ACKNOWLEDGEMENT

An endeavor to transform itself into success needs efforts. These efforts are
individual, standing in isolation. Such individual efforts require three things
for their further development. These three things being Reason,
Rationality and Self-Esteem. The combination of these three basic traits
delivers Productivity. However, time and again this productivity requires
encouragement and guidance. This much requisite support comes in the form
of individuals furthering the development of individuals. Professionals
furthering the development of Amateurs. This acknowledgement is an effort
to recognize these professionals who have made this project a combination
of the three fundamental traits.
This project report and the learning process behind it would not have been
possible without the guidance of My Faculty Guide, Professor H.S. Pande he
was able to impart me with the right approach that my training required for
its successful practical implementation.
These past three months were of utmost importance as they added value
towards my path of knowledge. I would like to end this acknowledgement
by thanking the customers, clients, investors, and people at large with whom
I have interacted during the course of my training.
I am grateful for each and every valuable interaction that brought me to a
better understanding of the workings of the Banking industry and of the
intricacies of Investment in India, both forming the crux of my report.

TABLE OF CONTENTS
Abstract

Introduction of Banking
Company Profile (Kotak Mahindra Bank)
Mutual Fund
- Introduction
- Mutual Fund Industry in Jaipur
- Mutual Fund Industry in India
- Mutual Fund Analysis
Retail Banking
- Introduction
- Product profile
- Comparative Analysis of Saving Accounts
Insurance
- Introduction
- History
- Product Profile
- Comparative analysis of Different Schemes
Conclusion
References

ABSTRACT

The investment banking is not a new subject in the field of finance. It started
in the fifteenth century in Italy and later on spread to France and the UK in
the eighteenth century. The name Merchant Banking originates from the fact
that it was started by merchants who added banking activities to their
operations, and through innovations, came up with what is the real merchant
bankers were to remit foreign currencies from one place to the other.
In UK, merchant bankers started with bill discounting for their customers,
even though they were more of merchants than of bankers. Barings brothers
was the oldest merchant banker in the UK while in the US indigenous
merchant bankers started operating by 1880 and started helping the
conversion of privately held companies into public companies.
When the great crash took place in 1929, most merchant bankers were left
with heavy losses and with the introduction of the Glass-Steagall Banking
Act in 1933, the government separated merchant banking from commercial
banking. Further, the Securities Act, 1934 prohibited depositories from
underwriting and tried to correct the malpractices in securities trading.
The Glass-Steagall Act restricts even investment bankers from owning a
firm dealing in securities and from underwriting. Owing to the legal
challenge created by the investment bankers in America, the government in
1987 has allowed banks to float subsidiaries to undertake the merchant
banking and investment-banking activity of the bank, where by the total
income from these subsidiaries can be up to 25% of the total income of the
bank.
The KOTAK MAHINDRA BANK Ltd. has started its operations 20 years
ago as an integral part of Kotak Mahindra Group and is one of the Indias
leading financial institutions today enjoying the trust and confidence of over
5 lakh customers across the country. The main functions of Kotak
Mahindra Bank Ltd. are: they offer a comprehensive range of financial
services and are market leaders in Retail Equities, Car Finance, Life
insurance and Investment Banking and as a financial institution they provide
world class financial solutions for Indians the world over.

INTRODUCTION

The essential function of a bank is to provide services related to the storing

of value and the extending credit. The evolution of banking dates back to the
earliest writing, and continues in the present where a bank is a financial
institution that provides banking and other financial services. Currently the
term bank is generally understood an institution that holds a banking license.
Banking licenses are granted by financial supervision authorities and
provide rights to conduct the most fundamental banking services such as
accepting deposits and making loans. There are also financial institutions
that provide certain banking services without meeting the legal definition of
a bank, a so-called non-bank. Banks are a subset of the financial services
industry.
The word bank is derived from the Italian banca, which is derived from
German and means bench. The terms bankrupt and "broke" are similarly
derived from banca rotta, which refers to an out of business bank, having its
bench physically broken. Moneylenders in Northern Italy originally did
business in open areas, or big open rooms, with each lender working from
his own bench or table.
Typically, a bank generates profits from transaction fees on financial
services or the interest spread on resources it holds in trust for clients while
paying them interest on the asset.
Services typically offered by banks
Although the type of services offered by a bank depends upon the type of
bank and the country, services provided usually include:
Directly take deposits from the general public and issue checking
and savings accounts
Lend out money to companies and individuals (see moneylender)
Cash checks.
Facilitate money transactions such as wire transfers and cashiers
checks
Issue credit cards, ATM, and debit cards.
Online banking.
Storage of valuables, particularly in a safe deposit box.
Investment solutions safe and profitable investment options

Types of banks

There are several different types of banks including:

Central banks usually control monetary policy and may be the
lender of last resort in the event of a crisis. They are often charged
with controlling the money supply, including printing paper money.
An example of central bank is the Reserve Bank Of India.
Investment banks underwrite stock and bond issues and advise on
mergers. Examples of investment banks are Goldman Sachs of the
(USA) or Kotak Mahindra Bank Ltd (India).
Merchant banks were traditionally banks, which engaged in trade
financing. The modern definition, however, refers to banks, which
provides capital to firms in the form of shares rather than loans.
Unlike Venture capital firms, they tend not to invest in new
companies.
Private banks manage the assets of the very rich.
Savings banks write mortgages exclusively.
Offshore banks are banks located in jurisdictions with low taxation
and regulation, such as Switzerland or the Channel Islands. Many
offshore banks are essentially private banks.
Commercial banks primarily lend to businesses (corporate banking)
Retail banks primarily lend to individuals.
Universal banks engage in several of these activities. For example,
Citigroup, a large American bank, is involved in commercial and
retail lending; it owns a merchant bank (Citicorp Merchant Bank
Limited) and an investment bank (Salomon Smith Barney); it
operates a private bank (Citigroup Private Bank).

COMPANY PROFILE

KOTAK MAHINDRA GROUP Kotak Mahindra is one of India's

leading financial institutions, offering complete financial solutions that
encompass every sphere of life. From commercial banking, to stock broking,
to mutual funds, to life insurance, to investment banking, the group caters to
the financial needs of individuals and corporates. The group has a net worth
of around Rs.1,700 crore and employs over 4,000 employees in its various
businesses. With a presence in 74 cities in India and offices in New York,
London, Dubai and Mauritius, it services a customer base of over 5,00,000.
Kotak Mahindra has international partnerships with Goldman Sachs (one of
the world's largest investment banks and brokerage firms), Ford Credit (one
of the world's largest dedicated automobile financiers) and Old Mutual (a
large insurance, banking and asset management conglomerate).
KEY GROUP COMPANIES AND THEIR BUSINESSES
Kotak Mahindra Bank The Kotak Mahindra Groups flagship company,
Kotak Mahindra Finance Ltd that was established in 1985, was converted
into a bank - Kotak Mahindra Bank Ltd in March 2003 becoming the first
Indian company to convert into a Bank. Its banking operations offers a
central platform for customer relationships across the groups various
businesses. The bank has a presence in the Commercial Vehicles, Retail
Finance, Corporate Banking and Treasury and has recently entered the
Housing Finance segment.
Kotak Mahindra Capital Company Kotak Mahindra Capital Company
Limited (KMCC), India's premier Investment Bank and a Primary Dealer
(PD) approved by the RBI, is a strategic joint venture between Kotak
Mahindra Bank Limited and the Goldman Sachs Group, LLP. KMCC's core
business areas include Equity Issuances, Mergers & Acquisitions, Structured
Finance and Advisory Services, Fixed Income Securities and Principal
Business.
Kotak Securities Kotak Securities Ltd., a strategic joint venture between
Kotak Mahindra Bank Limited and the Goldman Sachs Group, LLP., is one
of India's largest brokerage and securities distribution house in India. Over
the years Kotak Securities has been one of the leading investment broking
houses catering to the needs of both institutional and retails investor
categories with presence all over the country through franchisees and
coordinators. Kotak Street - the retail arm of Kotak Securities Ltd., offers

online and offline services well-researched expertise and financial products

to the retail investors.
Kotak Mahindra Primus Kotak Mahindra Primus Limited (KMP) is a joint
venture between Kotak Mahindra Bank Ltd and Ford Credit International
Inc., (USA) formed to finance all non-Ford passenger vehicles. KMP is one
of the countrys leading players in car finance and is focused to financing
and supporting automotive and automotive related manufacturers, dealers
and retail customers.
Kotak Mahindra Asset Management Company Kotak Mahindra Asset
Management Company (KMAMC), a subsidiary of Kotak Mahindra Bank,
is the asset manager for Kotak Mahindra Mutual Fund (KMMF). KMMF
manages funds in excess of Rs 4000 crores and offers schemes catering to
investors with varying risk- return profiles..
Kotak Mahindra Old Mutual Life Insurance Limited Kotak Mahindra
Old Mutual Life Insurance Limited is a joint venture between Kotak
Mahindra Bank Ltd. and Old Mutual plc. Kotak Life Insurance helps
customers to take important financial decisions at every stage in life by
offering them a wide range of innovative life insurance products, to make
them financially independent.
Creating
banking
history
Established in 1984, The Kotak Mahindra group has long been one of India's
most reputed financial organizations. In February 2003, Kotak Mahindra
Finance Ltd, the group's flagship company was given the license to carry on
banking business by the Reserve Bank of India (RBI). This approval creates
banking history since Kotak Mahindra Finance Ltd. is the first company in
India
to
convert
to
a
bank.
The complete bank
At Kotak Mahindra Bank, we address the entire spectrum of financial needs
for individuals and corporates. From Retail Finance to Equities, Mutual
Funds to Life Insurance and Investment Banking, we have the products, the
experience, the infrastructure and most importantly the commitment to
deliver pragmatic, end-to-end solutions that really work.

RETAIL BANKING

The essential function of a bank is to provide services related to the storing

of value and the extending credit. The evolution of banking dates back to the
earliest writing, and continues in the present where a bank is a financial
institution that provides banking and other financial services
Services typically offered by banks:
Although the type of services offered by a bank depends upon the type of
bank and the country, services provided usually include:

Directly take deposits from the general public and issue checking and
savings accounts

Lend out money to companies and individuals (see moneylender)

Cash checks.

Facilitate money transactions such as wire transfers and cashiers

checks

Issue credit cards, ATM, and debit cards.

Online banking.
Storage of valuables, particularly in a safe deposit box

The Product Profile-An Overview

No matter what ones banking needs are, Kotak Mahindra Bank has an offer
that's just right for him\her. Kotak savings accounts offer the customers
attractive returns with personalized banking services. It has a variety of
products to offer, Kotak Edge Savings Account, Kotak Pro Savings Account
and Kotak Ace Savings Account. Each product is feature packed ranging
from Free Home Banking, Free Access to 6000+ ATMs, Free DDs, and Free
At -Par Cheque Facility to Free Trading Account & Free Demat Account.
They can choose the one that suits them the most and meet their
requirements
PRODUCTS

1. Kotak Edge Saving Account

2. Kotak Pro Saving Account
3. Kotak Ace Saving Account

FEATURES

EDGE

SAVING
ACCOUNTS
PRO

MIN AQB

10,000

20,000

75,000

MULTIPLES OF
10K

MULTIPLES OF
20K

MULTIPLES OF
75K

HOME
BANKING

NO

YES/FREE

YES/FREE

DEMAND
DRAFT

CHARGED

2 WAY
SWEEP

ECS

ACE

FREE UPTO 500K FREE UPTO 500K

YES

YES

YES

KOTAK/UTI

GLOBAL

GLOBAL

PHANE
BANKING

YES

YES

YES

NET
BANKING

YES

YES

YES

MOBILE
BANKING

YES

YES

YES

TRADING
A/C

YES

YES

YES

YES

YES

YES

DEBIT CARD

DEMAT A/C

COMPARITIVE ANALYSIS OF SAVING ACCOUNTS

FEATURES/B KOTAK
ANK

ICICI

HSBC

HDFC

STAN.C

UTI

MIN AQB

20,000

5,000

25,000

5,000

50,000

5,000

2 WAY
SWEEP

YES

YES

YES

NO

YES

NO

HOME
BANKING

YES

NO

YES

NO

YES

NO

DEMAND
DRAFT

FREE

ECS

YES

YES

YES

YES

YES

YES

PHANE
BANKING

YES

YES

YES

YES

YES

YES

NET
BANKING

YES

YES

YES

YES

YES

YES

MOBILE
BANKING

YES

YES

YES

YES

YES

YES

TRADING
A/C

FREE

CHARG CHARG CHARGE CHARG CHARG

ED
ED
D
ED
ED

DEMAT A/C

FREE

CHARG CHARG CHARGE CHARG CHARG

ED
ED
D
ED
ED

CHARG FREE CHARGE FREE

ED
D

FREE

DEBIT CARD

MUTUAL FUND

An Introduction:
A mutual fund is a common pool of money in to which investors with
common investment objective place their contributions that are to be
invested in accordance with the stated investment objective of the scheme.
The investment manager would invest the money collected from the investor
in to assets that are defined/ permitted by the stated objective of the scheme.
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
realised are 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:

ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illustrates
the organizational set up of a mutual fund.

Concept of Mutual Fund

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 realised
are 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:

Advantages of Mutual Funds:

Professional Management - The primary advantage of funds (at least

theoretically) is the professional management of your money. Investors

purchase funds because they do not have the time or the expertise to manage
their own portfolio. A mutual fund is a relatively inexpensive way for a
small investor to get a full-time manager to make and monitor investments.
Diversification - By owning shares in a mutual fund instead of owning
individual stocks or bonds, your risk is spread out. The idea behind
diversification is to invest in a large number of assets so that a loss in any
particular investment is minimized by gains in others. In other words, the
more stocks and bonds you own, the less any one of them can hurt you
(think about Enron). Large mutual funds typically own hundreds of different
stocks in many different industries. It wouldn't be possible for an investor to
build this kind of a portfolio with a small amount of money.
Economies of Scale - Because a mutual fund buys and sells large amounts
of securities at a time, its transaction costs are lower than you as an
individual
would
pay.
Liquidity - Just like an individual stock, a mutual fund allows you to
request that your shares be converted into cash at any time.
Simplicity - Buying a mutual fund is easy! Pretty well any bank has its
own line of mutual funds, and the minimum investment is small. Most
companies also have automatic purchase plans whereby as little as $100 can
be invested on a monthly basis.
Return Potential :- Mutual fund house invest the amount which they
collect from public with the help of professional fund manager who does it
with lot of research and depth study of various stock so there is good chance
of getting good return.
Transparency :- All mutual fund house keep publishing all required
information about there scheme at news paper so that investor can know
about the current status of the scheme.
Flexibility :- Mutual fund provides flexibility to its investor to withdraw
his money any time from the scheme in open ended equity scheme, and it
also gives option to investor that if he want to switch to any other scheme of
same fund he can do it easily

 Tax benefits :- Income from mutual fund is exempted from income tax.
Dividend income received from equity fund is tax free in hand of investor,
income from long term capital gain is also tax free.
Well regulated :-Mutual fund work under the guideline provided by SEBI
Disadvantages of Mutual Funds
Professional Management- Did you notice how we qualified the
advantage of professional management with the word "theoretically"? Many
investors debate over whether or not the so-called professionals are any
better than you or I at picking stocks. Management is by no means infallible,
and, even if the fund loses money, the manager still takes his/her cut. We'll
talk
about
this
in
detail
in
a
later
section.
Costs - Mutual funds don't exist solely to make your life easier--all funds
are in it for a profit. The mutual fund industry is masterful at burying costs
under layers of jargon.
Dilution - It's possible to have too much diversification (this is explained
in our article entitled "Are You Over-Diversified?"). Because funds have
small holdings in so many different companies, high returns from a few
investments often don't make much difference on the overall return.
Taxes - When making decisions about your money, fund managers don't
consider your personal tax situation. For example, when a fund manager
sells a security, a capital-gain tax is triggered, which affects how profitable
the individual is from the sale.

Types of Mutual Funds

Mutual Funds can be categorized as follows
Investment Objective
Equity Oriented
Debt Oriented
Balanced Fund
Money Market or Liquid Fund
Gilt Fund
Index Funds
Constitution

 Open Ended Schemes

Close Ended Schemes

Equity Oriented Schemes

Commonly called Growth Schemes,
Seek to invest a majority of their funds in equities and a small portion in
money market instruments and have the potential to deliver superior
returns over the long term.
They are exposed to fluctuations in value especially in the short term.
Hence not suitable for investors seeking regular income or needing to
use their investments in the short-term. Ideal for investors who have a
long-term investment horizon

Sector Specific
These schemes restrict their investing to one or more pre-defined sectors,
e.g. technology sector.
Depend upon the performance of select sectors only, these schemes are
inherently more risky than general-purpose schemes.
They are suited for informed investors who wish to take a view and risk
on the concerned sector

Special Schemes
Index schemes
The primary purpose of an Index is to serve as a measure of the
performance of the market as a whole, or a specific sector of the market.

Saving schemes
Investors (individuals and Hindu Undivided Families (HUFs)) are being
encouraged to invest in equity markets through Equity Linked Savings
Scheme (ELSS) by offering them a tax rebate.

Real Estate Funds

Specialized real estate funds would invest in real estates directly, or may
fund real estate developers or lend to them directly or buy shares of housing
finance companies or may even buy their securitized assets.

Debt Based Schemes

These schemes, also commonly called Income Schemes, invest in debt
securities such as corporate bonds, debentures and government securities.
The prices of these schemes tend to be more stable compared with equity
schemes and most of the returns to the investors are generated through
dividends or steady capital appreciation.
These schemes are ideal for conservative investors or those not in a
position to take higher equity risks, such as retired individuals.

Income Schemes
These schemes invest in money markets, bonds and debentures of
corporate with medium and long-term maturities.
These schemes primarily target current income instead of capital
appreciation. They therefore distribute a substantial part of their
distributable surplus to the investor by way of dividend distribution.
Such schemes usually declare quarterly dividends and are suitable for
conservative investors who have medium to long term investment
horizon and are looking for regular income through dividend or steady
capital appreciation.

Money Market Schemes

Invest in short term instruments such as commercial paper (CP),
certificates of deposit (CD), treasury bills (T-Bill) and overnight
money (Call).
Least volatile of all the types of schemes because of their investments in
money market instrument with short-term maturities.
Are popular with institutional investors and high net worth individuals
having short-term surplus funds.

Gilt Funds
This scheme primarily invests in Government Debt. Hence the investor
usually does not have to worry about credit risk since Government Debt is
generally credit risk free.

Hybrid Schemes
These schemes are commonly known as balanced schemes. These
schemes invest in both equities as well as debt.
By investing in a mix of this nature, balanced schemes seek to attain the
objective of income and moderate capital appreciation and are ideal for
investors with a conservative, long-term orientation.

Index Funds
Replicate the portfolio of a particular index such as the BSE Sensitive
index, S&P NSE 50 index (Nifty), etc
Invest in the securities in the same weight age comprising of an index.
NAVs of such schemes would rise or fall in accordance with the rise or
fall in the index, though not exactly by the same percentage due to some
factors known as "tracking error" in technical terms.

 Exchange traded index funds launched by the mutual funds which are
traded on the stock exchanges

Balanced Fund
Aim of balanced funds is to provide both growth and regular income as
such schemes invest both in equities and fixed income securities
Appropriate for investors looking for moderate growth.
They generally invest 40-60% in equity and debt instruments.
NAVs of such funds are likely to be less volatile compared to pure equity
funds

Constitution
Schemes can be classified as Closed-ended or Open-ended depending upon
whether they give the investor the option to redeem at any time (openended) or whether the investor has to wait till maturity of the scheme.

MUTUAL FUND INDUSTRY IN INDIA

The mutual fund industry in India started in 1963 with the formation of
Unit Trust of India, at the initiative of the Government of India and
Reserve Bank . The history of mutual funds in India can be broadly
Divided into four distinct phases

First Phase 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.
It was set up by the Reserve Bank of India and functioned under the
Regulatory and administrative control of the Reserve Bank of India. In
1978 UTI was de-linked from the RBI and the Industrial Development Bank
of
India (IDBI) took over the regulatory and administrative control in place

of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the
end
of 1988 UTI had Rs.6,700 crores of assets under management.

Second Phase 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by
public sector banks and Life Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC). SBI Mutual Fund was the
First non- UTI Mutual Fund established in June 1987 followed by Canbank
Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian
Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda
Mutual
Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had
set up its mutual fund in December 1990.At the end of 1993, the mutual
fund industry had assets under management
of Rs.47,004 crores.

Third Phase 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the
Indian mutual fund industry, giving the Indian investors a wider choice of
fund families. Also, 1993 was the year in which the first Mutual Fund
Regulations came into being, under which all mutual funds, except UTI were
to be registered and governed. The erstwhile Kothari Pioneer (now merged
with Franklin Templeton) was the first private sector mutual fund
registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more
comprehensive and revised Mutual Fund Regulations in 1996. The industry
now functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign
mutual funds setting up funds in India and also the industry has witnessed
several mergers and acquisitions. As at the end of January 2003, there
were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit
Trust of India with Rs.44,541 crores of assets under management was way
ahead of other mutual funds.

Fourth Phase since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963
UTI was bifurcated into two separate entities. One is the Specified
Undertaking of the Unit Trust of India with assets under management of
Rs.29,835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes. The
Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does
not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and
LIC.It is registered with SEBI and functions under the Mutual Fund
Regulations.

MUTUAL FUND INDUSTRY IN JAIPUR

Looking at the current scenario it can be said that mutual fund industry in
Jaipur is in booming stage. The corpus size is 15 cr per month & is growing
at the rate of 100 percent which is simply remarkable.The prominent
segment in the industry are jewellery, carpet, handicrafts, garments, small
scale industries etc.
Carpet & garment manufcturing are the most potential segment in the
industry they alone comprises of 40% of the total market.These exporters are
always in the need of investment avenueswhere there funds dont get
blocked and generate returns as per to the requirements considering these
circumstances it can be said mutual fund is the best option available to them
and many exporters are coming forward to avail this lucrative opportunity.
PRODUCT RANGE
EQUITY PRODUCTS BALANCE
PRODUCTS
Kotak Mid-cap
Kotak Balance
Kotak MNC

DEBT PRODUCTS
Kotak Bond
Kotak Flexi Debt
Kotak Guilt
Kotak Income Plus
Kotak Liquid

A Brief Introduction of Various Mutual Fund Scheme

Kotak Bond
Kotak Bond is a pure debt scheme, with a diversified portfolio, comprising
of government, PSU and corporate bonds. Kotak Bond aims to reduce risk
by investing in instruments with a credit rating of AA- or higher. The
scheme offers dividends* 4 times a year. Kotak Bond is available with three
investment plans.

Kotak Flexi Debt

To maximise returns through an active management of a portfolio of debt
and money market securities.
0% to 95% in debt instruments with maturity more than 1 year. 5% to 100%
in debt and money market instruments with maturity less than 1 year.

Kotak Gilt
Kotak Gilt is a scheme that allows the retail investor to invest in the
otherwise wholesale government securities market. Kotak Gilt invests in the
gilt-edged government securities giving you a zero credit risk investment
option. It recognizes that for you, safety is prime, giving you the liquidity of
a
savings
account
with
attractive
returns.

Kotak Income plus

To enhance returns over a portfolio of debt instruments with a moderate
exposure in equity and equity related instruments.

Kotak Liquid

A money market scheme that seeks to provide reasonable returns with a high
level of liquidity through investments in Money market instruments,
corporate and government debt securities as well as repos in permitted
securities
of
different
maturities.
There shall be two options under the Scheme. They are :
A. Growth Option: Under this option, there will be no distribution of
income and the return to investors will be only by way of capital gains, if
any, through redemption at Applicable NAV of Units held by them.
B. Dividend Re-investment Option: The Trustee may decide to distribute
by way of dividend if distributable surplus is available and adequate for
distribution in the opinion of the Trustee. The Trustee's decision with regard
to such availability and adequacy of surplus, rate, timing and frequency of
distribution shall be final. The Dividend will be declared once a week and
the record date shall be every Monday.

Kotak Balance
Kotak Balance seeks to exploit the capital appreciation of equity and the
stable returns of debt. By investing a substantial amount in debt and money
market instruments, the scheme aims to minimize the risk that arises out of
even
the
most
carefully
picked
equity
stocks.
The scheme usually has an exposure of about 50% to 60% on equity and the
rest in debt instruments.

Kotak Mid-Cap
Kotak Mid-Cap will try to identify and invest in mid-cap companies that will
become
tomorrows
large-caps.
On their way to becoming large corporates, companies pass through a life
cycle. When they reach the mid-cap stage, companies have survived the
highest-risk part of their life cycle (the small-cap stage) and are entering a
period
of
long-term
growth.

Kotak MNC
Kotak MNC is a equity growth scheme that seeks to offer growth through
investments in reputed multinational companies operating in India or
companies where MNCs have a substantial stake.The investment focus is on

companies that have good governance, strong brands, market leadership and
strong parentage.
The scheme is suitable for investors with a time horizon of 3 to 5 years.

Mutual Fund Analysis

During my study I found out some basic rules for investing in mutual funds
1. Assess yourself: self assessment of ones need; expectation and risk profile
is of prime importance failing which, one will commit more mistakes in
putting money in right place. One should identify the degree of risk bearing
capacity the one has .
2. Try to understand where money is going: It is important to identify the
nature of investment and to know if one is comfortable with the investment.
3. Dont rush on picking funds, think first: it is important to know therisk
associated with the funds and align with the quantum to know the risk the
one is willing to take.
4. Invest dont Speculate
5. Dont put all the eggs in one bucket: One should invest in different assewt
classes and is generally the best option as it averages the risk in each
category
6. Be Regular: Investing should be a habit not an exercise undertaken at ones
wish
7. Do your homework: It is important for all investers to research the avenue
available to them in irrespective of the investers category the belong to,this
is important bcz an informed invester is in better position to take decision
8. Find the right funds:Finding funds that do not have much fees is of atmost
importance as the fee charged ultimately goes from the pocket of investor.
9. Keep the proper track of your investment.
10. Know when to sell your mutual fund: knowing when to exit a fund to is of
utmost importance. One should book profits immediately when enough has
been earned.

Insurance - An Overview
With largest number of life insurance policies in force in the world,
Insurance happens to be a mega opportunity in India. Its a business growing
at the rate of 15-20 per cent annually and presently is of the order of Rs 450
billion. Together with banking services, it adds about 7 per cent to the
countrys GDP. Gross premium collection is nearly 2 per cent of GDP and
funds available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population are without life insurance cover,
health insurance and non-life insurance continue to be below international
standards. And this part of the population is also subject to weak social
security and pension systems with hardly any old age income security. This
itself is an indicator that growth potential for the insurance sector is
immense.
A well-developed and evolved insurance sector is needed for economic
development as it provides long term funds for infrastructure development
and at the same time strengthens the risk taking ability. It is estimated that
over the next ten years India would require investments of the order of one
trillion US dollar. The Insurance sector, to some extent, can enable
investments in infrastructure development to sustain economic growth of the
country.
With a large capital outlay and long gestation periods, infrastructure projects
are fraught with a multitude of risks throughout the development,
construction and operation stages. These include risks associated with
project implementaion, including geological risks, maintenance, commercial
and political risks. Without covering these risks the financial institutions are
not willing to commit funds to the sector, especially because the financing of
most private projects is on a limited or non- recourse basis.
Insurance companies not only provide risk cover to infrastructure projects,
they also contribute long-term funds. In fact, insurance companies are an
ideal source of long term debt and equity for infrastructure projects. With
long term liability, they get a good asset- liability match by investing their
funds in such projects.

IRDA regulations require insurance companies to invest not less than 15

percent of their funds in infrastructure and social sectors. International
Insurance companies also invest their funds in such projects.
Insurance is a federal subject in India. There are two legislations that govern
the sector- The Insurance Act- 1938 and the IRDA Act- 1999.

HISTORY
The history of life insurance in India dates back to 1818 when it was
conceived as a means to provide for English Widows. Interestingly in those
days a higher premium was charged for Indian lives than the non-Indian
lives as Indian lives were considered more riskier for coverage.
The Bombay Mutual Life Insurance Society started its business in 1870. It
was the first company to charge same premium for both Indian and nonIndian lives. The Oriental Assurance Company was established in 1880. The
first general insurance company- Tital Insurance Company Limited, was
established in 1850. Till the end of nineteenth century insurance business
was almost entirely in the hands of overseas companies.
Insurance regulation formally began in India with the passing of the Life
Insurance Companies Act of 1912 and the provident fund Act of 1912.
Several frauds during 20's and 30's sullied insurance business in India. By
1938 there were 176 insurance companies. The first comprehensive
legislation was introduced with the Insurance Act of 1938 that provided
strict State Control over insurance business. The insurance business grew at
a faster pace after independence. Indian companies strengthened their hold
on this business but despite the growth that was witnessed, insurance
remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life
insurers and provident societies under one nationalised monopoly
corporation and LIC was born. Nationalisation was justified on the grounds
that it would create much needed funds for rapid industrialization. The (nonlife) insurance business, however, continued to thrive with the private sector
till 1972. Their operations were restricted to organised trade and industry in
large cities. The general insurance industry was nationalised in 1972. With
this, nearly 107 insurers were amalgamated and grouped into four
companies- National Insurance Company, New India Assurance Company,
Oriental Insurance Company and United India Insurance Company. These
were subsidiaries of the General Insurance Company (GIC).

The Government of India liberalised the insurance sector in March 2000

with the passage of the Insurance Regulatory and Development Authority
(IRDA) Bill, lifting all entry restrictions for private players and allowing
foreign players to enter the market with some limits on direct foreign
ownership. Under the current guidelines, there is a 26 percent equity cap for
foreign partners in an insurance company.

Major players in insurance sector

In the life Insurance segment the Life Insurance Corporation of India (LIC)
is the major player. The LIC has 2050 branches. It is constituted in to seven
Zones. Currently, there are 5,60,00 LIC agents in India.
The Life Insurance Corporation has been witnessing a major fall in its
market share. It has fallen to 80.4 percent in October from 81.1 percent a
month ago. And private insurers are known to have grabbed around 20
percent of the life insurance pie. While the reasons are many, withdrawal of
certain incentives of development officers is said to be one of the reasons for
the poor performance. LIC still holds 90.9 percent of the market as regards
policies and its premium income from new policies was over Rs 9952 crore
till October.
After liberlisation of insurance sector in 2000-01, many private players
entered into the market &the major companies are as follows :
1. HDFC Standard Life Insurance Company Ltd.
2. Max New York Life Insurance Company Ltd.
3. ICICI Prudential Life Insurance Company Ltd.
4. Kotak Mahindra Old Mutual Life Insurance Company Ltd.
5. Birla Sun Life Insurance Company Ltd.
6. Tata AIG Life Insurance Company Ltd.
7. SBI Life Insurance Company Ltd.
8. ING Vysya Life Insurance Company Private Ltd.
9. Bajaj Allianz Life Insurance Company Ltd.
10.Aviva Life Insurance Co. India Pvt. Ltd.
Among private life insurance companies, ICICI Prudential tops the charts
with a market share of 5.7 percent followed by Birla Sun Life - 2.9 percent,

Bajaj Allianz 2.4 percent, SBI Life 2.2 percent ,Kotak Mahindra 1.08
percent.

MAJOR PLAYERS IN INSURANCE

SECTOR
1 LIC

80.40%

2 ICICI Prudential

5.70%

3 Birla Sun Life

2.90%

4 Bajaj Allianj

2.40%

5 SBI Life

2.20%

6 Kotak Life Insuarance

1.10%

7 Others

5.30%

7 Others

6 Kotak Life

5 SBI Life

4 Bajaj

3 Birla Sun

2 ICICI

1 LIC

100.00%
80.00%
60.00%
40.00%
20.00%
0.00%

INVESTMENT PLANS
1.
2.
3.
4.

Kotak Safe Investment Plan I

Kotak Safe Investment Plan II
Kotak Flexi Investment Plan
Kotak Retirement Plan (Unit Link)

Kotak Safe Investment Plan I

Kotak Safe Investment Plan is an investment cum insurance plan, where we
invest your money in capital markets and you get market-linked returns. All
gains from the markets are yours to take and in case the markets do not
perform well, you would still get back the guaranteed Sum Assured. Sounds
interesting. Read on.
"What is Kotak Safe Investment Plan?"
This plan is an opportunity to invest in the capital markets and make market
linked returns. The plan assures you of a minimum guaranteed amount in
case of death or on maturity. Thus, while it invests your money in capital
markets, and gives you an opportunity to make high returns, it protects your
downside. Whats more, these returns are tax-free to you.
Money Market Fund - The portfolio will consist of money market
investments such as treasury bills, commercial paper, certificates of deposit,
short-term deposits, bills of exchange, debentures, bonds and Government
securities etc.
You have the flexibility to choose from four well-managed
investment funds namely Money Market/ Gilt/ Balanced/
Growth, based on your appetite for risk and commensurate
returns. At any point in time, you have complete flexibility to
switch your moneys (or a part of it) from one fund to the
other. The switching

 You may switch your funds any number of times during the
term of the plan, at daily declared selling and buying prices
NAVs (Net Asset Value).

You can monitor the daily performance of the fund on our website
www.kotaklifeinsurance.com.
In case you miss your premium payments after the first 3 years, the
Automatic Cover Maintenance facility would ensure that the policy
remain in force.
The units, from your holdings, would be sold at the prevailing selling
price to meet the risk and expense charges, so that your policy
continues to remain in force. As long as the value of units is sufficient
to meet the expenses, the policy would be in force. On maturity, the
residual value of units would be paid as a benefit to the policyholder.
Loan facility available after the policy has been in force for 3 years.
15 day free-look period.
"How does this plan work?"
The premiums paid by you will be invested in the fund of your choice after
deducting certain administration and other expenses. (Please refer to the
section on charges). Entry into a plan would be based on the buying price as
on that date.
During the term of the plan, your financial requirements could change. And
you may want switch between funds. Your units in the fund would be sold at
the selling price and other units bought at the buying price as per your
instructions.
Permanent Disability Benefit: This benefit can be added to the basic life
insurance plan to provide financial support in case of permanent disability
due to an accident. The amount payable under this benefit would be paid out
as an annuity. The maximum Permanent Disability Benefit that you can avail
of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).
"What are the charges applicable?"
Sales related and other expenses in the first year would be 14%. In
subsequent years, the expenses would be 3.5%.
Underwriting charges as applicable.

 Mortality charges and administration charges as applicable.

Annual Fund Management charges as follows:
Money market - 0.6%, Gilt Fund - 1.0%, Balanced Fund - 1.3%,
Growth fund - 1.5%
(To know more on charges, please refer to the sheet "Details on
Charges").
"An Illustration"
Jay Sharma, who is 30 years old, wants a product that gives him market
linked returns as well as a life cover. He, therefore, decides to buy the Kotak
Safe Investment Plan for a period of 10 years. He wants to invest Rs.50,000
per year in the plan. He chooses to put all his money in the Growth funds.
Based on this amount of investment*, Jays sum assured works out to be
Rs.532,000.
* Actual premium amount is Rs.50,032 p.a.

THE KOTAK SAFE INVESTMENT PLAN-II:

Kotak Safe Investment Plan is an investment cum insurance plan, where
Kotak invest customers money in capital markets and they get marketlinked returns. All gains from the markets are their to take and in case the
markets do not perform well, they would still get back the guaranteed Sum
Assured. Sounds interesting. Read on.
"What is Kotak Safe Investment Plan?"
This plan is an opportunity to invest in the capital markets and make market
linked returns. The plan assures customers of a minimum guaranteed amount
in case of death or on maturity. Thus, while it invests their money in capital
markets, and gives them an opportunity to make high returns, it protects
their downside.
Money Market Fund - The portfolio will consist of money market
investments such as treasury bills, commercial paper, certificates of deposit,
short-term deposits, bills of exchange, debentures, bonds and Government
securities etc.
Minimum Maximum Short term Investments such as money market
instruments, short term bank deposits, call money and cash 100% 100%
Gilt Fund - The portfolio will primarily consist of Government securities

and infrastructure debt assets as defined in the IRDA regulations as per the
following indicative investment pattern.
Minimum Maximum Investment in Government / Government guaranteed
securities 80% 100% Short term Investments such as money market
instruments, short term bank deposits, call money and cash 0% 20%
Balanced Fund - The portfolio will include primarily listed Indian equity
shares, debt instruments including corporate debt, Government securities
and short-term investments.
Minimum Maximum Investment in listed equity shares 30% 60%
Investment in Government / Government guaranteed securities and other
debt securities and infrastructure assets 20% 70% Short term Investments
such as money market instruments, short term bank deposits, call money and
cash
0%
20%
Growth Fund - The portfolio will consist of a professionally managed
portfolio primarily invested in listed equity and equity-related investments.
Security will be enhanced through holdings in Government and other debt
securities, infrastructure assets as defined in the IRDA regulations together
with short-term investments.
Minimum Maximum Investment in equity shares / equity related
instruments 40% 80% Investment in Government / Government guaranteed
securities and other debt securities and infrastructure assets 20% 60% Short
term Investments such as money market instruments, short term bank
deposits,
call
money
and
cash
0%
20%
Allocation of premiums to MM fund and other funds would be as per IRDA
regulations
"Who can avail of the plan?
How old do you have to be to avail of this plan?Minimum age - 18 years
Maximum age - 65 yearsFor what term can you avail of this plan?10 yrs - 30
yrsAt what intervals can I pay the premium?Quarterly Half- yearly
Yearly"What are advantages offered by Kotak Safe Investment Plan?"

Customers have the flexibility to choose from four well-managed

investment funds namely Money Market/ Gilt/ Balanced/ Growth, based on
their appetite for risk and commensurate returns.
At any point in time, they have complete flexibility to switch their moneys
(or a part of it) from one fund to the other. The switching between funds is a
simple process of filling in a Switch Form and sending it to Kotak sales
office.
Customers may switch their funds any number of times during the term of
the plan, at daily declared selling and buying prices NAVs (Net Asset Value).
Customers can monitor the daily performance of the fund on Kotaks
website www.kotaklifeinsurance.com.
In case customers miss their premium payments after the first 3 years, the
Automatic Cover Maintenance facility would ensure that the policy remain
in
force.
The units, from their holdings, would be sold at the prevailing selling price
to meet the risk and expense charges, so that their policy continues to remain
in force. As long as the value of units is sufficient to meet the expenses, the
policy would be in force. On maturity, the residual value of units would be
paid as a benefit to the policyholder.
Loan facility available after the policy has been in force for 3 years.
15 day free-look period.
"How does this plan work?"
The premiums paid by customers will be invested in the fund of their choice
after deducting certain administration and other expenses. Entry into a plan
would be based on the buying price as on that date.
Buying price is the price at which customers enter a fund, based on the
market value per unit, increased by the relevant trading costs associated with
buying the assets.
During the term of the plan, their financial requirements could change. And
they may want switch between funds. Their units in the fund would be sold
at the selling price and other units bought a
the buying price as per their instructions Selling price is the price at which
they can sell units, based on the market value per unit, less the relevant
trading costs associated with selling the assets.

"What do I receive on maturity of the plan?"

On maturity, customers would receive either the Sum Assured or the market
value of the units, whichever is higher.
"What happens in the event of death of the life insured?"
In the unfortunate event of death of the life insured, the beneficiary would
receive either the Sum Assured or the market value of the units whichever is
higher.
"What value-adds can customers opt for?"
Customers may avail of the following value-adds for a nominal premium at
the time of taking the plan. The aggregate premium on all value-adds should
not exceed 30% of the basic Kotak Safe Investment Plan premium.
Term / Preferred Term Benefit: In the event of death during the term of this
benefit, the beneficiary would receive an additional death benefit amount,
which is over and above the sum assured. The maximum amount of benefit
they can avail is equal to the basic sum assured. Where the Term Benefit
cover applied for is more than Rs.10 lakhs, better rates may apply, subject to
meeting eligibility requirements.
Accidental Death Benefit: This benefit provides an additional amount (over
and above the sum assured) to the beneficiary in the event accidental death
of the life insured. The maximum cover available under this benefit is equal
to the basic sum assured (subject to a maximum of Rs.10 lakhs).
Permanent Disability Benefit: This benefit can be added to the basic life
insurance plan to provide financial support in case of permanent disability
due to an accident. The amount payable under this benefit would be paid out
as an annuity. The maximum
Permanent Disability Benefit that they can avail of is equal to the basic sum
assured (subject to a maximum of Rs.10 lakhs).
Permanent Disability is defined as permanent and immediate inability to
work or permanent loss of use of two limbs or total and permanent loss of
sight.

Kotak Flexi Plan

As you move through different stages in life, your financial priorities will
change. When you are young, you may wish to invest more into investment
products. As you grow older and as responsibilities increase, you may want
to increase the amount that you set aside for insurance, to protect your
family against uncertainties. We at Kotak Life Insurance understand the
importance of flexibility in an insurance plan. Hence, we bring to you the
Kotak Flexi Plan.
"What is the Kotak Flexi Plan?"
An investment cum insurance plan that can be customized to meet your
constantly evolving needs. While on one hand it lets you decide the amount
of insurance cover that you want, on the other hand, it invests a portion of
the premium in the capital markets to ensure that your money works hard for
you.
At the same time the plan ensures that you have enough flexibility to meet
your financial objective of savings and protection, both through this single
plan. The plan gives you the option to add lump sum injections, when you
want. And whats more it offers you the flexibility to withdraw your funds in
part or in full.
Maturity Benefit: You have the option to choose the sum assured that you
would want on maturity. This sum assured would be referred to as the
maturity sum assured or SA1. Portion of the premium corresponding to this
amount would be referred to as the investment premium or P1.
On maturity, you would receive either the SA1 (which is guaranteed), or the
market value of units, whichever is higher.
Death Benefit: The plans offer you the flexibility to decide the amount of
insurance cover that you want. The amount of insurance cover selected
would be referred to as the insurance sum assured or SA2. Portion of the
premium corresponding to SA2 would be referred to as the insurance
premium or P2.
In the unfortunate event of death of the life insured, the beneficiary would

receive SA2 plus the market value of the units, less unpaid P2 premiums.
Flexibility in SA2: During the term of the plan, your need for life insurance
cover may change. You may need increased protection when you take up
additional liabilities or when your financial responsibilities change. For e.g.:
Avail of a home loan / personal loan
Get married
Birth of your child or childs education
Alternatively, on occasions such as closure of loans, children becoming
independent and so on, your liabilities will decrease.
Lump Sum Injection: There are times when you have excess surplus funds.
You may want to invest this amount into the capital market and gain more.
The plan allows you to make lump sum injection into the Supplementary
Account, without affecting the sum assured.
Supplementary Account is a separate account that will be set for lump sums
that you inject from time to time.
Part Withdrawal: The plan gives you option to withdraw your funds in
part, by liquidation of your units. The table given below illustrates the
amount payable (net of charges) for every Rs.100 of part withdrawal.
Main Account* Supplementary Account
Year 1
Nil
Nil
Year 2 & Year 3

50

100

Year 4 Year 10 97.5

100

After year 10

100

100

*Main Account is the account in which units bought from P1 (net of

charges) is held on your behalf, in the Fund specified by you.
When you request us for withdrawals, we would first liquidate units from
your Supplementary Account. And only if need be, would your Main
Account be liquidated. Part withdrawals from the Main Account will lead to
a proportionate reduction in SA1.
Surrender: Plan will acquire a surrender value at the end of year 1. Table

below outlines the surrender values payable, as a percentage of the value of

units.
Main Account
Year 1

Supplementary Account
Nil
Nil

Year 2 & Year 3

50%

100%

Year 4 Year 10

97.5

100%

After year 10

100%

100%

Paid Up Option: In case you do not wish to pay any further premiums, you
can make the policy paid up. When the policy is in paid up mode, the
amount paid out on death or maturity will be the market value of units. Units
from your fund would be liquidated to recover the administration charge.
Under the non-forfeiture option, if the value of units falls below Rs 10,000/the policy shall be foreclosed and the surrender value shall be paid.
Revival Option: In case your policy lapses, you can revive the benefits by
making an application within a period of five years.
Investment Options: You have a choice of 6 funds. Investment Premium or
P1 (net of charges) would be invested in any or a combination of the funds,
specified by you.
Money Market Fund - The fund seeks to provide reasonable returns
commensurate with low risk through investments in money market
instruments such as treasury bills, commercial paper, call money
market, etc.
Floating Rate Fund The fund seeks to deliver returns in line with
the market interest rate, from a portfolio invested primarily in floating
rate debt instruments.
Gilt Fund - The fund seeks to generate returns through investments
primarily in government securities. The fund gives you an option to
invest in zero credit risk Central Government securities, as it
recognizes that safety for you is prime.

 Bond Fund - The fund seeks to generate returns from a portfolio

constituted primarily of high-quality debt paper issued by corporates
in India.
Balanced Fund - The fund seeks to achieve steady income and
capital appreciation from a portfolio constituted of high quality debt
securities and listed equity.
Growth Fund - The fund seeks to achieve capital appreciation
through investments in listed equity and equity-related investments.
Security will be enhanced through holdings in highly rated debt
securities.

Money
Market

Floati
ng
Gilt
Rate

Bond

Balance
Growth
d

Money Market / Cash

100%

0% 20%

0% 20%

0% 20%

0% 20%

0% 20%

Floating Rate Debt

25% 100%

Government Securities

0% 75%

80% 0% -100% 75%

20% 70%

20% 60%

Corporate Debt

25% 100%

Equity shares

30% 60%

Equity & Related Instruments

40% 80%

* Percent refers to minimum and maximum limits within which investments

can be made in respective instruments. Allocation of money to Money
Market Fund and other funds would be as per IRDA guidelines / directions.
Money can be parked in the Money Market Fund only in the last policy year.

"What value-adds can you opt for?"

You may avail of the following value-adds for a nominal premium at the
time
of
taking
the
plan.
Accidental Death Benefit: It provides an additional amount (over and
above the death benefit) to the beneficiary in the event accidental death of
the
life
insured.
Permanent Disability Benefit: This benefit is designed to provide financial
support in case of permanent disability due to an accident.
Accidental Disability Guardian Benefit: In case the policyholder is
permanently disabled as a result of accident, this benefit keeps the policy
alive by waiving all future premiums on the policy.
"What are the tax benefits?"
Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for
Critical Illness Benefit qualify for benefits under Section 80D. These
benefits are as per the currently prevailing tax regulations and you are
advised to consult your tax advisor for details.
*Please consult your tax advisor for details.
Advantages of the Plan:
Flexibility to choose your investment and insurance amounts.
Guaranteed maturity sum assured, SA1, to protect your money from a
downside, even when you take an equity exposure.
Option to choose from six well-managed investment funds, of varying
risk-return profile. And the flexibility to switch between funds,
without attracting any tax liability.
Limited Premium Payment option to help you pay off your premiums
over a short period of 3,5,7,10 or 15 years.
Opportunity to make lump sum injections, so that your surplus funds
do not lie idle in a savings account.
In case of a financial emergency, you have the following options:
Make partial or full withdrawals of funds
Make policy paid up
Avail of automatic cover maintenance facility
Loan facility available.
Eligibility
Entry Age

Min- 14 years

Max- 65 years
Term of the Plan

Min -10 years

Max 30 years

Lump Sum Injection Amount

Min Rs.10,000
Thereafter in multiples of Rs.10,000

Part Withdrawals Amount

Min Rs.10,000
Max Subject to leaving behind a balance of
Rs.10,000 in the Main Account

SA2

Min - Rs.5,0000

P1 (including policy fees)

Mode
Quarterly
Half Yearly
Yearly

Amount
Rs.2,620
Rs.5,115
Rs.10,000

Please note:
In case of limited premium payment option, the minimum P1 is Rs.50, 000
In case of life assured being a minor or in case where the life assured is 61
years of age or older (at the time of entry into the plan), SA2 would be
restricted to Rs.50000.
For all policies with SA2 higher than Rs.50000, when the life assured
completes 70 years of age, SA2 would automatically reduce to Rs.50000.
The total premium payable is P1 plus P2 plus a fixed policy cost of Rs.100.

Charges
Sales related and other charges in the first year and subsequent would
be as per the table below. Charges are expressed as a percent age of
P1.
Year 2
Premium Paying Term
Year 1
Onwards
3 years
28%
4.375%
5,7 years

42%

4.375%

10 to 14 years

56%

4.375%

15 years and more

65%

4.375%

One time SA1 related charge 0.02% of SA1

In the first year, the administration charge would be 7% of the annual
premium, for annual premium upto Rs.20,000. For portion of
premium over Rs.20,000, the charge would be 3% of that part of the
annual premium exceeding Rs 20,000. It is to be noted that in the first
year, the maximum administration charge would be limited to a
maximum of Rs.30,000.
In subsequent years, the administration charge would be 4% of the
annual premium, for annual premium upto Rs.20,000. For portion of
premium over Rs.20,000, the charge would be 2% of that part of the
annual premium exceeding Rs 20,000.
Annual Fund Management charges as follows: Money market - 0.6%,
Gilt Fund - 1.0%, Floating Rate Fund 1.2%, Bond Fund 1.2%,
Balanced Fund - 1.3%, Growth fund - 1.5%
These are deducted from the unit price on daily basis
Buy-sell spread currently applicable are: Money market - .01%, Gilt
Fund - 0.10%, Floating Rate Fund 0.22%, Bond Fund 0.22%,
Balanced Fund - 0.50%, Growth fund 0.58%. It should be noted that
the spread would remain in the fund.
Lump sum injections would have an entry load of 2.5% of the Lump
sum injection
Please note:
The Annual Fund Management charges would not increase beyond 40% of
the initial level.
The buy-sell spread would not exceed beyond1%.
The renewal administration charges may be increased by a maximum of
40% in first 10 years or maximum 100% increase after 10 years.
Surrender charge on the Supplementary Account would not exceed 5%

Revision of Charges:
The company reserves the right to revise the charges including the right to
change the manner in which the charges are recovered. The company also
reserves the right to introduce new charges. Any revision or introduction of
charges will be with prospective effect, with prior approval of IRDA, and

only after giving notice to policyholder.

Investment Risk:
The investments in the Units are subject to market and other risks and
there can be no assurance that the objectives of any of the plans will
be achieved.
The Unit Value of the units of each of the funds can go up or down
depending on the factors and forces affecting the financial and debt
markets from time-to-time and may also be affected by changes in the
general level of interest rates.
The past performance of other plans of the Company is not
necessarily indicative of the future performance of any of these funds.
All benefits payable under the Policy are subject to the tax laws and
other financial enactments, as they exist form time to time.
"Prohibition of Rebates"
Section 41 of the Insurance Act, 1938 states:
(1) No person shall allow or offer to allow, either directly or indirectly, as an
inducement to any person to take out or renew or continue an insurance in
respect of any kind of risk relating to lives or property in India, any rebate of
the whole or part of the commission payable or any rebate of the premium
shown on the policy, nor shall any person taking out or renewing or
continuing a policy accept any rebate, except such rebate as may be allowed
in accordance with the published prospectuses or tables of the insurer.
(2) Any person making default in complying with the provision of this
section shall be punishable with fine, which may extend to five hundred
rupees.

Kotak Retirement Income Plan (Unit Link)

Retirement can be more relaxing when you don't have to worry about your
finances. Especially when you have secured your and your family's future
with the Kotak Retirement Income Plan. As an investment that is so
rewarding, it assures that even though you have stopped working, your
income continues. And you can continue living the life you love.
"What is the Kotak Retirement Income Plan (Unit linked)"
The Kotak Retirement Income Plan is a savings plan designed to build a
corpus for your future. It is a unit-linked plan where your money is invested

in the funds of your choice to generate superior returns. Your sum assured is
guaranteed* and you can enjoy the benefits of investing in the capital
markets without worrying.
You may opt for any of the following versions:
With Cover
Without Cover
Single Premium
"Who can avail of this plan?"
Minimum
Term
10 (Single Premium 5)

Maximum
30

Entry Age

18

55 (Single
Premium 60)

Vesting Age

45

75

Lumpsum injection

Rs, 10,000 per payment

Quarterly
Half Yearly
Premium payment
Yearly
(including policy fees)
Single
Premium

Rs.2,620
Rs.5,115
Rs.10,000
Rs.50,000

"What are the advantages of the Kotak Retirement Income Plan (Unit
linked)?"
Benefits payable on retirement*
You can take a cash lumpsum of upto a third of the total amount of
(a+b) :
a) Basic sum assured or Main Account, whichever is higher; and
b) The value of units in Supplementary Account.
The balance, i.e. two thirds will be used to buy an annuity of your
choice from Kotak Life Insurance or any other insurer available then

Benefits payable on death

With Cover
In case of death during the term of the plan, your beneficiary may opt for a
lumpsum or purchase an annuity with the total of :
The entire value of units or basic sum assured, whichever is higher; and
The value of units in Supplementary Account.
Without Cover
The value of units in the Main Account
And the value of units in the Supplementary Account
Single Premium
The entire value of units in the Main Account or basic sum assured of
102% of the single premium, whichever is higher
And the value of units in the Supplementary Account
Fund Management
You have a choice of four professionally managed funds to invest
your money in - Gilt fund, Bond Fund, Floating Rate Fund and
Balanced fund. You may transfer your funds to the Money Market
Fund during the last year of your policy term.
Depending on your risk appetite, you may switch your funds during
the term of the plan at daily declared selling and buying prices, which
are available on our website.
Retirement Age
You have an option to retire between the age of 45 and 75 years.
You can choose to retire early at any age on the grounds of ill-health
and withdraw the entire value of your units. You would also be able to
opt for early retirement (other than ill-health) after the first policy year
or on attainment of age 45, whichever is later. You will be given the
value of your units less surrender charge, if applicable.
"What are the Tax Benefits on this plan ?"
Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for
Critical Illness Benefit qualify for benefits under Section 80D. These

benefits are as per the currently prevailing tax regulations and you are
advised to consult your tax advisor for details.
"How does this plan apply in real life?"
Mr Kunal Sharma, a 35 year old, decides to opt for this plan to provide for
his future and would like to begin vesting from the age of 60. Given below is
the table which indicates the policy fund values at different premium amount
options.
With Cover
Guaranteed
Premium^ Benefit
- Sum Assured

Policy fund on retirement

6%

10%

10,000

2,90,000

3,95,200

7,20,300

15,000

4,35,000

5,92,900

10,80,500

20,000

5,80,000

7,90,500

14,40,700

Without Cover
Guaranteed Benefit
Premium^
- Sum Assured

Policy fund on retirement

6%

10%

10,000

3,10,000

4,17,600

7,56,300

15,000

4,65,000

6,26,500

11,34,500

20,000

6,20,000

8,35,300

15,12,700

If Mr Sharma decides to purchase a With Cover plan paying a premium of

Rs 20,000 per annum, he is expected to receive an amount of Rs 14,40,700
on his retirement assuming a 10% rate of return or Rs 7,90,500 at a return of
6%. In case of poor market performance, he will still receive a guaranteed
sum assured of Rs 5,80,000 ensuring that his hard earned money is not
eroded.
^Premium amount has been rounded off to the nearest 1000.
Assuming that 100% of the funds are invested in the Balanced Fund.
In the illustration, some benefits are guaranteed and some are variable.
Guaranteed Returns are marked "guaranteed" in the illustration. Variable
returns are shown at two different rates of assumed future returns. These
assumed rates of return are not guaranteed and they are not the upper or
lower limits of what you might get back .The actual return may be different
depending on a number of factors including future investment performance.
"What are the charges applicable?"
Mr Kunal Sharma, a 35 year old, decides to opt for this plan to provide for
his future and would like to begin vesting from the age of 60. Given below is
the table which indicates the policy fund values at different premium amount
options.
Premium Allocation Rate
Year 2
Year 1
onwards
Regular Premium
86.875%
97.20%
Single Premium

97.50%

Administration Charges
In the first year, the administration charges would be 13% for annual
premium upto Rs.20,000. For the portion of premium in excess of Rs
20,000/- , the charges would be 3% of the annual premium amount.
In subsequent years, the administration charges would be 8% for annual
premium upto Rs.20,000. For the portion of premium in excess of Rs
20,000/- , the charges would be 2% of the annual premium amount.
For the Single Premium plan, policy administration charges of Rs 32 / month
would be levied.
Annual Fund Management charges

Gilt Fund - 1.0%, Bond Fund 1.2 %, Floating Rate Fund 1.2%, Balanced
Fund - 1.3%, Money Market Fund 0.6%. These are deducted in the unit
price on daily basis.
Buy Sell spread
The spreads currently applicable are: Gilt Fund 0.10%, Bond Fund 0.22
%, Floating Rate Fund 0.22%, Balanced Fund - 0.50%, Money Market
Fund 0.01%. The spread is applied on the Net Asset Value of the units
Sum assured related charges
These charges are deducted monthly only in the first year by liquidating
units of the funds that you have invested in, and are based on the age of the
life to be insured.
For the without cover plan, the charges are 0.08% of the Sum Assured
For the with cover plan, they are calculated as follows:
Percentage of
Age of life insured (years) Basic Sum
Assured
18 to 35
0.2
36 to 45

0.3

46 to 59

0.4

60 above

0.6

Mortality charge (applicable for the with cover & single premium plan)
The mortality charge is equal to the Basic Sum Assured less premiums due
but not paid less the selling value of all the units held by you, multiplied by
the mortality charge for your age.

COMPARATIVE ANALYSIS
Comparative analysis of investment plans offered by different
companies.The comparison has been made according to certain parameters
given below:
1.Eligibility
2.Plan term
3. Maturity benefits
4. Tax rebate
5. Flexibility
6. Riders
7. Capital guarantee
8. Investment options
9. Death benefits
10. Injection /withdrawl amount
Kotak Flexi Plan
Eligibility:
Entry Age

MinMax- 65 years

14

years

Min
Max 30 years

-10

years

Plan Term:
Term of the Plan

Maturity Benefit: You have the option to choose the sum assured that you
would want on maturity. This sum assured would be referred to as the
maturity sum assured or SA1
Tax rebate: Section 80C, 10(10D) of Income Tax Act would apply.
Premiums paid for Critical Illness Benefit qualify for benefits under Section
80D. These benefits are as per the currently prevailing tax regulations.

Flexibility : Depending on your appetite for risk or your expectations of

returns, you could switch between these funds, any number of times, without
any tax liability
Riders: Accidental Death benefit, Permanent disability benefit, critical
Illness,Life guardian benefit.
Capital Guarantee : Kotak Mahindra Bank give capital gurantee for the
amount invested
Investment Options: You have a choice of 6 funds. Investment Premium or
P1 (net of charges) would be invested in any or a combination of the funds,
specified by you.
Money Market Fund
Floating Rate Fund
Gilt Fund
Bond Fund
Balanced Fund
Growth Fund
Death Benefit: The plans offer you the flexibility to decide the amount of
insurance cover that you want. In the unfortunate event of death of the life
insured, the beneficiary would receive plus the market value of the units,less
unpaidpremiums.
Lump Sum Injection:
Lump Sum Injection Amount

Min

Thereafter in multiples of Rs.10,000

Rs.10,000

Part Withdrawals Amount

Min

Rs.10,000
Max Subject to leaving behind a balance of
Rs.10,000 in the Main Account

Tata AIG- Invest Assure

Eligibility & term

15 years

Minimu
m age
30 days

Maximum
age
60 years

20 years

30 days

55 years

30 years

30 days

45 years

Term of policy

Maturity Benefit: You have the option to choose the sum assured that you
would want on maturity. This sum assured would be referred to as the
maturity sum assured
Tax-Benefit
Premiums paid under this plan are eligible for tax benefits under Section 88
as per current Income Tax Act. Moreover, all the life insurance proceeds are
generally tax-free as per Sec10 (10D) of Income Tax Act, 1961.
Flexibility: Flexibility of choosing the term of cover i.e 15 yrs, 20 yrs,&30
yrs.Flexibility of choosing the amount of death cover
Riders: Accidental Death benefit, Permanent disability benefit, critical
Illness.
Capital Gurantee: No capital gurantee is provided
Investment Options: You have a choice of 6 funds. Investment Premium or
P1 (net of charges) would be invested in any or a combination of the funds,
specified by you.
Money Market Fund
Floating Rate Fund
Gilt Fund
Bond Fund
Balanced Fund
Growth Fund

Death Benefit: The plans offer you the flexibility to decide the amount of
insurance cover that you want. In the unfortunate event of death of the life
insured, the beneficiary would receive plus the market value of the units,less
unpaidpremiums.

Lump Sum Injection:

Lump Sum Injection Amount

Min

Thereafter in multiples of Rs.10,000

Rs.10,000

Part Withdrawals Amount

Min

Rs.10,000
Max Subject to leaving behind a balance of
Rs.10,000 in the Main Account

SBI LIFE
Eligibility and term
Minimu
Term of policy
m age
5 years
18 years

Maximum
age
60 years

10 years

60 years

18 years

Maturity Benefit:
Guaranteed 5% annual additions(Simple) on Sum Assured with
benefit of Single Premium payment
In the event of death, the Sum Assured as increased by the annual
addition on the date of death will become payable. Upon survival, the
Sum Assured with total additions during the period will be payable.
Tax-Benefit: Premiums paid under this plan are eligible for tax benefits
under Section 88 as per current Income Tax Act. Moreover, all the life
insurance proceeds are generally tax-free as per Sec10 (10D) of Income Tax
Act, 1961
Flexibility: Flexible in choosing the term cover.as compared to other plans
its less flexible.
Riders: Critical illness benefit
Capital Gurantee: Guaranteed 5% annual additions(Simple) on Sum
Assured with benefit of Single Premium payment

Investment Options: No investment options are available.

Death Benefit: In the event of death, the Sum Assured as increased by the
annual addition on the date of death will become payable. Upon survival, the
Sum Assured with total additions during the period will be payable.

CONCLUSIONS
Retail Banking Conclusion
There are many banks offering saving bank accounts out of which five main
banks are chosen for this study namely, Kotak Mahindra Bank, ICICI bank,
HSBC bank, Standard Charted bank and UTI bank.
Out of all the banks which were under the scope of the study Kotak
Mahindra was seem to the best to offer saving bank accounts with the best of
its terms and services.
Mutual Funds: Conclusion
A mutual fund brings together a group of people and invests their money in
stocks, bonds, and other securities.

The advantages of mutual are professional management,

diversification, and economies of scale, simplicity, and liquidity.

The disadvantages of mutual are high costs, over-diversification,

possible tax consequences, and the inability of management to
guarantee a superior return.

There are many, many types of mutual funds. You can classify funds
based on asset class, investing strategy, region, etc.

Mutual funds have lots of costs.

Costs can be broken down into ongoing fees (represented by the

expense ratio) and transaction fees (loads).

The biggest problems with mutual funds are their costs and fees.

Mutual funds are easy to buy and sell. You can either buy them
directly from the fund company or through a third party.

Mutual fund ads can be very deceiving.

Insurance: Conclusion

After liberalization of insurance sector in 2000-01, many private

players entered into the market. But still the major player in this sector
is LIC with 80.40% of the market share and the premium collection
stands to 90% of the total market.

Thus is it still very difficult for the new players entered into the
market to convenience the investors and to gain confidence as LIC
had done in the previous days.

Talking about Kotak Life Insurance, it has just 2% of the market share
and has lots of potential to gain and to enlarge its investor base.

The only thing company has to do is to gain investors confidence and

to provide as much security of their fund as they can.

References:
www.kotak.com
www.utisel.com
www.amfiindia.com
www.investopedia.com
www.valueresearch.com
www.indiainfoline.com
www.nseindia.com
www.moneycontrol.com
www.mutualfundindia.com
www.utimutualfund.com
www.icicidirect.com
www.sbimf.com

Prowess
Books:Personal financial planning (SIMCS)
Portfolio Management (SIMCS)