SUMMER TRAINING PROJECT REPORT

ON
STUDY OF MUTUAL FUND OF AXIS BANK

AXIS BANK PVT LTD

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF
Master of Business Administration (MBA)

ACKNOWLEDGEMENT
The present work is an effort to throw some light on Axis Mutual Fund. The work
would not have been possible to come to the present shape without the able guidance,
supervision and help to me by number of people.
With deep sense of gratitude I acknowledge the encouragement and guidance received
by my organizational guide Mr. .................) and other staff members.
I convey my heartful affection to all those people who helped and supported me during
the course, for completion of my Project Report.

...............................
Enrollment No.:

EXECUTIVE SUMMARY
This marketing strategic plan has been written keeping in mind the Indian operations of
banking system. It aims first, at analyzing the banking system in India and finding a
place in it for AXIS BANK. It then sets out to describe the target audience for the
product range and finally suggests a host of marketing strategies and activities that will
help AXIS to achieve its target of becoming the #1 BANKING SYSTEM in India. The
plan begins with a brief overview of the product category being dealt. It also dwells
briefly on the history of the company and its current position and activities. The project
moves on to the crux of the matter the marketing plan to be followed by AXIS BANK
in India. Firstly, the objectives behind this plan and the core strategy are stated.
Customers to be eventually targeted are described and compared with competitors
customer targets. After starting the objectives and reasoning behind them, the actual
marketing programs are described in detail. This includes aspects such as pricing,
advertising, promotion, sales, channels, and the company website.
Suggestions are made on each and every one of these aspects; improvements and
innovations are recommended. The plan then goes on to the customer analysis section.
The customer base is identified and various segments are pointed out. Various criteria
and factors have been taken into consideration while segmenting the market. We have
also tried to ascertain why customers buy these products, how they choose, and what
factors matter most when making their decisions. The last few pages of this marketing
plan deal with the various ways in which the plan, once implemented, can be monitored
and controlled.

TABLE OF CONTENT
TOPICS

PAGE NO.

CHAPTER _1: INTRODUCTION

1-6

1.1 Overview of Industry as a whole

CHAPTER _2: COMPANY PROFILE

7-28

2.1 Profile of the organization

2.2 Problems of the organization
2.3 Competition Information
2.4 S.W.O.T. Analysis of the Organization

CHAPTER _3: CONCEPTUAL DISCUSSION

29-36

CHAPTER _4: RESEARCH METHODOLOGY

37-41

4.1 Research objective

4.2 Research design
4.3 Questionnaire formulation
4.4 Methodology Adopted
4.5 Limitation

CHAPTER _5: DATA ANALYSIS AND INTERPRETATION

42-54

CHAPTER _6: FINDINGS, CONCLUSION

55-58

CHAPTER _7: RECOMMENDATION

59-60

ANNEXURES
BIBLIOGRAPHY

CHAPTER- 1
INTRODUCTION

OVERVIEW OF INDUSTRY AS A WHOLE

The concept of mutual funds in India dates back to the year 1963. The era between 1963
and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn
assets under management (AUM), by the end of its monopoly era, the Unit Trust of India
(AXIS). By the end of the 80s decade, few other mutual fund companies in India took
their position in mutual fund market.
Kothari Pioneer was the first private sector mutual fund company in India which has now
merged with Franklin Templeton. Just after ten years with private sector players
penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund
companies in India.
The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank
Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of
India Mutual Fund.
The succeeding decade showed a new horizon in Indian mutual fund industry. By the end
of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds
started penetrating the fund families. In the same year the first Mutual Fund Regulations
came into existance with re-registering all mutual funds except AXIS. The regulations
were further given a revised shape in 1996.

RANGE OF PRODUCTS AND SERVICES

Mutual funds Industry unit holding pattern
From the data collected from the mutual funds, the following has been observed
i)

As on March 31, 2008 there are a total number of 1.6 crores investors accounts (it

is likely that there may be more than one folio of an investor which might have been
counted more than once and actual number of investors would be less) holding units of
Rs. 79,601 crores. Out of this total number of investors accounts, 1.56 crores are
individual investors accounts, accounting for 97.42% of the total number of investors
7

accounts and contribute Rs.32,691 crores which is 41.07% of the total net assets. The
total number of investors account is lower in comparison with the total number of
investors accounts as on March 31, 2007 as the above data includes information only of
AXIS Mutual Fund (which is registered with SEBI on January 14, 2008). The data of the
Specified Undertaking of AXIS (not registered with SEBI) is not available with us.
ii)

Corporates and institutions who form only 2.04% of the total number of investors

accounts in the mutual funds industry, contribute a sizeable amount of Rs.45,470 crores
which is 57.12% of the total net assets in the mutual funds industry.
iii)

The NRIs/OCBs and FIIs constitute a very small percentage of investors accounts

(0.54%) and contribute Rs.1440.18crores (1.81%) of net assets.

Unit holding pattern Private/public sector mutual funds

From the analysis of data on unit holding pattern of Private Sector Mutual Funds and
Public Sector Mutual Funds, the following observations are made:1.

Out of a total of 1.6 crores investors accounts in the mutual funds industry, (it is

likely that there may be more than one folio of an investor which might have been
counted more than once and therefore actual number of investors may be less) 42.93 lakh
investors accounts i.e 27% of the total investors accounts are in private sector mutual
funds whereas the 1.17 crores investors accounts ie.73% are with the public sector mutual
funds which includes AXIS Mutual Fund. However, the private sector mutual funds
manage 71.2% of the net assets whereas the public sector mutual funds own only 28.8%
of the assets

Risk factors
Mutual Funds and securities investments are subject to market risks and there can be no
assurance or guarantee that the Schemes objectives will be achieved. As with any
investment in securities, the Net Asset Value of Units issued under the Schemes may go
up or down depending on the various factors and forces affecting the capital market. Past
performance of the Sponsors/ AMC/ Mutual Fund/ Schemes and its affiliates do not
indicate the future performance of the Schemes of the Mutual Fund. The Sponsors are not
8

responsible or liable for any loss or shortfall resulting from the operations of the Schemes
beyond their contribution of Rs.10,000/- each made by them towards setting of the
Mutual Fund The Names of the Schemes do not in any manner indicate either the quality
of the Schemes or their future prospects and returns. Investors in the Schemes are not
being offered any guarantee / assured returns. Please read the Offer Documents carefully
before investing.

SEBI OKAYS FIDELITY PLANS

Fidelity Investments has received permission from SEBI to launch equity funds in India.
Fidelity has already filed a draft prospectus with SEBI for its maiden equity fund,
Fidelity Equity. The proposed fund will invest across sectors. The portfolio will comprise
60-80 stocks. The fund will ordinarily invest up to 95 per cent of its assets in equities, but
may invest up to 20 per cent in money market instruments.
SBI Mutual Fund has launched a mid-cap fund, Magnum MidCap Fund. It will invest
in stocks with a market capitalization of Rs 200-2,000 crores. The minimum
investment amount is Rs 5,000. The fund offers dividend and growth options. The
offer closes on March 17.
Principal Mutual has declared dividend of 100 per cent on Principal Resurgent India
Equity Fund. The record date is February 24.
Sundaram Mutual has declared dividends of 20 per cent each on Sundaram Select
Focus and Sundaram Growth. The record dates are March 4 and March 11
respectively.
AXIS Mutual Fund has declared a maiden dividend of 12 per cent for AXIS Basic
Industries Fund and a dividend of 25 per cent for AXIS Growth and Value Fund.
The record date for both the dividend payments is March 10. The fund house has
also declared a dividend of 18 per cent for AXIS Balanced Fund. The record date
is March 17.

 Franklin Templeton Mutual Fund has proposed a dividend for Franklin India
Taxshield. The record date is March 18.
HDFC Mutual proposes to declare dividend on HDFC Prudence and HDFC Balanced
Fund. The record date for the dividend will be March 18.
Franklin Templeton Mutual has mopped up Rs 1,950 crores from the initial offering
of Franklin Flexicap. This is the largest amount mobilized by any open-end fund
IPO. The fund will be open for an ongoing basis from March 7.

SEBI'S New Check & Balances

Alliance Capital Advisor: Alliance Capital Management Holding LLP has appointed
Blackstone Group LP to advise it on its Indian operations. The latter will look at strategic
options for the mutual fund business. There have been indications that Alliance may want
to wind up its mutual fund operations in India.
AXIS Crisis & After How the Crisis Originated
What was the Crisis that Overtook AXIS during 1999 to 2002?
Mr.Yogi Aggarwal, columnist of "india-syndicate.com/" further points out in his
illuminating articles published online"The facts as revealed by the government appointed Tarapore Committee and the other
committees which preceded it show a trail of bungling, structural flaws and AXIS
officials using public money in an "imprudent" manner to help various controversial and
powerful companies in stock exchange dealings that cost the AXIS
several thousands of crores and severely eroded investor wealth. What they reveal is not
just incompetence but a flouting of all prudential norms to favour certain individuals and
companies.
"While the Tarapore Committee saw no reason to believe in any "breach of
confidentiality" leading to the large scale redemptions in Unit-64 during April and May
2001 when around Rs 5,000 crores was taken out by big corporate and banks from Unit10

64, it severely criticized the way the scheme worked. A fundamental flaw was that Unit64 lived beyond its means, rewarding unit holders with dividends beyond its capabilities
and propping up the price of Units well beyond their real worth.

Million shares of DSQ Software for Rs 25.1 crores.

In the next article we give the recommendations as made by the Deepak Parekh
Committee
Mutual funds to be more Transparent
Finance Minister Yashwant Sinha called upon the mutual funds to focus on product
innovation, equity research, risk management and market reach, and endeavour to instil
greater confidence among investors.
He was addressing the sixth annual seminar of the mutual fund industry in Bombay on
Thursday.
Citing RBI data and the SEBI NCAER survey, Sinha said out that less than 8 per cent of
households channelize their savings into capital markets and that just 1 per cent of
household investment is in equity markets.
He also outlined the initiatives SEBI is taking, through the various committees.
Among the issues under active consideration are:

Reduction in the processing of investor applications in the initial offer period to 42

days from 90 days;

Use of unclaimed funds lying with mutual funds for investor education;

Creation of level playing field between mutual funds and FIIs in the context of
international investing

Formulation a code of conduct and development of best practices in the industry;

11

Standardization of portfolio disclosures;

Modification in the structure of mutual funds to company form of organization; and

Publication of the annual reports of asset management companies.

He said that the Indian markets are very safe, despite the growing volatility that has been
seen in the recent period.
AXIS chairman, P S Subramanian said that the quality of investor services in the industry
has grown over the years. He said there is a scope to increase the penetration and
volumes in the mutual fund industry by reaching out to more investors. He noted that
technology has significantly altered the manner in which mutual funds conduct their
business.
In the context of globalization of capital markets, he pointed out that risk management
has become critical for mutual funds. He also indicated that corporations will have to
adopt best practices in information disclosure and dissemination.

MARKET PRESENCE
Money market development of mutual funds
Resource mobilization by Mutual Funds improved during 1997-98. The number of offer
documents of mutual funds filed with SEBI increased substantially from 32 in 1996-97 to
60 in 1997-98. The amount mobilized through new schemes and subscriptions to open
ended schemes including Unit 64 of AXIS also increased. Indeed the gross mobilization
of resources by all mutual fund schemes during the year was around Rs. 13,000 crores
which was for the first time higher than the resources mobilized by the primary market.
Even net of redemptions in open ended schemes the resources mobilized by the mutual
funds during the year was higher than the resources raised through primary market. These
improvements were partly in response to the regulatory changes brought about by SEBI
following the publication of the Mutual Funds 2000 Report and the notification of new
regulations. The emphasis of these new regulations is on empowerment of investors,
greater compliance of regulations by mutual funds, obligations of trustees as frontline
regulators, improved disclosure standards in offer documents through the introduction of
12

standard offer document, standardization of valuation norms for investments and

computation of NVA. The regulations also sought to address the areas of misuse of funds
by introducing prohibitions and restrictions on affiliate transactions and investment
exposures to companies belonging to the group of sponsors of mutual funds.

13

CHAPTER-2
COMPANY PROFILE

14

COMPANY PROFILE

2.1 PROFILE OF THE ORGANISATION

AXIS Mutual Fund, the largest private sector Mutual Fund company in India with an
asset base of Rs 25,500 crores, will be the leading Fund Manager for Government of
India's newly created National Investment Fund (NIF).
Announcing this AXIS Asset Management Company Managing Director and Chief
Executive Officer (CEO) U K Sinha told newsmen here this evening that besides the
AXIS Mutual Fund, the other two leading financial institutions which were short listed
for the massive job were State Bank of India (SBI) and the Life Insurance
Corporation(LIC) of India.
He said the new fund had been created by the Centre with a view to investing the entire
disinvestment fund into the NIF corpus and re invests them in health, education and other
social causes through a calculated manner.
Since the scheme was still in its preliminary stage, the government was yet to create a
separate corpus for the fund, which was announced only last month.
Referring to the corporate plan of AXIS Mutual Fund whose ownership had recently
changed hands following the purchase of its 25 per cent stake each by the country's four
leading banks and financial institutions like SBI, Bank of Baroda(BOB), Punjab National
Bank (PNB) and the LIC last month with a total capital infusion of Rs 1236 crores, Mr
Sinha said under the new management they were planning to leverage their own
capabilities with a much higher target oriented growth.
AXIS AMC CEO, however, categorically ruled out the possibility of any clash of interest
among the new stake holders of the company in view of their similar business interest in
terms of Mutual Fund.
15

Replying to a related query he said though each of these institutions had their own mutual
fund businesses, it would not clash in any manner with that of AXIS mutual Fund since
the agreement among them would prevent them from doing so.
In the wake of over 33 per cent growth in the Indian Mutual Fund industry since April
this year, Mr Sinha said it had enabled the AXIS Mutual Fund to increase its Asset base
by over Rs 5,500 crores during this period from Rs 20,000 crores achieved till
March. "We are confident to maintain a similar growth path in the coming years too."
About the huge potential and the actual position, Mr Sinha claimed that AXIS Mutual
Fund had already been enjoying about 67 per cent domestic market share of the country's
around one crores investors in mutual fund products.
AXIS Asset Management Company became a private company last month with the four
sponsors, Life Insurance Corporation of India, State Bank of India, Punjab National Bank
and Bank of Baroda paying back the government its equity worth Rs 1,236.95 crores in
the company. Each sponsor now owns a 25 per cent stake in the company and under the
terms of the new agreement, the owners will not be allowed to change their shareholding
pattern.
We are also keen to increase our exposure in the overseas market through the offshore
funds, said Sinha.
AXIS Mutual Fund is also exploring investment opportunities in emerging sectors like
the knowledge process outsourcing, textiles and biotech through the private equity and
venture capital arm, AXIS Venture Funds, said D. S. R. Murthy, executive director,
AXIS Asset Management Company.

OUR MISSION AND VALUES

MISSION
1) Customer service and product innovation tuned to diverse needs of individual and
corporate clientele
16

1) Continuous technology up gradation while maintaining human values

2) Progressive globalization and achieving international standards
3) Efficiency and effectiveness built on ethical practices

17

CORE VALUES
Customer satisfaction through providing quality service
effectively and efficiently
Smile, it enhances your face valueis a service quality stressed
on periodic customer audits
Maximisation of stakeholder value
Success through team work,integrity and people

NEWLY LAUNCHED DEBT FUNDS BY THE AXIS BANK

Axis Bank has launched two debt funds. Axis Treasury Advantage Fund and Axis
Liquid Fund. The New Fund Offer (NFO) price for both the schemes is Rs 1000.
The new fund offer (NFO) subscription open and close on October 8, 2009.
Axis Treasury Advantage Fund, is an open ended debt scheme. The investment
objective of the scheme is to provide optimal returns and liquidity by investing
primarily in a mix of money market and short term debt instruments.
The minimum application amount for both the schemes is Rs. 5000 and in multiples
of Re. 1 thereafter. The scheme will not charge any entry or exit load.
The benchmark for the schemes will be Crisil Liquid Fund Index. The fund managers
of both the schemes will be Ninad Deshpande and Sriraj Bhattacharjee

18

The members of the Board are :

Smt. Shikha Sharma

Managing Director & CEO

Shri M. M. Agrawal

Deputy Managing Director (Designate)

Shri N.C. Singhal

Director

Shri J.R. Varma

Director

Dr. R.H. Patil

Director

Smt. Rama Bijapurkar

Director

Shri R.B.L. Vaish

Director

Shri M.V. Subbiah

Director

Shri K. N. Prithviraj

Director

19

ORGANISATIONAL STRUCTURE

20

21

MUT UAL FUNDS - INVESTMENT OBJECTIVES AND VALUATION

POLICIES

What are Mutual Funds?

A Mutual fund is an organization that invests in a diversified portfolio of financial
securities on behalf of a pool of subscribers to its schemes. These securities can be in the
form of equity, debt instruments, money market instruments etc., or a mix of these
securities, depending on the scheme objectives.
Why is it such a good idea to invest in Mutual Funds?
Diversification: Mutual Funds invest their corpus in diversified portfolios which
reduces the risk contained in the investment. This also means that you can invest
small sum of Rs.5000/- and still be a part of a portfolio where the market value of single
scrip might be much more than the total investment.
Research: These mutual funds perform an extensive research of the company before
making an investment decision giving you the benefit of expert advice.
Liquidity: These funds are extremely liquid; some of them even have features like
across-the-counter redemption. This feature is especially useful at times when the market
is rising or falling.
Professionally Managed: These funds are managed by professionals who have the
required expertise in buying and selling stocks. As a result they make better decisions on
entering and exiting a particular stock, which is very crucial for the overall performance
of a portfolio. Moreover, mutual fund investment also rids the investor of maintaining
records, eliminates hassles with the broker for payment, delivery and other arduous back
office tasks.
Savings on transaction costs: As purchases and sales are done in bigger quantities, the
funds also get the advantages of lesser brokerage and other reduced transaction costs.

22

Advantages: In India these funds become even more attractive because of the tax
advantages, like indexation benefits , long term capital gains tax , tax free dividends and
much more.

INVESTMENT OBJECTIVE (REGULATION: 43)

The moneys collected under any scheme of a mutual fund shall be invested only in
transferable securities in the money market or in the capital market or in privately placed
debentures or securities debts.
Provided that moneys collected under any money market scheme of a mutual fund shall
be invested only in money market instruments in accordance with directions issued by the
Reserve Bank of India;
Provided further that in case of securities debts such fund may invest in asset backed
securities and mortgaged backed securities.

THE ADVANTAGES OF INVESTING IN A MUTUAL FUND

The advantages of investing in a Mutual Fund are:

1.

Liquidity

In open-ended schemes, you can get your money back promptly at net asset value
related prices from the Mutual Fund itself. With close-ended schemes, you can sell your
units on a stock exchange at the prevailing market price or avail of the facility of direct
repurchase at NAV related prices which some close-ended and interval schemes offer you
periodically.
2.

Transparency

You get regular information on the value of your investment in addition to disclosure on
the specific investments made by your scheme, the proportion invested in each class of
assets and the fund manager's investment strategy and outlook.

23

3.

Flexibility

Through features such as regular investment plans, regular withdrawal plans and dividend
reinvestment plans, you can systematically invest or withdraw funds according to your
needs and convenience.
4.

Choice of Schemes

Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.

5.

Well Regulated

All Mutual Funds are registered with SEBI and they function within the provisions of
strict regulations designed to protect the interests of investors. The operations of Mutual
Funds are regularly monitored by SEBI.
In the following chapters we propose to discuss all relevant information about Mutual
Funds in India, the regulatory and legal structure governing them that a common investor
ought to know. The literature is mostly drawn from the website of SEB, but suitably
tabulated to provide ready information

6.

Professional Management

The investor avails of the services of experienced and skilled professionals who are
backed by a dedicated investment research team which analyses the performance and
prospects of companies and selects suitable investments to achieve the objectives of the
scheme.
7.

Diversification

Mutual Funds invest in a number of companies across a broad cross-section of industries

and sectors. This diversification reduces the risk because seldom do all stocks decline at

24

the same time and in the same proportion. You achieve this diversification through a
Mutual Fund with far less money than you can do on your own.
8.

Convenient Administration

Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such
as bad deliveries, delayed payments and unnecessary follow up with brokers and
companies. Mutual Funds save your time and make investing easy and convenient.
9.

Return Potential

Over a medium to long-term, Mutual Funds have the potential to provide a higher return
as they invest in a diversified basket of selected securities.
10. Low Costs
Mutual Funds are a relatively less expensive way to invest compared to directly investing
in the capital markets because the benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.

Growth of mutual fund in India

The Indian Mutual fund business has passed through three phases. The first phase was
between 1964 and 1987, when the only player was the Unit Trust of India, which had a
total asset of Rs. 6,700/- crores at the end of 1988. The second phase is between 1987 and
1993 during which period 8 funds were established (6 by banks and one each by LIC and
GIC). The total assets under management had grown to Rs. 61,028/- crores at the end of
1994 and the number of schemes were 167. The third phase began with the entry of
private and foreign sectors in the Mutual fund industry in 1993. Kothari Pioneer Mutual
fund was the first fund to be established by the private sector in association with a foreign
fund. The share of the private players has risen rapidly since then.
Within a short period of seven years after 2000 the growth statistics of the business of
Mutual Funds in India is given in the table below:

25

NET ASSETS OF MUTUAL FUNDS AS AT 31.03.2008 [SOURCE:

WEBSITE OF SEBI]
The net assets of all domestic schemes of mutual funds were Rs.3,23,838.30 crores as on
March 31, 2008 as against Rs. 68,193.08 crores as on March 31, 2000 . The details are
given below:

Banks

Amount(Rs Crs)

Percentage

AXIS

2,17,000.2

67.00

Public Sector

31,334.34

9.68

Private Sector

75,503.67

23.32

Total

3,23,838.30

100.00

During the year 2007-2008, the share of AXIS in the total assets of the mutual funds
industry has declined to 67% from 77.9% in 2007. Net assets of other public sector
mutual funds have also shown a decline from 12.09% in 2007-2008 to 9.68% However,
net assets of private sector mutual funds have increased from 9.97% in 2007-08 to
23.32% .
There are 34 private Mutual Funds in the fray and they have seized about 25% of the
market share in the brief period of 7 years, mobilizing above Rs.50000 Crores from the
public

SCOPE FOR DEVELOPMENT OF MUTUAL FUND BUSINESS IN

INDIA
A Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. India has a burgeoning population of middle class now estimated
26

around 300 million. A typical Indian middle class family can have liquid savings ranging
from Rs.2 to Rs.10 Lacs today. Investments in Banks are liquid and safe, but with the
falling rate of interest offered by Banks on Deposits, it is no longer attractive. At best a
part can be saved in bank deposits, but what is the other sources of investment for the
common man? Mutual Fund is the ready answer. Viewed in this sense globally India is
one of the best markets for Mutual Fund Business, so also for Insurance business. This is
the reason that foreign companies compete with one another in setting up insurance and
mutual fund business units in India. The sheer magnitude of the population of educated
white collar employees provides unlimited scope for development of Mutual Fund
Business in India.
The alternative to mutual fund is direct investment by the investor in equities and bonds
or corporate deposits. All investments whether in shares, debentures or deposits involve
risk: share value may go down depending upon the performance of the company, the
industry, state of capital markets and the economy; generally, however, longer the term,
lesser the risk; companies may default in payment of interest/ principal on their
debentures/bonds/deposits; the rate of interest on an investment may fall short of the rate
of inflation reducing the purchasing power. While risk cannot be eliminated, skillful
management can minimize risk. Mutual Funds help to reduce risk through diversification
and professional management. The experience and expertise of Mutual Fund managers in
selecting fundamentally sound securities and timing their purchases and sales, help them
to build a diversified portfolio that minimizes risk and maximizes returns.

BRIEF HISTORY
FIRST PHASE - 1964-87
Unit Trust of India (AXIS) was established on 1963 by an Act of Parliament. It was set
up by the Reserve Bank of India and functioned under the Regulatory and administrative
control of the Reserve Bank of India. In 1978 AXIS was de-linked from the RBI and the
Industrial Development Bank of India (IDBI) took over the regulatory and administrative
control in place of RBI. The first scheme launched by AXIS was Unit Scheme 1964. At
the end of 1988 AXIS had Rs.6,700 crores of assets under management.

27

SECOND PHASE - 1987-1993 (ENTRY OF PUBLIC SECTOR FUNDS)

Entry of non-AXIS mutual funds. SBI Mutual Fund was the first followed by Canara
bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank
Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92).
LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47,004 as assets under
management.

THIRD PHASE - 1993-2003 (ENTRY OF PRIVATE SECTOR FUNDS)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund
industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the
year in which the first Mutual Fund Regulations came into being, under which all mutual
funds, except AXIS were to be registered and governed. The erstwhile Kothari Pioneer
(now merged with Franklin Templeton) was the first private sector mutual fund registered
in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive
and revised Mutual Fund Regulations in 1996. The industry now functions under the
SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds
setting up funds in India and also the industry has witnessed several mergers and
acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets
of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under
management was way ahead of other mutual funds.
FOURTH PHASE - SINCE MAY 2009
The second is the AXIS Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile AXIS which had in March 2000 more than Rs.76,000 crores
of AUM and with the setting up of a AXIS Mutual Fund, conforming to the SEBI Mutual
Fund Regulations, and with recent mergers taking place among different private sector
funds, the mutual fund industry has entered its current phase of consolidation and growth.
As at the end of September, 2004, there were 29 funds, which manage assets of
Rs.153108 crores under 421 schemes.

28

CONCEPT
There are many entities involved and the diagram below illustrates the organisational set
up of a mutual fund:

Organization of a Mutual Fund

FEATURES
Unique Features of AXIS their Impact on its Functioning [Extract from the Report of
"Corporate Positioning" Committee]
In the initial stages, AXIS had been performing a hybrid role of both a financial
institution and a mutual fund. However, over the last few years, its role as a financial
institution has significantly diminished and it has positioned itself purely as the largest
mutual fund in the country. There is also a significant trend emerging which suggests that
financial institutions will gradually wither away or merge into universal banks. In this
scenario, commercial banks and mutual funds will emerge as the primary institutions for
the mobilization of household savings. This reinforces the need for AXIS to evolve as a
pure mutual fund. At the same time, consideration has to be given to the fact that AXIS
has promoted and holds controlling interest in a number of institutions outside the pure
mutual fund industry.

THE OBJECTIVES OF ASSOCIATION OF MUTUAL FUNDS IN

INDIA

29

The Association of Mutual Funds of India works with 30 registered AMCs of the country.
It has certain defined objectives which juxtaposes the guidelines of its Board of
Directors. The objectives are as follows:

This mutual fund association of India maintains high professional and ethical

standards in all areas of operation of the industry.

It also recommends and promotes the top class business practices and code of

conduct which is followed by members and related people engaged in the activities of
mutual fund and asset management. The agencies who are by any means connected or
involved in the field of capital markets and financial services also involved in this code of
conduct of the association.

AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual

fund industry.

Association of Mutual Fund of India does represent the Government of India, the

Reserve Bank of India and other related bodies on matters relating to the Mutual Fund
Industry.

It develops a team of well qualified and trained Agent distributors. It implements a

program of training and certification for all intermediaries and other engaged in the
mutual fund industry.

AMFI undertakes all India awareness program for investors in order to promote

proper understanding of the concept and working of mutual funds.

At last but not the least association of mutual fund of India also disseminate

information on Mutual Fund Industry and undertakes studies and research either directly
or in association with other bodies.

The consorters of Association of Mutual Funds in India

BANK SPONSORED

SBI Fund Management Ltd.

BOB Asset Management Co. Ltd.

Can bank Investment Management Services Ltd.

30

AXIS Asset Management Company Pvt. Ltd.

INSTITUTIONS

GIC Asset Management Co. Ltd.

Jeevan Bima Sahyog Asset Management Co. Ltd.

PRIVATE SECTOR INDIAN:

Bench Mark Asset Management Co. Pvt. Ltd.

Cholamandalam Asset Management Co. Ltd.

Credit Capital Asset Management Co. Ltd.

Escorts Asset Management Ltd.

JM Financial Mutual Fund

Kotak Mahindra Asset Management Co. Ltd.

Reliance Capital Asset Management Ltd.

Sahara Asset Management Co. Pvt. Ltd

Sundaram Asset Management Company Ltd.

Tata Asset Management Private Ltd.

PREDOMINANTLY INDIA JOINT VENTURES:

Birla Sun Life Asset Management Co. Ltd.

DSP Merrill Lynch Fund Managers Limited

HDFC Asset Management Company Ltd.

PREDOMINANTLY FOREIGN JOINT VENTURES:31

ABN AMRO Asset Management (I) Ltd.

Alliance Capital Asset Management (India) Pvt. Ltd.

Deutsche Asset Management (India) Pvt. Ltd.

Fidelity Fund Management Private Limited

Franklin Templeton Asset Mgmt. (India) Pvt. Ltd.

HSBC Asset Management (India) Private Ltd.

ING Investment Management (India) Pvt. Ltd.

Morgan Stanley Investment Management Pvt. Ltd.

Principal Asset Management Co. Pvt. Ltd.

Prudential ICICI Asset Management Co. Ltd.

Standard Chartered Asset Mgmt Co. Pvt. Ltd

AXIS Mutual Fund ties up with Dena Bank for distributing its MF schemes

AXIS Mutual Fund (AXIS MF) and Dena Bank today announced a strategic tie-up

for distribution of AXIS MF schemes. Under the agreement, Dena Bank will offer the
entire bouquet of AXIS MF's schemes across the bank's selected branches
September 12, 2005: AXIS Mutual Fund (AXIS MF) and Dena Bank today announced a
strategic tie-up for distribution of AXIS MF schemes. Under the agreement, Dena Bank
will offer the entire bouquet of AXIS MF's schemes across the bank's selected branches.
Presently AXIS MF (with assets under management of over Rs.25000 crores) reaches out
to its investors through its wide distribution network comprising 65 Financial Centers
(UFCs), 271 Chief Representative offices, 58 Chief Agents, over 19000 AMFI certified
Financial Advisors and through tie-ups with several Banks and Department of Post.
With today's tie-up, AXIS MF is further enhancing its distribution capabilities. AXIS MF
will now also be offering its schemes initially through 80 branches of Dena Bank
including 41 Fin Mart branches across India.
Announcing the AXIS MF's tie-up with Dena Bank, Dr R H Patil , Chairman, AXIS
AMC said, "This initiative reflects AXIS MF's strategy to rapidly expand in the retail
market and value-add its access network to complement the Mutual Fund's growth
32

strategy in the Indian mutual fund sector. With this tie-up millions of customers of Dena
Bank will get an opportunity to invest in various schemes of AXIS MF closer to their
doorstep at the branches where they do their banking transactions."
"Dena Bank has got a dominant presence in Gujarat and Maharashtra which happen to be
important retail markets for AXIS MF." he added

DEFINITION OF IMPORTANT TERMS/CONCEPTS IN MUTUAL

FUND INDUSTRY
Before proceeding to consider the salient provisions of SEBI regulations governing
mutual funds, it is necessary to get familiar with the basic terms and phraseology used in
Mutual Fund literature.
Net Asset Value ("NAV"): The performance of a particular scheme of a mutual fund is
denoted by Net Asset Value (NAV). Mutual funds invest the money collected from the
investors in securities markets. In simple words, Net Asset Value is the market value of
the securities held by the scheme. Since market value of securities changes every day,
NAV of a scheme also varies on day to day basis. The NAV per unit is the market value
of securities of a scheme divided by the total number of units of the scheme on any
particular date. For example, if the market value of securities of a mutual fund scheme is
Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the
investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by
the mutual funds on a regular basis - daily or weekly - depending on the type of scheme.

Why should one invest in Mutual Funds through AXIS Bank?

We meet your needs: We believe that every one has specific needs and priorities. Your
needs could vary from buying a house, getting your daughter married to providing for
your childs education. You might even want to travel the world. All your needs are very
important for us. We can help to fulfill your needs to reality by helping you select
schemes, which would be consonance with your needs.

33

We work towards building an Investment Culture: It would be our constant

endeavor to inculcate saving and organized investing habits in you. We will help you plan
your investments and build a healthy mutual fund portfolio, which would be an optimal
solution for your needs. Cultivating an investment culture will not only help you but also
your family.
With AXIS Bank- Mutual Fund services, you can consult with your own Investment
Advisor and invest in a Mutual Fund Scheme that is right for you. A great opportunity, to
get organized and make your investment more in line with your real needs.
Risk Factors: All the investments in the securities market are subject to market risks and
the NAV of schemes/plans may go up or down depending upon the factors and forces
affecting securities market. Past performance is not necessarily indicative of the future.

34

2.2 PROBLEMS OF THE ORGANIZATION

AXIS Bank personal loaning is about the futurethe secure and comfortable future

one would like to provide for himself and his loved ones. When a person plan for that
future, he starts with his goals, identifying the things he had like to be able to afford, what
theyll cost and when he will need the money to pay for them. The next step is creating a
strategy for accomplishing those goals. He will discover that saving and investing are
essential to AXIS Bank personal loaningand that if he wishes, he can find someone
with professional experience to help him decide how to make the most of the money he
already has. Another part of planning is writing a will or perhaps creating a trust that lets
a person create a legacy by sharing the assets he has accumulated with the people or
organizations he had want.

Some people know exactly what their Bank goals are. And some do not. Or maybe

they are spending all their energy managing their current Bank situation. If thats the
case, it may take a special effort to concentrate on what one thinks is important for the
future. But one will find its worth the time to consider the next 5, 20 and 40 years of his
life to anticipate where he had like to be when that time arrives. There are some goals that
most people share: staying out of debt, owning a home, and having a secure retirement.
Others may be more specific to paying for childrens college tuition or starting ones own
small business. There are no right answers about what the goals should bewith the
possible exception that most people have to be concerned about affording a Bankly
secure retirement. Thats why each persons plan is unique.

In industrialized countries, the journey through life tend to go through stages. The

stage we find our self in will have an impact on our AXIS Bank personal loaning.
Modigliani and Brumberg (1954) devised a model to explain these stages.

35

2.3 COMPETITION INFORMATION

ICICI BANK

Loans are for salaried & self employed individuals

Loans are available from Rs. 20000 to Rs. 15 lakhs

Tenures from 12 to 60 months

No security & guaranter required

All loans are done via EMI- equated monthly installments

Processing fees of 2%

3 months bank statement

Latest 2 salary slips

Latest 2 years ITR

Proof of turnover, proof of continuity current job,ID proof, residence proof, office

proof .

HDFC Bank

EMI as low as Rs. 36 per Rs. 1000 per month for 36 months &

50% off processing fees.

V 3 months bank statement

V No security and guranter required
V Loans are available for salaried as well as self employed people.
Baf India

Personal loans for as low as 18% per annum for 5 years.

v Tenure from 12-48 months.

V Loans are available from 2000-10 lakhs
SBI

Term- 2 years, the total amount- 100000 (11,75%), 500000 (11.75%) & 1000000

(19%).
V Every type of loan is provided without any guranteer.

36

2.4 S.W.O.T. ANALYSIS OF ORGANISATION

AXIS is a statutory corporation established under the Unit Trust of India, Act 1963 with a
view to encouraging saving and investment and participation in the income, profits and
gains accruing to the Corporation from the acquisition, holding, management and
disposal of securities. The Act came into force on 1st February 1964.
The initial capital of AXIS was Rs.5 crores which has been contributed as under:

Reserve Bank of India (RBI) Rs.2.50 crores

Life Insurance Corporation of India (LIC) Rs.0.75 crores

State Bank of India (SBI) and its subsidiary banks Rs.0.75 crores

Scheduled banks (other than SBI and its subsidiary banks) and notified financial
institutions Rs.1.00 crores

The initial capital forms part of US-64 and the subscribers hold units in that Scheme. In
1975, the AXIS Act was amended and by virtue of the amendment, the Industrial
Development Bank of India (IDBI) took over the rights and responsibilities of RBI under
the Act and the share of the initial capital held by RBI was transferred to and vested in
IDBI.
AXIS is the largest player in the mutual fund industry with total investible funds of
domestic schemes (at Market Value) as at 30th June, 2008 of Rs.2,17,000.2crores
constituting about 67% of the total investible funds of the industry. US 64 with a total
unit capital as at 30th June 2007 of Rs.60,786 crores had a substantial share of these
investible funds.

STRENGTHS

Its large size with consequential economies of scale;

37

Its nation-wide well entrenched distribution network and consequently its wide
reach and capacity to mobilize large resources;

Its brand image arising out of a public Its large size with consequential economies
of scale;

Its nation-wide well entrenched distribution network and consequently its wide
reach and capacity to mobilize large resources;

Its brand image arising out of a public perception that the safety of funds is
assured by its pseudo Government character, which may not be entirely
unjustified.

The fact that it does not have an AMC to whom management fees would have to
be paid which results in higher returns available to unit holders.

WEAKNESSES

Axis bank has to face competition from the other banks.

It is very difficult to create a brand.

Demands of todays customer is very high ,therefore it becomes a tough job to

satisfy the customers.

OPPORTUNITIES

Increasing market of the mutual funds.

Availability of the improved and latest technology.

Axis can get success or high profits by fulfilling the unfulfilled needs of the
customers.
38

As the education level in the country is improving there are a lots of investors
who are investing in the mutual funds.

THREATS

With the increase in the no. of investors there is also increase in the no. of the new
competitors in the market.

The mutual fund is totally a technology based business which is quite complex.

CHAPTER-3
CONCEPTUAL
DISCUSSION
39

CONCEPTUAL DISCUSSION

WONDERFUL OPPURTUNITY IN INVESTING IN MUTUAL

FUNDS
BY ALL accounts, 2005-2007 has been the wonderful years for investors in and
managers of mutual funds. There has been a considerable increase in the assets under
management of equity funds and profitability has thus increased for fund houses.
Investors, too, have never had it so good.
Many of the new mutual funds schemes in which investors poured substantial sums have
performed reasonably well. And the new schemes have not been stark under-performers,
as in earlier years. In a year in which the mutual funds in india were subjected to severe
stress due to strained liquidity conditions, the axis bank has deleivered a strong

40

performance. They have categorically reinforced the fact that mutual funds remain the
most suitable avenue for retail investors to build wealth.
Yet the mutual funds industry remains driven by the kind of marketing initiatives where
the interest of the brokers is paramount.

There are no debates on what could be done to save investors from the clutches of
the brokers or on product development.

Visibly, there are no attempts to link product development to feedback from

investors and market performance of funds.

Inefficient products are left unaddressed, suggesting a lack of research into

product performance.

Communication about assessment of fund performance is simplistic and

consequently, in many cases, misleading.

These may be a consequence of the small size of the industry as of now. As its size
improves, investor interests may regain their rightful place. There is, however, reason to
believe that the industry structure does not provide scope for developments. The
mutual fund industry may be forced to focus on doing simple things, mainly managing
index funds better. Innovations that matter may be driven into the fold of private equity
unless the incentive structure is re-worked.
Inefficient products: A sore point about mutual funds is that inefficient products are just
left to languish. Substantial sums invested in sector funds, index funds, bond funds,
balanced funds and monthly income plans are under-performing. We are, however, yet to
see the kind of restructuring necessary to make them more suitable to an investor's
portfolio.
For instance, indices such as BSE-100 and BSE-200 have consistently outperformed the
Sensex and the Nifty by about four percentage points per annum over the past three years.
There is, however, no attempt to introduce index funds at least on BSE-100.

The Important Follow-ups for AXIS Mutual Funds are

41

Adherence to best practices: Status and Future Agenda

The IOSCO has set out three objectives--protection of investors, ensuring fair, transparent
and efficient market and reduction of systemic risk--which securities regulations need to
address. Further, to enhance the ability of the regulatory system to attain these objectives,
the IOSCO has also laid down a set of guiding principles. (see Annexure II). As we have
discussed in the last section, the reform initiatives taken in the past decade have
addressed these objectives in varying degrees, which have resulted in the emergence of a
more modern and competitive securities market. In this section, we attempt to evaluate
the existing regulatory framework broadly using the IOSCO principles as criteria and to
identify problem areas, which call for future reform initiatives to strengthen the current
system. This chapter is divided into five sections. The second section deals with
regulatory issues: the regulators' mandate, their autonomy, powers and capacity to
enforce regulation and their coordination to make regulations effective. Self-regulation as
well as prudential issues are also discussed under this section. The third section outlines
the legal issues concerning the securities market. The fourth section deals with
crosscutting themes relating to the regulated market, namely, market infrastructure, and
issues relating to primary market and transparency. The challenges facing the mutual fund
industry are discussed in the fifth section. The discussion in this chapter provides some
examples of current practices, recognizing that these practices will and should change as
the markets change and as technology and improved coordination among regulators make
other strategies available.
Enforcement of securities regulatory
The SEBI has powers to carry out routine inspections of market intermediaries to ensure
compliance with prescribed standards. It also has investigation powers similar to that of a
civil court in terms of summoning persons and obtaining information relevant to its
enquiry. Action is taken on the basis of investigation. The enforcement powers of SEBI
include issuance of directions, imposition of monetary penalties, cancellation of
registration and even prosecution of market intermediaries. To ensure effective and
credible use of enforcement powers, the SEBI has adopted measures such as development
of a stock watch system, uniform price bands and establishment of a Market Surveillance
Division.

42

While SEBI has powers of direct surveillance of the stock exchanges, members of stock
exchanges and other market intermediaries registered with it, SEBI has no powers over
listed companies. Further, the present penalty levels in many cases are not high enough to
effectively deter market players from regulatory violations. In particular, the amount of
monetary penalty for non-compliance with respect to disclosure, information
requirements, insider trading and market manipulation is very inadequate. To cite an
example, a maximum monetary penalty of only Rs.1, 000/- can be imposed in case of
failure to comply with the provisions of listing agreement. Similarly, under the SEBI Act
the penalty for insider trading and non-disclosure of acquisition of shares and takeovers is
only Rs.5 lakh. The Group believes that there is a need to allow SEBI enhanced authority

Cooperation in Regulation
Various segments of the domestic financial market are getting increasingly integrated.
There have also been progressive linkages between the domestic and international capital
markets. As a result, the regulatory interventions or their absence in one market tend to
have repercussions in other markets that are more serious and more widespread than in
the past. Further, with the emergence of more and more financial supermarkets and
growing complexity of financial transactions, there are increasing instances of the same
market intermediary coming under the purview of multiple regulatory bodies. These
factors have raised the potential for regulatory gaps as well as overlaps, thereby
underlining the need for greater cooperation among various regulators.
Currently, coordination among domestic regulators is occurring through the High Level
Group on Capital Markets (HLGCM) comprising the RBI, SEBI, the IRDA and Finance
Ministry. The HLGCM has set up two Standing Committees: one for regulatory
coordination and the other for coordination in matters relating to the development of debt
markets. The Committee meets periodically to exchange information and views. Besides,
to address specific issues such as DvP system or asset securitization, the RBI and SEBI
have been coordinating through the institution of working groups. The Group observes
that there is scope to further strengthen the coordination efforts. There may be merit in
formalizing the HLGCM by giving it a legal status. Besides, the HLGCM needs to meet
more frequently and its functioning needs to be made more transparent. Also, a system
43

needs to be devised to allow designated functionaries (not necessarily only at the top
level) to share specified market information on a routine and automatic basis.
As regards coordination with regulators in other countries, the RBI has put in place a
system of exchange of need-based information in respect of international operations.
However, the powers of SEBI to assist foreign regulators or to enter into MOUs or other
cooperation arrangements are not explicitly provided by legislation, although SEBI has
signed a MoU with the Securities Exchange Commission of the USA. Hence, the Group
is of view that necessary legislative changes need to be made to enhance SEBI's scope in
this regard.

Self-Regulation
The SEBI Act provides for promotion and regulation of SROs (i.e., stock exchanges).
The stock exchanges are empowered to make rules and regulations for their members and
for regulating the conduct of respective members. However, self-regulation is not always
effective, because the current ownership and governance structures of many stock
exchanges allow scope for conflict of interest. These exchanges are owned and managed
by members who enjoy exclusive trading rights. In the broker-owned exchanges, brokers
elect their representatives to regulate activities of the exchange, including those of the
brokers themselves. This raises fairness issues, because the members of stock exchange
governing boards have access to valuable information about market participants.
Elimination of such conflict of interest through demutualization, which implies
separation of ownership of exchange from the right to trade on it, can promote fairness
and reinforce investor protection.
Further, the slow evolution of the Association of Mutual Funds of India (AMFI) as a SRO
has meant continuation of substantial regulatory burden on SEBI. In this regard, the
Group suggests that SEBI assist the AMFI to develop into a full-fledged SRO. Similarly,
in money and government securities markets, Fixed Income Money Market and
Derivatives Association of India (FIMMDA) and Primary Dealers Association of India
(PDAI) are operating as industry level associations, who are gradually taking on the role
of SROs. There is as yet no regulatory oversight of the RBI over these emerging SROs.
44

However, to facilitate these associations to emerge as full-fledged SROs, the RBI is

engaging them in a consultative process, which needs to be further intensified. On their
part, to promote integrity of the markets, FIMMDA and PDAI need to establish a
comprehensive code of conduct and best practices in securities transactions and also have
a mechanism to enforce such codes. The RBI can play a supportive role here.

LEGAL ISSUES
Institution-specific regulations
The legal framework constrains the RBI from exercising uniform powers vis-a-vis
different groups of players, even though the activity regulated is the same because of a
peculiar legal arrangement. The amended Securities Contract Regulation Act (SCRA) has
conferred on the RBI the responsibility of regulation of Government securities and
money markets, but not the necessary enforcement powers to regulate these markets. To
regulate these markets, the RBI therefore resorts to its regulatory authority over the major
participants in these markets such as banks, financial institutions and primary dealers
through separate institution-specific legislation. With respect to banks, the RBI has
statutory powers of inspection, investigation, surveillance and enforcement under
Banking Regulation Act, 1949. As regards financial institutions, the regulatory powers
are available to the RBI under the RBI Act 1934. The RBI's regulatory powers over FIs
are not as comprehensive as over banks. With regard to Primary Dealers, the RBI
exercises regulatory powers on the basis of guidelines issued by RBI and MOUs signed
between PDs and RBI on a contractual basis. This underlines the need for (a) the same
legislation to include both regulatory responsibilities and the authority to carry them out
and (b) the focus to shift from institution-specific regulation to market-specific
regulation.

MARKET ISSUES
It is important to recognize the trade-off between over-regulation and high cost of
compliance. Over-regulation may minimize market friction, but can potentially kill a
market. To dilute this tradeoff, it is important to modernize the microstructure.
(Microstructure relates to the manner in which a market is organized and the trading and
post-trading technology the market adopts.) As regulations become more and more
45

complex, certain regulatory objectives can be more easily attained through changes in
microstructure rather than further addition to regulatory law.

Market Infrastructure
Screen-Based Trading System
As enunciated in Chapter II, the equities market has witnessed a quantum improvement in
trading technology during the 1990s as it moved away from the open-outcry system of
trading to a computer screen-based trading. The new technology has not only increased
transparency in trading, but also facilitated the integration of different trading centers into
a single trading platform. Permitting of internet trading has enabled investors across the
globe to route orders through the internet for execution on the Indian stock exchanges. In
contrast to the equities market, the government securities market and the market for
money market instruments are largely negotiated markets. Although the NSE established
a wholesale debt market segment for exchange trading, members generally use this
segment only for reporting trades undertaken by them in the negotiated market, rather
than trading on the exchange.
Depositories and dematerialization
To ensure transferability of securities with speed, accuracy and security, the Depositories
Act was passed in 1996, which provided for the establishment of securities depositories
and allowed securities to be dematerialized. Following the legislation, two depositories
(NSDL and CDSL) have so far been established. Further, the compulsory
dematerialization of shares for trading purpose has been introduced in a phased manner
with the aim of synchronizing the settlement of trade and transfer of securities
irrespective of geographical locations, and eliminating the ills associated with paperbased securities system such as delay in transfer, bad delivery, theft and forgery. Although
the process of compulsory dematerialization is nearing completion, its full benefits have
not been reaped because of slow progress in introduction of rolling settlement.
With the appropriate infrastructure in place, there is now scope for taking further
advantage of depositories to promote retailing of government securities. The RBI has
taken a step in the right direction by allowing NSDL and CDSL to have a second SGL
46

account for depository participants who in turn can hold in custody government securities
on behalf of the final investors. This will facilitate holding of government securities in
demat form.

Primary Issues and Transparency

Private Placement Market
High costs of regulatory compliance associated with public issues of debt have made
issuers prefer the private placement market. The private placement market has registered
tremendous growth in the last few years. In 1999/2000, private placements accounted for
84 percent of total resources mobilized by the corporate sector. Preponderance of private
placement can potentially strip the market of its ability to discipline issuers and thereby
enhance systemic risk. Once investors have used the private placement route, they cannot
signal their changing evaluation of the business prospects of the issuers, because there is
no market in which they can sell. The dominance of private placement in primary issue
market possibly reflects an absence of regulatory level playing field in the sense that
public issues may be over-regulated while private placements could be under-regulated.
Corporate disclosure
With a view to enabling investors to take informed decisions as well as to promote
transparency, regulations have over the years become more stringent by requiring
disclosure to be more frequent and wider in scope. Currently, disclosure in India extends
to material having a bearing on the price of a security, and entities who either have
significant interest in a company or seek management control. A company offering
securities is required to make a public disclosure of all relevant information through its
offer documents. After a security is issued to the public and subsequently listed on a stock
exchange, the issuing company is required to make continuous disclosures, including
through publication of yearly audited balance sheets and quarterly un-audited financial
results. Moreover, the disclosure of material information, which could have a bearing on
the performance of the company, has to be made available to the public immediately.
Transparency in the debt market

47

As regards transparency in trading, the debt market is lagging behind the equity market.
The cash market in debt securities throughout the world prefers to operate through
negotiated deals either through telephone or an electronic dealing system like Bloomberg.
This is because unlike the equity market, the bond market participants are generally
wholesale institutional investors who put in large deals at a time, which may not always
be possible through the screen based order driven system. It is only in the futures market
that the principles of anonymity, price time priority, nationwide market and settlement
guarantee are known to work. As stated earlier, wholesale institutional investors have yet
to show adequate inclination to use the anonymous order matching system for executing
their debt securities transactions.

MUTUAL FUNDS
SEBI is the principal regulator of the mutual fund industry. Mutual funds in India are
constituted in the form of trusts. The funds sponsor executes the trust deed, which
outlines the liabilities and obligations of the trustees in relation to the unitholders. The
day-to-day operations of the fund are carried out by the asset management company
(AMC). The board of trustees oversees the funds activities and enters into a management
agreement with the AMC.
SEBI has put in place standards for the eligibility and the regulation of those who wish to
market or operate a collective investment scheme. Eligibility criteria have been set in
terms of net worth, track record and internal management procedure. The regulations lay
down disclosure requirements, procedures for calculating and declaring net asset values
(NAV) of mutual fund schemes, accounting standards and a code for advertisements.
Regulations are also prescribed to ensure arms-length relationship between the trustees
and the AMC. SEBI is responsible not only for registration and authorization of schemes,
but also for inspection of registered mutual funds and remedial action against any
regulatory infraction.

48

CHAPTER- 4
RESEARCH
METHODOLOGY

49

RESEARCH METHODOLOGY
4.1 OBJECTIVES
The present study has been undertaken with the following objectives: To analysis the conceptual issues pertaining to AXIS Mutual funds with their
implications for a developing country like India.
To examine the theoretical framework of AXIS Mutual fund in India to provide clues
for growth strategies of AXIS Mutual industry in India.
To study the role of AXIS Mutual in the economic development of the country, so as
to bring out the biases and inadequacy of the government policy related to the Mutual
funds in the country.
To determine the factor that effect the purchasing decision of mutual fund
To study the legal and regulatory frame work of AXIS Mutual fund in India;
To study the working of AXIS Mutual fund industry in India in terms of its practices,
procedures and constraints within which, it has been operating;.
To determine the age group which is most influenced by mutual fund
To determine the income group which is most influenced by mutual fund .

Conducting research in various parts of the city in order to get the statistical data

for commenting on future of mutual funds in India.

To know the market scenario of the mutual funds.

Customer acquisition by motivating them to invest in the mutual funds

50

4.2 RESEARCH DESIGN

Type of Research: - Descriptive research
Descriptive research includes Surveys and fact-finding enquiries of different kinds. The
main characteristic of this method is that the researcher has no control over the variables;
he can only report what has happened or what is happening.
Data Sources
There are two types of data.
Primary data
The data that is collected first hand by someone specifically for the purpose of facilitating
the study is known as primary data. So in this research the data is collected from
respondents through questionnaire.
Secondary data.
For the company information I had used secondary data like brochures, web site of the
company etc.
The Method used by me is Survey Method as the research done is Descriptive Research.
Research instruments
Selected instrument for Data Collection for Survey is Questionnaire.

4.3 QUESTIONNAIRE DESIGN/FORMULATION

Questionnaire: - A questionnaire consists of a set of questions presented to respondent
for their answers. It can be Closed Ended or Open Ended
Open Ended: - Allows respondents to answer in their own words & are difficult to
Interpret and Tabulate.
Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.
TYPES OF QUESTION INCLUDED:
51

Dichotomous Question
Which has only two answers Yes or No.
Multiple choice Question
Where respondent is offered more than two choices.
Importance scale
A scale that rates the importance of some attribute.
Rating scale
A scale that rates some attribute from highly satisfied to highly unsatisfied and
very inefficient to very efficient
Sample design
Who is to be surveyed? The marketing researcher must define the target population that
will be sampled.
The sample Unit taken by me; General public of different age group, different gender and
different profession
Extent:Where the survey should be carried out?
I have covered entire residential area of Delhi city for the survey

Time frame:When the survey should be conducted?

I conducted my survey for 8weeks from 10th may to 10th july

Sampling frame:The source from which the sample is drawn

Sampling Technique: How should the respondent be chosen?

52

In the Project sampling is done on basis of Probability sampling. Among the probability
sampling design the sampling design chosen is stratified random sampling.
Because in this survey I had stratified the sample in different age group, different gender
and different profession

Sample Size/ Population Size: - How many people should be surveyed?

My sample size is 50

4.4 METHODOLOGY
The AXIS Mutual funds seek to earn extraordinary return from their investments. For
this, generally they employ innovative methods of fund management and at the same time
they try to keep their strategies a closely guarded secret. In India, an additional point to
keep in mind is the limited number of AXIS Mutual funds in operation of AXIS Mutual
funds in operation. The research methodology for the present study has been adopted to
reflect these realties and help reach the logical conclusion in an objective and scientific
manner.

The important component of research methodology such as formulation of hypothesis,

method of data collection, tools for processing of the data and reporting format of the
study, are enumerated as follows:

DATA COLLECTION
The present study contemplated an exploratory research. Secondary data has been used
which is collected through venture activity reports, journals, magazines, newspapers
reports prepared by research scholars, universities and internet.

IMPORTANCE OF THE STUDY

The concept of AXIS Mutual was introduced in India with the objective of
commercialization of the indigenously developed technologies. It is an important
objective in itself and there is nothing wrong to pursue it vigorously. In the developed
countries particularly in the U.S.A., there has been a close linkage between AXIS Mutual
53

financing and commercial exploitation of new invariably high technology related

industries. The origin of the concept of AXIS Mutual has been associated with the
funding of untried technology in the USDA in 1940's by American Research &
Development Corporation. (ARDC) the first formal AXIS Mutual fund in the world.
With the success of ARDC experiment the concept of AXIS Mutual gained popularity
first in the U.S.A. and then gradually across the developed world. The point missed in
this connection is that the evolution of the AXIS Mutual market has been country specific
to repeat the differences in conditions prevailing in different countries.
The rules announced by SEBI in 1996 to regulate the AXIS Mutual funds in India have
relaxed the eligibility criteria for investment by AXIS Mutual funds. And the condition of
financing for untried technology by AXIS Mutual funds has been done away with. Still in
mindset in concerned quarters remain bounded to the same old concept.
The relevant issues to explore in this context are what modifications are required in the
policy regime? And what are the other factors holding the progress of the industry? The
answer to these questions requires a through analysis of the role the AXIS Mutual can
play in an economy like India and specific issues related to the venture fund in India,
there in lies the importance of the study.

4.5 LIMITATIONS OF THE RESEARCH

As far as limitations are concerned present research work has been completed in the face
of following major constraints.

The date used in my research study is secondary data.

Latest data and information about AXIS Mutual is very less.

The data is available in very brief manner.

Limited analytical techniques have been used due to the nature of data available

Some respondents were unwilling to talk regarding their investment in mutual

funds.

Misleading concepts of the people regarding investing in mutual funds.

54

CHAPTER-5
DATA ANALYSIS
AND
INTERPRETATION

No proper assurance of right information from the sources

available.
DATA ANALYSIS & INTERPRETATION
55

Question 1:- Why do you invest in mutual fund?

o Growth
o Income
o Tax Benefit
o Liquidity

NO.OF RESPONDENTS

SCHEMES

25

GROWTH

INCOME

15

TAX BENEFIT

LIQUIDITY

30
25
20
15

Series
1

OF

No.

Respondents

10

Growth

Income

Tax Benefit

Liquidity

Purpose of Investment

INTERPRETATION
According to the graph, we find that maximum number of people invest their fund for
Growth purpose than their next motive is tax benefit. Investors who are invest their fund
for growth they are between 21 to 35 Age Group and maximum are in middle income
56

group. Who are invest their fund for tax benefit they belong to high income family and
maximum investors are invest their fund for regular income and liquidity.

Question 2:-Who has suggested you to invest in this mutual fund?

N0. OF RESPONDENTS

INFLUENTIAL FACTOR

35
10
3
2

AGENT
FRIEND
NEWS PAPER
T.V.

INTERPRETATION
57

Maximum investors influenced by agent because they do not know any thing about
mutual fund and their schemes so they believe upon agents. Very few investors
influenced by their friend, news paper and television

58

Question 3:- Do you think tax benefit also influence you for purchasing
mutual fund?
NO. OF REPONDENTS

INFLUENTIAL BY TAX BENEFIT

35
15

YES
NO

INTERPRETATION
According to research 35 investors influenced by tax benefit , they belong from high
class family and maximum of them are 36 to 50 age group .And rest of the investors who
does not consider tax benefit .they belong from middle class family and maximum of
them are 21 to 35 age group .

Question 4:- What are the schemes of your mutual fund?

59

NO. OF REPONDENTS

SCHEMES

19
15
6
2
2

EQUITY
LIQUID
DEBT
INDEX
FIXED

OTHER

INTERPRETATION
In mutual fund schemes, maximum number of investors invests their money in equity
fund according to this schemes investors funds are invest in equity market for maximum
return. 15 investor are invest their money in liquid schemes , according to this schemes
they can withdraw their money at any time .Some investors are also invest their money in
debt , index , fixed and other schemes .

60

Question 5:- How many people feel ease in accessing the account?
COMPARISON BETWEEN AXIS AND ICICI BANK
AXIS BANK
SATISFACTION LEVEL OF CUSTOMERS

NO. OF PERSONS

(A) VERY DISSATISFIED

(B) DISSATISFIED

(C) NEUTRAL

11

(D) SATISFIED

20

(E) VERY SATISFIED

13
TOTAL:50

ICICI BANK
SATISFACTION LEVEL OF CUSTOMERS

NO. OF PERSONS

(A) VERY DISSATISFIED

(B) DISSATISFIED

(C) NEUTRAL

12

(D) SATISFIED

19

(E) VERY SATISFIED

11
TOTAL:50

GRAPHICAL REPRESENTATION OF THE DATA COMPARED BETWEEN

AXIS AND ICICI BANK:61

120
100
80
AXIS BANK

60

ICICI BANK

40
20
0
1

INTERPRETATION
If we analyze the aggregate satisfaction level , satisfaction level of AXIS BANK in ease
in accessing the account is 1.5% more than ICICI BANK

QUESTION 6:- WHAT IS THE SATISFACTION LEVEL OF

CUSTOMERS USING IN-BRANCH SERVICES?

62

IN- BRANCH SERVICES OF AXIS BANK

SATISFACTION LEVEL OF CUSTOMERS
(A) VERY DISSATISFIED
(B) DISSATISFIED
(C) NEUTRAL
(D) SATISFIED
(E) VERY SATISFIED

NO. OF PERSONS
3
9
12
16
10
TOTAL:50

ICICI BANK
SATISFACTION LEVEL OF CUSTOMERS
(A) VERY DISSATISFIED
(B) DISSATISFIED
(C) NEUTRAL
(D) SATISFIED
(E) VERY SATISFIED

NO. OF PERSONS
4
10
11
15
10
TOTAL:50

100
90
80
70
60
GRAPHICAL

REPRESENTATION

OF

COMPARISON

IN

SERVICES:50
40
30
20
10
0
1

63

IN-BRANCH
ICICI
AXIS

ANALYSIS
If we analyze the aggregate satisfaction level, satisfaction level of ICICI BANK in INBranch services is 1.5% more than AXIS BANK and dissatisfaction level is less than
AXIS BANK.
INTERPRETATION
If we analyze the aggregate satisfaction level , satisfaction level of AXIS BANK in ease
in accessing the account is 1.8% more than ICICI BANK

Q-7:- Do you have proper knowledge about the concept of mutual fund?
Yes

No

Partial, I would like to know more

46

21

83

64

Yes
31%
Partial, I would
like to know
more
55%

No
14%

Finding: As per the above pie chart 31% respondents had proper knowledge about the
mutual funds and 14% hid not have proper knowledge about the mutual fund. 55%
respondents wanted to know about the mutual funds as they had partial knowledge about
the mutual funds.

65

Q-8:-If you prefer mutual funds as your way of investment then in

which kind of mutual fund you would prefer?
Equity
120

Debt
17

Debt
11%

Balanced
13

Balanced
9%

Equity
80%

Finding: As per the above pie chart 80% respondents prefer equity funds, 11%
respondents prefer debt fund and 9% preferred balanced funds.

66

Q-8:-How much of your total portfolio is in equity?

0-25%
76

26-50%
60

51-75%
11

76-100%
3

51-75% 76-100%
2%
7%

0-25%
51%

26-50%
40%

Findings: As per the above pie chart 51% respondents had the invested less than 25% in
equity funds, 40% had invested in 26-50% in equity, 7% had invested in 51-75% in
equity and 2% respondent had invested 76-100% in equity funds.

67

COMPONENT MATRIX (A)

Component
1
Credit_Limit
-.505
Annual_Charges
.742
Number_of_Addon_Card
-.759
Schemes_Offered
.598
Extraction Method: Principal Component Analysis.

2
.731
.359
.353
.618

a 2 components extracted.

COMPONENT TRANSFORMATION MATRIX

Component
1
1
.747
2
.665
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.

68

2
-.665
.747

CHAPTER -6
FINDINGS, CONCLUSION

69

FINDINGS

The advantages of investing in a Mutual Fund are:

Diversification: The best mutual funds design their portfolios so individual

investments will react differently to the same economic conditions. For example,
economic conditions like a rise in interest rates may cause certain securities in a
diversified portfolio to decrease in value. Other securities in the portfolio will
respond to the same economic conditions by increasing in value. When a portfolio
is balanced in this way, the value of the overall portfolio should gradually increase
over time, even if some securities lose value.

Professional Management: Most mutual funds pay topflight professionals to

manage their investments. These managers decide what securities the fund will
buy and sell.

Regulatory oversight: Mutual funds are subject to many government regulations

that protect investors from fraud.

Liquidity: It's easy to get your money out of a mutual fund. Write a check, make
a call, and you've got the cash.

Convenience: You can usually buy mutual fund shares by mail, phone, or over
the Internet.

Low cost: Mutual fund expenses are often no more than 1.5 percent of your
investment. Expenses for Index Funds are less than that, because index funds are
not actively managed. Instead, they automatically buy stock in companies that are
listed on a specific index

Transparency

Flexibility

Choice of schemes

Tax benefits

Well regulated

70

REGULATION: GETTING BETTER

Through trial and error, SEBI has steadily improved its regulation of the mutual fund
industry. Corporate governance is better than before, but the last mile has still to be
negotiated before investor confidence can be taken for granted
How well is the Indian mutual funds industry regulated? If you were to look at media
headlines over the last couple of years, the regulators report card might well have carried
this comment: Needs improvement.
Till recently, the industry played host to several questionable practices late trading
(where big corporate investors got to invest at favorable prices of the previous day),
scheme switching (shifting investments between schemes within the same fund) and
excessive incentivisation for selling mutual fund schemes, among others.
Add the peccadilloes of Alliance Mutual Funds star CIO Samir Arora, which got SEBI
quite worked up, and the picture doesnt look too good.
But if you were to ask SEBI chairman G.N.Bajpai, he is certain that things are not as bad
as the media paints them. Whenever instances of malpractice have come to our notice,
we take action, he says.
And to be fair to the regulator, the mutual fund business has not seen any major upheaval
of the kind where investors have actually ended up losing money. The only case which
came close to this is that of the Unit Trust of India (AXIS), but the fact is that the
government stepped in to prevent investors from losing too much.
A majority of private sector mutual funds have managed to outperform their benchmarks,
drawing little ire from investors. Some of them do, in fact, charge fairly high fees, but
good market performance has made the case for lower fees not as compelling as in
America.

71

Even in the case of late trading which has been more or less the norm in an industry
where big corporate and distributors negotiate terms with mutual funds on a regular basis
malpractices have not been as rampant as in America.

CONCLUSION

While the mutual fund industry, thanks to its relatively small size till recently, has a bias
towards large corporate investors, governance standards overall have improved, aided
undoubtedly by significant regulatory changes over the last few years.
The only thing to complain about is that SEBI plugged the holes in the system by
following a trial-and-error approach, and not necessarily proactively. The regulatory
regime was tightened bit by bit, aided by SEBIs experiences and market forces. The pace
of regulation has actually accelerated in the last few years.
During 2002-03, for example, the regulator put out detailed guidelines on corporate
governance practices for asset management companies (AMCs). One of these was the
introduction of compulsory benchmarking of a funds performance against any chosen
index. .
This year, SEBI has also made it mandatory for the board of trustees to have two-thirds of
its strength as independent directors that is, those who are not associates of the sponsors
Another area of long-term concern is share switching. SEBI has not, so far, found a
foolproof way to prevent mutual funds from switching securities between schemes.
We regularly hold talks with AMFI and, in addition to that, we have a mutual fund
advisory committee consisting of people who are not drawn from the mutual fund
72

sector, he says. With barely two per cent of household savings going into mutual funds,
the segment has a lot of catching up to do. With post-office administered schemes and
bank deposits offering competition, more investors can be enticed to the mutual fund
industry only if it is steadily seen as very investor-friendly. Initiatives have set the
industry in the right direction, but the final destination is still some distance away.

STRUCTURE
The structure of AXIS should be in line with SEBI regulations as applicable to mutual
funds. Accordingly there should be a Sponsor, A Trustee Company and An Asset
Management Company (AMC). The Sponsor should be a Sponsoring Company in which
40% of the share capital should be held by the institutions which hold the initial capital of
AXIS of Rs.5 crores and which have made in 1999, the additional contribution of
Rs.445.5 crores pursuant to the Deepak Parekh Committee recommendations.(the
Sponsoring Institutions). 60% of the share capital of the Sponsoring Company should be
held by a Strategic Partner who is a recognized player in the market and whose reputation
and competence are expected to give the required degree of confidence to the unit
holders. The field for the selection of the Strategic Partner need not be restricted to Indian
entities. The suggested share capital of the Sponsoring Company should be Rs.550 crores
of which Rs.220 crores will be subscribed by the Sponsoring Institutions and Rs.330
crores by the Strategic Partner.
To make the desired contributions, each of the Sponsoring Institutions should convert
part or whole of their existing holdings in Unit-64 forming part of the initial capital of
Rs.5 crores and the additional contribution of Rs.445.5. crores into shares of the
Sponsoring Company. As some of the Sponsoring Institutions also own AMCs which
manage mutual funds competing with AXIS, no single Sponsoring Institution should hold
more than 25% of the share capital of the Sponsoring Company. To ensure that the
confidence of the unit-holders should not be adversely affected by a sudden withdrawal
of the Government umbrella, there should be a 'lock-in' period of three years during
which the Sponsoring Institutions may transfer their shareholding in the Sponsoring
Company amongst themselves but not to the Strategic Partner or to third parties.

73

CHAPTER -7
RECOMMENDATON
74

RECOMMENDATION

Initial contributors to AXIS should infuse permanent funds of at least Rs.500 crores.
The PSU portfolio should be transferred at book value to a Special Unit Scheme (SUS
99) to be subscribed for by GOI by the issue of dated GOI securities.
US-64 should make a strategic sale of its significant equity holdings by negotiation to the
highest bidder to ensure fetching the best value for the unit holder. The investment sublimit of Rs.10,000 for tax benefit on Equity Linked Savings Schemes should be removed
and benefit should be extended to US-64 and all schemes investing more than 50% in
equity. Income distributed by US-64 and schemes investing more than 50% in equity
should be exempt from tax. New schemes for investing in growth stocks in IT, Pharmacy
and FMCG sectors should be launched, to be subscribed for by banks. The size of the
AXIS Board should be increased to 15, with additional five members being co-opted by
the Board. Trustees should assume higher degree of responsibility and exercise greater
authority.

75

The remuneration of Trustees should be increased and their attendance record be

published in the Annual Report. There should be a separate Asset Management Company
for US-64 with an independent Board of Directors. Chinese walls should be created by
appointing separate and independent fund managers for each scheme.
Inter-scheme transfers must be based on independent decisions and requirements of
concerned fund managers and at market determined prices. There should be an
independent fund manager for US-64 with full responsibility and accountability.

US-64 should be NAV driven within three years.

If at the end of the three year period, the re-purchase price and the NAV are not in line,
the Trust will be left with no alternative but to seek GOI support once again the provide
the difference between the NAV and the repurchase price. Only a clear commitment from
the GOI to stand by US-64 till it finally assumes the character of a NAV driven scheme
will instill the required confidence in the US-64 investors.

The spread between sale and repurchase prices should be gradually increased to deter

short term investors.

The dividend distribution policy needs to follow a more conservative approach to

build up sufficient reserves during periods of good performances.

As a rule, dividends need to be curtailed when there is inadequate income.

The rate of return offered to investors needs to be reviewed on a periodic basis. The

yield offered on US-64 is excessively high as compared to other comparable instruments.

The composition of the portfolio needs to be changed to provide for more weightage

to debt consistent with the objectives of the Scheme.

The operations of US-64 should be brought under SEBI purview at the earliest.

.
76

No Guarantees: No investment is risk free. If the entire stock market declines in value,
the value of mutual fund shares will go down as well, no matter how balanced the
portfolio. Investors encounter fewer risks when they invest in mutual funds than when
they buy and sell stocks on their own. However, anyone who invests through a mutual
fund runs the risk of losing money.
Fees and commissions: All funds charge administrative fees to cover their day-to-day
expenses. Some funds also charge sales commissions or "loads" to compensate brokers,
financial consultants, or financial planners. Even if you don't use a broker or other
financial adviser, you will pay a sales commission if you buy shares in a Load Fund.
Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20
to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales,
you will pay taxes on the income you receive, even if you reinvest the money you made.
Management risk: When you invest in a mutual fund, you depend on the fund's manager
to make the right decisions regarding the fund's portfolio. If the manager does not
perform as well as you had hoped, you might not make as much money on your
investment as you expected. Of course, if you invest in Index Funds, you forego
management risk, because these funds do not employ managers
AXIS should list five ways in which one can buy the fund units.

77

ANNEXURES

78

ANNEXURES

SAMPLE QUESTIONNAIRE
Q1) Why do we invest in mutual fund?
Growth
Income
Tax benefit
Liquidity
Q2) Who has suggested you to invest in this mutual fund?
Agent
Friend
Newspaper
TV
Q3) Do you think tax benefit also influence you for purchasing mutual fund ?
Yes
No

79

Q4) What are the schemes of your mutual fund?

(Tick the box under the option that you think is appropriate)
Equity

Liquid

Debt

Index

Fixed

Q5) How many people feel ease in accessing account?

(Tick the box under the option that you think is appropriate)
Very

Dissatisfied

neutral

Satisfied

dissatisfied

Very
satisfied

Q6) What is the satisfaction level of customer using in branch services?

(Tick the box under the option that you think is appropriate)

Very

Dissatisfied

Neutral

dissatisfied

Satisfied

Very
satisfied

Q7) Do you have proper knowledge about the concept of mutual fund?
Yes
No
Partially

80

Q8) If you prefer mutual funds as your way of investment then in which kind of
mutual fund you would prefer?
Equity
Debt
Balanced

Q-9) How much of you total portfolio is in equity?

0-25%
26-50%
51-75%
76-100%

AXIS BANK LIMITED

BALANCE SHEET
Balance sheet as on
31-Mar

as on
31-03-2009
(rs in thousands)

as on
31-03-2008
Rs in
thousand)

CAPITAL AND LIABILITIES

Capital
Reserves and Surplus
Emplooyees stock
outstanding(net)
Deposits
Borrowings
Other Liabilities and
Provisions

81

35,90,051

35,77,097

9,85,45,835

8,41,07,939

12,111

21,868

1,17,37,41,052

87,62,62,206

10,18,54,762

5,62,40,405

9,94,76,676

7,55,68,972

TOTAL

1,47,72,20,487

1,09,57,78,487

Cash and balances with

Reserve bank of india

9,41,92,103

7,30,56,569

balances with banks and money

At call and short notice

5,59,76,854

5,19,85,835

Investments

46,33,03,514

33,70,51,008

Advances

81,55,67,658

59,66,11,446

fixed assets

1,07,28,873

92,28,501

other assets

3,74,51,485

2,78,45,128

TOTAL

1,44,72,20,487

1,09,57,78,487

Contigent liabilities

2,09,26,03,126

2,58,89,55,997

13,95,73,115

8,32,33,927

ASSETS

bills for collection

significant accounting policies
and notes to accounts
schedules reffered to above
form an integral part of the
balance sheet

AXIS BANK LIMITED

PROFIT AND
LOSS
ACCOUNT

year ended

year ended

31-03-2009
rs. In thousands

31-03-2008
rs.in thousands

10,83,54,856

7,00,53,151

for the year ended

On 31march

INCOME
interest earned

82

other income

2,89,68,781

1,79,54,888

13,73,23,637

8,80,08,039

EXPENDITURE
interest expended

7,14,92,742

4,41,99,617

operating expenses

2,85,82,127

2,15,49,269

provisions and contigencies

1,90,95,184

1,15,48,863

11,91,70,053

7,72,97,749

NET PROFIT FOR THE YEAR(1-2)

Balance in profit and loss account brought
Forward from previous year

1,81,53,584
1,55,83,689

1,07,10,290
1,02,90,740

AMOUNT AVAILABLE FOR APPROPRIATION

3,36,92,273

2,10,01,030

APPROPRIATIONS
Transfer to statuary reserve
Transfer to investment reserve
Transfer to capital reserve

45,38,396
622
14,67,231

26,77,572

proposed dividend(includes tax on dividend)

42,05,159

25,16,380

Balance in profit and loss account carried forward

2,34,80,865

1,55,38,689

TOTAL

3,36,92,273

2,10,01,030

Basic

50.61

32.15

Diluted

50.27

31.31

TOTAL

TOTAL

2,68,389

EARNING PER EQUITY

SHARE
(face value rs 10 each)

83

BIBLIOGRAPHY

84

BIBLIOGRAPHY
BOOKS
KOTLER PHILIP, MARKETING MANAGEMENT, Volume -6 th, ACCESS IN 10TH
JULY 2007
SHARMA RC, MONEY, BANKING AND FINANCE, BSC PUBLICATION,
ACCESS IN 15TH JUNE 2007

JOURNALS
ICFAI UNIVERSITY PRESS JOURNALS

WEB SITES

www.axisbank.com

www.mutualfundsindia.com

www.gemoney.in

85