CONTENTS

 Declaration

 Certifications

 Acknowledgement

 List Of Tables

 List Of Graphs

 CHAPTER – I INTRODUCTION

 CHAPTER – II ORGANISATION PROFILE

 Company Profile

 Vision

 History

 Organization Structure And Chart

 Board Of Directors

 CHAPTER – III WEALTH MANAGEMENT

 Introduction

 Meaning

 Wealth Management In India

 Wealth management And Various Fields

 Wealth Management In IDBI Bank

 IDBI Capital Ltd.

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  Equity & Mutual Funds

 Advantages

 Limitations

 ANALYSIS AND INTERPRETATION

 SWOT ANALYSIS

 CONCLUSION

 SUGGESTIONS AND RECOMMENDATIONS

 BIBLIOGRAPHY

 ANNEXURE

PROJECT TITLE

A study of Wealth Management at IDBI Bank Ltd.& Customer Perception

towards portfolio Management

Objectives

 To understand the concept of Banking Industry in India

 To explain the profile of IDBI Bank Ltd.
 To understand various aspects of Wealth Management
 To understand Wealth Management at IDBI Bank. Ltd.
 To have a customers’ perspective about Wealth Management at IDBI
Bank. Ltd.

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 To understand the significance of various Banking operations
 Carry out a SWOT Analysis for getting customers’ insight on Wealth
Management

3
 HISTORY OF BANKING IN INDIA

A bank is a financial institution licensed by a government. Its primary

activities include providing financial services to customers while enriching its
investors. Many financial activities were allowed over time. For example banks are
important players in financial markets and offer financial services such as
investment funds. In some countries such as Germany, banks have historically
owned major stakes in industrial corporations while in other countries such as the
United states banks are prohibited from owning non-financial companies. In Japan,
banks are usually the nexus of a cross-share holding entity known as the zaibastu.
In France, bancassurance is prevalent, as most banks offer insurance services (and
now real estate services) to their clients.
The level of government regulation of the banking industry varies widely,
with countries such as Iceland, having relatively light regulation of the banking
sector, and countries such as China having a wide variety regulations but no
systematic process that can be followed typical of a communist system.

WIDER COMMERCIAL ROLE

The commercial role of banks is not limited to banking, and includes:
• Issue of banknote (promissorynote) issued by a banker and payable to bearer
on demand)
• Processing of payments by way of telegraphic transfer EFTPOS internet
banking or other means.
• Issuing bank drafts and bank cheques accepting money on term deposits
,lending money by way of overdraft, installment loan or otherwise
• Providing documentary and standby letters of credit(trade finance),
guarantees, performance bonds, securities underwriting commitments and
other forms of off-balance sheet exposures
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 • Safekeeping of documents and other items in safe deposit boxes
• Acting as a 'financial supermarket' for the sale, distribution or brokerage,
with or without advice, of insurance, unit trusts and similar financial
products.
• Currency exchange.

Banking channels
Banks offer many different channels to access their banking and other services:
• A branch, banking centre or financial centre is a retail location where a bank
or financial institution offers a wide array of face-to-face service to its
customers.
• ATM is a computerized telecommunications device that provides a financial
institution's customers a method of financial transactions in a public space
without the need for a human clerk or bank teller. Most banks now have
more ATMs than branches, and ATMs are providing a wider range of
services to a wider range of users. For example in Hong Kong, most ATMs
enable anyone to deposit cash to any customer of the bank's account by
feeding in the notes and entering the account number to be credited. Also,
most ATMs enable card holders from other banks to get their account
balance and withdraw cash, even if the card is issued by a foreign bank.
• Mail is part of the postal system which itself is a system wherein written
documents typically enclosed in envelopes, and also small packages
containing other matter, are delivered to destinations around the world. This
can be used to deposit cheques and to send orders to the bank to pay money
to third parties. Banks also normally use mail to deliver periodic account
statements to customers.

5
• Telephone banking is a service provided by a financial institution which
allows its customers to perform transactions over the telephone. This
normally includes bill payments for bills from major billers (e.g. for
electricity).
• Online banking is a term used for performing transactions, payments etc.
over the Internet through a bank, credit union or building society's secure
website.
• Mobile banking is a method of using one's mobile phone to conduct simple
banking transactions by remotely linking into a banking network.
• Video banking is a term used for performing banking transactions or
professional banking consultations via a remote video and audio connection.
Video banking can be performed via purpose built banking transaction
machines (similar to an Automated teller machine), or via a videoconference
enabled bank branch.

6
 IDBI BANK PROFILE

A brief profile
The Industrial Development Bank of India Limited, now more popularly
known as IDBI Bank, was established as a wholly-owned subsidiary of Reserve
Bank of India. The foundation of the bank was laid down under an Act of
Parliament, in July 1964. The main aim behind the setting up of IDBI was to
provide credit and other facilities for the Indian industry, which was still in the
initial stages of growth and development. In February 1976, the ownership of IDBI
was transferred to Government of India.

7
 After the transfer of its ownership, IDBI became the main institution,
through which the institutes engaged in financing, promoting and developing
industry were to be coordinated. In January 1992, IDBI accessed domestic retail
debt market for the first time, with innovative Deep Discount Bonds, and registered
path-breaking success. The following year, it set up the IDBI Capital Market
Services Ltd., as its wholly-owned subsidiary, to offer a broad range of financial
services, including Bond Trading, Equity Broking, Client Asset Management and
Depository Services.
In September 1994, in response to RBI's policy of opening up domestic
banking sector to private participation, IDBI set up IDBI Bank Ltd., in association
with SIDBI. In July 1995, public issue of the bank was taken out, after which the
Government's shareholding came down (though it still retains majority of the
shareholding in the bank). In September 2003, IDBI took over Tata Home Finance
Ltd, renamed ‘IDBI Home finance Limited’, thus diversifying its business domain
and entering the arena of retail finance sector The year 2005 witnessed the merger
of IDBI Bank with the Industrial Development Bank of India Ltd. The new entity
continued to its development finance role, while providing an array of wholesale
and retail banking products (and does so till date). The following year, IDBI Bank
acquired United Western Bank (which, at that time, had 230 branches spread over
47 districts, in 9 states). In the financial year of 2008, IDBI Bank had a net income
of Rs 9415.9 crores and total assets of Rs 120,601 crores.

PRESENT
Today, IDBI Bank is counted amongst the leading public sector banks of
India, apart from claiming the distinction of being the 4th largest bank, in overall
ratings. It is presently regarded as the tenth largest development bank in the world,
mainly in terms of reach. This is because of its wide network of 509 branches, 900

8
ATMs and 319 centers. Apart from being involved in banking services, IDBI has
set up institutions like The National Stock Exchange of India (NSE), The National
Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of
India (SHCIL).

9
VISION AND OBJECTIVES OF IDBI

10
 HISTORY OF IDBI BANK

The Industrial Development Bank of India (IDBI) was established on July 4,

1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank
of India. In February 7, the ownership of IDBI was transferred to the Government
of India and it was made the principal financial institution for coordinating the
activities of institutions engaged in financing, promoting and developing industry
in the country. Although Government shareholding in the Bank came down below
100% following IDBI’s public issue in July 5, the former continues to be the major
shareholder (current shareholding: 52.3%). During the four decades of its existence,
IDBI has been instrumental not only in establishing a well-developed, diversified
and efficient industrial and institutional structure but also adding a qualitative
dimension to the process of industrial development in the country. IDBI has played
a pioneering role in fulfilling its mission of promoting industrial growth through
financing of medium and long-term projects, in consonance with national plans and
priorities. Over the years, IDBI has enlarged its basket of products and services,
covering almost the entire spectrum of industrial activities, including
manufacturing and services. IDBI provides financial assistance, both in rupee and
foreign currencies, for green-field projects as also for expansion, modernization
and diversification purposes. In the wake of financial sector reforms unveiled by
the government since 2, IDBI evolved an array of fund and fee-based services with
a view to providing an integrated solution to meet the entire demand of financial
and corporate advisory requirements of its clients. IDBI also provides indirect
financial assistance by way of refinancing of loans extended by State-level
financial institutions and banks and by way of rediscounting of bills of exchange
arising out of sale of indigenous machinery on deferred payment terms. IDBI has

11
played a pioneering role, particularly in the pre-reform era , in catalyzing broad
based industrial development in the country in keeping with its Government-
ordained ‘development banking’ charter. In pursuance of this mandate, IDBI’s
activities transcended the confines of pure long-term lending to industry and
encompassed, among others, balanced industrial growth through development of
backward areas, modernization of specific industries, employment generation,
entrepreneurship development along with support services for creating a deep and
vibrant domestic capital market, including development of apposite institutional
framework.
Narasimam committee recommends that IDBI should give up its direct financing
functions and concentrate only in promotional and refinancing role. But this
recommendation was rejected by the government. Latter RBI constituted a
committee under the chairmanship of S.H. Khan to examine the concept of
development financing in the changed global challenges. This committee is the first
to recommend the concept of universal banking. The committee wanted to the
development of financial institution to diversify its activity. It recommended to
harmonize the role of development financing and banking activities by getting
away from the conventional distinction between commercial banking and
developmental banking. IDBI Bank, with which the parent IDBI was merged, was a
vibrant new generation Bank. The Pvt. Bank was the fastest growing banking
company in India. The bank was pioneer in adapting to policy of first mover in tier
2 cities.

About IDBI Bank

The Industrial Development Bank of India Limited commonly known by its
acronym IDBI is one of India's leading public sector banks and 4th largest Bank in
overall ratings. RBI categorized IDBI as "other public sector bank”. It is currently

12
the tenth largest development bank in the world in terms of reach with 75 ATMs,
58 branches and 352 centers. Some of the institutions built by IDBI are
The National Stock Exchange of India (NSE), The National Securities Depository
Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL) IDBI
BANK , as a private bank after government policy for new generation private
banks.
Business Overview
IDBI, also known as Industrial Development Bank of India was established
in 4 july by an Act of Parliament to provide credit and other facilities for the
development of the fledgling Indian industry. IDBI provides financial assistance,
both in rupee and foreign currencies, for green-field projects as also for expansion,
modernization and diversification purposes. IDBI also provides indirect financial
assistance by way of refinancing of loan extended by State-level financial
institutions and banks and by way of rediscounting of bills of exchange arising out
of sale of indigenous machinery on deferred payment terms. In September 2003,
IDBI diversified its business domain further by acquiring the entire shareholding of
Tata Finance Limited in Tata Home finance Ltd., signaling IDBI’s foray into the
IDBI Bank, with which the parent IDBI was merged, was a vibrant new generation
Bank. The Private Bank was the fastest growing banking company in India. The
bank was pioneer in adapting to policy of first mover in tier 2 cities. The Bank also
had the least NPA and the highest productivity per employee in the banking
industry.. IDBI Bank was ranked in the Top 5 Indian banks on the basis of Business
Segment size.

13
 BUSINESS AND FINANCIAL METRICS

Historical Trends
Year over year, IDBI Bank Ltd has been able to grow revenues from 960
Crores to 1690 Crores in the year 2008. Company has reduced the percentage of
sales devoted to selling, general and administrative costs from 62.52% to 44.17%.
This led to a net profit growth from 590 Crores to 750 Crores.

14
 Annual income data, in
05-06 06-07 07-08
Crores
Net Interest Income Rs 5380.7 Rs 345.5 Rs 8020.8
Other Income Rs 280.4 Rs 027.2 Rs 35.5
Net Income Rs 448.7 Rs 748. Rs 45.
Profit (after tax) Rs 50. Rs 30.3 Rs 72.5
Source: Company reports.

Q1FY09 Financial Results

IDBI Bank reported a net profit of Rs 160 Crores, up by 4% as compared to
the last year .This increase is primarily driven by addition of 65 branches to the
network over the year. As of June 30, 2008, IDBI Bank’s total business (deposits
and advances) stood at Rs 1, 50,832 Crores as against Rs 1,06,529 Crores as of
June 30, 2007, registering a growth of 42%. Bottom-line growth (net profit growth)
during the quarter was bolstered on buyback of shares of its subsidiary and excess
depreciation write-back of Rs39.1 Crores. IDBI Bank continued to maintain a
sound capital base as indicated by its Capital Adequacy Ratio. As against the
stipulated RBI norm of 9%, the Bank's CAR stood at 12.02%. Total assets grew by
24% to Rs.1,30,410 Crores . Treasury gains for the quarter were supported by the
buyback and Provisions were lower due to the write-back of NPA provisions.

Q2 FY09 Financial Results

IDBI Bank reported a net profit (after tax) of Rs 162 Crores, up by 4.49% as
compared to last year's 156 Crores. Net Interest Income stood at Rs 229 Crores, up
by 53.09% as compared to last year's Rs 150 Crores. Total business (deposits and

15
advances) grew by 48.25% to Rs.1,66,564 Crores. The growth in "advances" is
primarily driven by strong demand for corporate loans, as other sources of funding
for infrastructure companies became expensive during the quarter. Deposits
increased due to higher interest rates prevailing in the system. CASA was reported
to be16.19% of total deposits.. Provisions were lower due to lower investment
depreciation and write-back of NPA provisions

Q3 FY09 Financial Results

The Bank has posted a net profit of Rs 222.6 Crores for the quarter ended
December 3, 2008 as compared to Rs 176 Crores for the quarter ended December
3, 2007. Total Income has increased from Rs 2450.7 Crores for the quarter ended
December 3, 2007 to Rs 3513.3 Crores for the quarter ended December 3, 2008

Share Holding Pattern

16
Business Segments

Wholesale Banking Services(58% income,61 % profits)

Wholesale Banking provided 4652 Crores as Net Interest Income and Rs 423
Crores as the Net Profit in the year of 2008. The Wholesale bank provides services
such as working capital finance, trade services, transactional services, cash
management, to large, mid & small sized corporates and agri-based businesses. It
has been actively participating in structuring and financing of infrastructure
projects in the areas of power, telecom, roads, airports, seaports, railways and
logistics as well as Special Economic Zones. IDBI is a member of the Core
Committee of the Government set up for finalization of the Ultra Mega Power
Projects. Further, it is also an active member of the Inter-Institutional Group for
power sector

Retail Banking Services(27% income, 31% profits) []

17
 Retail Banking provided Rs 2166 Crores as Net Interest Income and Rs 187
Crores as the Net Profit in the year of 2008. The objective of the Retail Bank is to
provide its target market customers a full range of financial products and banking
services, giving the customer a one-stop window for all his/her banking
requirements
Treasury (15% income, 6% profits)
Wholesale Banking provided Rs 1283 Crores as Net Interest Income and Rs
44.8 Crores as the Net Profit in the year of 2008. In Corporate Finance, IDBI offers
a wide array of corporate banking products under various business segments such
as Deposits, Cash Management Services, Central and State Government agency
business (both direct and indirect taxes), Trade Finance and Treasury Products..
Within Treasury, the bank has three main product areas - Foreign Exchange and
derivatives, Local Currency Money Market & Debt Securities, and Equities.

SUBSIDIARIES

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  IDBI Capital Market Services Limited
IDBI Capital Market Services Limited (IDBI Capital) offers Stock Broking,
Distribution of Financial Products, Merchant Banking, Corporate Advisory
Services, Debt arranging & underwriting, Portfolio Management of Pension Funds
& Research services to institutional, corporate and retail clients. IDBI Capital is a
major player in the Pension Fund Management with assets of over Rs.8250 Crores.
The Equity broking segment has scaled up its operations enhancing turnover of
cash segment by 40% over the previous year.
 IDBI Home Finance Limited
IDBI Home finance Ltd. is a 100% subsidiary of IDBI Bank Ltd. The
Company was incorporated on January 10, 2000 with the main object of
carrying on the business of providing long term finance to any person, company
or corporation, society or association enabling such borrower to construct or
purchase in India a house or flat for residential purposes. During the year, IDBI

19
 Home finance’s outstanding loan portfolio increased by Rs.53 Crores from
Rs.2147 Crores to Rs.2710 Crores, registering a growth of 26%.
 IDBI Intech Limited
It provides IT related services in the area of Consultancy, System Integration,
System implementation & support, Applications & Server hosting and other IT
related managed services and specialized training to the IDBI Group companies
and the other organizations, focusing mainly on the BFSI sector.
 IDBI Gilts Limited
IDBI Gilts Ltd. was set up to undertake Primary Dealership [PD] Business. The
company's business includes Bond trading, underwriting in auctions of primary
issuance of Government dated securities and treasury bills. In addition, IDBI Gilts
also plans to be a major player in the interest rate

Revenue Break Down among Subsidiaries

20
21
Competition

IDBI is the tenth largest development bank in the world. The company faces
competition from both national banks and regional banks in the country.
Financial Comparison of the competitors:

Financial metrics FY2008

Net
Market Total
Profit Earnings
Name Capitalization Earnings
in Rs per share
in Rs Cr in Rs Cr
Cr
IDBI 4,34.35 72.4 772. 0.0
SBI 730.58 72.2 58348.7 0.5
SB
8 38.85 2.3 885.7
Mysore
PNB 4358. 2048.7 22.58 4.8
Bank of
3344.7 200.4 4472.5 38.2
India

22
MARKET SHARE OF IDBI (BANKING SECTOR)

23
24
 BOARD OF DIRECTORS (position as on july 16,2009)

Mr. Yogesh Agarwal, Chairman & Mr. O.V. Bundellu, Deputy Managing
Managing Director Director

Mr. G.C. Chaturvedi Mr. Ajay Shankar

Mr. Analjit Singh Ms. Lila Firoz Poonawalla

Mr. K. Narasimha Murthy Mr. Hiralal Zutshi

Mr. Subhash Tuli Dr. Y S P Thorat

IDBI Bank Organizational Chart

25
 Chairman

President

Vice Vice Vice Vice

president president president president

Finance H. R. Marketing Operations

Regional Head

Zonal Head

Divisional Sales
Manager

Territory In
charge

26
 IDBI BANK BUSINESS CHART

IDBI BANK

Development Bank

Retail Banking

Saving Account Current Account Investment

Personal Saving Corporate Saving

27
BRANCH NETWORK OF IDBI BANK

Score board No. of branches.

Branches 566 Metro 196

ATMs 972 Urban 204

Ext. counters Nil Semi-urban 111

Centres 350 Rural 55

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 WEALTH MANAGEMENT – AN INTRODUCTION

Management is what a manager does "the statement given by Louis Allen

has very broad and meaningful meaning. Though we all know that 'Manage' is
nothing but to forecast and plan, to organize, to command, to co-ordinate and to
control. The eminent writer and management guru William Spriegal has given very
valuable definition that 'Management is that function of an enterprise which
concern itself with the direction and control of the various activities to attain
business objectives. Management embraces all duties and functions that pertain to
the initiation of an enterprise; it's financing the establishment of all major policies
and the provisions under which the organization is to be run and the selection of the
principal officers. In the general view the word management is form with Manage
+ Men + 'T' where 'T' stands for the factor time. The term wealth management,
also, now, a day’s having very importance. So many Banking companies are
engaged in the business of wealth management. The premier insurance industry is
now booming because so many bankers are also adopting and playing safe in the
business of insurance the term called is Banc assurance. Now a days wealth
Management has very craze in the business world. In a survey it was found that
India had 100,000 milliners day end of year 2006 is now grow up by 21% from a
year earlier (Asia pacific wealth report).

29
CONCEPT OF WEALTH MANAGEMENT:
The term wealth management formed with two words wealth &
Management. The Meaning of Management we have already seen in the steering
introduction. The meaning of wealth is – Funds, Assets, investments and cash it
means the term wealth management delt with funds Asset, instrument, cash and any
other item of similar nature. While defining wealth Management we have to think
in planned manner. "Wealth Management is an all inclusive set of strategies that
aims to grow, manage, protect and distribute assets in a much planned systematic
and integrated manner.

WEALTH MANAGEMENT IN INDIA: ISSUES & CONCERNS

The term wealth management formed with two words wealth &
Management. The Meaning of Management we have already seen in the steering
introduction. The meaning of wealth is – Funds, Assets, investments and cash it
means the term wealth management deft with funds Asset, instrument, cash and
any other item of similar nature. While defining wealth Management we have to
think in planned manner. "Wealth Management is an all inclusive set of strategies
that aims to grow, manage, protect and distribute assets in a much planned
systematic and integrated manner. "

WEALTH MANAGEMENT : INDIAN CONCERN :-

In this globalized era India have huge wealth management need. There are
two types of wealth management institutions. They are:-
(1) Private Banks
(2) Family Offices, engaged in the business of wealth management in Middle
East. For our information the wealth management institute (WMI), the first
30
center of excellence for the wealth management education in Asia was established
in Singapore in the year 2003.
The wealth management Institute (WMI) is providing professionals for
wealth management with a nice combination of learning and practical training. The
aim of WMI is to establish Singapore as the Asian hub for wealth
Management. Where Private Banks and Family Offices are discussing about the
strategies to capture the wealth management business in the Middle East. The
global institutions are looking towards the Middle East to grow their wealth
management business and attracting the big business houses by their attractive
service providing facilities. Tapping in to the Indian market it is very crucial for
private banks and private wealth managers, the entry and increasing market share is
not very easy task for them but they are fighting. The Middle East region has
become very highly competitive over the last five years. Local banks now
competing with international banks. Investment management is the professional
management of various securities (shares, bonds etc.) and assets (e.g., real estate),
to meet specified investment goals for the benefit of the investors. Investors may be
institutions (insurance companies, pension funds, corporations etc.) or private
investors (both directly via investment contracts and more commonly via collective
investment schemes e.g. mutual funds or Exchange Traded Funds)

Position of India in Wealth Management :-

In the annual survey done by Cap Gemini, SA and Merrill Lynch it was
found that ranks of millionaires grew 6% in the previous year, because the number
of richer people grew in India & China where India is competing China. India &
China posted the biggest gain in millionaires advancing by 23% & 20%
respectively.

31
When we are watching the world wide increase in number of millionaires the facts
collected by Cap Gemini, S.A. and Merrill Lynch survey report. India has 23%
growth in the last year. The biggest Asian economy China stands on second
position with 20%, west Asia 16%, United States 4% and United Kingdom (UK)
2%. So we can understand that there is more opportunities in the wealth
management business in Asia specially in India.

SERVICES PROVIDED BY WEALTH MANAGEMENT INSTITUTIONS :-

Wealth management offers the following services:
 Investment planning-
Assists you in investing your money into various investment markets, keeping
in mind your investment goals.

 Insurance planning-
Assists you in selecting from various types of insurances, self insurance
options and captive insurance companies.

 Retirement planning-
Retirement planning is critical to understand how much funds you require in
your old age.

 Asset protection-
Begins with your financial advisor trying to understand your preferred lifestyle
and then helping you deal with threats, such as taxes, volatility, inflation,
creditors and lawsuits, to maintaining this lifestyle.

32
 Taxation planning-
Helps in minimizing tax returns. This might include planning for charity,
supporting your favorite causes while also receiving tax benefits.

 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 of running your own
business.

 Business succession planning-

Assists in planning for the inevitable to maximize returns.

 Wealth transfer:
Helps you pass on your wealth to your dependents.

33
 IDBI WEALTH MANAGEMANT AND VARIOUS FEILDS

Because you have a lot more to manage than just your wealth
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. Investments ?, Of course.
Borrowing? Strategically, yes. Managing risk? Systematically. Planning
deliberately so that your wealth works to bring you a lifestyle well earned? That's
where it starts.

Income and Lifestyle

Through an in-depth discovery process your Financial Advisor will work
with you to understand and document what you want to do in this lifetime, from
now until retirement and from then on. We'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 you like,
strategies to guarantee that income.

Asset Management
By understanding the lifestyle you enjoy, and the one you're building toward,
your Financial Advisor can see the threats against it — taxes, inflation, volatility,
creditors, lawsuits, identity thieves, tragedy — and help you deal with them using
everything in the arsenal of one of the world's largest financial services firms.
Wealth Transfer
Your Financial Advisor will approach your plan for wealth transfer from a
wider angle than a traditional estate plan. We work with you to understand your
34
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. 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
We 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 powerful premise of
wealth management: Your investments and your life are uniquely intertwined.
Whether by design or by accident, they are all part of one plan. We advise that it be
by design. Investment management is the professional management of
various securities (shares, bonds etc.) and assets (e.g., real estate), to meet specified
investment goals for the benefit of the investors. Investors may be institutions
(insurance companies, pension funds, corporations etc.) or private investors (both
directly via investment contracts and more commonly via collective investment
schemes e.g. mutual funds or Exchange Traded Funds. The term asset management
is often used to refer to the investment management of collective investments, (not
necessarily) whilst the more generic fund management may refer to all forms of
institutional investment as well as investment management for private investors.
Investment managers who specialize in advisory or discretionary management on
behalf of (normally wealthy) private investors may often refer to their services as

35
wealth management or portfolio management often within the context of so-called
"private banking".

Financial planning
In general usage, a financial plan can be a budget, a plan for spending and
saving future income. This plan allocates future income to various types
of expenses, such as rent or utilities, and also reserves some income for short-term
and long-term savings. A financial plan can also be an investment plan, which
allocates savings to various assets or projects expected to produce future income,
such as a new business or product line, shares in an existing business, or real estate.
In business, a financial plan can refer to the three primary financial
statements (balance sheet, income statement, and cash flow statement created
within a business plan. Financial forecast or financial plan can also refer to an
annual projection of income and expenses for a company, division or
department. A financial plan can also be an estimation of cash needs and a decision
on how to raise the cash, such as through borrowing or issuing additional shares in
a company. While a financial plan refers to estimating future income, expenses and
assets, a financing plan or finance plan usually refers to the means by which cash
will be acquired to cover future expenses, for instance through earning, borrowing
or using saved cash.

Private Banking
Private banking is a term for banking, investment and other financial
services provided by banks to private individuals investing sizable assets. The term
"private" refers to the customer service being rendered on a more personal basis
than in mass-market retail banking, usually via dedicated bank advisers. It should
36
not be confused with a private bank, which is simply a non-incorporated banking
institution. Historically private banking has been viewed as very exclusive, only
catering for high net worth individuals with liquidity over $2 million, although it is
now possible to open some private bank accounts with as little as $250,000 for
private investors. An institution's private banking division will provide various
services such as wealth management, savings, inheritance and tax planning for their
clients. A high-level form of private banking (for the especially affluent) is often
referred to as wealth management. The word "private" also alludes to bank
secrecy and minimizing taxes through careful allocation of assets or by hiding
assets from the taxing authorities. Swiss and certain offshore banks have been
criticized for such cooperation with individuals practicing tax evasion.
Although tax fraud is a criminal offense in Switzerland, tax evasion is only a civil
offense, not requiring banks to notify taxing authorities. The term asset
management is often used to refer to the investment management of collective
investments, (not necessarily) whilst the more generic fund management may refer
to all forms of institutional investment as well as investment management for
private investors.

Portfolio Management
The functions of resource planning and procurement under a traditional
utility structure. Portfolio management can also be defined as the aggregation and
management of a diverse portfolio of supply (and demand-reduction) resources
which will act as a hedge against various risks that may affect specific resources
(i.e., fuel price fluctuations and certainty of supply, common mode failures,

37
operational reliability, changes in environmental regulations, and the risk of health,
safety, and environmental damages that may occur as a result of operating some
supply resources). Under a more market-driven power sector with a "powerpool" or
POOLCO wholesale market structure, a portfolio manager would: aggregate and
manage a diverse portfolio of spot-market purchases, contracts-for-differences,
futures contracts and other market-hedging-type contracts and mechanisms.

38
 WEALTH MANAGEMENT AT IDBI
Investment Services
IDBI believe that the key to a successful investment relationship is a full
understanding of our client’s short and long term goals, attitude towards risk and
investment horizon. Significant assets need special attention which is why we aim
to develop innovative and customized investment strategies to meet the specific
needs of our clients. When it comes to investing, we understand that the Asian
investor may face different challenges from other investors around the world. We
appreciate that they may expect a higher level of interaction with their Relationship
Managers and investment specialists, require the latest market information,
intelligence and leading investment opportunities. IDBI team of investment
advisory specialists service investors who choose to be highly active in their
investment decision-making. They use their expertise in asset allocation and
investment selection to provide clients with appropriate choices, whether they are
aiming for more aggressive strategies to capture immediate market trends, or
seeking advice on conservative hedging strategies. Our specialists provide
customized investment opportunities through equity, fixed income, derivatives and
innovative structured instruments that seek to meet specific investment
objectives. Or for those clients who may not have the time or expertise to manage
their wealth, and prefer to delegate the management of their portfolio, our
discretionary investment service is an ideal approach to achieve your financial
goals. Our discretionary investment specialists will work with clients to design an
individual strategy in accordance with their objectives, risk tolerance, and liquidity
needs and draw upon an open-architecture network of best-in-breed mutual funds,
traditional portfolios, multi-asset class portfolios and as well as leading alternative
investment managers.
39
Private Wealth Solutions
IDBI clients have worked hard to create wealth for their family and for future
generations. Through Private Wealth Solutions we help them establish a strong
foundation to protect their legacy. We provide comprehensive wealth planning
solutions tailored to the specific needs of clients and their families throughout Asia.
We have experts in international and domestic wealth planning who examine
personal situations and assist in creating ways to safeguard our client’s affairs. Our
wealth planners are specialists qualified in law, accounting and who work to ensure
that the financial and legal structures have a truly global perspective. Which is why
we are expertly positioned to help manage and protect and transfer our client’s
wealth to future generations - we help take care of their wealth planning needs
whilst giving them greater peace of mind.

Family Wealth Advisory

Whether simple or complex, most families want to safeguard their prosperity,
achieve greater tax efficiency, ensure a seamless management succession, and
provide for a sustainable future. Family Wealth Advisory gives clients the
combined experience of dedicated specialists. Working with their existing advisers
and other financial institutions, we function as an independent consultant, whose
advice is not tied to the purchase of IDBI products and services. This independent
approach enables us to work with service providers and advisers, whether outside
or within the IDBI Group, to provide the products, services and advice our clients
need.

Family governance and business succession planning

• Philanthropy

40
 • Investment consultancy services
• Corporate finance solutions
• Tax advisory services
Banking Services
Many of our Asian clients have international lifestyles and complex financial
needs. Apart from the essential transaction-related services required to help manage
their day-to-day finances, we can offer treasury and foreign exchange, offshore and
onshore deposits, and loans and mortgages in order to help meet their financial
needs.

Our aim is to help clients achieve their goals in the most effective way possible.
• Treasury and foreign exchange
• Offshore and onshore deposits
• Tailor-made loans and mortgages
• Overdrafts and bridge-over facilities
• Market Linked Deposits
• Retail banking facilities including access to HSBC Group
• Debit cards and credit cards
• Money transfers
• Online banking
• Corporate banking facilities including access to IDBI Group

IDBI CAPITAL MARKET SERVICES LIMITED

41
 IDBI Capital Market Services Limited (IDBI Capital), a wholly-owned
subsidiary of IDBI Bank, offers a fullsuite of financial products and services to
institutional, corporate and retail clients. Its businesses include Stock Broking,
Distribution of Financial Products, Merchant Banking, Corporate Advisory
Services, Debt arranging & underwriting, Portfolio Management of Pension / PF
Funds & Research services.

IDBI Capital has established itself in the Investment Banking business

having completed 13 issues apart from several Corporate Advisory assignments in
project appraisal, shares valuation, loan syndication, debt restructuring, etc. It has
also made initial forays into Private Equity investment. IDBI Capital continues to
remain a major player in the PF / Pension Fund Management with assets under
management of over Rs.8250 crore. Two years back, IDBI Capital launched its
online broking platform www.idbipaisabuilder.in to help retail investors’ invest in
Equity (BSE / NSE/F&O), Mutual Funds (15) and IPOs with information / analysis
/ recommendations provided therein.

To enhance its retail reach across the country, it has tied up with your Bank
as also with other banks viz. Punjab National Bank, Bank of Rajasthan, Union
Bank of India, Karur Vysya Bank and Oriental Bank of Commerce for marketing
its investment portal. This would help build an extensive retail network for the
Company.

42
 The Equity broking segment has scaled up its operations enhancing turnover
of cash segment by 40% over the previous year. The F&O segment market has also
been launched during this fiscal.
In accordance with the revised RBI guidelines, the primary dealing business
was relocated to IDBI’s new subsidiary, IDBI Gilts Limited. That would enable
IDBI Capital to concentrate on financial services (institutional & retail) and equity-
oriented businesses. The company was set up in 1993 with the objective of catering
to specific financial requirements of financial institutions, banks, mutual funds and
corporate houses. Over the last 5 years, the company has been ranked amongst the
leading players in each of these businesses. It has a strong agent network which
caters to the investment needs of retail investors in instruments like IPOs, Bonds,
etc.
The company is a major player in the Equity and Derivatives market and a
leading manager of Pension & Provident Funds in the country. The company has
executed several mandates on the Issue Management and Corporate Advisory
Services.
The company offers an online investment portal idbipaisabuilder.in with
advanced features and tools for an easy and informed investing experience in
Equities, Mutual Funds and IPOs.
IDBI Capital is highly regarded for safety and trust and enjoys a credit rating
of “AAA” by CARE for its medium-term borrowings and P1+ by ICRA for its
short-term borrowings.
After carrying out a detailed certification audit, M/s TUV India Private
Limited (Member of TUV NORD Group Germany), the certifying agency issued
the ISO 9001:2000 certificate.

43
44
 PRODUCTS & SERVICES OFFERED

IDBI Capital offers a full suite of products and services to Corporates,

Institutional and Individual clients. The range of services include :-

45
 INVESTMENT BANKING

Our Clients
We represent Government organizations, Public Sector Enterprises and
Indian Corporates covering sectors such as Steel and other metals, Mines, Minerals,
Chemicals, Healthcare, Hospitality, Financial Services and other Core Sectors.

Our Team
We have a combination of professionals with varied background who shares
our values of truthfulness, objectivity, innovation and analytical accuracy. The
professional qualification of our team provide a rock solid foundation for giving
consulting services and our depth of experience ranges from young management
graduates from premier business schools to experienced finance professional and
qualified chartered accountants as well.

46
A HIERARCHY SHOWING INVESTMENT BANKING

47
CAPITAL MARKETS

IDBI Capital as an institutional player provides the entire gamut of Capital Market
services encompassing:
1. Public Offerings
2. Qualified Institutional Placements
3. Buyback
4. Takeover
5. Preferential Allotments
6. External Commercial Borrowings, FCCBs, etc.
The above activities entails liasioning with institutional investors such as treasury
departments of Domestic Institutions, Banks and corporates, fund managers of
mutual funds, private equity firms, FIIs, HNIs.
A Hierarchy showing Capital Market Services

48
 INSTITUTIONAL BROKING & DISTRIBUTION

Institutions and Corporates have surplus funds to manage on daily basis as

well as investible surplus for a defined period. The risk differs for Institution and
Corporates subject to their preferences. The reward by way of return is always in
proportion to the risk taken. IDBI Capital define, advise and manage the same by
blending caution with aggression in the desired proportion to teach client. The
range of services include from Equity Broking with customized research, advisory
and distribution services for investment in Mutual Funds, Debt/Bonds, Equity IPOs
to placement of Equities etc
A Hierarchy showing Institutional Broking & Distribution

49
 RETAIL BROKING & DISTRIBUTION

In addition to offering corporate, institutional clients, IDBI Capital also

offers a gamut of financial products and services that cater to a varied cross section
of investors. IDBI Capital also offers to financial planners, retail intermediaries and
consumers to deliver lasting, innovative solutions.
Looking at the opportunities in our market and the growth of our country, we
believe it is high time investors are educated about the nuances of investments. The
knowledge and awareness gained will empower investors and help them create
wealth. We firmly believe brokers, media and regulators have a pivotal role in
assisting the individuals to become wealthy. We will go extra mile to empower the
investors in managing their wealth to ensure a more rewarding future. IDBI Capital
aims to provide a single-point source for retail investors in their requirements for
trading and investment products.
A Hierarchy showing Retail Broking & Distribution

50
 FUND MANAGEMENT

IDBI Capital Market Services Ltd. (ICMS) is a leading Fund Manager in the
country for Provident, Pension and Retirement Benefit Funds. The Company is a
SEBI registered Portfolio Manager and manage its Client’s assets under both
discretionary and non-discretionary mandates. These services are provided to
various public and private sector undertakings and their provident, pension,
retirement benefit and surplus funds. The Company’s client base includes leading
pension and provident funds in the country.
IDBI capital has been advising institutions, banks and corporates for their
investment in Debt, Mutual Funds and Equities over several years. Its services
include managing Client Assets--Pension & Provident Funds, Surplus fund
Management, Equity Portfolio Management and Mutual Fund Advisory.
The funds have continuously yielded superior returns, which are significantly
higher than the benchmark.

ISO Certification 9001:2000

Keeping in view the importance of standardized processes and service levels,
the Company has gone in for ISO Certification for Fund Management, and is the
only company to have done so in this sector. Being a public sector, the Company is
also audited by Comptroller and Auditor General (CAG) office and follows
transparent practices.
51
Regulatory Approval
IDBI Capital is a registered Portfolio Manager with Securities and Exchange
Board of India (SEBI) since 1998 and is authorised to undertake Funds
Management activities (Debt & Equity) for clients. These activities would be
governed by Securities and Exchange Board of India (Portfolio Managers) Rules
and Regulations, 1993. SEBI Registration No. of IDBI Capital is INP000000209,
valid till the year 2010.

The Key strengths of IDBI capital Market Services in the areas of Debt Fund
Management are:
1. Fund Management experience of 10 years
2. Expertise in managing large corpus
3. Expertise in both Debt & Equity Market
4. IDBI Capital is the only Portfolio Manager in the Country to achieve ISO
9001: 2000 Standard for Quality Management Systems in Fund Management
operations, with certification from TUV NORD an accredited German
standards firm
5. Substantial Returns Over Benchmark
6. IDBI Capital is a SEBI registered Portfolio Manager
7. Minimum Idle Days
8. Our fund management skill covers Portfolio Analysis that includes ALM,
Asset Allocation, Risk Analysis, Maturity Analysis and Yield Analysis
9. Transparency of Operations
10.Strict adherence to Compliance Procedures
11.Highly Rated Debt Research

52
 12.Presence in All Segment/ Asset of the Financial Services: IDBI Capital deals
in Equity and Equity related products and is one of the highly rated Mutual
Fund Distributor (won two consecutive CNBC TV18 Institutional Financial
Advisor Award). In Investment Banking and Debt Capital Market- Rated in
Top 15 by Prime Database
13.Group Strength in Debt Market: IDBI Capital is one of the leading players in
debt market with presence in primary dealership since July 2007. The current
operations of primary dealership is conducted by a group company, IDBI
Gilts

Infrastructure
 Experienced Fund Management Team:
The Fund Management team comprises of experienced professionals
(experience ranges between 2 years to 15 years) in Portfolio Management
with requisite exposure in the fixed income and equity segment and
qualifications
 Experienced Back-Office:
The Clearing and Settlement Operations are manned by experienced
personnel with requisite exposure to capital market and particularly debt
market. The process is standardized as per the regulatory and other specific
norms and mainly technology driven in most areas
 Accounting:
Real time accounting of Remittances, Investments, Interest and Redemption
proceeds ensures accurate reconciliation
 Professional Custodian:
Member of NSDL for demat services and offers Constituent SGL Account
facility for Government securities through IDBI Gilts Ltd.

53
  Functional Separation of Front and Back Office:
Separate personnel handle the front and back office functions to ensure
transparency and complete regulatory compliance
 Internal Controls:
Adequate Risk Management systems in place to ensure complete regulatory
compliance
 Audit Systems:
Audit of all transactions and reports by an independent firm of chartered
accountants. The accounts and transactions are also subject to CAG audit and
other regulators
 Belongs to IDBI Group:
IDBI is a leading bank, classified under ‘Other Public Sector Bank’.
Established in 1964 by Government of India under an Act of Parliament,
IDBI has essayed a significant role in the country’s industrial and economic
progress for over 40 years – first as apex Development Financial Institution
(DFI) and now as a full service commercial bank

Financial Statements
The abridged Balance Sheet and Profit & Loss Account of IDBI Capital are given
in Tables 1 and 2 respectively:

54
Abridged Balance Sheet of IDBI Capital for the year ended 31 March 2007 & 2008

Table 1 : IDBI Capital Market Services Ltd. - Abridged Balance Sheet (Rs.
Crore)

As at March 31 2007 2008

Paid up Capital 157.90 157.90

Reserves & Surplus 204.84 206.30

Current Liabilities & Provisions 23.35 30.37

Deferred Tax Liability 2.22 1.53

Total Liabilities 388.31 396.10

Total Assets 388.31 396.10

55
Abridged Profit & Loss Account of IDBI Capital for the year ended 31 March 2007
& 2008

Table 2 : IDBI Capital Market Services Ltd. - Abridged Profit & Loss Account
(Rs. Crore)

For the year ended March 31 2007 2008

Total Income 40.80 35.23

Total Expenditure 58.49 33.06

Profit/(Loss) Before Tax (17.69) 2.17

Profit/(Loss) After Tax (18.16) 2.26

56
 INVESTMENT PORTFOLIO
Portfolio Investment represents passive holdings of securities such as foreign
stocks, bonds, or other financial assets, none of which entails active management or
control of the securities' issuer by the investor; where such control exists, it is
known as foreign direct investment.
Some examples of portfolio investment are:
• purchase of shares in a foreign company.
• purchase of bonds issued by a foreign government.
• acquisition of assets in a foreign country.

Factors affecting international portfolio investment:

• tax rates on interest or dividends (investors will normally prefer countries
where the tax rates are relatively low)
• interest rates (money tends to flow to countries with high interest rates)
• exchange rates (foreign investors may be attracted if the local currency is
expended to strengthen)

Portfolio investment is part of the capital account on the balance of payments

statistics.
IDBI has got a huge investment portfolio of quoted and unquoted equity
stocks. It could unlock value from these investments, which may be considered as
precious gems in IDBI’s book and could augment the profitability of IDBI. The
approximate market value of quoted investments of IDBI is about Rs 1,800 crs. The
investments include fast growing and restructuring companies like IDFC, IFCI,
Reliance Petroleum, Indraprastha Gas, Gujarat State Petronet Ltd, etc. On an

57
unrealized gains basis, the value of these investments is Rs 528 crs. There could be
many other stocks, which would be included in IDBI’s equity portfolio and the
amount of investments or stake could be far more than revealed. Moreover, it has
many strategic investments in unlisted companies, which are as shown below:

Unlisted Company % Holding Unlisted Company % Holding

ARCIL 19.95 NSE 5.00

CARE 26.75 STCI 7.28

CCIL 6.5 SIDBI 19.21

NSDL 30.00 SHCIL 16.96

Introduction to Equity
Equity investment generally refers to the buying and holding of shares of
stock on a stock market by individuals and funds in anticipation of income from
dividends and capital gain as the value of the stock rises. It also sometimes refers to
the acquisition of equity (ownership) participation in a private (unlisted) company
or a startup (a company being created or newly created). When the investment is in
infant companies, it is referred to as venture capital investing and is generally
understood to be higher risk than investment in listed going-concern situations.

Direct holdings and pooled funds

58
 The equities held by private individuals are often held via mutual funds or
other forms of pooled investment vehicle, many of which have quoted prices that
are listed in financial newspapers or magazines; the mutual funds are typically
managed by prominent fund management firms (e.g. Fidelity Investments or The
Vanguard Group).

Share price determination

At any given moment, an equity's price is strictly a result of supply and demand.
The supply is the number of shares offered for sale at any one moment. The
demand is the number of shares investors wish to buy at exactly that same time.
The price of the stock moves in order to achieve and maintain equilibrium.

Market participants
Many years ago, worldwide, buyers and sellers were individual investors,
such as wealthy businessmen, with long family histories (and emotional ties) to
particular corporations. Over time, markets have become more "institutionalized";
buyers and sellers are largely institutions (e.g., pension funds, insurance companies,
mutual funds, hedge funds, investor groups, and banks). The rise of the institutional
investor has brought with it some improvements in market operations. Thus, the
government was responsible for "fixed" (and exorbitant) fees being markedly
reduced for the 'small' investor, but only after the large institutions had managed to
break the brokers' solid front on fees they then went to 'negotiated' fees, but only
for large institutions)
However, corporate governance (at least in the West) has been very much
adversely affected by the rise of (largely 'absentee') institutional 'owners'[

History

59
 Historian Fernand Braudel suggests that in Cairo in the 11th century Muslim
and Jewish merchants had already set up every form of trade association and had
knowledge of many methods of credit and payment, disproving the belief that these
were invented later by Italians. In 12th century France the courratiers de change
were concerned with managing and regulating the debts of agricultural
communities on behalf of the banks. Because these men also traded with debts,
they could be called the first brokers. In late 13th century Bruges commodity
traders gathered inside the house of a man called Van der Beurse, and in 1309 they
became the "Brugse Beurse", institutionalizing what had been, until then, an
informal meeting. The idea quickly spread around Flanders and neighboring
counties and "Beurzen" soon opened in Ghent Antwerp and Amsterdam.
In the middle of the 13th century Venetian bankers began to trade in
government securities. In 1351 the Venetian government outlawed spreading
rumors intended to lower the price of government funds. Bankers in Pisa, Verona,
Genoa and Florence also began trading in government securities during the 14th
century. This was only possible because these were independent city states not
ruled by a duke but a council of influential citizens. The Dutch later started joint
stock companies, which let shareholders invest in business ventures and get a share
of their profits - or losses. In 1602, the Dutch East India Company issued the first
shares on the Amsterdam Stock Exchange. It was the first company to issue stocks
and bonds.

60
 THE INDIAN STOCK MARKET

The Bombay Stock Exchange in Mumbai.

The working of stock exchanges in India started in 1875. BSE is the oldest
stock market in India. The history of Indian stock trading starts with 318 persons
taking membership in Native Share and Stock Brokers Association, which we now
know by the name Bombay Stock Exchange or BSE in short. In 1965, BSE got
permanent recognition from the Government of India. National Stock Exchange
comes second to BSE in terms of popularity. BSE and NSE represent themselves as
synonyms of Indian stock market. The history of Indian stock market is almost the
same as the history of BSE.
The 30 stock sensitive index or Sensex was first compiled in 1986. The
Sensex is compiled based on the performance of the stocks of 30 financially sound

61
benchmark companies. In 1990 the BSE crossed the 1000 mark for the first time. It
crossed 2000, 3000 and 4000 figures in 1992. The reason for such huge surge in the
stock market was the liberal financial policies announced by the then financial
minister Dr. Man Mohan Singh.
The up-beat mood of the market was suddenly lost with Harshad Mehta
scam. It came to public knowledge that Mr. Mehta, also known as the big-bull of
Indian stock market diverted huge funds from banks through fraudulent means. He
played with 270 million shares of about 90 companies. Millions of small-scale
investors became victims to the fraud as the Sensex fell flat shedding 570 points.
To prevent such frauds, the Government formed The Securities and
Exchange Board of India, through an Act in 1992. SEBI is the statutory body that
controls and regulates the functioning of stock exchanges, brokers, sub-brokers,
portfolio managers investment advisors etc. SEBI oblige several rigid measures to
protect the interest of investors. Now with the inception of online trading and daily
settlements the chances for a fraud is nil, says top officials of SEBI.
Sensex crossed the 5000 mark in 1999 and the 6000 mark in 2000. The 7000
mark was crossed in June and the 8000 mark on September 8 in 2005. Many
foreign institutional investors (FII) are investing in Indian stock markets on a very
large scale. The liberal economic policies pursued by successive Governments
attracted foreign institutional investors to a large scale. Experts now believe the
sensex can soar past 14000 mark before 2010.
The unpredictable behavior of the market gave it a tag – ‘a volatile market.’
The factors that affected the market in the past were good monsoon, Bharatiya
Janta Party’s rise to power etc. The result of a cricket match between India and
Pakistan also affected the movements in Indian stock market. The National
Democratic Alliance led by BJP, during 2004 public elections unsuccessfully tried
to ride on the market sentiments to power. NDA was voted out of power and the

62
sensex recorded the biggest fall in a day amidst fears that the Congress-Communist
coalition would stall economic reforms. Later prime minister Man Mohan Singh’s
assurance of ‘reforms with a human face’ cast off the fears and market reacted
sharply to touch the highest ever mark of 8500.
India, after United States hosts the largest number of listed companies.
Global investors now ardently seek India as their preferred location for investment.
Once viewed with skepticism, stock market now appeals to middle class Indians
also. Many Indians working in foreign countries now divert their savings to stocks.
This recent phenomenon is the result of opening up of online trading and
diminished interest rates from banks. The stockbrokers based in India are opening
offices in different countries mainly to cater the needs of Non Resident Indians.
The time factor also works for the NRIs. They can buy or sell stock online after
returning from their work places.
The recent incidents that led to growing interest among Indian middle class
are the initial public offers announced by Tata Consultancy Services, Maruti Udyog
Limited, ONGC and big names like that. Good monsoons always raise the market
sentiments. A good monsoon means improved agricultural produce and more
spending capacity among rural folk.
The bullish run of the stock market can be associated with a steady growth of
around 6% in GDP, the growth of Indian companies to MNCs, large potential of
growth in the fields of telecommunication, mass media, education, tourism and IT
sectors backed by economic reforms ensure that Indian stock market continues its
bull run.

63
 IMPORTANCE OF STOCK MARKET

The stock market is one of the most important sources for companies to raise
money. This allows businesses to be publicly traded, or raise additional capital for
expansion by selling shares of ownership of the company in a public market. The
liquidity that an exchange provides affords investors the ability to quickly and
easily sell securities. This is an attractive feature of investing in stocks, compared
to other less liquid investments such as real estate.
History has shown that the price of shares and other assets is an important part of
the dynamics of economic activity, and can influence or be an indicator of social
mood. Rising share prices, for instance, tend to be associated with increased
business investment and vice versa. Share prices also affect the wealth of
households and their consumption. Therefore, central banks tend to keep an eye on
the control and behavior of the stock market and, in general, on the smooth
operation of financial system functions. Financial stability is the raison d'être of
central banks.
Exchanges also act as the clearinghouse for each transaction, meaning that they
collect and deliver the shares, and guarantee payment to the seller of a security.
This eliminates the risk to an individual buyer or seller that the counterparty could
default on the transaction.
The smooth functioning of all these activities facilitates economic growth in that
lower costs and enterprise risks promote the production of goods and services as
well as employment. In this way the financial system contributes to increased
prosperity.

TYPES OF EQUITY

64
There are three basic types of equity:-

Common Stock
“Common stock represents an ownership in a corporation”
Common stockholders participate in the earnings stream of the corporation through
dividends paid and capital gains made on a per share basis. Owners of common
stock are responsible for the election of the Board of Directors, appointment of
Senior Officers, the selection of an auditor for the corporate financial statements,
dividend policy and other matters of corporate governance. This may also be done
on a proxy basis, whereby a third party may be ceded the shareholders right to vote
by the shareholder.
The responsibilities associated with common stock mean the investor participates
to a greater extent in the fortunes of the firm. Capital gains, through the increase in
market price of the firm's stock, accrue to a greater extent to the holder of common
stock than to the holder of preferred stock.
Common stockholders also have a couple of significant rights should the business
invested in be wound down: limited liability to the creditors of the firm and a

65
residual claim on any assets or income derived once all prior claims (mortgages,
bondholders, creditors, etc.) have been satisfied.

Preferred Shares
Preferred shares are stock in a company which have a defined dividend, and
a prior claim on income to the common stock holder
Should the company wind up operations, preferred shareholders are paid any
obligations owed to them. Should a dividend be suspended by the Board of
Directors, for whatever reason, the preferred share usually has a cumulative clause
in it allowing that any unpaid dividends must be paid fully before any dividends
may be declared and paid to holders of common stock. This means that the
preferred share is a relatively more secure investment. The corporate issuing
preferred shares may add differing features to the share in order to make it more
attractive. These features are similar to those used in the fixed income market and
include convertibility into common shares, call provisions, etc. Many have equated
preferred shares with a form of fixed income security due to its defined dividend
stream.
However, with the added security offered by the guaranteed dividend stream, the
holder of preferred shares gives up the right to vote on issues related to corporate
governance. Therefore, the preferred holder has little input into corporate policy

66
Warrants
Warrants are a form of option which is usually added to a corporate bond
issue or preferred stock in order to sweeten the deal
Warrant is a long dated option which allows the owner to participate in the capital
gains (losses) of a firm without buying the common stock. In effect, the holder of a
warrant has a leveraged play on the corporate common stock.
As a form of option, a warrant has an exercise price and an expiry date. The
exercise price is the price at which the holder may convert the warrant into
common shares of the issuer. The expiry date is the last date on which the warrant
may be converted into common shares. Given that a warrant is generally issued to
reduce the cost of a debt issuer, the expiry date is usually more than two years from
issuance. This allows warrants to trade separately from the bond with which they
were issued. There by providing the investor with a long dated option on a firm's
common stock.
There is a drawback to warrants for those investors concerned with income.
As an option, a warrant does not pay a dividend, and is subject to a certain amount
of price compression as the underlying stock approaches or surpasses the exercise
price. This is only a factor if the investor is purchasing the warrants when the
common stock is trading near the exercise price.
Warrant holders have no voting rights until the warrants are converted into
common shares. Upon conversion an active role may be taken in corporate
governance. If the warrants provide for conversion into preferred shares, it is
unlikely the holder will gain any influence into corporate governance upon
conversion

67
Introduction to Mutual Funds

Depressed market or not, over 15 financial services institutions are warming

up to take the plunge into the Indian mutual fund industry over the next one year.
The idea of these neo-asset management companies (or AMCs) is to commence
their fund business at a time when the market is in a lull phase, set a track record
for themselves and go full throttle when the market begins to steam up, industry
officials said.
If industry sources are to be believed, Goldman Sachs, Shinsei Bank, DLF
Prudential, Nippon Asset Management, BoB Pioneer, Indiabulls, IDBI, Edelweiss,
Motilal Oswal, Anand Rathi, Religare, RSM Ambit, Schroders UK, India Infoline
and Future Capital are all set to launch mutual funds in India. “
Currently, the MF industry has Rs 5.67 lakh crore of assets under
management. As per data released by Association of Mutual Funds in India, the
asset base of all mutual fund combined has risen by 7.32% in April, the first month
of the current fiscal. As of now, there are 33 fund houses in the country including
16 joint ventures and 3 wholly-owned foreign asset managers.
According to a recent McKinsey report, the total AUM of the Indian mutual
fund industry could grow to $350-440 billion by 2012, expanding 33% annually.
While the revenue and profit (PAT) pools of Indian AMCs are pegged at $542
million and $220 million respectively, it is at par with fund houses in developed
economies.
Operating profits for AMCs in India, as a percentage of average assets under
management, were at 32 basis points in 2006-07, while the number was 12 bps in
UK, 17 bps in Germany and 18 bps in the US, in the same time frame, the
McKinsey report said. The report predicts that the retail segment could grow at a
CAGR of 36-42% annually, taking the total AUM from US$36 billion in 2007 to
$160-$200 billion in 2012. Rising incomes and increasing demand for wealth
68
management services will drive this growth. Institutional investments in mutual
funds are likely to witness a 25-33% annual growth, with total assets under
management increasing from $42 billion in 2007 to $160 billion by 2012.
According to Dhirendra Kumar of Value Research, a mutual fund research
firm, most of these financial services institutions started planning to set up AMCs
in 2007 while equities were booming in India. “Most of them would set up their
AMCs, but what remains to be seen is how many succeed in their venture.
Advantages of a MF
– Mutual Funds provide the benefit of cheap access to expensive stocks
– Mutual funds diversify the risk of the investor by investing in a basket
of assets
– A team of professional fund managers manages them with in-depth
research inputs from investment analysts.
– Being institutions with good bargaining power in markets, mutual
funds have access to crucial corporate information, which individual
investors cannot access.

About Mutual Funds

A Mutual Fund is a trust that pools the savings of a number of investors who
share a common financial goal. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. The income
earned through these investments and the capital appreciation realized is shared by
its unit holders in proportion to the number of units owned by them. Thus a Mutual
Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at
a relatively low cost. The flow chart below describes broadly the working of a
mutual fund.

69
 Saving AMC
s
Trus Investment
Unit t s
Unit s Return
holders s

Registrar

Trust
SEBI
Custodian AMC

• The structure of Mutual Funds in India is governed by SEBI (Mutual Fund)

Regulations, 1996.
• It is mandatory to have a three tier structure of Sponsor – Trustee – Asset
Management Company.
• The trust is established by a Sponsor or more than one sponsor who is like a
promoter of a company. He appoints the Trustees who are responsible to the
investors of the fund.
• The Trustees of the mutual fund hold its property for the benefit of the unit
holders.
• Asset Management Company (AMC) approved by SEBI is the business face of
the mutual fund as it manages all the affairs of the fund by making investments
in various types of securities.
• Custodian, who is registered with SEBI, holds the securities of various
schemes of the funds in its custody
CATEGORIES OF MUTUAL FUNDS:

70
Mutual funds can be classified as follow:
 Based on their structure:

71
 • Open-ended funds: Investors can buy and sell the units from the fund, at any
point of time.
• Close-ended funds: These funds raise money from investors only once.
Therefore, after the offer period, fresh investments cannot be made into the
fund. If the fund is listed on a stocks exchange the units can be traded like
stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New
Fund Offers of close-ended funds provided liquidity window on a periodic
basis such as monthly or weekly. Redemption of units can be made during
specified intervals. Therefore, such funds have relatively low liquidity.
 Based on their investment objective:
Equity funds: These funds invest in equities and equity related instruments.
With fluctuating share prices, such funds show volatile performance, even
losses. However, short term fluctuations in the market, generally smoothens
out in the long term, thereby offering higher returns at relatively lower
volatility. At the same time, such funds can yield great capital appreciation
as, historically, equities have outperformed all asset classes in the long term.
Hence, investment in equity funds should be considered for a period of at
least 3-5 years. It can be further classified as:
i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty
is tracked. Their portfolio mirrors the benchmark index both in terms of
composition and individual stock weightages.
ii) Equity diversified funds- 100% of the capital is invested in equities
spreading across different sectors and stocks.
iii|) Dividend yield funds- it is similar to the equity diversified funds except that
they invest in companies offering high dividend yields.

72
iv) Thematic funds- Invest 100% of the assets in sectors which are related
through some theme. e.g. -An infrastructure fund invests in power, construction,
cements sectors etc.
v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking
sector fund will invest in banking stocks.
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.
Balanced fund: Their investment portfolio includes both debt and equity. As a
result, on the risk-return ladder, they fall between equity and debt funds. Balanced
funds are the ideal mutual funds vehicle for investors who prefer spreading their
risk across various instruments. Following are balanced funds classes:
i) Debt-oriented funds -Investment below 65% in equities.
ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.
Debt fund: They invest only in debt instruments, and are a good option for
investors averse to idea of taking risk associated with equities. Therefore, they
invest exclusively in fixed-income instruments like bonds, debentures, Government
of India securities; and money market instruments such as certificates of deposit
(CD), commercial paper (CP) and call money. Put your money into any of these
debt funds depending on your investment horizon and needs.
i) Liquid funds- These funds invest 100% in money market instruments, a large
portion being invested in call money market.
ii) Gilt funds ST- They invest 100% of their portfolio in government securities
of and T-bills.
iii) Floating rate funds - Invest in short-term debt papers. Floaters invest in debt
instruments which have variable coupon rate.
iv) Arbitrage fund- They generate income through arbitrage opportunities due to
mis-pricing between cash market and derivatives market. Funds are allocated to

73
equities, derivatives and money markets. Higher proportion (around 75%) is put in
money markets, in the absence of arbitrage opportunities.
v) Gilt funds LT- They invest 100% of their portfolio in long-term government
securities.
vi) Income funds LT- Typically, such funds invest a major portion of the
portfolio in long-term debt papers.
vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an
exposure of 10%-30% to equities.
viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in line
with that of the fund.

Investment strategies:
1. Systematic Investment Plan: under this a fixed sum is invested each month
on a fixed date of a month. Payment is made through post dated cheques or direct
debit facilities. The investor gets fewer units when the NAV is high and more units
when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA)
2. Systematic Transfer Plan: under this an investor invest in debt oriented fund
and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme
of the same mutual 0fund.
3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual
fund then he can withdraw a fixed amount each month.

RISK V/S. RETURN:

74
BANKS V/S MUTUAL FUNDS:
Mutual Funds are now also competing with commercial banks in the race for
retail investor’s savings and corporate float money. The power shift towards mutual
funds has become obvious. The coming few years will show that the traditional
saving avenues are losing out in the current scenario. Many investors are realizing
that investments in savings accounts are as good as locking up their deposits in a
closet. The fund mobilization trend by mutual funds indicates that money is going
to mutual fund in a big way.
India is at the first stage of a revolution that has already peaked in the U.S. The
U.S. boasts of an Asset base that is much higher than its bank deposits. In India,
mutual fund assets are not even 10 per cent of the bank deposits, but this trend is

75
beginning to change. This is forcing a large number of banks to adopt the concept
of narrow banking wherein the deposits are kept in Gilts and some other assets
which improves liquidity and reduces risk. The basic fact lies that banks cannot be
ignored and they will not close down completely. Their role as intermediaries
cannot be ignored. It is just that mutual funds are going to change the way banks do
business in the future.

CATEGORY BANKS MUTUAL FUNDS

Returns Low High

Administrative exp. High Low
Risk Low Moderate
Investment options Less More
Network High penetration Low but improving
Liquidity At a cost Better
Quality of assets Not transparent Transparent
Interest calculation Minimum balance Everyday
between 10th & 30th of
every month
Guarantee Maximum Rs.1 lakh on None
deposits

BENEFITS OF MUTUAL FUND INVESTMENT

76
Advantages of Wealth Management
1) Helpful In Tax Planning:
The wealth management professional always shows the good path to the customers
and provide the service of tax planning. How to minimize the tax and save more
money?
2) Helpful In Selection of Investment Strategy:
Another advantage from the customer point of view is with the help of WM
Professional the customer can easily know the investment strategy and analyze risk
and return.
3) Helpful In Estate Management:
With the help of wealth management professional we can also manage our estate.
Estate management is a task to provide objective administration of our funds
tailored to aim in responsible distribution and protection of our overall estate.

4) Helpful in forward looking:

77
We can say planning, that recognizes as our estate grows and changes occurs we
require some team of professionals who help us in future planning.

5) Helpful for Indian Economy:

Banks which are engaged in business of WM earning revenues from the foreign
countries i.e. outsourcing for economy

LIMITATIONS OF WEALTH MANAGEMENT

1. Wealth management Reduces The Scope Of Management:

Though we all know that management has existence at all levels of life and
society but the term wealth management only related with the higher level means
rich people, and is not having any plans and provisions for poor and lower and
middle level of society.

2. Chances of Fraud:
Another demerit or limitation of the WM concept is it is not showing the
actual position. The customer doesn't know about the things going on with using
his wealth and there may be chances of forgery and fraud with customers.

3. Actual Picture VS Inflation:

What is the actual position of market we don't know because everything is
done by some WM professionals. So we cannot assume our position in the market
that also results in inflation because economy is unknown about the actual state.
There may be chance that the customers are in risk but they are showing the false
return and vice-versa.

78
 RESEARCH METHODOLOGY

Objective of the study

Project study which is being conducted by me for the last three months is not
only a formality for the fulfillment of the two year full time Post Graduate
Programme in Management. But being a management student I tried my best to
extract best of the information available in the market for the use of society and
people. The objectives have been classified by me in this project from personal to
professional, but here I am not disclosing my personal objective which have been
achieved by me while doing the project. Only professional objectives which are
being covered by me in this project are as following-
 To understand the concept of Banking Industry in India.
 To explain the profile of IDBI Bank Ltd.
 To understand various aspects of Wealth Management
 To understand Wealth Management at IDBI Bank. Ltd.
 To have a customers’ perspective about Wealth Management at IDBI Bank. Ltd.
 To understand the significance of various Banking operations
 Carry out a SWOT Analysis for getting customers’ insight on Wealth
Management.

Scope of the Study

Each and every project study along with its certain objectives also have
scope for future. And this scope in future gives to new researches a new need to
research a new project with a new scope. Scope of the study not only consist one or

79
two future business plan but sometime it also gives idea about a new business
which becomes much more profitable for the researches then the older one.
Scope of the study could give the projected scenario for a new successful
strategy with a proper implementation plan. Whatever scope I observed in my
project are not exactly having all the features of the scope which I described above
but also not lacking all the features.

Tools and Techniques

As no study could be successfully completed without proper tools and
techniques, same with my project. For the better presentation and right explanation
I used tools of statistics and computer very frequently. And I am very thankful to
all those tools for helping me a lot. Basic tools which I used for project from
statistics are-
- Bar Charts
- Pie charts
- Tables
Bar charts and pie charts are really useful tools for every research to show
the result in a well clear, ease and simple way. Because I used bar charts and pie
charts in project for showing data in a systematic way, so it need not necessary for
any observer to read all the theoretical detail, simple on seeing the charts anybody
could know that what is being said.

Technological Tools –
Ms-Excel
Ms-Access
Ms-Word

80
Sources of Primary and Secondary data:

For the purpose of project, data is very much required which works as a food
for process which will ultimately give output in the form of information. So before
mentioning the source of data for the project I would like to mention that what type
of data I have collected for the purpose of project and what it is exactly.
1. Primary Data:
Primary data is basically the live data which I collected on field while doing
cold calls with the customers and I shown them list of question for which I had
required their responses. In some cases I got no response from their side and
then on the basis of my previous experiences I filled those fields.
Source: Main source for the primary data for the project was questionnaires
which I got filled by the customers or sometimes filled myself on the basis of
discussion with the customers.
2. Secondary Data:
Secondary data for the base of the project, I collected from intranet of the Bank
and from internet, RBI Bulletin, Journal by ICFAI University.
Statistical Analysis
In this segment I will show my findings in the form of graphs and charts. All the
data which I got from the market will not be disclosed over here but extract of that
in the form of information will definitely be here.
Details:
Size of Data : 100
Area : Jabalpur
Type of Data : 1. Primary 2. Secondary
Industry : Banking
Respondent : Customers of IDBI Bank.

81
 DATA INTERPRETATION & ANALYSIS

Dear Respondent,
I am a student of New Delhi Institution of Management for Finance
Specialization, I have taken up a research project on “Study of Wealth Management
at IDBI Bank Ltd. & Customer Perception towards Portfolio Management” I would
be really grateful if you could spare your precious time for answering this
questionnaire.
1) Do your family members have any account in IDBI Bank?
(a) 42% yes
(b)58% No

Interpretation
When I ask this question to the customers I found that there is a scope to grab
customer family account because still customers having more than one account and
family account also in another bank.

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2) Which of the following, other than Savings Account & Current Account,
have you opted at IDBI?
Ans-
1. IDBI FORTIS – 14%
2. LOCKERS- 28%
3. LOANS- NIL
4. DEMAT ACCOUNT- 34%
5. PAISA BUILDER- 11%
6. OTHER- 13%

Interpretation
After the survey I found that customer banking with IDBI Bank in such a manner
that they are solving their problem not as a trusted regular customer, because
analysis sayings there is a scope in Demat account and paisa builder because this is
equity market.

83
3) Approximately how much percentage of annual income do you invest
before?
Age Group Percentage
22-35 20%
36-50 50%
51-65 30%

Interpretation
Between age group 22-35 I found that still there is untouched youth generations
where we can work about. The earning capacity of huge generation is much high
but they are not interested to save money for wealth management.
Between age group 36-50 I found that this segment is interested in Mutual Funds,
Fortis but more for Fixed Deposits.
The next segment i.e. Between age group 51-65 are totally interested in Fixed
Deposits because they don’t want to take any risk and save the money for their
future.

84
4) Have you ever availed services of any Financial Advisor for managing your
wealth?
(a) Were you satisfied with their services?
(b) If not kindly mention reason for the dissatisfaction?
(a) 12% YES
(b) 88%NO

Interpretation
In Jabalpur city customer believe that he can manage his Funds and there is no
requirement of financial planner. This is new concept as well. But those who opted
certified financial planner are satisfied with their services. Some people are not
satisfied because of low returns in previous 3 years in equity market.

85
5) Have you opted any Wealth Management Products and Services?
If yes which of the following?
a) Fixed Deposit
b) Securities Market
c) Mutual Funds
d) Gold & precious metals
e) Post Office Schemes
f) Others (Please Specify)
Ans-
Fixed Deposit -78%
Securities Market-65%
Mutual Funds-73%
Gold & precious metals-14%
Post Office Schemes34%
Others (real estate, LIC, etc) 24%

Interpretation
When I ask the customers of IDBI Bank about Wealth Management Products and
Services I found that people believe in investing money in fixed deposits other than
that of other services of IDBI Bank.

86
6) Whether these Wealth Management Products and Services are in IDBI? If
not in IDBI then where?

Ans-
a) 27% YES (in IDBI Bank)
b) 73% NO

Interpretation
Under the survey people still believe in government sectors bank that’s why they
invest more in government sector bank whether it is ULIP (Unit Link Insurance
Plan), Bonds, Fixed Deposit etc.

87
7) What option out of the following would you prefer the most:
a) If risk is your concern
I. Fixed Deposit
II. Post Office Schemes
III. Others (Please Specify)
b) If growth is your concern
I. Securities Market
II. Mutual Funds
III. ULIPS
IV. Gold & precious metals
V. Others (Please Specify)
Ans –
b) If risk is your concern
I. Fixed Deposit-100%
II. Post Office Schemes-73%
III. Real estate – 42%
IV. Others (Gold, Art, Equity)-24%

Interpretation
When I ask the question with the IDBI Bank customer I felt that people strongly
believe in fixed deposits and feel that, to invest money in fixed deposits is the
safest part of any bank as compare to other services of IDBI Bank.

88
b) If Growth is your concern
I. Securities Market-63%
II. Mutual Funds- 18%
III. ULIPS-9%
IV. Gold & precious metals- 3%
V. Others (Real estate, Art, etc)-7%

Interpretation
When I asked this question to IDBI customers I felt that as growth is the concern
the vast area covers Securities and no doubt they like to invest in mutual funds.

89
8) How much knowledge of stock market do you have as an equity investor?
a) Totally ignorant 19%
b) Partial Knowledge of Equity 68%
c) Fully Aware 13%

KNOWLEDGE OF STOCK MARKET

Interpretation
As per the sample size, it shows that a major part of the investors have partial
knowledge of equity, whereas there are some which totally lack this knowledge and
expertise.

90
9) How much experience do the customers have in the stock market which is
influencing the investments?

a) Less then a year 26%

b) 1-4 year 21%
c) More then 4 years 53%

EXPERIENCE IN THE MARKET

Interpretation
The experience in the market was the factor which influenced the investments.
There are very few who have experience of less than a year. These are those
investors who entered into the market after noticing the rise in the market. The
achievement of 12,000 mark by SENSEX was motivational force in this. Major
part was having vast experience that is of more than 4 years. These are the ones
who have been in the market and saw it rising to conquer the 10.000 peak

91
10) What are the factors which are influencing the investment decision of the
investors?

a) Broker 32%

b) News 10%

c) magazines 6%

d) friends 20%

e) self 30%

f) others 2%

Factors Influencing the Investment Decision of Investors

Interpretation
There are many factors which influence the investment decision of the investors. It
may be the current news (political, technological, financial, etc.), Magazines,
friends, etc. in the study it proved that many people trust the brokers most for the
investment decisions. These are the ones who have less experience. The “Self-
Evaluation” is the next major factor. The experienced person trust himself

92
thereafter he/she invests. Magazines and current News also matters. Any bad news
can make a person change his/her decision.
11) Are you aware of government pension plans?
(a) 22%YES
(b) 78% NO

Interpretation
When I ask this question with IDBI Bank customer I come to know that still there
is a lack of information about government pension plans, but there is the scope for
the banks and Financial institutions to sale their products to those who are not
government employees or will not get pension from their employer.

12) In future, which investment option will you prefer to opt and why?
93
Ans-
(a) 78% Fixed Deposits
(b) 13% Mutual Funds
(c) 9% Others

Interpretation
In survey I found that generally people don’t want to take risk because of horrible
result of previous financial years at week financial condition of the company
because of sub- prime crisis in U.S.A. But still people are moving from Fixed
Deposits to Equity Market.

94
13) Share Market now reaches our families kitchen. Do you agree with that?

Ans-
When I ask this question to customers of IDBI Bank customers I got
following results:
(a) 83%YES
(b) 17% NO

Interpretation
Because of the high level of education even the women can get information from
the various sources like Television, Internet, News Paper and all the above the
Policy maker even do print their share on the pamphlets which is circulated to
make aware of market position sensex.

95
14) On a scale of 1-5 how you rank the following :
a) Share Market
b) Fixed Deposits
c) Gold
d) Real estate
e) Others
Ans-
1. Share Market- 60% (2nd)
2. Fixed Deposits- 80% (1st)
3. Gold- 40% (3rd)
4. Real estate- 60% (2nd)
5. Others- 20% (4th) (art, gold, post office, LIC. etc)

Interpretation
After the survey I found that people secure themselves and their money in Fixed
Deposits other than that of services provided by IDBI Bank or other Banks. To
convince people to invest their money to other services of IDBI Bank is very
difficult.
96
15) As per your experience, which services of IDBI BANK should improve to
give more satisfaction?

Ans-
When I ask this question to customers of IDBI Bank I found that customer
complaining about following services of IDBI Bank they are:
(a) Courier Services of IDBI Bank.
(b) In time officers response.
(c) Customer complaining about printers also for statements.
Thus IDBI Bank should improve the above services so that in
future IDBI Bank will get more and more customer and the
development and growth can increase rapidly and frequently.

97
 SWOT ANALYSIS
Strength:
• Huge customer base in IDBI.
• IDBI is located in the middle of the city so people can reach their easily.
• 3) IDBI is regularly providing Wealth Management training to their staff &
preferred customer for monthly market report, market position & future aspect
which is a unique services in this segment.
• IDBI is a government bank but working like a private sector bank i.e. (U.S.P.)
Unique selling point of IDBI Bank.
• Dedicated staff for wealth management which gives more satisfaction to their
clients.
• Young blood is also a strong reason to give in time services with efficiency
which is most important for wealth management.
• IDBI introduce IDBI fortis Wealth management services. When new company
comes in the market with new idea, strategy effect more to the segment.

WEAKNESS:
• “Sarkarikarn” can influence the services.
• Sometimes young generation is also a cause for lack of experience.
• It is very tough to break Axis bank & ICICI bank customers especially for
wealth management.
• I have seen customer complaining about IDBI courier services.
• Company which is introducing wealth management services newly could
take some time to make customer faith.

OPPORTUNITES:
98
• Huge earning capacity of people is increasing.
• Huge potential and good market position of the bank.
• So many govt. sectors are customers of IDBI bank which gives opportunities to
reach government employees.
• Market condition (equity) is also always opportunity for banks and investments
institutes.
• High network individuals (HNI) segments are very strong in the banks.

THREATS:
• Axis bank, ICICI bank & HDFC bank are the big competitor for IDBI Bank.
• Axis bank manages separate wealth management system which IDBI Bank does
not do.
• Branches of the IDBI Bank is also a limited.
• Bajaj, Reliance, Max New York etc investment companies in the rural areas
give a huge rural market to them.
• Lack of separate wealth management in IDBI bank is also a threat.

99
 CONCLUSION

After studying the overall concept of wealth management we can say that it has
various aspects some are favorable and friendly for the Indian economy and some
are very dangerous for the Indian economy. The customers have to beware and
they have to make SWOT analysis before choosing the wealth management option.
At present Indian Economy is facing a lot of trouble by increasing inflation by
11.05% and hike in fuel prices in the Indian as well as international market. As per
Indian concept wealth management cannot success in India. But if Indian financial
institutions are engaged and choosing the WM business in foreign countries, most
probably middle-east countries, it may be some relief for the downward moving
Indian economy.
In the end, I would like to say that I am still at the bottom rung of the ladder and
there is still a large scope for improvement. My effort has mainly to discover and
identify the facts.
How much I have succeeded is there for all to see through the medium of this
project. The functions were the primary tools along with my interpretation. These
functions, previously uncharted territories have now become like a sixth sense.
There is definitely scope for improvement and further refinement. This project is
just a scratch in the vast expense of identifying corporate/ individuals and most
importantly retention of those respective services.
Suggestions & Recommendations
1. There is lack of wealth management services, so bank should start
separate branch for that.
2. Bank should start IDBI wealth management service with adequate
staff dedicated only for same.

100
3. Customers complaining about courier services, bank should take
serious action against this issue.
4. With young generation there should be some experienced employers
because mixture of experience and young blood can grow faster.
5. It is tough to break the competition of the competitors like Axis Bank,
ICICI Bank & HDFC Bank but the proper service of the bank still makes
favorable conditions. IDBI Bank should start separate quick service desk
for NRIs & High Net worth Individuals (HNI).
6. IDBI Bank open their branches in rural areas like Chindwara, Rewa,
Satna & Sagar but customers are not aware about this ,so bank should
advertise this through posters ,banners ,print, media & other ways.

101
 BIBLIOGRAPHY

REFERENCE MATERIAL

• Banking law and practice by P.N. Varshney.

• Research Methodology by Cooper and Schindler.

• ICFAI Journal of banking.

• The Economic Times.

Websites

• www.idbi.com

• www2.idbi.com

• www.google.com

• www.idbicapital.in

• www.idbipaisabuilder.in

• www.mutualfundsindia.com

102
 Annexure

Questionnaire
Dear Respondent,
I am a student of National School of Business, Bangalore. As a part of MBA
curriculum for Finance Specialization, I have taken up a research project on “Study
of Wealth Management, at IDBI Bank Ltd.& Customer Perception Towards
Portfolio Management”. I would be really grateful if you could spare your precious
time for answering this questionnaire.

(Kindly tick mark whichever is applicable)

Name : …………………….…………………………….
Gender : Male ………. Female……..
Married : Yes ………. No ……….
Address :.……………………………………………………………….
………………………………………………………………………………………
……..………………………............
Contact No. :(Res.)…………………..(Off.)………………….(Mob.)
…………………………….
Qualification :…………………………………
No. of Earning : 1 …… 2 ….. 3 …… if more please specify ..…..
Members in
family

103
1) A. Occupation:-
Salaried……..Business..……Student……..Retired.…….Others……..
B. Annual Income:-
Equal to or less than Rs. 5 lacs …….
Between Rs. 5 lacs & Rs. 10 lacs .……
Between Rs. 1 lacss & Rs. 20 Lacs …….
Above Rs. 20 Lacs .……

2) Do your family members have account in IDBI Bank?

Yes ……… No ……….

3) Do you operate your account in any other bank than IDBI?

Yes ……… No ..……..

4) If Yes please specify where?

SBI ………… AXIS ………… HDFC ………… ICICI ………. Any other
…………

5) Which of the following, other than Savings Account & Current Account,
have you opted at IDBI?
I. IDBI FORTIS Products
II. Lockers
III. Loans
IV. Demat Account
V. IDBI Paisa Builder (Online Stock Trading Account)

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 VI. Other (Please Specify)…………………..

6) A. Approximately how much %age of annual income do you invest?

.........%

B. What is your Investment Horizon as per your age?

Age (Yrs.) 18-30 1 Yr. - 3 Yrs. ……

31-45 1 Yr. -10 Yrs. ……
46-65 3 Yrs.- 5 Yrs. ……

7) Have you ever availed services of any Financial Advisor(s) for managing your
wealth? Yes …….. No ……...
Were you satisfied with their services? Yes …….. No ……...
If not kindly mention the reason for dissatisfaction…………………….
………………………………………………………………………………………
…….

8) Have you opted any Wealth Management Products and Services?

Yes …….. No ……...

9) If yes which of the following?

I. Fixed Deposit .…………..
II. Securities Market …………….
III. Mutual Funds .…………..
IV. Gold & precious metals ……………
V. Post Office Schemes …………….
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 VI. Others (Please Specify) …………….

10) Whether these are in IDBI ? Yes ……… No ………

If No, please specify where else?
………………………………………………………………………………………
……
11) What option out of the following would you prefer the most -:
A. If safety is your concern
IV. Fixed Deposit ..………..
V. Post Office Schemes …….…….
VI. Real Estate …………..
VII. Others (Please Specify) …………………………………
12) Which Wealth Management Product or Service of IDBI, do you think
should be improved so that you would like to opt it?
……………………………………………………………………………………….
13) Are you aware about govt. pension plan?
Yes ..…… No ……..
14) Share market has now reached our families kitchen? Do you agree?
Yes …….. No ……..
15) How you score the following out of 5 points:
1. Share Market
2. Fixed Deposits
3. Gold
4. Real Estate
5. Others

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