Kotak Mahindra Prime Limited

DECLARATION

I, hereby declare that this project report entitled, “THE STUDY ON KOTAK

MAHINDRA PRIME LIMITED”, submitted to MAHATMA GANDHI University,

in partial fulfillment of the requirements for the award of the degree of the Master

of Business Administration is an original work done by me. I further declare that

the said work has not previously been submitted to any other university or academic

body.

Place: RESHMI FRANCIS

Date

1

LIST OF TABLES

SL NO. TITLE REF NO PAGE NO.

1BANKING AND FINANCIAL INSTITUTIONS IN INDIA Tab 2-1 14

2

COMPETITOR’S STATUS Tab 2-2 16

3 COMPARISON WITH COMPETITORS

Tab 2-3 17

4 BOARD OF DIRECTORS Tab 3-1 19

5 APPRAISAL CRITERIA Tab 3-2 44

2

LIST OF FIGURES

SL NO CAPTION REF NO PAGE NO.

1 Major players Fig 2-1 13

2 Corporate Structure Fig 4-1 47

3 Marketing Department Structure Fig 4-2 49

4 Finance Department Structure Fig 4-3 50

5 Customer Relations Department Structure

Fig 4-4 51

6 HR Department Structure Fig 4-5 52

7 Operations Department Structure Fig 4-6 53

8 Marketing Flow Fig 5-1 56

9 Sales Flow Fig 5-2 67

3

TABLE OF CONTENTS

CHAPTER NO. TITLE PAGE NO.

ACKNOWLEDGEMENT i

EXECUTIVE SUMMARY ii

LIST OF TABLES iii

LIST OF FIGURES iv

I INTRODUCTION 1

1.1 An Introduction to the study 2

1.2 Scope of the Study 2

1.3 Objective of the Study 3

1.4 Methodology 3

1.5 Limitations of the study 4

CHAPTER NO.

TITLE PAGE NO

4

II BUSINESS ENVIRONMENTAL

ANALYSIS

5

2.1 Business Environmental Analysis 6

2.2 Industry Profile 10

2.2.1 Global Scenario 10

2.2.2 Indian Finance Industry. 11

2.2.3 Finance Industry in Kerala 12

2.3 Industry Analysis 13

2.3.1 Industry Key Players 13

2.3.2 Competitor Analysis 15

III ORGANIZATIONAL PROFILE 18

3.1 Background and History 19

3.2 Vision 27

3.3 Products and Markets 28

5

CHAPTER NO TITLE PAGE NO

3.4Certifications,Awards, Recognitions 38

3.5 Business Performance 43

IV ORGANIZATIONAL STRUCTURE 44

4.1 Corporate Structure 46

4.2 Business Level Structure 48

4.2.1 Marketing Department Chart 49

4.2.2 Finance Department Chart 50

4.2.3Customer Relations Department Chart 51

4.2.4 Human Relations Department Chart 52

4.2.5 Operations Department Chart 53

V FUNCTIONAL ANALYSIS 54

5.1 Marketing Department 55

5.2 Finance Department 57

6

5.3 Customer Relations Department 59

5.4 Operations Department 62

5.5 Human Resource Department 64

5.6 Collection Department 65

5.7 Sales Department 67

5.8 Customer Credit Department 68

VI ORGANIZATIONAL ANALYSIS 71

SWOT Analysis 72

VII FINDINGS AND CONCLUSIONS 75

BIBLIOGRAPHY 78

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I. INTRODUCTION

8

1.1 AN INTRODUCTION TO THE STUDY

In a general perspective, an organization can be defined as the rational and logical

coordination of the activities of man power for the accomplishment of common goals,

through division of labor and function, and through a hierarchy of authority and

responsibility. In a more specific approach, the use of the word organization means

the weaving together of the various functional components in the best possible

combination so that the enterprise can accomplish its objectives to the optimum level

in the most efficient manner. It is the back bone of management.

Organization is a process of fixing duties and responsibilities of persons in an

enterprise so that business goals are achieved. It is the creation of relationship among

persons and work so that it may be carried on in a better and efficient way.

1.2 SCOPE OF THE STUDY

The study is done to know the organization in depth. It is focused functioning of the

Kochi branch of Kotak Mahindra. All the departments in the organization is covered

which includes the marketing department, finance department, customer relations

department, operations department, human resource department, collection

department, sales department and the customer credit department. Since the study is

limited to the Kochi branch, the transactions of some departments are done in a

narrow sense like the Human Resource Department where in all the recruitments are

made at the Mumbai Head office and not at the Kochi office.

An organization is the mechanism through which the management directs,

coordinates and controls its business. A good organization is important because:

It facilitates administration.

It makes growth and diversification possible.

It stimulates independent, creative thinking and initiative through well defined

areas of work.

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It facilitates the optimum use of technological improvement

1.3 OBJECTIVE OF THE STUDY

- To know how a business organization works.

- To know the various departments and its functioning in an organization.

- To understand the challenging fields in business and suggest ways to mitigate and overcome them.

- To identify the opportunities and suggest ways to take its advantage to the maximum.

- To know the strengths, weakness, opportunities and threats of the business.

1.4 METHODOLOGY

The study mainly utilized two methods for data collection. They are survey

questionnaires method and interview method. The survey questionnaire is done in

narrow sense as it covered only a limited number of employees. The employees were

given a small questionnaire with 10 questions (except the personal details) on their

job nature. The interview method was the one which had been given more

importance. Both the primary data and secondary data is utilized for the facilitation of

the study. Thus the methodology used for the study mainly involves both the primary

and secondary data collected through the interview method. Primary data involved the

direct question answer session. The employees of the organization were very

supportive as they sincerely answered all the questions put to them. Secondary data

involved the reference of their books and accounts. Also some relevant details were

abstracted from their official website in the internet.

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1.5 LIMITATIONS OF THE STUDY.

a) Head Office at Mumbai , Limited transactions at Kochi:

Kotak Mahindra Group is a well established and reputed

organization. It has more than 50 braches all over the country which has a number of

business operations. They have business roots in private finance, car finance and so

on. The organization chosen for the study is the Kotak Mahindra Prime Limited at

Palarivattom, Kerala. KMPL is a wing of the Kotak Mahindra Group which deals

with the Automobile finance and Personal finance. Their headquarters is at Mumbai

where all their important dealings are held. Thus one of the main limitations of the

study was that KMPL had limited dealings of some of their department like Human

Resource related to new recruits. The organization had all their appointments made at

their headquarters in Mumbai. They just directed their applicants to the Mumbai

office where the actual appointment is made.

b) Limited time :

The study is done in a limited time period of 2 weeks which made it difficult to cover the organization in detail.

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II BUSINESS ENVIRONMENT ANALYSIS

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2.1 BUSINESS ENVIRONMENTAL ANALYSIS

Business Environmental Analysis is done with PEST analysis. A PEST analysis is

concerned with the environmental influences on a business. The acronym stands for

the Political, Economic, Social and Technological issues that could affect the

strategic development of a business. Identifying PEST influences is a useful way of

summarizing the external environment in which a business operates. PEST analysis of

any industry investigates the important factors that affect the industry and influence

the companies operating in the sector. The PEST Analysis is a tool to analyze the

forces that drive the industry and how those factors can influence the industry.

POLITICAL FACTORS

Government and RBI policies affect the finance sector. Sometimes looking into the

political advantage of a particular party, the Government declares some measures to

their benefits like waiver of short-term agricultural loans, to attract the farmer’s votes.

By doing so, the profits of the bank get affected. Various banks in the cooperative

sector are open and run by the politicians. They exploit these banks for their benefits.

Sometimes the government appoints various chairmen of the banks.

Various policies are framed by the RBI looking at the present situation of the country

for better control over the financial institutions.

ECONOMIC FACTORS

Banking and Financial sector is as old as authentic history and the modern

commercial banking and financial service sector are traceable to ancient times. In

India, banking has existed in one form or the other from time to time. The present era

in banking may be taken to have commenced with establishment of Bank of Bengal in

1809 under the government charter and with government participation in share

capital. Allahabad bank was started in the year 1865 and Punjab National Bank in

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1895, and thus, others followed. Whereas the financial institutions also do take a

prominent role in the industry along with these recognized banks.

SOCIO CULTURAL FACTORS

Socio-culture factors also affect the business. They show how people behave in a

country. Socio-cultural factors like taboos, customs, traditions, tastes, preferences,

buying and consumption habit of people, their language, beliefs and values affect the

business. Finance industry also operates under this social environment and it is also

thus affect by this factor.

The pattern of the people’s lifestyle, their behavior, consumption pattern etc. is

changing and also creating opportunities and threat for financial service industry.

There are some socio-culture factors that affect financial sector in India which have

been analyzed below :

TRADITIONAL MAHAJAN PRATHA

Before the birth of the banks, people of India were used to borrow money from local

moneylenders, shahukars, shroffs. They were used to charge higher interest and also

mortgage land and house. Farmers were exploited by these shahukars. But farmers

need money. So, they did not have any choice other than going to shahukar and

borrowing money from them in spite of exploitation by these people. But after the

emergence of banks, the attitude of people was changed. Traditional mahajan pratha

still exist in India specially in rural areas. This affects the banking sector. Rural

people are afraid to go to bank to borrow money instead they prefer to borrow from

shahukar with whom they have relationships from the time of their fore fathers.

Banking infrastructure is also week in some interior areas of India.

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SHIFT TOWARDS NUCLEAR FAMILY

Attitude of people of India is changing. Now, younger generation wants to remain

separate from their parents after they get married. Joint families are breaking up.

There are many reasons behind this. But banking sector and financial sector is

positively affected by this trend. A family needs home consumer durables like

freezers, washing machine, television, bike, car etc so they demand these products

and consequently borrows money from these institutions. Recently there is boost in

housing finance and vehicle loans. As they do not have money in full settlements they

go for installments. So, banks and financial institutions satisfy nuclear families wants.

CHANGE IN LIFE STYLE

Life style of India is changing rapidly. They are demanding high class products. They

have become more advanced. People want everything car, mobile, etc.. what their

fore father had not even dreamt off. Now even teenagers who are dependent on their

parents too have mobile phones and vehicles. Even middle class people also want to

have well furnished home, television, mobile, vehicle and this has opened

opportunities for banking sector to tap this change. Everything is available so it has

become easy to purchase anything even if you do not have lump sum.

POPULATION

Increase in population is one of the important factor, which affect the private sector

banks. Banks would open their branches after looking into the population

demographics of the area. Percentage of deposit in any branches of banks depends

upon the population demographic of that particular area. The population of India is

about 102.90 and is expected to reach about 119.70 cores in 2011. About 70% of

population is below 35years of age. They are in the prime earning stage and this

increase the earning of the banks. Total Deposits mobilized by the Private Sector

Banks increased from Rs, 2,52,335 crore as on 31st March 2004 to Rs. 3,12,645 crore

15

as on 31st March 2005. Deposits showed a subdued growth during 2004-05.Income

distributions also affects the operations and overall business of private sector banks.

TECHNOLOGY IN BANKS

Technology plays a very important role in financial institution’s internal control

mechanisms as well as services offered by them. It has in fact given new dimensions

to the institutions as well as services that they cater to and the private institutions are

enthusiastically adopting new technological innovations for devising new products

and services.

ATM

The latest developments in terms of technology in computer and telecommunication

have encouraged the bankers to change the concept of branch banking to anywhere

banking. The use of ATM and Internet banking has allowed ‘anytime, anywhere

banking facilities.

IT SERVICES & MOBILE BANKING

Today these institutions are also using SMS and Internet as major tool of promotions

and giving great utility to its customers. For example SMS functions through simple

text messages sent from your mobile. The messages are then recognized by the bank

to provide you with the required information.

All these technological changes have forced the bankers to adopt customer-based

approach instead of product-based approach. Technology advancement has changed

the face of traditional banking systems. Technology advancement has offer 24X7

banking even giving faster and secured service.

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2.2 INDUSTRY PROFILE

2.2.1 GLOBAL FINANCE INDUSTRY

Financial services refer to services provided by the finance industry. The finance

industry encompasses a broad range of organizations that deal with the management

of money. Among these organizations are credit unions, banks, credit card

companies, insurance companies, consumer finance companies, stock brokerages,

investment funds and some government sponsored enterprises. As of 2004, the

financial services industry represented 20% of the market capitalization of the S&P

500 in the United States.

According to the Global 2000 (annual report by Forbes), seven of the world’s top 10

companies belonged to the financial industry. These included Citigroup, Bank of

America, HSBC Holdings and JPMorgan Chase. Their combined revenues in 2007

were worth $645 billion, down from the 2006 high of $785 billion.

According to the Fortune 500 rankings, in 2006 financial services generated $257

billion in profits, a third of total Fortune 500 profits. In 2008, however, they lost a

staggering $213 billion, a total swing of $470 billion. Big players on the list, such as

Citigroup and Bank of America, may only be alive today thanks to government

money.

The finance industry is an industry in itself as well as an ancillary that supports other

industries. Trade and commerce across the world would come to a standstill if there

was no means to fund, pay and protect the transactions, hence the need for

governments to support the financial services industry when companies that are ‘too

big to fail’ are close to collapse.

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2.2.2 INDIAN FINANCE INDUSTRY

Financial services organizations are striving to achieve increasingly ambitious profit

and growth targets against a background of heightened risk, regulation and market

pressures.

Customer needs and expectations are evolving in the face of increasing personal

wealth, more private funding of pensions and health care and the desire for ever more

accessible and personalized financial products and services. In turn, intense

competition has squeezed industry margins and forced organizations to cut costs

while still seeking to enhance the quality of client choice and service. The battle for

talent is also heating up as companies seek to enhance innovation, customer loyalty

and investment returns.

The corollary of this market evolution is increasing risk as products become more

complex, organizations more diffuse and the business environment ever more

uncertain. Regulation is also tightening in the wake of public and government

pressure for improved governance, transparency and accountability.

In this environment, the winners will be companies that can turn the challenges into

opportunities to build stronger and more enduring customer relationships; sharpen

process efficiency; unlock talent and creativity; use improved risk management

processes to deliver more sustainable returns; and use new regulatory demands as a

catalyst for strengthening the business and enhancing market confidence.

The Automotive industry in India is one of the largest in the world and one of the

fastest growing globally. India manufactures over 17.5 million vehicles (including 2

wheeled and 4 wheeled) and exports about 2.33 million every year. It is the world's

second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million

in 2009. India's passenger car and commercial vehicle manufacturing industry is the

seventh largest in the world, with an annual production of more than 3.7 million units

in 2010. According to recent reports, India is set to overtake Brazil to become the

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sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell

around three million units in the course of 2011-12. In 2009, India emerged as Asia's

fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.

As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million

automotive vehicles were produced in India in 2010 (an increase of 33.9%), making

the country the second fastest growing automobile market in the world. According to

the Society of Indian Automobile Manufacturers, annual car sales are projected to

increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050,

the country is expected to top the world in car volumes with approximately 611

million vehicles on the nation's roads.

A chunk of India's car manufacturing industry is based in and around Chennai, also

known as the "Detroit of India" with the India operations of BMW, Ford, Hyundai

and Nissan headquartered in the city. Chennai accounts for 60 per cent of the

country's automotive exports. Gurgaon and Manesar in Haryana are hubs where all of

the Maruti Suzuki cars in India are manufactured. The Chakan corridor near Pune,

Maharashtra is another vehicular production hub with companies like General

Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz,

Fiat and Force Motors having assembly plants in the area. Ahmedabad with the Tata

Nano plant, Halol with General Motors, Aurangabad with Audi, Kolkatta with

Hindustan Motors, Noida with Honda and Bengaluru with Toyota are some of the

other automotive manufacturing regions around the country.

2.2.3 FINANCE INDUSTRY IN KERALA

The most essential element in the process of development and growth of the country

is finance. The economy of a country becomes crippled without the flow of finance

and the economic growth is stunted. Monitory resources can be channelized only with

the help of a proper financial infrastructure. An effective financial system in the form

of banks and financial institutions offer economical lending and borrowing.

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Kerala boasts of a well-developed financial infrastructure. With progressing time

Kerala financial system has attained a high benchmark. There are many prominent

participants in the finance sector in kerala . They includes Kotak Mahindra Prime

Limited, HDFC, Sundaram Finance and so on.

2.3 INDUSTRY ANALYSIS

KEY PLAYERS IN FINANCE INDUSTRY

Indian Automobile Loan Industry involves a lot of credit providers. It is because of

Indian automobile market is one of the fast growing largest markets in the world.

Compared with the European market, American market and the Japanese market, the

specialty of Indian market is that it accepts all price range of vehicles .On the basis of

nature of business, automobile car providers are mainly classified as follows :

2.3.1 MAJOR PLAYERS

The major players of the Finance Industry can be categorized into 2 groups. They are

as shown in Fig 2-1 :

Fig 2-1 MAJOR PLAYERS IN FINANCE INDUSTRY

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Non-Banking Financial Institutions Banking Financial Institutions

Major players

2.3.2 BANKING AND FINANCIAL INSTITUTIONS :

There are many Banking and Financial institutions in India. The major institutions

among them are stated in Tab 2-1 :

Tab 2-1 BANKING AND FINANCIAL INSTITUTIONS IN INDIA

LEADING NATIONAL BANKS LEADING PRIVATE BANKS

State Bank group ICICI Bank

Axis Banks HDFC Bank

Union Bank Kotak Mahindra Prime Limited

Saraswat Coperative Bank Tata Motors finance Limited

Standard Chartered Bank Financial Services Company of Fiat

Citi Bank

Citicorp MarutI

Sundaram Finance

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Associate Finance

2.3.3 COMPETITOR ANALYSIS

The industry holds a number of efficient and eminent competitors. The major

competitors involves :

ICICI Bank.

HDFC Bank.

Reliance Capital Limited.

Axis Bank .

State Bank Group.

Mahindra Finance.

Co-operative Bank.

KSFE.

Sundaram Finance.

South Indian Bank Limited.

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The financial status of various competitors are :

Tab 2-2 COMPETOTOR’S STATUS

Last Price Market Cap.(Rs. cr.)

Net InterestIncome

Net Profit Total Assets

ICICI Bank 1,060.20 122,110.91 25,974.05 5,151.38 363,399.71

HDFC Bank 2,559.15 119,058.23 19,928.21 3,926.39 277,352.61

Axis Bank 1,305.95 53,789.58 15,154.81 3,388.49 242,713.37

Kotak Mahindra 480.90 35,436.15 4,303.56 818.18 50,850.66

IndusInd Bank 287.50 13,396.64 3,589.36 577.32 45,635.85

YES BANK 322.25 11,186.82 4,041.74 727.13 59,007.00

Federal Bank 460.55 7,873.78 4,052.03 587.08 43,675.61

Karur Vysya 420.20 4,913.82 2,217.69 415.59 21,993.49

JK Bank 849.20 4,116.73 3,713.13 615.20 50,508.15

ING Vysya Bank 328.35 3,972.60 2,694.06 318.65 33,880.24

Tab 2-3 COMPARISON WITH COMPETITORS

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KMB KMF price KMB

Balance Sheet

Kotak Mahindra

ICICI Bank

HDFC Bank

Axis Bank

Mar '11 Mar '10 Mar '11 Mar '11Capital and Liabilities:Total Share Capital 368.44 1,114.89 465.23 410.55Equity Share Capital 368.44 1,114.89 465.23 410.55Share Application Money 0.00 0.00 0.00 0.00Preference Share Capital 0.00 0.00 0.00 0.00Reserves 6,464.95 50,503.48 24,914.04 18,588.28Revaluation Reserves 0.00 0.00 0.00 0.00Net Worth 6,833.39 51,618.37 25,379.27 18,998.83Deposits 29,260.97 202,016.60 208,586.41 189,237.80Borrowings 11,723.95 94,263.57 14,394.06 26,267.88Total Debt 40,984.92 296,280.17 222,980.47 215,505.68Other Liabilities & Provisions

3,032.36 15,501.18 28,992.86 8,208.86

Total Liabilities 50,850.67 363,399.72 277,352.60 242,713.37Kotak

MahindraICICI Bank

HDFC Bank

Axis Bank

Mar '11 Mar '10 Mar '11 Mar '11AssetsCash & Balances with RBI

2,107.72 27,514.29 25,100.82 13,886.16

Balance with Banks, Money at Call

363.26 11,359.40 4,568.02 7,522.49

Advances 29,329.31 181,205.60 159,982.67 142,407.83Investments 17,121.44 120,892.80 70,929.37 71,991.62Gross Block 831.80 7,114.12 5,244.21 3,426.49Accumulated Depreciation

406.20 3,901.43 3,073.56 1,176.03

Net Block 425.60 3,212.69 2,170.65 2,250.46Capital Work In Progress 0.00 0.00 0.00 22.69Other Assets 1,503.33 19,214.93 14,601.08 4,632.12Total Assets 50,850.66 363,399.71 277,352.61 242,713.37Contingent Liabilities 12,291.30 694,948.84 559,681.87 429,069.63Bills for collection 4,470.06 38,597.36 28,869.10 57,400.80Book Value (Rs) 92.74 463.01 545.53 462.77

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III. ORGANIZATIONAL PROFILE

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3.1 BACKGROUND AND HISTORY

Kotak Mahindra is one of India's leading financial organizations, offering a wide

range of financial services 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 diverse financial needs of individuals and corporate.

The group has a net worth of over Rs. 6,523 crore and has a distribution

network of branches, franchisees, representative offices and satellite offices across

cities and towns in India and offices in New York, London, San Francisco, Dubai,

Mauritius and Singapore. The Group services around 6,2 million customers accounts.

3.1.1 BOARD OF DIRECTORS

Tab 3-1 BOARD OF DIRECTORS OF KOTAK MAHINDRA

Mr. K.M.Gherda - Executive Chairman

Mr. Uday Kotak - Executive Vice Chairman and

Managing Director

Mr. Anand Mahindra - Co Promoter of Kotak Mahindra

Bank And Vice Chairman and

Managing Director of Mahindra

and Mahindra

Mr. Cyril Shroff - Co Promoter

Mr. Pradeep N Kotak - Agri Division of Kotak and

CompanyLimited

Mr. Shivaji Dam - Managing Director Kotak

Mahindra Old Mutual Life

26

Insurance Limited.

Mr. C.Jayaram Executive Director

HISTORY

Kotak Mahindra group was started in the year 1985 as Kotak Capital Management

Finance Limited. Uday Kotak Sidney and Pinto are the promoters of the company.

Industrialist Harshath Mahindra and Anand Mahindra took a stake in 1986. After that

the company changed its name to Kotak Mahindra Finance Limited.

1986 - Kotak Mahindra Finance limited starts the business of Bill Discounting.

1987 - Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market.

1990 - The Auto Finance division is started.

1991 - The Investment Banking Division is started. Takes over

FICOM, one of India’s largest financial retail marketing

networks .

1992 - Enters the Funds Syndication sector.

1995 Brokerage and Distribution businesses incorporated into a separate company -

Kotak Securities. Investment Banking division incorporated into a separate company

- Kotak Mahindra Capital Company .

1996 - The Auto Finance Business is hived off into a separate company - Kotak

Mahindra Primus Limited. Kotak Mahindra takes a significant stake in Ford Credit

Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix

Information Services Limited marks the Group’s entry into information distribution.

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1998 - Enters the mutual fund market with the launch of Kotak

Mahindra Asset Management Company.

2000 - Kotak Mahindra ties up with Old Mutual plc. for the

Life Insurance business.

Kotak Securities launches kotakstreet.com - its on-line broking

site. Formal commencement of private equity activity through

setting up of Kotak Mahindra Venture Capital Fund.

2003 - Kotak Mahindra Finance Ltd. Converts to bank

Kotak Mahindra Finance Limited (KMFL), the Non-Banking Financial Corporation

(NBFC) started its operations in the year 1985 as car financers and since then has

come a long way. Kotak Mahindra Finance Limited was converted into a bank as a

conglomeration of six entities. They are Kotak Mahindra Capital

Company( Investment Banking ), Kotak Securities (broking), Kotak Mahindra

Limited (Auto finance), Kotak Mahindra Asset Management (Mutual funds) old

Mutual Kotak Mahindra (Life Insurance) and Kotak Mahindra Primus ( Auto

Finance) .

Kotak Group

The ventures of Kotak group involves the following :

Kotak Mahindra Bank Limited.

Kotak Mahindra Capital Company.

Kotak Mahindra Old Mutual Life Insurance Limited.

Kotak Mahindra Asset Management Company Limited.

Kotak International Business.

Kotak Securities Limited.

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KOTAK MAHINDRA BANK LIMITED

Kotak Mahindra Bank is the flagship company of the Kotak group. The company was

incorporated as Kotak Mahindra Finance Company Limited in the year 1985. In

February 1003, the company was given the license to carry on banking business by

Reserve Bank of India ( RBI). It was the first company to convert to a bank. With the

conversion into a bank, retail liabilities , treasury and corporate banking segments

have been also added company to convert to bank. With the conversion into a bank,

retail liabilities, treasury and corporate banking segments have also been added.

The products of the bank include the following:

Retail Banking.

Commercial Vehicles.

Home Loans.

Personal Loans.

Wealth Management.

Corporate Banking.

Treasury.

KOTAK MAHINDRA CAPITAL COMPANY LIMITED

Kotak Mahindra Capital Company Limited (KMCO) , India’s premier investment

bank is a strategic joint venture between Kotak Mahindra Bank ( holding 55%) and

Gold Sachs ( holding 25% ) KMCC offers full services investment banking solutions

to its clients by combining the global reach and expertise of the Goldman Sachs and

the local knowledge and skills of Kotak Mahindra.

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KMCC identifies structures and executes diverse transactions and provide innovative

solutions to corporate and government enterprises. Transactions include mergers and

acquisitions , divestitures and issuance and debt and equity.

Within mergers and acquisitions, KMCC structures and executes a wide range of

domestic and cross border transactions including acquisitions divestitures merger

joint venture corporate restructuring tender offers and defenses against unsolicited

takeover attempts.

KOTAK SECURITIES LIMITED

Kotak Securities limited , a strategic joint venture between Kotak Mahindra Bank

Limited ( holding 75% ) and Goldman Sachs ( holding 25%) is one of India’s largest

brokerage and securities distribution house in India.

The Private Client Group (PCG) of the company provides value added investment

advisory services to the high net worth individuals. NRI investors, trusts , corporate

and Banks. The investment product range offered by PCG covers investment and

trading, equity derivatives, portfolio management IPO’s and Mutual Funds.

Kotak Securities is also a Depository Participant with National Securities Depository

limited ( NSDL) and Central Depository Services Limited (CDSL) providing dual

benefit service wherein the investors can use the brokerage services of the company

for executing the transactions and the depository services for settling them.

OM KOTAK MAHINDRA LIFE INSURANCE LIMITED

OM Kotak Mahindra Life Insurance company limited ( OMKM) is a joint venture

between Kotak Mahindra Bank ( holding 74%) and Old Mutual ( holding 26%). Old

Mutual Plc, a UK based financial services group with 158 years of experience in

insurance and banking is a fortune 500 company listed London Stock Exchange.

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OMKM offers a wide range of innovative life insurance products aimed at making the

Indian consumer financially independent. It operates through a wide networks of 40

branches across the country. The company has 14 products including 3 group

insurance products and 7 riders that can be added into the basic policy. The company

now has a full range of products from pure insurance to saving products and market-

linked products from children’s insurance to retirement solutions.

KOTAK MAHINDRA ASSET MANAGEMENT COMPANY LIMITED

Kotak Mahindra Asset Management Company ( KMAMC) is the asset manager for

Kotak Mutual Fund ( KMMF), which started operations in December 1998, manages

assets of over Rs. 3900 crore contributed investors in various schemes. It operates

through 23 branches all over the country.

KMMF offers schemes catering to investors with varying risk appetites and return

desires. It was the first house in the country to launch a dedicated gilt scheme

investing only in government securities.

The Mutual Fund’s mission is to offer a family of schemes for building investor

wealth. The family of schemes compromise of diverse portfolios to suit different risk/

reward expectations of investors.

KOTAK MAHINDRA PRIME LIMITED

Retail Finance in commercial vehicles, cars and personal loan is a traditional area of

strength for Kotak Mahindra . As for most finance companies, Kotak Mahindra has

invested a considerable amount of resources in vehicle financing. Kotak Primus the

car-financing unit is more impressive.

Kotak Mahindra Prime Limited (KMPL) started with a joint venture between Kotak

Mahindra Bank Limited (KMBL) and Ford Credit International Inc. (USA) (FCII)

formed to finance all non-Ford passenger vehicles. The joint Venture is dedicated to

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financing and supporting automotive and automotive related manufacturers, dealers

and retail customers. The Company was incorporated on 28th February 1996 and

commenced its operations on 1st November 1996. After incorporation and subsequent

commencement of the business by the joint venture. The business of financing non-

Ford passenger cars and its related activities, previously carried out by KMFL are

being undertaken by KMPL. In 2007 Kotak Mahindra Prime Limited because Kotak

Mahindra Prime Limited and the Joint Venture has been cancelled.

KMPL has retained its market leadership by developing and maintaining close

relationship with manufacturers, dealers, direct marketing associates and individual

customers. Currently KMPL is the preferred financier for Hyundai. Mercedes Benz ,

Toyota, General Motors, Honda and Fiat. Additionally , it has good relationship and

market share with Maruti, Telco and M & M.

Highlights of the Company

The company started with a joint venture between Kotak Mahindra Bank Limited ( formerly, Kotak Mahindra Finance Limited ) which holds 60 % of the equity share capital and Ford Credit International Inc., USA that holds the balance 40 % of the equity and 2007 it cancellers the joint venture.

The company has been a significant player in the car finance market in the last 10 years.

The company has been able to maintain increased disbursements year over year due to increased geographic reach and improved depth of distribution.

The company gives inventory funding to dealers.

The company has a distribution network across 53 locations in the country covering over 100 towns.

The company enjoys good relationship with major automobile manufacturers.

The delinquency ratios of the company are the best among the auto finance industry.

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The company has been consistently improving its profits since the last three years.

The existing major competitors in the car finance are:

Reliance Capital Limited.

Axis Bank.

HDFC Bank Limited.

ICICI Bank Limited.

Federal Bank.

State Bank Of India.

Sundaram Finance.

Mahindra and Mahindra Finance.

Kotak Cochin division started its operations in 1997. This Cochin Branch office

operates as head office to other branches in Kerala. It controls the entire operations in

the state. It has four branches in Kerala. They are in Kottayam, Trichur, Calicut and

Thiruvananthapuram. Trichur and Calicut branch started its operations in 1998 and

Thiruvananthapuram branch started in 1999.

Features :

It is a profit centre of KMPL.

The business attitude towards customers is based on IRR.

High level of automation.

It controls the entire business of Kerala.

Profit Centre

Cochin branch is a profit centre of KMPL. Since it’s a profit centre it can decide its

own lending rates. The Cochin division decides the rates and sends it to the corporate

office Mumbai for approval. The corporate office may approve or disapprove it and

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inform the cent, which it takes reasonable. It is only in the case of minimum lending

rate. Highest rate can go up to any figure. The Corporate Office’s decision is based on

certain parameters. They are:

Operations cost.

Delinquency rate.

Margin ( difference between lending rate and borrowing rate )

Product mix.

3.2 VISION

The vision of KMPL is:

The Global Indian Financial Services Brand | Our customers will enjoy the benefits

of dealing with a global Indian brand that best understands their needs and delivers

customized pragmatic solutions across multiple platforms. We will be a world class

Indian Financial service group. Our technology and best practices will be

benchmarked along international lines while our understanding of customers will be

uniquely Indian. We will be more than a repository of our customers’ savings. We,

the group, will be a single window to every financial service in customer’s universe.

The most preferred employer in financial services | A culture of empowerment and a

spirit of enterprise attracts bright minds with an entrepreneurial streak to join us and

stay with us. Working with a home-grown, professionally- managed company, which

has partnership with international leaders, gives our people a perspective that in

universal as well as unique.

The most trusted financial services company | we will create an ethos of trust across

all our constituents. Adhering to high standards of compliance and corporate

governance will be an integral part of building trust. Value Creation | Value Creation

rather than size alone will be our business driver.

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3.3 PRODUCTS AND MARKETS

PRODUCTS AND SERVICES

New Car Financing.

Used Car Financing.

Personal Loan.

Refinancing.

Insurance Services.

New Car Financing :

It is the financing of new cars and maximum funding is 100 %.

Used Car Financing : It is for financing the second hand or used cars and the maximum funding available is 80 %.

Personal loan :

Only existing customers can avail this facility. Those customers who paid over rage half of the total installments and did not make default in the payments of EMI will get personal loans.

Refinancing :

If the customer is a good customer and does not have a background of

committing defaults, he will get refinancing facility after the payment of loan

or when the hypothecation is over.

Insurance :

This is a service by Kotak to its own customers and others also. Kotak works as an intermediary or an agent between the client and the insurance company. Kotak has tie up with 3 insurance companies. They are HDFC CHUBB , Royal Sundaram , and Oriental Insurance. Through this service the non-customers of Kotak will become its customers. For the

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customers it makes the processing very easy not only at the time of opening the insurance but also when the case of claim occurs. Kotak gets commission for this service. It collects premium from customers and pay it to the insurance company. This service is for cars as well as for the two-wheelers also.

KOTAK MAHINDRA PRIME LIMITED

Kotak Mahindra Prime Limited is a subsidiary of Kotak Mahindra Bank Limited

primarily formed to finance all passenger vehicles. KMPL is India’s largest car

finance company. The company is dedicated to financing and supporting the

automobile form of loan for the entire range of passenger cars, multi utility vehicles

and pre-owned cars. The company also offers inventory funding and infrastructure

funding to car dealers. KMPL has preferred financer relationship with the various car

manufacturers in India such as General Motors, Honda, Hyundai, Maruti, Toyota , M

& M etc. KMPL has a robust delivery platform which is critical for a sustained

growth.

PRODUCT PROFILE

Kotak Car Finance is one of the big player in the area of car finance. They extend

finance to all models of cars. Kotak group extends finance to all cars through their

company, KMPL.

Types of Services

KMPL has different types of services like:

1. Car Finance.

2. Dealer Finance.

3. Inventory Funding.

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# CAR FINANCE

KMPL offers a very flexible scheme to suit our needs, a hassle free documentation

and quick processing. This causes the company’s relations with the car manufacturers

to give the maximum benefit of the most attractive deals in the market.

“our commitment is to get you into the driver’s seat quickly while giving you some

really smart options to choose from”

KMPL offers:

the widest range of new and pre-owned cars.

Attractive interest rate.

Flexible schemes.

Speedy loan processing.

New Car Finance

The company offers loans up to 90 % of the ex-showroom price and flexible

repayment theories as per the customer’s convenience.

Margin money scheme

The company provide finance for the acquisition of new cars up to 90% of the

invoice value for certain models. The customer should pay the margin money

(invoice value minus the finance amount) to the dealer directly. He also has an option

to pay the margin of KMPL upon which we would release the entire invoice value to

the dealer.

Set up scheme.

Increase in EMI after every year, 6 months or quarterly( depending upon your needs )

Best suited for the people who want luxury car experience.

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Make payment on time with your growing income ( starting with low EMI’s in the early period of repayment)

Low EMI , Balloon Scheme.

10%-25% of the cost of the car to be paid as last EMI.

Reduced EMI for the entire tenure.

Best for customers who want to dispose off their vehicle at the end of the tenure and are looking at affordable EMIs during the tenure.

Advance EMI Scheme

Make the payments of few monthly installments upfront.

Balance payable through EMIs.

Repay your loan much faster with the advance installments.

Used Car Finance

Owning a car can be a simple, easy and reliable experience with KMPL used car

finance. The company offers up to 90% funding of the car value. The customers may

also avail finance against your existing car.

Pre-approved Loan

Low ticket size loans:

- Loan amount up to 1.5 lacs.

- Minimum documentation.

Preferred Segment Loan

- Loan amount between 1.5 – 15 lacs.

- Hassle free processing.

Funding up to 85% with maximum tenure of 60 months.

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Approve your own loan

For salaried employees:

- Monthly installments equals 40 % of net salary.

- Loan amount equals up to 3 times of your annual salary.

Cash against your car.

Avail this loan by pledging your existing car which is free from any loan/

hypothecation.

Takeover of your existing car loan and generate cash

It’s a loan taken over from the bank where the foreclosure amount is lesser than what

KMPL actually funds on the assets. That is how the cash is generated and the

customer get more than 100% finance.

# Dealer Finance

KMPL has vast experience in providing comprehensive solution to the wholesale

funding requirement of over 125 automobile dealers across the various

manufacturers. KMPL offers superlative experience to automobile dealers by catering

to their entire spectrum of financial requirement through ‘Single Window’ . This

results in better response time to KMPL’s esteemed customers.

The various financial options available to the KMPL customers are:

- Inventory Funding

- Project Funding – Term Loans.

- Setting up of CC/BG/LC through Kotak Mahindra Bank Limited.

KMPL also offers value added services such as Dealer Finance Restructuring and Specific Advisory Services to Dealers.

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Term Loan Options

Term loan is available to automobile dealers for setting up of new dealership

expansion / renovation of showroom / workshop / supplementary working capital

requirement.

Equipment term loan is available to automobile dealers for purchasing the equipments

for their service centre.

Amortizing term loans is available to automobile dealers for purchasing the properties

for The business expansions and new dealerships.

Working capital term loan is available to automobile dealers to find core working

capital / supplement the working capital requirements.

# Inventory Funding

Inventory Funding is available to automobile dealers to finance the working capital

requirement.

Retail linked trade Advance :

Dealer inventory funding facility is linked to retail business source through dealership

counter. It is unsecured / semi-secured advances. Generally the exposure is capped at

Rs. 1 crore based on the dealer’s working capital requirement and credit assessment.

Wholesale finance facility :

It is a semi secured advance available to automobile dealers and is linked with the

Retail business. The maximum exposure under this is Rs. 5 Crore based on the

dealers working capital requirement and credit assessment.

Floor Finance / Single Payment Gateway Plan :

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This caters to the entire working capital requirements. The facility is similar to the

Cash Credit / Over Draft products of banks. The credit exposure is based on the

dealers working capital requirement of credit assessment. Under this products ,

KMPL is the exclusive financier for inventory funding needs of the dealership.

Criteria for applying loan through KMPL

The following is the list stating the person, trust or companies who can avail loan

from KMPL :

- Salaried individuals in the age group of 21 years – 65 years.

- Self employed individuals in the age group of 21 years – 65 years.

- Partnership Firms

- Public and Private Limited Companies.

- HUF’s and Trusts.

Salaried Individuals

Eligibility criteria :

- Minimum age of applicant must be 21 years.

- Maximum age of applicant at the time of loan maturity is 65 years.

- Minimum income should be at least Rs. 1,00,000 per annum.

- Minimum employment of 6 months.

Documents required.

Identity proof - passport , PAN card, election ID card or license.

Income Proof – latest salary slip with form 16.

Address proof - ration card, license, ID card, passport, phone bill or PAN card.

Salary Bank Statement.

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Self Employed

Eligibility Criteria

- Minimum age of the applicant must be 21 years.

- Maximum age of applicant at the time of loan maturity must be 65 years.

- Minimum employment – at least 2 years in business.

Documents Required.

Identity proof - passport, PAN card, election ID card or license.

Income Proof – latest ITR

Address proof - ration card , license, ID card, passport, phone bill or PAN card.

Business Bank Statement

Application Process.

The process of applying loan in KMPL is a 7 steps process. The steps involved

are :

1. Getting Information :

The prospect can get the information on KMPL in a number of ways .

this includes :

- Send Mail to [email protected]

- Visit KMPL or call up any Branch Office.

- Apply on-line.

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- Can send SMS CF < followed by name of your city > at 5675788.

2. Receiving KMPL office :

Kotak offers tailor made schemes based on the customer needs and they are free

to Choose from the schemes made available.

3. Documentation :

Once the vehicles, product and scheme are finalized it will be fine for us to

initiate the process of making finance available to the customers as soon as

possible. In order to process the loan the application smoothly, the previously

mentioned statements of the customers are essential.

4. Credit Evaluation :

A field investigation officer will visit the customer for additional information that

will help the company to process the customer’s loan. A KMPL credit officer will

evaluate the customer’s proposal based on the documents submitted by the

customer along with the FI report.

5. Processing of finance :

After the credit approval, the company will enter into an agreement with the

customer and collect the post dated cheques and ECS mandate.

6. Delivery of Car :

The time has finally arrived at this step, since at this point of time the customer

can take the delivery of their own car.

7. Recovery Agreement :

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At the time of delivery, the customer must ensure that he collects the invoice from

the dealer. Usually registration takes minimum 9 days to 10 days hence the

customers are expected to follow up with their dealer / DSA for the receipt of the

same. The customer must also make sure that the vehicle is insured under

comprehensive insurance plans giving the during the loan period. The company

will send the agreement copy and repayment schedule to the customer at their

correspondence address within 15 days of the loan disbursal.

ALLIANCES AND PARTNERHIP

KMCC is a strategic joint venture between Kotak Mahindra Bank limited and the

Goldman Sachs group . The Brokerage, Distribution and Research functions are

looked after by the Kotak Securities (KS) another joint venture with Goldman Sachs .

KMCL together with KS is a full Service Investment Bank bringing to our clients.

The global reach and enterprise of Goldman Sachs and the local knowledge and the

skills of Kotak Mahindra.

For the employees:

The company also has tie-ups with various external training bodies and institutions

and provide our employees an easy access to open market programs on diverse topics

through the year.

INDUSTRY AFFILIATIONS :

As an investment bank KMCC is registered with the SEBI and is also registered as a

non-banking financial company with RBI. KMCC has a subsidiary company, Kotak

Mahindra Securities Limited ( KMSL ) which looks after the debt broking and which

is registered with NSE .The company is an active member of the Association of

Merchant Bankers of India ( AMBI) . KMSL is a member of the Association of NSE

members of India. The U.K subsidiary with the securities and futures Association and

the US subsidiary with the Securities Exchange Commission.

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3.4 CERTIFICATIONS, AWARDS AND RECOGNITIONS

Kotak Mahindra has received a number of Awards and Certifications at both the

national and international levels. These recognitions is on its various field of

functions including Banking, Insurance, securities, investment banking, asset

management, International asset management. Miscellaneous and wealth

management.

Banking :

ICAI Award :

Excellence in Financial Reporting under Category 1 - Banking

Sector for the year ending 31st March, 2010 .

Asiamoney :

Best Local Cash Management Bank 2010

IDG India :

Kotak won the CIO 100 'The Agile 100' award 2010.

IDRBT :

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Banking Technology Excellence Awards Best Bank Award in IT

Framework and Governance Among Other Banks' - 2009

Banking Technology Award for IT Governance and Value Delivery, 2008.

IR Global Rankings :

Best Corporate Governance Practices - Ranked among the top 5

companies in Asia Pacific, 2009 .

FinanceAsia :

Best Private Bank in India, for Wealth Management business,

2009.

Kotak Royal Signature Credit Card :

Was chosen "Product of the Year" in a survey conducted by

Nielsen in 2009

IBA Banking Technology Awards :

-Best Customer Relationship Achievement - Winner 2008 & 2009

- Best overall winner, 2007

- Best IT Team of the Year, 4 years in a row from 2006 to 2009

- Best IT Security Policies & Practices, 2007

Euromoney :

Best Private Banking Services (overall), 2009 .

Insurance :

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- Outlook Money

Kotak Platinum Advantage Plan - Ranked 1st in Type II ULIP category, 2008

Kotak Long Life Wealth Plus Plans - Ranked 4th in the Type I ULIPs

category

Securities :

FinanceAsia

Best Broker in India - 2010

CNBC Financial Advisor Awards

Best Performing Equity Broker, 2008 & 2009

Asiamoney Brokers Poll

Best Local Brokerage, 2006, 2007, 2008 & 2009

Best Analyst in India – Sanjeev Prasad, 2005, 2006, 2007, 2008 & 2009

FinanceAsia Country Awards for Achievement

Best Broker in India, 2006, 2009 & 2010

Thomson Extel Surveys Awards

India's Leading Equity House, 2007

SuperBrands Council of India

Business Super brand India, 2008

Investment Banking:

Finance Asia

Best Investment Bank in India, 2010

Best Equity House in India, 2010

Best Broker in India, 2010

Asia money

Best Domestic Equity House, 2010

Best Local Brokerage in the Asia money Brokers Poll – 2010

Global Finance

Best Investment Bank in India, 2010

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Euromoney Real Estate Poll

Best Bank for Equity Finance in India, 2010

Asset Asian Awards

Best Domestic Investment Bank, 2010

FinanceAsia Country Awards for Achievement

Best Investment Bank in India, 2006, 2007, 2008, 2009 & 2010

Best Equity House in India, 2008 & 2010

Asiamoney Best Domestic Bank Awards

Best Domestic Equity House, 2008, 2009 & 2010

IFR Asia

India Equity House of the Year, 2008

Global Finance

Best Investment Bank in India, 2008, 2009 & 2010

Asset Asian Awards

Best Domestic Investment Bank, 2006, 2007, 2008 & 2009

Asset management :

ICRA Mutual Fund Awards 2009

Kotak Liquid (Regular Plan) - Ranked as a Seven Star Fund for its 1 year

performance

Kotak Flexi Debt Fund - Ranked as a Five Star Fund for its 1 year

performance

Kotak Flexi Debt Fund - Ranked as a Five Star Fund for its 3 year

performance

Kotak 30 - Ranked as a Five Star Fund for its 3 year performance

International Asset Management :

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Global Investor (Editorial Award)

Asian Asset Manager of the Year, 2009

Miscellaneous:

Businessworld

'Most Valuable CEO' overall, 2010 awarded to Mr. Uday Kotak, Executive

Vice Chairman & Managing Director

CNBCTV 18

'Best Performing CFO in the Banking/Financial Services sector by CNBCTV

18 CFO Awards 2010 awarded to Mr. Jaimin Bhatt

GIREM

GIREM awarded Kotak Realty Funds Group, the "Investor of the Year"

Award for 2009

IBA Banking Technology Awards

Best Use of Business Intelligence - up, 2008

Best Enterprise Risk Management - Runner up, 2008

The Great Places to Work Institute, India

Best Workplaces in India, 2008

Hewitt

10th Best Employer in India, 2007, 2008 & 2009

Financial Insights Innovation Award

Best Innovation in Enterprise Security Management in the Asia Pacific

Region, 2009

Frost & Sullivan

Best Passenger Vehicle Finance Company in India, 2006

CNBC TV 18

Indian Business Leader of the Year, 2008 awarded to Uday Kotak, Executive

Vice Chairman & Managing Director .

Wealth Management

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FinanceAsia

Best Private Bank India – FinanceAsia 2010

3.5 BUSINESS PERFORMANCES

PRODUCT MIX

Product Mix contains mainly the following 2 contents :

1. High yield products where the risk is high like :

- Personal loan.

- Used Car Financing.

2. Low yield products where the risk is low like :

- New car financing.

SCHEMES

A ) Margin Money Scheme –

In this scheme KMPL part finance the car from 65% - 90% for

certain models. The customer will have to make down payment for the margin

amount. The financed amount can be repaid through Equated Monthly Installments.

B) Advanced EMI Scheme –

In this scheme the customer has to pay few installments upfront.

The balance is payable through EMI. It helps the customer to pay off the loan faster.

CUSTOMERS OF KMPL

The customers of KMPL are of two types :

1. External customers: includes the customers and dealers.

2. Internal customers: includes all the employees.

MARKET SEGMENTATION

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It can be in two ways. They are product wise segmentation and customer wise

segmentation.

Product wise segmentation like luxury cars, premium cars, standard cars, new cars

and used cars. Customer wise segmentation like government, employees.

Businessmen. NRIs etc.

MANAGEMENT STYLE OF KOTAK ( Working of MBO)

The entire working of Kotak Mahindra is based on MBO ( management by

objectives). In each quarter every division has to decide its own objectives and

targets. This target is fixed by superiors and subordinates jointly. So each person has

Key Results Area (KRA ) and that person is reasonable for achieving his targets.

KRA can be function wise and target wise. Sometimes they may have to redefine

KRA’s due to the impact of external environment. For example, if KRA is defined on

the basis of expectation that the industry will grow by 10 and it may decline by that

much percentage instead of growing. In such cases KRA’s will be redefined. Senior

sales manager is responsible for state wise sales target and Senior Sales Executive is

responsible for functional targets. In each quarter company makes appraisal on the

performance of that quarter. It follows 360 degree methods of appraisal . So each one

will be evaluated by himself, superiors and subordinates. As per the appraisal they

categorize the performances as mentioned below :

Tab 3-2 APPRAISAL CRITERIA

Outstanding – 150% above target

Exeeds expectation – 100%-150% above target

Meets expectation – 80%-100% of target

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Below expectations – below 80% of target

The salary and incentives in Kotak is based on performance. So outstanding and

exceeds expectation performance will invite higher salary, incentives and promotion,

performance below expectation will be counted as bad performance.

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IV ORGANIZATIONAL STRUCTURE

4.1 CORPORATE STRUCTURE

The Corporate Structure of Kotak Mahindra is as shown in Fig 4-1 :

53

Fig 4-1 CORPORATE STRUCTURE OF KOTAK MAHINDRA

54

CHIEF EXECUTIVE OFFICER

REGIONAL MANAGER

OPERATIONS DEPARTMENT

COLLECTIONS DEPARTMENT

MARKETING DEPARTMENT

CUSTOMER SERVICE DEPARTMENT

OPERATIONS EXECUTIVES

FIELD COLLECTION STAFF SALES PERSON CUSTOMER SERVICE EXECUTIVE

4.2 BUSINESS LEVEL STRUCTURE

4.2.1 MARKETING DEPARTMENT

55

Since Kotak Mahindra is an automobile finance company, the role of marketing

department is very important. It focus on those activities which places the company in

to the minds of its prospects. The department structure is a four level hierarchical

structure headed by the Marketing Manager. The marketing department has about 30

– 35 employees. The other employees include the Chief Marketing Executives,

Marketing Executives and Marketing Executive trainees.

FIG 4-2 MARKETING DEPARTMENT STRUCTURE

4.2.2 FINANCE DEPARTMENT

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Marketing Manager

Chief Marketing Executives

Marketing Executives

Marketing Executive Trainees

Finance Department controls the monetary transactions of the company. The

department comprises of a Finance Manager, Asst. Manager (Finance), executives

and accountants headed by the Finance Manager. There are 10-15 employees in this

department.

Fig 4-3 FINANCE DEPARTMENT STRUCTURE

4.2.3 CUSTOMER RELATIONS DEPARTMENT

57

Finance Manager

Assistant Manager (finance)

Executives ( finance)

Accountants

Customer Relations Department deals with the customer relations and all other

customer related issues. If the customers are not satisfied with the services the

organization cannot sustain in the market. The head of this department is the

Customer Relations Executive. He is the person who deals with the grievances and

other related concerned problems. Other employees includes Asst. Customer

Relations Office, Office assistant and Receptionist.

Fig 4-4 CUSTOMER RELATIONS DEPARTMENT STRUCTURE

4.2.4 HUMAN RESOURCE DEPARTMENT

58

Customer Relations Officer

Asst. Customer Relations Officer

Receptionist Office Assistant

Human Resource Department deals with the needs and wants of the employees of the

organization. This department takes decisions regarding the appointment of the staff

in the organization and also regarding the duties to be assigned to the staff in the

organization. The department is headed by the HR Manager, other employees

includes HR Executive, Asst. Manager and the Department staffs.

Fig 4-5 HUMAN RESOURCE DEPARTMENT STRUCTURE

4.2.5 OPERATIONS DEPARTMENT

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H R MANAGER

H R EXECUTIVE ASSISTANT MANAGER DEPARTMENT STAFF

The Operations Department does the duties related to the processing of loans and

other concerned affairs with the customers. Thus, the department is in charge for the

processing of loans of the customers. It is also in charge of entering details of the

customers in the database of the company. The department has a Branch Operations

Head, staffs and their assistants.

Fig 4-6 OPERATIONS DEPARTMENT STRUCTURE

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Branch Operations Head

Staffs

Assistant

V . FUNCTIONAL ANALYSIS

5.1 MARKETING DEPARTMENT :

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Marketing department is the back born of the company. The department is headed by

a Marketing Manager , who the executives under him. The head of the department

gives instructions to the executives regarding the tools to increase the sales and

selection of the customers.

The main duty of this department is to market their products and make the company

more profitable. This department is marketing the different types of loans to the

customers and they are making the top in this industry. The Manager will guide the

executives and all the final decisions are taken by him regarding the granting of loans

and the other related affairs. The executives who are appointed in the marketing field

are supposed to obey the guidelines given by the department head. The manager will

assign certain jobs for different executives and they are given clear guidelines also.

This department is also interested to increase the market share of the company and

they are succeeding in that effort. The top management is enquiring about the sales to

the marketing manger only. They are supposed to give all the details regarding the

concerned field to the management. Kotak Mahindra is having a very effective

marketing wing and all these wings are under the control of the Marketing Manager.

Fig 5-1 Marketing Flow

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Framing the Scheme

Not satisfied

If satisfied

The marketing flow of Kotak Mahindra starts with the framing of various schemes

which is available on the loans offered on the various automobiles. Once these

Schemes are framed, the company starts thinking about the marketing channels that

can be used to make the customers aware of the newly framed Schemes. The

company usually uses the channels like internet, Television, direct marketing,

hoardings and also used to hold counters on various fairs and festivals. Once the

schemes are communicated to the customers, they have the freedom to accept or

reject. If the customers feels satisfied on the Schemes, they will accept the offer and

takes loan. If he or she is not satisfied, then the customer rejects the offer and the loan

is not taken.

The marketing department has about 30 – 35 employees . The employees includes the

Marketing Manager, Chief Marketing Executives, Marketing Executives and

Marketing Executive trainees. The Marketing Manager sets the sales target for the

time period as per the decision of the management and communicates it to the other

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Marketing channels used

Informing the Customers

No loan is taken

Takes the loan

employees of the department. The employees are provided with incentives if the

targets are met on time as specified.

5.2 FINANCE DEPARTMENT

The finance department deals with the financial activities of the organization. Here,

the officials are experts in the financial fields. This department is headed by an

eminent Financial Manager, who can make the financial details of the organization up

to date. Every year an audit will be conducted for checking the financial position of

the organization and to check the corrections of the accounts.

The Finance Manager will give proper guidelines to the accounting staff and he will

go through the accounts for verification .The accountant and all the other accounts

related staffs are included in this department of the organization. Every day all the

accounting details will be included in the day book. And these details will be signed

by the Financial Manager.

At the time of auditing , the accounts will be presented before the auditor appointed

by the Management. The Finance Department gives clear idea to the top management

regarding how the company is running. Every day all accounts will be settled by the

Finance Department.

Here the details regarding the given loan amount, repayment from the customer and

all are being recorded. The finance department will give clear instructions to the top

management and to the concerned officers regarding the financial position of the

organization by reporting it to the top management only they can take necessary

steps.

The Assistant Manager ( finance ) will be having the charge in the absence of the

Finance Manager. He is supposed to take all the decisions in the absence of the

finance manager. The executives will be assisting the finance manager in his duties.

They all will help the manager in taking actions in the office. The accountants are the

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people who records the financial details into the books of accounts. The mistakes will

be found at the time of audit. The auditor will be checking all the accounts.

The Finance Department will be dealing with the interest rates and the other related

areas. They all are giving information to all the top management in all the matters

regarding the financial stability and the other concerned areas.

AUDIT DETAILS

Audit Committee

The Audit Committee consists of Mr. Deepak Gupta, Chairman, Mr Jaimin Bhatt and

Mr. Chandrashrekhar Sathe. The Quorum comprises of any two Directors.

Auditors

The Company’s auditors Messrs. Deloitte Haskins & Sells, Chartered Accountants,

Baroda, retire at the Eleventh Annual General Meeting. Messrs. Deloitte Haskins &

Sells, Chartered Accountants, Baroda, have consented to act as Auditors of the

Company and are eligible for reappointment.

The audit works of Kotak Mahindra is outsourced to Delloite. The following is the

Auditor’s report submitted to the Kotak Mahindra by them in the financial year 2007:

To The Members of Kotak Mahindra Prime Limited

1. We have audited the attached Balance Sheet of Kotak Mahindra Prime

Limited as at 31st March, 2007, and also the Profit and Loss Account

and the cash flow statement for the year ended on that date annexed

thereto. These financial statements are the responsibility of the

company’s management. Our responsibility is to express an opinion

on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards

Generally accepted in India. Those standards require that we plan

and perform the audit to obtain reasonable assurance about whether

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the financial statements are free of material misstatement. An

audit includes examining, on a test basis, evidence supporting the

amounts and disclosures in the financial statements. An audit also

includes assessing the accounting principles used and significant

estimates made by management, as well as evaluating the overall

financial statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued

by the Central Government of India in terms of sub-section (4A) of

section 227 of the Companies Act, 1956 and on the basis of such

checks of the books and records of the company as we considered

appropriate and according to the information and explanations given

to us, we give in the Annexure a statement on the matters specified in

paragraphs 4 and 5 of the said Order.

5.3 CUSTOMER RELATIONS DEPARTMENT

Customer Relations Department deals with the customer relations and all other

customer related issues. Nowadays , customers are very important for the

organization. If the customers are not satisfied with the services the organization

cannot survive. Thus the head of this department is the Customer Relations

Executives. He is the person who deals with the grievances and other related

concerned problems.

A Customer Relations officer will be appointed under him to solve the problems of

the customers. This department is very essential for the smooth functioning of the

organization. If this department is not functioning properly many problems will be

there for the customers.

The Customer Relations Department is very essential in an organization as this

department is deals with all the matters concerned with the customer satisfaction. So

for making the customers satisfied, this department must function properly. In every

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organization, a customer relations officer is selected with due care. Thus the customer

relations officer is appointed next to the customer relations executives. He is having

the charge in the absence of the customer relations executives.

The main duties of the department are:

Clarifying the doubts of the customers.

Give support for the customers when they come to the office.

Helping them in solving the problems.

Report them the matters or affairs concerned with them that occurs in the office.

Taking actions according to the customer’s interest.

Making the customers at ease when they are approaching the office.

Kotak gives much importance to their Customer Relations Management. It has much application in the field of financial services. In most cases old customers will become new customers or they bring new customers. Company sends feedback forms to customers to collect their opinion as part of maintaining customer relations, it provides three customer oriented products. They are :

1. Pre – approved loan. (Personal loan)

2. Loyalty Scheme: when old customer comes for a new loan he gets 1.5 of the value of old vehicle or 85 % of the vehicle value whichever is higher.

3. Advantage in rate: when an old customer becomes new customer he will get the loan at a rate, which is, less than the prevailing rates.

The customer care department has mainly 3 functions:

A) Customer Queries :

On the balance outstanding, date and amount of EMI foreclosure amount, validating foreclosure, RTO confirmation etc.

B) Closing of loans :

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When customers close their loan the company has to issue No

Objection Certificate (NOC) to cancel the hypothecation. Issuing NOC

is a function of Customer Care Department.

C) Balancing Confirmation :

Customers may enquire about the balance remaining as principal,

interest paid and payable for various purposes like filing tax returns. They

may ask for account statement, repayment chart etc.

Customer Complaints

The different types of complaints are:

- Agreement copy not received.

- Sales Complaint.

- Collection Complaint.

- EMI banking Complaint.

- Operations Related Complaint.

Complaint handling process

The process involved in handling the complaints are as mentioned

below :

Discuss the complaint with the customers

Entering into the complaints log.

Forward to another department.

Close the entry in the complaint book with a note of action taken.

Review by the branch manager.

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Customer requests:

Repayment schedule.

Statement of account.

Letter for penal charges.

NOC on termination of contract / foreclosure.

Foreclosure statement.

NOC for duplicate RC book.

5.4 OPERATIONS DEPARTMENT :

Operations Department plays an important role in the organization. This

department deals with all the accounts of the firms and with the customers.

The Operations Department does the duties related to the processing of loans

and other concerned affairs with the customers. Thus, the department is in

charge for the processing of loans of the customers. It’s also in charge of

entering details of the customers in the database of the company.

Role of Operations department in Kotak Mahindra:

Regional operations control department is situated in Chennai. It is the

topmost body of the Operations Department. All the payments and receipts

regarding the loans are all recorded in this department. From this department,

NOC’s are issued to the customers. If a customer closes his entire loan

account he or she will ask for their NOC. Then from the custom service

department, a request for NOC will be sent to the head of the department in

Chennai showing all the details of the repayment of the loan. From these, the

NOC will be sent to the customer service. The Operations Department is a

controlling mechanism and service department to other departments.

Company has policies for everything. For example, the branch head can issue

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a loan up to a specified amount. Above that limit it needs permission from the

corporate office. Operations Department checks whether all these policies are

being followed or not. So it’s a policy checking functions too.

The 3 basic functions of Operations Department are:

1) Folder checking and disbursements :

Folder checking means checking that all various required documents are

there or not. After checking all documents it sanctions amount of loan and

disburses it to the dealer through the Demand Draft.

2) Banking Function :

Operation Department sends cheques given by customer on due date foe

collection. Also it collects all dues and penalties from customers directly

as well as from collection agent.

3) NOC on termination of hypothesis :

Issuing the NOC in the case of period over foreclosure.

Legal compliance is also a function of the Operations Department. All the legal

compliance like sales tax, service tax, tax liabilities of employees and liaison with the

bank is dealt by the Operations Department.

5.5 HUMAN RESOURCE DEPARTMENT :

Human Resource Department deals with the needs and wants of the employees of the

organization. This department takes decisions regarding the appointment of the staff

in the organization and also regarding the duties to be assigned to the staff in the

organization. The department plays an inevitable part in the organization since it

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takes actions for making the employees satisfied with the working atmosphere and the

environment as such.

The head of this department is the Human Resource Manager (HR Manager ). He

takes all the important decisions in the Human Resource Department. Some of the

main duties of the Human Resource Department are:

Appointing appropriate people for the appropriate jobs in the organization.

Making good working atmosphere for the employees n the organization.

Meeting the needs and wants of the employees.

Conveying the needs and wants of the employees to the top management.

Providing necessary needs for the employees for performing them better in their assigned tasks.

Conducting interviews and tasks for the employees and also for the people who are applying for the certain jobs.

Making a good selection from the group.

Giving promotion to the right person at the right time.

These are the main duties and functions that are concerned with this

department. It’s very essential for the employees of the organization to be

satisfied with the services provided by the company. Otherwise they will not

do their duties properly. This department acts as a Link between the top

management and the employees. Under the Human Resource Manager, an

executive will be there to help the Manager in coordinating all these affairs.

The Human Resource is one of the vital factor behind the success of every

organization. So for managing these manpower, an eminent person is very

essential. So the manager will be more close to the employees and he will

know all the problems related to the employees. The HR Manager will try to

provide as much as the facilities to the employees of the concern.

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All the final appointments of the company is made at the head office at

Mumbai. The job aspirants can apply directly to the branch office. The branch

office will forward their application to the Mumbai office. The HR manager at

the head office will scrutinize the application forms and will accept the

candidate if he is qualified and stands with the job specification and job

description. Thus the final appointment will be made at the Mumbai office.

5.6 COLLECTIONS DEPARTMENT :

Collection Department does the duty of collecting the money from the customers as the repayment of loans and also as down payment and other sort of cash inflows to the organization. The main duties of this department are as follows :

Collecting down payment from the customers.

Collecting the monthly installments.

Sending the collection agents to the particular destinations.

Making sure that the people are correctly repaying the amounts.

Informing people regarding the cheques and other concerned details.

Allocate collection agents to different locations.

In other words, collection department mainly deals with default in

installments and its collections. The functioning of the department is as

follows :

Customer has to give post-dated cheques while obtaining loan. Operations

Department sends these cheques to banks for collection. Collection

department’s work starts when the cheque bounces. When the 1st cheque

bounces , the company will allow the customer to settle down it . If the

customer doen not pay it in time and if the 2nd cheque too bounce, the

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company will send legal notice to the client. If the third cheque also bounce,

the company will start recovery steps.

Once the recovery steps starts the customers has to pay off the entire amount

which includes the principal amount , interest and other costs.

Costs include :

o Rs. 259 per each bounced cheque as dishonor fee.

o 3% of EMI per month as overdue expenditure.

o Commission of collection agents as collection expenses

o Legal costs and other expenses.

Once the vehicle is recovered , company will start to sell it off to get back its

money. Before that it gives an opportunity to the customer to repay the entire

amount within a period of 7-14 days. If the company gets excess amount

through sales then the excess portion will be passed to the customer. And if

there is loss and such loss is less than Rs. 50,000, it will be written off. If it is

more that Rs.50,000 , legal actions is taken. Collection of default is done

through private collection agencies.

5.7 SALES DEPARTMENT :

Sales Department is responsible for achieving the sales target. The department

deals with financing of new cars and used cars, personal loans, refinancing etc. It

functions mainly through Direct Marketing Associates (DMA’a). Thus DMA’s are

the core part who brings sales to the company.

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Fig 5-2 SALES FLOW

The following is the Sales Flow Process at KMPL:

If satisfied If not

Satisfied

Sales Flow starts with the Customer. When the customer decides to take an

automobile loan, he can contact the dealers of Kotak Mahindra. The dealers are

available at almost every car showrooms. The dealer informs the customer about the

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Customer Dealers

No loan taken

Scheme 1

Scheme 2

Scheme 3

Agreement Down payment

Down payment

Delivery

Installments Follow up

various schemes of loans available to them on different cars. If the customer is

satisfied and impressed with the scheme available, the agreement is signed between

the customer and the company. The agreement will clearly specifies the amount of

loan taken, down payment amount and the number and amounts of installments.

After signing the agreement, the customer pays the down payment and makes the

delivery of the car. Then the customer pays the first installment as per the agreement

made and this is continued till the loan amount is paid in full.

5.8 CUSTOMER CREDIT DEPARTMENT :

Customer Credit Department has a Credit Officer who will evaluate credit worthiness

of the customer based on the documents submitted by him along with the field

investigation report. A field investigation officer will visit the customer for additional

information that will help to process the loan.

Credit Evaluation is mainly based on 5 C’s. They are:

1) Character

2) Commitment

3) Consistency

4) Capacity

5) Collectability

Each department docket must contain the following:

Application form

Field investigation report

Pricing matrix showing the scheme

Credit Evaluation Scorecard.

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Functional documents obtained for taking credit direction like:

- Salary Certificate (form 16).

- Land Ownership Forms.

- Audited annual accounts.

- Income tax return

Credit Approval Process

Credit Approval Process is a 16 step process. It includes the

following :

1) Application with other document.

2) Credit evaluation.

3) Credit history of customer with Kotak or any other group company.

4) Field Investigation Report.

5) Identity Proof.

6) Signature Verification.

7) Finance Company / Bank Reference .

8) Employment / business.

9) Rejection.

10) Score Card – Company has a Score Card to assess the customer and the risk. Financial Information

11) CIBIL

12) Guarantor’s financials

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13) Exposure approval ( it’s the amount financed by KMPL to its customers )

14) Credit evaluation.

15) Approval /

16) Credit Appraisal Report: Prepared by the credit appraisal officer after credit evaluation.

QUALITY

KMPL has established a centralized customer service activity to ensure high quality and timely responses to the customer needs. The robust system platform ensures the above standards are met. KMPL’s launch of the website is a commitment by the organization to provide all the stakeholders including customary accurate and up to date information. These all are very useful. The company is giving loans for the loans for the customers on the basis of their repaying capacity and their financial background too. The different services offered by Kotak Mahindra are :

Collection agents to collect the cash from the customers home or office.

Easy documentation procedure.

Fast and flexible finance schemes.

Eminent executives to give correct information.

Very efficient customer care department.

Website to give all details regarding the organization.

Offices in all parts of the state for easy access.

Well organized management.

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VI . ORGANIZATIONAL ANALYSIS

SWOT ANALYSIS

6.1 STRENGTH

Processing Speed:

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The loan processing speed is very high at Kotak Mahindra. It takes

maximum 1 week for the KMPL customers to access their automobile finance

from the company since their application.

Customer Satisfaction:

Kotak Mahindra Prime Limited (KMPL) is a customer centric organization having

dedicated customer service personnel servicing our customers keeping in mind the

following values:

-Ownership

-Accuracy

- Transparency

KMPL has dedicated customer service desks at Kochi providing personalized service

thereby ensuring faster resolution and minimum turnaround time. KMPL has

evolved into centralized customer service activity to ensure high quality and timely

response to customer needs. The robust system platform ensures the above

standards are met.

Ranked 6th among the private players out of the best 10 in India :

KMPL is rated as the 6th Best Automobile Finance Company in India. This is

one of the strength of the company.

4th in Brand Awareness :

KMPL is ranked as the 4th in the Brand Awareness in Automobile Finance

industry in urban area.

6.2 WEAKNESS

Limited branches :

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The company is having a very limited branches in face only a branch at

cochin. This is one of the limiting factor of the company.

Slow Career development:

Even though the company is offering a good package to its employees , the

career path for its employees is very slow moving. The company demands

years of experience in the concerned department to get promoted to the next

higher level.

Preference of people for nationalized banks :

The customers still show a preference to the nationalized banks because of its

assurity. This is one of the most important weakness of KMPL.

6.3 OPPORTUNITIES

The company provide limited automobile financial services abroad. There is a

great opportunity for the company to expand its business abroad.

Changing lifestyles of the people is another big opportunity for KMPL to

explore its business .

Getting close to the customers is the key element of KMPL. Its well exercised

by the company at the present status and its also an opportunity for the

company to proceed with.

6.4 THREAT

Managing Multi cultural and multi geographical workforce :

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The multi cultural and multi geographical workforce is a major threat for the

company. It’s high time for KMPL to cope up with these societal changes.

The scenario prefers change in the government policies. There is a very

limited support from the government for the improvement of private financial

players.

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VII FINDINGS AND CONCLUSION

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The study helped to understand the working style of KMPL. The company facilitates

its business through its various departments. It was understood that the

departmentalization at KMPL is very apt and its one of the core factor that facilitates

the functioning of their business activities. The crux of the company’s structure is

undoubtedly their perfect bonding with customers and employees. It was also seen

that the company is offering very healthy and friendly services to their customers.

The organization do hold a separate wing for their customers which always keeps in

touch with their customers. The organization has a separate wing for their customers

itself. Apart from the customer care, the company provides a good and friendly

working environment for their employees. The Human Resource department is very

active in the organization. The employees are free to approach their department heads

at times of any emergencies and can also give their suggestions to the management

which will accepted for sure if it support the status on demand. The focus on the

betterment of the customers and employees is the forcing factor that keeps the

company and their employees and customers together forever resulting in the

prosperity of the business both in terms of profitability and satisfaction. The

opportunities of the company involves the changing lifestyle of the people. The

people in the current society, especially the young generation is now demanding a

better lifestyle in which owning an automobile is a vital part. The company must

utilize this opportunity and introduce attractive options to their customers. The

company has a lots of challenges on its way, wherein the competitor’s challenge form

the major part. The major competitors are the HDFC bank and ICICI bank. Its

recommendable to the company to focus more on the statistical methods to mitigate

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and overcome these challenges like the trend analysis and moving averages to

identify the trend of automobile sales. It is a fact that the company is doing its best to

incorporate all its strengths and that is the main reason that made the company to fit

into the list of the BEST TOP 10 AUTOMOBILE FINANCE COMPANIES in India.

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BIBLIOGRAPHY

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3. Sharma R.K., Shashi K. Gupta. ‘Management Process & Organizational Behavior’. Kalyani Publishers, 2009.

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accounts”

5. http://www.kotak.com/Kotak_GroupSite/annual_reports_flash/fy06-07/

report/kmprime.html ( Access : May 20110

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