vehicles, are diverse and come in several different forms.

 The financial industry is quite adept at creating new products and successfully
marketing them to the masses. Many of these products have been successes that
have made money for investors and the financial institutions that offer them.

 A financial product is an instrument in which a person can either:

 Make a financial investment (for example, a share);

 Borrow money (for example, credit cards, loans or bonds); or

 Save money (for example, term deposits).

 List of the financial product
- Mutual Fund
- Bond
- Insurance
- Life Insurance
- Derivative
- Saving Account
- Structured Product
- Equity
- Securities
- Credit Derivative
 Mutual Fund

•A mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that collects money from
a number of investors who share a common investment objective and invests the same in equities, bonds, money
market instruments and/or other securities.

 Bond

•"Bond funds" and "income funds" are terms used to describe a type of investment company (mutual fund, ETF,
closed-end fund or unit investment trust (UIT)) that invests primarily in bonds or other types of debt securities

 Saving Account

• Look to a savings account when you want to set money aside for future needs and goals. Savings accounts
allow you to deposit money for safekeeping and earn interest on your balance. You can open these accounts at
a bank or credit union.
 Insurance

• It is a contract between the insured and the insurance company whereby the insured financial risk
is covered by the insurance company. The risk can be of your vehicle, property, legal, etc. So
effectively, you pass on the risk to the insurances company and they charge you a nominal sum of
money for taking that risk which is called  Insurance Premium.

 Life Insurance

• Life insurance is a contract between an insurer and a policy owner. A life insurance policy
guarantees the insurer pays a sum of money to named beneficiaries when the insured dies in
exchange for the premiums paid by the policyholder during their lifetime. The life insurance
application must accurately disclose the insured’s past and current health conditions and high-risk
activities to enforce the contract.
 Derivative

• Financial derivatives are used for two main purposes to speculate and to hedge investments. A
derivative is a security with a price that is dependent upon or derived from one or more
underlying assets. The derivative itself is a contract between two or more parties based upon the
asset or assets. Its value is determined by fluctuations in the underlying asset. The most common
underlying assets include stocks, bonds, commodities, currencies,. Interest rates and market
indexes.

 Structured Product

•Structured Products can be loosely defined as a savings or investment products where the return is
linked to an underlying asset with pre-defined features (maturity date, coupon date, capital
protection level …). They belong to the range of products with ‘non-traditional’ investment strategies.
 Equity

• Equity represents the amount of money that would be returned to a company’s shareholders if that
company were to liquefy its assets, pay off its debts, and distribute the remainder of its capital.
More generally, equity can be thought of as a degree of ownership of an asset after subtracting all
debts associated with it. Equity is recorded on a company’s balance sheet along with assets
and liabilities. To determine a company’s equity, just take the sum of their assets and subtract the
sum of their liabilities.

 Securities

• The term "security" refers to a fungible, negotiable financial instrument that holds some type of
monetary value. A security can represent ownership in a corporation in the form of stock, a creditor
relationship with a governmental body or a corporation represented by owning that entity's bond; or
rights to ownership as represented by an option
 Credit Derivative

• A credit derivative is a financial contract that allows parties to minimize their exposure to credit risk.
Credit derivatives consist of a privately held, negotiable bilateral contract traded over-the-counter
(OTC) between two parties in a creditor/debtor relationship. These allow the creditor to effectively
transfer some or all of the risk of a debtor defaulting to a third party. This third party accepts the risk
in return for payment, known as the premium.
 10 Steps involved in the creation of a new Financial Product.

1. Concept of New Financial Products 

• The first step in developing a new financial product is to conceptualize it. The idea for a new product
can arise from a variety of sources, such as client demand, internal sales force or a third party.

2. Product Development

• Coming up with a product idea is one thing, but developing it is another thing altogether since the
devil truly is in the details. At this stage, the product development team has to translate the idea into
a tangible product that can be sold to the institution’s client at a reasonable profit. The development
team has to walk a fine line in devising a product that is neither unnecessarily complex (a real risk
with financial products), nor is so plain-vanilla that it is easy for the competition to replicate.
The clientele for the product is also identified at this stage since most of the subsequent steps are driven by
whether the product is meant for a retail audience, or should only be targeted at institutional clients.

3. Regulatory, Legal Requirements

• The new product must meet securities regulations mandated by the appropriate authority.

4. Operations

• At this stage of a new product's evolution, the nitty-gritty is hammered out. This is probably the most
important step in the entire new product development process since it encompasses all the key details
involved with offering the product. This includes developing the forms and paperwork to be filled out by a
client, ensuring the transaction will be efficiently executed on the firm’s platform and identifying the steps
involved in processing the trade in the back office. It also includes other key elements such as
devising risk management and controls to make sure that risks to the firm arising from the new product are
mitigated, as well as client reporting, employee training (front office and back office) and supervision. 
5. Registration of Products

• The new product may need to be registered through a prospectus or offering documents with the
applicable body such as the Securities Exchange Commission 

6. Marketing New Financial Products

• Marketing a new product is vital to ensure its success. This phase also involves educating the client
if the product is quite complex. In general, marketing cannot commence—or can only be conducted
in a limited manner—until such time as approval has been received from the body with whom the
prospectus or offering document has been registered. Developing marketing literature such as
brochures and presentations that effectively communicate the product’s features and benefits, and
formulating a cohesive media strategy, are time-intensive activities that can take weeks to
complete.
7. Distribution of the New Product

• This is another key step since if there is no effective sales force to sell or distribute the product, it will be
doomed to failure. The firm or institution has to make a number of important decisions at this stage — who
will sell the product, how will they be compensated, what is the level of compensation and so on. The
product’s attributes are essential for determining the right target audience for it.
• For example, a high-risk, high-reward product or one that is quite complex may be better suited for
institutional investors, while a relatively simpler one may be attractive to retail investors. Once the target
market has been identified, the right distribution channels can then be put into place.

8. Product Launch

• Finally, the big day arrives when the product is finally launched, the culmination of months of effort. New
financial products are typically launched with a lot of fanfare, right after or during a media blitz to raise
product awareness. Some new products may fly off the shelf as soon as they are released, while others
may take more time to gain traction. It all depends on which investor need is being met by the new product
—income, growth, hedge, or other needs—as well as its risk profile.
9. Compliance

• The firm’s compliance department will monitor sales of the new product to ensure that it is only
being sold to those clients of the firm for whom the product is suitable. Client suitability is a very big
issue in the financial industry.

10. Product, Profitability Review

• In the final stage of a new product’s development cycle, it will be reviewed at set periodic intervals
to assess various parameters — product sales versus projections, unexpected challenges, risk
management, the product’s contribution to profit and so on. Depending on the outcome of such
periodic reviews, the new product may either turn out to have a short shelf life, or it may be a winner
that expands the firm’s portfolio of successful product offerings.
 Financial Product
• Credit Card
 Definition

• A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a
card entitling its holder to buy goods and services based on the holders promise to pay for these goods and
services. A credit card is different from a charge card, where a charge card requires the balance to be paid in full
each month.

• Credit cards provide convenience and safety to the buying process. It enables an individual to purchase certain
products/services without paying immediately. Credit card can, therefore, be considered as a good substitute for
cash and cheques

• A credit card is a way of payment by the plastic cards which are issued to customers for their payment. Credit
cards are different than the debit cards.

• Credit card works differently from the debit card. It is issued after a credit card application has been made to the
issuer. The issuer then lends money to the credit card holder generally on different rates of interest. And if a
consumer is using credit cards then it means he can reconcile his balance at the cost of charging interest and it
would make his payment period longer than before. Most credit cards are having almost the same shape and
size around the globe.
• Credit cards work in a very simple way, a consumer is issued a credit card after his application for
credit card has been approved by concerning authorities and a credit company shows its consent to
issue the applicant a credit card. Now the customer who has purchased the credit card will be able to
buy things on credit up to the limit of credit which was agreed upon by both parties in terms and
conditions.

• A consumer can also used credit card online facilities to get benefit from his credit card. This online
credit card facility is easy to use and it is faster than the actual procedures of cash transactions .

• Every credit card ts supported by a credit card compames. Some of credit cards companies are best
and they offer very user-friendly credit cards. This kind of credit card is one of the best credit card and
their characteristics have no comparison with any other type of credit cards.

• In these cards the widely known cards are Visa Credit Cards & Master Credit Cards they are used all
over the world. You can apply for credit card in any credit card company, or in a bank or you can also
apply online for getting a credit card.
• Different credit card companies and credit banks also maintain a system of credit check to get
their credit in times. So a consumer will not be able to deceive them by using their credit cards.

• This credit check is maintained regularly and if a credit card holder is not able to pay his
payments in the assigned time of payment then he will be given a grace period and in a case
he would not be able to pay his credit. His credit card would be blocked. And he will not be
able to make any further purchases from his credit card.

• The rewards and points which person gets from using a credit card can be emerged together
and that would the credit card consolidation.
 History of Credit Card

• Selling goods on credit, relying upon the credibility of the consumer has been the practice of
the merchants from time immemorial. Such a system helped both the consumer and the
merchant. In this context, credit cards were introduced as a viable means of selling goods on
credit with an aim of expanding sales and building a strong customer base.

• The credit card was the successor of a variety of merchant credit schemes. It was first used
in the 1920s, in the United States, specifically to sell fuel to a growing number of automobile
owners. In 1938 several companies started to accept each other's cards.

• The concept of using a card for purchases was invented in 1887 by Edward Bellamy and
described in his utopian novel Looking Backward . Bellamy uses the explicit term "Credit Card"
eleven times in his novel.
• The concept of paying merchants using a card was invented in 1950 by Ralph Schneider and
Frank X. McNamara in order to consolidate multiple cards. The Diners Club, which was
created partially through a merger with Dine and Sign, produced the first "general purpose"
charge card, which is similar but required the entire bill to be paid with each statement; it
was followed shortly thereafter by American Express and Carte Blanche. Western Union had
begun issuing charge cards to its frequent customers in 1914.

• Bank of America created the BankAmericard in 1958, a product which eventually evolved into
the Visa system ("Chargex" also became Visa). MasterCard came to being in 1966 when a
group of credit-issuing banks established MasterCharge.
 FEATURES OF MODERN CREDIT CARD

• Any card that is used as a payment device to access a customer's financial resources is referred
to as a credit card.The card may be used during travel,home,for purchases or at the Automated
Teller Machines(ATMs) for credit or debit transactions.
• It is also known as "plastic money",and it can be used for the purchase of all kinds of goods and
services

• Following are the salient features of the modem credit card:

 Fees and Charges

• The saying "there's no such thing as a free lunch" is particularly true when it comes to credit cards.
So work out exactly what fees you're likely to be paying, and if it's possible to avoid them. For
example, you may avoid paying interest if you pay the balance off in full each month.
 Annual Fee

• When the credit card companies realised that some people really could be disciplined and pay off
their balance each month, they discovered they didn't make any money. So in came the annual
fee - basically to make sure you pay them something for the use of their card. The good news is
that with the credit card market being so competitive, you can often negotiate to have this fee
removed.

 Cash Advance Fee

• Nearly every credit card company will charge you a cash advance fee. Be warned - some of
them charge some very hefty cash advance fees.
 Wide Usage:

• Bank credit is the most widely used payment device issued by banks.It is based on the system
of revolving credit whereby a credit limit is sanctioned to the customer and can be availed in part
or in full.Once the outstanding balance is paid,the credit limit is restored for further use.The credit
card holders can use the credit cards at merchant
• Locations to buy goods or services.Special credit cards can also be used to obtain cash through
ATM's .Going by their popularity all over the world,credit cards have been a runaway sucess.

 Owner Identification:

• A credit card identifies its owner as the one who is entitled to purchase goods and services
without physical money and is eligible for credit from establishments.
 Credit Limit:

• The issuer, for the pupose of convenience and scrutiny, sets up a credit limit for its cardholders and a floor limit for
its merchants establishments. The convenience and safety factors add value to these cards.

 Technology Dependent:

• The credit card business is typically a high volume low value business ,with the potential to break-even only
beyond a certain volume of cards issued.the dependence on technology is inevitable to keep the operating cost to
the minimum

 Other Fees

• Credit companies are very good at coming up with fees for almost everything, so check the fine print and make
sure you know what they are. Some things to look out for include over-the-limit fees, late-payment fees, return-item
fees and set-up fees. Mostly these can be avoided by careful management , but it's still handy to be prepared if
you ever get charged one
 FACILITIES AND SERVICES :
• Besides providing credit, the credit card organisations extend some additional facilities to attract
customers.Some of these facilities offered by banks are explained below:

 Twenty four hour service

• The revolutionary phone banking service ensures that the banks extend 24 hour customer service
to assist the cardholder,all seven days a week.For example,SBI card help line available for SBI
cardholders,is of great help to cardholders and provides a variety of information required by
customers.

 Supplementary Cards

• Supplementary cards are issued to the family members of cardholders. A cardholder of any bank
can obtain a maximum of two supplementary cards at the prevailing card fee for the immediate
family members.
 Advantages of Credit Card

• They allow you to make purchases on credit without carrying around a lot of cash. This allows
you a lot of flexibility.

• They allow accurate record-keeping by consolidating purchases into a single statement.

• They allow convenient remote purchasing - ordering/shopping online or by phone. They allow
you to pay for large purchases in small, monthly installments.

• They are cheaper for short-term borrowing - interest is only paid on the remaining debt, not the
full loan amount.

• Many cards offer additional benefits such as additional msurance cover on purchases, cash
back, air miles and discounts on holidays.
 Disadvantages of Credit Card

• You may become an impulsive buyer and tend to overspend because of the ease of using credit
cards. Cards can encourage the purchasing of goods and services you cannot really afford.

• Credit cards are a relatively expensive way of obtaining credit if you don't use them carefully,
especially because of the high interest rates and other costs.
• Lost or stolen cards may result in some unwanted expense and inconvenience.
• The use of a large number of credit cards can get you even further into debt.

• Using a credit card, especially remotely, introduces an element of risk as the card details may
fall into the wrong hands resulting in fraudulent purchases on the card. Fraudulent or
unauthorized charges may take months to dispute, investigate, and resolve.
 DRAWBACKS OF CREDIT CARDS

• Credit card has many drawbacks for the user, issuer, and the merchant establishments alike. Some
of these are :

• Waste of money :It would be a waste of money to subscribe to a credit card if the card was not
utilized.

• Thoughtless buying : Credit cards invariably encourage impulsive purchases. Since the user need
not pay instantly, it may tempt the purchase of products/services that are not genuinely required.

• Financial problem : These happens where repayment on the credit card account is not done
promptly.

• Mental agency : The pressure tactics used by recovery agents appointed by some card issuers to
collect outstanding dues may cause mental agony to the user.
 PREVENTION:

•Considerable time and money are spent in controlling credit card frauds. Some of the
methods used in prevention of frauds are:

• Maintaining details of fraudulent application files,preferably m an automated environment.

• Establishment of credit Information Bureaus(CIB) which provide the credit history of
individual borrowers through credit reports.
• Designing systems to moniters cardholder activity and identify unusual spending behaviour
• Educating cardholders on card frauds and creating awareness about measures to prevent
frauds
• Merchant education in reconnizing and Intercepting counterfeit cards

• Strict and comprehensive controls at the manufacturing level to ensure that each credit
card meets established standards and strictly conforms to all security requirements .
 ICICI Bank Credit Card
 COMPANY PROFILE :

• ICICI Bank is India's second-largest bank. The Bank has a network of about 573 branches and
extension counters and over 2,000 ATMs. ICICI Bank was originally promoted in 1994 by ICICI
Limited, an Indian financial institution, and was its wholly-owned subsidiary. 

• "ICICI Bank is India's second largest Bank with consolidated total assets of over Rs. 470,000 crores
and networth of over Rs. 50,000 crores. The Bank's capital adequacy ratio of 15.6% is among the
highest levels of capital adequacy in large Indian banks and much higher than the regulatory
requirement of 9.0%. ICICI Bank made a profit after tax of Rs. 4, 158 crore (over US$ 850 million) in
FY2008 and Rs. 3,014 crore (US$ 619 million) in the nine months ended December 31, 2008.“

• ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses.
• ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border
needs of clients and leverage on its domestic banking strengths to offer products internationally .
ICICI Bank currently has subsidiaries in the United Kingdom, Canada and Russia, branches in
Singapore and Bahrain and representative offices in the United States, China, United Arab
Emirates, Bangladesh and South Africa.

• Today, ICICI Bank offers a wide range of banking products and financial services to corporate and
retail customers through a variety of delivery channels and through its
 ICICI Bank offers a number of credit cards that cater to various needs and lifestyle habits. With
ICICI Bank credit cards, you can earn reward points and benefits on your travel, fuel, dining, shopping,
and entertainment expenses. Below is the list of ICICI Bank credit cards. You can study their features,
choose the ones that are best suited for you and apply for the same.

 Features and Benefits of ICICI Bank Credit Cards

 ICICI Bank credit cards come with a lot of exciting offers and discounts that ease your shopping
expenses.

 You can now avail personal loans through your ICICI Bank credit cards with instant approvals.

 ICICI Bank offers a credit card protection plan and this will help you protect your cards from being
misused in case of theft or loss.

 You can easily request and increase the limit on your ICICI Bank credit cards.

 You can pay your mobile, electricity, gas, water bills via your ICICI Bank credit cards online.
 Eligibility to Apply for ICICI Bank Credit Cards
• To avail any of the ICICI credit cards, you must meet these eligibility criteria:

 You must be an Indian national citizen.

 You must not be younger than 23 years at the time of application. The minimum age for an add-on
cardholder is 18 years.

 If you are self-employed, the minimum annual income must be not lesser than Rs.3 lakh, as listed
on the last IT returns document.

 You must have a clean credit record, with no obvious red flags.
 How to Apply for ICICI Credit Card Online

• Step 1: You can easily apply for an ICICI Bank credit card by visiting the website:
https://www.icicibank.com/Personal-Banking/credit-card/apply-online.page

• Step 2: Click on ‘Apply now’.

• Step 3: Fill in the form and click 'Get offers’.

• Step 4: A list of credit cards will be shown to you.

• Step 5: Once you have chosen the credit card that you want, click on ‘Apply
Now'.

• Step 6: Click on ‘Confirm’.

• An ICICI Bank official will get in touch with you and help you complete the
process.
 How to Apply for ICICI Credit Card Offline

• Step 1: Visit any ICICI Bank branch.

• Step 2: A bank official will give you an application form.

• Step 3: You need to fill this form and submit it with the required documents.

• Once you meet the ICICI credit card eligibility criteria, an ICICI Bank official will
get in touch with you and help you complete the process.
 ICICI Bank Credit Card Bill Payment

 Use the bank's Internet Banking facility and login to your ICICI Bank Account. You can then pay the overdue amount.

 You can pay the credit card bill via QR-Code based Unified Payments Interface (UPI) payments.

 You can also make payments via the ICICI Bank iMobile app.

 You can pay your credit card bill via the ICICI Bank Debit Card at ICICI Bank ATMs

• If you are a non-ICICI Bank customer, you can pay your outstanding ICICI credit card bill in the following ways:
• Step 1: Choose the bank from which you want to make your ICICI Bank credit card payment.

• Step 2: Choose the type of credit card.

• Step 3: Enter the 15/16digit ICICI Bank Credit Card number and also the amount that you want to pay.

• Step 4: You will be redirected to a payment interface.

• Step 5: Enter the authentication details and confirm your payment amount.

• Step 6: You will get a Transaction Reference Number once you complete the transaction.
 How to Contact ICICI Bank Credit Card Customer Care

• You can call the ICICI Bank credit card customer care number at 1860 120 7777.
 OBJECTIVES OF THE STUDY :
 Primary Objectives :
• To know the reasons for using credit cards.
• To know the preference for using ICICI bank credit cards.
• To know the Customer satisfaction regarding the credit card.
• To know the preference for various other bank credit card.
• To know the rate of preference for using ICICI bank credit card with other bank credit card.

 Secondary objectives :
• To find the frequency of usage of their Credit card for daily purpose.
• To find the satisfaction levelof the Credit Card.
• To find out who prompted the customer to apply for a particular Credit Card.
• To find out the range of the age where the largest number of users fall
• To find the percentage of multi credit card users.
 SCOPE OF THE STUDY

• The study undertaken for usage of credit card by the customer and to know the preference
regarding the ICICI Bank credit card and also the preference for various other bank credit card
and aims to find the reason of choice for selecting a particular Credit card and relative
preference of customers for various credit.

• The study will help to know the features which attracted the customers. The study helps to
know about the usage pattern of credit card users. The study also helps to find the best
possible way of reaching the customers. The study will also helps in choosing a best credit
card bank. All these results will help the consumer to know the features, functions and to
create awareness of using credit card. This study will also help the bank to create a
product
 LIMITATIONS OF THE STUDY

• The study is applicable only to the credit cardholder. It is not be fully applicable to other cardholders.Insome cases the

cardholder is not fully aware about their bank credit card.

• The area of study is limited to cities and towns only ,because most of the village people do not have a credit card.

• During the collection of data, respondents are not responding with their full interest.

• As it is a sensitive topic, the respondents have not given clear information. So researcher was unable to conduct in depth

study.

• In some cases the respondents does not remember the exact usage pattern which creates a bias.

• Sample size of the project is very small, so we can't come to an clear idea about the project.

• Some customers where not available.

Thank You