A Project Report

On
AWARENESS OF MUTUAL FUND AMONG INVESTORS
FOR
ING VYSYA BANK, ALLAHABAD

In partial fulfillment of the requirement for the

Degree of Master of Business Administration

SUBMITTED BY
RAHUL KESARWANI
MBA Final Year
Session 2009-2011

SUBMITTED TO
MOTILAL NEHRU INSTITUTE OF RESEARCH
AND BUSINESS ADMINISTRATION
UNIVERSITY OF ALLAHABAD, ALLAHABAD-211002
DECLARATION
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I hereby declare that the project work entitled “AWARENESS OF MUTUAL FUND AMONG
INVESTORS” submitted in partial fulfillment of the requirements of the Master of Business
Administration program of “MOTILAL NEHRU INSTITUTE OF RESEARCH AND
BUSINESS ADMINISTRATION, Allahabad” is my original work. I have not plagiarized or
submitted the same work for the award of any other Degree.

Date: RAHUL KESARWANI

MBA Final Year
MONIRBA
University of Allahabad,
Allahabad.

ACKNOWLEDGEMENT

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I would like to express my sincere thanks to Mr. K.G Singh, Branch Manager, ING Vysya
Bank without whose help this project would have seemed impossible. I am very thankful to him
as he gave me opportunity to complete my summer training from ING Vysya Bank, Allahabad.

I would also like to thank Mr. Sanjay Shukla (Sales Manager) and Mr. Shuvendu (member of
sales team) of ING Vysya Bank who helped and supported me in completion of my Summer
Training.

I would also like to thank the respondents who have spared their valuable time for filling the
questionnaires.

Last, but not the least, I would like to thank my Parents and all my Friends for their wholehearted
support and encouragement.

PREFACE

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For any management course, summer training is an essential and important part of curriculum of
MBA program because along with the theoretical aspects, practical training is also very
important. Summer Training is an exposure to corporate environment and help MBA students to
get acquainted with organizational norms, procedures, practices, ethics, and culture. It also gives
an insight of actual functioning of the organization. It helps the student to understand and to
correlate with theoretical aspect with practical reality. I feel honored to have the opportunity of
pursuing my summer training at ING Vysya Bank, Allahabad, a renowned and reputed bank
which has helped me to improve my communication and interpersonal skills and also give me
the better understanding of the subject.

Date: RAHUL KESARWANI

MBA Final Year
MONIRBA
University of Allahabad,
Allahabad.

CONTENTS

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1. Introduction to Mutual Fund……………………………………………………………….7
1.1. What is Mutual Fund?....................................................................................................7
1.2. Advantages of Mutual Funds………………………………………………………….9
1.3. Disadvantages of Mutual Funds……………………………………………………...12
1.4. History of Mutual Funds……………………………………………………………..15
1.5. Recent trends in Mutual Fund Industry……………………………………………...19
1.6. Organisation of Mutual Fund………………………………………………………...22
1.7. Types of Mutual Fund Schemes……………...………………………………….….. 25
1.8. More about Mutual Fund…………………………………………………………….28
1.9. Risks involved in investing in Mutual Funds……………………………….………..29
1.10. Procedure for registering a Mutual Fund with SEBI………………………………...30
1.11. Rights that are available to a Mutual Fund holder in India…………………………..31
1.12. Fund Offer document………………………………………………………………...32
1.13. Exchange-Traded Fund………………………………………………………………33
1.14. Mutual Funds are an under tapped market in India………………………………….34
1.15. Name and Addresses of SEBI Registered Mutual Funds……………………………36
2. About the Bank……………………………………………………………………….…….46
2.1. History of Vysya Bank and its transformation into ING Vysya Bank Limited……...47
2.2. Milestones…………………………………………………………………………….53
2.3. Network Distribution…………………………………………………………….…...55
2.4. Board of Directors……………………………………………………………………56
2.5. Executive Management Council…………………………………………….………..57
2.6. Financial Results……………………………………………………………….……..58
2.7. Mutual Funds of ING Vysya Bank…………………………………………………..61
3. Objectives of the Study………………………………………… ………………………….64

4. Research Methodology………………………………………………………………….….66
4.1. Research Design………………………………………………………………….….66

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 4.2. Data Collection Method…………………………………………………….……….67
4.3. Sampling Plan……………………………………………………………….……….68
4.4. Data Analysis and Interpretation……………………………………………………69
4.5. Limitations…………………………………………………………………………..87
5. Conclusion……………………………………………………………………………….….89
6. Recommendations and Suggestions…………………………………………………..……91
7. Annexure……………………………………………………………………………………93
8. Bibliography…………………………………………………......………………….………96

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 CHAPTER 1
INTRODUCTION TO MUTUAL FUND

INTRODUCTION TO MUTUAL FUND

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1.1. What is Mutual Fund?

According to Association of Mutual Funds in India (AMFI) “A Mutual Fund is a trust that
pools the savings of a number of investors who share a common financial goal. The money thus
collected is then invested in capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital appreciation realised are
shared by its unit holders in proportion to the number of units owned by them. Thus 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.”

Market (fluctuations)
Investors

Mutual Fund Schemes

Invests in variety of
stocks/bonds
Invest their money

Profit/Loss from portfolio Profit/Loss from

of investment Individual

INVESTMENT FLOW

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In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as disclosed in offer
document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus
the risk is reduced. Diversification reduces the risk because all stocks may not move in the same
direction in the same proportion at the same time. Mutual fund issues units to the investors in
accordance with quantum of money invested by them. Investors of Mutual funds are known as
unit holders.

The profits or losses are shared by the investors in proportion to their investments. The Mutual
funds normally come out with a number of schemes with different investment objectives which
are launched from time to time. In India, A Mutual fund is required to be registered with
Securities and Exchange Board of India (SEBI) which regulates securities markets before it can
collect funds from the public.

In Short, a Mutual fund is a common pool of money in to which investors with common
investment objective place their contributions that are to be invested in accordance with the
stated investment objective of the scheme. The investment manager would invest the money
collected from the investor in to assets that are defined/ permitted by the stated objective of the
scheme. For example, an equity fund would invest equity and equity related instruments and a
debt fund would invest in bonds, debentures, gilts etc. Mutual fund is a 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.

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1.2. Advantages of Mutual Funds

1. Affordability

Mutual funds allow you to invest small sums. For instance, if you want to buy a portfolio of
blue chips of modest size, you should at least have a few lakhs of rupees. A mutual fund
gives you the same portfolio for meager investment of Rs.1,000-5,000. A mutual fund can
do that because it collects money from many people and it has a large corpus.

2. Tax Benefits
You do not have to pay any taxes on dividends issued by mutual funds. You also have the
advantage of capital gains taxation. Tax-saving schemes and pension schemes give you the
added advantage of benefits under section 88.

3. Diversification

One rule of investing, for both large and small investors, is asset diversification.
Diversification involves the mixing of investments within a portfolio and is used to manage
risk. For example, by choosing to buy stocks in the retail sector and offsetting them with
stocks in the industrial sector, you can reduce the impact of the performance of any one
security on your entire portfolio. To achieve a truly diversified portfolio, you may have to
buy stocks with different capitalizations from different industries and bonds with varying
maturities from different issuers. For the individual investor, this can be quite costly.

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By purchasing mutual funds, you are provided with the immediate benefit of instant
diversification and asset allocation without the large amounts of cash needed to create
individual portfolios. One caveat, however, is that simply purchasing one mutual fund might
not give you adequate diversification - check to see if the fund is sector or industry specific.
For example, investing in an oil and energy mutual fund might spread your money over fifty
companies, but if energy prices fall, your portfolio will likely suffer.

4. Professional Management

When you buy a mutual fund, you are also choosing a professional money manager. This
manager will use the money that you invest to buy and sell stocks that he or she has carefully
researched. Therefore, rather than having to thoroughly research every investment before you
decide to buy or sell, you have a mutual fund's money manager to handle it for you.

5. Costs Effectiveness

A small investor will find that the mutual fund route is a cost-effective method (the AMC fee
is normally 2.5%) and it also saves a lot of transaction cost as mutual funds get concession
from brokerages. Also, the investor gets the service of a financial professional for a very
small fee. If he were to seek a financial advisor's help directly, he will end up paying
significantly more for investment advice. Also, he will need to have a sizeable corpus to offer
for investment management to be eligible for an investment adviser’s services.

6. Transparency

Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on
a regular basis. They also send quarterly newsletters, which give details of the portfolio,
performance of schemes against various benchmarks, etc. They are also well regulated and
SEBI monitors their actions closely.

7. Liquidity

Another advantage of mutual funds is the ability to get in and out with relative ease. In
general, you are able to sell your mutual funds in a short period of time without there being
much difference between the sale price and the most current market value. However, it is
important to watch out for any fees associated with selling, including back-end load fees.
Also, unlike stocks and exchange-traded funds (ETFs), which trade any time during market
hours, mutual funds transact only once per day after the fund's net asset value (NAV) is
calculated.

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 8. Economies of Scale

The easiest way to understand economies of scale is by thinking about volume discounts; in
many stores, the more of one product you buy, the cheaper that product becomes. For
example, when you buy a dozen donuts, the price per donut is usually cheaper than buying a
single one. This also occurs in the purchase and sale of securities. If you buy only one
security at a time, the transaction fees will be relatively large.

Mutual funds are able to take advantage of their buying and selling size and thereby reduce
transaction costs for investors. When you buy a mutual fund, you are able to diversify
without the numerous commission charges. Imagine if you had to buy the 10-20 stocks
needed for diversification. The commission charges alone would eat up a good chunk of your
savings. Add to this the fact that you would have to pay more transaction fees every time you
wanted to modify your portfolio - as you can see the costs begin to add up. With mutual
funds, you can make transactions on a much larger scale for less money.

9. Divisibility

Many investors don't have the exact sums of money to buy round lots of securities. One to
two hundred dollars is usually not enough to buy a round lot of a stock, especially after
deducting commissions. Investors can purchase mutual funds in smaller denominations,
ranging from $100 to $1,000 minimums. Smaller denominations of mutual funds provide
mutual fund investors the ability to make periodic investments through monthly purchase
plans while taking advantage of dollar-cost averaging. So, rather than having to wait until
you have enough money to buy higher-cost investments, you can get in right away with
mutual funds. This provides an additional advantage - liquidity. 

1.3. Disadvantages of Mutual Funds

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1. Fluctuating Returns

Mutual funds are like many other investments without a guaranteed return: there is always
the possibility that the value of your mutual fund will depreciate. Unlike fixed-income
products, such as bonds and Treasury bills, mutual funds experience price fluctuations along
with the stocks that make up the fund. When deciding on a particular fund to buy, you need
to research the risks involved - just because a professional manager is looking after the fund
that does not mean the performance will be stellar.

Another important thing to know is that mutual funds are not guaranteed by the U.S.
government, so in the case of dissolution, you won't get anything back. This is especially
important for investors in money market funds.

2. Diversification

Although diversification is one of the keys to successful investing, many mutual fund
investors tend to overdiversify. The idea of diversification is to reduce the risks associated
with holding a single security; overdiversification (also known as diworsification) occurs
when investors acquire many funds that are highly related and, as a result, don't get the risk
reducing benefits of diversification.

At the other extreme, just because you own mutual funds doesn't mean you are automatically
diversified. For example, a fund that invests only in a particular industry or region is still
relatively risky.

3. Cash, Cash and More Cash

As you know already, mutual funds pool money from thousands of investors, so everyday
investors are putting money into the fund as well as withdrawing investments. To maintain
liquidity and the capacity to accommodate withdrawals, funds typically have to keep a large
portion of their portfolios as cash. Having ample cash is great for liquidity, but money sitting
around as cash is not working for you and thus is not very advantageous.

4. Taxes

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When making decisions about your money, fund managers don't consider your personal tax
situation. For example, when a fund manager sells a security, a capital-gain tax is triggered,
which affects how profitable the individual is from the sale. It might have been more
advantageous for the individual to defer the capital gains liability.

5. Cost

Mutual funds provide investors with professional management, but it comes at a cost. Funds
will typically have a range of different fees that reduce the overall payout. In mutual funds,
the fees are classified into two categories: shareholder fees and annual operating fees.
The shareholder fees, in the forms of loads and redemption fees, are paid directly by
shareholders purchasing or selling the funds. The annual fund operating fees are charged as
an annual percentage - usually ranging from 1-3%. These fees are assessed to mutual fund
investors regardless of the performance of the fund. As you can imagine, in years when the
fund doesn't make money, these fees only magnify losses.

6. Misleading Advertisements

The misleading advertisements of different funds can guide investors down the wrong path.
Some funds may be incorrectly labeled as growth funds, while others are classified as small
cap or income funds. The Securities and Exchange Commission (SEC) requires that
funds have at least 80% of assets in the particular type of investment implied in their names.
How the remaining assets are invested is up to the fund manager.However, the different
categories that qualify for the required 80% of the assets may be vague and wide-ranging. A
fund can therefore manipulate prospective investors by using names that are attractive and
misleading. Instead of labeling itself a small cap, a fund may be sold as a "growth fund". Or,
the "Congo High-Tech Fund" could be sold with the title "International High-Tech Fund".

7. Evaluating Funds

Another disadvantage of mutual funds is the difficulty they pose for investors interested in
researching and evaluating the different funds. Unlike stocks, mutual funds do not offer
investors the opportunity to compare the P/E ratio, sales growth, earnings per share, etc. A
mutual fund's net asset value gives investors the total value of the fund's portfolio less
liabilities, but how do you know if one fund is better than another? Furthermore,
advertisements, rankings and ratings issued by fund companies only describe past
performance. Always note that mutual fund descriptions/advertisements always include the
tagline "past results are not indicative of future returns". Be sure not to pick funds only
because they have performed well in the past - yesterday's big winners may be today's big
losers.
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Equity funds, if selected in the right manner and in the right proportion, have the ability to play
an important role in achieving most long-term objectives of investors in different segments.
While the selection process becomes much easier if you get advice from professionals, it is
equally important to know certain aspects of equity investing yourself to do justice to your hard
earned money.

1.4. History of Mutual Funds

1.4.1. History of the Global Mutual Fund Industry  

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Mutual funds really captured the public's attention in the 1980s and '90s when mutual fund
investment hit record highs and investors saw incredible returns. However, the idea of pooling
assets for investment purposes has been around for a long time. Here we look at the evolution of
this investment vehicle, from its beginnings in the Netherlands in the 18th century to its present
status as a growing, international industry with fund holdings accounting for trillions of dollars
in the United States alone.

In the Beginning

Historians are uncertain of the origins of investment funds; some cite the closed-end investment
companies launched in the Netherlands in 1822 by King William I as the first mutual funds,
while others point to a Dutch merchant named Adriaan van Ketwich whose investment trust
created in 1774 may have given the king the idea. Ketwich probably theorized that
diversification would increase the appeal of investments to smaller investors with minimal
capital. The name of Ketwich's fund, Eendragt Maakt Magt, translates to "unity creates
strength". The next wave of near-mutual funds included an investment trust launched in
Switzerland in 1849, followed by similar vehicles created in Scotland in the 1880s.

The idea of pooling resources and spreading risk using closed-end investments soon took root in
Great Britain and France, making its way to the United States in the 1890s. The Boston Personal
Property Trust, formed in 1893, was the first closed-end fund in the U.S. The creation of the
Alexander Fund in Philadelphia in 1907 was an important step in the evolution toward what we
know as the modern mutual fund. The Alexander Fund featured semi-annual issues and allowed
investors to make withdrawals on demand.

The Arrival of the Modern Fund

The creation of the Massachusetts Investors' Trust in Boston, Massachusetts, heralded the arrival
of the modern mutual fund in 1924. The fund went public in 1928, eventually spawning the
mutual fund firm known today as MFS Investment Management. State Street Investors' Trust
was the custodian of the Massachusetts Investors' Trust. Later, State Street Investors started its
own fund in 1924 with Richard Paine, Richard Saltonstall and Paul Cabot at the helm. Saltonstall
was also affiliated with Scudder, Stevens and Clark, an outfit that would launch the first no-load
fund in 1928. A momentous year in the history of the mutual fund, 1928 also saw the launch of
the Wellington Fund, which was the first mutual fund to include stocks and bonds, as opposed to
direct merchant bank style of investments in business and trade.

Regulation and Expansion

By 1929, there were 19 open-ended mutual funds competing with nearly 700 closed-end funds.
With the stock market crash of 1929, the dynamic began to change as highly-leveraged closed-
end funds were wiped out and small open-end funds managed to survive.

16
Government regulators also began to take notice of the fledgling mutual fund industry. The
creation of the Securities and Exchange Commission (SEC), the passage of the Securities Act of
1933 and the enactment of the Securities Exchange Act of 1934 put in place safeguards to protect
investors: mutual funds were required to register with the SEC and to provide disclosure in the
form of a prospectus. The Investment Company Act of 1940 put in place additional regulations
that required more disclosures and sought to minimize conflicts of interest.

The mutual fund industry continued to expand. At the beginning of the 1950s, the number of
open-end funds topped 100. In 1954, the financial markets overcame their 1929 peak, and the
mutual fund industry began to grow in earnest, adding some 50 new funds over the course of the
decade. The 1960s saw the rise of aggressive growth funds, with more than 100 new funds
established and billions of dollars in new asset inflows.

Hundreds of new funds were launched throughout the 1960s until the bear market of 1969 cooled
the public appetite for mutual funds. Money flowed out of mutual funds as quickly as investors
could redeem their shares, but the industry's growth later resumed.

Recent Developments

In 1971, William Fouse and John McQuown of Wells Fargo Bank established the first index
fund, a concept that John Bogle would use as a foundation on which to build The Vanguard
Group, a mutual fund powerhouse renowned for low-cost index funds. The 1970s also saw the
rise of the no-load fund. This new way of doing business had an enormous impact on the way
mutual funds were sold and would make a major contribution to the industry's success.

With the 1980s and '90s came bull market mania and previously obscure fund managers became
superstars; Max Heine, Michael Price and Peter Lynch, the mutual fund industry's top
gunslingers, became household names and money poured into the retail investment industry at a
stunning pace. More recently, the burst of the tech bubble and a spate of scandals involving big
names in the industry took much of the shine off of the industry's reputation. Shady dealings at
major fund companies demonstrated that mutual funds aren't always benign investments
managed by folks who have their shareholders' best interests in mind.

Conclusion

Despite the 2003 mutual fund scandals and the global financial crisis of 2008-2009, the story of
the mutual fund is far from over. In fact, the industry is still growing. In the U.S. alone there are
more than 10,000 mutual funds, and if one accounts for all share classes of similar funds, fund
holdings are measured in the trillions of dollars. Despite the launch of separate
accounts, exchange-traded funds and other competing products, the mutual fund industry
remains healthy and fund ownership continues to grow.

1.4.2. History of the Indian Mutual Fund Industry

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The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the
initiative of the Government of India and Reserve Bank of India. The history of mutual funds in
India can be broadly divided into four distinct phases

First Phase – 1964-87  

Unit Trust of India (UTI) 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 UTI 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 UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700
crores of assets under management.  

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and
Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).
SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by
Canbank 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
established its mutual fund in June 1989 while GIC had set up its mutual fund in December
1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004
crores.  

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
UTI 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 February 2003  

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In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated
into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets
under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of
Unit Trust of India, functioning under an administrator and under the rules framed by
Government of India and does not come under the purview of the Mutual Fund Regulations.  
The second is the UTI Mutual Fund, 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
UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with
the setting up of a UTI 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.

1.5. Recent trends in Mutual Fund Industry

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The most important trend in the mutual fund industry is the aggressive expansion of the foreign
owned mutual fund companies and the decline of the companies floated by nationalized banks
and smaller private sector players.

Many nationalized banks got into the mutual fund business in the early nineties and got off to a
good start due to the stock market boom prevailing then. These banks did not really understand
the mutual fund business and they just viewed it as another kind of banking activity. Few hired
specialized staff and generally chose to transfer staff from the parent organizations. The
performance of most of the schemes floated by these funds was not good. Some schemes had
offered guaranteed returns and their parent organizations had to bail out these AMCs by paying
large amounts of money as the difference between the guaranteed and actual returns. The service
levels were also very bad. Most of these AMCs have not been able to retain staff, float new
schemes etc. and it is doubtful whether, barring a few exceptions, they have serious plans of
continuing the activity in a major way.

The experience of some of the AMCs floated by private sector Indian companies was also very
similar. They quickly realized that the AMC business is a business, which makes money in the
long term and requires deep-pocketed support in the intermediate years. Some have sold out to
foreign owned companies, some have merged with others and there is general restructuring going
on.

They can be credited with introducing many new practices such as new product innovation,
sharp improvement in service standards and disclosure, usage of technology, broker education
and support etc. In fact, they have forced the industry to upgrade itself and service levels of
organizations like UTI have improved dramatically in the last few years in response to the
competition provided by these.

Performance of Mutual Funds in India

Let us start the discussion of the performance of mutual funds in India from the day the concept
of mutual fund took birth in India. The year was 1963. Unit Trust of India invited investors or
rather to those who believed in savings, to park their money in UTI Mutual Fund. The
performance of mutual funds in India in the initial phase was not even closer to satisfactory
level. People rarely understood, and of course investing was out of question. But yes, some 24
million shareholders were accustomed with guaranteed high returns by the beginning of
liberalization of the industry in 1992. This good record of UTI became marketing tool for new
entrants. The expectations of investors touched the sky in profitability factor. However, people
were miles away from the preparedness of risks factor after the liberalization.

The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me concentrate
about the performance of mutual funds in India through figures. From Rs. 67bn. the Assets
Under Management rose to Rs. 470 bn. in March 1993 and the figure had a three times higher
performance by April 2004. It rose as high as Rs. 1,540bn. The net asset value (NAV) of mutual
funds in India declined when stock prices started falling in the year 1992. Those days, the market
regulations did not allow portfolio shifts into alternative investments. There was rather no choice

20
apart from holding the cash or to further continue investing in shares. One more thing to be
noted, since only closed-end funds were floated in the market, the investors disinvested by
selling at a loss in the secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market scandal,
the losses by disinvestments and of course the lack of transparent rules in the whereabouts
rocked confidence among the investors. Partly owing to a relatively weak stock market
performance, mutual funds have not yet recovered, with funds trading at an average discount of
1020 percent of their net asset value. The measure was taken to make mutual funds the key
instrument for long-term saving. The more the variety offered, the quantitative will be investors.
At last to mention, as long as mutual fund companies are performing with lower risks and higher
profitability within a short span of time, more and more people will be inclined to invest until
and unless they are fully educated with the dos and don'ts of mutual funds.

Market Trends

Comparison of Mutual Funds with other Instrument

A lone UTI with just one scheme in 1964 now competes with as many as 400 odd products and
34 players in the market. In spite of the stiff competition and losing market share, Last six years
have been the most turbulent as well as exiting ones for the industry. New players have come in,
while others have decided to close shop by either selling off or merging with others. Product
innovation is now passé with the game shifting to performance delivery in fund management as
well as service. Those directly associated with the fund management industry like distributors,
registrars and transfer agents, and even the regulators have become more mature and responsible.

The industry is also having a profound impact on financial markets. While UTI has always been
a dominant player on the bourses as well as the debt markets, the new generations of private
funds, which have gained substantial mass, are now flexing their muscles. Fund managers, by
their selection criteria for stocks have forced corporate governance on the industry. Rewarding
honest and transparent management with higher valuations has created a system of risk-reward
created where the corporate sector is more transparent then before.

Funds have shifted their focus to the recession free sectors like pharmaceuticals, FMCG and
technology sector. Funds performances are improving. Funds collection, which averaged at less
than Rs100bn per annum over five-year period spanning 1993-98 doubled to Rs210bn in 1998-
99. In the current year mobilization till now have exceeded Rs300bn. Total collection for the
current financial year ending March 2000 is expected to reach Rs450bn.

What is particularly noteworthy is that bulk of the mobilization has been by the private sector
mutual funds rather than public sector mutual funds. Indeed private MFs saw a net inflow of Rs.
7819.34 Crore during the first nine months of the year as against a net inflow of Rs.604.40 Crore
in the case of public sector funds.

The graph indicates the growth of assets over the years.

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1.6. Organisation of Mutual Fund

22
SEBI

The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for
the securities market in India. It was formed officially by the Government of India in 1992 with
SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave.

To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds.
It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time.
Mutual Fund either promoted by public or by private sector entities including one promoted by
foreign entities are governed by these Regulations.

SEBI approved Asset Management Company (AMC) manages the funds by making investments
in various types of securities. Custodian, registered with SEBI, holds the securities of various
schemes of the fund in its custody. The general power of superintendence and direction over
AMC is vested with the trustees.

According to SEBI Regulations, two thirds of the directors of Trustee Company or board of
trustees must be independent. They should not be associated with the sponsors. 50% of the
directors of AMC must be independent. All mutual funds are required to be registered with SEBI
before they launch any scheme.

Increase of load more than the level mentioned in the offer document is applicable only to
prospective investments by the MFs. For original investments, the offer documents have to be
amended to make investors aware of loads at the time of investments.

23
Sponsor

Sponsor is the person who acting alone or in combination with another body corporate
establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the
Investment Managed and meet the eligibility criteria prescribed under the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or
liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial
contribution made by it towards setting up of the Mutual Fund.  

 Trust  

The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts
Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.

Trustee

Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The
main responsibility of the Trustee is to safeguard the interest of the unit holders and inter alias
ensure that the AMC functions in the interest of investors and in accordance with the Securities
and Exchange Board of India (Mutual Funds) Regulations, 1996. At least 2/3rd directors of the
Trustee are independent directors who are not associated with the Sponsor in any manner.  

Asset Management Company (AMC) 

Trustee as the Investment Manager of the Mutual Fund appoints the AMC. The AMC is required
to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset
management company of the Mutual Fund. Atlas 50% of the directors of the AMC is an
independent director who is not associated with the Sponsor in any manner. The AMC must have
a net worth of at least 10 crore at all times

Custodian

A custodian’s role is safe keeping of physical securities and also keeping a tabon the corporate
actions like rights, bonus and dividends declared by the companies in which the fund has
invested. The Custodian is appointed by the Board of Trustees. The custodian also participates in
a clearing and settlement system through approved depository companies on behalf of mutual
funds, in case of dematerialized securities. In India today, securities (and units of mutual funds)
are no longer held in physical form but mostly in dematerialized form with the Depositories. The
holdings are held in the Depository through Depository Participants (DPs). Only the physical
securities are held by the Custodian. The deliveries and receipt of units of a mutual fund are done
by the custodian or a depository participant at the instruction of the AMC and under the overall
direction and responsibility of the Trustees. Regulations provide that the Sponsor and the
Custodian must be separate entities.

24
Transfer Agent

An agent employed by a corporation or mutual fund to maintain shareholder records, including

purchases, sales, and account balances.

The transfer agent is responsible for the following:

 Provide quarterly statements to investors

 Send annual tax documents to investors
 Maintain detailed records of account holders
 Send interest payments and dividends to investors
 Issue new shares when a stock splits its shares
 Runs the customer service department for the fund
 Investigate lost or stolen stock and bond certificates

1.7. Types of Mutual Fund Schemes

a. On the basis of Structure

i. Open Ended Schemes

25
The units offered by these schemes are available for sale and repurchase on any business day at
NAV based prices. Hence, the unit capital of the schemes keeps changing each day. Such
schemes thus offer very high liquidity to investors and are becoming increasingly popular in
India. Please note that an open-ended fund is NOT obliged to keep selling/issuing new units at
all times, and may stop issuing further subscription to new investors. On the other hand, an open-
ended fund rarely denies to its investor the facility to redeem existing units.

ii. Closed – Ended Schemes

The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed number of
units. These schemes are launched with an initial public offer (IPO) with a stated maturity period
after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy
or sell units on the stock exchanges where they are listed. Unlike open-ended schemes, the unit
capital in closed-ended schemes usually remains unchanged. After an initial closed period, the
scheme may offer direct repurchase facility to the investors. Closed-ended schemes are usually
more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV.
This discount tends towards the NAV closer to the maturity date of the scheme.

iii. Interval Schemes

These schemes combine the features of open-ended and closed-ended schemes. They may be
traded on the stock exchange or may be open for sale or redemption during pre-determined
intervals at NAV based prices.

b. On the basis of Investment Objective

i. Growth Schemes

26
These schemes, also commonly called Equity Schemes, seek to invest a majority of their funds in
equities and a small portion in money market instruments. Such schemes have the potential to
deliver superior returns over the long term. However, because they invest in equities, these
schemes are exposed to fluctuations in value especially in the short term.

ii. Income Schemes

These schemes, also commonly called Debt Schemes, invest in debt securities such as corporate
bonds, debentures and government securities. The prices of these schemes tend to be more stable
compared with equity schemes and most of the returns to the investors are generated through
dividends or steady capital appreciation. These schemes are ideal for conservative investors or
those not in a position to take higher equity risks, such as retired individuals. However, as
compared to the money market schemes they do have a higher price fluctuation risk and
compared to a Gilt fund they have a higher credit risk.

iii. Balanced Schemes

These schemes are commonly known as Hybrid schemes. These schemes invest in both equities
as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the
objective of income and moderate capital appreciation and are ideal for investors with a
conservative, long-term orientation.

iv. Liquid Schemes

Liquid funds are used primarily as an alternative to short-term fix deposits. Liquid funds invest
with minimal risk (like money market funds). Most funds have a lock-in period of a maximum of
three days to protect against procedural (primarily banking) glitches, and offer redemption
proceeds within 24 hours. The minimum investment size in a liquid fund varies from Rs. 25,000
to Rs 1 lakh.

Liquid funds invest in short-term debt instruments with maturities of less than one year.
Therefore, they invest in money market instruments, short-term corporate deposits and treasury.
The maturity of instruments held is between three and six months. A liquid fund provides good
liquidity, low interest rate risk and the prevailing yield in the market. Liquid funds have the
restriction that they can only have 10 per cent or less mark-to-market component, indicating a
lower interest rate risk.

c. On the basis of Other Schemes

i. Tax Saving Schemes

27
Investors are being encouraged to invest in equity markets through Equity Linked Savings
Scheme (“ELSS”) by offering them a tax rebate. Units purchased cannot be assigned /
transferred/ pledged / redeemed / switched – out until completion of 3 years from the date of
allotment of the respective Units.

The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations,
1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs),
Government of India regarding ELSS.

Subject to such conditions and limitations, as prescribed under Section 88 of the Income-tax Act,
1961.

ii. Special Schemes.

Index Schemes

The primary purpose of an Index is to serve as a measure of the performance of the market as a
whole, or a specific sector of the market. An Index also serves as a relevant benchmark to
evaluate the performance of mutual funds. Some investors are interested in investing in the
market in general rather than investing in any specific fund. Such investors are happy to receive
the returns posted by the markets. As it is not practical to invest in each and every stock in the
market in proportion to its size, these investors are comfortable investing in a fund that they
believe is a good representative of the entire market. Index Funds are launched and managed for
such investors.

Sector Specific Schemes

Sector Specific Schemes generally invests money in some specified sectors for example: “Real
Estate” Specialized real estate funds would invest in real estates directly, or may fund real estate
developers or lend to them directly or buy shares of housing finance companies or may even buy
their securitized assets.

1.8. More about Mutual Fund

Net Asset Value (NAV)

28
Net Asset Value of the fund is the cumulative market value of the assets of the fund net of its
liabilities. NAV per unit is simply the net value of assets divided by the number of units
outstanding. Buying and selling into funds is done on the basis of NAV-related prices.

The NAV of a mutual fund are required to be published in newspapers. The NAV of an open end
scheme should be disclosed on a daily basis and the NAV of a close end scheme should be
disclosed at least on a weekly basis.

Entry/Exit Load

A Load is a charge, which the mutual fund may collect on entry and/or exit from a fund. A load
is levied to cover the up-front cost incurred by the mutual fund for selling the fund. It also covers
one time processing costs. Some funds do not charge any entry or exit load. These funds are
referred to as ‘No Load Fund’. Funds usually charge an entry load ranging between 1.00% and
2.00%. Exit loads vary between 0.25% and 2.00%.

For e.g. Let us assume an investor invests Rs. 10,000/- and the current NAV is Rs.13/-. If the
entry load levied is 1.00%, the price at which the investor invests is Rs.13.13 per unit. The
investor receives 10000/13.13 = 761.6146 units. (Note that units are allotted to an investor based
on the amount invested and not on the basis of no. of units purchased).

Let us now assume that the same investor decides to redeem his 761.6146 units. Let us also
assume that the NAV is Rs 15/- and the exit load is 0.50%. Therefore the redemption price per
unit works out to Rs. 14.925. The investor therefore receives 761.6146 x 14.925 = Rs.11367.10.

Sale or Repurchase/Redemption price

The price or NAV a unit holder is charged while investing in an open-ended scheme is called
sales price. It may include sales load if applicable.

Repurchase or Redemption price is the price or NAV at which an open-ended scheme purchases
or redeems its units from the holders. It may include exit load if applicable.

1.9. Risks involved in investing in Mutual Funds

29
Mutual Funds do not provide assured returns. Their returns are linked to their performance. They
invest in shares, debentures, bonds etc. All these investments involve an element of risk. The unit
value may vary depending upon the performance of the company and if a company defaults in
payment of interest/principal on their debentures/bonds the performance of the fund may get
affected. Besides incase there is a sudden downturn in an industry or the government comes up
with new a regulation which affects a particular industry or company the fund can again be
adversely affected. All these factors influence the performance of Mutual Funds.

Some of the Risk to which Mutual Funds are exposed to is given below:

1. Market risk

If the overall stock or bond markets fall on account of overall economic factors, the value of
stock or bond holdings in the fund's portfolio can drop, thereby impacting the fund performance.

2. Non-market risk

Bad news about an individual company can pull down its stock price, which can negatively
affect fund holdings. This risk can be reduced by having a diversified portfolio that consists of a
wide variety of stocks drawn from different industries.

3. Interest rate risk

Bond prices and interest rates move in opposite directions. When interest rates rise, bond prices
fall and this decline in underlying securities affects the fund negatively.

4. Credit risk

Bonds are debt obligations. So when the funds invest in corporate bonds, they run the risk of the
corporate defaulting on their interest and principal payment obligations and when that risk
crystallizes, it leads to a fall in the value of the bond causing the NAV of the fund to take a
beating.

1.10. Procedure for registering a Mutual Fund with SEBI

30
An applicant proposing to sponsor a mutual fund in India must apply in Form A with a fee of
Rs.25,000. The application is examined and once the sponsor satisfies certain conditions such as
being in the financial services business and possessing positive net worth for the last five years,
having net profit in three out of the last five years and possessing the general reputation of
fairness and integrity in all business transactions, it is required to complete the remaining
formalities for setting up a mutual fund.

These include inter alia, executing the trust deed and investment management agreement, setting
up a trustee company/board of trustees comprising two- thirds independent trustees,
incorporating the asset management company (AMC), contributing to at least 40% of the net
worth of the AMC and appointing a custodian. Upon satisfying these conditions, the registration
certificate is issued subject to the payment of registration fees of Rs.25.00 lakhs for details; see
the SEBI (Mutual Funds) Regulations, 1996.

1.11. Rights that are available to a Mutual Fund holder in India

31
As per SEBI Regulations on Mutual Funds, an investor is entitled to:

1. Receive Unit certificates or statements of accounts confirming your title within 6 weeks
from the date your request for a unit certificate is received by the Mutual Fund.

2. Receive information about the investment policies, investment objectives, financial

position and general affairs of the scheme.

3. Receive dividend within 30 days of their declaration and receive the redemption or
repurchase proceeds within 10 days from the date of redemption or repurchase.

4. The trustees shall be bound to make such disclosures to the unit holders as are essential in
order to keep them informed about any information, which may have an adverse bearing
on their investments.

5. 75% of the unit holders with the prior approval of SEBI can terminate the AMC of the
fund.

6. 75% of the unit holders can pass a resolution to wind-up the scheme.

7. An investor can send complaints to SEBI, who will take up the matter with the concerned
Mutual Funds and follow up with them till they are resolved.

1.12. Fund Offer document

32
A Fund Offer document is a document that offers you all the information you could possibly
need about a particular scheme and the fund launching that scheme. That way, before you put in
your money, you're well aware of the risks etc involved. This has to be designed in accordance
with the guidelines stipulated by SEBI and the prospectus must disclose details about:

 Investment objectives

 Risk factors and special considerations

 Summary of expenses

 Constitution of the fund

 Guidelines on how to invest

 Organization and capital structure

 Tax provisions related to transactions

 Financial information

1.13. Exchange-Traded Fund (ETF)

33
Think of an exchange-traded fund as a mutual fund that trades like a stock. Just like an index
fund, an ETF represents a basket of stocks that reflect an index such as the Nifty. An ETF,
however, isn't a mutual fund; it trades just like any other company on a stock exchange. Unlike a
mutual fund that has its net-asset value (NAV) calculated at the end of each trading day, an
ETF's price changes throughout the day, fluctuating with supply and demand. It is important to
remember that while ETFs attempt to replicate the return on indexes, there is no guarantee that
they will do so exactly. By owning an ETF, you get the diversification of an index fund plus the
flexibility of a stock. Because, ETFs trade like stocks, you can short sell them, buy them on
margin and purchase as little as one share. Another advantage is that the expense ratios of most
ETFs are lower than that of the average mutual fund. When buying and selling ETFs, you pay
your broker the same commission that you'd pay on any regular trade.

There are various ETFs available in India, such as:

1. NIFTY BeES: An Exchange Traded Fund launched by Benchmark Mutual Fund in January
2002.

2. Junior BeES: An Exchange Traded Fund on CNX Nifty Junior, launched by Benchmark
Mutual Fund in February 2003.

3. SUNDER: An Exchange Traded Fund launched by UTI in July 2003.

4. Liquid BeES: An Exchange Traded Fund launched by Benchmark Mutual Fund in July 2003.

5. Bank BeES: An Exchange Traded Fund (ETF) launched by Benchmark Mutual Fund in May
2004.

1.14. Mutual Funds are an under tapped market in India

34
Despite being available in the market for over two decades now with assets under management
equaling Rs 7,81,71,152 Lakhs (as of 28 February,2010) (Source: Association of Mutual
Funds, India) , less than 10% of Indian households have invested in mutual funds. A recent
report on Mutual Funds Investments in India published by research and analytics firm, Boston
Analytics, suggests investors are holding back from putting their money in mutual funds due to
their perceived high risk and a lack of information on how mutual funds work. This report is
based on a survey of approximately 10,000 respondents in 15 Indian cities and towns as of
March 2010.There are 43 Mutual Funds at present.

The primary reason for not investing appears to be correlated with city size. For example, as
depicted in the exhibit below, among respondents with a high savings rate, close to 40% of those
who live in metros and Tier I cities cited such investments were very risky, whereas 33% of
those in Tier II cities said they did not how and where to invest in such assets.

On the other hand, among those who invested, close to nine out of ten respondents did so
because they felt these assets to be more professionally managed than other asset classes. Exhibit

35
2 lists some of the influencing factors for investing in mutual funds. Interestingly, while non-
investors cite “risk” as one of the primary reasons they do not invest in mutual funds, those who
do invest cite the fact that they are “professionally managed” and “more diverse” most often as
the reasons they invest in mutual funds versus other investments.

1.15. Name and Addresses of SEBI Registered Mutual Funds

36
Sr. No. Name Registration No. Registration Date
1. AEGON Mutual Fund MF/059/08/04 25.09.2008
45, Maker Chambers VI,
Nariman Point,
Mumbai 400021
TEL : 66542614/15
Fax: 66542617
e-mail: aegonamc@aegonindia.com
2. Alliance Capital Mutual Fund, MF/021/95/3 30.12.94
Address for correspondence
C/o. AZB & Partners
Advocates & Solicitors,
Express Towers – 23rd Floor,
Nariman Point, Mumbai – 400 021
3. AIG Global Investment Group Mutual MF/054/07/02 09.02.2007
Fund
FCH House, Ground Floor
Peninsula Corporate Park
Ganpatrao Kadam Marg
Lower Parel
Mumbai – 400 013
TEL : 40930000
FAX: 40930077
4. Axis Mutual Fund, MF/061/09/01 04.09.2009
11th Floor, Nariman Bhavan,
Vinay K. Shah Marg,
Nariman Point,
Mumbai – 400 021
TEL : 39403300
FAX : 22040130
WEB : www.axismf.com
www.axismutual.com
Email customerservice@axismf.com
Toll Free No : 1800 3000 3300
5. Benchmark Mutual Fund, MF/045/01/6 12.6.2001
405, Raheja Chambers,
213, Free Press Journal Marg,
Nariman Point,
Mumbai - 400 021
TEL : 56512727
FAX : 22003412
WEB : www.benchmarkfunds.com
Email:webmaster@benchmarkfunds.com
6. Baroda Pioneer Mutual Fund MF/018/94/2 21.11.94
501, Titanium, 5th floor,
Western Express Highway,
Goregaon (E), Mumbai 400 063.
TEL : 307410000, 42197999
FAX :30741001
WEB : www.barodapioneer.in
Email : info@barodapioneer.in
7. Birla Sunlife Mutual Fund MF/020/94/8 23.12.94

37
 One India Bulls Centre, Tower-1,
17th Floor, Jupiter Mills Compound,
841, Senapati Bapat Marg,
Elphinstone Road, Mumbai- 400001
TEL : 43568000 FAX : 43568110/8111
WEB : www.birlasunlife.com
8. Bharti AXA Mutual Fund MF/056/08/01 31.03.2008
51, 5th Floor,
Kalpataru Synergy, East Wing,
Vakola, Santacruz (E),
Mumbai 400 055.
TEL : 40479000
FAX : 40479001
Web : www.bhartiaxa-im.com
Email: info@bhartiaxa-im.com
9. Canara Robeco Mutual Fund MF/004/93/4 19.10.93
Construction House, 4th Floor,
5, Walchand Hirachand Marg,
Ballard Estate, Mumbai 400 001.
Tel : 6658 5000 to 5010
Fax 6658 5011 to 5013
WEB : www.canararobeco.com
Email : crmf@canararobeco.com
10. CRB Mutual Fund (Suspended) MF/008/93/5 17.12.93
Daruwala Mansion, 3rd Floor,
90 Chandanwadi Cross Lane,
Mumbai 400 020.
TEL : 2072719/20
FAX : 2096433
11. Deutsche Mutual Fund MF/047/02/10 28.10.2002
2nd Floor, 222, Kodak House,
Dr. D. N. Road,
Mumbai 400 001.
TEL : 22072211
FAX : 22074411
WEB : http://www.deutschemutual.com
Email : deutsche.mutual@db.com
12. DSP BlackRock Mutual Fund, MF/036/97/7 30.1.97
Tulsiani Chambers,
West Wing, 11th Floor,
Nariman Point,
Mumbai 400 021.
TEL : 56578000
FAX: 56578181
WEB : www.dspblackrock.com
Email : service@dspblackrock.com
Toll Free No: 1800 345 4499
13. Edelweiss Mutual Fund MF/057/08/02 30.04.2008
14th Floor, Express Towers,
Nariman Point, Mumbai – 400 021
TEL : 022-22864400
FAX : 022-4097 9970
Email: investor.amc@edelcap.com
Website: www.edelweissmf.com

38
 Toll Free No: 1800 425 0090
14. Escorts Mutual Fund, MF/028/96/4 3.7.96
11, Scindia House,
Connaught Circus,
New Delhi 110 001.
TEL : 011-3321654 / 5177 / 3319991 /
3351343
FAX : 011-23761495, 23325177
WEB: www.escortsmutual.com
Email : help@escortsmutual.com
Mumbai Tel. Nos.
TEL : 30947097, 24218162
15. FORTIS Mutual Fund MF/049/04/01 27.05.2004
Fortis Investment Management (India) Pvt
Ltd
5th Floor, French Bank Building,
62, Homji Street, Fort,
Mumbai - 400 001-India
Tel- 91 (22) 6656 0001
Fax- 91 (22) 6656 0040
WEB : www.fortisinvestments.in
hemanti.wadhwa@fortisinvestments.in
16. Franklin Templeton Mutual Fund MF/026/96/8 19.2.96
Level 4, Wockhardt Towers,
Bandra Kurla Complex,
Bandra (East),
Mumbai – 400 051
TEL : 6751 9100
FAX : 6649 0622
WEB : www.templetonindia.com
17. Fidelity Mutual Fund MF/050/05/01 17.02.2005
6th floor, Mafatlal Centre,
Nariman Point,
Mumbai 400 021
TEL: Toll Free number 1-600- 121262
Gurgaon : +91 (0124) 509 2104
(Investor Relations Officer's number)
Mumbai : + 91 (022) 5655 4000
FAX: Gurgaon : +91 (0124) 509 2100
Mumbai: +91 (022) 5655 4200
Email: investor.line@fidelity.co.in
WEB : www.fidelity.co.in
18. Goldman Sachs Mutual Fund MF/058/08/03 26.08.2008
Rational House,
Appasaheb Marathe Marg,
Prabhadevi,
Mumbai 400025
TEL : 66169000
FAX : 66279240
Email: gsamindia@gs.com
WEB: www.gsam.in
19. HDFC Mutual Fund, MF/044/00/6 30.6.2000
Ramon House, 3rd Floor,

39
 169, Backbay Reclamation,
Churchgate,Mumbai 400 020.
TEL : 22029111 FAX: 22028862
WEB : www.hdfcfund.com
20. HSBC Mutual Fund, MF/046/02/5 27.5.2002
314 D N Road, Fort,
Mumbai 400 001.
TEL : 66145000
FAX: 40029600
Email : hsbcmf@hsbc.co.in
21. ICICI Securities Fund, MF/043/00/3 28.3.2000
ICICI Towers, 7th Floor,
North Block,
Bandra-Kurla Complex,
Mumbai 400 051.
TEL : 6531414 / 6538988 (D)
FAX : 6531063 / 6531178
22. ING Mutual Fund, MF/040/99/5 11.2.99
Unit No. 101, 601/606, 6th Floor,
“Windsor”, Off. C.S.T. Road,
Vidyanagari Marg,
Kalina, Santacruz (East),
Mumbai – 400 098
TEL : 022-39827999
Toll Free : 18004255433
FAX : 022-26500248
Email : information@in.ing.com
WEB : www.ingim.co.in
23. ICICI Prudential Mutual Fund MF/003/93/6 13.10.93
2nd Floor, 302, Block B-2,
Nirlon Knowledge Park,
Western Express Highway,
Mumbai - 400063.
Tel No. +9122 42090573
Registered Office :
12th Floor, Narain Manzil,
23, Barakhamba Road,
New Delhi – 110 001
WEB : www.pruicici.com
24. IDBI Mutual Fund MF/064/10/01 29.3.2010
IDBI Building, 2nd Floor,
Plot No.39-41, Sector – 11,
CBD Belapur,
Navi Mumbai 400 614.
Tel.: 66096100/ 66096101
Fax: 66096110
E-mail:
Krishnamurthy.vijayan@idbimutual.co.in
www.idbimutual.co.in
25. IDFC Mutual Fund, MF/042/00/3 13.3.2000
One IndiaBulls Centre,
841, Jupiter Mills Compound,
Senapati Bapat Marg,

40
 Elphinstone Road (West),
Mumbai – 400 013.
TEL : 22621111
FAX : 22693365
Email : investor@idfcmf.com
WEB : www.idfcmf.com
26. JM Financial Mutual Fund MF/015/94/8 15.9.94
502, 5th Floor, ‘A’ Wing,
Laxmi Towers, Bandra Kurla Complex,
Mumbai - 400020
TEL : 39877777
FAX : 26528377-78
WEB : www.JMFinancialmf.com
Email : mktg@jmmutual.com
27. JP Morgan Mutual Fund MF/053/07/01 08.02.2007
Kalpatau Synergy, 3rd Floor
West Wing, Santacruz - East
Mumbai 400 055
TEL : 6783 7000
FAX : 6783 7001
WEB : www.jpmorganmf.com
Email : india.investors@jpmorgan.com
28. Kotak Mahindra Mutual Fund, MF/038/98/1 23.6.98
5A, 5th Floor, Bakhtawar,
229, Nariman Point,
Mumbai – 400 021
TEL : 66384444
FAX : 66384455
WEB : www.kotakmutual.com
29. KJMC Mutual Fund, MF/041/99/4 28.4.99
168, Atlanta,
16th Floor,
Nariman Point
Mumbai 400 021
TEL : 22885201/22832350
FAX : 22852892
Email : kjmcmutual@kjmcmutual.com

30. LIC Mutual Fund MF/012/94/5 9.5.94

Industrial Assurance Bldg.,
4th Floor, Opp Churchgate Stn.,
Mumbai 400 020.
TEL : 22851661/22851663
FAX : 22040039
WEB : www.licmutual.com
31. L&T Mutual Fund MF/035/97/9 3.1.97
309, Trade Centre, 3rd Floor,
Bandra Kurla Complex,
Bandra (East),
Mumbai - 400 051.
TEL : 66574000
FAX : 66574004
WEB : www.lntmf.com
E-mail: ltmf@lntmf.com

41
32. Morgan Stanley Mutual Fund MF/005/93/1 5.11.93
Forbes Building,
Charanjit Rai Marg,
Mumbai - 400 001.
TEL : 22096600
FAX : 22096606 / 22096610
WEB : www.msgfindia.com
33. Mirae Asset Mutual Fund MF/055/07/03 30.11.2007
Unit 606, 6th Floor, Windsor,
Off CST Road, Kalina, Santacruz (E),
MUMBAI 400 098
TEL : 67800300
FAX : 6725 3942 / 45
Email : customercare@miraeassetmf.co.in
WEB : www.miraeassetmf.co.in
34. Motilal Oswal Mutual Fund MF/063/09/04 29.12.2009
81/82, 8th Floor,
Bajaj Bhawan,
Nariman Point, Mumbai 400 021
Tel: 39804200
Web:
www.motilaloswal.com/assetmanagement
35. Peerless Mutual Fund MF/062/09/03 04.12.2009
Peerless Mansion,
1 Chowringhee Square,
Kolkata-700069
TEL : 033-22435496
FAX : 033-22435339
Mumbai office:
Ground 03, Churchgate Chambers,
Premises Co-operative Housing Society
Ltd,
Plot - 05, Sir. Vithaldas Thackersay Marg,
Next to American Centre,
Mumbai - 400 020
Email: pfmc@peerless.co.in
WEB : www.peerlessmf.co.in
36. Pramerica Mutual Fund MF/065/10/02 13.5.2010
Nirlon House, 2nd Floor,
Dr. Annie Besant Road,
Worli, Mumbai- 400025
TEL: 022- 61593000
FAX: 022- 61593100
37. Principal Mutual Fund MF/019/94/0 13.12.94
Exchange Plaza, 2nd Floor,
B Wing, NSE Building,
Bandra Kurla Complex,
Bandra(East)
Mumbai 400051.
TEL : 67720555
FAX : 2204 4990
Toll Free No: 1800225600

42
 WEB : www.principalindia.com
38. Quantum Mutual Fund, MF/051/05/02 02.12.2005
505, 5th Floor,
Regent Chambers,
Nariman Point,
Mumbai – 400021
TEL : 22830322
FAX : 22854318
WEB : www.quantumamc.com
39. Reliance Mutual Fund MF/022/95/1 30.6.95
One India Bulls Centre, Tower 1,
11th 7 12th Floor, Jupiter Mills Compound,
841 Senapati Bapat Marg,
Elphinstone Road, Mumbai 400 001.
TEL : 30287168
FAX : 30414885
WEB: www.reliancemutual.com
40. Religare Mutual Fund MF/052/06/01 24.07.2006
3rd Floor, GYS Infinity,
Paranjpe “B” Scheme,
Subhash Road, Vile Parle (East),
Mumbai – 400 057.
TEL : 67310000
FAX : 28371565

41. Sahara Mutual Fund, MF/030/96/0 1.10.96

9th Floor, 97-98
Atlanta Building
Nariman Point
Mumbai – 400 021
Tel : 22-6752 0121 – 27
Fax : 66547855
WEB : www.saharamutual.com
Email: saharamutual@saharamutual.com
42. SBI Mutual Fund MF/009/93/3 23.12.93
191, Maker Towers "E"
Cuffe Parade
Mumbai 400005
TEL : 22180221-25,27
FAX : 22189663
WEB : www.sbimf.com
43. Shriram Mutual Fund MF/017/94/4 21.11.94
106, Shiv Chambers, 1stFloor,
‘B’ Wing Sector - 11,
C.B.D.Belapur,
Navi Mumbai 400 614.
TEL : 7901447/8
FAX : 7901449
Email: srmf@roltanet.com

43
 44. Sundaram BNP Paribas Mutual Fund, MF/034/97/2 3.1.97
46, Whites Road,
Royapettah,
Chennai 600 014.
TEL : 044-28543362/28543367
FAX : 044-28543156
45. Shinsei Mutual Fund, MF/060/09/01 10.02.2009
5th Floor, Harchandrai House,
81, Maharshi Karve Road,
Marine Lines, Mumbai – 400 002
TEL : 022-66142900
FAX : 022-66100148
WEB : www.shinseifunds.com
46. Taurus Mutual Fund MF/002/93/ 21.9.93
Ground Floor, AML Centre-1
8 Mahal Industrial Estate
Mahakali Caves Road
Andheri (E), Mumbai – 400093
Tel: 022- 66242700
Fax: 022- 66242722
Website: www.taurusmutualfund.com
47. Tata Mutual Fund, MF/023/95/9 30.6.95
Mafatlal Center,
9th Floor, Nariman Point,
Mumbai 400 021.
TEL : 66578282
FAX : 22613782
WEB : www.tatamutualfund.com
48. UTI Mutual Fund MF/048/03/1 14.01.2003
UTI Towers,
‘Gn’ Block, Bandra-Kurla Complex,
Bandra (East),
Mumbai 400 051
TEL : 56786666
FAX : 56786578
WEB : www.utimf.com

The Association of Mutual Funds of India

Association of Mutual Funds of India (AMFI)
706-708, Balarama,
Bandra Kurla Complex,
Bandra (East)
Mumbai – 400 051
TEL : 26590206 / 26590243

44
26590246 / 26590382
FAX : 26590209
WEB: www.amfiindia.com
Email: amfi@bom5.vsnl.net.in

45
 CHAPTER 2
ABOUT THE BANK

ABOUT THE BANK

ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank
Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of
Dutch origin, during Oct 2002.The origin of the erstwhile Vysya Bank was pretty humble. It was
in the year 1930 that a team of visionaries came together to form a bank that would extend a
helping hand to those who weren't privileged enough to enjoy banking services.

46
It's been a long journey since then and the Bank has grown in size and stature to encompass
every area of present-day banking activity and has carved a distinct identity of being India's
Premier Private Sector Bank.

In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made
rapid strides to reach the coveted position of being the number one private sector bank. In 1990,
the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations, the then
Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank ‘Stupendous’.
The 75th anniversary, the Platinum Jubilee of the bank was celebrated during 2005.

2.1. History of Vysya Bank and its transformation into ING Vysya Bank Limited

Year Events
1930 The Bank was Incorporated at Bangalore City. The Bank transacts general banking
business of every description.
1958 The Bank was granted a license by the Reserve Bank of India to carry on banking
business.
1972 With effect from 1st January, the Bank was upgraded to `B' class.

47
1978 80,000 Right shares issued at par 1977 in proportion of 2:1.
1985 6,00,000 Rights equity shares issued at par in proportion if 1:2.
1987 The Vysya Bank Leasing, Ltd. was incorporated on 4th January, as a subsidiary of the
Company to take up equipment leasing and such other forms of business as are
permissibile through the subsidiary. The Vysya Bank Housing Finance, Ltd., is also a
subsidiary of the bank.

6,00,000 Rights equity shares issued at par in proportion of 1:2.

1990 The bank introduced the Investors' club activity to render buying and selling of capital
market investments on behalf of its members apart from giving loans and providing
security for the scrips deposited with the bank.
1993 At the Extraordinary General Meeting held on 27th September, a Special Resolution
was passed for issue of Rights Shares to the shareholder and Preferential Allotment of
Shares to the Managment Group and Employees. The allotment of 24 lakh shares was
made to Management Group on 10th December, which was kept in abeyance vide RBI
directive dated 15th December.
1994 The Bank launched new products like VYS STORE – credit facility for constructions
of godowns, agri-vehicles for transportation of produce and inputs and cash credit for
agricultural lendings.

A new division was set up to strengthened merchant banking activities of the bank.
The bank underwrote 118 capital issues aggregating Rs 34.47 crores.

A separate cell managed by professionals specialised in investment management was

formed to look after the equity investments of the bank.

The Company's schemes such as vysprime and vysinvest exis exclusively for NRIs.
Vysbuy for facilitating purchase of consumer articles, vysmobile for purchase of
vehicles and vysequity facilitating purchase of shares.

2,43,600 shares were allotted at a premium of Rs 10 per share to the employees of the
bank and subsidiary companies.

The RBI has revoked its order letter dated 29th September, and permitted allotment as
follows: (i) Issue of 2,66,500 shares of Rs 10 each in the ratio of 50 shares to each
employee of its subsidiary companies at a premiuim of Rs 10 per shares,(ii) Issue of
6,00,000 shares of Rs 10 each to the Management Group at a premium of Rs 364.25
per shares, (iii) After Completion of the above issues, rights issues to the shareholders
including (i) and (ii) in the ratio of 5 shares for every share at a price in accordance
with pricing guidelines of RBI.
6 lakhs shares were allotted to Management Group at a premium of Rs 364.25 as
approved by RBI. Balance of 18 lakh shares awaited for the decisive of the Company.

1200 shares allotted.

48
1995 The bank launched two new schemes, namely
Vysdouble Scheme - doubles money in less than 57 months &
Vyswift Scheme -A scheme for fast collection of out station cheques.

The banks has signed a MOU with Bank Brussels Lambert for strategic alliance. It
enable the bank to globalise its operations.

The bank has appointed M/s. KPMC Peat Marwick to conduct a stud of the bank for
re-engineering the business processes of the bank and suggest an appropriate business
strategy to remodel th bank as a World Class Bank.

131,32,830 No. of equity shares of Rs 10 each at a prem. of Rs 2 per share allotted to

the existing shareholders on rights basis in the ratio of 5:1.
1996 A MOU was signed with MC Securities Ltd., London a group company of Bank
Brussels Lambert for establishing a joint venture company for International
Investment Banking.

834,800 No. of equity shares of Rs 10 each at a premium of Rs 316.07 per share

allotted on preferential basis to BBL Mauritius Holidings, a wholly owned subsidiary
of Bank Brussels Laviber Belgium and 13,435 No. of equity shares of Rs 10 each at a
premium of Rs 25 per share allotted out of abeyance cases of Rights issue.
1998 Sri T. B. Dhananjaya Rao, Director, expired on 1st October.

The Bank set-up V-SATs in 6 Metros using DAMA technology as an internal

communication support system through which 200 of the Bank's Branches are
proposed to be linked to the Bank's Corporate Office for data transmission and E-Mail
Communication.
1999 The Bank launched Insurance linked Premium Savings Bank Account for individuals.

The Bank has signed an MOU with ING for distribution of Life Insurance products, as
and when the insurance industry opens up in India.
2000 Indus Software Private Limited a Pune-based software products company has signed
an agreement with the Vysya Bank Ltd., a leading private sector bank in India for the
implementation of its product, ISI (lending solutions from Indus).

Vysya Bank Ltd. signed a MoU with Global TeleSystems Ltd. to utilise their e-
commerce payments processing infrastructure.
The Bank has signed a memorandum of understanding with the ING group to pick up
26% stake in ING Asset Management Company for nominal amount of Rs 10 crore.

Vysya Bank has signed an MoU with Satyam Infoway for its foray into e-commerce.

The Vysya Bank signed an MoU with Siri Technologies Pvt for a technical and
marketing partnership to develop, customise and implement remittance/payment
processing, software solutions according to a press release issued by Vysya Bank.
49
 ING Insurance, a sub-holding company of Dutch financial major ING Group, has tied
up with Bangalore-based Vysysa Bank to enter the Indian life insurance market.

Vysya Bank is likely to review its joint venture agreement with Citibank for the credit
card business.

Bangalore-based private sector bank Vysya Bank is to launch a floating rate deposit.

ING Insurance, Vysya Bank Ltd. and the Damani Group have signed an agreement to
form a life insurance joint venture in India.

The Bank announced launching of VysyAMulya project, envisaging an investment of

about Rs. 60 Crores spread over two financial years, which involves setting up of a
Data Centre and networking of 125 branches for online real-time Centralised
Processing through Sanchez's Core banking suite of products - PROFILE/Anyware -
IBS.

The Bank has entered into an agreement with IBM India Ltd for the IT related
hardware/software supply and system integration.

The Bank has also entered into an agreement with M/s. Bangalore Labs for providing
suitable and stable communications network design and
layout, which will allow the bank to operate 24 hours, seven days a week.

The Bank launched, during the year, two new technology aided products viz., - Vys-
Sambandh and Access Plus.

Sri K R Ramamoorthy, has been re-appointed as the Chairman and Chief Executive
Officer of the Bank for a period of three years.
2001 Vysya Bank named a new Managing Director Mr. K Balasubramanian, sees this as the
first step in its long-term succession plan for the Bank's top job.

Vysya Bank Ltd as part of its restructuring exercise, has merged six regional offices
and will be opening 30 branches, including extension counters, in the next three years.
2002 Vysya Bank announces Employees Voluntary Retirement scheme.

Vysya Bank Ltd has informed that the following changes have been approved
consequent increase in the stake of equity of BBL (ING Group) from 20% to 43.99%.
The following Directors resigned from the office of Director w.e.f September 09,
2002: a) Mr. M K Ramachandra, b) Mr. H N Tarachandani, c) Mr. Yadalam A
Subramanyam, d) Mr. K V K Seshavataram e) Mr. G B S Raju. Mr. Peter Alexander
Smyth, a nominee of ING Group has been appointed as Director in the casual vacancy
caused by the resignation of Mr. M K Ramachandra w.e.f. September 09,2002. Mr.
Jacques P M Kemp, a nominee of ING Group has been appointed as Director in the

50
 casual vacancy caused by the resignation of Mr. G R S Raju w.e.f. September 09,
2002.

Vysya Bank Ltd has informed that RBI has sanctioned the appointment of Mr Bart
Hellemans as Managing Director & Chief Executive Officer and Mr G Mallikarjuna
Rao as part time Chairman of the Bank. Mr K Balasubramanian the outgoing
Managing Director will continue as non-executive Director of the Bank.

G Mallikarjuna Rao takes charge as part time Chairman of Vysya Bank.

Vysya Bank Ltd has informed BSE that The Board of Directors througha Circular
Resolution passed on November 9, 2002 has noted the resignation of Mr Leo Willy
Janssen, nominee of ING from the Board ofthe Bank.
2003 Vysya Bank Ltd has informed BSE that the Board of Directors of Vysya Bank Ltd at
their meeting held on January 30, 2003 took on record the following:
1. Appointment of Arun Thiagrajan as Additional Director
2. Appointment of K R Ramamorthy as Additional Director effective
February 12, 2003 3. Resignation of A P Rao as Director effective Jan 30, 2003.

Western Union, the top American money transfer firm has tied up with ING Vysya
Bank for inward money transfer.

ING Group acquired 23.99% equity of Vysya Bank, and the name has been changed
to ING Vysya Bank Ltd.

Change in the Management Structure:

Appointment of Mr.Arun Thiagrajan as Additional Director
Appointment of K Ramamorthy as Additional Director and Resignation of A P Rao as
the Director.

Mr Robin Roy, the point man for retail banking of ING Vysya Bank Ltd has resigned.

Mr Prakash G Apte has been appointed as Additional Director on the board of the
bank.

ING Vysya has launched 3 new endowment products:

Powering Life - Limited payment endowment plan
Creating Life - Child Protection plan
Reassuring Life - Endowment plan with revisionary bonus.

ING Vysya Bank Ltd has reported a 26% growth in its net profit for the year.

ING Vysya Bank has entered into a subscription and shareholders agreement with
Nationale Nederlanden Interfinance BV, Kirti Equities Pvt Ltd and ING Investment
Management (India)Pvt Ltd.

51
 Crisil assigs AA+ rating for the 200cr bond programme of ING Vysya bank.

ING vysya bank has launched new Saving Bank Account called Orange, with facilities
like personal accident cover, free annual accident cover.

ING Vysya's new Registered office: at No 22, M G Road Bangalore 560001.

Ph.Nos : 080-5005000 & 5559222 Fax No. 080-5005555.

ING-Vysya has raised Rs.200cr through tier-II capital bonds at 6.25%. The bonds are
rated AA plus by both Fitch and Crisil.

Medvin Finance Private Ltd., shareholder of the Bank and a constituent of GMR
Group of Companies, Indian Promoters, sells 452521 equity shares amounting to 2%
of the paid up capital of the company

Resignation of Mr. Ramsay Alexander Urquhart and Mr. Jacques P M Kemp from the
Board of the Bank. Further, the Board of Directors appointed i) Mr. Lars Kramer; ii)
Mr. Cees Ovelgonne and iii) Mr.Peter Staal as Directors of the Bank in the casual
vacancies arising out of resignation of Mr. Jacques P M Kemp, Mr. Ramsay
Alexander Urquhart and Mr. K Balasubramanian respectively as Directors.

ING Vysya Bank received Rs 4.35 crore to take back bad loans from its erstwhile
housing finance arm that had been acquired by Dewan Housing Finance

iGate Global Solutions signs outsourcing deal worth approx million with ING Vysya
Bank

Toyota signs agreement with ING Vysya for auto finance

ING Vysya Life signed an agreement with public sector Madras Fertiliser Ltd (MFL)
to sell its life insurance policies to farmers, using the fertiliser company's dealer
network in rural sector
2004 Dolphin Milk forges alliance with ING Vysya Bank

ING on course to amalgamate with Vysya venture

ING Vysya inks pact with Madras Fert

Introduced Protected Home Loans - a housing loan product

2005 ING Vysya Bank names Mr Ned Swarup as CEO

Introduced Solo - My Own Account for youth and Customer Service Line-Phone
Banking Service

ING Vysya Bank launches an `Advantage Current Account' for mid-sized

52
 businesses

ING Vysya Bank rolls out online money transfer service

2006 ING Vysya Bank Ltd has informed that the Company has appointed Mr.Vaughn
Richtor as its new Chief Executive Officer (CEO) and Managing Director for a three-
year term, following approval from the Reserve Bank of India.

ING Vysya Bank Ltd delists securities of the Bank from Bangalore Stock Exchange
Ltd.

ING Vysya forays into portfolio management biz Bank has networked all the branches
to facilitate ‘AAA’ transactions i.e. Anywhere, Anytime & Anyhow Banking
2007 ING Vysya Bank has unveiled a scheme called `Freedom Savings Account.' The
features of the account are a zero quarterly balance requirement and a zero penal
charge for non-maintenance of minimum quarterly balance.
2008 ING Vysya Bank Ltd has appointed Mr. M Damodaran as a Non-Executive & Non
Independent Director of the Bank.
2009 ING Vysya Bank Ltd has appointed Mr. Vaughn Nigel Richtor as an Additional
Director on the Board, effective June 01, 2009. He will bea Non-Executive and Non-
Independent Director.
2010 Ing Vysya Bank Limited has appointed Mr. Peter Henri Maria Staal as a Non-
Executive & Non-Independent Director of the Bank effective January 21, 2010.

ING Vysya Bank Ltd has informed that the Board of Directors of the Company at its
meeting held on January 21, 2010, have approved the appointment of Mr. Peter Henri
Maria Staal as a Non-Executive & Non-Independent Director of the Bank effective
January 21, 2010.

2.2. The long journey of seventy-five years has had several milestones…

1930 Set up in Bangalore

1948 Scheduled Bank
1985 Largest Private Sector Bank
1987 The Vysya Bank Leasing Ltd. Commenced
1988 Pioneered the concept of Co branding of Credit Cards
1990 Promoted Vysya Bank Housing Finance Ltd.
1992 Deposits cross Rs.1000 crores

53
 1993 Number of Branches crossed 300
1996 Signs Strategic Alliance with BBL., Belgium. Two National Awards by Gem & Jewellery
Export Promotion Council for excellent performance in Export Promotion
1998 Cash Management Services, & commissioning of VSAT. Golden Peacock Award - for
the best HR Practices by Institute of Directors. Rated as Best Domestic Bank in India by
Global Finance (International Financial Journal - June 1998)
2000 State -of - the -art Date Centre at ITPL, Bangalore.
RBI clears setting up of ING Vysya Life Insurance Company
2001 ING-Vysya commenced life insurance business.
2002 The Bank launched a range of products & services like the Vys Vyapar Plus, the range of
loan schemes for traders, ATM services, Smartserv, personal assistant service, Save &
Secure, an account that provides accident hospitalization and insurance cover, Sambandh,
the International Debit Card and the mi-b@nk net banking service.
2002 ING takes over the Management of the Bank from October 7th , 2002
2002 RBI clears the new name of the Bank as ING Vysya Bank Ltd, vide their letter of
17.12.02
2003 Introduced customer friendly products like Orange Savings, Orange Current and
Protected Home Loans
2004 Introduced Protected Home Loans - a housing loan product
2005 Introduced Solo - My Own Account for youth and Customer Service Line – Phone
Banking Service
2006 Bank has networked all the branches to facilitate ‘AAA’ transactions i.e. Anywhere,
Anytime & Anyhow Banking
 
 

In terms of pure numbers, the performance over the decades can better be appreciated from the
following table:

Rs. in millions

Year Networth Deposits Advances Profits Outlets

1940 0.001 0.400 0.400 0.001 4
1950 1.40 5.30 3.80 0.09 16

54
 1960 1.60 20.10 13.50 0.13 19
1970 3.00 91.50 62.80 0.74 39
1980 11.50 1414.30 813.70 1.13 228
1990 162.10 8509.40 4584.80 50.35 319
2000 5900.00 74240.00 39380.00 443.10 481
2001 6527.00 81411.10 43163.10 371.90 484
2002 6863.24 80680.00 44180.00 687.50 483
2003 7067.90 91870.00 56120.00 863.50 456
2004 7473.20 104780.00 69367.30 590.01 523
2005 7094.00 125693.10 90805.90 (381.80) 536
2006 10196.70 133352.50 102315.20 90.6 562
2007 11101.90 154185.70 119761.70 889.0 626
2008 14260.00 204980.00 146500.00 1569.00 677
2009 15940.00 248900.00 167510.00 1888.00 857*

*Outlets comprises of 441 branches, 37 ECs, 28 Satellite Offices and 351 ATMs as of March
31st 2009. Additionally the bank also has Internet Banking, mi-b@nk and Customer Service
Line for Phone Banking Service.

2.3. Network Distribution

55
Break up of 833 Outlets

Particulars No.
Branches 475
Extension 13
Counters
Satellite Office 28
ATMs 367

2.4. Board of Directors (updated as of 09.08.2010)

56
Sri Arun Thiagarajan
Part-time Chairman

Sri Shailendra Bhandari

Managing Director & Chief Executive Officer

Sri Aditya Krishna

Director

Sri Philippe Damas

Director

Sri Richard Cox

Director

Sri Ryan Andrew Padgett

Director

Sri Santosh Ramesh Desai

Director

Sri M Damodaran
Director

Sri Vaughn Nigel Richtor

Director

Sri Peter Henri Maria Staal

Director

Sri Lars Kramer

Director

2.5. Executive Management Council (in alphabetical order) (updated as of 28.07.10)

57
 
Names Designation SBU/Function Place Office Address
Ashok Rao B Chief of Staff Legal and Bangalor 22, M G Road,
Compliance, e Bangalore - 560 001.
Vigilance and
Special Projects
Jan Van Chief Risk Credit Operational Bangalor 22, M G Road,
Wellen Officer, & Market Risk e Bangalore - 560 001.
Janak Desai Country Head - Treasury & Mumbai Plot No. C-12, G-Block,
Wholesale Wholesale Bandra Kurla Complex,
Banking Banking Bandra (E), Mumbai
-400 051
Jayant Chief Financial Finance & Bangalor 22, M G Road,
Mehrotra Officer Accounts e Bangalore - 560 001.
Meenakshi A Head - Operations Bangalor 22, M G Road,
Operations e Bangalore - 560 001.
MSR Chief Audit Internal Audit Bangalor 22, M G Road,
Manjunatha Executive Department e Bangalore - 560 001.
Prasad C V G Chief Information & Bangalor 22, M G Road,
Information Technology e Bangalore - 560 001.
Officer
Prasad J M Chief - Human Human Resources Bangalor 22, M G Road,
Resources e Bangalore - 560 001.
Samir Bimal Country Head - Private Banking Mumbai 9A, Laxmi Towers,C-
Private Banking Wing, Bandra-Kurla
Complex,Bandra
(East),Mumbai 400 051.
Shailendra Managing - Bangalor 22, M G Road,
Bhandari Director & e Bangalore - 560 001
Chief Executive
Officer
Uday Sareen Country Head - Retail Banking Bangalor 22, M G Road,
Retail Banking e Bangalore - 560 001

2.6. Financial Results

ING Vysya Bank Q2 Net Profit up 41%

58
ING Vysya Bank announced its unaudited financial results for the quarter and half-year ended
30 September 2010 following the approval by its Board of Directors at their meeting held in
Bangalore today.

Performance at a Glance

Q2 FY 11 v Q2 FY 10

 Net Profit up 41% to Rs. 75.3 crores

 Net Interest Income up 33% to Rs. 254.2 crores
 Deposits up 16% over September 2009 and up 8% on sequential basis (Q-o-Q)
 CASA deposits up 27% over September 2009 and up 14% on sequential basis (Q-o-Q)
 CASA Ratio at 35.9% against 32.7%. Core CASA Ratio stood at 34.8%
 Advances up 24% over September 2009 and up 7% on sequential basis (Q-o-Q)
 Provision Cover up at 72.8% against 39.8%
 Net NPA at 0.81% against 1.78%
 Return on Assets improves to 0.86% compared to 0.74%

Financial Highlights

The Net Profit (PAT) of the Bank for the quarter ended 30 September 2010 increased by 41% to
Rs. 75.3 crores compared to Rs. 53.5 crores reported in the corresponding quarter of the previous
year. Net Interest Income (NII) for the quarter increased sharply by 33% to Rs. 254.2 crores from
Rs. 191.4 crores with Net Interest Margin (NIM) at 3.34% compared to 3.09% for the quarter
ended 30 September 2009. This was achieved on the back of significant improvement in the cost
of deposits which improved to 4.85% in the current quarter from 5.47% for the quarter ended
September 2009. This is inspite of the fact that there has been an increase in cost of savings bank
deposits and higher reserve requirements. Other income was up by 27% at Rs. 193.3 crores,
which included one off investment gains. Total income increased by 30% to Rs. 447.5 crores
from Rs. 343.0 crores in the corresponding quarter of previous year. Operating costs increased to
Rs. 263.3 crores for the period under review from Rs. 199.4 crores reported in the corresponding
quarter of the previous year. This was primarily on account of increase in staff costs to Rs. 160.1
crores from Rs. 104.3 crores. The Bank and the Indian Banks’ Association have sought the
approval from the Reserve Bank of India to permit amortization of the impact on retirement
benefits on account of 9th Bipartite Settlement and amendment to the Payment of Gratuity Act,
1972 over a period of five years or allow set off against reserves, which is awaited. Meanwhile
the Bank is providing towards such impact on an estimate basis. Operating profit increased by
28% to Rs. 184.2 crores from Rs. 143.6 crores in the corresponding quarter of previous year.
While the Bank has received regulatory approval for achieving the Provision Coverage Ratio of
70% by 31 March 2011, the Bank has accelerated provision in the current quarter and Provision
Coverage Ratio improved to 72.8% against 39.8% in September 2009. The Provisions and
contingencies for the current quarter stood at Rs. 69.8 crores. Return on assets improved to
0.86% compared to 0.74% in September 2009 quarter.

59
The Net Profit (PAT) of the Bank for the half year ended 30 September 2010 increased by 27%
to Rs. 144.3 crores compared to Rs. 113.7 crores reported in the corresponding period of the
previous year. Net Interest Income (NII) increased sharply by 36% to Rs. 492.3 crores from Rs.
363.3 crores with Net Interest Margin (NIM) at 3.3% compared to 2.9% for the half year ended
30 September 2009. This was achieved on the back of significant improvement in the cost of
deposits which improved to 4.8% in the current half year from 5.9% for the period ended
September 2009. This is inspite of the fact that there has been an increase in cost of savings bank
deposits and higher reserve requirements. Total income increased to Rs. 809.9 crores from Rs.
674.6 crores in the corresponding period of previous year. Operating costs increased to Rs. 477.1
crores for the period under review from Rs. 388.8 crores reported in the corresponding period of
the previous year. This was primarily on account of increase in staff costs to Rs. 284.5 crores
from Rs. 203.7 crores. Operating profit increased by 16% to Rs. 332.8 crores from Rs. 285.8
crores in the corresponding period of previous year. Provisions and contingencies for the current
year were at Rs. 113.7 crores against Rs. 111.3 crores in the previous year. Return on assets
improved to 0.84% compared to 0.78% for the period ended September 2009.

Commenting on the results, Managing Director, Shailendra Bhandari said “I am pleased to note
that we are now moving closer to our stated objective of growing faster than the market. We
have seen significant momentum in Advances and CASA while simultaneously improving the
asset quality, in particular the Provision Coverage Ratio.”

60
Business Highlights

Total Deposits were Rs. 26,069 crores at the end of September 2010, up from Rs. 22,496 crores
as at the end of September 2009. Current and Savings (CASA) deposits grew by a healthy 27%
to Rs. 9,354 crores from Rs. 7,350 crores as at end of September 2009. CASA ratio increased to
35.9% of total deposits as at the end of September 2010 as against 32.7% at the end of
September 2009. However, after adjusting for certain large CASA deposits which flowed in
towards the end of the period, core CASA increased to 34.8% of total deposits.

Advances grew by 24% to Rs. 20,242 crores at the end of September 2010 from Rs. 16,384
crores as at end September 2009. The Credit Deposit Ratio stood at 77.6% as at September 2010
as against 72.8% as at September 2009.

The Gross NPA ratio and Net NPA ratio were at 2.91% and 0.81% respectively as at 30
September 2010 compared to 2.85% and 1.78% respectively as at 30 September 2009. Provision
Cover more than doubled from 39.8% at the end of September 2009 to 72.8% as at 30 September
2010 (59.0% as at the end of June 2010). While RBI has permitted the Bank to achieve the
Provision Coverage Ratio of 70% by March 2011, the Bank has achieved the prescribed
Regulatory minimum by September 2010 itself on account of higher provisioning.

The Capital Adequacy Ratio (CAR) of the Bank as at 30 September 2010 stood at 13.50%
(without reckoning H1 FY11 profit, as stipulated by Reserve Bank of India) from 14.48%, as at
30 September 2009 (as per Basel-II).

61
2.7. Mutual Funds of ING Vysya Bank

ING Vysya Mutual Fund was setup on February 11, 1999 with the same named Trustee
Company. It is a joint venture of Vysya and ING. The AMC, ING Investment Management
(INDIA) Pvt. Ltd. was incorporated on April 6, 1998.

ING Group is known for its philosophy of 'keeping it simple' covering some 60 million private,
corporate and institutional clients in 50 countries. It is the world’s fourth largest financial
services group.

ING Vysya Mutual Fund aims to provide investors with the most practical and secure investment
opportunities to invest their valuable savings. This is combined with a range of innovative
options to deliver healthy returns combined with a high degree of security. Currently, the fund
offers four equity, five debt and two hybrid schemes to its investors.

ING investment management is the leading company of India which stood apart from all the
other mutual fund industry. ING has a unique and reliable name in the country so the investor
trusts on it.

Therefore, company takes care of its customers as well with providing them the helpline service
and with customer support center which guide the investor throughout the process of how and
where to invest the money and which scheme is suitable for them.

The company has more than 60 million clients in 50 countries. The company launched different
products in the market, which are liked by the investor very much. Company designed these
products with keen observation of the market difficulties and tries to give the full satisfaction to
the customer.

ING launched different types of funds some are open ended and some are close ended, the open
ended funds are debt fund, atm fund, balanced fund, dividend yield fund, domestic opportunities
fund, equity fund, floating rate fund, gilt fund, dynamic fund, income fund, short term fund,
liquid fund, madcap fund, nifty plus fund, select stocks fund and tax saving fund.

On the other hand, there are some close-ended funds such as C.U.B fund and dynamic asset
allocation fund. These funds are long term and short-term investment mutual funds. These funds
designed for to give some extra income and profit to the people to achieve their goals in life.

The company offers the debt fund and the aim of this fund is to generate the money by investing
in fixed income securities and money market instrument. The company also maintains the
exposure of the fund and liquidity. The fund belongs to the open-ended income scheme and it is
a long-term investment. The under plan of the fund is to provide growth, dividend and bonus.

The other great offer for is its domestic opportunities fund and the main object of the fund is to
generate money for long term capital appreciation by investing in the big companies which

62
generate income highly. The fund is open ended so it is best for those who invest their money for
long period.

The company also offers the close-ended funds, which are specially designed for short-term
investment. The object of the fund is to generate the income by investing in the equity and its
related securities of companies. The fund automatically converts into the open-ended scheme
after the end of the third year.

Here is a list of mutual funds of ING Vysya which includes Debt Schemes, Equity Schemes
and Hybrid Schemes.

Product NAV(Rs.) Date Type YTD(%)

ING Balanced Fund 27.0900 02-Nov-10 Hybrid 35.78

ING C.U.B. Fund 19.8000 02-Nov-10 Equity 54.68
ING Contra Fund 17.8500 02-Nov-10 Equity 62.84
ING Core Equity Fund 42.1300 02-Nov-10 Equity 42.01
ING Dividend Yield Fund 25.7500 02-Nov-10 Equity 45.33
ING Domestic Opportunities Fund 41.2700 02-Nov-10 Equity 46.34
ING Guilt Fund-Provident Fund 15.5512 02-Nov-10 Debt -2.84
ING Global Real Estate Fund 9.9500 01-Nov-10 Alt. Asset -1.74
ING Income Fund 25.1305 02-Nov-10 Debt -0.05
ING Latin America Equity Fund 11.4800 29-Oct-10 Alt. Asset 35.99
ING Liquid Fund 19.8617 02-Nov-10 Debt 2.52
ING Long Term FMP - II 0 - Debt -
ING Midcap Fund 23.8400 02-Nov-10 Equity 51.04
ING MIP Fund 14.6461 02-Nov-10 Debt 11.01
ING Nifty Plus Fund 30.5200 02-Nov-10 Equity 48.29
ING OptiMix 5 Star Multi-Manager FoF Scheme 16.6900 01-Nov-10 Equity -
ING OptiMix Active Debt Multi-Manager FoF 13.0731 01-Nov-10 Debt -
Schm
ING OptiMix Asset Allocator Multi-Manager FoF 15.7403 01-Nov-10 Hybrid -
Sch
ING OptiMix Global Commodities Fund 12.8639 29-Oct-10 Alt. Asset -
ING OptiMix Income Growth Multi-Manager FoF 11.4283 01-Nov-10 Hybrid -
Scheme-15% Equity Plan
ING OptiMix Income Growth Multi-Manager FoF 12.5929 01-Nov-10 Hybrid -
Scheme-15% Equity Plan
ING OptiMix Multi Manager Equity Fund- Option A 11.9000 02-Nov-10 Equity -
ING Short Term Equity Fund 17.3202 02-Nov-10 Debt 4.27
ING Tax Saving Fund 32.8000 02-Nov-10 Equity 50.49
ING Treasury Advantage Fund 12.7137 02-Nov-10 Debt 2.67

63
 CHAPTER 3
OBJECTIVES OF THE STUDY

64
 OBJECTIVES OF THE STUDY
 The objective of the research is to study and analyze the awareness level of investors of
mutual funds.
 To get insight knowledge about mutual funds.
 An attempt has been made to measure various variables playing in the minds of investors
in terms of safety, liquidity, service, returns, and tax saving.
 To analyze the investment needs of the investors.
 To know the awareness of ING Vysya bank among the investors.
 To make people aware about ING Vysya bank and its presence in Allahabad.

65
 CHAPTER 4
RESEARCH METHODOLOGY

66
 RESEARCH METHODOLOGY
Research-Research can be defined as the search for knowledge or as any systematic
investigation, with an open mind, to establish novel facts, usually using a scientific method. The
primary purpose for applied research (as opposed to basic research) is discovering, interpreting,
and the development of methods and systems for the advancement of human knowledge on a
wide variety of scientific matters of our world and the universe.

Methodology - Methodology can be defined as:

1. "the analysis of the principles of methods, rules, and postulates employed by a discipline"
2. "the systematic study of methods that are, can be, or have been applied within a
discipline"
3. is the study or description of methods

Method can be defined as a systematic and orderly procedure or process for attaining some
objective.

Steps involved in Research Methodology are as follows:-

4.1. Research Design- There are mainly two types of research designs viz

(i) Quantitative Research Designs-This has three subsections viz.

Descriptive-

 Describe phenomena as they exist. Descriptive studies generally take raw data and
summarize it in a useable form.
 Can also be qualitative in nature if the sample size is small and data are collected
from questionnaires, interviews or observations.

Experimental-

The art of planning and implementing an experiment in which the research has control
over some of the conditions where the study takes place and control over some aspects of
the independent variable(s) (presumed cause or variable used to predict another variable).

Quasi-experimental-

A form of experimental research. One in which the researcher cannot control at least one
of the three elements of an experimental design:
 Environment
 Intervention (program or practice)

67
  Assignment to experimental and control groups
(ii) Qualitative Research Designs This has three subsections viz.

Historical-

 Collection and evaluation of data related to past events that are used to describe
causes, effects and trends that may explain present or future events. Data are often
archival.
 Data includes interviews.

Ethnographic-

 The collection of extensive narrative data over an extended period of time in natural
settings to gain insights about other types of research.
 Data are collected through observations at particular points of time over a sustained
period.
 Data include observations, records and interpretations of what is seen.

Case Studies-

 An in-depth study of an individual group, institution, organization or program.

 Data include interviews, field notes of observations, archival data and biographical
data.

“Type of research design used in my survey is descriptive research because it attempts to

describe and explain conditions of the present by using many subjects and questionnaires
to fully describe a phenomenon. In this technique data are collected from questionnaires,
interviews or observations. The study conducted for this project was quite exploratory in
nature, because no known hypothesis was developed.”

4.2. Data Collection Method-

(i) Primary Data- The source of primary data was through filling of questionnaires
by various customers at bank and during personal visit. I conducted my survey in
areas of Civil Lines, Chowk, Katra, and Ashok Nagar.
(ii) Secondary Data - Secondary data has been collected through surfing of various
websites. Various data regarding to mutual fund has been analyzed and an
exhaustive questionnaires was developed.

68
4.3. Sampling Plan –

A simple random sampling technique was used for data collection as in this technique
each member of the population an equal chance of being chosen. In my survey I have
tried to cover a large variety of people which includes salaried, businessman, student,
professional and retired.

The sample size of my survey is 50.

69
4.4. Data Analysis and Interpretation

1) Occupation

Occupation Number
Salaried 17
Business 17
House Wife 0
Student 6
Professional 9
Retired 1
Total 50

Occupation
Salaried Business House Wife Student Pofessional Retired
18% 2%
34%

12%

34%

Interpretation –

It can be interpreted from the data that there are equal number of people in salaried class and
business class and the number of professional is few and number of housewives and retired are
negligible.

70
 2) Annual Income

Annual Income Number

Below Rs.2, 00,000 7
Rs.2, 00,000-Rs.4, 00,000 30
4, 00,000-6, 00,000 5
Above Rs.6, 00,000 2
Total 44

Annual Income
Below 2L 2L-4L 4L-6L Above 6L
11% 16%
5%

68%

Interpretation –

Here we can see that most number of people fall in the category of 2 lakh-4 lakh group this
shows that most of the people are of middle class and the percentage of rest of the categories is
very few and above 6 lakh category having the lowest number of respondents.

71
 3) Qualification

Qualification Number
Under Graduate 7
Graduate 32
Post Graduate 11
Total 50

Qualification
Under Graduate Graduate Post Graduate

22% 14%

64%

Interpretation –

This shows that the majority of people are graduates and the percentage of people in rest of the 2
category viz. under graduate and post graduate are in minority.

72
 4) Gender

Gender Number
Male 44
Female 6
Total 50

Gender
Male Female

12%

88%

Interpretation –

This shows that the majority of working population is of males were females constitute a smaller
part.

73
 5) Age Group

Age Group Number

Between 20-30 - 25 25
Between 30-40 - 11 11
Above 40 - 14 14
Total 50

Age Group
Between 20-30 Between 30-40 Above 40
28%

50%

22%

Interpretation –

50% of respondents are of the age group between 20-30 this shows that the major population that
is working is young. Whereas the number of people of age group between 30-40 and above 40
years are nearly equal.

74
 6) Current Bank

Current Bank Number

SBI 24
BOB 6
Corporation Bank 3
Axis Bank 3
IDBI 2
PNB 7
ICICI 2
UBI 2
Dena Bank 1
Total 50

Current Bank
SBI BOB Corporation Bank
Axis Bank IDBI PNB
ICICI UBI Dena Bank
4% 2%
14% 4%

48%
4%

6%

6% 12%

Interpretation –

Here it is very clear that SBI is the most popular bank among the customers and the next in the
hierarchy is BOB and PNB and then there are other banks.

75
 7) Before this survey have you heard of ING Vysya Bank?

Heard of ING Vysya Bank Number

Yes 26
No 24
Total 50

Heard of ING Vysya Bank

Yes No

48%
52%

Interpretation –

It is clear that a large population has not even heard of ING Vysya bank.

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 8) Do you know where is the branch of ING Vysya Bank located?

Know the location of ING Vysya Bank Number

Yes 24
No 26
Total 50

Location of ING Vyasya Bank

Yes No

48%
52%

Interpretation –

This shows that a large number of people of Allahabad don’t even know where ING Vysya Bank
is located.

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 9) At present what are your Investment Needs?

Investment Needs Number

Medical Emergencies 13
Retirement 8
Home Purchase 14
Children’s Education 14
Children’s Marriage 8
Others 14
Total 71

Investment Needs
20% 18%
Medical Emergencies Retirement Home Purchase Children's Education
Children's Marrige Others

11%
11%

20% 20%

Interpretation –

In this we can see that there is a greater ratio of people who are concerned about home purchase
and children’s Education. The thing to be noticed is that people are getting more aware about
their health and a big proportion of people are also concerned about Medical Emergencies. The
others option may include land purchase or start up a new business or anything else.

78
 10) What Percentage of Income you Invest?

Percentage of Income Invested Number

0-15% 31
15-30% 13
Total 44

Percentage of Income Invested

30% 0-15% 15-30%

70%

Interpretation –

It is very clear that most of the investors invest very small amount of their income and a very
small percentage of people invest a larger chunk of their income.

79
 11) What is the time Period of your Investment?

Time Period of Investment Number

Short Term 27
Long Term 32
Total 59

Time Period of Investment

Short Term Long Term

46%

54%

Interpretation –

There are nearly equal percentage of people who invest for short term and long term. There are a
number of respondents who invest both for long term and short term.

80
 12) Do you have knowledge of Investment in Mutual Funds?

Knowledge of Investment in Mutual Funds Number

Yes 31
No 19
Total 50

Knowledge of Mutual Funds

Yes No

38%

62%

Interpretation –

Here we can see that majority of people i.e. around 60% of respondents have the knowledge of
mutual funds.

81
11) In which type of the Mutual Fund you invest?

A) On the basis of flexibility

Type of Mutual Fund(Flexibility) Number

Open Ended 8
Close Ended 24
Total 32

Type of Mutual Fund(On the basis of flexibility)

Open Ended Close Ended
25%

75%

Interpretation –

From the number of people who invest in mutual funds we can see that 75% of people invest in
close ended mutual funds therefore there is more demand for closed ended mutual funds.

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B) On the basis of Objective

Type of Mutual Fund(Objective) Number

Equity/Growth Funds 6
Tax Saving Funds 28
Debt/Income Funds 0
Liquid Funds 8
Guilt Funds 0
Balanced Funds 1
Total 43

Type of Mutual Fund(On the basis of Objective)

Equity/Growth Tax Saving Debt/Income
Liquid Guilt Balanced
19% 2% 14%

65%

Interpretation –

Majority of investors of mutual funds invest in tax saving funds so we can say that investor
investing in mutual fund have one more objective of tax avoidance. Then people invest in liquid
and Equity funds. Investment in debt, guilt and balanced fun is nearly zero.

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 12) Do you invest in systematic investment plan of Mutual Fund?

Invest In SIP Number

Yes 26
No 18
Total 44

Investment in Systemetin Investment Plan

Yes No

41%

59%

Interpretation –

Here we can see that a greater percentage of people invest in SIP schemes in which they have to
invest a particular sum of money per month.

84
 13) Are you satisfied with the financial advisor of the current organization?

Satisfaction from Current Financial Advisor Number

Yes 14
No 17
Total 31

Satisfaction from current Financial Advisor

Yes No

45%

55%

Interpretation –

We can see that a greater ratio of people who invest are satisfied but a large percentage of people
are dissatisfied also so there is a good scope of new financial advisors where people are
dissatisfied.

85
 14) Do you need a financial advisor?

Need a Financial Advisor Number

Yes 14
No 36
Total 50

Need a Financial Advisor

Yes No

28%

72%

Interpretation –

One thing to notice is that even though a large number of people are dissatisfied with their
current financial advisor but they do not want a new financial advisor.

86
 15) Would you like to hire ING VYSYA Financial advisor?

Like to Hire ING Vysya Financial Advisor Number

Yes 13
No 37
Total 50

Like to hire ING Vysya Financial Advisor

Yes No
26%

74%

Interpretation –

This shows that people are not much aware about ING Vysya bank that’s the reason that they
don’t want to hire ING Vysya financial advisor.

87
4.5. Limitations

It is known that all limitations are bound to be present in any study and it is correct in my
case also. My study contains various limitations which are as follows:-

 The survey has been conducted in a very small region due to various constraints.
 The number of respondents is very small so a correct scenario cannot be known.
 People are not willing to give their correct financial data because they are afraid of
revealing their correct incomes.
 Many respondents are uninterested while giving the information as the think that they
will not gain anything from this.
 The information provided by the people in response to queries put forward was based on
to a great extent on approximation.

88
CHAPTER 5
CONCLUSION

89
 CONCLUSION

Running a successful Mutual Fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the psyche of the small investors. This study has made an attempt
to understand the knowledge of Mutual Fund among investors and the awareness of ING Vysya
Bank. I observed that many of people have fear of Mutual Fund. They think their money will not
be secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms. Many
people do not invest in mutual fund due to lack of awareness although they have money to
invest. As the awareness and income is growing the number of mutual fund investors are also
growing. “Brand” plays an important role for the investment. People invest in those Companies
where they have faith or which are well known with them so ING Vysya Bank has to make its
brand name by aggressively advertising and providing satisfactory services to the customers.
Distribution channels are also important for the investment in mutual fund. Financial Advisors
are the most preferred channel for the investment in mutual fund. They can change investors’
mind from one investment option to others. New products targeting middle class population
should be launched and advertised locally to attract investors and increase the awareness level of
ING Vysya Bank and its products among the people of Allahabad.

90
 CHAPTER 6
RECOMMENDATIONS AND SUGGESTIONS

91
 RECOMMENDATIONS AND SUGGESTIONS

 ING Vysya Bank should target salaried and business class to convert them in to their
prospective investors.
 ING Vysya Bank should launch such product which suits the middle class families as
there is presence of a large number of low income group people.
 There is a need of professional financial adviser.
 Aggressive advertising is needed for ING Vysya Bank as most of the people of Allahabad
are unaware about its presence. Advertising through newspapers, local television
channels, banners, canopies are the best methods of advertising locally these methods
should be adopted to make people aware about the bank and its products.
 As the trend in mutual fund is increasing so ING Vysya Bank should also promote its
mutual fund products aggressively. The bank should launch new products and advertise
then in a manner that the investors are attracted towards those schemes.
 As a big chunk of respondents were not satisfied with their current financial advisors so
ING Vysya financial advisors should tap those customers. ING Vysya Bank should retain
its old customers and try to tap new customers and retain them.
 Customers of ING Vysya Bank should be made aware about mutual fund and its benefits
so that they may start investing in mutual fund. The customers visiting the bank should be
made aware about what Mutual Fund is and various pamphlets of various attractive
schemes should be given to them so that they may also start investing in Mutual Fund.

92
CHAPTER 7
ANNEXURE

93
 ANNEXURE

Questionnaire
Name: ………………………………………………………………………

Occupation: Salaried Business House Wife

Student Professional Retired

Annual Income: Below Rs.2,00,000 Rs.2,00,000-Rs.4,00,000

4,00,000-6,00,000 Above Rs.6,00,000

Qualification: Under Graduate Graduate Post Graduate

Gender: Male Female

Age Group: Below 20 Between 20-30 Between 30-40 Above 40

Address: ……………………………………………………………………………………………

Contact no: …………………………………………………………………………………………

Email Id: ……………………………………………………………………………………………

1.   Your current Bank …………………………………………………………………………….

2. How happy are you with the services provided by your existing bank.

Highly Satisfied Satisfied Neither Satisfied nor Dissatisfied

Dissatisfied Highly Dissatisfied

3.   Before this survey have you heard of ING VYSYA Bank? Yes            No

4.   Do you know where is the branch of ING VASYA Bank located in Allahabad? Yes No

5. What factors do you consider for opening a saving account?

Accessibility Min Balance Net Banking Cash Deposit

94
 Mobile Banking Free Cheques At Par Cheques Debit Card

NEFT/RTGS DD/Pay Order Charges

6. What products/services you are presently availing.

Savings a/c Mutual Fund Current a/c FDR Credit Card

Equity Lockers Demat a/c Loans Life Insurance

7. At present what are your investment needs?

Medical Emergencies Retirement Home Purchase

Children’s Education Children’s Marriage Others

8. What percentage of income you invest?

0-15% 15-30% 30-50%

9. What is the time period of your investment? Short Term Long Term

10. Do you have knowledge of investment in Mutual Funds? Yes No

11. In which type of the Mutual Fund you invest?

A. On the basis of flexibility.

Open Ended Close Ended

B. On the basis of objective.

Equity/Growth Funds Tax Saving Funds Debt/Income Funds

Liquid Funds Guilt Funds Balanced Funds

12. Do you invest in systematic investment plan of Mutual Fund? Yes No

13. If you have invested in Mutual Funds then are you satisfied with the financial advisor of the
current organization? Yes No

14. Do you need a financial advisor? Yes No

15. Would you like to hire ING VYSYA Financial advisor? Yes No

95
 CHAPTER 8
BIBLIOGRAPHY

96
 BIBLIOGRAPHY

a) www.ingvysyabank.com
b) whttp://www.amfiindia.com
c) ww.ingim.co.in
d) http://www.sebi.gov.in
e) http://en.wikipedia.org
f) http://www.investopedia.com
g) http://www.investorwords.com
h) http://www.mysmp.com
i) http://finance.indiamart.com
j) www.nseindia.com
k) http://www.moneycontrol.com
l) http://www.iloveindia.com
m) http://www.indianmba.com
n) http://www.mc3edsupport.org
o) http://www.info2india.com

97