A Project Report

ON
A DETAILED STUDY OF DEPOSITORY SERVICES RENDERED BY PRIVATE SECTOR BANKS (A CASE STUDY OF ICICI, AXIS, KOTAK MAHINDRA Bank)

Submitted To
Kurukshetra University, Kurukshetra in partial fulfillment for the degree of Master In Business Administration

(Session 2008-2010)

UNDER THE GUIDANCE OF

Mr. RAMESH CHANDER DALAL (Prof.) Ms. SUNIDHI JAIN (T.A.) FACULTY (USM)

SUBMITTED BY
ANKUSH VERMA MBA (gen.) FINAL SEM. ROLL No. - 77

DECLARATION

I, Ankush Verma the student of university school of management K.U.K, studying in MBA 4th Semester have submitted a Research Project on the title DETAILED STUDY ON DEPOSITORY SERVICE RENDERED BY PRIVATE SECTOR BANKS for the partial fulfilment of the degree of Master in Business Administration (MBA) to Kurukshetra University, Kurukshetra. I solemnly declare that the work done by me is original and no copy of it has been submitted to any other University/Institution for an award of any other degree.

(ANKUSH VERMA) .

ACKNOWLEDGEMENT
With the great reverence I bow before The Almighty for blessing me with the zeal to successfully complete the project. It really makes me privileged to be a student of USM, KUK that has given me a platform to nurture my aptitude and competency required for doing this project successfully and capably. I express my deepest gratitude and reverence to, Mr. RAMESH CHANDER DALAL, MBA Department for there kind consideration, painstaking efforts, constant encouragement and valuable advice throughout the study of the present research problem as well as preparation of the project report. I would like to thank for giving his precious time from her busy schedule to answer my queries and solving my problems. I would be failing in my duty if I do not express my thanks to my respondents whom I visited and who spared their valuable time to answer my questions. Last but not the least, my thanks to all the people who helped me in making my efforts fruitful

(ANKUSH VERMA)

CONTENTS
Page No. 1. Introduction Profile of the study Significance of the study 2. 3. 4. Objective of the study Literature Review Research Methodology Sampling & Sample Design Analytical Tools Data Collection Hypothesis Testing Limitations of the study 5. 6. 7. 8. Result & Discussions/Findings Recommendation Bibliography Annexure

CHAPTER

1ST

EXECUTIVE SUMMARY

The erstwhile settlement system on Indian Stock Exchange was also inefficient and increased risk, due to the time that elapsed before trades were settled. The transfer was by physical movement of papers. There had to be a physical delivery of securities a process fraught with delays and resultant risks. The second aspect of the settlement relates to transfer of shares in favour of the purchaser by the company. The system of transfer of ownership was glossy inefficient as every transfer involves physical movement of paper securities to the issuer for registration, with the change of ownership being evidenced by an endorsement on security certificate. In many cases the process of transfer would take much longer than two months. Hence cases like theft, forgery, mAXISlation of certificates and other irregularities were rampant. To obviate these problems, the Depository Act ,1996 was passed, it provides for the establishment of depositories in securities in securities with the objective of ensuring free transferability with speed, accuracy and security. In earlier days shares are being traded in physical form .In line with the global

phemomenan , Indian capital markets have also moved to rolling settlements on a T+2 basis where trades are settled on the second day after trading. Now share prices are available on real time basis and there is no rigging in prices of shares due to transport trading. Due to increase in use of internet and net banking invertors are now trading. Online thereby saving on time as well as cost coupled with trust of leading names in financial / banking sector.

CHAPTER

ND

CONCEPTUAL FRAMEWORK

2.1 INRODUCTION
DEPOSITORY SYSTEM
It is a system whereby the transfer and settlement of scripts take place not through the traditional method of transfer deeds and physical delivery of scripts but through modern system of effecting transfer of ownership of securities by means of book entry on the ledgers or the depository without physical movement of scripts. The new system thus eliminates paper work, facilitates automatic and transparent trading in scripts, shortens the settlement period and ultimately contributes to the liquidity of investment in securities. This system is also known as Scriples trading system

CONSTITUENTS OF DEPOSITORY SYSTEM:

There are essentially four players in the depository system: 1. The Depository Participant 2. The Beneficial Owner/Investor 3. The issuer 4. The Depository

FACILITIES OFFERED BY DEPOSITORY SYSTEM:

The following are some of important facilities offered by depository system:1. Dematerialization 2. Rematerialisation 3. Electronic settlement of trade 4. Electronic credit of securities allotted in public, rights and bonus issue.

5. Pledging or hypothecation of dematerialized securities. 6. Freezing of demat account.

ADVANTAGES OF DEPOSITORY SYSTEM :

The system is expected to offer the much-awaited custodial services to Indian and Foreign investors together. It is likely to bring about the following benefits to various investors, issuing companies as well as nation: (A) Advantages to the Investors:

Quick transfer of funds and securities. Elimination of all risks associated with physical certificates. Minimized chances of fraud, theft of securities. Statement of accounts. (B) Advantages to the issuer: Costs of registration & transfer of shares get reduced which the issuer company earlier incurred. Saving in cost involved at the time of public issues. Easy to attract foreign investors without any cost of issuance in overseas market. (C) Advantages to Intermediaries: Faster settlement Less risk of Bad Delivery Reduced chances of forgery, counterfeit certificates, loss in transit, theft etc. What is a Depository? A depository is an organization, which holds securities of investors in electronic form at

the request of the investors through a registered Depository Participant. It also provides services related to transactions in securities. In India, Depository Act defines a depository to mean a company formed and registered under Companies Act, 1956 and which has been granted a certificate of registration under sub section (IA) of section 12 of Securities and Exchange Board of India Act, 1992 How is a depository similar to a bank? It can be compared with a bank, which holds the funds for depositors. A Bank Depository Analogy is given in the following table: BANK Holds funds in an account Facilitates transfer without having to handle money Facilitates safekeeping of money DEPOSITORY Hold securities in an account Facilitates transfer of ownership without having to handle securities Facilitates safekeeping of securities

How many Depositories are registered with SEBI? At present two Depositories viz. 1. National Securities Depository Limited (NSDL) and 2. Central Depository Services (I) Limited (CDSL) are registered with SEBI.

2.2 SOME IMPORTANT POINTS:

Who is a Depository Participant? A Depository Participant (DP) is an agent of the depository through which it interfaces with the investor. A DP can offer depository services only after it gets proper registration from SEBI. Banking services can be availed through a branch whereas depository services can be availed through a DP. What is the minimum net worth required for a depository? The minimum net worth stipulated by SEBI for a depository is Rs.100 crore. How many Depository Participants are registered with SEBI? As on 31/03/2006, total of 538 DPs are registered with SEBI. What is required to be done if one has physical certificates with

the same combination of names, but the sequence of names is different i.e. some certificates with A as first holder and B as second holder and other set of certificates with B as first holder and A as the second holder?
In this case the investor may open only one account with A & B as the account holders and lodge the security certificates with different order of names for dematerialization in the same account. An additional form called Transposition cum Demat form will have to be filled in. This would help you to effect change in the order of names as well as dematerialise the securities. Can an investor operate a joint account on either or survivor

basis just like a bank account?

No. The demat account cannot be operated on either or survivor basis like the bank account.

Can an investor close his demat account with one DP and

transfer all securities to another account with another DP?

Yes. The investor can submit account closure request to his DP in the prescribed form. The DP will transfer all the securities lying in the account, as per the instruction, and close the demat account. What would be the charges for account closure and securities

transfer due to account closing?

SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005 advised that with effect from January 09, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership. All other transfer of securities consequent to closure of account, not fulfilling the abovestated criteria, would be treated like any other transaction and charged as per the schedule of charges agreed upon between the BO and the DP. Whether investors can freeze or lock their accounts? Investors can freeze or lock their accounts for any given period of time, if so desired. Accounts can be frozen for debits (preventing transfer of securities out of accounts) or for credits (preventing any movements of hindrances into accounts) or for both. What is an ISIN? ISIN (International Securities Identification Number) is a unique identification number for a security.

 Do dematerialized shares have distinctive numbers ? Dematerialized shares do not have any distinctive numbers. These shares are fungible, which means that all the holdings of a particular security will be identical and interchangeable. What is Standing Instruction given in the account opening form? In a bank account, credit to the account is given only when a pay in slip is submitted together with cash/cheque. Similarly, in a depository account Receipt in form has to be submitted to receive securities in the account. However, for the convenience of investors, facility of standing instruction is given. If you say Yes for standing instruction, you need not submit Receipt in slip every time you buy securities. If you are particular that securities can be credited to your account only with your consent, then do not say yes [or tick ] to standing instruction in the application form. Is it possible to give delivery instructions to the DP over Internet and if

yes, how?
Yes. Both NSDL and CDSL have launched this facility for delivering instructions to your DP over Internet, called SPEED-e and EASI respectively. All registered users can use the facility after paying the applicable charges.

Is it possible to get securities allotted in public offering directly in the

electronic form?
Yes, it is possible to get securities allotted to in Public Offerings directly in the electronic form. In the public issue application form there is a provision to indicate the manner in which an investor wants the securities allotted. He has to mention the BO ID and the name and ID of the DP on the application form. Any allotment made will be credited into the BO account.

 How are cash corporate benefit such as dividend / interest

received?
The concerned company obtains the details of beneficiary holders and their holdings as on the date of the book closure / record date from Depositories. The payment to the investors will be made by the company through the ECS (Electronic Clearing Service) facility, wherever available. Thus the dividend / interest will be credited to your bank account directly. Where ECS facility is not available dividend / interest will be given by issuing warrants on which your bank account details are printed. The bank account details will be those, which you would have mentioned in your account opening, form or changed thereafter. How would one receive non-cash corporate benefit such as bonus

etc.?
The concerned company obtains the details of beneficiary holders and their holdings as on the date of the book closure / record date from depositories. The company directly into the BO account will credit the entitlement.

Who should be contacted in case of discrepancies in corporate

benefits?
In case of discrepancies in corporate benefits, one can approach the company / its R&T Agent.

2.3 PROFILE ICICI Bank

ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and representative offices in the United States, United Arab Emirates, China, South Africa and Bangladesh. Our UK subsidiary has established a branch in Belgium. ICICI Bank is the most valuable bank in India in terms of market capitalisation. ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000.

DEMAT SERVICES:
ICICI Bank Demat Services boasts of an ever growing customer base of over 11.5 lacs account holders ICICI Bank claims to offer best class services to customers. Services offered by ICICI Bank to its customer are:-

e-instructions: You can transfer securities 24 hour a day, 7 days a week through internet and

interactive Voice response at a lower cost. Now with speak to transfer you can also transfer or pledge instructions through our customer care services.

Consolidation Demat Account:Dematerialise your physical shares in various holding patterns and consolidate all such scattered holdings into your primary demat account at reduced cost.

Digitally signed Statement:Receive your Account statements and bill by e-mail.

Corporate Benefit Tracking:Track your dividend, interest and bonus through your account statements.

Mobile Requests:-.

Access your demat account by sending SMS to enquire about holdings, transactions, bills and ISIN details.

Mobile Alerts:Receive SMS alerts for all debit/ credit as well as for any request, which cannot be processed. Dedicated customer care executives at call centre to handle all queries. Countrywide network of branches.

SCHEDULE OF CHARGES:
Charge Head
A/c Opening Annual service charges

Standard Charges
Nil Rs.500/-(Rs. 450/- For customers receiving statements by e-mail) Rs.100/Nil

Frequent/sub brokerage charges

Nil Rs.1250/-(Rs.1200/customer statements by e-mail) Rs.100/Nil for

receiving

Agreement Stamp Paper Buy-Market & Off market Sell-Market & Off

Market(% of transaction value of each ISIN) Max. Rs.500/instrument -For trade for done debt on Nil 0.04% (Min Rs.10/-) 0.04% (Min Rs.15/-) 0.04% (Min Rs. 30/-) Rs. 30/for inst. the Nil 0.02% (Min Rs.5/-) 0.02% (Min. Rs 10/-) 0.02% (Min Rs.15/-) Rs.15/-

www.icicidirect.com -For instructions submitted through internet(e-instructions) -For instructions submitted through call centre(e-inst) -For instructions submitted Branches Rejection / Fails Extra charges processing Submitted of on through

execution date late (accepted at clients risk)

-For

inst

submitted

Nil Nil

Nil Nil

through internet (e- inst.) -For inst submitted through call centre (einst.) -For inst submitted

Rs.10/- per ISIN

Rs.10/- per ISIN

through branches Dematerialisation -For each request form -Extra for each certificate Rematerialisation (for each Request form) Closure of account -If ICICI Bank is counter party -If ICICI Bank is not counter party Additional A/c Statement

Rs.35/Rs.2/Rs.20/-

Rs.35/Rs.2/Rs.20/-

Nil 0.02% (Min Rs.15/-) 0.04% (Min Rs.30/-) Rs.20/-

Nil 0.02% (Min Rs.15/-) 0.04% (Min Rs.30/-) Rs.20/-

2.4

AXIS BANK

AXIS Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (AXIS - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. and other four PSU companies, i.e. National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation and United Insurance Company Ltd. The Bank today is capitalized to the extent of Rs. 281.46 Crores with the public holding (other than promoters) at 56.86 %.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. Presently the Bank has a very wide network of more than 510 branch offices and Extension Counters. The Bank has a network of over 2200 ATMs providing 24hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.

Depository Services Provided: Transfer of Shares and settlements:All that is required is an instrument slip from you. If you are selling securities then it has to be a delivery instruction slip . If you are purchasing securities it has to be a receipt instruction slip or standing instruction for credit. Receipt of Corporate Benefits:Even Securities entitlements like bonus and rights can be credited to your demat a/c electronically. All you have to do is choose aright option in the share application form.

 Holdings and Transaction Statement on E-mail:AXIS provides statement of transactions of holding on the e-mail id for the clients registered for the service.

Tele Depository services:For customer at Mumbai and Ahmedabad this special service allows for getting balances of securities in voice/ fax.

SHEDULE OF CHARGES:-

Charges
A/c Opening A/c Closure Annual Maintenance Charges

Charges (per instruction)

Nil Nil Rs. 600/- p.a. for Non AXIS Bank Customers Rs. 400/- for AXIS Bank Customer Rs. 250/- for senior citizens Rs.2.50/- per certificate Min Rs. 50/Rs. 20/- per certificate Min Rs. 50/Nil 0.04% for value of transaction and

Basis of Recovery
Nil Nil To be recovered upfront in the month of April to financial year Monthly Monthly Nil

Demat Request Remat Request - Credit

- Debit Failed/ Rejected -Creation -Closure Invocation Borrowing Lending Freezing instructions on speed-e instructions on speede

minimum Rs. 21/-. Flat Rs. 21/- for transaction entered through speed-e Rs. 10/0.02% of value Min Rs. 25/- + NSDL charges (Rs. 25/-) Rs.50/Rs.50/Rs. 50/Nil Rs. 125/- per instruction

Monthly Monthly Monthly Monthly Monthly Monthly Nil Monthly

2.5 KOTAK MAHINDRA BANK

Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to

stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates. The group has a net worth of around Rs. 3,100 crore, employs around 9,600 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 300 cities and towns in India and offices in New York, London, Dubai and Mauritius. The Group services around 2.2 million customer accounts. Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and distribution arm of the Kotak Mahindra Group. The company was set up in 1994

Depository

Services

Kotak Securities is a depository participant with the National Securities Depository Limited and Central Depository Services (India) Limited for trading and settlement of dematerialized shares. Since it is also in the broking business, investors who use its depository services get a dual benefit. They are able to use its brokerage services to execute transactions and its depository services to settle these.

SHEDULE OF CHARGES:Charges Charges (per instruction) Basis of recovery

A/c Opening A/c Closure Annual Maintenance charges Demat Request Remat Request Transfer of Securities Credit Debit

Nil Nil Rs. 400/-

Nil Nil To be recovered upfront at the time of opening of account Monthly Monthly

Rs. 3/- per certificate plus Rs. 25/- per request Rs. 10/- per certificate at actual as levied by NSDL Nil 0.04% for value of transaction min Rs.20/- per script Not Mention 0.02% of transaction value min Rs. 50/Nil Nil

Nil Monthly

Failed/ Rejected Pledge Creation

NA Monthly

Lending Custody charges

Nil Nil

DEMAT ACCOUNT:
Demat account allows you to buy, sell and transact shares without the endless paperwork and delays. It is also safe, secure and convenient.

Whats a demat account?

Demat refers to a dematerialized account. Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Lets say your portfolio of shares looks like this: 40 of Infosys, 25 of Wipro, 45 of HLL and 100 of ACC. All these will show in your demat account. So you dont have to possess any physical certificates showing that you own these shares. They are all held electronically in your account. As you buy and sell the shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions.

Is a demat account a must?

Nowadays, practically all trades have to be settled in dematerialized form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing.

Why demat?
The demat account reduces brokerage charges, makes pledging/hypothecation of shares easier, enables quick ownership of securities on settlement resulting in increased liquidity, avoids confusion in the ownership title of securities, and provides easy receipt of public issue allotments.It also helps you avoid bad deliveries caused by signature mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks

associated with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat account holders can also avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses.

Buying & Selling

The procedure for buying and selling dematerialised securities is similar to the procedure for buying and selling physical securities. The difference lies in the process of delivery (in case of sale) and receipt (in case of purchase) of securities.

In case of purchase:

The broker will receive the securities in his account on the payout day The broker will give instruction to its DP to debit his account and credit investors account Investor will give Receipt Instruction to DP for receiving credit by filling appropriate form. However one can give standing instruction for credit in to ones account that will obviate the need of giving Receipt Instruction every time.

In case of sale:The investor will give delivery instruction to DP to debit his account and credit the brokers account. Such instruction should reach the DPs office at least 24 hours before the pay-in as other wise DP will accept the instruction only at the investors risk.

Delivery Instruction Slip

To give the delivery one has to fill a form called Delivery Instruction Slip (DIS). DIS may be compared to chequebook of a bank account. The following precautions are to be taken in respect of DIS:

Ensure and insist with DP to issue DIS book. Ensure that DIS numbers are pre-printed and DP takes acknowledgment for the DIS booklet issued to investor. Ensure that your account number [client id] is pre-stamped. If the account is a joint account, all the joint holders have to sign the instruction slips. Instruction cannot be executed if all joint holders have not signed. Avoid using loose slips Do not leave signed blank DIS with anyone viz., broker/sub-broker. Keep the DIS book under lock and key when not in use. If only one entry is made in the DIS book, strike out remaining space to prevent misuse by any one.

Demat Benefits:
The benefits are enumerated below:

A safe and convenient way to hold securities; Immediate transfer of securities; No stamp duty on transfer of securities; Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.; Reduction in paperwork involved in transfer of securities; Reduction in transaction cost; No odd lot problem, even one share can be sold; Nomination facility;

Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately;

Transmission of securities is done by DP eliminating correspondence with companies; Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc. Holding investments in equity and debt instruments in a account.

Demat Conversion:
Converting physical holding into electronic holding (dematerializing securities) In order to dematerialize physical securities one has to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical certificates one wishes to dematerialize. Separate DRF has to be filled for each ISIN Number. The complete process of dematerialization is outlined below:

Surrender certificates for dematerialization to your depository participant. Depository participant intimates Depository of the request through the system. Depository participant submits the certificates to the registrar of the Issuer Company. Registrar confirms the dematerialization request from depository. After dematerializing the certificates, Registrar updates accounts and informs depository of the completion of dematerialization. Depository updates its accounts and informs the depository participant. Depository participant updates the demat account of the investor.

Demat Options
Banks score over others Around 200 depository participants (DPs) offer the demat account facility. A comparison of the fees charged by different DPs is detailed below. But there are three distinct advantages of having a demat account with a bank quick processing, accessibility and online transaction. Generally, banks credit your demat account with shares in case of purchase, or credit your savings accounts with the proceeds of a sale on the third day. Banks are also advantageous because of the number of branches they have. Some banks give the option of opening a demat account in any branch, while others restrict themselves to a select set of branches. Some private banks also provide online access to the demat account. So, you can check on your holdings, transactions and status of requests through the net banking facility. A broker who acts as a DP may not be able to provide these services.

Fees Involved:
NOW to the crux the cost of opening and holding a demat account. There are four major charges usually levied on a demat account: Account opening fee, annual maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP.

Account-opening fee
Depending on the DP, there may or may not be an opening account fee. Private banks, such as ICICI Bank and AXIS Bank, do not have one. However, players such as Karvy Consultants and the State Bank of India do so. But most players levy this when you reopen a demat account, though the Stock Holding Corporation offers a lifetime account opening fee, which allows you to hold on to your demat account over a long period. This fee is refundable.

Annual maintenance fee Custodian fee

This is also known as folio maintenance charges, and is generally levied in advance.

This fee is charged monthly and depends on the number of securities (international securities identification numbers ISIN) held in the account. It generally ranges between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custody fee for ISIN on which the companies have paid one-time custody charges to the depository.

Transaction fee

The transaction fee is charged for crediting/debiting securities to and from the account on a monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, ICICI Bank peg the fee to the transaction value, subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). Some DPs charge only for debiting the securities while others charge for both. The DPs also charge if your instruction to buy/sell fails or is rejected. In addition, service tax is also charged by the DPs. In addition to the other fees , the DP also charges a fee for converting the shares from the physical to the electronic form or vice-versa. This fee varies for both demat and remat requests. For demat, some DPs charge a flat fee per request in addition to the variable fee per certificate, while others charge only the variable fee. For instance, Stock Holding Corporation charges Rs 25 as the request fee and Rs 3 per certificate as the variable fee. However, SBI charges only the variable fee, which is Rs 3 per certificate. Remat requests also have charges akin to that of demat. However, variable charges for remat are generally higher than demat. Some of the additional features (usually offered by banks) are: Some DPs offer a frequent trader account, where they charge frequent traders at lower rates than the standard charges. Demat account holders are generally required to pay the DP an advance fee for each account which will be adjusted against the various service charges. The account holder needs to raise the balance when it falls below a certain amount prescribed by the DP. However, if you also hold a savings account with the DP you can provide a debit authorisation to the DP for paying this charge.

 Finally, once you choose your DP, it will be prudent to keep all your accounts with that DP, so that tracking your capital gains liability is easier. This is because, for calculating capital gains tax, the DP will determine the period of holding and different DPs follow different methods. For instance, ICICI Bank uses the first in first out (FIFO) method to compute the period of holding. The proof of the cost of acquisition will be the contract note. The computation of capital gains is done account-wise.

How many accounts?

If your shares are held in joint names, be sure to open the account in the same order of names. If X, Y and Z jointly hold 100 shares in a company and have three share certificates all listing X, Y and Z as the first, second and third holders respectively, one account will suffice. For different combinations of names, open separate accounts for each combination. If the three certificates are held as XYZ, YXZ and ZYX, three accounts are necessary. There is no limit to the number of accounts you can open. There is no limit to the number of DPs you can have accounts with. You can even open a multiple-sign demat account, which can be operated by multiple holders, like a joint savings bank account. You can open a demat account even before you acquire your first security.

Opening an account
Steps involved in opening a demat account First an investor has to approach a DP and fill up an account opening form. The account

opening form must be supported by copies of any one of the approved documents to serve as proof of identity (POI) and proof of address (POA) as specified by SEBI. Besides, production of PAN card in original at the time of opening of account has been made mandatory effective from April 01, 2006. All applicants should carry original documents for verification by an authorized official of the depository participant, under his signature. Further, the investor has to sign an agreement with DP in a depository prescribed standard format, which details rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference. The DP will open the account in the system and give an account number, which is also called BO ID (Beneficiary Owner Identification number). The DP may revise the charges by giving 30 days notice in advance. SEBI has rationalized the cost structure for dematerialisation by removing account opening charges, transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005. Further, SEBI has vide circular dated November 09, 2005 advised that with effect from January 09, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at transferor DP is a joint account, the BO Account at transferee DP should also be a joint account in the same sequence of ownership.

Required Documents

The extent of documentation required to open a demat account may vary according to your relationship with the institution. If you plan to open a demat account with a bank, a savings account holder has an edge over the non-account holder. In fact, banks usually offer additional incentives to customers who open a demat account with them. Along with the application form, your photographs (with co-applicants) and proof of identity/residence/date of birth have to be submitted. The DPs also ask for a DP-client agreement to be executed on non-judicial stamp paper. Here is a broad list (you wont need all of them though):

PAN card Voters ID Passport Ration card Drivers license Photo credit card Employee ID card Bank attestation IT returns Electricity/ Landline phone bill

While they only ask for photocopies of the documents, they will need the originals for verification. You will have to submit a passport size photograph on which you sign across.

Investing Online

While most of us understand the benefits of investing, we often do not give enough importance to this process because of the hassles involved and the erroneous belief that it is not my cup of tea. This article explains how investing online can be a very easy, convenient and an informed experience. Say goodbye to hassles of investing offline. . . When one has very little time on hand and too many options to choose from, investing can be a very daunting experience. One faces several issues while investing offline like maintaining bank and demat accounts separately and manually, lack of proper information, tools and advice, constant struggle with the paperwork that is generated (try filling an IPO initial public offer form manually), lack of time to plan investments systematically and finally keeping track of your investment portfolio and net worth. This either leads to a situation of too much dependency on someone, total inactivity or sometimes even taking wrong decisions while planning your investments. Fortunately, help is at hand through the online investing platforms. Today technology enables you to completely plan your investing needs in the comfort of your home and at a time you like, all at the click of the mouse. All you need is a computer with an Internet connection and a subscription to a 3-in-1 online investing account with any such service providers. Online mode of investing largely eliminates all major hassles of investing:

It provides a wealth of information, analysis and tools that enable you to take more Virtually no paperwork involved as all transaction records are online and

informed decisions,

statements available in digital form,

You can invest anytime and from anywhere at your convenience (yes, even at Integrated operations between your bank account, de-mat account and trading You can track your investment portfolio and net-worth online anytime.

night),

accounts, and

Today, the online mode allows you to invest across different asset classes like equity shares, mutual funds and IPOs amongst others. You can be your own master in planning your investments. The online mode provides you the benefit of getting up-to-date information and analysis, which is often sourced and compiled, in an investor friendly format, from some of the best information providers in their respective fields. You are, therefore, not only able to take more informed investment decisions but in the process is also able to reduce the probability of risk and improve the probability of earning better returns on your investments. Services to look out for. . . To start investing online you would need to register as a member for an integrated 3-in1 online trading account with any of the service providers. The three accounts are:

Trading account, which enables you to transact online, An Internet-enabled bank account for online money transfers with any of the banks Your demat account, where your shares will be deposited.

with whom the online service provider has a tie-up, and

Tips on choosing your online investing account:

 Credibility and credentials of the service provider: While there are several service providers, for any retail investor like you, the backing of a reputed bank or financial institution can always provide that additional safety. Some service providers also have an ISO certification for their online investing portal. Investments that you can make online: Are you allowed to invest in equity shares, mutual funds, futures & options and IPOs fully through the online route or in only one of them? To derive the full power of online investing it is important you get to invest in all. Quality of information and content: Ensure you are getting the best information, research support and tools in an easy and reader-friendly manner. This would play a key role in taking informed investment decisions. Speed of order execution: Are you able to place your equity orders and receive quick order confirmations during peak hours or are you struggling to access the site just when you need it most. Are you getting wide array of products to choose from? A few service providers provide a choice of products starting from the basic (classic) account to more advanced (trading platforms with live and streaming market information on equity markets). Safety: Check for the inbuilt security features. Customer care: Does the service provider have a dedicated customer care cell to take care of your queries and problems? Additional features: Besides the above criteria there are a combination of several additional features whose importance can be determined based on your own investing needs - ability to sell shares next day before receiving delivery, SMS alerts, and intra-day trading in equities.

Rematerialisation
The process of converting electronic holdings (demat shares) back into Physical Certificates is called Rematerialisation.
If one wish to get back his securities in the physical form one has to fill in the RRF (Remat Request Form) and request his DP for rematerialisation of the balances in his securities account. The process of rematerialisation is outlined below:

One makes a request for rematerialisation. Depository participant intimates depository of the request through the system. Depository confirms rematerialisation request to the registrar. Registrar updates accounts and prints certificates. Depository updates accounts and downloads details to depository participant. Registrar dispatches certificates to investor.

PLEDGE AND HYPOTHECATION

The clients may use the securities held with NSDL as collateral to secure loans and other credits. In manual environment, borrowers are required to deliver pledged securities in physical form to lender or its custodian. These securities are verified for authensity and often need to be transferred in the name of lender. Use of depository services for pledging and hypothecation the securities make the process very simple and cost effective.

Some important points: Can one pledge dematerialized securities? Yes. In fact, pledging dematerialized securities is easier and more advantageous as compared to pledging physical securities. What should one do to pledge electronic securities? The procedure to pledge electronic securities is as follows:

Both investor (pledgor) as well as the lender (pledgee) must have depository accounts with the same depository; Investor has to initiate the pledge by submitting to DP the details of the securities to be pledged in a standard format ; The pledgee has to confirm the request through his/her DP; Once this is done, securities are pledged. All financial transactions between the pledgor and the pledgee are handled as per usual practice outside the depository system.

How can one close the pledge after repayment of loan? After one has repaid the loan, one can request for a closure of pledge by instructing the DP in a prescribed format. The pledgee on receiving the repayment will instruct his DP accordingly for the closure of the pledge.

 Can one change the securities offered in a pledge? Yes, if the pledgee [lender] agrees, one may change the securities offered in a pledge. Who would receive the corporate benefits on the pledged

securities?
The securities pledged are only blocked in the account of pledgor in favour of the pledgee. The pledgor would continue to receive all the corporate benefits.

TRANSACTION STATEMENTS:

How does one know that the DP has updated the account after each

transaction?
The DP gives a Transaction Statement periodically, which will detail current balances and various transactions made through the depository account. If so desired, DP may provide the Transaction Statement at intervals shorter than the stipulated ones, probably at a cost. At what frequency will the investor receive his Transaction Statement

from his DP?

DPs have to provide transaction statements to their clients once in a month, if there are transactions and once in a quarter, if there are no transactions. Moreover, DPs can provide transaction statement in electronic form under digital signature subject to their entering into a legally enforceable arrangement with the BOs to this effect. What is to be done if there are any discrepancies in transaction

statement?
In case of any discrepancy in the transaction statement, one can contact his/her DP. If the discrepancy cannot be resolved at the DP level, one should approach the Depository. Whom should one contact in case of any investor complaint / problem /

query?
In case of any investor complaint / problem / query one may first contact his DP. If DP is unable to solve the complaint / problem / query one should approach concerned depository. If one is not satisfied one may approach SEBI. One may also approach SEBI directly.

LENDING AND BORROWING:

What is Lending and Borrowing of Securities?

If any person required to deliver a security in the market does not readily have that security, he can borrow the same from another person who is willing to lend as per the Securities Lending and Borrowing Scheme.

Can lending and borrowing be done directly between two

persons?
No. Lending and borrowing has to be done through an Approved Intermediary registered with SEBI. The approved intermediary would borrow the securities for further lending to borrowers. Lenders of the securities and borrowers of the securities enter into separate agreements with the approved intermediary for lending and borrowing the securities. Lending and borrowing is effected through the depository system. SEBI.

Can I lend the securities lying in my account?

Yes. You can lend your securities through Approved Intermediaries registered with

How would I lend my demat securities?

You may enter into an agreement with the approved intermediary to be a lender under this scheme. After that, you may lend securities any time by submitting lending instruction to your DP.

How would I get back the securities lent by me?

Intermediary may return the securities at any time or at the end of the agreed period of lending. Intermediary has to repay the securities together with any benefits received during the period of the loan.

How would I receive the corporate benefits, which would accrue

on these securities during the period of lending?

The benefits will be given to the Intermediary/borrower. However, whenever the

securities are being returned / recalled. Intermediary/borrower will return the securities together with benefits received.

NOMINATION:
Who can nominate?
Only individuals holding beneficiary accounts either singly or jointly can make nomination. Non-individuals including society, trust, body corporate, karta of Hindu Undivided Family, holder of power of attorney cannot nominate.

Who can be a nominee?

Only an individual can be a nominee. A nominee shall not be a society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family or a power of attorney holder.

What is transmission of demat securities?

Transmission is the process by which securities of a deceased account holder are transferred to the account of his legal heirs / nominee. Process of transmission in case of dematerialized holdings is more convenient as the transmission formalities for all securities held in a demat account can be completed by submitting documents to the DP, whereas in case of physical securities the legal heirs/nominee/surviving joint holder has to independently correspond with each company in which securities are held.

In the event of death of the sole holder, how the successors should claim the securities lying in the demat account?
The claimant should submit to the concerned DP an application Transmission Request Form (TRF) along with the following supporting documents

In case of death of sole holder where the sole holder has appointed a nominee: Notarized copy of the death certificate In case of death of the sole holder, where the sole holder has not appointed a nominee: Notarized copy of the death certificate

Any one of the below mentioned documents

Succession certificate Copy of probated will Letter of Administration

The DP, after ensuring that the application is genuine, will transfer securities to the account of the claimant. The major advantage in case of dematerialized holdings is that the transmission formalities for all securities held with a DP can be completed by interaction with the DP alone, unlike in the case of physical share certificates, where the claimant will have to interact with each Issuing Company or its Registrar separately.

CHAPTER 3
RD

LITERATURE REVIEW

LITERATURE REVIEW
After the formulation of the problem, a brief summary of it should be written down and the researcher should have to do its extensive literature survey connected with the problem. For this purpose, abstracting and indexing journals and published or unpublished bibliographies

are first place to go Academic Journals, Conference proceedings, reports etc. must be tapped depending upon nature of the problem. The literature for this project will include various newspapers, magazines Economic Survey 1 for the information regarding the depository services by depository participants. In the external sector of the Economic survey the trends over the period of time are given. RBI bulletin 2 for the information regarding the demat services of different banks over the period of last years. C.R Kothari 3 The information regarding the basics of research and research methodology, what are the different types of research designs, what is problem statement, what are the sources of data collection and what are the methods of data collection is given in this section. S.P Gupta 4. The information regarding the statistical tools and their limitations in different fields the research is given in this section. This section explains why to use correlation and what are the situations in which correlation can be used, and what does correlation means. Hooda R.P.5, Statistics for Business and Economics to have information regarding various statistical tools applied like time series, correlation, and hypothesis.

S.R rawat 6, information regarding various statistical tools applied like time series, correlation, and hypothesis.

 S.P Gupta 7. , To have information regarding depositories in India, for the information regarding the depository services by depository participants. In the external sector of the Economic survey the trends over the period of time are given

Hooda R.P 8, statistical tools and their limitations in different fields the research is given in this section.

C K. Gupta9, Financial Institutions And Markets, Kalyani Publications, New Delhi To have information regarding depositories in India Bhole L.M.10, Management of Financial institutions, Tata MC Graw Hill, 2000 To have information regarding dematerialization and rematerialisation process. Khan M.Y.11 , the information regarding the depository services by depository participants. In the external sector of the Economic survey the trends over the period of time are given

Sashi K. Gupta

12

, Financial Institutions And Markets, Kalyani

Publications, New Delhi (Pg.6.1-6.40)

Sharma

L.M

13

,the

information

regarding

the

depository

services. .Punithawathy Pandian, Security Analysis and Investment

Management.
http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm been used to get information regarding icici bank. http://www.dfcb.com/aboutus/general/default.htm information regarding. http://www.AXISbank.com/Banking/bank.asp bank.
17 16 15

this site has

it is being used to get

to collect information of AXIS

 http://www.turionbop.co.in/site/aboutus.html 18 to collect information regarding the profile of private companies. http://www.kotak.com/Kotak_GroupSite/aboutus/default.htm19to get information regarding the Kotak Mahindra group this site is being used. http://www.hdfcsec.com/basics/index.php?section=6 http://www.nseindia.com/
21 20

To

get

information

regarding the various dematerialized securities of bank this site is being used. In order to get information regarding national stock
22

exchange of India this site is used. http://content.icicidirect.com/home.asp information regarding the demat
23

securities of ICICI bank this site is being used. http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm to collect information of bank http://wwwaxisbank.com/aboutus/general/default.htm securities of bank this site is being used http://www.nse.com/basics/index.php?section=6 of stock market http://content.icicidirect.com/home.asp
26 25 24

to

collect

information of bank .To get information regarding the various dematerialized

to collect information

To get information regarding the

various dematerialized securities of bank this site is being used www.financeindia.com 27 information regarding demat investment. www.investmentzone.com
28

to get information regarding national stock

29

exchange of India this site is used. www.indiansharemarket.com/ http://www.nseindia.com/

30

To get information regarding the various

dematerialized securities of bank this site is being used to get information regarding national stock

exchange of India this site is used. http://www.crisil.com/home.asp regarding ranking http://www.moneycontrol.com/ 32 gets information regarding icici bank.
31

this site has been used to get information

 http://www.marketmaker.com/ regarding icici Kotak, axis bank.

33

this site has been used to get information

CHAPTER

TH

RESEARCH METHODOLOGY

4.1 SIGNIFICANCE OF STUDY:

This study can be helpful for knowing about the number of depository services which can help in increase in number of opening of demat accounts with the different depository participants. After getting the knowledge about the charge structure of various Private Sector Banks, one can easily compare the charges and select one participant according to their requirement.

It will help in Comparing of Depository services offered by Private Sector

Banks and thus by comparing the charges one can easily select one according to his/her needs. It will be helpful in helping bankers to maintain customer relationship with their

customers as customers are highly attracted by this service. This helps them to gain a wider share of the customer wallet. It will also helpful in knowing more about the various depository services

provided by different Depository Participants. It will also helpful in determining the various benefits of holding Demat

Accounts. It will also helpful in increasing the focus on Private Banking, it would be

necessary for the banks to build capabilities in the areas of equity advisory etc. It will also helpful for the investors to look for a best Depository Participants

offering the various depository services. The most important part is to look for the hidden cost, as the financial service industry is really famous for hiding a host of fees and charges under the complex jargons of bulky terms. So this study helps in clear comparison of various costs such as account opening cost, a/c maintenance cost, pledging and lending costs and many more.

4.2OBJECTIVE OF STUDY:
The objective of the research means the purpose for which the research is being carried out. The objectives of this research are as follows:

Primary Objective:1. The primary objective of our report is to impart a comparative and analytical study of the depository and online share trading services of private sector banks in India

2. Basic understanding of the manner in which they function in this competitive environment the products and services offered by Private Sector Banks entire process of share transactions and account openings and brokerage charged and different software used to facilitate the trading process. To know about the benefits derived from such system.

Secondary Objective: Apart from understanding the stock Exchange terminologies or jargons, we also aimed about reading of market conditions, the feasibility and growth of depository services of various depository participants in India. The client servicing offered by the online share trading sites in real market situations.

4.3RESEARCH METHODOLOGY:Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. Infact, research is an art of scientific investigation.

RESEARCH DESIGN

At the outset may be noted that there are several ways of studying and tackling a problem. The formidable problem that follows the task of defining the research problem is the preparation of the design of research project popularly known as research design. Decision regarding what, where, when, how much, by what means concerning an enquiry or a research study constitute a research design. A research design is an arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to research purpose with economy in procedure. More explicitly the designing decision happened to be in respect of following What is study about? Why is study being made? Where will the study be carried out? What type of data is required What will be the sample design? How will the data be collected? How will the data be analyised?

TYPES OF RESEARCH DESIGN

EXPLORATORY RESEARCH DESIGN

DESCRIPTIVE & DIAGNOSTIC RESEARCH DESIGN

EXPERIMENTAL RESEARCH DESIGN

EXPLORATORY RESEARCH DESIGN: Exploratory research design is termed as formulating research studies. The main purpose of study is that of formulating a problem. The major emphasis in such study is on discovery of new ideas and insights. As such the research design appropriate for such studies must be flexible enough to provide opportunity for considering different aspects of problem. DESCRIPTIVE AND DIAGNOSTIC RESEARCH DESIGN: Descriptive research design are those design which are concerned with describing the characteristics of particular individual or of the group Whereas diagnostic research studies determine the frequency with which something occurs or its association with some else. In descriptive and diagnostic study the researcher must be able to define clearly what he wants to measure and must find adequate method for measuring it.

EXPERIMENTAL RESEARCH DESIGN: These are those studies where the researcher tests the hypothesis of casual relationship between variables. Such study requires procedure that will not only reduce biasness and increase reliability but will permit drawing influence about casuality. Usually experiments meets this requirement, hence these research designs are prepared for experiment.

Research design in study: In the study I have apply

descriptive research design. As descriptive

research design is the description of state of affairs, as ix exists at present. In this type
of research the researcher has no control over the variables; he can only report what ahs happened or what is happening.

4.4 DATA COLLECTION

After the research problem has been identified and selected the next step is to gather the requisite data. While deciding about the method of data collection to be used for the the researcher should keep in mind two types of data VIZ. primary and secondary

TYPES OF DATA

PRIMARY DATA

SECONDRY DATA

PRIMARY DATA: The primary data are those, which are collected afresh and for the first time, and thus happened to be original in character. We can obtain primary data either through observation or through direct communication with respondent in one form or another or through personal interview.

METHODS OF PRIMARY DATA

OBSERVATION METHOD

INTERVIEW METHIOD

QUETIONAIRE METHOD

SCHEDULE METHOD

SECONDARY DATA: The secondary data on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical processes. When the researcher utilizes secondary data then he has to look into various sources from where he can obtain them. For e.g. Books, magazine, newspaper, Internet, publications and reports.

METHODS USED IN STUDY: -

I will collect the data through the secondary sources such As

Books Magazines Newspapers Internet

CHAPTER

TH

DATA ANALYSIS & INTERPRETATION

STATISTICAL TOOL AND DATA ANALYSIS.

CORRELATION
For analyzing the data I will use correlation and Trend analysis. I will use correlation for knowing the relationship between the Income levels and numbers of demat account opened.

I will use correlation to check whether there is any correlation exists between income levels and numbers of demat account opened. In the correlation I will be using Karl Pearsons coefficient of correlation in which r = xy / x2 y2 for analyzing the data I will be using the software of XLSTAT.

Total No of Demat Account Income 0-10,000 10,000-20,000 20,000-30,000 30,000-40,000 40,000-50,000 50,000 & above TOTAL (Y) 470 750 1028 1140 1250 1590 Mid point (X) 5000 15000 25000 35000 45000 55000 x -25000 -15000 -5000 5000 15000 25000 y -568 -288 -10 102 212 552 x2 625 225 25 25 225 625 1750 y2 322624 82944 100 10404 44944 304704 765720 xy 14200 4320 50 510 3180 13800 36060

r r

= =

xy / x2 y2 36060 1750 765720

r r =

0.98 0.98 (approx.)

Where, r = rank coefficient of the correlation

So, there is a high degree correlation between Income and total no of demat account opened in private sector banks and conclude that due to increase in income no. of demat a/c opened also increase. Since the correlation coefficient calculated lies within the limits I.e. -1 to +1. Hence we can conclude that the correlation is significant. The variables are positively or directly correlated.

A/c

Correlation between level of income and no. of Demat . Opened with ICICI Bank

Correlation b/w level of income and no. of Demat Account Opened with ICICI Bank:
No of Demat Income 0-10,000 10,000-20,000 20,000-30,000 30,000-40,000 Account (Y) 22 35 50 62 Mid point (X) 5000 15000 25000 35000 x -25000 -15000 -5000 5000 y -32 -19 -4 8 x2 625 225 25 25 y2 1024 361 16 64 xy 800 285 20 40

40,000-50,000 50,000 & above TOTAL

69 86

45000 55000

15000 25000

15 32

225 625 1750

225 1024 2714

225 800 2170

r r

= =

xy / x2 y2 2170 1750 2714

0.99

Since the correlation coefficient calculated lies within the limits i.e. -1 to +1. Hence we can conclude that there is high degree of correlation b/w the variables.

Correlation between level of income and no. Of Demat Opened with AXIS Bank:
No of Demat Mid point (X) 15 22 35 44 58 60 5000 15000 25000 35000 45000 55000 x -25000 -15000 -5000 5000 15000 25000 y -24 -17 -4 5 19 21 x2 625 225 25 25 225 625 1750 y2 576 289 16 25 361 441 1708 xy 600 255 20 25 285 525 1710

A/c.

Income 0-10,000 10,000-20,000 20,000-30,000 30,000-40,000 40,000-50,000 50,000 & above TOTAL

Account (Y)

r r

= =

xy / x2 y2 1710

1750 1708 r = 0.989

Thus there is also highly positive correlation b/w income level and no of a/c opened with AXIS.

HYPOTHESIS TESTING

XLSTAT 7.1 - Correlation Tests Significance level: 0.05

Pearson's correlation coefficient test (parametric test): Observed value Two-tailed p-value Alpha Decision: In other words, the correlation is significant. 0.985 0.000 0.05

TREND ANALYSIS:
Time series: The set of data collected on the basis of time is called as time series. Under time series there are two types of variables: (1) Independent variables (this represents time) (2) Dependent variables (this represents the changes taken place in the value of data with the passage of time)

A set of data depending on the time is called time series. -Kenny & Keeping Utility of time series: The study of time series has great importance in economic and business world which is illustrated by the following points:1. To study the past behavior of data: 2. To forecast future behavior: 3. Estimation of trade cycle: 4. Universal utility: 5. Study of present variations

Methods of measuring trend::

1. Free hand curve method 2. Semi average method 3. Moving average method 4. Least square method

Trend Analysis n o. of d e m at a/ c o p e n e 80,000 70,000 60,000 50,000 40,000 ,000 30,000 ,000 20,000 ,000 10,000 0 2005 2006 2007 years 2008 2009

Actual values Predicted values

With the help of this trend analysis we can predict future values like for the year 2007; Here X=3, Y= 9932.6 + 2194.5(3) = 16,516.1

Calculations are shown in Annexure 1

Comparative Table of Demat A/c Charges of ICICI, AXIS, KOTAK MAHINDRA Bank
Banks:Annual Maintenance Charges

ICICI
Rs.500/-

AXIS
Rs.400/-normal and Rs.250/- senior citizens

Kotak Mahindra
Rs.400/-

Debit Instruction

Rs.10/- per ISIN

0.04% of value or minimum Rs.15/Rs.2.5/- per certificate Min Rs.50/Rs. 20/- per certificate Min Rs.50/0.02%+ Rs.25/-+Rs.25/NSDL Charges Rs.100/Rs.10/-

0.04% of value or minimum Rs.20/Rs.25/- +Rs.3/per certificate Rs.10/- per Certificate 0.02% min Rs.50

Dematerialization Rs.35/-+ Rs.22/per certificate Rematerialisation Rs. 20/- per certificate Pledge Creation 0.02% Min Rs.15/-& 0.04% min.Rs. Closure Failed Instruction 30/Same as above Rs.30/-

Same as above Not Mentioned

SERVICES ON OFFER:-

ICICI Voice Instructions E-Statement SMS Alerts Mobile Advice View Statement on net Speed-e Yes Yes Yes Yes Yes Yes

AXIS No Yes No No Yes

Kotak Mahindra No Yes No No Yes

Yes

Yes

ICICI Bank clearly enjoys lead over other banks in terms of the services they offer to Demat Customers

LIMITATIONS:

 Probably the time and money constraints can affect my research Lack of knowledge about the topic. Dependency too much on secondary data for conducting the research that is insufficient for the research. Difficulty in collection of the data. Study is conducted in limited area only.

RESULTS& FINDINGS

1.

Annual maintenance charges of all banks are equal except AXIS and Kotak Mahindra wherein the AMC charges are a bit lower at Rs.400/- as compared to

Rs.500/- charge by other DPs. Also AXIS Bank is offered special charges to senior citizens at AMC of Rs. 250/-. 2. 3. 4. Debit Instruction charges are lowest @ Rs. 10/- per ISIN in case of ICICI bank followed by Kotak, AXIS that is costliest in min charges at Rs.25/-. Demat Charges are more or less same for all the banks but AXIS bank is a bit costlier and minimum charges are highest at Rs. 50/AXIS Bank is again costliest at monthly Rs. 50/- And Rs. 20/- per certificate for demat as compared to Rs 10/- (Actual Charges of NSDL) charged by Kotak Mahindra 5. For failed instructions ICICI is charging highest followed by AXIS In the nut shell we can say that all banks are charging more and less same to the customers If bank is charging less in selling then they are charging higher amount in Demat or Remat of Securities thereby bringing a balance in tariff structure as compared with other banks. I have also find the comparison among three banks. After analyzing all the parameters I find the results that the services offer by the icici bank is better then axis and the Kotak bank.

RECOMMENDATIONS: To attract the more capital from the country, the govt. procedure regarding setting of new projects should be simplified. However the Govt. announced several policy

measures in order to remove the constraints. It is hoped that this will benefit the Investors. Technology should be upgraded. There should be programmes for depository services improvement and programmes for error control. So that the cost of production of the services can be reduced. Reduction in cost will in turn make the Indian economy competitive in the international market Dematerialization & Rematerialisation facilities should be proper established by the all banks. Annual maintenance charges should be in that manner so that the customer cannot skip from first service provider to second. Now with the advent of new and easy technology more and more market players are moving into the area of depository and online trading. Majority of big brokers, online trading portals and technologically superior banks are offering demat services to their clients. Some of them are also moving up in the value chain by offering online trading services. So the policy of the services provider should be according to the market conditions

BIBLIOGRAPHY:
BOOKS: -

 C.R Kothari, Research Methodology, Wishwa Parkashan, 2nd

Edition (Pg. 39-67 & 117-157).

S.P Gupta. Statistical Methods, 30th edition, Sultan Chand &sons Hooda R.P, Indian Financial System, Tata MC Graw Hill, 2000 Bhole L.M., Management of Financial institutions, Tata MC Graw Hill, 2000 Khan M.Y., , Indian Financial System, Tata MC Graw Hill, 2000 Sashi K. Gupta, Financial Institutions And Markets, Kalyani

Publications, New Delhi (Pg.6.1-6.40)

Bhole L.M., Management of Financial institutions, Tata MC Graw

Hill, 2000
Punithawathy . Security Analysis and Investment Management.

JOURNALS & NEWSPAPERS

Economic Survey 2005-06, EXTERNAL SECTOR (page no.-

131,160)
RBI bulletin, INDIAN TRADE (page no.-887) M Narasimhulu And Irfana Samdani Southern Economist July 2006, Trends And Pattern Of Fdi In India (page no. 24-28)

SANJEEV KUMAR, Icfai Reader JULY 2006 FDI AND FII

(Page no.-35-40)

Ms sidhu & lavleen kaur, southern economist dec 2005, market India some issues (page no.27-30) M.Narasimhulu And Irfana Samdani, INDIAN JOURNAL Of Finance, A Study Of banks (Page No.51-60) S.narashima chary and v. Gangadhar, INDIAN JOURNAL OF FINANCE, D Mat services in India (page no.51-60)

 http://www.dfcb.com/aboutus/general/default.htm http://www.utibank.com/Banking/bank.asp. http://www.turionbop.co.in/site/aboutus.html http://www.kotak.com/Kotak_GroupSite/aboutus/default.htm http://www.hdfcsec.com/basics/index.php?section=6 http://www.nseindia.com/. http://content.icicidirect.com/home.asp http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm http://wwwaxisbank.com/aboutus/general/default.htm http://www.nse.com/basics/index.php?section=6 http://content.icicidirect.com/home.asp www.financeindia.com. www.investmentzone.com www.indiansharemarket.com http://www.nseindia.com/

http://www.crisil.com/home.asp

http://www.moneycontrol.com/ http://www.marketmaker.com/ .

ANNEXURE-1

Total no of Demat A/c Year Opened (Y) X XY X2

2003 2004 2005 2006 2007 Total

5,294 7,775 10,310 12,260 14,024 49,663

-2 -1 0 1 2 0

10,588 -7,775 0 12,260 28,048 21,945

4 1 0 1 4 10

The equation of the straight line is Y= a+bX Since, X= 0, a = Y/ N , b = XY/X2

Putting values we get, a= 49,663/5 = 9932.6 b= 21,945/10 = 2194.5 Hence the equation of straight line trend is Y= 9932.6 + 2194.5X Origin=2004; X units one year.

For X=-2, Y= 9932.6 + 2194.5 (-2) = 5543.6 X=-1, Y= 9932.6 + 2194.5 (-1) = 7738.1 X= 0, Y= 9932.6 + 2194.5(0) = 9932.6 X=1, Y = 9932.6 + 2194.5(1) = 12127.1 X =2, Y = 9932.6 + 2194.5(2) = 14321.6

REGRESSION

year

Total three banks d.mat acc(lackh)

2003 2004 2005 2006

Total three banks Trading(crore)

42 48 65 87 90 112 145 183

2007

118

220

XLSTAT 7.1 - Nonlinear Regression - 6/1/2005 at 10:16:46 PM Dependent variable: workbook = Book1 / sheet = Sheet1 / range = $E$9:$E$13 / 5 rows and 1 column Explanatory variables: workbook = Book1 / sheet = Sheet1 / range = $D$9:$D$13 / 5 rows and 1 column Uniform weighting (default) No missing values

Goodness of fit coefficients: R (coefficient of correlation) R (coefficient of determination) SSR 0.999 0.998 17.117

Model parameters: Parameters pr1 pr2 pr3 pr4 Value Standard deviation 1322.393 62985.935 0.169 11.513 2.984 1320.848 -1830.416 183394.883

ObservationsWeights Obs1 1 Obs2 1 Obs3 1 Obs4 1 Obs5 1

d.mat 42.000 48.000 65.000 87.000 118.000

trading trading (Model) 90.000 91.908 112.000 108.766 145.000 146.713 183.000 182.738 220.000 219.880

Residuals Standardized residuals -1.908 -0.461 3.234 0.782 -1.713 -0.414 0.262 0.063 0.120 0.029

Observations and fitted model

250

200

1 50

1 00

50

0 40 50 60 70 80 d.mat 90 1 00 10 1 1 20

trading / Standardized residuals

1 0.8 0.6 0.4 0.2 0 0 -0.2 -0.4 -0.6 trading 50 1 00 1 50 200 250

d.mat / Standardized residuals

1 0.8 0.6 0.4 0.2 0 40 -0.2 -0.4 -0.6 d.mat 50 60 70 80 90 1 00 10 1 1 20

Standardized residuals

Obs5

Obs4

Obs3

Obs2

Obs1

-1

-0.8

-0.6

-0.4

-0.2

0.2

0.4

0.6

0.8

Standardized residuals