Page |1

THREE MANDATORY PROJECT REPORTS ON

GENERAL MANAGEMENT, SPECIALIZATION & SOCIAL RELEVANCE

Submitted in partial fulfilment for the award of the degree of

MASTER OF MANAGEMENT STUDIES

UNIVERSITY OF MUMBAI

Submitted by

Mr. Dinesh Murugan.

ROLL NO. M8116
2017-2019.

Under The Guidance of

Prof. Rahul Wadekar.

DES’s NAVINCHANDRA MEHTA INSTITUTE OF TECHNOLOGY

AND DEVELOPMENT, MUMBAI – 400028.
 Page |2

DECCAN EDUCATION SOCIETY’S

NAVINCHANDRA MEHTA INSTITUTE OF

TECHNOLOGY AND DEVELOPMENT.

GENERAL MANAGEMENT PROJECT.

On

“CORRUPTION IN INDIA”

Submitted to University of Mumbai in partial fulfilment of the requirements for qualifying

MASTER OF MANAGEMENT STUDIES Examination

By

Dinesh Murugan.

(Seat No. M - 8116)

Under the Guidance of

Prof. Rahul Wadekar.

 Page |3

CORRUPTION IN INDIA.
 Page |4

Project Certificate

This is to certify that the project titled “Corruption in India” submitted in partial
fulfilment for MMS Degree Examination by Dinesh Murugan [Seat No. M-
8116] is a record of Research work carried out by him under my guidance, and
has been found satisfactory. This report had not been submitted for any other
examination and does not form part of any other course undergone by the
candidate.

Internal Guide Director

EXAMINED BY

INTERNAL EXAMINER………………………………………………..
------------------------------ -----------------------
EXTERNAL EXAMINER…………………………………………………
 Page |5

DECLARATION

I hereby declare that this project report submitted by me to the partial fulfilment

of the requirement for the award of MASTER OF MANAGEMEN STUDIES

(MMS) of the University of Mumbai is a bonafide work undertaken by me and

it is not submitted to any other University or Institution for the award of any

degree, diploma/ certificate or published any time before.

Name: Dinesh Murugan.

Roll No.M-8116 Signature of the student

( Dinesh Murugan )
 Page |6

ACKNOWLEDGEMENT

This project has been a great learning experience for me. I take this
opportunity to thank Prof. Rahul Wadekar , my internal project guide
whose valuable guidance & suggestions made this project possible.
I am extremely thankful to him for his support. He has encouraged me
and channelized my enthusiasm effectively.

I express my heart - felt gratitude towards my parents Mr. S.Murugan &

Mrs. Deepa Laxmi Murugan, siblings and all those friends who have
willingly and with utmost commitment helped me during the course of
my project work.

I also express my profound gratitude to Dr. Samadhan Khamkar,

Director of DES’s Navinchandra Mehta Institute of Technology and
Development for giving me the opportunity to work on the project and
broaden my knowledge and experience.

I would like to thank all the professors and the staff of DES’s NMITD
especially the Library staff who were very helpful in providing books
and articles which I had needed for my project.

Last but not the least, I am thankful to all those who indirectly extended
their co-operation and invaluable support to me.
 Page |7

EXECUTIVE SUMMARY.

Corruption misrepresents markets and creates unfair competition. Companies

often pay bribes or fix up bids to win various public/private procurement
contracts. Many companies hide corrupt acts behind secret deals and
arrangements. They seek to pressure political decision-making in wrong
manner. Also many companies exploit tax laws to evade taxes, wok under
cartels or misuse legal loopholes. Private companies have huge influence in
many public spheres. So it is easy to see how corruption in private sector
businesses harms tax payers interests, consumer’s benefits and in effect
paralyses the whole system.

Today, businesses are operating in extremely challenging, the fact that

executives and their teams are under increasing pressure to deliver unrealistic
results in difficult markets. Managers in their companies are under tremendous
pressure to deliver exception financial results over the next fiscal years. Thus,
they indulge in corrupt practices next time to win businesses.

India in recent times the public and private partnership system has been put
under the microscope and it has been found to be actively working in
partnership with politicos and bureaucrats to perpetrate large-scale corruption.

Also, private sector is involved in corruption internally which involves top

management of the companies to mislead the shareholders or public in large or
involves the middle and lower tier of the company to fool the top management
or the consumers to gain extra monetary benefit. The same has been noticed in
the Central Vigilance Commission (CVC) report by Transparency International
India (TII) that documents this unholy nexus.
The report makes scathing observations on the decay in the private sector
against the backdrop of the various scams, in the decay in the private sector
against the backdrop of the various scams, in which major private players are in
the dock for colluding with the system executes India’s biggest corruption
scandals.
 Page |8

Contents of General Management Project.

Table of contents

Item No. Particulars Page No.

1 Chapter 1 - Introduction. 09-18
1.1 Effects of Corruption. 10-17
2 Objectives of study. 17
3 Hypothesis. 18
1.2 Corruption in India. 19-32
1.3 Anti – Corruption Laws in India. 33-37
1.4 Impact of corruption. 38
1.5 EY Global Fraud Survey on Corruption in India. 39-41
2.1 How India Is the Most Corrupt Country In Asia – 8 facts? 42-44
4 Scope of the Study. 45
5 Need of the study. 45
6 Chapter 2 - Literature review. 46
7 Chapter 3 - Research Methodology. 47-48
8 Chapter 4 - Conclusion. 49-50
2.2 Corruption laws in India 51-53
9 Bibliography 54
 Page |9

CHAPTER 1

1. INTRODUCTION.

We have defined corporate corruption in the following manner: Any corporation

or employee of a corporation who, in their dealings with a public official and
seeking benefits for himself or any third party, engages in behaviour which
promotes the violation of law or abuse of power on the part of the government
official.

Historically, corporate corruption has generally been defined by the term

“bribery.” However, modern understanding of corporate corruption has
recognized that there are a myriad of ways that the private sector might pervert
governmental processes. The modern conventions dealing with corruption have
adopted a more comprehensive approach and, in a significant development,
have included recovery of assets, a major concern for countries that pursue the
assets of former leaders and other officials accused, or found to have engaged,
in corruption.

We are not, of course, the first generation to recognize or try to curb corruption
occurring between corporations and countries. The British East India Trading
Company won duty-free treatment for its goods exported from the Far East in
 P a g e | 10

the 1600s by bribing foreign rulers. Today, the essential practice of corruption
in corporate dealings with foreign governments follows much the same
structural pattern. No matter, however, who is corrupting whom, either foreign
or domestic, the practice is not tolerable for the country or the corporation.
Private sector corruption is bad for the country and bad for business.

In the 2011 World Bank’s Integrity Vice-Presidency’s Annual Report, Robert

Zoellick, the former World Bank president, noted the strong link between
poverty and corruption. “Poverty invites fraud and corruption,” he stated. He
noted that they weaken the institutional foundation, the rule of law, on which
economic growth is built so that they also undermine development and deepen
poverty. The negative impact to a country’s economy and well-being include.

 Effects of Corruption (1.1) :-

Corruption leads to a culture of secrecy, which erodes trust and undermines

democracy.

 Corruption corrodes trust in governments (both internally and externally)

and, thereby stifles economic growth;

 Investment in a country without the rule of law is stifled;

 P a g e | 11

 Companies adhering to the World Bank compliance codes will leave

countries where corruption is rampant, leaving business to inferior
companies;

 Corruption frequently centers on the subversion of regulations, such as

the protection of historical and natural resources.

 Societal effects include the smothering of individual initiative and

ambition.

 Respect for authority evaporates in the wake of corruption, anger and

resentment build, and economic inequality grows.

The cost of corporate corruption to a nation’s economic and, indeed, political

stability is obvious. An example of how this affects the nations’ citizens is
Myanmar which is near the bottom of Transparency International’s Index
rankings. Its weak economy, a result of its lack of transparency and corruption,
forces thousands of its citizens to immigrate to Thailand where, because of local
hiring laws, these workers must accept lower wages than Thai citizens receive.

 Private sector corruption is bad for business as well.

 It increases the cost of doing business by an average of 10%.

 Kills business opportunities generally.

 Promotes a culture of corruption within your organization and among

corporations.

 Loss of corporate reputation and credibility.

 Stiff penalties. Siemens, the German engineering giant, was forced to pay
combined sanctions of over EUR 1.24 billion for engaging in foreign
bribery around the world. That is the equivalent of $1,634,940,000.00.
Former Siemens executives are also facing criminal charges.
 P a g e | 12

 Innovation and creativity suppressed; new products not developed. Only

through free trade on a fair and even playing field is development and
creativity fostered.

 According to the UNCAC, there are three ways to fight corporate

corruption: preventive measures, criminalization and law enforcement,
and international cooperation.

 Preventive policies include:

 Establishment of anti-corruption bodies in the country and teams within

businesses;

 Transparency in financial and political terms;

 Development of anti-corruption policies;

 Independent dissemination of information and knowledge adequately

resourced;

 Properly-trained corporate staff;

 Safeguards that promote efficiency, transparency and recruitment based

on merit;

 Codes of conduct and requirements for disclosures with appropriate

disciplinary measures for noncompliance;

 Measures to prevent money laundering;

 Transparency and accountability in matters of public finance, particularly

in very critical areas such as public procurement;

 Partnership between the private and public sectors; and

 Open records laws so civil society is engaged.

 A law enforcement approach to combating corporate corruption requires

specific legislation that criminalizes not only bribery and embezzlement,
but also conduct not already criminalized in many countries, such as
 P a g e | 13

trading in official influence and other abuses of official functions.

Countries should criminalize acts that include both active and passive
bribery, embezzlement of public funds, obstruction of justice, and the
concealment, conversion, or transfer of criminal proceeds through money
laundering. Sanctions should extend to those who participate in, or
attempt to commit, corruption offenses.

Additional measures to hinder corruption would be overcoming obstacles that

currently arise in prosecuting these offenses. One example is bank secrecy laws
which prevent law enforcement and prosecutors from discovering illegal gains
and pursuing money laundering charges. The UNCAC agreement includes
protection of witnesses, victims, and whistle blowers; these protections assist in
the investigation and prosecution of corporations, and promote integrity in the
corporate setting.

International cooperation is essential in ferreting out and prosecuting corruption

in this global economy. Countries should assist one another in every aspect of
the fight against corruption, including prevention, investigation, and the
prosecution of offenders. Particular emphasis should be focused on mutual legal
assistance, in gathering and transferring evidence for use in court, and the
extradition of offenders.

The UNCAC adapted the principle of dual criminality. It can only be insisted on
where the assistance would require coercive action, such as arrest or search and
seizure. Thus, countries are encouraged to allow a wider scope of assistance
without dual criminality, where possible. Also, where dual criminality is
required, it is sufficient that the conduct at issue constitutes a crime in both
jurisdictions; the language of the laws need not coincide exactly. Under
UNCAC, cooperation in criminal matters is mandatory. In civil administrative
matters, state parties are encouraged to cooperate.

UNCAC also focuses on parties obligations to fight corruption in

the private sector in Article 12. That article includes various measures to
achieve the goal of preventing private sector corruption. Additionally, as a
matter of public policy, countries should encourage specialized governmental
agencies to integrate anti-corruption policies for corporations into their
strategies. Countries might also consider creating a national black list of corrupt
 P a g e | 14

corporations, similar to terrorism black-listed entities. Finally, schools and

universities, particularly teaching business courses, should include as mandatory
courses on tackling corruption in all of its forms and ethical behaviour for
businesses.

Overcoming corrupt behaviour, both in the public and private sectors, must be a
priority for all countries and for each and every private citizen. This will be an
on-going struggle as countries evolve and people reach towards freedom.
Tackling private sector corruption will go far in the goal of overcoming public
corruption, but it will continue to take the collective will of the international
community to continue to fight corruption at all levels.

Corruption is a corrosive drain on public trust and on the legitimacy of public

and private sector institutions. Its toll can be devastating to a national economy,
particularly at a time when open global markets can rapidly reverse investment
and capital flows if confidence and trust are compromised by revelations of
systemic corruption. Corruption affects all types and sizes of business firms —
from global conglomerates to small and medium sized enterprises (SMEs) and
co-operatives — each with varying degrees of resources and capabilities to deal
with the consequences. It has the power to destroy firms and with them, the
livelihoods of stakeholders who depend on a company’s success.

In Russia, as in many other countries, corruption remains a persistent problem.

Despite Russia’s accession to the World Trade Organization (WTO) in 2012
and heightened expectations of more transparency in business, corruption risks
continue to pose a significant barrier to investment. In Transparency
International’s (TI) most recent Corruption Perceptions Index, Russia ranks
133rd out of 176 countries and territories surveyed with a low score of 28 on a
scale where 0 indicates highly corrupt and 100 very clean. According to
Russia’s Interior Ministry, the average size of a bribe remained stable between
2011 and 2012 at the ruble equivalent of US$9,4002 and the Prosecutor General
recently estimated that damage from corruption in Russia exceeded 20 billion
rubles (over US$650 million) in 2012. In dealing with corruption, there are no
simple answers. In some instances business can be a source of corruption, while
in others it is simply a victim. Crucially, the private sector can be a force in
developing solutions to the corruption problem, and companies around the
world are taking charge. They are doing it in a multiplicity of ways. Some
 P a g e | 15

engage in collective action to reform the business climate to make it more

transparent.

Others push for ethical standards and fair practices in dealing with the
government, as is the case with industry-initiated integrity pacts. Private sector
solutions to corruption, however, are not only external in nature. Many
companies are also beginning to look inside, seeking ways to ensure that they
are not unwittingly contributing to the climate of corruption. One key way of
addressing corruption problem through internal measures is the establishment of
strong corporate governance within companies. Good corporate governance is
not only a tool that raises efficiency, improves access to capital, and ensures
sustainability — it is also emerging as an effective anti-corruption tool. On the
day-to-day transaction level it makes bribes more difficult to give and to
conceal. At the decision-making level, corporate governance injects
transparency and accountability, so that it is very clear how decisions are made
and why.

Finally, underlying the very roots of corporate governance and providing its
moral compass, is ethics. The ethical behaviour of companies is rarely
recognized as a cornerstone of good corporate governance. Yet, in many ways,
ethics underlies much of business behaviour, whether it is at the board or staff
level, and regardless of a company’s geographic location, size, or industry. How
business decisions are made matters from both an ethical and pragmatic
standpoint not only in a large company from an Organisation for Economic Co-
operation and Development (OECD) country doing business in its own back
yard but also in a small business from a developing country engaged in regional
trade.

In fact, legislation such as the U.S. Foreign Corrupt Practices Act (FCPA) or the
United Kingdom Bribery Act places legal responsibility on large companies for
the behaviour of their suppliers and distributors in global value chains.
Enforcement of these laws is creating pressure for companies to seek overseas
business partners who share their commitment to anti-corruption. It also
removes deniability of wrongdoing at the C-suite level when a local agent or
supplier pays a bribe.

Therefore, internal compliance becomes a key element of the board’s approach

to risk management. External institutions shape the environment in which a
company operates and they include contract enforcement, rule of law, and
 P a g e | 16

property rights. Internal institutions have to do with corporate governance and

the rules it sets for how a company’s strategy is formed and day-to-day
decisions are made. In places where external institutions are weak, corporate
governance and ethics play a much more fundamental role in facilitating repeat
business transactions. As such, they are a key to economic growth and
development.

India ranks ninth among 41 countries in bribery and corrupt practices in

businesses, according to the findings of a recent survey. Nearly 78 per cent
respondents queried in the country said that bribery and corrupt practices
happen widely in businesses here, as per the EY Europe, Middle East, India and
Africa (EMEIA) Fraud Survey 2017.

India ranks behind Ukraine, Cyprus, Greece, Slovenia, Croatia, Kenya, South
Africa and Hungary, in the perception survey. The ranking has improved
marginally from the survey findings in 2015 when India was at the sixth
position, owing to better regulatory scrutiny and emphasis on transparency and
governance. "The perception of fraud and corruption in corporate India has seen
a marginal but positive shift, led by amplified regulatory scrutiny and emphasis
on transparency and governance," EY India's Partner and National Leader,
Fraud Investigation & Dispute Services, Arpinder Singh said.

"However, unethical behaviour at the workplace among Gen Y (generally

referred to people born in the 1980s-90s) has become a serious cause of
concern," he said. He further pointed out that while improved enforcement
action has restored.

In businesses, organisations should encourage millennia’s to "strengthen their

moral compass, communicate the importance of upholding ethical standards and
develop programmes to motivate future leaders make right choices in life."The
report said that uncertainties in the business environment, augmenting pressure
to meet financial targets and aspirations to achieve unprecedented career growth
are driving employees to justify unethical workplace behaviour.
 P a g e | 17

Nearly 41 per cent of Indian respondents would be prepared to act unethically to

enhance their own career, the findings revealed.
Further, over 13 per cent are prepared to provide false information to improve
their career or pay, while 58 per cent stated that loyalty towards company
prevents employees from reporting fraud, bribery or corruption.
Globally, 1 in 5 respondents said they would be prepared to act unethically for
their careers.

2. OBJECTIVE OF STUDY.

The specific objectives of the present study are :-

1. To discuss the present situation and various factors responsible for

increasing the incidence of corporate corruption in India.

2. To study and observe the types of corruption as well as the causes and
consequences of corporate corruption.

3. To study the Prevention of Corruption Act, 1988 and the various

procedures and practices in the pursuit of preventing corporate corruption.

4. To evaluate the performance of the Anti-Corruption Agencies in India.

5. To carry out a study on Anti-Corruption Agencies in other (selected)

countries regarding their adoption of Anti-Corruption Policies to eradicate
corruption.
 P a g e | 18

3. Hypothesis

The researcher has formulated the following hypothesis based on the research
problem.

1. Selfishness, greed, favouritism and nepotism of the individuals and of the

officials and their financial necessity make corruption flourish precariously.

2. The Prevention of Corruption Act, 1988 and other anti-corruption laws

despite their legitimate enactment are getting crippled due to certain limitations.

3. The Anti-Corruption Agencies are not so empowered that they can curb
corruption effectively and completely.

4. The Anti-Corruption Bureau of Andhra Pradesh has not been successful to

prevent corruption in the State. It is feeble with many lapses.

5 . Anti-Corruption Agencies in Hong Kong, Singapore, New South Wales and

United States of America are functioning effectively and are successful in
curbing the Corruption.
 P a g e | 19

1.2 Corruption in India.

Corruption is an issue that adversely affects India's economy of central, state

and local government agencies. Not only has it held the economy back from
reaching new heights, but rampant corruption has stunted the country's
development. A study conducted by Transparency International in 2005
recorded that more than 62% of Indians had at some point or another paid a
bribe to a public official to get a job done. In a study conducted in 2008,

Transparency International reported that about 50% of Indians had first hand
experience of paying bribes or using contacts to get services performed by
public offices.

Although, Transparency International's 2018 Corruption Perception Index ranks

the country 78th place out of 180 countries reflecting steady decline in
perception of corruption among people.

The largest contributors to corruption are entitlement programs and social

spending schemes enacted by the Indian government. Examples include
the Mahatma Gandhi National Rural Employment Guarantee Act and
the National Rural Health Mission. Other areas of corruption include India's
trucking industry which is forced to pay billions of rupees in bribes annually to
numerous regulatory and police stops on interstate highways.
 P a g e | 20

The media has widely published allegations of corrupt Indian citizens stashing
millions of rupees in Swiss banks. Swiss authorities denied these allegations,
which were later proven in 2015–2016. The Indian media is largely controlled
by extremely corrupt politicians and industrialists who play a major role by
misleading the public with incorrect information and use the media for mud-
slinging at political and business opponents.

The causes of corruption in India include excessive regulations, complicated tax

and licensing systems, numerous government departments with opaque
bureaucracy and discretionary powers, monopoly of government controlled
institutions on certain goods and services delivery, and the lack of transparent
laws and processes.There are significant variations in the level of corruption and
in the government's efforts to reduce corruption across different areas of India.
 P a g e | 21

Corruption in Politics.

Corruption in India is a problem that has serious implications for protecting

the rule of law and ensuring access to justice. As of December 2009, 120 of
India's 524 parliament members were accused of various crimes, under
India's First Information Report procedure wherein anyone can allege another to
have committed a crime.

Many of the biggest scandals since 2010 have involved high level government
officials, including Cabinet Ministers and Chief Ministers, such as the 2010
Commonwealth Games scam (₹70,000 crore (US$9.7 billion)), the Adarsh
Housing Society scam, the Coal Mining Scam (₹1.86 lakh
crore (US$26 billion)), the Mining Scandal in Karnataka and the Cash for Vote
scams.

 Bureaucracy.

A 2005 study done by the Transparency International in India found that more
than 92% of the people had firsthand experience of paying bribes or peddling
influence to get services performed in a public office. Taxes and bribes are
common between state borders; Transparency International estimates that
truckers annually pay ₹222 crore (US$31 million) in bribes.

Both government regulators and police share in bribe money, to the tune of 43%
and 45% each, respectively. The en route stoppages at checkpoints and entry-
points can take up to 11 hours per day. About 60% of these (forced) stoppages
on roads by concerned authorities such as government regulators, police, forest,
 P a g e | 22

sales and excise, Octroi, and weighing and measuring departments are for
extorting money. The loss in productivity due to these stoppages is an important
national concern; the number of truck trips could increase by 40%, if forced
delays are avoided. According to a 2007 World Bank published report, the
travel time for a Delhi-Mumbai trip could be reduced by about 2 days per trip if
the corruption and associated regulatory stoppages to extract bribes were
eliminated.
A 2009 survey of the leading economies of Asia, revealed Indian bureaucracy to
be not only the least efficient out of Singapore, Hong Kong, Thailand, South
Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines and Indonesia,
but that working with India's civil servants was a "slow and painful" process.

 Land and property

 Illegal housing in India.

Officials are alleged to steal state property. In cities and villages throughout
India, groups of municipal and other government officials, elected politicians,
judicial officers, real estate developers and law enforcement officials, acquire,
develop and sell land in illegal ways.[18] Such officials and politicians are very
well protected by the immense power and influence they possess. Apart from
this, slum-dwellers who are allotted houses under several housing schemes such
as Pradhan Mantri Gramin Awaas Yojana, Rajiv Awas Yojna, Pradhan Mantri
Awas Yojna etc., rent out these houses to others, to earn money due to severe
unemployment and lack of a steady source of income.

 Tendering processes and awarding contracts.

A 2006 report claimed state-funded construction activities in Uttar Pradesh,

such as road building were dominated by construction mafias, consisting of
cabals of corrupt public works officials, materials suppliers, politicians and
construction contractors.

Problems caused by corruption in government funded projects are not limited to

the state of Uttar Pradesh. According to The World Bank, aid programmes are
beset by corruption, bad administration and under-payments. As an example,
the report cites that only 40% of grain handed out for the poor reaches its
intended target. The World Bank study finds that the public distribution
 P a g e | 23

programmes and social spending contracts have proven to be a waste due to

corruption.

For example, the government implemented the Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA) on 25 August 2005. The Central
government outlay for this welfare scheme is ₹400 crore(US$56 million) in FY
2010–2011. After 5 years of implementation, in 2011, the programme was
widely criticised as no more effective than other poverty reduction programmes
in India. Despite its best intentions, MGNREGA faces the challenges of corrupt
officials reportedly pocketing money on behalf of fake rural employees, poor
quality of the programme infrastructure, and unintended destructive effect
[clarification needed] on poverty.

 Hospitals and health care.

In Government Hospitals, corruption is associated with non-

availability/duplication of medicines, obtaining admission, consultations with
doctors and receiving diagnostic services.

National Rural Health Mission is another health care-related government

programme that has been subject to large scale corruption allegations. This
social spending and entitlement programme hoped to improve health care
delivery across rural India. Managed since 2005 by the Ministry of Health, the
Indian government mandated a spending of ₹2.77 lakh crore (US$39 billion) in
2004–2005, and increased it annually to be about 1% of India's gross domestic
product. The National Rural Health Mission programme has been clouded by a
large-scale corruption scandal in which high-level government appointed
officials were arrested, several of whom died under mysterious circumstances
including one in prison. Corruption, waste and fraud-related losses from this
government programme has been alleged to be ₹1 lakh crore (US$14 billion).

 Science and technology.

CSIR, the Council of Scientific and Industrial Research, has been flagged in
ongoing efforts to root out corruption in India. Established with the directive to
do translational research and create real technologies, CSIR has been accused of
 P a g e | 24

transforming into a ritualistic, overly-bureaucratic organisation that does little

more than churn out papers.
There are many issues facing Indian scientists, with some, such as MIT systems
scientist VA Shiva Ayyadurai, calling for transparency, a meritocratic system,
and an overhaul of the bureaucratic agencies that oversee science and
technology. Sumit Bhaduri stated, "The challenges of turning Indian science
into part of an innovation process are many. Many competent Indian scientists
aspire to be ineffectual administrators (due to administrative power and political
patronage), rather than do the kind of science that makes a difference". Former
Prime minister Manmohan Singh spoke at the 99th Indian Science Congress and
commented on the state of the sciences in India, after an advisory council
informed him there were problems with "the overall environment for innovation
and creative work" and a "war-like" approach was needed.

 Income tax department.

There have been several cases of collusion involving officials of the Income
Tax Department of India for preferential tax treatment and in exchange for bribes.
relaxed prosecutions

 Preferential award of mineral resources.

 Illegal mining in India

In August 2011, an iron ore mining scandal became a media focus in India. In
September 2011, elected member of Karnataka's legislative assembly
Janardhana Reddy, was arrested on charges of corruption and illegal mining of
iron ore in his home state. It was alleged that his company received preferential
allotment of resources, organised and exported billions of dollars' worth of iron
 P a g e | 25

ore to Chinese companies in recent years without paying any royalty to the state
government exchequer of Karnataka or the central government of India, and that
these Chinese companies made payment to shell companies registered in
Caribbean and north Atlantic tax havens controlled by Reddy.

It was also alleged that corrupt government officials cooperated with Reddy,
starting from government officials in charge of regulating mining to government
officials in charge of regulating port facilities and shipping. These officials
received monthly bribes in exchange for enabling the illegal export of illegally
mined iron ore to China. Such scandals have led to a demand in India for
consensually driven action plan to eradicate the piracy of India's mineral
resources by an illegal, politically corrupt government officials-business nexus,
removal of incentives for illegal mining, and the creation of incentives for legal
mining and domestic use of iron ore and steel manufacturing.

 Driver licensing.

A study conducted between 2004 and 2005 found that India's driver licensing
procedure was a hugely distorted bureaucratic process and allows drivers to be
licensed despite their low driving ability through promoting the usage of agents.
Individuals with the willingness to pay make a significant payment above the
official fee and most of these extra payments are made to agents, who act as an
intermediary between bureaucrats and applicants.

The average licensee paid Rs 1,080, approximately 2.5 times the official fee of
Rs 450, in order to obtain a license. On average, those who hired agents had a
lower driving ability, with agents helping unqualified drivers obtain licenses
and bypass the legally required driving examination. Among the surveyed
individuals, approximately 60% of the license holders did not even take the
licensing exam and 54% of those license holders failed an independent driving
test.

Agents are the channels of corruption in this bureaucratic driver licensing

system, facilitating access to licenses among those who are unqualified to drive.
Some of the failures of this licensing system are caused by corrupt bureaucrats
who collaborate with agents by creating additional barriers within the system
against those who did not hire agents.
 P a g e | 26

 Trends.

Professor Bibek Debroy and Laveesh Bhandari claim in their book Corruption
in India: The DNA and RNA that public officials in India may be cornering as
much as ₹921 billion (US$13 billion), or 1.26 per cent of the GDP through
corruption. The book claims most bribery is in government delivered services
and the transport and real estate industries.

Bribery and corruption are pervasive, but some areas tend to more issues than
others. A 2013 EY (Ernst & Young) Study reports the industries perceived to be
the most vulnerable to corruption as: Infrastructure & Real Estate, Metals &
Mining, Aerospace & Defense, and Power & Utilities.

There are a range of specific factors that make a sector more susceptible to
bribery and corruption risks than others. High use of middlemen, large value
contracts and drive the depth, volume and frequency of corrupt practices in
vulnerable sectors.

A 2011 KPMG study reports India's real estate, telecommunications and

government-run social development projects as the three top sectors plagued by
corruption. The study found India's defence, the information technology
industry and energy sectors to be the most competitive and least corruption
prone sectors.

CMS India claims in its 2010 India Corruption Study report that socio-
economically weaker sections of Indian society are the most adversely affected
by government corruption. These include the rural and urban poor, although the
study claims that nationwide perception of corruption has decreased between
2005 and 2010. Over the 5-year period, a significantly greater number of people
surveyed from the middle and poorest classes in all parts of India claimed
government corruption had dropped over time, and that they had fewer direct
experiences with bribery demands. Whereas in reality corruption has increased
ten folds since 2010 and continues to grow relentlessly on a daily basis.
 P a g e | 27

The table below compares the perceived anti-corruption effort across some of
the major states in India.[12] A rising index implies higher anti-corruption effort
and falling corruption. According to this table, the states
of Bihar and Gujarat have experienced significant improvements in their anti-
corruption efforts, while conditions have worsened in the states
of Assam and West Bengal. Consistent with the results in this table, in 2012 a
BBC News report claimed the state of Bihar has transformed in recent years to
become the least corrupt state in India.

Index trends in major states by respective anti-corruption effort

1990–
State 1996–00 2001–05 2006–10
95

Bihar 0.41 0.30 0.43 0.88

Gujarat 0.48 0.57 0.64 0.69

Andhra Pradesh 0.53 0.73 0.55 0.61

Punjab 0.32 0.46 0.46 0.60

Jammu & Kashmir 0.13 0.32 0.17 0.40

Haryana 0.33 0.60 0.31 0.37

Himachal Pradesh 0.26 0.14 0.23 0.35

Tamil Nadu 0.19 0.20 0.24 0.29

Madhya Pradesh 0.23 0.22 0.31 0.29

Karnataka 0.24 0.19 0.20 0.29

 P a g e | 28

Index trends in major states by respective anti-corruption effort

1990–
State 1996–00 2001–05 2006–10
95

Rajasthan 0.27 0.23 0.26 0.27

Kerala 0.16 0.20 0.22 0.27

Maharashtra 0.45 0.29 0.27 0.26

Uttar Pradesh 0.11 0.11 0.16 0.21

Odisha 0.22 0.16 0.15 0.19

Assam 0.21 0.02 0.14 0.17

West Bengal 0.11 0.08 0.03 0.01

 Black Money.

Black money refers to money that is not fully or legitimately the property of the
'owner'. A government white paper on black money in India suggests two
possible sources of black money in India; the first includes activities not
permitted by the law, such as crime, drug trade, terrorism and corruption, all of
which are illegal in India and secondly, wealth that may have been generated
through lawful activity but accumulated by failure to declare income and pay
taxes. Some of this black money ends up in illicit financial flows across
international borders, such as deposits in tax haven countries.

A November 2010 report from the Washington-based Global Financial Integrity

estimates that over a 60-year period, India lost US$213 billion in illicit financial
 P a g e | 29

flows beginning in 1948; adjusted for inflation, this is estimated to be $462

billion in 2010, or about $8 billion per year ($7 per capita per year). The report
also estimated the size of India's underground economy at approximately
US$640 billion at the end of 2008 or roughly 50% of the nation's GDP.

 Indian black money in Switzerland.

India was ranked 38th by money held by its citizens in Swiss banks in 2004 but
then improved its ranking by slipping to 61st position in 2015 and further
improved its position by slipping to 75th position in 2016. According to a
2010 The Hindu article, unofficial estimates indicate that Indians had over
US$1,456 billion in black money stored in Swiss banks (approximately US$1.4
trillion). While some news reports claimed that data provided by the Swiss
Banking Association Report (2006) showed India has more black money than
the rest of the world combined, a more recent report quoted the SBA's Head of
International Communications as saying that no such official Swiss Banking
Association statistics exist.

Another report said that Indian-owned Swiss bank account assets are worth 13
times the country's national debt. These allegations have been denied by Swiss
Bankers Association. James Nason of Swiss Bankers Association in an
interview about alleged black money from India, holds that "The (black money)
figures were rapidly picked up in the Indian media and in Indian opposition
circles, and circulated as gospel truth. However, this story was a complete
fabrication. The Swiss Bankers Association never published such a report.
Anyone claiming to have such figures (for India) should be forced to identify
their source and explain the methodology used to produce them."

In a separate study, Dev Kar of Global Financial Integrity concludes, "Media

reports circulating in India that Indian nationals held around US$1.4 trillion in
illicit external assets are widely off the mark compared to the estimates found
by his study." Kar claims the amounts are significantly smaller, only about 1.5%
of India's GDP on average per annum basis, between 1948 and 2008. This
includes corruption, bribery and kickbacks, criminal activities, trade mispricing
and efforts to shelter wealth by Indians from India's tax authorities.

According to a third report, published in May 2012, Swiss National Bank

estimates that the total amount of deposits in all Swiss banks, at the end of
 P a g e | 30

2010, by citizens of India were CHF 1.95 billion (₹92.95

billion(US$1.3 billion)). The Swiss Ministry of External Affairs has confirmed
these figures upon request for information by the Indian Ministry of External
Affairs. This amount is about 700-fold less than the alleged $1.4 trillion in some
media reports.[9] The report also provided a comparison of the deposits held by
Indians and by citizens of other nations in Swiss banks. Total deposits held by
citizens of India constitute only 0.13 per cent of the total bank deposits of
citizens of all countries. Further, the share of Indians in the total bank deposits
of citizens of all countries in Swiss banks has reduced from 0.29 per cent in
2006 to 0.13 per cent in 2010.

 Domestic black money.

Indian companies are reportedly misusing public trusts for money laundering.
India has no centralised repository—like the registrar of companies for
corporates—of information on public trusts.

 Gold purchases
In Gujarat, Delhi and many other major cities, sales of gold increased on 9
November, with an increased 20% to 30% premium surging the price as much
as ₹45,000 (US$630) from the ruling price of ₹31,900 (US$440) per 10 grams
(0.35 oz).

 Donations
Authorities of Sri Jalakanteswarar temple at Vellore discovered cash worth ₹4.4
million (US$61,000) from the temple Hundi.

 Multiple bank transactions

There have also been reports of people circumventing the restrictions imposed
on exchange transactions and attempting to convert black money into white by
making multiple transactions at different bank branches. People were also
getting rid of large amounts of banned currency by sending people in groups to
exchange their money at banks. In response, the government announced that it
would start marking customers with indelible ink. This was in addition to other
measures proposed to ensure that the exchange transactions are carried out only
once by each person. On 17 November, the government reduced the exchange
amount to ₹2,000 (US$28) to discourage attempts to convert black money into
legitimate money.
 P a g e | 31

 Railway bookings
As soon as the demonetisation was announced, it was observed by the Indian
Railways authorities that a large number of people started booking tickets
particularly in classes 1A and 2A for the longest distance possible, to get rid of
unaccounted for cash. A senior official said, "On November 13, 42.7 million
passengers were nationally booked across all classes. Of these, only 1,209 were
1A and 16,999 for 2A. It is a sharp dip from the number of passengers booked
on November 9, when 27,237 passengers had booked tickets in 1A and 69,950
in 2A.".
The Railways Ministry and the Railway Board responded swiftly and decided
that cancellation and refund of tickets of value ₹10,000 and above will not be
allowed by any means involving cash. The payment can only be through
cheque/electronic payment. Tickets above ₹10,000 can be refunded by filing
ticket deposit receipt only on surrendering the original ticket. A copy of
the PAN card must be submitted for any cash transaction above ₹50,000. The
railway claimed that since the Railway Board on 10 November imposed a
number of restrictions to book and cancel tickets, the number of people booking
1A and 2A tickets came down.

 Municipal and local tax payments

As the use of the demonetised notes had been allowed by the government for
the payment of municipal and local body taxes, leading to people using the
demonetised ₹500 and ₹1,000 notes to pay large amounts of outstanding and
advance taxes. As a result, revenue collections of the local civic bodies jumped.
The Greater Hyderabad Municipal Corporation reported collecting about ₹1.6
billion (US$22 million) in cash payments of outstanding and advance taxes
within 4 days.

 Business and corruption.

Public servants have very wide discretionary powers offering the opportunity to
extort undue payments from companies and ordinary citizens. The awarding of
public contracts is notoriously corrupt, especially at the state level. Scandals
involving high-level politicians have highlighted the payment of kickbacks in
the healthcare, IT and military sectors. The deterioration of the overall
efficiency of the government, protection of property rights, ethics and
 P a g e | 32

corruption as well as undue influence on government and judicial decisions has

resulted in a more difficult business environment.[citation needed]

 Judiciary
According to Transparency International[unreliable source?], Judicial
corruption in India is attributable to factors such as "delays in the disposal of
cases, shortage of judges and complex procedures, all of which are exacerbated
by a preponderance of new laws".Over the years there have been numerous
allegations against judges, and in 2011 Soumitra Sen, a former judge at
the Kolkata High Court became the first judge in India to be impeached by
the Rajya Sabha, (Upper House of the Indian Parliament) for misappropriation
of funds.

 Anti-corruption efforts

Right to Information Act

Main article: Right to Information Act

The 2005 Right to Information Act required government officials to provide

information requested by citizens or face punitive action, as well as the
computerisation of services and the establishment of vigilance commissions.
This considerably reduced corruption and opened up avenues to redress
grievances.
Right to public services legislation
Main article: Right to Public Services legislation

Right to Public Services legislation, which has been enacted in 19 states of

India, guarantee time bound delivery of services for various public
services rendered by the government to citizen and provides mechanisms for
punishing the errant public servant who is deficient in providing the service
stipulated under the statute. Right to Service legislation is meant to reduce
corruption among the government officials and to increase transparency and
public accountability.
 P a g e | 33

1.3 Anti-corruption laws in India.

1. Public servants in India can be imprisoned for several years and penalised
for corruption under the:
2. Indian Penal Code, 1860
3. Prosecution section of Income Tax Act, 1961
4. The Prevention of Corruption Act, 1988
5. The Benami Transactions (Prohibition) Act, 1988 to prohibit benami
transactions.
6. Prevention of Money Laundering Act, 2002
7. Punishment for bribery in India can range from six months to seven years
of imprisonment.

India is also a signatory to the United Nations Convention against

Corruption since 2005 (ratified 2011). The Convention covers a wide range of
acts of corruption and also proposes certain preventive policies.

The Lokpal and Lokayuktas Act, 2013 which came into force from 16 January
2014, seeks to provide for the establishment of the institution of Lokpal to
inquire into allegations of corruption against certain public functionaries in
India.

Whistle Blowers Protection Act, 2011, which provides a mechanism to

investigate alleged corruption and misuse of power by public servants and also
protect anyone who exposes alleged wrongdoing in government bodies, projects
and offices, has received the assent of the President of India on 9 May 2014,
and (as of 2 August) is pending for notification by the Central Government.

At present there are no legal provisions to check graft in the private sector in
India. Government has proposed amendments in existing acts and certain new
bills for checking corruption in private sector. Big-ticket corruption is mainly
witnessed in the operations of large commercial or corporate entities. In order to
 P a g e | 34

prevent bribery on supply side, it is proposed that key managerial personnel of

companies' and also the company shall be held liable for offering bribes to gain
undue benefits.[citation needed]

The Prevention of Money Laundering Act, 2002 provides that the properties of
corrupt public servants shall be confiscated. However, the Government is
considering incorporating provisions for confiscation or forfeiture of the
property of corrupt public servants into the Prevention of Corruption Act, 1988
to make it more self-contained and comprehensive.

A committee headed by the Chairman of Central Board of Direct Taxes

(CBDT), has been constituted to examine ways to strengthen laws to curb
generation of black money in India, its illegal transfer abroad, and its recovery.
"The Committee shall examine the existing legal and administrative framework
to deal with the menace of generation of black money through illegal means
including inter-alia the following: 1. Declaring wealth generated illegally as
national asset; 2. Enacting/amending laws to confiscate and recover such assets;
and 3. Providing for exemplary punishment against its perpetrators."
(Source: 2013 EY report on Bribery & Corruption).

The Companies Act, 2013, contains certain provisions to regulate frauds by

corporations including increased penalties for frauds, giving more powers to the
Serious Fraud Investigation Office, mandatory responsibility of auditors to
reveal frauds, and increased responsibilities of independent directors.[76] The
Companies Act, 2013 also provides for mandatory vigil mechanisms which
allow directors and employees to report concerns and whistleblower protection
mechanism for every listed company and any other companies which accepts
deposits from public or has taken loans more than 50 crore rupees from banks
and financial institutions. This intended to avoid accounting scandals such as
the Satyam scandal which have plagued India. It replaces The Companies Act,
1956 which was proven outmoded in terms of handling 21st century problems.

In 2015, Parliament passed the Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Bill, 2015 to curb and impose penalties on black
money hoarded abroad. The Act has received the assent of the President of India
on 26 May 2015. It came into effect from 1 July 2015.
 P a g e | 35

 Anti-corruption police and courts.

The Directorate General of Income Tax Investigation, Central Vigilance

Commission and Central Bureau of Investigation all deal with anti-corruption
initiatives. Certain states such as Andhra Pradesh (Anti-Corruption Bureau,
Andhra Pradesh) and Karnataka (Lokayukta) also have their own anti-
corruption agencies and courts.

Andhra Pradesh's Anti Corruption Bureau (ACB) has launched a large scale
investigation in the "cash-for-bail" scam.[81] CBI court judge Talluri
Pattabhirama Rao was arrested on 19 June 2012 for taking a bribe to grant bail
to former Karnataka Minister Gali Janardhan Reddy, who was allegedly
amassing assets disproportionate to his known sources of income. Investigation
revealed that India Cements (one of India's largest cement companies) had been
investing in Reddy's businesses in return for government contracts.[82] A case
has also been opened against seven other individuals under the Indian Penal
Code and the Prevention of Corruption Act.

 Civic anti-corruption organisations.

A variety of organisations have been created in India to actively fight against

corrupt government and business practices. Notable organisations include:

 [Bharat Swabhiman Trust], established by Ramdev, has campaigned against

black money and corruption for a decade.

 5th Pillar is most known for the creation of the zero rupee note, a valueless
note designed to be given to corrupt officials when they request
bribes.[citation needed].

 India Against Corruption was a popular movement active during 2011–12

that received much media attention. Among its prominent public faces
were Arvind Kejriwal, Kiran Bedi and Anna Hazare. Kejriwal went on to
form the Aam Aadmi Party and Hazare established Jan Tantra Morcha.
 P a g e | 36

 Jaago Re! One Billion Votes was an organisation founded by Tata

Tea and Janaagraha to increase youth voter registration. They have since
expanded their work to include other social issues, including corruption.

 Association for Social Transparency, Rights and Action (ASTRA) is an

NGO focused on grass-roots work to fight corruption in Karnataka.

 The Lok Satta Movement, has transformed itself from a civil organisation
to a full-fledged political party, the Lok Satta Party. The party has fielded
candidates in Andhra Pradesh, Tamil Nadu, and Bangalore. In 2009, it
obtained its first elected post, when Jayaprakash Narayan won the
election for the Kukatpally Assembly Constituency in Andhra Pradesh.

Electoral Reforms - Electoral reform in India

A number of ideas have been in discussion to improve the efficiency and

effectiveness of electoral processes in India.

Factors contributing to corruption in India

In a 2004 report on Corruption in India,[11] one of the world's largest audit and
compliance firms KPMG notes several issues that encourage corruption in
India. The report suggests high taxes and excessive regulation bureaucracy as a
major cause; India has high marginal tax rates and numerous regulatory bodies
with the power to stop any citizen or business from going about their daily
affairs.

This power of Indian authorities to search and question individuals creates

opportunities for corrupt public officials to extract bribes—each individual or
business decides if the effort required for due process and the cost of delay is
worth paying the bribe demanded. In cases of high taxes, paying off the corrupt
official is cheaper than the tax. This, according to the report, is one major cause
of corruption in India and 150 other countries across the world. In the real estate
industry, the high capital gains tax in India encourages large-scale corruption.
The KPMG report claims that the correlation between high real estate taxes and
corruption is high in India as it is other countries including the developed
 P a g e | 37

economies; this correlation has been true in modern times as well as throughout
centuries of human history in various cultures.

The desire to pay lower taxes than those demanded by the state explains the
demand side of corruption. The net result is that the corrupt officials collect
bribes, the government fails to collect taxes for its own budget, and corruption
grows. The report suggests regulatory reforms, process simplification and lower
taxes as means to increase tax receipts and reduce causes of corruption.

In addition to tax rates and regulatory burdens, the KPMG report claims
corruption results from opaque process and paperwork on the part of the
government. Lack of transparency allows room for manoeuvre for both
demanders and suppliers of corruption. Whenever objective standards and
transparent processes are missing, and subjective opinion driven regulators and
opaque/hidden processes are present, conditions are ripe for corruption.

Vito Tanzi in an International Monetary Fund study suggests that in India, like
other countries in the world, corruption is caused by excessive regulations and
authorisation requirements, complicated taxes and licensing systems, mandated
spending programmes, lack of competitive free markets, monopoly of certain
goods and service providers by government controlled institutions, bureaucracy,
lack of penalties for corruption of public officials, and lack of transparent laws
and processes. A Harvard University study finds these to be some of the causes
of corruption and underground economy in India.
 P a g e | 38

1.4 Impact of Corruption

1. Loss of credibility.

In a study on Bribery and Corruption in India conducted in 2013 by global

professional services firm Ernst & Young (EY), a majority of the survey
respondents from PE firms said that a company operating in a sector which is
perceived as highly corrupt may lose ground when it comes to fair valuation of
its business, as investors bargain hard and factor in the cost of corruption at the
time of transaction.

According to a report by KPMG, "high-level corruption and scams are now

threatening to derail the country's its credibility and [its] economic boom".

2. Economic loss.

Corruption may lead to further bureaucratic delay and inefficiency if corrupted

bureaucrats introduce red tape in order to extort more bribes.[91] Such
inadequacies in institutional efficiency could affect growth indirectly by
lowering the private marginal product of capital and investment rate.[92] Levine
and Renelt showed that investment rate is a robust determinant of economic
growth.

Bureaucratic inefficiency also affects growth directly through misallocation of

investments in the economy. Additionally, corruption results in lower economic
growth for a given level of income.

3. Lower corruption, higher growth rates.

If corruption levels in India were reduced to levels in developed economies such

as Singapore or the United Kingdom, India's GDP growth rate could increase at
a higher rate annually. C. K. Prahalad estimates the lost opportunity caused by
corruption in terms of investment, growth and jobs for India is over US$50
billion a year.
 P a g e | 39

1.5 Corporate India still struggling to combat fraud, bribery and

corruption risks – EY Global Fraud Survey.

 71% of Indian respondents consider fraud, bribery and corruption as

significant concerns.
 51% see cybercrime to be a high risk for their organizations.
 Almost 80% succumb to the pressure to achieve financial targets

Mumbai, 11 June 2014 – Fraud, bribery and corruption continues to be a key

challenge faced by Indian organizations according to EY’s 13th Global Fraud
Survey, Overcoming compliance fatigue: reinforcing the commitment to ethical
growth. The India findings from the survey reveal that unethical behavior still
persists, with a majority of respondents justifying unfair actions undertaken to
survive the economic downturn. Personal gifts, cash payments and offering
entertainment to win or retain the business, and misstating the company’s
performance has emerged as consistent problems in the corporate environment.
However, Indian respondents exhibit greater awareness toward the hazards of
emerging threats such as cybercrime as compared to their global counterparts.
Almost 55% are concerned about cybercrime perpetrated by employees or
contractors as compared to hackers.
The survey comprises detailed interviews conducted with leading CEOs and
senior executives in India across functions such as finance, internal audit,
 P a g e | 40

marketing/ sales, compliance and others. Bribery and corruption risks in India
appear widespread (68%) as compared to the global average (39%).

 Arpinder Singh, Partner and Head- India and Emerging markets,

Forensic & Integrity Services, EY says, “The market sentiment
continues to be challenged by the ever growing risks around fraud,
bribery and corruption. Over the last few years, corporate India has seen
compliance levels stall as management has focused on dealing with
economic uncertainties and changes in the Indian regulatory landscape.
The need of the hour is to have business heads take the lead, embrace
compliance and implement a thorough risk assessment process before
implementing policies and procedures.”

 Bending the rules or breaking the law?

In this increasingly competitive market, most companies are under intense
scrutiny to perform better than expected. Given the pressure that often exists to
meet financial targets, 80% of the India respondents say that having more
flexible product return policies, changing assumptions to determine valuations
or reserves, backdating contract etc. can be deemed as acceptable reasons to
achieve those targets. According to the survey, 76% are willing to offer more
flexible product return policies, significantly higher than the global average of
33%. This is highest amongst all nations’ respondents.

 Has compliance taken a backseat?

A comparison of EY’s 12th and 13th Global Fraud Survey reveals that Indian
companies seem to be fatigued in their compliance efforts. Only 71% of India
respondents say that senior management has strongly communicated its
commitment to anti-bribery/anti-corruption policies. This is low compared to
last time which stood at 88%. Only 50% of India respondents say that there are
clear penalties for breaking anti-bribery/anti-corruption policies - this is again
significantly lower compared to last time (72%). Only 44% of India respondents
said that people have been penalized for breaching our anti-bribery/anti-
corruption policies, this is significantly lower compared to last time (56%).

 Has India Inc. taken the right steps to demonstrate its commitment ?
The trend of conducting anti-bribery/anti-corruption trainings appears more in
principle than actual adoption. Only 29% of India respondents say that they
have attended anti-bribery/anti-corruption training. Risk assessment is also low
 P a g e | 41

on the organizational radar and in last few years, only 27% India respondents
have been asked by their companies to participate in an anti-bribery/anti-
corruption risk assessment. The survey also highlights that the incidence of
bribery is higher as compared to the training provided. So although 37% of
India respondents said that they have been asked to pay a bribe in a business
situation, only 29% said that they have attended anti-bribery/anti-corruption
training. India (27%) also falls short in comparison to the global average (38%)
when it comes to participating in an interview by an internal auditor in relation
to anti-bribery/anti-corruption compliance. Additionally, less than half of India
respondents (47%) said that their companies have whistleblowing hotlines.

 About EY’s Forensic & Intergrity Services practice.

Dealing with complex issues of fraud, regulatory compliance and business
disputes can detract from efforts to succeed. Better management of fraud risk
and compliance exposure is a critical business priority — no matter the size or
industry sector. With approximately 4,500 forensic professionals around the
world, we will assemble the right multidisciplinary and culturally aligned team
to work with you and your legal advisors. We work to give you the benefit of
our broad sector experience, our deep subject-matter knowledge and the latest
insights from our work worldwide.

 About EY
EY is a global leader in assurance, tax, transaction and advisory services. The
insights and quality services we deliver help build trust and confidence in the
capital markets and in economies the world over. We develop outstanding
leaders who team to deliver on our promises to all of our stakeholders. In so
doing, we play a critical role in building a better working world for our people,
for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the
member firms of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. For more information about our
organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global
EY.
 P a g e | 42

8 Shameful Statistics That Prove How India Is the Most Corrupt

Country In Asia

A few months ago, a survey revealed that Asia's most corrupt country was - you
guessed it - India. We beat Thailand at 3rd and Vietnam at 2nd for this most
'coveted' of titles, and why not. The bane of corruption runs deep here, it's
permeated into every institution, every social program, every strand of our
country's nervous system. It's not just me saying this either, there's cold, hard
facts and statistics supporting each of those claims. Here's one for you right now
- 54% of India's population has paid a bribe when accessing public services and
institutions, that's more than 1 in 2 citizens. Anyhow, here's a few other
numbers about the discredited state of affairs in India.

1. 38% of land and property deals in India involve bribes

In India, 38% of land deals involve some form of bribes, mostly because for the
buyer, that's the only option left. The entire nexus of government officials,
politicians, judicial officers, real estate developers and law enforcement
officials control the property trade, wherein they acquire and sell land illegally.
These groups also remain well protected and are highly connected for the most
part, making it nigh impossible to renege on a deal.

2. 62% of law enforcement officers take bribes

The police actually collects the highest amount of bribes. Passport verifications
make up 30% of the average bribe paid by a regular Indian in a year, while traffic
violations make up 25%. The methods are numerous and the amounts far-reaching,
ranging from botched breathalyser tests charging Rs. 2500 to Rs. 500 for passport
verification.
 P a g e | 43

3. 60% of road stops for truckers are for extorting money.

According to Transparency International, truckers pay ₹222 crore in bribes every
year. Authorities such as government regulators, police, forest and sales and excise
force stoppages on roads, and 60% of these are for extorting money. These delays
lead to an egregious loss in productivity.

4. 60% of people who got their driving license from an agent haven't
taken the driving exam
The procedure to get a driving license in India is highly askew, with research
showing that it is possible for people with little to no ability to get a license
through the use of agents. A study showed that agents helping unqualified drivers
obtain licenses and bypass the legally required driving examination was a
widespread practise. Among those surveyed, around 60% of the license holders
hadn't even taken the licensing exam and 54% of those license holders had failed
an independent driving test.

5 . 31% of members of parliament have criminal cases against them

Political parties are - surprise surprise - the most corrupt institutions in India. They
have a corruption rate of 4.4 on a scale of 5 (1 being least corrupt rate and 5 being
highest). In 2012, there were criminal cases pending against 31 percent of members
of parliament and the legislative assembly. The dismal state of affairs has led to a
lot of political candidates actually promoting their criminality as an indication of
their ability to defend the interests of their communities, a fact that is as laughable
as it is abysmal.
 P a g e | 44

6. The monetary value of petty corruption in 11 basic services in

government like education, healthcare and the judiciary amounts to about
Rs. 3,19,72,50,00,000 annually.

8. India’s telecom ministry siphoned approximately $30 billion

The 2G spectrum scam, which saw licences being granted to mobile phone
companies during an irregular sale, cost the government (well at least those who
weren't part of deal) ₹1.76 trillion.

9. Just about 40% of grain intended for the poor reaches them.

A report by World Bank showed that only 40% of grain handed out to the poor
reaches its target. This report says that aid programs in India are beset by
corruption, bad administration and under-payments.
 P a g e | 45

4. SCOPE OF THE STUDY.

The scope of the present study is limited to the reasons for growth of corporate corruption in
India. To acquire comprehensive perception an effort is made to study the Prevention of
Corruption Act, 1988, its relevance to the contemporary Indian society and examine the
performance of Anti-Corruption Agencies in India. Further, the study covers the International
Anti-Corruption Policies and Programmes of (selected) countries to observe whether there
are any policies and programs that can suit the Indian situation to prevent the corporate
corruption.

5. NEED OF THE STUDY.

Need for the Present Study India the largest democratic country in the world with a
population of over a one million people, is the second most populous country after China.
Indian economy is one of the fastest growing economics and is attracting huge investments
from the developed countries India has become the 6th largest economy in the world. In spite
of healthy growth indices, vast population in India still lives in poverty. Corruption has
become a part in every walk of life . The Nation’s progress is seriously hampered by all
pervasive corruption. Weeding out corruption today is a major challenge before Indian
society. To eradicate the evil of corruption, the Central Government has enacted Anti-
Corruption Laws to deal with the prevention of corruption and constituted commissions such
as Central Vigilance Commission (CVC), Central Bureau of Investigation (CBI) and Anti-
Corruption Bureau (ACB) to enforce the Anti-Corruption Laws effectively The prevalence of
corruption is identified with any one or institution who misuses the discretionary decision
making power conferred on one. Ordinary citizens face unnecessary problems in their routine
interactions with the Government organizations. In many instances, it is observed that it is the
lack of monitoring mechanisms or their poor enforcement which encourages public officials
at different levels to seek or accept illegal gratification. Today there is not a single institution
in India that can claim freedom from corruption. From the Office of the Prime Minister to the
Secretary of the Village Panchayat the cases of corruption have been worryingly obvious.
Despite Legislations and Commissions appointed by the Government, there is a rapid growth
of corruption in India. This is evident from the reports of Transparency India International, a
Berlin based NGO that India ranks 84 from 180 countries with a score of 3.4. Since the first
iterations of the index, India has scored between 2.7 to 3.5 indicating that–despite some
progress-corruption continues to be perceived as rampant and endemic by the various CPI
sources. No doubt there are numerous laws to curb corruption, and various anticorruption
agencies for implementing the anti-corruption policies and raising the awareness on
corruption issues. Yet, the rampant of corruption has corrosive effects on society.
 P a g e | 46

CHAPTER 2

6. LITERATURE REVIEW

10th United Nations International Anti-Corruption Day. Corruption remains a significant

obstacle to economic and social development. According to the World Bank, every year $1
trillion is paid in bribes, while an estimated $2.6 trillion is stolen annually through corruption
– a sum equivalent to more than five per cent of global GDP.

While the UN urges governments and businesses to take action, we are seeing an increasing
amount of anti-corruption activity in the corporate world. Organisations are investing in
rigorous anti-corruption programmes and supporting that investment with compliance and
monitoring to check the effectiveness of what has been put in place.
Much progress has been made in successfully implementing controls to prevent corruption
from occurring inside an organisation. However, where many businesses are still struggling is
in preventing the corruption that others may do on their behalf. Some companies are only just
addressing this problem; others are finding that the ethically challenging environments in
which they are required to operate are often hostile to the practices and procedures they are
seeking to introduce.

At our Business Ethics Debates we hear a lot about these difficulties and as best practice is
shared, the importance of risk-based and proportionate due diligence is repeatedly
emphasised. This need to be supported by communication and training to ensure that purpose
and the policy are properly understood. Monitoring is also essential if a company wishes to
be sure that what it has in place is really working. What has been interesting to note this year
is the development of collective action in several of the countries where we have conducted
assessments?
In Senegal, Tanzania, Egypt and Kenya we have seen groups of businesses collaborating to
develop effective solutions that support a zero tolerance towards corruption. We support
these initiatives and encourage businesses to spread this best practice in other areas of their
operation.

The Banknote Ethics Initiative (BnEI), for which we have developed the auditing framework,
is a good example of how an industry can work together to reduce corruption. Similar
industry initiatives are to be supported and we are keen to share our expertise with other
sectors thinking along these lines.
 P a g e | 47

CHAPTER 3

7. RESEARCH METHODOLOGY

Being an explanatory research, it is based on secondary data of journals, articles, newspapers

and magazines. Considering the objectives of study descriptive type research design is
adopted to have more accuracy and rigorous analysis of research study. The accessible
secondary data is intensively used for research study.

India has one of the highest percentages of companies where fraud, in particular corruption
and bribery, was detected, according to a new survey of large local and multinational
companies across industries worldwide. Conducted by the Economist Intelligence Unit and
commissioned by New York-based risk consultancy firm Kroll Inc., the survey asked around
770 senior executives if they had discovered any fraud in their companies in 2014.

Around three-quarters of the executives surveyed said they encountered fraud, including
corruption, bribery and stealing of proprietary information among other things, according to
the Wall Street Journal.
The problem is even worse in emerging countries like India, where 80 per cent of the
respondents said they'd come across fraud in their firm.
India was more prone to some types of fraud than any other country. For instance, the survey
found that Indian respondents were most likely to report encountering corruption and bribery,
regulatory breaches, money laundering and theft of intellectual property.
Globally, 11 per cent of all executives surveyed said they discovered cases of in-house
corruption and bribery, while 25 per cent of respondents from India said they came across
such types of fraud in the past year, according to the report.
In comparison, only around 18 per cent of Chinese executives and 20 per cent of Russians
said they encountered corruption and bribery.
One reason India's numbers appear higher than some of its emerging market peers might be
because more and more Indian companies have in recent years started reporting and
confronting corrupt practices, the Wall Street Journal said.
 P a g e | 48

Even so, fraud in India remains a growing problem, both for Indian companies and investors,
the Journal said, citing Reshmi Khurana, head of South Asia for Kroll.
Part of the problem is that accounting standards and financial regulations are not strictly
implemented.

Auditing of firm balance sheets, for instance, is supposed to be independent but is sometimes
carried out by auditors who are too close to the company's management.
In addition, the standards for corporate governance within Indian companies are broadly low,
according to Khurana as cited by the Journal. Besides bribery to government officials, one
key issue for companies in India is executives taking bribes to give a big order to a vendor, or
to hire someone, Khurana was quoted as saying.

According to the fraud report, India's record on lack of compliance with regulations is also
the worst among the countries surveyed.
A fifth of respondents from India said they had found instances of regulatory or compliance
breach, compared to a global average of 12 per cent.

India, though, appears slightly better compared to the global average on a handful of
matrices, including the theft of physical assets.
While 22 per cent of respondents globally reported such theft, only 17.5 per cent of
respondents from India said they had come across it.
 P a g e | 49

CHAPTER 4

8. CONCLUSION

In the present legal system, throughout the world, there is no specific law which eradicates
the corruption in the society. Our legal systems have various constitutional and legal
provisions still corruption is not control and growing up day by day. Roots of corruption are
very deep and common person are suffering.

On the other hand criminals who have committed corruption or involve in big scam are
moving free in our society, so if there will be an elaborating, specific law, corruption may be
controlled or eradicated. As like Rose is king of all flowers, Corruption is also “King” of all
‘offences’. Neither the Law nor the law enforcement and investigating machinery or the
public service administration able to control the “corruption” in society.

The biggest hurdle in the Prevention of Corruption is the lack of public awareness.
Corruption is heinous crime as compare to that of traditional crimes. Corruption directly
attack on national economy affecting development of country which is necessary to be curbed
and removed by adopting proper legal system. White Collar Crime is offspring of “Economic
offences”.

Due to lack of evidence and legal technicality and after taking undue advantage or benefit of
lacuna or of defects under the law/enactments relating to corruption, they easily come out of
jail and enjoy ill-gotten money. Loss cause due to big scam or scandal directly causes great
harm to national wealth and progress. To control this harm their option should be particular
law.

Existing laws or enactments related to eradication of corruption in society are failing to

control its menace as well as insufficient to fight with it and there is need of new
comprehensive law to control and punish these corrupt Criminals. Today, people have
already lost their faith or confidence on criminal justice system because we always seen that,
politicians and influential public officers and even ideal person to whom we take aspiration
are involved in scam but they never goes to jail despite huge evidence. In short, common
persons are suffering whereas, white collar criminals are moving free in our society so if
there will be an elaborative specific.
 P a g e | 50

Law on corruption in India then only its menace can be controlled. At last, we can say that,
nothing can be done until there is will power in the people to fight corruption. Laws can only
act when people come forward and complaint against corrupt practices, all the laws will have
effect unless people will come forward and fight against evil of corruption. Lack of
awareness is one of the key obstacles in the anti-corruption movements, very less number of
people are aware of their right course of action to be taken against the corrupt officials and
what will be the remedies for the aggrieved party At concluding we can say that, awareness
among people will bring out the change in the society and ultimately, India will be a
corruption free country in the world. Constitution of India ensures that, dignity of person will
be protected; accordingly it is the responsibility of the Government to eradicate or combat the
corruption in society. However, considering the kinds/aspect of corruption government alone
cannot eradicate corruption but if the people and civil society institutions shows their
activeness then only it is possible to eradicate corruption in society. Ignorance of people
towards corruption is the biggest reason why corrupt officers get away without ever getting
punished. Present laws relating to corruption in India to fight corruption are not sufficient and
suffer from many loopholes which restrict their power to prosecute corrupt officers and
ministers. Legislations like the Prevention of Corruption Act which came into force in 1988
is not able to punish the culprits, along with that, the investigation agencies like CAG, ED,
CVC and ACB have very less power in their own hand. Existing laws relating to corruption
are adequate subject to some modification, amendment. From last two decades corruption is
increases even in private or corporate sector as compare to public sector. The Prevention of
Corruption Act 1988 is a comprehensive law which covers all possible acts pertaining to
corruption and corrupt practices by public servants. Despite all these laws, the country is still
not free from the scourge of corruption. Corruption is still one of the biggest problems of the
world for which there is no satisfactory answer. The Indian criminal justice system is also
facing many problems and challenges in fight against corruption in the society. At present,
there is no law to deal with corruption.
 P a g e | 51

2.2 Corruption laws in India

Public servants in India can be penalized for corruption under the Indian Penal Code, 1860
andthe Prevention of Corruption Act, 1988. The Benami Transactions (Prohibition) Act, 1988
prohibits benami transactions. The Prevention of Money Laundering Act, 2002 penalises
publicservants for the offence of money laundering. India is also a signatory (not ratified) to
the UNConvention against Corruption since 2005. The Convention covers a wide range of
acts ofcorruption and also proposes certain preventive policies.

 Key Features of the Acts related to corruption

 Indian Penal Code, 1860.

• The IPC defines “public servant” as a government employee, officers in the military,
navy or air force; police, judges, officers of Court of Justice, and any local authority
established by a central or state Act.

• Section 169 pertains to a public servant unlawfully buying or bidding for property. The
public servant shall be punished with imprisonment of upto two years or with fine or
both. If the property is purchased, it shall be confiscated.

• Section 409 pertains to criminal breach of trust by a public servant. The public servant
shall be punished with life imprisonment or with imprisonment of upto 10 years and a
fine.

 The Prevention of Corruption Act, 1988.

• In addition to the categories included in the IPC, the definition of “public servant”
includes office bearers of cooperative societies receiving financial aid from the
government, employees of universities, Public Service Commission and banks.

• If a public servant takes gratification other than his legal remuneration in respect of an
official act or to influence public servants is liable to minimum punishment of six months
and maximum punishment of five years and fine. The Act also penalizes a public servant
for taking gratification to influence the public by illegal means and for exercising his
personal influence with a public servant.

• If a public servant accepts a valuable thing without paying for it or paying inadequately
from a person with whom he is involved in a business transaction in his official capacity,
he shall be penalized with minimum punishment of six months and maximum
punishment of five years and fine.

• It is necessary to obtain prior sanction from the central or state government in order to
prosecute a public servant.
 P a g e | 52

 The Benami Transactions (Prohibition) Act, 1988.

• The Act prohibits any benami transaction (purchase of property in false name of another
person who does not pay for the property) except when a person purchases property in his
wife’s or unmarried daughter’s name.

• Any person who enters into a benami transaction shall be punishable with imprisonment
of upto three years and/or a fine.

• All properties that are held to be benami can be acquired by a prescribed authority and no
money shall be paid for such acquisition.

 The Prevention of Money Laundering Act, 2002.

• The Act states that an offence of money laundering has been committed if a person is a
party to any process connected with the proceeds of crime and projects such proceeds as
untainted property. “Proceeds of crime” means any property obtained by a person as a
result of criminal activity related to certain offences listed in the schedule to the Act. A
person can be charged with the offence of money laundering only if he has been charged
with committing a scheduled offence.

• The penalty for committing the offence of money laundering is rigorous imprisonment
for three to seven years and a fine of upto Rs 5 lakh. If a person is convicted of an
offence under the Narcotics Drugs and Psychotropic Substances Act, 1985 the term of
imprisonment can extend upto 10 years.

• The Adjudicating Authority, appointed by the central government, shall decide whether
any of the property attached or seized is involved in money laundering. An Appellate
Tribunal shall hear appeals against the orders of the Adjudicating Authority and any other
authority under the Act.

• Every banking company, financial institution and intermediary shall maintain a record of
all transactions of a specified nature and value, and verify and maintain records of all its
customers, and furnish such information to the specified authorities.
 P a g e | 53

 Process followed to investigate and prosecute corrupt public

servants.

• The three main authorities involved in inquiring, investigating and prosecuting corruption
cases are the Central Vigilance Commission (CVC), the Central Bureau of Investigation
(CBI) and the state Anti-Corruption Bureau (ACB). Cases related to money laundering
by public servants are investigated and prosecuted by the Directorate of Enforcement and
the Financial Intelligence Unit, which are under the Ministry of Finance.

• The CBI and state ACBs investigate cases related to corruption under the Prevention of
Corruption Act, 1988 and the Indian Penal Code, 1860. The CBI’s jurisdiction is the
central government and Union Territories while the state ACBs investigates cases within
the states. States can refer cases to the CBI.

• The CVC is a statutory body that supervises corruption cases in government departments.
The CBI is under its supervision. The CVC can refer cases either to the Central
Vigilance Officer (CVO) in each department or to the CBI. The CVC or the CVO
recommends the action to be taken against a public servant but the decision to take any
disciplinary action against a civil servant rests on the department authority.

• Prosecution can be initiated by an investigating agency only after it has the prior sanction
of the central or state government. Government appointed prosecutors undertake the
prosecution proceeding in the courts.

• All cases under the Prevention of Corruption Act, 1988 are tried by Special Judges who
are appointed by the central or state government.
 P a g e | 54

8. Bibliography

 www.investopedia.com

 www.Google.com

 www.wikipedia.com
 P a g e | 55

DECCAN EDUCATION SOCIETY’S

NAVINCHANDRA MEHTA INSTITUTE OF TECHNOLOGY

AND DEVELOPMENT

“FINANCIAL ROLE IN ATM SECTOR”

Submitted to University of Mumbai in partial fulfilment of the requirements for qualifying

MASTER OF MANAGEMENT STUDIES Examination

By

Dinesh Murugan.
(Seat No. M 8116)

Under the Guidance of

Prof. Rahul Wadekar
2017-19.
 P a g e | 56

PROJECT CERTIFICATE

Project Certificate

This is to certify that the project titled “FINANCIAL ROLE IN ATM

SECTOR” submitted in partial fulfilment for MMS Degree Examination by
Dinesh Murugan [Seat No. M-8116] is a record of Research work carried out by
him under my guidance, and has been found satisfactory. This report had not
been submitted for any other examination and does not form part of any other
course undergone by the candidate.

Internal Guide Director

EXAMINED BY

INTERNAL EXAMINER………………………………………………..
------------------------------ -----------------------
EXTERNAL EXAMINER…………………………………………………
 P a g e | 57

DECLARATION

I hereby declare that this project report submitted by me to the partial fulfilment

of the requirement for the award of MASTER OF MANAGEMEN STUDIES

(MMS) from University of Mumbai is a bonafide work undertaken by me and

it is not submitted to any other University or Institution for the award of any

degree, diploma/ certificate or published any time before.

Name: Dinesh Murugan.

Roll No.M-8116 Signature of the student

( Dinesh Murugan )
 P a g e | 58

ACKNOWLEDGEMENT

This project has been a great learning experience for me. I take this
opportunity to thank Prof. Rahul Wadekar , my internal project guide
whose valuable guidance & suggestions made this project possible.
I am extremely thankful to him for his support. He has encouraged me
and channelized my enthusiasm effectively.

I express my heart - felt gratitude towards my parents Mr. S.Murugan &

Mrs. Deepa Laxmi Murugan, siblings and all those friends who have
willingly and with utmost commitment helped me during the course of
my project work.

I also express my profound gratitude to Dr. Samadhan Khamkar,

Director of DES’s Navinchandra Mehta Institute of Technology and
Development for giving me the opportunity to work on the project and
broaden my knowledge and experience.

I would like to thank all the professors and the staff of DES’s NMITD
especially the Library staff who were very helpful in providing books
and articles I needed for my project.
 P a g e | 59

Table of contents

Item No. Particulars Page No.

1 Introduction 60

1.1 Need of the Study 60

1.2 Objectives of study 60

2 Organizational Profile / Background 61 - 62

2.1 Vision and mission / Milestones. 63

2.2 Milestones, Awards & Achievements 63-64

2.3 Profile 65

2.4 Corporate Social Responsibility. 66-69

2.5 Board of Directors 70

3 Literature Review. 71

3.1 Introduction 71

3.2. Procedures 72

3.3. Literature review 73-74

3.4 New Research in the field. 74-75

3.5 Problem area in the literature. 76-77

4 Services Provided 77

4.1 ATM services - Bank & White Label. 77

4.2 POS services. 78-80

4.3 Emerging payment services & automation products 80

4.4 Cash Recylcer Machine. 80-82

5 Company Overview. 82-85

6 9 useful services provided by ATM & ATM description 85-90

7 Critical role of Banks in ATM sector 90

8 USES OF ATM. 90-93

9 Research Methodology. 94

10 Conclusion and Suggestions 95

11 Limitations of the Study 96

10
Bibliography 97
 P a g e | 60

INTRODUCTION

1.1 NEED OF THE STUDY:

1. To have an exposure to the corporate world.
2. To know the working of a bank and its processes.
3. To know how a team works inside a corporate world.
4. To know how an ATM works and process to complete the ATM installation.
5. To know the ATM working procedure.
6. To solve bank issues.

1.2 OBJECTIVE OF THE STUDY:

7. To study what kind of changes the organization has undergone in the recent past or
have initiated recently.
8. To find out the competitors operating in the Market and analyzing the market.
9. To find out the bank issues and help resolving them.
10. To study about consumer awareness & satisfaction about ATM services and help
guiding them. Also, taking a note of customer feedback.
11. To understand the satisfaction level of bank and customers regarding ATM services.
12. To understand the entire process behind ATM installation and how ATM works.
13. To understand how bank issues cash to the ATM and volume of cash provided on
daily/alternate days.
14. To study how much a company and bank earns on each and every transaction done by
the customers in the ATM.
15. To understand how to co-ordinate with vendors working for the company.
16. To co-ordinate with internal and external sources for smooth conduct of business.
17. Making notes of the important inputs received from all the team members.
 P a g e | 61

2. ORGANIZATIONAL PROFILE

HITACHI PAYMENT SERVICES PVT.LTD

 Vision & Statement :- Ideal Payment Partner – “ We enable

secured commerce for businesses ”
 P a g e | 62

Hitachi Payment Services Pvt. Ltd. was formerly known as Prizm Payment Services Private
Ltd. and changed its name to Hitachi Payment Services Pvt. Ltd. in April 2015. The company
was incorporated in 2005 and is based in Mumbai, India with a registered office in Chennai,
India; and central operations centers in Chennai and Gurgaon, India. It has additional offices
in India. As per the transaction announced on November 26, 2013, Hitachi Payment Services
Pvt. Ltd. operates as a subsidiary of Hitachi Ltd.

About Hitachi Payment Services :- We are a team of highly dedicated individuals with a
passion for providing best in class payment services and a commitment to excellence. Our
team consists of industry experts who have architected and Built, innovative and secure
payment platforms that have contributed to the rapid growth of electronic payment channels
in the country. Founded in 2008, we have seen steady growth with currently over 55,000
ATMs, 850,000 POS devices (including Mobile POS) & 12,000 CRMs under management.
With over 50 satisfied banks serviced by us, we are the leading payment services company in
India.

We provide innovative, cost effective and comprehensive payment services through our
multiple lines of businesses i.e. Banking Automation Products, ATM Services, Point of Sale
Services (POS) and Emerging Payments Services.

Our Registered Office is located in Chennai, India and Central Operations Centre is located at
Chennai and Gurgaon, India, each that works as a Business Continuity Centre to the other.
Operationally Headquartered in Mumbai, India, our team consists of over 1300 employees
spread over 12 offices across the country.
 P a g e | 63

2.1 VISION & MISSION :

As a leader in the payments services space, our Emerging payments services business unit
focuses on offering ‘non cash” and innovative payments systems outside the traditional ATM
and POS channels. Mobile POS, card management services and e-commerce based payments
are the mainstay of this business unit.

2.2 MILESTONE :-

Conferred Skoch Order-of-Merit, 2016 during the 46th Skoch Summit in New Delhi

Hitachi Payment Services’ Pungrain project was conferred the Skoch Order-of-Merit
during the 46th Skoch Summit in New Delhi. Hitachi Payment Services enables banks
that have tied up with Pungrain (Punjab Grains Procurement Corporation Ltd), to
facilitate faster payments to Pungrain’s commission agents (Arthiyas), which in turn
will benefit farmers.

India Region Inspire the World prize for the Hitachi Inspiration of the Year Global
Award 2016

Hitachi Payment Services’ Prizm Remote Infrastructure Management Application

(PRIMA) won the India Region Inspire the World prize for the Hitachi Inspiration of
the Year Global Award 2016. This global award is in recognition of activities that
have significantly contributed to enhancing the value of the Hitachi brand and have
demonstrated the Hitachi group identity.
 P a g e | 64

India Region Grand Prix prize for the Hitachi Inspiration of the Year Global Award
2015

Hitachi Payment Services’ E-Payment Hub (E-Hub) solution won the India Region
Grand Prix prize for the Hitachi Inspiration of the Year Global Award 2015. This
global award is in recognition of activities that have significantly contributed to
enhancing the value of the Hitachi brand and have demonstrated the Hitachi group
identity.

Ranked 35th on Deloitte Technology Fast 500 Asia Pacific 2012

Hitachi Payments Services ranked 35th on the Deloitte Technology Fast 500 Asia
Pacific 2012, a ranking of the 500 fastest growing technology companies in Asia
Pacific

Ranked 3rd on Deloitte Technology Fast 50 India 2012.

For the second time in a row Hitachi Payment Services Ranked 3rd at the Deloitte
Technology Fast 50 India 2012, a ranking of the 50 fastest growing
technology companies in India. Rankings are based on percentage revenue growth
over three years.

Ranked 3rd on Deloitte Technology Fast 50 India 2011

Hitachi Payment Services ranked 3rd on the Deloitte Technology Fast 50 India 2011,
a ranking of the 50 fastest growing technology companies in India. Rankings are
based on percentage revenue growth over three years.
 P a g e | 65

2.3 PROFILE :-

2.4 ATM SERVICES – BANK & WHITE LABEL

We provide customized technology and service led solutions for building

ATM networks for banks and non-banks. This includes new ATM deployment
and Management services for existing ATM networks .With our unique win-
win business models for bank-branded and white label ATM deployment &
management, customers can develop a reliable, cost effective and secured
nation-wide ATM network.

 POS SERVICES
We have a strong portfolio of POS services, which allows customers to easily
pick and choose the desired services for meeting their business objectives.
With POS deployment, management, transaction processing services, risk
management and back-office reconciliations.

2.5 EMERGING PAYMENTS SERVICES

As a leader in the payments services space, our emerging payments services

business unit focuses on offering ‘non cash” and innovative payments systems
outside the traditional ATM and POS channels. Mobile POS, card
management services and e-commerce.

 BANKING AUTOMATION PRODUCTS

Our banking automation products such as Cash Recycling Machines and Auto
Passbook Entry Machines enable financial institutions to provide convenient
services to its customers and at the same time offer operational efficiency and
cost savings. Our technologically advanced Products, combine hardware and
software technologies, as well as high levels of information security to provide
highly reliable products. Combined with end to end managed services our
offerings are among the most comprehensive in the market.
 P a g e | 66

2.6 CORPORATE SOCIAL RESPONSIBILITY (CSR)

 MAKING A DIFFERENCE :-
As a responsible corporate citizen, we strive to contribute towards solving social issues
through sustainable CSR initiatives. By recognizing, identifying and prioritizing social issues,
Hitachi Payment Services implements CSR initiatives through collaboration with employees
as well as through consultation with various stakeholders.

Our CSR policy contributes to the company and Hitachi Group’s objectives by focusing on
one or more of the activities as defined in Schedule VII of the Company’s Act 2013. In line
with the mission of ‘One Hitachi’, our CSR activities are aligned to the CSR initiatives
pursued by the Hitachi Group in the country.
 P a g e | 67

 SUPPORTING CHILDREN FROM LOW INCOME GROUPS :-

Our partnerships with The Akanksha Foundation, Life Trust for their ‘Joy in a Box’ initiative,
Udhavum Ullangal Illam, and activities for Nethaji Mercy Home (during festival season)
have positively impacted the lives of children from low-income group communities.

To promote education among under privileged children, we had also associated with the
NGO, Ritinjali, for a unique fund raising Golf Tournament for one of their initiatives, the
Second Chance School in Mahipalpur. The school attempts to educate urban, deprived young
adults through vocational training, apprenticeships and job oriented skills in order to
 P a g e | 68

mainstream them into the society. Ritinjali has been working in the field of education and
community development for over 20 years.

 BLOOD DONATION CAMPS :-

In an effort to bridge the ever-widening gap between the demand for and the availability of
blood components, we have organized blood donation camps for our employees.

A blood donation occurs when a person voluntarily has blood drawn and used
for transfusions and/or made into biopharmaceutical medications by a process
called fractionation(separation of whole-blood components). Donation may be of whole
blood, or of specific components directly (the latter called apheresis). Blood banks often
participate in the collection process as well as the procedures that follow it.

Today in the developed world, most blood donors are unpaid volunteers who donate blood
for a community supply. In some countries, established supplies are limited and donors
usually give blood when family or friends need a transfusion (directed donation). Many
donors donate as an act of charity, but in countries that allow paid donation some donors are
paid, and in some cases there are incentives other than money such as paid time off from
work. Donors can also have blood drawn for their own future use (autologous donation).
Donating is relatively safe, but some donors have bruising where the needle is inserted or
may feel faint.
 P a g e | 69

 CONSERVATION OF NATURAL RESOURCES :-

As part of our initiative to support conservation of natural resources, we have tied up with
Deshpande Foundation/Kakatiya Sandbox for the Farm Pond Project. Initiated in 2014 by the
Foundation, Neer Sinchina is a program that helps farmers engage in sustainable agricultural
practices involving rainwater conservation and harvesting.

Farm Pond initiative not only help farmers fight drought, but also enables their own
agricultural extension by providing access to skills, tools, inputs and knowledge they need to
thrive. As part of this initiative, 43 farm ponds have been constructed in rural areas of
Telangana where they can harvest and store water in farm ponds sized 60 X 50 X 12 cubic ft.

This program has been especially helpful in facilitating irrigation in drought-prone areas with
erratic rainfall. By improving access to water, farmers can now cultivate more than one crop
a year thereby increasing their revenue by 50%.
 P a g e | 70

2.5 BOARD OF DIRECTORS (BOD)

Name of the Person Post

Mr. Loney Antony Managing Director

Mr. Shyam Sunder Executive Director

Mr. Jayant Demello Director - International Business

Mr. Rustom Irani Chief Executive Officer - Cash Business

Mr. Navtej Singh Chief Executive Officer – Digital Business.

Mr. Sreekumar M Director - Domestic Sales & Relationship Management

Mr. K S Balaji Chief Financial Officer

Mr. Rashmi Parekh Director - Financial Operations.

Mr. Sankarnarayan Lakshmanan Chief Technology Officer

Mr. Sanmitra Trivedi Director - HR & Administration

Mr. Rohit Ramana Director - Business Finance

Mr. Amit Shahani Director , Operations - Cash Business

Senior Vice President , Relationship Management Head - WLA

Mr. Santhosh Nair Business

Mr. Sulesh Sivan Vice President, Operations - Digital Business

Mr. Maulik Joshi Vice President, Sales - Digital Business

Mr. Takashi Shimoyama Executive Vice President - Strategy, Integration & Hitachi Synergy.

Mr. Yukinori Amino Vice President – Finance

 P a g e | 71

CHAPTER 3

LITERATURE REVIEW

Automated teller machines (ATMs) have altered the relationship between banks and
theirdepositors, as well as the competitive relationships among banks. In this paper, I survey
theliterature to describe the ways that ATMs have influenced these aspects of banking
markets, andconclude with suggestions for further research.

3.1 INTRODUCTION

Automated teller machines can offer significant benefits to both banks and their depositors.
The machines can enable depositors to withdraw cash at more convenient times and places
than during banking hours at branches. At the same time, by automating services that were
previously completed manually, ATMs can reduce the costs of servicing some depositor
demands. These potential benefits are multiplied when banks share their ATMs, allowing
depositors of other banks to access their accounts through a bank’s ATM. The decision by
banks to share their ATMs is partially determined by the terms under which the sharing
would occur. In particular, there are several prices that can be charged to or collected by
the three main parties involved in an ATM transaction, the cardholder, the cardholder’s
bank, and the ATM owner.

How, and by whom, these prices are set affects a number of

economic decisions, including the number of machines that banks and non-banks choose to
deploy, deposit market interest rates, distances travelled by depositors and non-depositors
that wish to withdraw cash, profits of banks, and welfare of bank customers.

In this paper, I will review the literature on ATM pricing. I will first describe ATM
fees and some rough empirical magnitudes in the U.S. context. In addition, I will examine
the institutional framework under which most sharing agreements are formed. Following
that grounding, I will review the literature, which has focused both on the motives for
sharing ATM facilities, as well as on the pricing of the use of ATMs under a sharing
agreement.
 P a g e | 72

3.2 PROCEDURES.

Most ATM networks began as joint ventures owned by a central group of bank members.

A network provides an array of services that link together the ATMs of its members. The
activities of the network are governed by a set of rules that are agreed to and implemented
by the network’s board of directors. In the India, ATM networks are not directly regulated
by any government agency.

ATM network organizations engage in a host of activities that support the trademark,
brand name, reliability, and operation of the ATM system controlled by the network. The
basic operational activity of the network is to support ATM cash withdrawals by the
deposit account holders of any member bank. This function requires the network to
transfer electronically, or “switch”, the transaction information from the ATM to the
account holder’s bank and back again. This communication and sorting activity is
accomplished through the aid of leased or dial-up telephone lines and centralized
computers. Many networks also provide ancillary services such as ATM servicing and
clearing and settlement of payments to its members or other banks.

Use of ATM services usually trigger the levy of two types of fees: wholesale fees,
which are paid by the banks to other banks or to the network, and retail fees, which are
paid by the person conducting the transaction to his or her bank or to the ATM owner.

Wholesale fees are set by ATM networks and comprise the switch fee and the
interchange fee (most networks also charge a wholesale membership fee, which is not
transaction-based). Switch fees, which cover the costs of routing transactions through the
network’s computer switching system.

For usage based fees, when a cardholder uses an ATM the cardholder could be charged a fee.
If the ATM is owned by the cardholder’s bank, the cardholder could be charged an “on-us”
fee, though few banks charge such fee. Much more common is the “on-other’s” or foreign fee
that banks charge when their cardholder uses a machine owned by another party.
 P a g e | 73

 WHAT IS ONUS & OFF US TRANSACTION ?

 An onus transaction is identified when the issuer and acquirer bank are identical.
An onus transaction is very beneficial for banks as they obtain revenue from the
acquiring and issuing side while reversing little to no revenue to the network.

 The host determines whether the message is an "on us" or "off us" transaction. An "on
us" transaction is one destined for the bank that owns that particular host. The host
then checks the amount of cash requested, confirms whether the customer has the
money, and then authorizes or denies the transaction.

3.3 LITERATURE REVIEW.

Before an ATM is placed in a public place, it typically has undergone extensive testing with
both test money and the backend computer systems that allow it to perform transactions.
Banking customers also have come to expect high reliability in their ATMs, which provides
incentives to ATM providers to minimise machine and network failures. Financial
consequences of incorrect machine operation also provide high degrees of incentive to
minimise malfunctions.

The motivation of banks to deploy ATMs and share their ATMs with the customers of
other banks are areas that economists have investigated.
The motive for deploying ATMs based on cost saving and how the costs are influenced by
the deployment of ATMs. Also, ATM transactions cost about half the amount that the same
transaction would cost if it were conducted in a branch of a bank.

However, no savings were realized from the significant expansion of ATM services
Instead, bank customers, taking advantage of the increased convenience of ATM services,
increased the number of transactions, leaving total bank costs roughly the same as had no
ATMs been deployed. Banks, those that carefully managed their service delivery operations,
were able to reduce their costs by deploying ATMs. Humphrey’s findings indicate that
satisfying consumer demands is an important consideration in the decision to deploy ATMs,
perhaps more important than an attempt by banks to reduce costs.

Examine the deployment of ATMs by individual banks prior to the advent of sharing ATMs
in by considering the size of the bank and the geographic dispersion of the bank’s depositors,
they are able to detect a significant network effect in the demand for ATM services by bank
 P a g e | 74

customers. They examine a dynamic model of investment. Banks whose customers have a
higher willingness to pay for a service will invest in providing that service sooner than
another bank that is similar in other respects.

Network adopted ATMs sooner than other large banks, as their customers could take better
advantage of the geographic diversity of ATM sites (usually provided at a bank’s
branches) in meeting their demands for cash.

The interchange transactions increased as ATM networks were formed among banks and
became more concentrated. As ATM networks became more concentrated, the ability of
bank customers to use other regional banks’ ATMs tended to expand as well. The merger of
two ATM networks led to a significantly higher growth rates of total
transactions, interchange transactions, and ATM’s. In addition, network operating costs fell
substantially following the merger.

ATMs can be placed at any location but are most often placed near or inside banks, shopping
centers/malls, airports, railway stations, metro stations, grocery stores, petrol/gas stations,
restaurants, and other locations. ATMs are also found on cruise ships and on some US
Navy ships, where sailors can draw out their pay.
ATMs may be on- and off-premises. On-premises ATMs are typically more advanced, multi-
function machines that complement a bank branch's capabilities, and are thus more
expensive. Off-premises machines are deployed by financial institutions and Independent
Sales organisations (ISOs) where there is a simple need for cash, so they are generally
cheaper single function devices.
In the US, Canada and some Gulf countries, banks may have Drive-thru lanes providing
access to ATMs using an automobile.
In recent times, countries like India and some countries in Africa are installing ATMs in rural
areas, which are solar powered.

3.4 NEW RESEARCH IN THE FIELD.

A talking ATM is a type of ATM that provides audible instructions so that people who cannot
read a screen can independently use the machine, therefore effectively eliminating the need
for assistance from an external, potentially malevolent source. All audible information is
delivered privately through a standard headphone jack on the face of the machine.
Alternatively, some banks such as the Nordea and Swedbank use a built-in external speaker
which may be invoked by pressing the talk button on the keypad. Information is delivered to
the customer either through pre-recorded sound files or via text-to-speech speech synthesis.

A scrip cash dispenser may have many components in common with an ATM, but it lacks the
ability to dispense physical cash and consequently requires no vault. Instead, the customer
requests a withdrawal transaction from the machine, which prints a receipt. The customer
then takes this receipt to a nearby sales clerk, who then exchanges it for cash from the till.
 P a g e | 75

A teller assist unit (TAU) is distinct in that it is designed to be operated solely by trained
personnel and not by the general public, does integrate directly into interbank networks, and
usually is controlled by a computer that is not directly integrated into the overall construction
of the unit.
A Web ATM is an online interface for ATM card banking that uses a smart card reader. All
the usual ATM functions are available, except for withdrawing cash. Most banks
in Taiwan provide these online services

A cash recycler is a complex machine that handles a couple of simple, but important tasks—
accepting and dispensing cash. It also stores money securely, keeps an accurate accounting
of cash on hand, and automates the cash cycle. Generally, you'll find them in banks, credit
unions and back-office retail cash rooms.

3.5. PROBLEM AREA FOR THE LITERATURE REVIEW.

In some countries, multiple security cameras and security guards are a common
feature.[79] In the United States, The New York State Comptroller's Office has advised the
New York State Department of Banking to have more thorough safety inspections of ATMs
in high crime areas.
Consultants of ATM operators assert that the issue of customer security should have more
focus by the banking industry; it has been suggested that efforts are now more concentrated
on the preventive measure of deterrent legislation than on the problem of ongoing forced
withdrawals.
At least as far back as July 30, 1986, consultants of the industry have advised for the adoption
of an emergency PIN system for ATMs, where the user is able to send a silent alarm in
response to a threat.
In 1998, three towns outside Cleveland, Ohio, in response to an ATM crime wave, adopted
legislation requiring that an emergency telephone number switch be installed at all outdoor
ATMs within their jurisdiction. In the wake of a homicide in Sharon Hill, Pennsylvania, the
city council passed an ATM security bill as well.
In China and elsewhere, many efforts to promote security have been made. On-premises
ATMs are often located inside the bank's lobby, which may be accessible 24 hours a day.
These lobbies have extensive security camera coverage, a courtesy telephone for consulting
with the bank staff, and a security guard on the premises. Bank lobbies that are not guarded
24 hours a day may also have secure doors that can only be opened from outside by swiping
the bank card against a wall-mounted scanner, allowing the bank to identify which card
enters the building. Most ATMs will also display on-screen safety warnings and may also be
fitted with convex mirrors above the display allowing the user to see what is happening
behind them.
As of 2013, the only claim available about the extent of ATM-connected homicides is that
they range from 500 to 1,000 per year in the US, covering only cases where the victim had an
ATM card and the card was used by the killer after the known time of death
 P a g e | 76

 FRAUDS

As with any device containing objects of value, ATMs and the systems they depend on to
function are the targets of fraud. Fraud against ATMs and people's attempts to use them takes
several forms.

The first known instance of a fake ATM was installed at a shopping mall in Manchester,
Connecticut in 1993. By modifying the inner workings of a Fujitsu model 7020 ATM, a
criminal gang known as the Buck-lands Boys stole information from cards inserted into the
machine by customers.

WAVY-TV reported an incident in Virginia Beach in September 2006 where a hacker, who
had probably obtained a factory-default administrator password for a filling station's white-
label ATM, caused the unit to assume it was loaded with US$5 bills instead of $20s, enabling
himself—and many subsequent customers—to walk away with four times the money
withdrawn from their accounts. This type of scam was featured on the TV series.

ATM Behaviour can change during what is called "stand-in" time, where the bank's cash
dispensing network is unable to access databases that contain account information (possibly
for database maintenance). In order to give customers access to cash, customers may be
allowed to withdraw cash up to a certain amount that may be less than their usual daily
withdrawal limit, but may still exceed the amount of available money in their accounts, which
could result in fraud if the customers intentionally withdraw more money than what they had
in their accounts.

In an attempt to prevent criminals from shoulder surfing the customer's personal

identification number (PIN), some banks draw privacy areas on the floor.

For a low-tech form of fraud, the easiest is to simply steal a customer's card along with its
PIN. A later variant of this approach is to trap the card inside of the ATM's card reader with a
device often referred to as a Lebanese loop. When the customer gets frustrated by not getting
the card back and walks away from the machine, the criminal is able to remove the card and
withdraw cash from the customer's account, using the card and it’s PIN.

This type of fraud has spread globally. Although somewhat replaced in terms of volume by
skimming incidents, a re-emergence of card trapping has been noticed in regions such as
Europe, where EMV chip and PIN cards have increased in circulation.
 P a g e | 77

Another simple form of fraud involves attempting to get the customer's bank to issue a new
card and its PIN and stealing them from their mail.

By contrast, a newer high-tech method of operating, sometimes called card skimming or card
cloning, involves the installation of a magnetic card reader over the real ATM's card slot and
the use of a wireless surveillance camera or a modified digital camera or a false PIN keypad
to observe the user's PIN. Card data is then cloned into a duplicate card and the criminal
attempts a standard cash withdrawal. The availability of low-cost commodity wireless
cameras, keypads, card readers, and card writers has made it a relatively simple form of
fraud, with comparatively low risk to the fraudsters.

In an attempt to stop these practices, countermeasures against card cloning have been
developed by the banking industry, in particular by the use of smart cards which cannot easily
be copied or spoofed by unauthenticated devices, and by attempting to make the outside of
their ATMs tamper evident. Older chip-card security systems include the French Carte
Bleue, Visa Cash, Mondex, Blue from American Express and EMV '96 or EMV 3.11. The
most actively developed form of smart card security in the industry today is known as EMV
2000 or EMV 4.x.

EMV is widely used in the UK (Chip and PIN) and other parts of Europe, but when it is not
available in a specific area, ATMs must fall back to using the easy–to–copy magnetic stripe
to perform transactions. This fallback behaviour can be exploited. However, the fallback
option has been removed on the ATMs of some UK banks, meaning if the chip is not read,
the transaction will be declined.

4. TYPES OF SERVICES PROVIDED BY HITACHI PAYMENT

SERVICES.

4.1 ATM SERVICES – BANK & WHITE LABEL.

 P a g e | 78

Hitachi Payment Services provides the nation’s most comprehensive service suite for new
ATM deployment, management of existing ATM networks and Service enablement through
technology solutions.
As different customers have different needs depending on when they have embarked on the
building of their ATM networks, our services are customised to suit customer requirements.
Our offer is perhaps the most comprehensive service.
 A National Deployer, which means we can deploy ATMs for you across the country
 A Service Provider‚ which means we can manage your ATM network on a 24x7 basis
centrally and provide you field services to ensure your brand is protected and demonstrated
in a compelling manner
 A Transaction Processor‚ which means we can provide you technology solutions and
services, provide a comprehensive acquiring service by connecting to authorizers using
gateway services and ensuring all transactions are in proof using a comprehensive back
office risk-based service

4.2 POS SERVICES.

We have a strong portfolio of POS services, which allows customers to easily pick and
choose the desired services for meeting their business objectives. With POS deployment,
management and transaction processing services, we provide customized solutions to
financial institutions and its merchant customers.

If you are looking to build a Merchant Network or if you have merchants that need POS
Terminals‚ then you have come to the right place. We can be your ideal partner in your
 P a g e | 79

endeavour to build a card acquiring network. Our services are organized into 3 main
categories which simply put makes us

 A National Deployer, which means we can deploy POS for you across the country.

 A Service Provider‚ which means we can provide you services which are not core to
your banking business but essential for the management of the POS network.

 A Transaction Processor‚ which means we can provide you technology solutions to

connect POS to a switch‚ connect to national and international networks and provide
you with back-office tools for management of the network.

4.3 EMERGING PAYMENT SERVICES.

The Emerging Payments Services unit offers “non-cash” and innovative payment systems
outside the traditional ATM and POS channels. These include mobile POS, Card
management, switching services, debit card issuance and e-commerce based payments.
 P a g e | 80

4.4 BANKING AUTOMATION PRODUCTS.

4.5 CASH RECYCLING MACHINES :-

Cash Recycling Machines enable financial institutions to provide convenient services to its
customers and at the same time offer operational efficiency and cost savings. Our
technologically advanced products, combine hardware and software technologies, as well as
 P a g e | 81

high levels of information security to provide high reliability. Combined with end to end
managed services our offerings are among the most comprehensive in the market

 The value proposition of cash recycling machines are as follows:

 Reduced cash handling cost and interest cost. Since the cash deposited by the customer can
be used for cash withdrawal, the frequency of cash loading and replenishment and idle cash
in ATM can be minimized.
 Consistent and reliable counting of cash and detection of fraud notes during both cash
deposit and cash withdrawal.
 A recycler is more cost effective than 2 specialized devices of dispensing and depositing
especially in locations where amount of cash deposit and cash withdrawal is balanced.
 The 24x7 nature of the service would mean banks can offer cash deposit services after
business hour especially in locations where traders and businessmen operate their
businesses beyond business hours. These devices hence can be a source of customer
acquisition or retention of customer services.
 A new range of value added services can be offered by the bank – which would normally
be done at teller counter – e.g. bill payment versus cash etc. These devices can also be used
for money transfer services since they can operate in a card or card less model.

4.6 PEM/SSPBP (AUTO PASSBOOK ENTRY MACHINE/SELF

SERVICE PASSBOOK PRINTING KIOSK)

Long queues of bank customers can often be seen in front of teller counters waiting to have
transaction details printed in their passbooks. In addition, entering data in the customer
passbook is a burden on bank tellers who have other responsibilities too. Using Passbook
Entry Machine (PEM) installed at bank lobbies, customers need only to open their passbook
 P a g e | 82

and insert it, and the machine does the rest and the transaction data in the passbook is
automatically updated.

Our Passbook Entry Machine uses latest technologies to ensure high product reliability and is
supported by end to end managed services including supply of machine readable passbooks,
making our offering among the most comprehensive in the market.

Unique features include

 High speed printing and feeding, and Auto page turning which mean higher overall
performance
 Superior print quality, using innovative printing mechanism and smudge-free ink ribbon
 Low operating costs, due to the high-capacity ink ribbon (up to 4 million characters)

5. Company Overview

Hitachi Payment Services Pvt. Ltd. provides payment services by using ATMs and point of
sale (POS) systems to banks and financial institutions in India. It offers ATM deployment
and management services, such as money spot ATMs deployment; card and transaction
analytics; ATM site identification; site implementation solutions; field services; ATM second
line maintenance; ATM driving and switching services; card management and gateways;
back office tools; and ATM central operations. The company also provides various POS
deployment, management, and transaction processing services that include merchant
analytics, merchant sourcing, turnkey POS deployment, central operations, field services,
POS second line maintenance, POS driving, card management and gateways, and back office
tools. In addition, the company offers emerging payment services, such as card management,
switching services, and e-commerce based payments for non-bank entities; and banking
channel products that include cash recycling ATMs, and auto passbook entry machine/self-
service passbook printing kiosk. Hitachi Payment Services Pvt. Ltd. was formerly known as
Prizm Payment Services Private Ltd. and changed its name to Hitachi Payment Services Pvt.
Ltd. in April 2015. The company was incorporated in 2005 and is based in Mumbai, India
with a registered office in Chennai, India; and central operations centers in Chennai and
Gurgaon, India. It has additional offices in India. As per the transaction announced on
November 26, 2013, Hitachi Payment Services Pvt. Ltd. operates as a subsidiary of Hitachi
Ltd.
 P a g e | 83

 HITACHI NETWORK AND HOW IT WORKS ?

 PAN INDIA OFFICE NETWORK

Hitachi Payment Services is arguably the country’s leading provider of innovative payment
services across electronic channels with a dominant market share of the country’s ATMs,
POS & Mobile POS devices under management. This network is managed by a team of
dedicated employees across 12 offices in India. This includes our regional offices in key
cities as well as the registered office in Chennai, India and the corporate office in Mumbai,
India.

 CENTRALISED OPERATIONS
Our 24 X 7 centralised operations (COPS) centre are in Chennai, India and Gurgaon, India
that provides a comprehensive range of central operations services including Help Desk,
Cash Operations, POS Operations, Reconciliation and Disputes, Vendor Management,
Quality and Metrics and other support services. The Central Operations team uses high
degree of automation in providing service to its customers which ensures that the issues
managed by the COPS team are handled swiftly and promptly. We also have a Centralized
ATM Kitting and technical repair centre in Puducherry, India for our Banking Channel
Products division.

 DATA CENTRE
Our switching, server and network Infrastructure is hosted at Mumbai at a tier 3+ state-of–
the-art data centre with 100 % redundancy built-in and an equal capacity disaster recovery
centre (DR) at Chennai.

 COMPLIANCE
Cardholder data security is our top priority and to minimise risk of fraud, we invest heavily in
technology to protect data and hence are PCI DSS (The Payment Card Industry Data Security
Standard) compliant. We are a PCI-DSS compliant Third Party Processor (TPP) for NPCI,
Visa, MasterCard and American Express. As part of PCI DSS compliance, our security
systems include more robust encryption methodology on high-availability, high-
performance Hardware security module (HSM) appliances, all of which enables us to
provide high level of security and data management. Our stringent compliance processes and
systems ensure that cardholders can make secure transactions and are assured that their data
is well protected.
 P a g e | 84

 POS NETWORKS SPREAD ALL OVER INDIA :-

 P a g e | 85

6. 9-USEFUL SERVICES PROVIDED BY THE ATM.

HOW IT IS USEFUL IN FINANCIAL SECTOR ?

OPEN OR WITHDRAW A FIXED DEPOSIT.

You can open a fixed deposit with your bank using an ATM.
Select ‘Open Fixed Deposit on the ATM menu, select the duration, enter the amount and
confirm the other necessary details.

RECHARGE YOUR MOBILE

Prepaid services of most mobile operators can be recharged from an ATM.

You can also recharge mobile phones of friends or family members in the same manner.
Select 'Mobile Recharge', Enter your mobile number and re-confirm, then enter the recharge
amount.

PAY INCOME TAX

Some banks offer the convenience of paying income tax using ATMs. This includes advance
tax, self-assessment tax as well as tax due after regular assessment.
You need to register for the facility on the bank's website or branch first.
Once the amount is deducted from your account, the ATM will generate a unique number
(CIN). You can visit the bank website after 24 hours and print the challan using the CIN.
 P a g e | 86

Deposit cash
Many banks have installed cash Deposit.

Many banks have installed cash deposit machines in ATM kiosks.

One can deposit up to Rs 49,900 per transaction.
Denominations of Rs 100, Rs 500 and Rs 1,000 are accepted.

Pay insurance premium

Insurers like LIC, HDFC Life and SBI Life have tied up with banks to facilitate premium
payment through ATMs. Just keep the policy number handy.
Go to 'Bill Pay', select insurer, enter policy number and date of birth or mobile number, than
enter premium amount.

Apply for personal loan

To avail of small ticket personal loans, you don’t need to approach a bank branch or speak to
a phone banking executive. Some private sector banks now offer pre-approved personal loans
for customers using ATMs as the point of disbursal.

Transfer cash

If you do not have access to Net Banking, funds can be transferred from your bank account to
that of another bank using an ATM.
You need to register the beneficiary account online or at bank branch.
Upto Rs 40,000 can be transferred to the beneficiary account in a day, with no limit on the
number of transactions.

Pay your bills

You can pay utility bills like your telephone bill, electricity bill, gas bill and others through
ATM’s.

Book railway tickets

Public sector banks like SBI and Punjab National Bank, among others, offer the facility at As
of now, only long distance reserved tickets are issued this way.
 P a g e | 87

 FINANCIAL NETWORKS.

Most ATMs are connected to interbank networks, enabling people to withdraw and deposit
money from machines not belonging to the bank where they have their accounts or in the
countries where their accounts are held (enabling cash withdrawals in local currency). Some
examples of interbank networks include NYCE, PULSE, PLUS, Cirrus, AFFN, Interac, Inter
switch, STAR, LINK, Mega Link, and Banc Net.

ATMs rely on authorization of a financial transaction by the card issuer or other authorizing
institution on a communications network. This is often performed through an ISO 8583
messaging system.
Many banks charge ATM usage fees. In some cases, these fees are charged solely to users
who are not customers of the bank that operates the ATM; in other cases, they apply to all
users.
In order to allow a more diverse range of devices to attach to their networks, some interbank
networks have passed rules expanding the definition of an ATM to be a terminal that either
has the vault within its footprint or Utilises the vault or cash drawer within the merchant
establishment, which allows for the use of a scrip cash dispenser.
ATMs typically connect directly to their host or ATM Controller on either ADSL or dial-
up modem over a telephone line or directly on a leased line. Leased lines are preferable
to plain old telephone service (POTS) lines because they require less time to establish a
connection. Less-trafficked machines will usually rely on a dial-up modem on a POTS line
rather than using a leased line, since a leased line may be comparatively more expensive to
operate compared to a POTS line. That dilemma may be solved as high-speed
Internet VPN connections become more ubiquitous. Common lower-level layer
communication protocols used by ATMs to communicate back to the bank
include SNA over SDLC, TC500 over Async, X.25, and TCP/IP over Ethernet.

 HARDWARES AND SOFTWARES USED IN ATM’s.

 Hardwares.

ATM is typically made up of the following devices:

 CPU (to control the user interface and transaction devices)

 Magnetic or chip card reader (to identify the customer)
 PIN pad EEP4 (similar in layout to a touch tone or calculator keypad), manufactured as
part of a secure enclosure
 Secure Cryp-to-processor, generally within a secure enclosure
 Display (used by the customer for performing the transaction)
 P a g e | 88

 Function key buttons (usually close to the display) or a touchscreen (used to select the
various aspects of the transaction)
 Record printer (to provide the customer with a record of the transaction)
 Vault (to store the parts of the machinery requiring restricted access)
 Housing (for aesthetics and to attach signage to)
 Sensors and indicators
 Due to heavier computing demands and the falling price of personal computer–like
architectures, ATMs have moved away from custom hardware architectures
using microcontrollers or application-specific integrated circuits and have adopted the
hardware architecture of a personal computer, such as USB connections for peripherals,
Ethernet and IP communications, and use personal computer operating systems.
 Business owners often lease ATMs from service providers. However, based on the
economies of scale, the price of equipment has dropped to the point where many business
owners are simply paying for ATMs using a credit card.
 New ADA voice and text-to-speech guidelines imposed in 2010, but required by March
2012 have forced many ATM owners to either upgrade non-compliant machines or
dispose them if they are not upgradable, and purchase new compliant equipment. This
has created an avenue for hackers and thieves to obtain ATM hardware at junkyards from
improperly disposed decommissioned machines.

 The vault of an ATM is within the footprint of the device itself and is where items of
value are kept. Scrip cash dispensers do not incorporate a vault.
 Mechanisms found inside the vault may include:
 Dispensing mechanism (to provide cash or other items of value)
 Deposit mechanism including a cheque processing module and bulk note acceptor (to
allow the customer to make deposits)
 Security sensors (magnetic, thermal, seismic, gas)
 Locks (to ensure controlled access to the contents of the vault)
 Journaling systems; many are electronic (a sealed flash memory device based on in-house
standards) or a solid-state device (an actual printer) which accrues all records of activity
including access timestamps, number of notes dispensed, etc. This is considered sensitive
data and is secured in similar fashion to the cash as it is a similar liability.
 ATM vaults are supplied by manufacturers in several grades. Factors influencing vault
grade selection include cost, weight, regulatory requirements, ATM type, operator risk
avoidance practices and internal volume requirements. Industry standard vault
configurations include Underwriters Laboratories UL-291 "Business Hours" and Level 1
Safes, RAL TL-30 derivatives,[59] and CEN EN 1143-1 - CEN III and CEN IV.
 ATM manufacturers recommend that a vault be attached to the floor to prevent theft,
though there is a record of a theft conducted by tunnelling into an ATM floor.
 P a g e | 89

 Softwares.

With the migration to commodity Personal Computer hardware, standard commercial "off-
the-shelf" operating systems and programming environments can be used inside of ATMs.
Typical platforms previously used in ATM development include RMX or OS/2.

There is a computer industry security view that general public desktop operating systems(os)
have greater risks as operating systems for cash dispensing machines than other types of
operating systems like (secure) real-time operating systems (RTOS). RISKS Digest has many
articles about ATM operating system vulnerabilities.

Linux is also finding some reception in the ATM marketplace. An example of this
is Banrisul, the largest bank in the south of Brazil, which has replaced the MS-DOS operating
systems in its ATMs with Linux. Banco do Brasil is also migrating ATMs to Linux. Indian-
based Vortex Engineering is manufacturing ATMs which operate only with Linux. Common
application layer transaction protocols, such as Diebold 91x (911 or 912) and NCRNDC or
NDC+ provide emulation of older generations of hardware on newer platforms with
incremental extensions made over time to address new capabilities, although companies like
NCR continuously improve these protocols issuing newer versions (e.g. NCR's AANDC
v3.x.y, where x.y are subversions). Most major ATM manufacturers provide software
packages that implement these protocols. Newer protocols such as IFX have yet to find wide
acceptance by transaction processors.

With the move to a more Standardised software base, financial institutions have been
increasingly interested in the ability to pick and choose the application programs that drive
their equipment. WOSA/XFS, now known as CEN XFS (or simply XFS), provides a
common API for accessing and manipulating the various devices of an ATM. J/XFS is a Java
implementation of the CEN XFS API.
While the perceived benefit of XFS is similar to the Java's "Write once, run
anywhere" mantra, often different ATM hardware vendors have different interpretations of
the XFS standard. The result of these differences in interpretation means that ATM
applications typically use a middleware to even out the differences among various platforms.
With the onset of Windows operating systems and XFS on ATMs, the software applications
have the ability to become more intelligent. This has created a new breed of ATM
 P a g e | 90

applications commonly referred to as programmable applications. These types of applications

allows for an entirely new host of applications in which the ATM terminal can do more than
only communicate with the ATM switch. It is now empowered to connected to other content
servers and video banking systems.
Notable ATM software that operates on XFS platforms include Triton
PRISM, Diebold Agilis EmPower, NCR APTRA Edge, Absolute
Systems AbsoluteINTERACT, KAL Kalignite Software Platform, Phoenix Interactive
VISTAatm, Wincor Nixdorf ProTopas, Euronet EFTS and Intertech inter-ATM.
With the move of ATMs to industry-standard computing environments, concern has risen
about the integrity of the ATM's software stack.

7. The Critical role of ATM’s in the transformation of branch

banking.

Reports of the death of branch banking are decidedly premature. Branch banking isn't going
away any time soon, but the branches of tomorrow are going to look very different than the
branches of yesterday. The reasons are the rise of high-tech banking, customer demand for
faster, more convenient bank transactions and the need to optimize operational expenses.

1. Transition to high-tech branch banking.

One of the prime catalysts in the transformation of branch banking is a new generation of
ATMs that makes the transition to high-tech branch banking easier, more customer-friendly
and more profitable. Research backs up this conclusion. While recent surveys note that in the
past five years, the number of U.S. branches is dropping, they also note that banks are
continuing to invest in their branches. The fact remains that banks that have a visible network
of branch locations tend to bring about more confidence and credibility than those that don't.
 P a g e | 91

According to a recent Cummins Allison survey of banks and credit unions, financial
institutions are increasingly focused on ATM capabilities to help in branch transformation. In
addition, as institutions replace ageing ATMs or expand their current ATM fleets.

1. Convenience Centers to Sales Centers.

As with most changes in the financial industry, this one is all about customer service;
ensuring that your institution can serve your customers when, where and how they
want to do their banking. In today's marketplace, branch bank transformation must
take into account behaviour of technology-savvy customers as well as the more
'traditional' clients. Mobile banking is a significant factor in the reduction of the
number of visits to brick-and-mortar branches. In response to these changing
consumer behaviours, the trend is now to incorporate digital technology in the
transformation of branches from convenience Centers to true sales Centers. Today's
multi-purpose ATMs play a critical role in this transition.

2. Optimizing expenses yields positive growth.

What will the branch of tomorrow look like? In many cases, the largest difference will
be that there will be fewer tellers — or no tellers at all — onsite. Instead, there will be
more self-service equipment providing multiple services such as Manage account
balances, open loans, process currency or coins.
Next generation ATMs will be capable of doing everything from dispensing cash to
accepting deposits and transfers to selling products such as loans and new accounts
via remote teleconference with a teller or bank officer. In many branches, customers
entering during normal banking hours will be greeted by a concierge who will discern
what they wish to accomplish, then help them locate an appropriate ATM, assisting
them if they want or need help during the transaction. ATMs will also continue to
provide round-the-clock automated banking services for added customer convenience.

3. ATM Reliability.

Because new ATMs will be taking on a larger role in banking, reliability becomes more
essential than ever. As more customers look to ATMs to perform more of their banking and
financial activities, machines that are slow or out of service can reduce customer satisfaction
and risk losing business. To ensure reliability, financial institutions are increasingly turning to
suppliers with local repair, parts and maintenance presence, with timely response that brings
machines back to working order in a matter of hours, not days.

4. Customer Satisfaction

It's clear that an essential part of the new paradigm in branch banking is providing multi-
purpose ATMs that increase the satisfaction of the institution's entire customer base, from
 P a g e | 92

Baby Boomers to Millennials. Bottom line, as financial institutions begin the transformation
of branch banking, ATMs will be fundamental to their success.

8. USES OF ATM.

ATMs were originally developed as cash dispensers, and have evolved to

provide many other bank-related functions:

 Paying routine bills, fees, and taxes (utilities, phone bills, social security,
legal fees, income taxes, etc.)
 Printing or ordering bank statements
 Updating passbooks
 Cash advances
 Cheque Processing Module
 Paying (in full or partially) the credit balance on a card linked to a
specific current account.
 Transferring money between linked accounts (such as transferring between
accounts)
 Deposit currency recognition, acceptance, and recycling.
In some countries, especially those which benefit from a fully integrated cross-
bank network (e.g.: Multibanco in Portugal), ATMs include many functions that
are not directly related to the management of one's own bank account, such as:

 Loading monetary value into stored value cards

 Adding pre-paid cell phone / mobile phone credit.
 Purchasing
 Concert tickets.
 Gold.
 Lottery tickets.
 Movie tickets.
 Postage stamps.
 Train tickets.
 Shopping mall gift certificates.
 Donating to charities.
Increasingly, banks are seeking to use the ATM as a sales device to deliver pre-
approved loans and targeted advertising using products such as ITM (the
Intelligent Teller Machine) from Aptra Relate from NCR. ATMs can also act as
an advertising channel for other companies.
 P a g e | 93

However, several different ATM technologies have not yet reached worldwide
acceptance, such as:

 Videoconferencing with human tellers, known as video tellers.

 Biometrics, where authorization of transactions is based on the scanning of a
customer's fingerprint, iris, face, etc.
 Cheque/cash Acceptance, where the machine accepts and recognises
cheques and/or currency without using envelopes. Expected to grow in
importance in the US through Check 21 legislation.
 Bar code scanning
 On-demand printing of "items of value" (such as movie tickets, traveller's
cheques, etc.)
 Dispensing additional media (such as phone cards)
 Co-ordination of ATMs with mobile phones.
 Integration with non-banking equipment.
 Games and promotional features.
 CRM through the ATM
Videoconferencing teller machines are currently referred to as Interactive Teller
Machines. Benton Smith, in the Idaho Business Review writes "The software
that allows interactive teller machines to function was created by a Salt Lake
City-based company called u-Genius, a producer of video banking software.
NCR, a leading manufacturer of ATMs, acquired u -Genius in 2013 and married
its own ATM hardware with u-Genius' video software."
 P a g e | 94

9. Research Methodology

5.1 Data Collection:

Both the primary as well as the secondary form of information was used to prepare
the report. The details of these sources are highlighted below:

(a) Primary Source

I have collected primary information by interviewing employees, managers, observing

various organizational procedures, structures. Primary data were mostly derived from
the discussion with the employees of the organization.

(b) Secondary Source

I have elaborated different types of secondary data in my research. Sources like

internet data are mostly considered as secondary source.
 P a g e | 95

10. Conclusion and Suggestions

 On the basis of the study it is found Hitachi Payment Services Pvt .Ltd is a good
service provider and emerging payments company.
 It provides fast services.
 Study also concludes that most of the services provided by the company people are
not aware about this in rural areas.
 The company should also organize seminars and similar activities to enhance the
knowledge of prospective and existing customers, so that they feel more comfortable
in using ATM & other services.
 Company should more concentrate on rural areas. So, as to make them aware about all
the technology carried out by the company.
 Advertisement, Seminars , Pamplets , Advertising in T.V , Magazines, Radio etc and
all the channel of communication should be used to make people aware about the
technology.
 The company should focus on the advertising strategy and also the marketing of the
product and focus more on rural locations.
 Setting up of machines in rural areas will help make people aware about the company
products and how technology has evolved throughout the year.
 More safety measures should be used so as to that the Customer’s account should not
to be used to make frauds.
 Even though lot of technologies has come but still people find out fraud ways to lure
common people’s money.
 P a g e | 96

11. LIMITATION OF THE STUDY.

Every process usually carries limitations with it. This study is not an exception.
The limitations hat had come on way to making this report are stated below

 Due to time restrictions, the study was bound to be concentrated in

selected areas.

 The study is restricted for the company.

 The Time period is limited for the study.

 The study is limited for ATM industry.

 The secondary data collected includes details published through

magazines journals and websites.

 Most of the things are still left to explain about the industry.

 Limited exposure to the corporate world.

Even though, there are some limitations I have tried my best to collect

adequate data and information to make the report meaningful.

 P a g e | 97

Bibliography

 www.investopedia.com

 www.Google.com

 www.hitachipaymentservices.com

 www.wikipedia.com
 P a g e | 98

SOCIAL RELEVANCE PROJECT

“TO STUDY THE NON GOVERNMENTAL ORANIZATION WITH

REFRENCE TO MA NIKETAN ORPHANAGE”
 P a g e | 99

DECCAN EDUCATION SOCIETY’S

NAVINCHANDRA MEHTA INSTITUTE OF
TECHNOLOGY AND DEVELOPMENT

SOCIAL RELEVANCCE PROJECT ON VISIT TO “MA NIKETAN ORPHANAGE”

Submitted to University of Mumbai in partial fulfilment of the requirements for

qualifying MASTER OF MANAGEMENT STUDIES Examination

By

Dinesh Murugan

( Seat No. M-8116 )

Under the Guidance of

Prof. Rahul Wadekar NMITD

 P a g e | 100

PROJECT CERTIFICATE

This is to certify that the project titled “To Study the Non-Governmental
Organization With Reference To Ma Niketan Orphanage”, is successfully
completed by Ms. Dinesh Murugan during the IV Semester, and in partial
fulfilment of the Master’s Degree in Management Studies recognized by the
University of Mumbai for the academic year 2017 – 2019. This project work is
original and not submitted earlier for the award of any degree, diploma or
associate ship of any other University / Institution.

Internal Guide Director

EXAMINED BY

INTERNAL EXAMINER..........................................................

EXTERNAL EXAMINER.........................................................
 P a g e | 101

CERTIFICATE FROM THE NGO ORGANIZATION.

 P a g e | 102

DECLARATION

I hereby declare that this project report submitted by me to the partial fulfilment
of the requirement for the award of MASTER OF MANAGEMENT
STUDIES (MMS) of the University of Mumbai is a bonafide work undertaken
by me and it is not submitted to any other University or Institution for the award
of any degree, diploma/ certificate or published any time before.

Name: Dinesh Murugan

Roll No. M8116 Signature of the student

( Dinesh Murugan)
 P a g e | 103

ACKNOWLEDGEMENT

This project has been a great learning experience for me. I take this opportunity
to thank Prof. Rahul Wadekar, my internal project guide whose valuable
guidance & suggestions made this project possible. I am extremely thankful to
him/her for his/her support. He has encouraged me and channelized my
enthusiasm effectively.

I express my heart-felt gratitude towards my parents, siblings and all those

friends who have willingly and with utmost commitment helped me during the
course of my project work.

I also express my profound gratitude to Dr. Samadhan Khamkar, Director of

DES’s Navinchandra Mehta Institute of Technology and Development for
giving me the opportunity to work on the project and broaden my knowledge
and experience.

I would like to thank all the professors and the staff of DES’s NMITD
especially the Library staff who were very helpful in providing books and
articles I needed for my project.

Last but not the least, I am thankful to all those who indirectly extended their
co-operation and invaluable support to me.
 P a g e | 104

EXECUTIVE SUMMARY

The main motivation of undertaking this project was to provide the detailed and
comprehensive study about the NGOs as a program. This study provides the
opportunity to know the perspective of the students about the NGOs as a
program. The report has been organized into parts.

Part I deals with the detailed overview about the Ngo’s which are in operational
in India.

Part II provides is brief introduction about the organization Ma Niketan

Orphanage.

The report also analyzed the findings and suggestion for NGO’s in India. The
report also includes the environmental problem and how the NGO’s are
providing help towards such issues in India. Research was also done to analyze
why social relevance is Important for management student. Research also
includes the organization objective. The result also includes the future plans for
girl child welfare. The reports end with the suggestion as a finance student and
conclusion of the project.
 P a g e | 105

OUR VISIT TO “MA NIKETAN ORPHANAGE”

 P a g e | 106

 What exactly does a NGO do?

A non-profit making, voluntary, service – oriented/ development oriented

organization, either for the benefit of members (a grassroots organization) or of

other members of the population (an agency).

1. Attempts to serve the people without profit for itself.

2. It is an organization of private individuals who believe in certain basic social

principles and who structure their activities to bring about development to

communities that they are servicing.

3. Social development organization assisting in empowerment of people.

4. An organization or group of people working independent of any external

5. control with specific objectives and aims to fulfil tasks that are oriented to

6. Helps to bring about desirable change in a given community or area or

situation.

7. Independent, democratic, non-sectarian people’s organization working for the

empowerment of economic and/or socially marginalized groups.

8. An organization not affiliated to political parties, generally engaged in

 P a g e | 107

9. It is basically working towards achieving aid, development and welfare of the

community.

10. Organization committed to the root causes of the problems trying to better

the quality of life especially for the poor, the oppressed, the marginalized in

urban and rural areas.

11. Intervention from the government; they are not only a charity organization,

but work on socio-economic-cultural activities.

12. An organization that is flexible and democratic in nature.

 P a g e | 108

Contents of Social Relevance Project

Description
Executive Summary
Chapters Page No
Chapter 1 Introduction
1.1 Introduction 109-110
1.2 Role and Functions of NGOs in India 110-111
1.3 Statement of the Problem. 111
1.4 Some cause Best NGOs in India Work 111-112
1.4 NGO Scope India 112
1.5 Types of NGO’s 113
Chapter 2 Review Of Literature 114-115
2.1 INTRODUCTION TO ‘SOCIETY OF HELPERS 114-115
OF MARY’
Chapter 3 Need & Objective of the study 115
3.1 INTRODUCTION TO MA NIKETAN 115-116
3.2 Vision 116
3.3 MISSION 116
3.4 Case Study –Fact File 117
3.5 Location 118-119
3.6 SPACES AND STRUCTURES 119
Chapter 4 Research Methodology. 120
4.1 Design Analysis. 120-130
4.2 Questions asked during “MA NIKETAN 131
ORPHANAGE” Ngo visit.
4.3 LIFE LESSONS LEARNT. 131
Chapter 5 Conclusion , Suggestion & Limitation 132
Chapter 6 Bibliography 133
 P a g e | 109

Chapter 1

1.1 Introduction

Non-governmental organizations, or Non-governmental organizations,

ordinarily alluded to as NGOs, are typically non-benefit and here and there
worldwide associations autonomous of governments and universal
administrative associations (however frequently financed by governments) that
are dynamic in compassionate, instructive, medicinal services, open strategy,
social, human rights, natural, and different zones to impact changes as indicated
by their goals. They are in this manner a subgroup of all associations established
by residents, which incorporate clubs and different affiliations that give
administrations, advantages, and premises just to individuals. Now and again
the term is utilized as an equivalent word of "common society association" to
allude to any affiliation established by nationals, however this isn't the manner
by which the term is ordinarily utilized as a part of the media or ordinary
dialect, as recorded by significant lexicons. The clarification of the term by
NGO.org (the non-legislative associations related with the United Nations) is
conflicted. It initially says a NGO is any non-benefit, intentional natives'
gathering which is sorted out on a neighborhood, national or global level, yet
then goes ahead to confine the importance in the sense utilized by most English
speakers and the media: Task-situated and driven by individuals with a typical
intrigue, NGOs play out an assortment of administration and helpful capacities,
convey subject worries to Governments, backer and screen strategies and
empower political support through arrangement of data.
 P a g e | 110

NGOs are typically subsidized by gifts; however some maintain a strategic

distance from formal financing inside and out and are run principally by
volunteers. NGOs are profoundly various gatherings of associations occupied
with an extensive variety of exercises, and take diverse structures in various
parts of the world. Some may have altruistic status; while others might be
enrolled for assess exclusion in view of acknowledgment of social purposes.
Others might be fronts for political, religious, or different interests. Since the
finish of World War II, NGOs have had an expanding part in global
improvement, especially in the fields of helpful help and neediness easing.

1.2 Role and Functions of NGOs in India.

Non-Governmental Organizations, or NGOs, as they are called in common

parlance, are organizations which are involved in carrying out a wide range of
activities for the benefit of underprivileged people and the society at large. As
the name suggests, NGOs work independently, without any financial aid of the
government although they may work in close coordination with the government
agencies for executing their projects.

NGOs take up and execute projects to promote welfare of the community they
work with. They work to address various concerns and issues prevailing within
the society. NGOs are not-for-profit bodies which means they do not have any
commercial interest. NGOs are run on donations made by individuals, corporate
and institutions.

They engage in fundraising activities to raise money for carrying about the work
they do. Ever since independence, NGOs have played a crucial role in helping
 P a g e | 111

the needy in India, providing aid to the distressed and elevating the socio-
economic status of millions in the country.

NGOs not only go on the ground to address these issues; they also undertake
massive campaigning activities to generate awareness on these issues. In
today’s time, NGOs are efficiently leveraging the power of social media to
disseminate information about their work and reach more and more people.

1.3 Statement of the Problem:

Study of the NGO Maa Niketan Orphanage for Girls by a team of Marketing,
Finance, HR and IT Students of DES’s NMITD.

1.4 Some Causes Best NGOs in India Work.

Utilizing funds raised through donations, NGOs in India work for a wide range
of causes. Some such causes include:

1. Child Rights

2. Poverty

3. Social Injustice

4. Environment Conservation

5. Human Rights

6. Care for elderly people

7. Women Empowerment

8. Wildlife Conservation
 P a g e | 112

9. Animal Rights

10. Sanitation and Hygiene

11. Humanitarian Relief

12. Health and Nutrition

13. Literacy and education

14. Refugee crisis

15. Disease Control and Others.

1.4 NGO Scope India.

They manage some social issues like ladies strengthening, young lady tyke, sex
issues, training, contamination, road kids, ghetto occupants, wellbeing, urban
improvement, human rights, worries of less advantaged and so forth. NGOs
raise individuals' worries and issues to the administration and strategy creators
non-benefit making, deliberate, benefit situated/improvement arranged
association, either for the advantage of individuals or of different individuals
from the populace.

Non-Government Organizations are the non-profit voluntary groups established

at local, national or international level. They perform different tasks for solving
problems and development of society. NGOs are connected with government or
private sector firms. It is an association of private people who have confidence
in positive fundamental social standards and who structure their exercises to
realize improvement to groups that they are adjusting. A free, law based, non-
partisan people groups associations working for the strengthening of monetary
as well as socially minimized gatherings.
 P a g e | 113

1.5 Types of NGOs.

There are numerous possibilities to classify NGOs. The following is the

typology the World Bank uses.

1. Operational NGO’s –

Their primary purpose is the design and implementation of development-related

projects. One categorization that is frequently used is the division into relief-
oriented or development-oriented organization: they can also be classified
according to whether they stress service delivery or participation; or whether
they are religious and secular: and whether they are more public or private-
oriented. Operational NGOs can be community-based, national or international.

2. Advocacy NGO’s –

Their primary purpose is to promote a specific cause. As opposed to operational

project management, these organizations typically try to raise awareness,
acceptance and knowledge by lobbying, press work and activist events.

3. Humanitarian NGOs: -

Whose primary purpose is to provide aid in Disaster Area, and alleviate

suffering from poverty and disease?
 P a g e | 114

CHAPTER – 2

REVIEW OF LITERATURE

2.1 INTRODUCTION TO ‘SOCIETY OF HELPERS OF MARY’

The founder of the society, mother Anna Huberta Roggendorf, was born in
Germany on 31st July 1909. She came to India in 1932 as a young missionary
and a couple of years later she was appointed as the superior of St. Catherine’s
home in Andheri.

While at St. Catherine’s, she saw the misery and the inhuman conditions all
around in the ever-expanding city of Mumbai.

She felt the call to take Jesus’ love and message out into the world where the
poor lived. She opened hospitable doors to thousands of destitute children and
helped them to find a new beginning despite their broken lives.

Inspired by this vision of taking Jesus’ love to others; nine young women joined
mother Anna Huberta in her noble work in the year 1942 and dedicated their
entire life to Jesus in the service of the poor.

Mother Anna Huberta called them “Helpers of Mary”.

 P a g e | 115

They imitated Mary in the simplicity of her life, lived in small communities in
the midst of the poor, and shared their needs and sufferings. The sisters were a
sign of god’s presence for the people, bearers of his love and joy.

Mother Anna Huberta left no stone unturned in her desire to reach out to those
who were at the edge of society.

She was laid to rest in the premises of Shraddha Vihar, Andheri, and the
headquarters of the society. Mother Anna Huberta may be no more, but her
magnificent legacy lives on.

Chapter 3 - Need & Objective of the study

3.1 INTRODUCTION TO MA NIKETAN – GREEN HOME FOR

LITTLE ANGELS

From the several homes founded by the

society of helpers of Mary, Ma Niketan,
thane is one of them. The word ma is a
word that is charged with meaning and
sentiment of love and care that every
heart bows down to. it strives to fill the
void for these little angels who have not
known the security of such feeling. Ma
Niketan, home for children is a large
campus with beautiful surroundings. It
is a small village in itself. The girls who
are admitted in this institution come from various backgrounds. There are
 P a g e | 116

children who have lost both their parents, some who were found abused,
harassed and left lost on the roads, some from broken families, while others
were found lost on the roads and admitted here by good Samaritans. While most
privileged girls of their age are having fun and experiencing a comfortable life,
these children have to wake up at 5, clean and help around the ashram, and get
to sleep by 10 at night exhausted.

3.2 VISION

Ma Niketan seeks to commit itself to listen and to love, to share and to care, to
bring up all the children by giving them education, leadership skills,
professional training, job opportunities and health.

3.3 MISSION

 To concentrate on the education of the

girl child.
 Nurturing them to blossom into mature
women as they experience the love,
warmth and the feeling of security.
 This helps them grow emotionally and
spiritually.
 Ma Niketan also firmly believes in go green policy, so they have planted
many trees and is dedicated to different means like rain water harvesting,
etc in a bid to save mother earth.
 P a g e | 117

3.4 CASE STUDY : FACT FILE

 LOCATION – 2ND, POKHRAN ROAD,

THANE WEST

 FOUNDER – MOTHER ANNA HUBERTA

 AREA – 217800 SQ FEET ( 5 ACRES )

 PLANNING AND CONSTRUCTION – 1972

 BLOCKS ON THE SITE – 9 EXCLUDING SMALL SHEDS

 NUMBER OF CHLDREN – 250 ( YEAR 2017- 19 )

 P a g e | 118

3.5 LOCATION.

The piece of land was donated by Diwaliben Mohanlal Mehta in 1972.

 Ma Niketan is located in a rectangular plane surrounded by the beauty of

nature and plenty of water supplies.

 The orphanage is of 5 acres which consists of 9 blocks that include 4

homes, 1 convent with office and chapel, a kitchen house, 2 multipurpose
halls of which one has a technology lab attached to it and a dispensary

 The houses are spread out with landscaping adding to the beauty which
gives a village like feel and a calm environment.
 P a g e | 119

3.6 SPACES AND STRUCTURES.

1. The orphanage is designed in such a way that it depicts simplicity and

love towards nature and thus it gives a home like feel.
2. The space planning of the houses is somehow interconnected yet apart.
3. Every house can be reached from the main entrance, that’s how the
circulation of the whole site is.
4. As they follow the go green policy, every structure has rain water
harvesting as well as solar energy and greenery surrounding all the
houses.
5. The whole orphanage is divided into 9 parts and they are as follows :
1. Home 1 – Usha Kiran
2. Kitchen house
3. Multipurpose hall – prayer hall
4. Multi-purpose hall + it lab
5. Convent + office
6. Home 2 – little paradise
7. Home 3
8. Home 4
9. Dispensary
6. The exteriors are more of geometrical concrete structures and some
temporary sheds here and there.
7. As road widening is going to happen in front of the home, they are
currently shifting the motor room inside.
 P a g e | 120

CHAPTER 4

Research METHODOLOGY

4.1 DESIGN ANALYSIS

 HOME 1 – USHA KIRAN

This home is situated facing the main entrance with a mother Mary’s grotto
attached to it.

Fig : 1
 P a g e | 121

This structure is a g+1 home for children with sloping roofs on different levels
with ample space of verandah in the front and the house is on a higher level
from the ground.

This house is under renovation so the children are currently residing in one of
the multipurpose halls in the vicinity.

Fig - 2

 MULTIPURPOSE HALL 1

 This hall is opposite to home 1 which is used normally as prayer

hall.

Fig - 3
 P a g e | 122

 A structure with sloping roof and exhaust ventilators on them.

 A platform or a stage at the very end with a spacious front that is used
to learn yoga, study etc.
 Book shelves have been kept on both the sides of the hall maybe due
to lack of space to keep books in the houses.
 Apart from the first home this hall is directly accessible from the
main entrance

3. CONVENT AND OFFICE.

 A g+1 building adjacent to the prayer hall, precisely in the center

of the plot.

Fig 4 : part of the convent

 P a g e | 123

Fig 4: Entrance to the convent

Fig 5: Interiors of the chapel altar self-clicked

The whole spacing is such that a heavenly feel is built there though the interiors
are abet shallow for a chapel.

This is the main waiting area if there are too many guests. Spacious and
peaceful, though sunny outside there is coolness inside due to greenery
 P a g e | 124

Fig 6: waiting area

 KITCHEN HOUSE

 A huge structure with normal kitchen as well as work area

Fig 7: Kitchen Block

A space divided into storage rooms, normal kitchen to cook food in small
quantities, washroom, and corridor from the entrance to the back where there is
work area and utility sheds.
 P a g e | 125

A ground level structure with a huge water tank on the terrace for use. There is
also a crashed attached to the structure where a school bus is parked. The
exteriors give a more of a hexagonal shape but in reality the plan is rectangular.
A work area with stone stoves is used to cook rice and curry which is in large
quantity. The interiors is very dark with not much finishing be it the walls or
floors.

Fig 8: Kitchen interior

Fig 9 : Work area

 P a g e | 126

Fig 10: space where logs are collected for cooking

5. MULTIPURPOSE HALL 2 + IT LAB

A small yet functional hall which is currently used as a home for few children
as their home is under renovation.

Fig 11: Multipurpose hall 2

Like the normal homes in the vicinity this block doesn’t have all the facilities.
Currently it is just a dormitory for the kids with bedding area and dressing area.

 An open verandah where kids sit and study. There is an IT Lab which is part
of the structure which has 30 computers.
 P a g e | 127

Fig 12 : IT lab

6. HOME 2 – LITTLE PARADISE

This structure is on the back side of the plot with open stage in the center where beds are
sundried and kept inside.

The design is more like a village school with wooden doors, open verandah, sloping roof and
open spaces.

Fig 13 : collage of home 2

 P a g e | 128

7. HOME 3 – DONATED BY JAPAN

A g+1 structure with all the facilities including solar energy, rain water
harvesting and waste water recycling.

A building consisting of a big dormitory, bedding room, dressing room, games

room, study room, warden room etc.

A playground is also setup beside it for entertainment.

Fig 14: HOME 3 FRONT VIEW

Fig 15: PLAY AREA

 P a g e | 129

8. HOME 4 – SAME AS HOME 3

A g+1 structure with flat roof and all the sustainable features.
More of minimalistic interiors and spacious enough for activities

Fig 16 : Home 4

Fig 17 : Entrance to the home

 P a g e | 130

9. DISPENSARY

A small hospital set up to treat illness of children with a facility of 25 beds for
patients, doctors room and kitchen.

Fig 18 : Entrance of the dispensary

Fig 19 : Waiting area

 P a g e | 131

4.2 Questions asked during “MA NIKETAN ORPHANAGE” Ngo visit.

11. APPENDICES Questions asked during “MA NIKETAN ORPHANAGE” Ngo visit

1. What is the vision & mission for MA NIKETAN ORPHANAGE?

2. What are the long term goals?

3. How do the children cope up with their studies?

4. On what basis each and every student is evaluated to pass a certain standard?

5. How does the recruitment process take place for each child?

6. How exactly are the teachers trained to teach these children?

7. How do the Corporates help in the funding of the Ngo?

8. Are the computer labs up to date?

10. If there is by chance a shortage of funds how is it managed?

4.3 LIFE LESSONS LEARNT.

1. We should be grateful to God for giving us a life without life challenging

situations which these children face every day.

2. We should live life each day feeling blessed and grateful with what life has offered us.

3. We should always keep a positive outlook on life no matter what are problems are as
these children are a source of inspiration as each day these children always have a
cheerful attitude.
 P a g e | 132

Conclusion , Suggestion & Limitation

 Overall it’s a simple design that lacks improvement of many facilities

 The sisters serving in the institution pay good attention to all the
however, in spite of all the limited facilities and comforts provided
(which children from normal families also do not enjoy due to
poverty or other reasons), the children staying in this institution miss
the personal attention, parental love and affection which they would
otherwise enjoy if they lived with their family.

 The design is very old styled and needs attention especially the
kitchen.

 No matter how big the plot is circulation or connection of each houses

is missing.

 This are just structures build up when in need and doesn’t have a
proper plan.

 That’s why the design or the exterior style varies from house to
house.

 As they have taken the initiative of sustainability, more of it can be in

cooperated in one form or the other.
 P a g e | 133

Bibliography.

 aim-yoga.blogspot.com
 karmayog.org/nonprofits/npocitylocationdisp
lay.asp?r=218&loc=Thane%20(West)&cityloc= thane#.VwV_hPl97IV
 Maniketan.org
 slideshare.net/harshalsk/role-of-publicrelations-in-ngo-management
 societyofthehelpersofmary.wordpress.com/2 014/03/24/mother-anna-huberta-
gertruderoggendorf/
 Udaanwelfare.org
 vridhamma.org/Course-At-Ma-Niketan