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Name :- Vikrant Chauhan Prn no. :- 11021021064 Semester :- 6th Subject :- Business Entrepreneurship


I would like to express my gratitude to Mr. Bharat Bhushan who gave me the golden opportunity to do this Interesting project. Secondly I would like to thank my fellow classmates who helped me to know more about the topic. I am making this project not only for marks but also to increase my knowledge.


I, the undersigned hereby declare that the final project report submitted to my college i.e. SYMBIOSIS CENTRE FOR MANAGEMENT STUDIES (SCMS, NOIDA) in partial fulfillment for the degree of Bachelor Of Business Administration on ENTERPRENEURSHIP is a result of my own work under continuous guidance and kind co-operation of our college faculty member Mr. Bharat Bhushan.



Generation and Evaluation of idea Statement of Mission, vision and Values Business plan containing business and industry profile, business strategy, description of products and services, marketing strategy, competitor analysis, management team, operational plan, financial plan with projections, break even, growth plan, global aspects of business Legal Form of the Business Location and layout Pricing Strategy Marketing, promotion and distribution IPR issues Succession plan Recommendations

Generation and evaluation of idea What is a bank? According to, a bank is: An institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans and derive a profit from the difference in the interest rates paid and charged, respectively.
How do you start your own bank? What if you wanted to start your own bank? Do you just rent some space, put out a sign and started taking deposits? Not exactly. Lets look at the steps you have to go through in order to start your own bank. The rules and requirements vary from state to state.
INTRODUCTION The Union Finance Minister, in his budget speech for the year 2010-11 had announced that The Indian banking system has emerged unscathed from the crisis. We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services. In this context, I am happy to inform the Honourable Members that the RBI is considering giving some additional banking licences to private sector players. Non Banking Financial Companies could also be considered, if they meet the RBIs eligibility criteria. Subsequently, in line with the above announcement, the Governor, Reserve Bank of India indicated in the Annual Policy Statement for the year 2010-11 that the Reserve Bank will prepare a discussion paper marshalling the international practices, the Indian experience as well as the extant ownership and governance (O&G) guidelines and place it on the Reserve Banks web site by end-July 2010 for wider comments and feedback. The Reserve Bank also noted that detailed discussions will be held with all stakeholders on the discussion paper and guidelines will be finalised based on the feedback. All applications received in this regard would be referred to an external expert group for examination and recommendations to the Reserve Bank for granting licenses. The guidelines for licensing of new banks in the private sector were issued by the Reserve Bank of India (RBI) on January 22, 1993. Out of various applications received, RBI had granted licences to 10 banks. After a review of the experience gained on the functioning of the new banks in the private sector, in consultation with the Government, it has now been decided to revise the licensing guidelines. The revised guidelines for entry of new banks in private sector are given below. The guidelines are indicative and any other relevant factor or circumstances would be kept in view while considering an application. With the issue of revised guidelines, applications pending with RBI would be treated as lapsed. Guidelines (i) The initial minimum paid-up capital for a new bank shall be Rs.200 crore. The initial capital will be raised to Rs.300 crore within three years of commencement of business. The overall capital structure of the proposed bank including the authorised capital shall be approved by the RBI.

(ii) The promoters contribution shall be a minimum of 40 per cent of the paid-up capital of the bank at any point of time. The initial capital, other than the promoters contribution, could be

raised through public issue or private placement. In case the promoters contribution to the initial capital is in excess of the minimum proportion of 40 per cent, they shall dilute their excess stake after one year of the banks operations. (In case divestment after one year is proposed to be spread over a period of time, this would require specific approval of the RBI). Promoters contribution of 40% of the initial capital shall be locked in for a period of five years from the date of licensing of the bank. (iii) While augmenting capital to Rs.300 crore within three years of commencement of business, the promoters will have to bring in additional capital, which would be at least 40 per cent of the fresh capital raised. The remaining portion could be raised through public issue or private placement. The promoters contribution of a minimum of 40% of additional capital will also be locked in for a minimum period of 5 years from the date of receipt of capital by the bank. (iv) NRI participation in the primary equity of a new bank shall be to the maximum extent of 40 per cent. In the case of a foreign banking company or finance company (including multilateral institutions) as a technical collaborator or a co-promoter, equity participation shall be restricted to 20 per cent within the above ceiling of 40 per cent. In cases of shortfall in foreign equity contributions by NRIs, designated multilateral institutions would be allowed to contribute foreign equity to the extent of the shortfall in NRI contribution to the equity. The proposed bank shall obtain necessary approval of Foreign Investment Promotion Board of the Government of India and Exchange Control Department of RBI. (v) The new bank should not be promoted by a large industrial house. However, individual companies, directly or indirectly connected with large industrial houses may be permitted to participate in the equity of a new private sector bank up to a maximum of 10 per cent but will not have controlling interest in the bank. The 10 per cent limit would apply to all inter- connected companies belonging to the concerned large industrial houses. In taking a view on whether the companies, either as promoters or investors, belong to a large industrial house or to a company connected to a large industrial house, the decision of the RBI will be final. (vi) The proposed bank shall maintain an arms length relationship with business entities in the promoter group and the individual company/ies investing upto 10% of the equity as stipulated above. It shall not extend any credit facilities to the promoters and company/ies investing up to 10 per cent of the equity.The relationship between business entities in the promoter group and the proposed bank shall be of a similar nature as between two independent and unconnected entities. In taking view on whether a company belongs to a particular Promoter Group or not, the decision of RBI shall be final. Other Requirements (i) The bank shall be required to maintain a minimum capital adequacy ratio of 10 per cent on a continuous basis from the commencement of its operations. (ii) In order to ensure level playing field, a) the new bank will have to observe priority sector lending target of 40 per cent of net bank credit as applicable to other domestic banks, and b) the new bank will be required to open 25 per cent of its branches in rural and semi-urban areas to avoid over concentration of their branches in metropolitan areas and cities on the same

lines as new private sector banks established under guidelines laid down by RBI in January 1993, (iii) The promoters, their group companies and the proposed bank shall accept the system of consolidated supervision by the Reserve Bank of India. (iv) The new bank shall not be allowed to set up a subsidiary or mutual fund for at least three years from the date of commencement of business. (v) The headquarters of the proposed new bank could be in any location in India as decided by the promoters. (vi) The new bank shall make full use of modern infrastructural facilities in office equipments, computer, telecommunications etc. in order to provide cost-effective customer service. It should have a high powered Customer Grievances Cell to handle customer complaints.
(vii) The new bank will be governed by the provisions of the Banking Regulation Act, 1949, Reserve Bank of India Act, 1934, other relevant Statutes and the Directives, Prudential regulations and other Guidelines/Instructions issued by RBI and the regulations of SEBI regarding public issues and other guidelines applicable to listed banking companies.

Procedure for Applications i) In terms of Rule 11 of the Banking Regulation (Companies) Rules, 1949 applications shall be submitted in the prescribed form (Form III). In addition, the applications should furnish a project report covering business potential and viability of the proposed bank, the business focus, the product lines, proposed regional or location spread, level of information technology capability and any other information that they consider relevant. The project report should give as much concrete details as feasible, based on adequate ground level information and avoid unrealistic or unduly ambitious projections. Applications should also be supported by detailed information on the background of promoters, their expertise, track record of business and financial worth, details of promoters direct and indirect interests in various companies/industries, details of credit/other facilities availed by the promoters/ promoter company(ies)/other Group company(ies) with banks/financial institutions, and details of proposed participation by foreign banks/NRI/OCBs. ii) Applications for setting up new banks in the private sector, along with other details as mentioned above, should reach the following address before March 31, 2001.
The Chief General Manager-in-Charge, Department of Banking Operations and Development, Reserve Bank of India, World Trade Centre, Centre I, Cuffe Parade, Colaba, Mumbai 400 005.

Procedure for RBI decisions i) In view of the increasing emphasis on stringent prudential norms, transparency, disclosure requirements and modern technology, the new banks need to have strength and efficiency to work profitably in a highly competitive environment. As a number of banks are already functioning, licences will be issued on a very selective basis to those who conform to the above

requirements and who are likely to conform to the best international and domestic standards of customer service and efficiency. Preference will however be given to promoters with expertise of financing priority areas and in setting up banks specialising in the financing of rural and agro based industries. The number of licences to be issued in the next three years may be restricted to two or three of the best acceptable proposals. This number would also include permission granted to any NBFC for conversion into bank. {If the number of acceptable proposals of the highest standards are more than three, this limit may be relaxed on recommendation of the Advisory Committee (see below). In that case the period for issuing new licences may be stretched to four or five years}.
ii) At the first stage, the applications will be screened by RBI to ensure prima facie eligibility of the applicants. Thereafter, the applications will be referred to a high-level Advisory Committee to be set up by RBI comprising

Dr. I.G. Patel, former Governor of Reserve Bank of India Shri C.G. Somiah, former Comptroller and Auditor General of India Shri Dipankar Basu, former Chairman of State Bank of India

Chairman . Member Member

Chief General Manager of the Department of Banking Operations and Development of RBI will be the Secretary of the Advisory Committee.

(iii) The Committee will set up its own procedures for screening the applications. The Committee will reserve the right to call for more information as well as have discussions with any applicant/s and seek clarification on any issue as required by it. The Committee will submit its recommendations to RBI for consideration within three months after the last date of receipt of applications by RBI (i.e. 30 June 2001). The decision to issue an in-principle approval for setting up of a bank will be taken by RBI. RBIs decision will be final. (iv) The validity of the in-principle approval issued by RBI will be one year from the date of granting in-principle approval and would thereafter lapse automatically. (v) After issue of the in-principle approval for setting up of a bank in the private sector, if any adverse features are noticed subsequently regarding the promoters or the companies/firms with which the promoters are associated and the group in which they have interest, the Reserve Bank of India may impose additional conditions and if warranted, it may withdraw the in-principle approval.

WHY NEW BANKS IN INDIA It is generally accepted that greater financial system depth, stability and soundness contribute to economic growth. But beyond that, for growth to be truly inclusive requires broadening and deepening the reach of banking. A wider distribution and access of financial services helps both consumers and producers raise their welfare and productivity. Such access is especially powerful for the poor as it provides them opportunities to build savings, make investments, avail credit, and more important, insure themselves against income shocks and emergencies.

As of March 31, 2009, the Indian banking system comprised 27 public sector banks, 7 new private sector banks, 15 old private sector banks, 31 foreign banks, 86 Regional Rural Banks (RRBs), 4 Local Area Banks (LABs), 1,721 urban co-operative banks, 31 state co-operative banks and 371 district central cooperative banks.

The average population coverage by a commercial bank branch in urban areas improved from 12,300 as on June 30, 2005 to 9,400 as on June 30, 2010 and in rural and semi urban areas from 17,200 as on June 30, 2005 to 15,900 as on June 30, 2010. The all India weighted average during the same period improved from 15,500 to 13,400.
Though the Indian financial system has made impressive strides in resource mobilization, geographical and functional reach, financial viability, profitability and competitiveness, vast segments of the population, especially the underprivileged sections of the society, have still no access to formal banking services. The Reserve Bank is therefore considering providing licences to a limited number of new banks. A larger number of banks would foster greater competition, and thereby reduce costs, and improve the quality of service. More importantly, it would promote financial inclusion, and ultimately support inclusive economic growth, which is a key focus of public policy. This discussion paper outlines past approaches, international experience, and considers the various costs and benefits of increasing the number of new banks as well as the pros and cons of various policy parameters in licensing new banks. PAST APPROACH TO NEW BANKS

Reserve Banks approach When financial sector reforms were initiated in India in the early nineties, guidelines for licensing of new banks in the private sector were issued in January 1993 and subsequently revised in January 2001; the objective was to instill greater competition in the banking system to increase productivity and efficiency. The revised 2001 guidelines by and large were still cautious in nature. Large industrial houses were not permitted to promote new banks. However, individual companies, directly or indirectly connected with large industrial houses were permitted to own 10 percent of the equity of a bank, but without any controlling interest. An NBFC with good track records was considered eligible to convert into a bank, provided it was not promoted by a large industrial house and satisfied the prescribed minimum capital requirements, a triple A (AAA) or its equivalent, credit rating in the previous year, capital adequacy of not less than 12 percent and net Non Performing Assets (NPA) ratio of not more than 5 percent. The initial minimum paid up capital was prescribed at Rs. 200 crore to be raised to Rs.300 crore within three years of commencement of business. Promoters were required to contribute a minimum of 40 percent of the paid up capital of the bank at any point of time, with a lock-in period of five years. However, if the promoter's contribution to the initial capital was more than the minimum 40 percent, they were required to dilute their excess stake after one year of the bank's operations. Non Resident Indians (NRIs) were permitted to participate in the primary equity of a new bank to

the maximum extent of 40 percent. However, the equity participation was restricted to 20 percent within the above ceiling of 40 percent, in the case of a foreign banking company or finance company (including multilateral institutions) acting as a technical collaborator or a copromoter. Banks were required to maintain an arms length relationship with business entities in the promoter group and individual company/ies investing up to 10 percent of the equity. They could not extend any credit facilities to the promoters and company /ies investing up to 10 percent of the equity. The relationship between business entities in a promoter group and the bank had to be of a similar nature as between two independent and unconnected entities. The shares of the bank had to be listed on a stock exchange. Capital adequacy ratio of the bank had to be 10 percent on a continuous basis from the commencement of operations. Banks were obliged to maintain up to 40 percent of their net bank credit as loans to the priority sector. Banks were obliged to open at least 25 percent of their total number of branches in rural and semi urban centers.
Reserve Banks experience 10 new banks were set up in the private sector after the 1993 guidelines and 2 new banks after the 2001 revised guidelines. Out of these, four were promoted by financial institutions, one each by conversion of co-operative bank and NBFC into commercial banks, and the remaining six by individual banking professionals and an established media house. Out of the four banks promoted by individuals in 1993, only one has survived with muted growth. One bank has been compulsorily merged with a nationalized bank due to erosion of networth on account of large capital market exposure. The other two banks have voluntarily amalgamated with other private sector banks over a period of 10 to 13 years due to the decisions of the majority shareholders arising out of poor governance and lack of financial strength.

Out of the remaining six banks that were licensed in 1993, one bank promoted by a media group has voluntarily amalgamated itself with another private sector bank within five years of operations and four banks promoted by financial institutions have either merged with the parent or rebranded and achieved growth over a period of time. The bank that was converted from a Cooperative bank has taken some time in aligning itself to the commercial banking and is endeavoring to stabilize itself. The two banks licensed in the second phase have been functioning for less than 10 years and their transition from the settling stage has been fairly smooth. The experience of the Reserve Bank over these 17 years has been that banks promoted by individuals, though banking professionals, either failed or merged with other banks or had muted growth. Only those banks that had adequate experience in broad financial sector, financial resources, trustworthy people, strong and competent managerial support could withstand the rigorous demands of promoting and managing a bank. The experience with small banks has not been encouraging, Out of the six Local Area Banks licensed, only four remain. The license of one has been cancelled due to serious misrepresentation / concealment of facts at the time of granting of licence and another has been merged with a bank on account of bad governance and unfit management. Of the remaining four, two though continuing to maintain minimum capital, liquidity and profitability, have not progressed much. The remaining two are functioning satisfactorily but their growth has been

restrained due to inadequacies of the small bank model. The Local Area Bank model has inherent weakness such as unviable and uncompetitive cost structures which are a result of its small size and concentration risk. Local Area banks are required to confine their operations to a small area of three districts. This concentration exposes the banks to the risk of adverse selection. Further, the size of operations and also the locational disadvantage of these banks act as a constraint to attracting and retaining professional staff as well as competent management. Corporate governance standards in these banks are also found wanting partly because of their concentrated ownership. The experience with other small banks i.e. urban co-operative banks, and small deposit taking NBFCs is similar. Low capital base, lack of professional management, poor credit management, and diversion of funds have led to multi-faceted problems.
As such, in the interest of the depositors and the financial system as a whole, and also due to the thrust on the financial inclusion, banks should be required to start with sufficient initial capital. Further, strong capital base would also ensure that the banks withstand any adverse conditions in the financial sector as well as the economy.

Minimum capital requirements for new banks and promoters contribution International Experience Internationally, the bank regulators either insist on certain initial minimum capital to be brought by the applicant/applicants (e.g., European Union, Germany, France, United Kingdom, Japan, Canada, Hong Kong, Malaysia, Singapore) to obtain a banking license, or assess the required start-up capital to be brought by the proposed bank based on the scale, nature, complexity and inherent risks of the operations as proposed in the business plan (e.g., Australia, USA).Minimum capital requirements range between USD 1.6 million (INR 8 crore) in Argentina to USD 1077.8 million (INR 5389 crore) in Singapore. Out of the statistics available for 21 countries, four countries have minimum capital requirements exceeding USD 100 million (INR 470 crore) viz. Malaysia USD 618.8 million (INR 3094 crore), Kuwait USD 257.3 million (INR 1286 crore), Indonesia USD 331 million (INR 1655 crore) and Singapore USD 1077.8 million (INR 5389 crore). However, in Australia and USA the capital requirements are prescribed on a case to case basis depending on the business plan, scale, nature and complexity of operations. Further, in Hong Kong and Argentina, minimum capital is determined in accordance with the type of financial institution being established. Indian Approach The guidelines issued in 1993 for licensing of new banks in the private sector had prescribed Rs. 100 crore as minimum capital and the 2001 guidelines raised this to Rs. 200 crore to be increased to Rs.300 crore over three years from commencement of business. In India, as there are only full-fledged bank licenses with no restricted licenses being given, the minimum capital requirement has been kept reasonably high. Taking into account the lapse of time since the last guidelines issued in January 2001 and inflation since then, there is a case to have the minimum capital requirement at more than Rs. 300 crore. Indian approach

Modern banking in India started with the establishment of a limited number of banks by British agency houses, which were largely confined to port centres, for financing of trade in the raw materials needed for British industries. The Indian enterprises made significant entry into banking business only during the early twenties, which got strengthened by the growing nationalist sentiment and the spread of the Swadeshi movement. The economic power in the Indian joint stock banks was concentrated in the hands of a few families, who managed to make the bulk of its finance available to themselves, favoured groups and their concerns. Moreover, the bulk of the bank advances were diverted to industry, particularly to large and medium-scale industries and big and established business houses, while the needs of vital sectors like smallscale industry, agriculture and exports tended to be neglected. It was only due to the impact of the diversification and growth of Indian industry during the Second World War as also the Five Year Plans on industrial development in the fifties that Indian banks changed their banking policies and stance to a certain extent. The banking system, being an important intermediary through which the savings of the community got channelized and served as a key constituent of country's basic social and economic objective, the Government of India introduced a scheme of social control over banks in 1967 with the main objective of achieving a wider spread of bank credit, preventing its misuse, directing a larger volume of credit flow to priority sectors and making it a more effective instrument of economic development. Subsequently, in July 1969, 14 major commercial banks were nationalized, the basic objective of which was to ensure that credit was channeled to various priority sectors of the economy, which were hitherto neglected, and in accordance with the national planning priorities. The nationalization of commercial banks marked a paradigm shift in the focus of banking as it sought a shift from class banking to mass banking and a thrust to branch expansion in the rural and semi-urban areas as also stepping up of lending to the so called priority sectors. Additional statutory powers were conferred upon the Reserve Bank, not only with the objective of protecting the depositors interest, but also to ensure that particular clients or groups of clients are not favoured in the matter of distribution of credit and whatever the character of the shareholding, its influence is neutralized in the constitution of the board of directors and in the actual credit decision taken at different levels of bank management. To avoid problems arising out of possible conflict of interests, such as connected lending, the 1993 and 2001 guidelines on entry of new private sector banks sought to reduce the control of functions of banks by the promoters. In India, the promoters have been allowed to bring in higher stake (minimum of 40 percent of the paid-up capital of the bank) at the time of licensing of banks with a lock-in period of 5 years. The main intention was to have a stable capital base, and strong professional management, but without any interference or control of management by the promoters. The February 2005 Ownership and Governance (O & G) guidelines require promoters and other shareholders of the banks to divest/dilute their shareholding to a level of 10 percent or below of the banks share capital within a specified time frame. However, under exceptional circumstances and where the ownership is that of a financial entity, that is well established, well regulated, widely held, publicly listed and enjoying good standing in the financial community, higher shareholding is permitted to a level of more than 10 percent up to 30 percent. A level exceeding 30 percent is subject to higher due diligence standards prescribed in the February 2004 guidelines for acknowledgement of transfer / allotment of shares in private sector banks. Any acquisition or transfer of shares of private sector banks, taking the aggregate shareholding

of an individual or group, either directly or indirectly to 5 percent or more of share capital, requires acknowledgement from the Reserve Bank of India which is aimed at ensuring that the significant shareholders are fit and proper. Banks (including foreign banks having branch presence in India) and financial Institutions are not permitted to acquire any fresh stake in a banks equity shares, rendering its holding to exceed 5 percent of the investee banks equity capital. This is with a view to limit interlocking of capital within the banking system. Foreign shareholding in the new banks Indian Approach The 2001 guidelines on entry of new banks permitted NRIs to participate in the primary equity of a new bank to the maximum extent of 40 percent. However, the equity participation was restricted to 20 percent within the above ceiling of 40 percent, in the case of a foreign banking company or finance company (including multilateral institutions) acting as a technical collaborator or a co-promoter. Subsequently, based on the March 5, 2004 Press Note 2 of the Government of Indias (Ministry of Commerce and Industry), the aggregate foreign investment from all sources (FDI, FII, NRI) in private sector banks was not to exceed 74 percent of the paid-up capital of the bank, under the automatic route. This included FDI, investment under Portfolio Investment Scheme (PIS) by FIIs and NRIs, and also included IPOs, Private Placements, GDRs/ADRs and acquisition of shares from existing shareholders. Further, the FDI policy prescribes that at all times, at least 26 percent of the paid up capital of private sector bank will have to be held by residents, except for wholly-owned subsidiary of a foreign bank. The sub caps for individual FII and NRI holding is restricted to 10 percent with the aggregate limit for all FIIs and NRIs capped at 24 percent and 10 percent respectively, with a possibility to raise cap with the approval of the Board/General Body to 49 percent and 24 percent respectively. Transfer of shares under FDI from residents to non-residents requires approval of Foreign Investment Promotion Board (FIPB) under Foreign Exchange Management Act (FEMA). The February 3, 2004 RBI guidelines on grant of acknowledgement of transfer/allotment of shares in private sector banks is also applicable to acquisition of shares by foreign investors, if such acquisition results in any person owning or controlling 5 percent or more of the paid up capital of the private bank. However, the Press Notes 2, 3 & 4 issued by Government of India in February 2009 indicate that banks with foreign shareholding of more than 50 percent would be treated as nonresident owned banks. In the event of the foreign shareholders having the right to appoint majority of directors on the Board, the bank would be treated as nonresident controlled bank.

View Points In Support i. Industrial and business houses can be an important source of capital and can provide management expertise and strategic direction to banks as they have done to a broad range of non-banking companies and other financial companies. ii. Large industrial and business houses have already been permitted to operate in other financial services sectors, such as insurance companies, asset management companies and other non-banking finance companies including loan and leasing companies. Many of the largest private sector companies in these segments are fully or partially owned by industrial and business houses. Thus, the industrial and business houses with their presence in the above sectors, are already competing with banks both on the assets and liabilities side. iii. Industrial and business houses have a long history of building and nurturing new businesses in highly regulated sectors such as Telecom, Power, Automobiles, Defence, infrastructure projects like Airports, Highways, Dams, Ports. iv. Equity of large industrial and business houses is widely held and all are listed on the stock exchanges and are accordingly subject to Companies laws, SEBI laws and regulations on transparency, disclosure and corporate governance. v. An Industrial and business house with presence across various sectors would face a higher reputational risk compared to a pure individual promoter or financial services player. vi. Strengthening banking regulation & supervision, stronger corporate governance norms, a more competitive banking market and stringent prudential regulations and disclosure requirements could mitigate the risks of affiliations of banks with the industrial and business houses. vii. Permitting industrial and business houses to own a limited number of banks should not lead to undue concentration of control of banking activities as the Indian banking system is largely composed of public sector and private sector banks.
II. Potential risks Even though Industrial and business houses are already permitted in other areas of financial services, banks are special as they are highly leveraged fiduciary entities central to the monetary and payment system. There are several deep rooted fears in allowing industrial and business houses to own banks. Mainly these relate to the fact that such an affiliation tends to undermine the independence and neutrality of banks as arbiters of the allocation of credit to the real sectors of economy. Conflicts of interest, concentration of economic power, likely political affiliations, potential for regulatory capture, governance and safety net issues are the main concerns. The Japanese experience with Keiretsu, the Korean experience with Chaebols and the Indian experience prior to nationalization are strong reminders of the pitfalls of commercial interests promoting / controlling banks.

Some other major factors for entry of a new bank For well over two decades, after the nationalisation of 14 larger banks in 1969, no banks have been allowed to be set up in the private sector. Progressively, over this period, public sector banks have expanded their branch network considerably and catered to the socio-economic needs of large masses of the population, especially the weaker section and those in the rural areas. The public sector banks now have 91 per cent of the total bank branches and handle 85 per cent of the total banking business in the country. While recognising the importance and the role of public sector banks, there is increasing recognition of the need to introduce greater competition which can lead to higher productivity and efficiency of the banking system. A stage has now been reached when new private sector banks may be allowed to be set up. It is necessary that while permitting the entry of new private sector banks the following considerations have to be kept in view: (a) they sub-serve the underlying goals of financial sector reforms which are to provide competitive, efficient and low cost financial intermediation services for the society at large; (b) they are financially viable; (c) they should result in upgradation of technology in the banking sector; (d) they avoid the shortcomings, such as, unfair preemption and concentration of credit, monopolisation of economic power, corss holdings with industrial groups, etc., which beset the private sector banks prior to nationalisation; (e) freedom of entry in the banking sector may have to be managed carefully and judiciously. Based on these considerations, the Reserve Bank has formulated the following guidelines for establishment of new banks in the private sector :(a) Such a bank shall be registered as a public limited company under the Companies Act, 1956. (b) The RBI may, on merits, grant a licence under the Banking Regulation Act, 1949 for such a bank. The bank may also be included in the Second Schedule of the Reserve Bank of India Act, 1934 at the appropriate time. The decision of the RBI in these matters shall be final. (c) The bank will be governed by the provisions of the Banking Regulation Act, 1949 in regard to its authorised, subscribed and paid-up capital. The minimum paid-up capital for such a bank shall be Rs.100 crores. The promoters' contribution for such a bank shall be determined by the RBI and will also be subject to other applicable regulations. (d) The shares of the bank should be listed on stock exchanges. (e) To avoid concentration of the headquarters of new banks in metropolitan cities and other overbanked areas, while granting a licence, preference may be given to those, the headquarters of which, are proposed to be located in a centre which does not have the headquarters of any other bank. (f) Voting rights of an individual shareholder shall be governed by the ceiling of 1 per cent of the total voting rights as stipulated by Section 12 (2) of the Banking Regulation Act. However, expemption from this ceiling may be granted under Section 53 of the said Act, to public financial institutions.

(g) The new bank shall not be allowed to have as a director any person who is a director of any other banking company, or of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent of the total voting rights of all the shareholders of the banking company, as laid down in the Banking Regulation Act, 1949. (h) The bank will be governed by the provisions of the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949 and other relevant statues, in regard to its management, set-up, liquidity requirements and the scope of its activities. The directives, instructions, guidelines and advices given by the RBI, shall be applicable to such a bank as in the case of other banks. It would be ensured that a new bank would concentrate on core banking activities initially. (i) Such a bank shall be subject to prudential norms in respect of banking operations, accounting policies and other policies as are laid down by RBI. The bank will have to achieve capital adequacy of 8 per cent of the risk weighted assets from the very beginning. Similarly, norms for income recognition, asset classification and provisioning will also be applicable to it from the beginning. So will be the single borrower and group borrowers exposure limits that will be in force from time to time. (j) The bank shall have to observe priority sector lending targets as applicable to other domestic banks. However, in recognition of the fact that new entrants may require some time to lend to all categories of the priority sector, some modifications in the composition of the priority sector lending may be considered by RBI for the initial period of three years. (k) Such a bank will also have to comply with such directions of the RBI as are applicable to existing banks in the matter or export credit. As a facilitation of this it may be issued an authorised dealer's licence to deal in foreign exchange, when applied for. (l) A new bank shall not be allowed to set up a subsidiary or mutual fund for at least three years after its establishment. The holding of such a bank in the equity of other companies shall be governed by the existing provisions applicable to other banks, viz. (i) 30 per cent of the bank's or the investee company's capital funds, whichever is less, as set out under the Banking Regulation Act, 1949, and (ii) 1.5 per cent of the bank's incremental deposits during a year as per RBI guidelines. The aggregate of such investments in the subsidiaries and Mutual Fund (if and when set up) and portfolio investments in other companies shall not exceed 20 per cent of the bank's own paid-up capital and reserves. (m) In regard to branch opening, it shall be governed by the existing policy that banks are free to open branches at various centres including urban/metropolitan centres without the prior approval of the RBI once they satisfy the capital adequacy and prudential accounting norms. However, to avoid overconcentration of their branches in metropolitan areas and cities, a new bank will be required to open rural and semi-urban branches also, as may be laid down by RBI. (n) Such a bank shall have to lay down its loan policy within the overall policy guidelines of RBI. While doing so, it shall specifically provide prudential norms covering related party transactions. (o) Such a bank shall make full use of modern infrastructural facilities in office equipments, computer, telecommunications, etc. in order to provide good customer service. The bank should have a high powered customer grievances cell to handle customer complaints. (p) Such other conditions as RBI may prescribe from time to time.

Statement of Mission, vision and Values


To emerge as a leading group offering a comprehensive range of services and product to our customers. Ensuring high standards of customer satisfaction and a society responsible organization .Develop into a top rate, nimble footed banking institution committed to excellence in services to its customers, enhancing stakeholders value though care and competence and fulfilling obligations to the community at large. Vision Attain high standards of efficiency and professionalism and core institutional values comparable to the best in the field. Possess world-class standards of efficiency and professionalism rooted in the core institutional values of the State Bank Group. To be a committed, caring and responsible corporate citizen To provide a satisfying work environment with opportunities for learning, selfdevelopment and self-actualization.


Honesty Discipline Faith Devotion Responsibility Workmanship Profession Ability Punctuality Target Achievement Coordination Excellence in customer service Integrity Confidentiality

Business plan containing following points :Business and industry profile MAAV bank has many deposit schemes tailored to suit the needs of its customers, both individuals and organisations. Credit/Advances/Loan Schemes specifically designed for its customers. Also offers various novel services to customers, both individuals and organisations. The Bank's own training establishment, MAAV bank Management Academy for Growth & Excellence (IMAGE) was established. MAAV bank has launched a scheme called Cash Management Services' in the year 2013 for speedy collection of outstation cheques. The Bank entered into a strategic tie-up with HDFC Standard Life Insurance Company Ltd., the first in the private sector to receive the Certificate of Registration for foray into Life Insurance business for distribution of latter's insurance products. The Bank with the Insurance Company signed a Memorandum of understanding in February of the year 2012. The Bank in two branches implemented the Core Banking Solution in December of the year 2013. The Bank signed an agreement with Export Credit Guarantee Corporation of India to distribute the latter's credit insurance packages for exporters and also in the same year the Bank joined hands with Times of Money for remittance solution. The last year MMAV Bank entered into strategic alliance with Mahindra & Mahindra Limited and TAFE Limited for pushing up tractor usage among farmers. MAAV bank launched Ind on-line Doorstep Banking to deliver Banking and Financial Services at the doorsteps of the common man. The Bank signed an agreement with Indian Railway Catering and Tourism Corporation Limited (IRCTC) for offering train ticket booking services through IRCTC website Business strategy - Our business strategy emphasizes the following : Increase our market share in Indias expanding banking and financial services industry by following a disciplined growth strategy focusing on quality and not on quantity and delivering high quality customer service. Leverage our technology platform and open scalable systems to deliver more products to more customers and to control operating costs. Maintain our current high standards for asset quality through disciplined credit risk management. Develop innovative products and services that attract our targeted customers and address inefficiencies in the Indian financial sector. Continue to develop products and services that reduce our cost of funds. Focus on high earnings growth with low volatility.

Description of products and services The products and services are as follows : Savings fund account Current account Fixes deposits schemes Capital gain account scheme -1988 Doorstep banking services Cards Nomination facilities Deceased claim cases Centralized banking solutions View your loan application

Payments/Transfer Funds Transfer Intra-Bank Transfer RTGS/NEFT Credit Card (VISA) IMPS Payments NRI eZ Trade Funds Transfer

E Deposits E-TDR/e-STDR E-TDR/e-STDR under Income Tax Savings Scheme SBI Flexi Deposit E-Annuity Deposit Scheme E- Recurring Deposits

Other banking facilities Social banking Msme banking Agricultural banking Corporate banking International banking/ NRI Financial services

Marketing strategy Target marketing and customer acquisition Share of wallet Channel strategy and management Relationship management and database marketing Product development & innovation Credit approval

Competitor analysis The are a lot of competitors in the market, some of the big an small competitors are IDBI bank, ICICI bank, HDFC bank, AXIS bank, citizen corporation bank, DENA ban, VIJAYA bank, OBC bank, PnB bank, Indian overseas bank etc.. Management team A good banker requires a well-organized mind with an eye for detail. Good verbal and written communication skills help in effective interaction with the clients as well as the staff. His work includes maintenance of records which requires accuracy and efficiency. The person should have mathematical skills. Employees joining as officers should be able to lead, motivate and manage the bank staff. Integrity and honesty play a major role in all dealings related to money, staff and clients. Operational plan - MAAV provides a range of banking products through its network of branches in
India and overseas, including products aimed at non-resident Indians (NRIs). It offers e-commerce facilty to its every customer, so that they dont need to visit the branch everytime.

Financial plan with projections and growth plans - The MAAV bank develops and applies advanced technology to the efficient and convenient delivery of banking and related financial services. The bank provides: Self-Service Banking in-branch and off-branch ATMs and 24-hour Phone Banking. Trade and Corporate Banking services with real-time access to a centralized information database Instantaneous inter-city transactions through online connections between all branches A state-of-the-art treasury dealing system A sophisticated card system supporting debit and credit cards, domestic and international VISA, MasterCard, and co-branded cards A dedicated acquiring system for both MasterCard and Visa transactions online@maav, MAAV internet banking service, provides customers with an integrated and secure platform to access their accounts. Internet Payment Gateway handles credit card transactions on the internet

Global aspects of business MAAV bank offers foreign services to common as well as NRI person. These services are offered through third party applications such as a LORO account etc. The bank is still in process of acquiring the technology to deal directly with foreign customers which would also be cost effective in future.

LEGAL FORM OF THE BUSINESS Introduction These Terms and Conditions contain important information which you should read carefully as they explain our obligations to you and your obligations to us as a customer of MAAV bank. The Terms and Conditions are divided into two Parts. The first Part called "General Terms and Conditions" sets out the general terms and conditions which apply to any Account you hold with us. The second Part called "Specific Terms and Conditions" contains Account specific information which relates to particular Accounts which you have with us or services which you use. Part 1: General Terms and Conditions Opening an Account Accounts can be opened by individuals, partnership firms, companies, charitable organisations, trusts or any other organisations formed within the legal framework. Our application form for the Account for which you are applying will contain the eligibility criteria for opening thatAccount. You should read the application carefully to ensure that you are eligible. The information contained in the application form, including that filled in by you, forms part of our contract. If you have any queries please contact us on 0000 000 000. If you are an individual, you may be able to register with us to receive interest gross. Otherwise interest will be paid net of income tax at the prescribed rate. Interest on Accounts is subject to deduction of tax at the rate specified by HM Revenue and Customs, unless we have received a completed HM Revenue and Customs Form R85. The agreement between us relating to the Account is made up of these Terms and Conditions and includes any other special conditions (such as interest rates, notice periods and charges) whether on our Website or in paper form. Please see sections 8.2, 8.3 and 17 for details of when we may make changes to these Terms and Conditions or your Account.

Proof of your identity and address When you open an Account with us, we need to obtain sufficient proof of your identity and address to enable us to satisfy our legal obligations and protect you, the public and us against fraud and misuse of the banking system. Please note that in some instances we may need to ask you to send in further information or documents or askyou to visit your local Branch. From time to time we may also need to update the proof of identity and address wehold for you or make any other enquiries necessary. We will not open an Account if you do not satisfy our requirements in relation to establishing your identity under relevant Anti-Money Laundering legislation and

in the event that we do refuse under this section 3.2 to open anAccount, we will refund any monies received to you without interest or charge, provided that we are permitted to do so under applicable Anti-Money Laundering legislation.

You may have more than one Account with us and these Terms and Conditions will apply to each Account unless you are otherwise notified. Joint Accounts Anyone who is eligible to open an Account with us may be accepted by us to open a joint Account. We are not able to treat the tax status of each of the joint Account holders differently for the purposes of applying interest, so unless you are all eligible to receive interest gross we will pay interest net of tax. For further details please see section 8.7 below. Each joint Account holder is responsible for complying with these Terms and Conditions. If one of you breaks any of the terms of your agreement with us we are able to take action against any or all of you. If we find out that any one of you is declared bankrupt, we may put a hold on the joint Account and refuse to pay out any amount from it until we receive instructions from the Account holder who has not become bankrupt and the person appointed to handle the bankrupt person's assets. We will send statements to each of the Account holders, but you can opt out of receiving more than one statement, in which case we will send the statement relating to your Account to the first named Account holder, unless you otherwise advise us. If you opt out of receiving more than one statement then a notice to the first named Account holder/the one Account holder counts as a notice to all of you. Unless you have previously given us instructions to the contrary, we are entitled to accept the authority of any jointAccount holder to give instructions on behalf of all other Account holders relating to the Account until it is cancelled by any such other joint Account holders, or treated by us as cancelled as described in section 15 or by operation of law. If any one of the joint Account holders tells us of a dispute between them, we may treat this as notice of cancellation of the authority of any single joint Account holder. If we do, any further transactions will need the authority of all the joint Account holders. In the event of the death of any joint Account holder, then subject to any rights we or a third party may have, any money in the Account will be at the disposal of the survivor(s). We may make information about a joint Account available to any other joint Account holder by telephone, letter, e-mail or over the internet if you subscribe to internet banking on our Website. Interest When you have money in your Account, you will be eligible for credit interest. We will work this out on the amount actually in your Account at close of business each Working Day. You start earning interest on your Account from the day that cash funds are added to your Account. For interest on cheques that have not yet cleared, see condition 7.6.3 above. Interest is calculated on a daily basis according to our interest rate schedule available

fromyour local Branch or our website (www.MAAV We credit interest in accordance with these Terms and Conditions and our interest rate schedule. We may without notice change your interest rate at any time with immediate effect for any of the following reasons:

where your Account is linked to an external reference rate (a publically available rate which we do not set, for example, the Bank of England Base Rate), to reflect changes in this reference rate; and/or for any reason if the change benefits you. We will provide you with 2 months' written notice if we change interest rates for any of the following reasons: if there is a change in relevant law, regulation, code of practice or to reflect a recommendation, requirement or decision of any applicable court, ombudsman, regulator or similar body; to reflect changes or expected changes in the costs we pay to others and/or changes in inflation, or the costs of the services or facilities we provide to reflect any change in interest rates charged by other UK competing banks or financial institutions; to reflect any changes in money market interest rates or the cost to us of money we lend; to reflect any reorganisation of our business by it being acquired by or by our acquiring another bank or organisation (so that customers with similar products can be treated in the same way); to ensure we maintain financial strength and the competitiveness of our business generally; and/or to reflect any event beyond our reasonable control. Any change we make to interest rates will be proportionate to the circumstances giving rise to the change. Changes to interest rates will not be made in accordance with conditions 8.2 and 8.3 if we have agreed a fixed rate of interest with you that applies to your Account. If you do not accept the proposed change(s) to your interest rate as set out in section 8.3, you must let us know in writing before the change(s) take effect. You have the right to terminate the contract as a result of changes referred to in section 8.3 without any cost or charge to you. If you wish to change or close your Account due to notice of a reduction in rates, you must notify us within the 2 month period. If you do not notify us, we will consider that youhave accepted the change. Information about our current interest rates, for savings and current accounts, is available on our Website, by telephoning us and by asking any member of our staff at any of our Branches. When we change the interest rate on your Account the old rate will also be available to help you compare rates. We will pay you interest after deduction of tax at the applicable rate. If you are eligible and have completed, signed and returned to us the correct form from HM Revenue and Customs then we will pay you interest gross. Please note if you are joint Account holders then we will always pay interest net of tax unless all of you are eligible for interest gross (for which you would each have to provide a form as outlined above). Details of interest chargeable for overdraft Accounts agreed by us will be explained in the facility letter issued to you for such Accounts. Payments out of your Account

You can make payments from your Account as long as there are enough available funds in your Account to cover the payments. We will take into account any other payments which we have paid or agreed to pay from your Account that day, or which have been authorised for that day, such as standing orders and direct debits. When a payment or standing order is due on a day which is not a normal Working Day, we will make the payment on the next Working Day. Please note that we do not offer overdraft facilities or any borrowing facilities on any personal savings Accounts and may refuse to make payments where there are insufficient available funds irrespective of funds you may hold in other Accounts with us. We will charge you a fee - as shown on our Tariff of Charges- ifwe have to refuse a payment. When you want to make payments from savings Accounts which do not have a cheque facility, you can either speak to one of our cashiers at our Branches or send us a withdrawal form or letter telling us how you would like the payment to be made. Payment may be made by the Account holder issuing a cheque wherever cheque books are issued by us. Cheques should be issued in the currency of the Account. We may not pay the cheque issued by you if there are insufficient funds in your Account or effecting such payment exceeds the agreed overdraft limit. A cheque issued may not be paid due to other reasons for example if amount in words and figures differs, it is out of date i.e. date on the cheque is more than 6 months prior to the date of presentation, it is post dated, or the Authorised Signatory's signature differs. The cheque may not be paid if there is suspicion of any fraudulent activity. You can request us to stop payment of a cheque provided that you do so before it has been debited to Your Account and we have not told the payee or their bank that the cheque will be paid. Your request to stop a cheque must also be received by our local Branch, before 12 noon on a Working Day in order to be processed on that day. Such request should be in writing mentioning the Account and cheque details and signed by the Authorised Signatory. There is a charge for this service as set out in our Tariff of Charges. You should take care when issuing a cheque to prevent forgery. All our cheques are marked 'A/C Payee' and are payable only through the payees Account. You can request a banker's cheque or draft in your name or a third party by making a written request. Charges as mentioned in our Tariff of Charges will apply for the same. Withdrawals may be allowed by way of direct debits received through clearing where the Account has such facility. Payments can be made by electronic transfer through Swift by providing us with a written request signed by you.You should provide your Account details from which the payment will be made, the beneficiary's name, address and IBAN, correct details of the recipient bank, including the bank's Swift (BIC) address and the purpose of remittance. For payments within the UK, you must provide the account number and Sort Code of the beneficiary's bank. If there are funds in the Account, payments will be made within one Working Day of receiving yourinstructions. Any payment made by electronic transfer including through Swift will be sent to the beneficiary's bank on the same day. However, the value date on which the beneficiary's account will be credited will depend on the beneficiary's banker. In case of payments requested in currencies other than the currency of

the Account, the currency conversion would be done at our prevailing exchange rate applying on the day of the conversion. Wepublish the indicative exchange rate for rupees on our Website and the exchange rate is published in yourStatement of Account. Payments made out of your Account are based on the information provided by you. In case the information provided by you is incorrect we will make reasonable efforts to recover the funds involved in the payment transaction and may charge you for any reasonable costs incurred in recovering your funds. We no longer accept standing orders for outward payments from deposit Accounts. Any outward payment request received after the Cut-Off Time will be considered to have been received on the next Working Day. For security reasons, we may contact you by telephone or by email to seek confirmation of a payment request received through a messenger, by post or by fax. You must notify us of any loss suffered by you on any Account or any unauthorised or incorrectly executed payment transactions as soon as you become aware of them but not later than 13 months from the date of debit in the Account, otherwise we shall not be liable to you. However, this condition shall not apply if we fail to provideyou with the information of the payment in line with section 20.1 of these Terms and Conditions. For payments involving currency conversion, the rate we will apply will be the rate on offer on that day. The rate is made available to you at our Branches or over the telephone. If a payment is made involving foreign currency and the payment is returned, we will reconvert the returned payment to the original currency at our prevailing exchange rate and credit your Account. We shall not be liable for any loss in exchange on account of the conversion.

Transaction Processing Time The processing time for payments into and out of your Account may be more than the time set out in sections 7 and 9 due to the following reasons: defective request or insufficient, incomplete or incorrect details in your instructions to us;if your instructions in any way give rise to suspicion in which case the matter would be investigated before any decision is taken regarding application of funds; to comply with our legal or regulatory obligations; order by a competent court; order or stipulation by any other law enforcing body; and/or business disruption on account of natural calamity, riot, war, terrorist activity, industrial action, equipment failure or any such event which is beyond our control. In the above circumstances, we will not be liable for any delay or loss suffered by the Account holders(s), provided that we have acted reasonably, including where lawful notifying you of the refusal or delay in making the payment and the reasons why at the earliest opportunity and, in the event that payment details are incorrect because of an error by you or a third party we will help you investigate. Right of Set Off We may use any Account/s held by you with us which are in credit to reduce or repay any amount you may owe tous in other Account/s held by you in the same name. In the process we may appropriate fixed deposit/s held byyou with us for a certain period along with the interest payable by us. In cases where the credit balances are in a

different currency than the balances owed to us, then the currency conversion would be done at our prevailing market rate. If you hold a joint Account, and another Account holder on this Account owes us money in relation to anotherAccount held with us in his/her name, we can exercise our right of set off on the Account you hold jointly with thisAccount holder. Cheques you issue 12.1 If your Account has a cheque facility and you issue a cheque on your Account, it will normally be deducted fromyour Account two Working Days after the recipient pays it into their Account. For example, a cheque paid in on a Monday will normally be deducted from your Account on a Wednesday. More time may be needed for a cheque paid into a building society account or any bank outside England and Wales, or any account held at a non-clearing bank. Charges When you open your Account, we will give you details of our Tariff of 1 Charges for the day to day running of your Account. You can also find out about these charges by contacting your Account holding Branch or by looking atour Website. If we increase any of these charges or introduce a new charge, we will give you at 2 least two months' notice before the changes take effect. We will tell you the charge for any other service or product before we provide it toyou, and at any time should you request it. Before we deduct charges for standard Account services from your Account, we will give you at least 14 calendar days notice of how much we will deduct. If any sum due and payable by you is not paid on the due date, you will be liable to 3 pay the interest (both after, as well as before, any judgment) on such sum at such a rate or rates as we will provide to you from time to time from the date the payment is due up to the date of payment. Payments from your Account will be made in accordance with the notice period 4 applying to your Account. Youchoose this notice period when you open your Account. For example, if your Account is on 90 calendar days' notice, you will need to allow 90 calendar days from the day we receive your instructions before we make the payment. You can give notice for a withdrawal by telephone or fax. However, we will only carry out the withdrawal ifwe have received confirmation of your request in writing (which also notes the date of your original call or fax) before the date you want the payment to be made. Internet banking If you have indicated that you would like us to provide internet banking services, the following terms and conditions apply for those Accounts on which we offer internet banking. This section 21 sets out the rules which apply to your internet access to your Account(s), and explains our obligations you, and your obligations to us, when operating these Accounts. We offer internet banking facilities to all Account holders. Please log on tohttps://www.onlineMAAV and download a registration form for individualAccounts and Corporate Registration form for company/business Accounts. The completed registration form should be sent to the Branch Manager where you have your Account. You will then be sent your User ID, password and transaction password for internet banking. 'Net Banking' enables you to do the following:

1 2 3

5 6 6.1

view your Account on line; transfer funds between Accounts; make payments; pay bills; remittances; order drafts; request cheque books; and deal with other related enquiries. We may add further services from time to time to our 'Net Banking' offering. Use of websites You can access your Accounts through the Website after you receive and confirm receipt to us of the User ID and password sent to you by us. You must change the password provided by us at the time of first logging into internet banking on our Website. Our internet banking service is available in respect of all the Accounts you hold with us, All requests received from you are logged and transmitted to your local Branch for their fulfilment. The requests become effective from the time these are recorded/registered at the respective Branch. When using our Websites, the terms of use applicable to the relevant Website will apply. Availability of internet banking services We work hard to make sure our internet banking services are available at the times you wish to use them. However, we cannot and do not guarantee their availability, nor that access to, and use of, our Websites will be uninterrupted or error free. From time to time we may need to suspend provision of the internet banking services for repair, maintenance or upgrade purposes. We will not, in any event, have any liability to you if we are prevented from, or delayed in, providing any internet banking services due to the failure of any telecommunication link or other equipment or infrastructure not owned or controlled exclusively by us and/or any acts or omissions of third party telecommunications or internet service providers. Instructions

6.2 6.3

6.4 7 .7.1


For the purposes of this section 21 and the web requirements, you agree to provide: 8.1 written confirmation of your request to make a withdrawal from your Account; and all other instructions in relation to the operation of your Account in writing (unless we have made other specific and documented arrangements), you can comply with these requirements by providing us with the relevant details using your authenticated security details on our Website. 8.2 However, please pay careful attention to the security notice set out in the following section and comply with it.

Part 2: Specific Account Terms and Conditions Debit Card Terms and Conditions These are our terms and conditions for use of the card with your current Account. Please read them carefully and keep them in a safe place. Introduction 1 Your agreement with us is contained in:

these card conditions; the application form for the card/Account application signed by you; and Our General Terms and Conditions and any other Terms and Conditions which apply to your Account. Issuing a card 1 We will only send you a card if you ask for one or to replace a card you already have. We issue the following types of card: MasterCard and unembossed Debit Card. 2 For security purposes we will ask you to contact us upon receipt of any new or replacement card you receive from us before you can use it. 3 We will issue you with a Personal Identification Number (PIN). We will send your PIN number separately from your card for security purposes. We will not reveal your PIN to anyone but you. You can use your PIN with your card for withdrawing money and using other services available from self-service machines. You will also need your PIN to be sure that you can pay for goods and services at the premises of a retailer or other supplier with a chip and PIN card. 4 You must sign your card as soon as you receive it and follow any reasonable instructions that we give about using cards and keeping them safe. 5 You can change your PIN. We tell you how to change your PIN when we issue your PIN. 6 You must not use your card after the end of the month it expires or after we have asked you to return it to us or told you that its use is suspended. 7 You authorise us to deduct from your Account the amount of any transaction carried out using your card with or without use of your PIN or using your debit card details, whether or not you have given or authorised such instructions. You will only be responsible for transactions which have not been made or authorised by you as set out in section 10 below. 8 You have the right to cancel your use of the card at any time by sending us written notice in accordance with section 15 of our General Terms and Conditions. You must also return the card cut into 4 pieces, making sure youcut through the magnetic strip. Making payments using your card 1 Mastercard can be used to pay for goods and services where you see the appropriate Mastercard logo, the Channel Islands and the Isle of Man or the Mastercard logo abroad. A "cash back" service may also sometimes be available. 2 You may use your debit card to make payment for goods and services through a variety of channels such as the internet, telephone, television and mail order. You must not disclose your PIN when using any of these channels.We strongly recommend the use of "secure payment" sites and software when sending your card details over the internet. When using your card to make payment over the telephone or by mail order you may be asked for additional identification. 3 Your card will be enabled for the Mastercard Secure Code by default. This code is used to confirm yourtransactions over the internet by the organisations that participate in Mastercard Secure Code (to prevent fraud). To get your code, you will have to visit our website ( bank/enrollment/enrollwelcome.jsp) and give your card number and mobile number. Details of the procedure are provided in sections 14.4 and 14.5 below. 4 We will not be responsible if a retailer or other supplier refuses to accept your card or

if you cannot use your card to make a payment. 5 You can only use the card or the card number for transactions if you have enough money in your Account.

Payments and your Account 1 All transactions, cash withdrawals and transfers will be shown on your Account statement. 2 You cannot stop a debit card payment but a retailer or supplier may make a refund. We will credit your Accountwhen we receive their instructions but will not be responsible for any delay in receiving their instructions. 3 We may refuse to authorise a payment if we consider that your card or Account has been or is likely to be misused or for fraud prevention purposes. We may refer an authorisation request back to the retailer for more information if we consider this necessary to help us to prevent card misuse. This may result in you being asked to produce additional identification. This may also be done on a random basis for fraud prevention purposes. Charges 6.1 We may charge for use by you of the card at the rate set out in our Tariff of Charges. Please also see section 11 below about how we may change our charges which apply. You authorise us to deduct all such charges from your Account. Security 1 You must do all that you can to keep the card safe and your PIN secret at all times. You must keep the card separate from any cheques. 2 You must never allow anyone else to use your card, PIN or other security information. 3 You must never write down or record your PIN or other security information. 4 You must only reveal the card number to make a transaction, to report loss or theft of the card or if we allow you to do so. 5 We will never contact you to ask you for your security information such as your PIN, passwords or the 3 digit number on the reverse of your card. You should not reveal your security information to anyone else. Changing the terms of this agreement 1 We may change the terms of this agreement including our charges and other changes needed if we add extra functions to the card at any time. We will tell you about any changes and when they come into effect by advertising in the press or putting messages in your statements or sending you a separate written notice as set out in our General Terms and Conditions or notifying you on our website 2 Any change to the terms of this agreement which is made to reflect a change of applicable law or regulation will take effect immediately or otherwise as we may tell you. We will give you at least two months' notice of any other changes. If you wish you may stop using the card and there will be no extra charge payable. 3 We may introduce new charges for use of the card or change our existing charges. When you use the card ourlatest charges will apply. You should make sure that you have checked the latest charges, details of which are available

on our website www.MAAV We will always tell you at least two months in advance before introducing any changes to our charges and we will tell you of these changes as set out in section 11.1 above.

Location and layout Site Selection for New and Relocated Branches It's not difficult to comprehend the basic idea of depicting market statistics on maps in an effort to evaluate locations. But these days, there are so many more techniques and tools in the arsenal to allow the organization to go so much further. "Spatial interaction modeling" captures the patterns of customer locations in relation to the branches they may choose to execute transactions. Systems can go to work calculating complicated geography-based statistics (e.g. households within a 5-minute drive, an index representing overall competitive intensity that takes into account proximity of branches, whether or not a branch is on the "going home side" of the street for commuters, etc.) for thousands of locations at one time. Distribution of customer home locations can be fully analyzed to better understand impacts on nearby branch openings. Besides assessing a given site opportunity, GIS helps prioritize alternative site locations, assess the expected performance of existing branches based on the market conditions faced, quantify the estimated financial impact of changes to the branch network (including competitors'), evaluate stores in which a small banking kiosk may be installed and assess branch relocation opportunities to name a few. Branch Closure Evaluation Assessing the attractiveness of the markets in which branches operate with the help of GIS can help a bank decide whether or not to reduce its presence in that market and assess the risks in doing so. But GIS-based analysis of closure opportunities is especially helpful when it comes to predicting the customer loss (attrition) that would Concise whitepapers to help leaders manage market growth more intelligently Top 10 Ways to Use GIS in Retail Banking 2 Market Fort Ltd. All Rights Reserved. Result should a given branch be closed. Capturing this ability to retain customers through transfer of business to nearby branches can have a very significant impact on the decision involved, where it's sometimes better to close one branch that performs on its own better than another candidate for closure. Some banking organizations are taking this concept to the next level and applying sophisticated customer attrition models across a national network of branch locations in an effort to identify consolidation opportunities.

Pricing Strategy If your organisation is like most, strategic pricing is often hard to manage because there is an incomplete knowledge of all the disparate activities and how to coordinate them. In many businesses, each function Finance, Marketing, Sales and Operations works with a different set of data to make pricing decisions. Different functions also often define goals and reward performance using different metrics, which can be in conflict with each other The Potentials of Strategic Pricing Effective pricing management can help you increase profitability by improving the way you analyse, set and deliver prices, including enforcing pricing policies. The benefits can be realised in both good times and bad. The tools and discipline of pricing and profitability management can help address the immediate issues presented during economic instability, as well as help position a company for long-term profitable growth. A comprehensive pricing strategy is made of multiple layers which create a foundation for price setting: The foundation of Strategic Pricing is Value Creation, or determining what the best value for the customer is. The next step is to establish the Price Structure. The pricing of a product should match the delivered value and cost to serve. Once the Price Structure has been determined, marketing can develop the Price & Value Communication to the customer. The Pricing Process must be able to stand up to aggressive customers and competitors it should rather influence the expectations and not react to them. Marketing Identifying the customers financial needs and wants. Develop appropriate banking products and services to meet customers needs. Determine the prices for the products/services developed. Advertise and promote the product to existing and potential customer of financial services. Set up suitable distribution channels and bank branches. Forecasting and research of future market needs.

Challenges of bank marketing Technology Marketing by private sector banks and foreign banks is more effective than public sector banks because these banks are IT oriented. Private sector banks and foreign

banks are attracting more customers by providing e-services. Thus, technology has become a challenge before the public sector banks. Untrained Staff Often it happens that when a prospective customer approaches the branch, the employees seem to have very little knowledge about the scheme. This reflects an ugly picture of our banks image. Banks are not losing one prospective customer but 10 more customers who would be touch of this man. Attitude of the employees towards customers is also not very well. Thus, it is a need of time to reorient the staff. Rural Marketing This is a big challenge before the Indian banks to enhance rural marketing to increase their customers. Banks should open their branches not only in the urban and semiurban areas but also in the rural areas. Trust of Customers Marketing can be enhanced only by increasing the customers. Customers can be increased or attracted only by winning the trust of the customers. Customer Awareness Customer awareness is also a challenge before the banks. Bank can market their products and services by giving the proper knowledge about the product to customer or by awarding the customer about the products. Bank should literate the customers.

Promotion The basic promotion a can do is through providing low interest rate for limited time, cash back on shopping through debit/credit cards, attractive offers/discounts on various shopping sites, can provide promo code to its customers so that they can use them to avail benefits etc. Intellectual property rights All present and future rights in and to trade secrets, patents, copyright, trademarks, service marks, know-how and other proprietary rights of any type arising at law, including rights in and to all applications and registrations relating to this website (including but not limited to all data contained on this website relating to you and your associated customer (Data), information, text, look and feel, material, graphics, software and advertisements) (the Intellectual Property Rights) shall, as between you and us, at all times be and remain the sole and exclusive property of MAAV Merchant Services. You assign upon creation all Intellectual Property Rights to us. The MAAV Merchant Services trademark and logo are registered trademarks of

MAAV Bank Limited and used under licence by MAAV Merchant Services Private Limited. The FIRST DATA name, logo and related trademarks and service marks are owned by First Data Corporation and are registered and used in the United States of America and many foreign countries. You agree not to display or use in any manner the MAAV Merchant Services or FIRST DATA names, trademarks or service marks and logos contained in this website without the express prior written consent of MAAV Merchant Services or First Data Corporation respectively. You do not acquire any rights or licences in or to the Intellectual Property Rights, this website and materials contained within this website other than the limited right to use this website in accordance with the Terms of Use. You agree to protect the Intellectual Property Rights of MAAV Merchant Services and all others having rights in this website during and after the term of this agreement and to comply with all reasonable written requests made by MAAV Merchant Services or its suppliers of content (including Data) (Content), equipment or otherwise to protect their and others contractual, statutory and common law rights in this website

Succession plan
The MAAV Group has prepared a succession plan for top-level executives of its subsidiaries. Sources said that this is a contingency plan, in the event of an exit of the present heads of its two subsidiaries MAAV Prudential and MAAV Ventures. At present, Mr. A is managing director & chief executive officer (CEO) of MAAV Prudential Life Insurance, while Mr. B is managing director and CEO of MAAV Ventures. According to sources familiar with the developments, Mr. V, MAAV Executive Director, will replace Mr. A in case he moves out. Mr. S, executive director, is the likely candidate to replace Mr. B. Mr. V joined the bank in 2000 with over 10 years experience in A2Z ltd. He has been responsible for setting up consumer finance business, which was a separate company called MAAV Personal Finance Services. The company later merged with MAAV . At present, he is heading the retail banking, SME banking and rural banking divisions. Mr. S, who joined the erstwhile MAAV s project finance business in 1994, has been incharge of their international business. Earlier, he was the managing director and CEO of PB ltd. Currently, he is responsible for corporate and investment banking, government banking and international banking divisions. Senior executives in MAAV said that they have a policy whereby succession plans are there from the deputy general manager level. In response to an e-mail from Business Standard, the bank said that it does not respond to speculation. Sources also said that

in a continuation with the succession plan, the likely replacements for Mr. V and Mr. S on the board of MAAV could be Mr. C, senior general manager and global head of SME banking division and Mr. D, senior general manager, customer service and phone banking. As part of the top deck reshuffle, MAAV Prudential Executive Director N is moving to the bank as its CFO, while Mr. Mad, who was earlier an Executive Director at MAAV , has been appointed the CEO of MAAV Securities.


High Level Investment Commission The February 2006 report of The High Level Investment Commission, constituted by the Government of India in December 2004 with the objective of enhancing both foreign and domestic investment levels in India, has, among other things, recommended permitting ownership in Indian banks of up to 15 percent by Indian corporates, and also to increase limits of holdings by any one foreign bank up to 15 percent in private banks. High Level Committee on Fuller Capital Account Convertibility The July 2006 report of The High Level Committee on Fuller Capital Account Convertibility, constituted by the Reserve Bank of India in March 2006 under the chairmanship of Shri S. S. Tarapore, has recommended that RBI should evolve policies to allow, on a case by case basis, industrial houses to have a stake in Indian banks or promote new banks. The policy may also encourage non-banking finance companies to convert into banks. It has also recommended that after exploring these avenues until 2009, foreign banks may be allowed to enhance their presence in the banking system. Committee on Financial Sector Reforms The September 2008 report of The High Level Committee on Financial Sector Reforms, constituted by the Government of India in August 2007 under the chairmanship of Dr. Raghuram G. Rajan, has recommended allowing more entry to private well-governed deposit-taking small finance banks with stipulation of higher capital adequacy norms, a strict prohibition on related party transactions, and lower allowable concentration norms (loans as a share of capital that can be made to one party). Such measures would also increase financial inclusion by reaching out to poorer households and local small and medium enterprises.

Lessons from the recent global financial crisis A constellation of regulatory practices, accounting rules and incentives magnified the credit boom ahead of the recent global financial crisis. The same factors accelerated the downturn in markets and intensified the crisis. Macroeconomic stability and financial stability were generally treated as separate and unrelated constructs with the former focusing on preserving low and stable inflation, while the latter dealing with the firm-level supervision of the formal banking sector. In this process, not only was the growing shadow financial sector ignored, but also factors such as the interconnectedness within the complex financial system, especially between banks and the financial institutions, the systemic risk arising out of too-big-to-fail entities and system-wide liquidity needs. Though the epicentre of the crisis lay in the sub-prime mortgage market in the US, it was transmitted rapidly throughout the globe, destabilizing financial markets and banking systems. The crisis eventually impacted the broader macro-economy, affecting economic growth and employment throughout the world.
The magnitude of this crisis has clearly signaled the need for major overhaul of the global financial regulatory architecture, the importance and need for improving quality and level of capital, risk management and governance standards, having strong domestic (indigenous) banks, avoiding large and complex banking structures as well as strengthening banks transparency and disclosures.