Business Opportunity for Yes Bank Ltd in Foreign Contribution Regulation Act Accounts of Charitable Institutions

Guidance Under :
Dr. Amit Gautam Asst. Professor FMS,BHU

Supervision Under:
Mr. Ashish Bhatnagar Vice President Govt. Relationship Management Yes Bank Ltd.

Submitted By Ashutosh Dubey 12382MA011 MBA(IB)

Flow of Presentation
Industry Analysis Company Analysis Research Methodology i) Objectives ii) Research Design iii) Sampling iv) Data Collection v) Data Analysis and interpretation Findings and Conclusions Suggestions

Banking Industry
Bank of Hindustan (1770-1829) and The General Bank of India-1786 Reserve Bank of India was established in 1935 Banking Regulation Act 1949 RBI to supervise and regulate all banking activities. Nationalization of Banks (1969) 14 commercial banks were nationalized. Branch licensing Policy(1977) To Expand Reach to the masses. No. of PSBs- 21

Continued....
No. Of private sector banks-18 Market share as on March 2013 PSBs- 80 % & private banks 20 %. SBI -19.1 % & 20 NBs - 60.6 % NPBs (new private banks)- 15.8 % OPBs (old private banks)- 4.5 %.

Yes Bank Ltd.

Founded in November 2003 by Rana Kapoor and Ashok Kapoor with an Initial capital of $45 million India's fourth largest private sector Bank Is a full service commercial bank that offers Corporate Banking, Investment Banking, and Personal Banking services across India. The sustained growth of YES BANK is based on- Growth ,Trust, Technology, Human Capital & Responsible Banking. Total Assets/Liabilities -99,104 crore Total income for FY 2012-13 is Rs 9,551.43 crore YES Bank has posted 33.2 per cent jump in net profit . Net Interest Income improved by 42.4 %

FCRA 2010
FCRA, 2010 is an improvement over the FCRA 1976 as more stringent provisions have been made in order to prevent misutilization of the foreign contribution received by the associations. The basic purpose of FCRA 2010 The prime objective of the Act The focus of the Act

SWOT ANALYSIS OF YES BANK LTD.

India's fourth largest private sector Bank competent top management team only Greenfield license awarded by the RBI in the last 17 years Low brand awareness Low market presence Less promotional activity Latecomer

Strength

Weakness

Threat
High competitive Private banks Other better investment options available Capital Market slowdown

opportunity

Growth opportunity in SME sector Wide scope in rural India Large retail and corporate market

Research Methodology

RESEARCH OBJECTIVES To search Business opportunities in FCRA accounts of charitable institutions and forming strategies to target this segment for the bank. To make a comparative analysis of the Banking product offered by the Banks in FCRA accounts to the charitable institutions. To take an overview of the needs of the charitable institutions in banking industry. To recommend a product in accordance to the rules of FCRA 2010 and as per the guidelines of the RBI.

SAMPLE DESIGN
Research Type- Descriptive Scope of the study- Charitable institutions of NCR region Data Collection- Questionnaire & interview Sampling Technique- Convenience Sampling Sampling size- 30

TYPE OF DATA COLLECTED

1. Primary-questionnaire. 2. Secondary- MHA yearly Reports & website of MHA & Yes Bank Ltd.

Foreign receipt in the present year.

No foreign receipt in present Never received foreign funds Foreign receipt in present

0% 27%

73%

Donor from which country.

Donor from all over the world except USA Donor only from USA Donor from USA & others

18% 27% 55%

Dealing with which Bank for FCRA accounts.

Account in Public Bank Account in Foreign Bank Account in Private Bank

18% 55%

27%

Investment advisory an important value added.

Investment advisory required Already getting Own separate advisory body

18% 55%

27%

Auditing done by FCRA Department for the organization.

No auditing by FCRA Auditing in Past

18%

82%

Response level of FCRA department.

Poor Average Good Excellent

0% 0% 18%

82%

Comparative Analysis
HDFC Bank Yes Bank
Corporation Bank No special team International Banking Division (IBD) is contacting central government for FCRA accounts MIS Special care in case of Prior permission obtained by organization from central government.

Consultancy services as extra benefits to the account. Special team for FCRA accounts reporting regularly to central government and RBI. Special care in case of Prior permission obtained by organization from central government.

Special team targeting NGOs for FCRA accounts. Compliance team at Mumbai is reporting RBI and central government Special care in case of Prior permission obtained by organization from central government

16

Needs of the charitable institutions

Nominal foreign exchange conversion rates Investment Advisory Special Compliance Team for reporting to MHA More Services like online remittance of payments

Findings & Conclusion

FCRA product will be a good source of foreign funds for the bank 1120 FCRA accounts in year 2011- 12 had received 1557 crores in NCR. About 73% of the total money received was FC 55% PSBs dont have special compliance teams reporting to MHA and RBI 18% of the NGOs are not satisfied by the services of their current banks Some of the banks are charging very high amount for providing the service of maintaining the FCRA Account. Investment advisory is missed by more than half of the NGOs. This sector of banking has posted a growth of 50% in terms of funds received in form of FC and numbers of associations were growing at 10% per year. Most of the NGOs are in search of specialized services from the bank in form of advisory and reporting.

Suggestions
The product should have following features:
Special Compliance team Relationship with FCRA department Personalized Consultancy Services
Investment advisory

Assistance in the process of documentation and obtaining necessary approvals from MHA
Marketing teams

THANK YOU