Copy of Kotak Project Final 55 Copy of It It

“Verily my Lord understand best the mysteries

of

all that He planneth to do. For verily He is full

of knowledge and wisdom”.

I

DEDICATIONDEDICATION

This piece of work is humbly dedicated with all love

and devotion to the greatest of all Almighty. As it

would not have been possible to complete

successfully my project without hid love and grace he

has bestowed upon me. I thank him foe al that he has

given me during this golden period of learning and

learning it realistically.

“And thou (standest) on an exalted standard of

character”.

II

ACKNOWLEDGEMENTACKNOWLEDGEMENT

It is my pleasant duty to gratefully acknowledge my

deep debt of gratitude and to offer my sincerest thanks to

kind, and supportive Mr. Prakash Nayak (Vice president-

Corporate banking) Mr. Jayraj Bhatt (Sr.Manager- Corporate

banking) whose positive attitude and faith in my abilities

spurred me a lot to perform well.

I am also very thankful to MS. Bhavana Shah without

whom my project work would not have been possible. She

has always been a great source of help at every stage of the

project through discussion and criticism would also like to

thank whole staff of Kotak Mahindra Bank who have been

directly or indirectly being instrumental in the development

of this project.

Lastly, but not least, I owe our special regards to our

parents, sisters and brothers, who always supported us and

prayed for my betterment and success.

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EXECUTIVE SUMMARY

“Finance as are source stands next in importance to the awesome

power of human potential and financial intermediaries are the pillars

that support the activity of finance.”

The Kotak Mahindra Group was born in 1985 as Kotak Capital

Management Finance Limited. This company was promoted by Uday

Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish

Mahindra and Anand Mahindra took a stake in 1986, and that's when

the company changed its name to Kotak Mahindra Finance Limited.

Since then it's been a steady and confident journey to growth and

success.

Entering of mahindras in to finance sector was not an eventual event it

was an well thought and very much awaited movement which has led

to an foundation of full service banking and one of giants in to an

automobile sector to venture in to banking sector.

The report focuses on components of trade finance offered by division

of corporatebanking.Following are the range of products and services

offered by corporate banking department.They offer corporate anf

intituitions a complete banking client centric solutionsand

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services.These include working capital,trade services,transaction

banking,moneymarket and foreing exchange sevices and cash

management.All of there services are client focused and tailored

according to clients needs and delivered after factoring in industry

imperatives and individual contexts.

Specifically my project objective requirqd me to undertake an study

and find out the prospective market for corporate banking product like

L/C(LETTER OF CREDIT) CBD (CLEAN BILL DISCOUNTING). Our study

concentrated on two major sector in the industries which are heavily

dependent on efficient functiong of supply chain in to there

organization.We segregated our study in to two sectors Pharma sector

and oil sector.The focus was on finding out the current status of there

financing of the transportation and logistics expenses and

simultaneously prospecting about there wllingness nad awareness

about different kind of na financinf instruments available and provided

by our bank.Collection of an data mainly concentrated on collecting

information regarding there current financials,there critical raw

materials requirement nad an list of vendors to there company.After

collecting al this materials from the companies next step was to

analyse and segregate the vendor of this company who may fit in to

the criteria for providing services .The method used for contacting and

having healthy discussion with them was questionnaire and some

amount of oral communication.after getting an informationliated an

interpretation and analysis was done in order to drive out na business

from this information.

V

Companies selected for collection of data were:

INTAS PHARMACIEUTICALS LIMITED

CADILA PHARMACIUETICALS LIMITED

TROEKA PHARMACIUETICALS LIMITED

PLOX PHARMACIEUTICALS LIMITED

ISHITA DRUGS PRIVATE LIMITED & IPCL

INTRODUCTION TO BANKING IN INDIA

Banking in India has its origin as early as the vedic period. It

is believed that the transistion from money lending to

banking must have occurred even before Manu, the great

Hindu Jurist, who has devoted a section of his work to

deposits and advances and laid down rules relating to rates

of interest. During the Mogul period, the indegenous bankers

played a very important role in lending money and financing

foreign trade and commerce. During the days of the East

India Company, it was the turn of the agency houses to carry

on the banking business. The General Bank of India was the

first Joint Stock Bank to be established in the year 1786. The

others which followed were the Bank of Hindustan and the

Bengal Bank. The Bank of Hindustan is reported to have

continued till 1906 while the other two failed in the

meantime. In the first half of the 19th century the East India

Company established three banks; the Bank of Bengal in

1809, the Bank of Bombay in 1840 and the Bank of Madras

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in 1843. These three banks also known as Presidency Banks,

were independent units and functioned well. These three

banks were amalgamated in 1920 and a new bank, the

Imperial Bank of India was established on 27th January 1921.

With the passing of the State Bank of India Act in 1955 the

undertaking of the Imperial Bank of India was taken over by

the newly constituted State Bank of India. The Reserve Bank

which is the Central Bank was created in 1935 by passing

Reserve Bank of India Act 1934. In the wake of the Swadeshi

Movement, a number of banks with Indian management

were established in the country namely, Punjab National

Bank Ltd, Bank of India Ltd, Canara Bank Ltd, Indian Bank

Ltd, the Bank of Baroda Ltd, the Central Bank of India Ltd. On

July 19, 1969, 14 major banks of the country were

nationalised and in 15th April 1980 six more commercial

private sector banks were also taken over by the

government. Today the commercial banking system in India

may be distinguished into :

Public Sector Banks

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State Bank of India and its associate banks called the State

Bank group

20 nationalised banks

Regional Rural Banks mainly sponsored by Public Sector

Banks

Private Sector Banks

Old generation private banks

New generation private banks

Foreign banks in India

Scheduled Co-operative Banks

Non-scheduled Banks

CO-OPERATIVE SECTOR

The co-operative banking sector has

been developed in the country to the

suppliment the village money lender.

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The co-operatiev banking sector in India is divided into 4

components

State Co-operative Banks

Central Co-operative Banks

Primary Agriculture Credit Societies

Land Development Banks

Urban Co-operative Banks

Primary Agricultural Development Banks

Primary Land Development Banks

State Land Development Banks

DEVELOPMENT BANKS

Industrial Finance Corporation of India (IFCI)

Industrial Development Bank of India (IDBI)

Industrial Credit and Investment Corporation of India

(ICICI)

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Industrial Investment Bank of India (IIBI)

Small Industries Development Bank of India (SIDBI)

SCICI Ltd.

National Bank for Agriculture and Rural Development

(NABARD)

Export Import Bank of India

National Housing Bank

LET US LOOK AT THE BASIC REASONS AS TO

WHY AN BUSINESS WORLD WOULD LIKE TO

INVEST IN INDIA:

There are several good reasons for investing in India. One of the largest economies in the world.

Strategic location - access to the vast domestic and South

Asian market.

A large and rapidly growing consumer market up to 300 million

people, constitute the market for branded consumer goods -

estimated to be growing at 8% per annum. Demand for several

consumer products is growing at over 12% per annum.

Foreign investment is welcome, approval is required but is

automatic in sixty categories of Industries.

X

Skilled man-power and professional managers are available at

competitive cost.

One of the largest manufacturing sectors in the world, spanning

almost all areas of manufacturing activities.

One of the largest pools of scientists, engineers, technicians

and managers in the world.

Rich base of mineral and agricultural resources.

Long history of market economy infrastructure

Sophisticated financial sector.

Vibrant capital market with over 9,000 listed companies and

market capitalisation of US$ 154 billion (March,1996)

Well developed R&D infrastructure and technical and marketing

services.

Policy environment that provides freedom of entry, investment,

location, choice of technology, production, import and export.

Well balanced package of fiscal incentives.

A sophisticated legal and accounting system.

English is widely spoken and understood.

Rupee is convertible on Current Account at market determined

rate.

Free and full repatriation of capital, technical fee, royalty and

dividends.

Foreign brand names are freely used. No income tax on profits

derived from export of goods.

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Complete exemption from Customs Duty on industrial inputs

and Corporate Tax Holiday for five years for 100 per cent

Export Oriented units and units in Export Processing Zones.

Corporate Tax applicable to the foreign companies of a country

with which agreement for avoidance of Double Taxation exists,

can be one which is lower between the rates prevailing in any

one of the two countries and the treaty rate.

A long history of stable parliamentary democracy

INTRODUCTION TO KOTAK MAHINDRA GROUP

KOTAK MAHINDRA GROUPKotak Mahindra is one of India's

leading financial institutions, offering complete financial

solutions that encompass every sphere of life. From

commercial banking, to stock broking, to mutual funds, to

life insurance, to investment banking, the group caters to

the financial needs of individuals and corporates.The group

has a net worth of over Rs.1,550 crore and employs over

3,000 employees in its various businesses. With a presence

in 59 cities in India and offices in New York, London, Dubai

and Mauritius, it services a customer base of over

5,00,000.Kotak Mahindra has international partnerships with

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Goldman Sachs (one of the world's largest investment banks

and brokerage firms), Ford Credit (one of the world's largest

dedicated automobile financiers) and Old Mutual (a large

insurance, banking and asset management conglomerate).

THE

JOURNEY SO FAR ... KEY GROUP COMPANIES AND

THEIR BUSINESSES Kotak Mahindra BankThe Kotak Mahindra

Group’s flagship company, Kotak Mahindra Finance Ltd

which was established in 1985, was converted into a bank –

Kotak Mahindra Bank Ltd in March 2003 becoming the first

Indian company to convert into a Bank. It’s banking

operations offers a central platform for customer

relationships across the group’s various businesses. The

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bank has a presence in the Commerial Vehicles, Retail

Finance, Corporate Banking and Treasury and has recently

entered the Housing Finance segment. Kotak Mahindra

Capital CompanyKotak Mahindra Capital Company Limited

(KMCC), India's premier Investment Bank and a Primary

Dealer (PD) approved by the RBI, is a strategic joint venture

between Kotak Mahindra Bank Limited and the Goldman

Sachs Group, LLP. KMCC's core business areas include Equity

Issuances, Mergers & Acquisitions, Structured Finance and

Advisory Services, Fixed Income Securities and Principal

Business. Kotak SecuritiesKotak Securities Ltd., a strategic

joint venture between Kotak Mahindra Bank Limited and the

Goldman Sachs Group, LLP., is one of India's largest

brokerage and securities distribution house in India. Over the

years Kotak Securities has been one of the leading

investment broking houses catering to the needs of both

institutional and retails investor categories with presence all

over the country through franchisees and co-ordinators.

Kotak Street - the retail arm of Kotak Securities Ltd., offers

online (through www.kotakstreet.com) and offline services

well-researched expertise and financial products to the retail

investors.Kotak Mahindra PrimusKotak Mahindra Primus

Limited (KMP) is a joint venture between Kotak Mahindra

Bank Ltd and Ford Credit International Inc., (USA) formed to

finance all non-Ford passenger vehicles. KMP is one of the

country’s leading players in car finance and is focused to

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financing and supporting automotive and automotive related

manufacturers, dealers and retail customers.Kotak Mahindra

Asset Management CompanyKotak Mahindra Asset

Management Company (KMAMC), a subsidiary of Kotak

Mahindra Bank, is the asset manager for Kotak Mahindra

Mutual Fund (KMMF). KMMF manages funds in excess of Rs

4000 crores and offers schemes catering to investors with

varying risk- return profiles. It was the first fund house in the

country to launch a dedicated gilt scheme investing only in

government securities.Kotak Mahindra Old Mutual Life

Insurance LimitedKotak Mahindra Old Mutual Life Insurance

Limited, is a joint venture between Kotak Mahindra Bank Ltd.

and Old Mutual plc. Kotak Life Insurance helps customers to

take important financial decisions at every stage in life by

offering them a wide range of innovative life insurance

products, to make them financially independent.

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INTRODUCTION TO KOTAK MAHINDRA BANK

LTD.

Kotak Mahindra is one of India's leading financial institutions,

offering complete financial solutions that encompass every

sphere of life. From commercial banking, to stock broking, to

mutual funds, to life insurance, to investment banking, the

group caters to the financial needs of individuals and

corporates.

3,000 employees in its various businesses. With a presence

in 60

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cities in India and offices in New York, London, Dubai and

Mauritius, it services a customer base of over 5,00,000.

Kotak Mahindra has international partnerships with Goldman

Sachs (one of the world's largest investment banks and

brokerage firms),

cities in India and offices in New York, London, Dubai and

Mauritius, it services a customer base of over 5,00,000.

Ford Credit (one of the world's largest dedicated automobile

financiers) and Old Mutual (a large insurance, banking and

asset management conglomerate). Apart from this kotak

has also ventured a long way in to different retail banking

and securities services.

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ORGANISATION CHART

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No. Name of the Company Directors

1 Kotak Mahindra Capital Company Limited Uday Kotak (C)

Ajay Sondhi (VC & MD)

Shanti Ekambaram

N.J. Jhaveri

Dipak Gupta

Richard Gnodde

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Tim Leissner

Noel Sephton (Alt. to Richard Gnodde)

2 Kotak Securities Limited Uday Kotak (C)

C. Jayaram

Narayan S.A. (MD)

Ajay Sondhi

Falguni Nayar (ED)

Sanjiv Bhatia

Jenny Finney

Noel Sephton (Alt. to Jenny Finney )

3 Kotak Mahindra Primus Limited Uday Kotak (C)

Dipak Gupta

Gaurang Shah

C. Jayaram

Narpal Ahluwalia

Pankaj Desai

Michael Kozel

Gregory Cohen

4 Kotak Mahindra Old Mutual Life Insurance Limited

Uday Kotak (C)

Shivaji Dam (MD)

Dipak Gupta

Hasan Askari

James Harry Sutcliffe

Vineet Nayyar

Pallavi Shroff

S.S. Thakur

M.G. Diwan

5 Kotak Mahindra Asset Management Co. Limited

Uday Kotak (C)

R.C. Khanna

Sukant Kelkar

C. Jayaram

Narayan S.A.

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Bipin R. Shah

6 Kotak Mahindra Trustee Company Limited Amit Desai (C)

Chandrashekhar Sathe

Girish Sharedalal

Tushar Mavani

Anirudha Barwe

7 Kotak Mahindra Private-Equity Trustee Ltd.

Shailesh Haribhakti (C)

M.R. Punja

Chandrashekhar Sathe

8 Kotak Forex Brokerage Limited Uday Kotak

Dipak Gupta

Chandrashekhar Sathe

9 Kotak Mahindra Investments Limited Dipak Gupta

Jaimin Bhatt

Shanti Ekambaram

K V S Manian

R. Sundarraman

10 Kotak Mahindra (International) Ltd. Kishore Sunil Banymandhub

Ashraf Ramtoola

Ravi Lochan Pola

Paul Parambi

Shyam Kumar

11 Kotak Mahindra (UK) Limited Paul Parambi

Shyam Kumar

Viswanathan Varadarajan

12 Kotak Mahindra Inc. Paul Parambi

Ravi Lochan Pola

Viswanathan Varadarajan

Shyam Kumar

13 Global Investment Opportunities Fund Ltd.

Uday Kumar Gujadhar

Yuvraj Kumar Juwaheer

Paul Parambi

Shyam Kumar

Ravi Lochan Pola

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14 Kotak Mahindra Securities Ltd. Chandrashekhar Sathe

Shanti Ekambaram

Jaimin Bhatt

HISTORY OF INDIAN TRADE FINANCE

Historically, the Indian government has pursued a

cautious policy with regard to financing budgets,

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allowing only small amounts of deficit spending. Budget

deficits increased in the late 1980s, and the necessity

of financing these deficits from foreign borrowing

contributed to the 1990 balance of payments crisis. The

central government budget deficit reached 8.4 percent

of GDP in FY 1990, up from 2.6 percent in FY 1970, 5.9

percent in FY 1980, and 7.8 percent in FY 1989. The

deficit was cut to 5.9 percent in FY 1991 and 5.2

percent in FY 1992, but widened to 7.4 percent in FY

1993. It was expected to recede to 6.2 percent in FY

1995.

The central government's budget deficits during the

1980s increased the total public debt rapidly until in FY

1991 it stood at Rs3.9 trillion. The bulk of this debt was

owed to citizens and domestic institutions and firms,

particularly the central bank. Readers of Indian

monetary statistics should be alert to the use of the

terms lakh (see Glossary) and crore (see Glossary),

which are used to express higher numbers.

India Monetary Process

The basic elements of the financial system were

established during British rule (1757-1947). The

national currency, the rupee, had long been used

domestically before independence and even circulated

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abroad, for example, in the Persian Gulf region. Foreign

banks, mainly British and including some from such

other parts of the empire as Hong Kong, provided

banking and other services. The Reserve Bank of India

was formed in 1935 as a private bank, but it also

carried out some central bank functions. This colonial

banking system, however, was geared to foreign trade

and short-term loans. Banking was concentrated in the

major port cities.

The Reserve Bank was nationalized on January 1, 1949,

and given broader powers. It was the bank of issue for

all rupee notes higher than the one-rupee

denomination; the agent of the Ministry of Finance in

controlling foreign exchange; and the banker to the

central and state governments, commercial banks,

state cooperative banks, and other financial

institutions. The Reserve Bank formulated and

administered monetary policy to promote stable prices

and higher production. It was given increasing

responsibilities for the development of banking and

credit and to coordinate banking and credit with the

five-year plans. The Reserve Bank had a number of

tools with which to affect commercial bank credit.

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After independence the government sought to adapt

the banking system to promote development and

formed a number of specialized institutions to provide

credit to industry, agriculture, and small businesses.

Banking penetrated rural areas, and agricultural and

industrial credit cooperatives were promoted. Deposit

insurance and a system of postal savings banks and

offices fostered use by small savers. Subsidized credit

was provided to particular groups or activities

considered in need and which deserved such help. A

credit guarantee corporation covered loans by

commercial banks to small traders, transport operators,

self-employed persons, and other borrowers not

otherwise effectively covered by major institutions. The

system effectively reached all kinds of savers and

provided credit to many different customers.

The government nationalized fourteen major private

commercial banks in 1969 and six more in 1980.

Nationalization forced commercial banks increasingly to

meet the credit requirements of the weaker sections of

the nation and to eliminate monopolization by vested

interests of large industry, trade, and agriculture.

The banking system in India expanded rapidly after

nationalization. The number of bank branches, for

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instance, increased from about 7,000 in 1969 to more

than 60,000 in 1994, two-thirds of which were in rural

areas. The deposit base rose from Rs50 billion in 1969

to around Rs3.5 trillion in 1994. Nevertheless, currency

accounted for well over 50 percent of all the money

supply circulating among the public. In 1992 the

nationalized banks held 93 percent of all deposits.

In FY 1990, twenty-three foreign banks operated in

India. The most important were ANZ Grindlays Bank,

Citibank, the Hongkong and Shanghai Banking

Corporation, and Standard Chartered Bank.

Public-sector banks in India are required to reserve

their lending based on 40 percent of their deposits for

priority sectors, especially agriculture, at favorable

rates. In addition, 35 percent of their deposits have to

be held in liquid form to satisfy statutory liquidity

requirements, and 15 percent are needed to meet the

cash reserve requirements of the Reserve Bank. Both

these percentages represent an easing of earlier

requirements, but only a small proportion of public-

sector banks' resources can be deployed freely. In late

1994, the rate of interest on bank loans was

deregulated, but deposit rates were still subject to

ceilings.

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More than 50 percent of bank lending is to the

government sector. With the onset of economic reform,

India's banks were experiencing major financial losses

as the result of low productivity, bad loans, and poor

capitalization. Seeking to stabilize the banking industry,

the Reserve Bank of India developed new reporting

formats and has initiated takeovers and mergers of

smaller banks that were operating with financial losses.

India has a rapidly expanding stock market that in 1993

listed around 5,000 companies in fourteen stock

exchanges, although only the stocks of about 400 of

these companies were actively traded. Financial

institutions and government bodies controlled an

estimated 45 percent of all listed capital. In April 1992,

the Bombay stock market, the nation's largest with a

market capital of US$65.1 billion, collapsed, in part

because of revelations about financial malpractice

amounting to US$2 billion. Afterward, the Securities and

Exchange Board of India, the government's capital

market regulator, implemented reforms designed to

strengthen investor confidence in the stock market. In

the mid-1990s, foreign institutional investors took

greater interest than ever before in the Indian stock

XXVII

markets, investing around US$2 billion in FY 1993

alone.

Despite increases in energy costs and other pressures

from the world economy, for most of the period since

independence India has not experienced severe

inflation. The underlying average rate of inflation,

however, has tended to rise. Consumer prices rose at

an annual average of 2.1 percent in the 1950s, 6.3

percent in the 1960s, 7.8 percent in the 1970s, and 8.5

percent in the 1980s.

Three factors lay behind India's relative price stability.

First, the government has intervened, either directly or

indirectly, to keep stable the price of certain staples,

including wheat, rice, cloth, and sugar. Second,

monetary regulation has restricted growth in the money

supply.

Third, the overall influence of the labor unions on

wages has been small because of the weakness of the

unions in India's labor surplus economy.

XXVIII

AREA OF ACTIVITY UNDERTAKEN UNDER THE

PURVIEW OF PROJECT STUDY:

WHAT IS TRADE FINANCE?

Trade is your business. Making it happen faster is job. Kotak

Mahindra Bank offers an entire gamut of trade finance

services to cover your trade finance needs. This includes

both Export & Import finance, Inland Bill Discounting and Bill

Collection Remittances, Bank Guarantee. We have a

dedicated trade finance team that has a rich experience in

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understanding customer needs to structure various Trade

Finance products.

SERVICES PROVIDED UNDER TRADE FINANCE

Domestic : Bills Discounting

Bnaks experienced and dedicated trade finance team is

focused on structuring bill discounting products to meet

customer needs — be it short term or medium term finance.

In fact, banks services go beyond plain bill discounting to

encompass a complete range of supply chain management

solutions.They aim at increasing the efficiency of the entire

cycle, ensuring that transactions are executed speedily and

effectively. They will soon offer integrated supply chain

services on an electronic platform.

Domestic : Invoice Discounting

Invoice discounting entails "discounting" an accepted

invoice / bill for the sale of goods to provide working capital.

They offer to the clients the dual advantage of simple

XXX

documentation and absence of collateral requirements.

Finance is extended either by crediting the current account

of the supplier or by issuing a pay order.

Domestic : Purchase Order Financing

Purchase order financing is an innovative program where

they offer flexible finance to supply chain partners of

corporates. This involves "discounting" a contract/ purchase

order to help finance the manufacturing cycle for goods

ordered by the corporate. This service is particularly useful

for vendors with seasonal increases in working capital

requirements

Highlights:

Service extended to key vendors identified by the

corporate

Pre-shipment loan against Purchase Order from

corporate

Corporate pays the bank directly for all supplies by the

vendor

Maximum tenure is currently 45 days.

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International : Exports

PRESHIPMENT CREDIT:

They offer pre-shipment credit to exporters by way of

packing credit, enabling them to finance operations like

purchase/import of raw materials or processing and packing

of export goods. Exporters can avail of this pre-shipment

credit either in rupees or foreign currency

Post-Shipment Credit They offer post-shipment credit to exporters, helping them

finance export sales receivable for the time lag between

shipment of goods and date of realization of export

proceeds. Exporters can avail of the following services:

Negotiation/ payment/ acceptance of export documents

under letter of credit

Purchase/ discount of export documents under confirmed

orders/export contracts etc.

Advances against export bills sent on collection basis

Advances against exports on consignment basis

Advances against undrawn balance on exports

Advances against approved deemed exports

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Exporters can avail of this post-shipment credit either in

rupees or foreign currency.

Bills and Collections

They have a strong, experienced trade finance team

that focuses on client trade-related requirements,

whether domestic or international. This team advises

and guides clients on documentation and transactions

ensuring:

Quick turnaround times through smooth document

processing

Faster payments through constant follow-ups with

correspondent banks for timely recovery of funds

Cost effectiveness

Better reach

Excellent trade support

Arrangement of credit reports of overseas parties

Specialised advice on international trade related issues

as well as technical issues such as ECM requirements,

RBI reporting, new circulars and international

developments

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They have developed a global network of correspondent

banks that enables them to handle large volume collection

portfolios. Theyoffer world-class facilities for handling

collections related to international trade.

They also handle documents where proceeds have been

received by the exporter on an advance payment basis and

the actual shipment takes place later. In such cases, the

documents need to be accompanied with an Foreign Inward

Remittance Certificate (FIRC) as proof of receipt of the

advance payment.

Inward Remittances

They facilitate Foreign Inward Remittance (foreign

exchange received by a person in India through banking

channels) and offer convenient modes of operations for

quick and easy disbursement.

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The facility is extended through arrangements with reputed,

correspondent banks located in most countries around the

world.

International : Imports : Letter of Credit

They offer to there customers import financing services

through Letters of Credit (L/C) which are well accepted

globally and supported by a strong trade finance setup.

They have correspondent banking arrangements with a large

number of banks worldwide for this service.There trade team

is equipped to structure solutions for a variety of purchase

requirements, ranging from simple L/Cs to revolving L/Cs, bid

bonds, Standby L/Cs and other performance guarantees

Bills and Collections

They have a strong, experienced trade finance team that

focuses on client trade-related requirements, whether

domestic or international. This team advises and guides

clients on documentation and transactions ensuring:

XXXV

Quick turnaround times through smooth document

processing

Faster payments through constant follow-ups with

correspondent banks for timely recovery of funds

Cost effectiveness

Better reach

Excellent trade support

Arrangement of credit reports of overseas parties

Specialised advice on international trade related issues

as well as technical issues such as ECM requirements,

RBI reporting, new circulars and international

developments

They have developed a global network of correspondent

banks that enables them to handle large volume collection

portfolios. We offer world-class facilities for handling

collections related to international trade.

Outward Remittances

There services in this area include:

Payment of direct Import Bills: Processing and

remittances for Import Bills directly received by

importers in India.

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Advance payment towards imports: Processing and

remittances towards advance payment for imports.

Other outward remittances like dividend payouts, ECB

payments, royalty, shipping, etc.

Treasury Products

They have a state-of-the-art dealing room situated at

Nariman Point, Mumbai. The dealing room handles inter-

XXXVII

bank transactions and corporate foreign exchange flows

generated by the various branches.

Products

Spot foreign exchange transactions (for value up to two

business days)

Forward foreign exchange transactions (for value

greater than two business days)

Inward/outward remittances

Derivatives such as Options,Currency Swaps, etc.

Services

Active dealings in the inter-bank market for major

currencies, spot and forwards

Quick and competitive dealing in prices in major

currencies

customised solutions for specific client exposures

Trading recommendations based on technical analysis

Regular fundamental analysis

Established correspondent banking relationships

XXXVIII

Treasury Products : Money Market

There Money Market and Fixed Income Desk is an active

player in the Rupee markets and caters to the treasury

requirements of clients across the Inter-Bank, Co-operative

bank, Corporate, Pension Fund and Trust sectors.

With an active sales force in Mumbai, Delhi, Kolkata,

Chennai, Bangalore and Ahmedabad They are equipped to

meet client requirements across the country. Here they also

offer the entire spectrum of services involved in the

origination and placement of corporate debt.

Our Money Market Desk offers :

Fixed Income Solutions

Short Term Needs: Purchase/ Sale of Treasury Bills,

Commercial Paper, Certificate of Deposits

Long Term Needs: Purchase/ Sale of Government and

Corporate Debt

Distribution Needs: Placement of Debt Issues

Depository Needs: Constituent SGL Facility

Retail Needs: Purchase/Sale of instruments in smaller

lots is also offered.

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Derivative Solutions

Hedging Needs: Market Maker in the Rupee interest

Rate swap market in tenors upto 5 years

Research : Overview

We know how important it is for our corporate clients to

keep their finger on the pulse of fluid market dynamics and

stay on top of economic and market trends.

Our Fixed Income Research is focused on in-depth analysis

of key issues influencing the Indian debt, money and foreign

exchange markets. Our unique approach to the analysis of

economic and financial news is documented in a full range of

research products. These provide insights on asset

allocation, identify significant market trends and publish

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global forecasts on economic activity, policies, interest-rates

and the Indian rupee. All our research is geared towards

highlighting opportunities for our customers.

Our Research products include:

The Daily Forex Monitor (DFM) that tracks the Indian and

International foreign exchange markets and opines on

currency strategies on a daily basis.

The Weekly Money Market Update that details the

developments in money markets and provides a short-term

interest-rate view along with indicative pricing for Triple A

credits.

The monthly FINSEC that details the significant macro-

economic indicators, developments in fixed income markets

and the conduct of Government / Central bank monetary

policy. It also documents our views on market trends for the

coming month and assesses the investment outlook.

The FINSEC Focus that attempts to identify and analyse

significant lead indicators of real economic activity to aid

forecasts. The 'Back to School' section covers the theoretical

understanding of various economic concepts.

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PROCEDURE THAT WAS UNDERTAKEN TO

FULFILL THE PROJECT OBJECTIVE

The project that was given to me required me to contact the

procurement department of each and every company that

was mentioned under the scope of my project. Basically my

project would require me to collect all of the primary

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information about the institution which could be availed of

either by observation or but mutual talks which ever way it

could be convienient.after having the primary information

about an organization Includes proceed further in the

direction of my getting the primary information about kind of

raw material that could be used with in the organization.

Though relating all the information and getting all the

information required was a tough task but that was been

made possible by support of bank staff and my project

guide. I was given sufficient time to make an amount of

interactive level that would aloe me to get an critical

information that was required for accomplishment of the

project. Actually my project required an list of vendors of all

of the companies under my portfolio which could allow bank

to garner the trade financing relationship with them by

having there suppliers business being financed by us.

COLLECTION OF DATA:

By and large in to the primary round of collecting a data

front companied regarding there list of vendors the method

used was verbal communication and contacts.

After which using an instrument called questionnaire did

contacting and collecting information from the vendors. The

basic need for having a method of collection was lack of time

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with vendors to have a long verbal communication and also

some of the critical information that was to be collected hard

for that matter.

CONTENTS OF QUESTIONNAIRE:

Being a research document it was taken care to be tested

first and then applied as an instrument to have a final

decision being made based on that. At very inception stage

my project guide took an special effort to have an pilot study

of an instrument done so that it would perfectly suffice the

purpose for which it was been administered.

ANALYSIS OF DATA COLLECTED :

Already most of the vendors were having there trade

being financed from other banks

The only differentiating factor for the banks were

there services

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Our bank could very well succeed in the market for

creditability and rapport with the market that

mahindras are carrying

Kotak mahindra bank evokes an absolutely positive

kind of an response which shows presence of one

year old bank in to the market

In the field of corporate finance your contacts are

your business

Relationship maintenance and making truly customer

a king are very well fitted jargons over here

Trade finance requires lot of awareness from your

side also.

We need to be updated with each and every

development.

Most of the vendors were ready to change there

current trade financing bank if better terms were

made available

Another important differentiating factor was hassle

free financing that would require minimum

documentation and information.

We need to be highly careful of our premium clients

who give us an wholesome business.

Great amount of research work goes in to for having

an current developments notified to the clients.

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FIANCIAL OVERVIEW

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