CHAPTER I INTRODUCTION

1.0 INTRODUCTION Banking in India originated in the first decade of 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the "The Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras. The presidency banks were established under charters from the British East India Company. They merged in 1925 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. For many years the Presidency banks acted as quasi-central banks, as did their successors. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.

RESERVE BANK OF INDIA Central Bank and supreme monetary authority Scheduled Banks Cooperativ
e Urban Cooperatives State Cooperatives Public Sector

Non Scheduled Banks Commerci al

Private Sector Foreign Banks

Other Nationalized Banks

SBI & Associates

Regional Rural Banks

1.1 Early History

The first fully Indian owned bank was the Allahabad Bank, established in 1865. However, at the end of late-18th century, there were hardly any banks in India in the modern sense of the term. The American Civil War stopped the supply of cotton to Lancashire from the Confederate States. Promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondichery, then a French colony, followed. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking centre. The Bank of Bengal, which later became the State Bank of India. Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India. There were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. Punjab National Bank is the first Swadeshi Bank founded by the
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leaders like Lala Lajpat Rai, Sardar Dyal Singh Majithia. The Swadeshi movement in particular inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.

1.2 Nationalized banks in India Banking System in India is dominated by nationalized banks. The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective behind nationalization was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. Before 1969, State Bank of India (SBI) was the only public sector bank in India. SBI was nationalized in 1955 under the SBI Act of 1955. The second phase of nationalization of Indian banks took place in the year 1980. Seven more banks were nationalized with deposits over 200 crores.

List of Public Sector Banks in India is as follows Allahabad Bank State Bank of Indore State Bank of Patiala State Bank of Travancore UCO Bank United Bank of India s Andhra Bank Bank of India Canara Bank Corporation Bank Indian Bank Oriental Bank of Commerce Punjab National Bank State Bank of India (SBI) State Bank of Mysore State Bank of Saurashtra Syndicate Bank Union Bank of India Vijaya Bank Bank of Baroda Bank of Maharashtra Central Bank of India Dena Bank Indian Overseas Bank Punjab and Sind Bank State Bank of Bikaner & Jaipur

1.3 Private Banks in India

All the banks in India were earlier private banks. They were founded in the pre-independence era to cater to the banking needs of the people. But after nationalization of banks in 1969 public sector banks came to occupy dominant role in the banking structure. Private sector banking in India received a fillip in 1994 when Reserve Bank of India encouraged setting up of private banks as part of its policy of liberalization of the Indian Banking Industry. Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Private Banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency and forced them to become more competitive.

List of Private Sector Banks in India is as follows Bank of Rajasthan Axis Bank Centurion Bank of Punjab Federal Bank ICICI Bank IndusInd Bank Jammu & Kashmir Bank Karur Vysya Bank SBI Commercial and International Bank United Western Bank Bharat Overseas Bank Catholic Syrian Bank Dhanalakshmi Bank HDFC Bank IDBI Bank ING Vysya Bank Karnataka Bank Kotak Mahindra Bank South Indian Bank YES Bank

CHAPTER II OVERVIEW OF THE ORGANISATION

2.0 INTRODUCTION TO AXIS BANK Axis Bank Ltd was incorporated in the year 1993 as UTI Bank Ltd which provided corporate and retail banking products and was the first 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 (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The Bank as on 30th June, 2011 is capitalized to the extent of Rs. 411.88 crores with the public holding (other than promoters and GDRs) at 52.87%. The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 1281 branches (including 169 Service Branches/CPCs as on 31st March, 2011). The Bank has a network of over 6270 ATMs (as on 31st March, 2011) providing 24 hrs 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. 2.1 UTI to AXIS In 2007 the bank decided to have an identity of its own distinct from its parent UTI-I. Thus was born a brand Axis - a word which connotes solidity and gives a feel of transcending geographical boundaries. The Bank successfully rebranded itself as Axis Bank in July 07 which
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has helped it in shedding the faint perception of being a Government owned entity. This brand makeover was very well executed, thus ensuring No slippages in the banks growth trajectory which was evident from the 67% growth in its customer accounts to 9.9 mn during FY08 as against 5.93 mn during FY07. The Bank today is capitalized to the extent of Rs. 403.63 crores with the public holding (other than promoters and GDRs) at 53.72%. The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 896 branches and Extension Counters (as on 31st December 2009). The Bank has a network of over 4055 ATMs (as on 31st December 2009) providing 24 hrs 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. Axis Bank currently has global footprints in four countries by way of 3 branches in Singapore, Hong Kong, Dubai and 2 representative offices in Shanghai and Dubai. It has also sought permission from the Sri Lankan Government to open a branch in Sri Lanka in the current fiscal. In these locations it offers corporate credit and trade finance solutions, debt syndication and wealth management services to NRI population settled in these cities. 2.3 VISION, MISSION AND VALUES 2.3.1 Vision To be the preferred brand for total financial banking for both corporate and individuals 2.3.2 Mission Customer Service and Product Innovation tuned to diverse needs of individual and corporate clientele. Continuous technology up gradation while maintaining human values. Progressive globalization and achieving international standards. Efficiency and effectiveness built on ethical practices. 2.3.3 Values Customer Satisfaction through
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Providing quality service effectively and efficiently Smile, it enhances your face value" is a service quality stressed on Periodic Customer Service Audits Maximization of Stakeholder value Success through Teamwork, Integrity and People

2.3.4 VISION 2015 AND CORE VALUES VISION 2015 To be the preferred financial solutions provider excelling in customer delivery through insight, empowered employees and smart use of technology CORE VALUES Customer Centricity Ethics Transparency Teamwork Ownership 2.4 BOARD OF DIRECTORES S.No 1 2 3 4 5 Name Dr.Adarsh Kishore Mr.S K Chakrabarti Mr.Prasad R Menon Dr.R H Patil Mrs.Shikha Sharma Designation Chairman / Chair Person Deputy Managing Director Director Director Managing Director & CEO

2.5 ORGANISATION STRUCTURE

2.5 POLICIES OF AXIS BANK 2.6.1 Compensation Policy The objective of this policy is to establish a system whereby the Bank compensates the customer for the financial loss the customer could incur due to deficiency in service on the part of the Bank or any act of omission or commission directly attributable to the Bank. The policy is based on the principles of transparency and fairness in the treatment of customers.
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It is designed to compensate the customer only for the financial loss incurred by the customer due to deficiency in the services offered by the Bank which can be measured directly and limited to the compensation specified for the respective service as given below. The date of receipt of complaint/notice by the Bank would be taken as day 'zero' and the timelines mentioned would be counted from the next working day onwards. The commitments under this policy are without prejudice to any right the Bank will have in defending its position before any Court of Law, Tribunal or forum duly constituted to adjudicate banker-customer disputes. The policy document covers the following aspects: - Erroneous debiting of account - Debits towards service charges - Payment of cheques after acknowledgement of stop payment instructions - Payment of interest to customers for delayed collection of instruments - Handling of instruments lost in transit - Funds transfers using NEFT/RTGS - Foreign exchange services - Collection of cheques outside India denominated in foreign currency - Failure to execute standing instructions - Reversal of erroneous debits arising on account of fraudulent transactions - Violation of the Code by banks agent - Transaction of 'at par instruments' of Cooperative Banks by Commercial Banks 2.6.2 Comprehensive Deposit Policy One of the important functions of the Bank is to accept deposits from the public for the purpose of lending. In fact, depositors are the major stakeholders of the Banking System. The depositors and their interests form the key area of the regulatory framework for banking in India and this has been enshrined in the Banking Regulation Act, 1949. The Reserve Bank of India is empowered to issue directives / advices on interest rates on deposits and other aspects regarding conduct of deposit accounts from time to time. With liberalization in the financial system and deregulation of interest rates, banks are now free to formulate deposit products within the broad guidelines issued by RBI.

This policy document on deposits outlines the guiding principles in respect of formulation of various deposit products offered by the Bank and terms and conditions governing the conduct of the account. The document recognizes the rights of depositors and aims at dissemination of information with regard to various aspects of acceptance of deposits from the members of the public, conduct and operations of various deposits accounts, payment of interest on various deposit accounts, closure of deposit accounts, method of disposal of deposits of deceased depositors, etc., for the benefit of customers. It is expected that this document will impart greater transparency in dealing with the individual customers and create awareness among customers of their rights. The ultimate objective is that the customer will get services they are rightfully entitled to receive without demand. While adopting this policy, the bank reiterates its commitments to individual customers outlined in Bankers' Fair Practice Code of Indian Banks' Association. This document is a broad framework under which the rights of common depositors are recognized. Detailed operational instructions on various deposit schemes and related services will be issued from time to time 2.6.3 Bankers Fair Practice Code This is a voluntary Code, which sets standards of fair banking practices for member banks of Indian Banks' Association to follow when they are dealing with individual customers. It provides valuable guidance to you for your day-to-day operations. The Code applies to: Current, Savings and all other Deposit accounts Pension, PPF accounts etc. operated as agents of RBI/Government Collection and Remittance services offered by the banks Loans and Overdrafts Foreign-exchange services Card products Third party products offered through our network.

2.6.4 Cheque Collection Policy The Bank as a part of the normal banking operations undertakes collection of cheques deposited by their customers, some of which could also be drawn on non-local bank branches. Such cheques are called outstation cheques. In order to facilitate faster collection of outstation cheques, the Reserve Bank of India started a special clearing styled "Speed Clearing" by
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leveraging the core banking solutions implemented in banks. To bring about public awareness on speed clearing, we have revised the policy to reflect the features of this collection system. Collection of cheques and other instruments payable locally at centers within India and abroad Our commitment regarding time norms for collection of instruments Policy on payment of interest in cases where the Bank fails to meet time norms for realization of proceeds of outstation instruments Our policy in dealing with collection instruments lost in transit

2.6 AWARDS &SIGNIFICANT EVENTS

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CHAPTER III FUNCTIONAL DEPARTMENTS

3.0 SERVICES 3.1 Retail Banking Retail banking is a key component of the banking industry. Retail banks only work with consumers, not businesses. Retail banks allow consumers to purchase homes, cars and consumer products by providing mortgages and loans. In this way, they provide needed liquidity to keep the economy growing. Retail banks provide a safe place for people to deposit their money by offering savings accounts, CDs (certificates of deposit) and other financial products. Retail banks also provide checking accounts. All of this can be done online, which has become an important added convenience. Retail banks primarily make money by charging higher interest rates on their loans than they pay for deposits. Corporate banking Financial services specifically offered to corporations, such as cash management, financing, underwriting, and issuing of stocks, bonds, or other instruments. Financial institutions often maintain specific divisions for handling the needs of corporate clients, separate from consumer or retail banking activities for individual accounts. Retail banking Deposit schemes Loans and advances Personal Loans Housing Loans Loan against Property Education Loan Car Loan Loan against Shares Loan against Security Personal banking Accounts Terms deposits Fixed deposits Recurring deposits Cards Gold plus cards Silver cards silver plus cards Corporate banking Accounts Normal current a/c Trust/NGO savings a/c Services Private equity, mergers and acquisitions Advisory services Capital market funding E- broking Capital Market Treasury

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NRI Accounts NRE Savings Account Non-Resident (Ordinary) NRO Savings Account NRI Prime Account Priority Account NR Portfolio Investment Scheme(PIS) Account NRE Salary Account Resident Foreign Currency(RFC) Account

NRI Deposits NRE Rupee Deposit NRO Rupee Deposit FCNR Deposit RFC Term Deposit

3.2 ACCOUNT OPENING A customers formal relationship with any bank begins with account opening. In Axis bank, accounts of the customers are usually not opened at branches. The applications are received, scrutinized and then forwarded to Central Processing Unit and where they are eventually opened. In order to prevent misuse of banking channel for perpetration of financial frauds, money laundering, terrorism etc., Reserve Bank of India has a part of their initiatives to prevent suspicious activities, advised banks to follow certain procedure which are known as Know Your Customers guidelines.
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Account can be opened by Resident Individuals Ordinary individuals Hindu undivided family Senior citizen Married women Foreign nationals Minors Illiterate persons Visually challenged persons Non-Resident Indians Limited liability partnership Products of Axis bank Easy Access Savings Account Krishi Savings Account Prime Savings Account Salary Account Women's Savings Account Priority Account - Resident 3.3 KNOW YOUR CUSTOMERS Know Your Customer - KYC enables banks to know/ understand their customers and their financial dealings to be able to serve them better. The Reserve Bank of India (RBI) has advised banks to follow a 'KYC guidelines', wherein certain personal information of the accountopening prospect or the customer is obtained. The objective of doing so is to enable the Bank to have positive identification of its customers. This is also in the interest of customers to safeguard their hard earned money. The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are 1. Photograph 2. Proof of identity 3. Proof of address
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Institutions/Organizations Government department Defense establishment Trusts registered under Indian Trust Act 1882 Employee welfare trust Society registered under the Societies Registration Act 1860 Self help group Official liquidator Unregistered Trust/society State/Urban/District/Regional/Local area bank Association of persons

Demat Account Senior Citizen's Account Defence Salary Account Trust/NGO Savings Account RFC(D) Account Pension Savings Account

These guidelines are so important, that even an existing account may have to be closed due to banks inability to verify the customers identity, although only branch heads will have the authority to take such a decision. The aim of these guidelines is to: Determine and document the true identity and basic background of all customers Obtain and document any additional customer information, commensurate with assessment of the money laundering risk posed by customers expected use of the bans products and services Minimize frauds Avoid opening of accounts with fictitious names and addresses Check misappropriations Prevent money laundering

Regulatory: In terms of the guidelines issued by the Reserve Bank of India (RBI) on November 29, 2004 on Know Your Customer [KYC] Standards Anti Money Laundering [AML] Measures, all banks are required to put in place a comprehensive policy framework covering KYC Standards and AML Measures. Legal: The Prevention of Money Laundering Act, 2002 (PMLA) which came into force from July 1, 2005 (after rules under the Act were formulated and published in the Official Gazette) also requires Banks, Financial Institutions and Intermediaries to ensure that they follow certain minimum standards of KYC and AML as laid down in the Act and the rules framed there under.

When does KYC apply? KYC will be carried out at the following stages: Opening a new account Opening a subsequent account where documents as per current KYC standards not been submitted while opening the initial account Opening a Locker Facility where these documents are not available with the bank for all the Locker facility holders When the bank feels it necessary to obtain additional information from existing customers based on conduct of the account When there are changes to signatories, mandate holders, beneficial owners etc
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KYC will also be carried out in respect of non-account holders approaching the bank for high value one-off transactions.

3.4 DEMAND DRAFTS AND PAYORDER PROCESSING Customer requests of Demand drafts and PayOrders are processed by the dedicated bank official at every branch of bank.

3.5 TRANSFERS Intrabank Transfer This is the money transfer among the Axis bank accounts.

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Interbank Transfers This is the money transfers between the Axis bank accounts and the other Bank accounts. Real Time Gross Settlement (RTGS) System, introduced in India since March 2004, is a system through which electronic instruments can be given by banks to transfer funds from their account to the account of another bank. The RTGS system is maintained and operated by RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations. As the name suggests, funds transfer between banks take place on a real time basis. Therefore, money can reach the beneficiary instantaneously and the beneficiarys bank has the responsibility to credit the Beneficiarys account within 2 hours. The minimum amount to be remitted through RTGS is RS.2 lakhs. There is no upper ceiling for RTGS transactions.

National Electronic Funds Transfer (NEFT) System is a nationwide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch. The maximum amount to be remitted through NEFT is RS.2 lakhs. There is no lower ceiling for NEFT transactions. Speed Clearing refers to collection of outstation cheques through the local clearing. It facilitates collection of cheques drawn on outstation core-banking-enabled branches of banks, if they have a networked branch locally. As of now, outstation cheques are paid through 2 channels viz, on collection basis or through National Clearing (Inter-city Clearing). This requires movement of cheques from the Presentation centre (city where the cheque is presented) to Drawee centre (city where the cheque is payable) which elongates the realization time for cheques. Speed Clearing aims to reduce the time taken for realization of outstation cheques.

3.6 LOANS A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in
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an annuity, each installment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent. Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding. 3.6.1 TYPES OF LOAN 1. Secured loan A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan. A subsidized loan is a loan that will not gain interest before you begin to pay it. It is known to be used at multiple colleges. A unsubsidized loan is a loan that gains interest the day of disbursement. A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security a lien on the title to the house until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.

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A type of loan especially used in limited partnership agreements is the recourse note. A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss, using options or other hedging strategies to reduce lender risk. A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible for a pre-settlement loan. This is considered a secured non-recourse debt due to the fact that if the case reaches a verdict in favor of the defendant the loan is forgiven. 2. Unsecured Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be available from financial institutions under many different guises or marketing packages:

credit card debt personal loans bank overdrafts credit facilities or lines of credit corporate bonds (may be secured or unsecured)

The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974. 3. Demand loan Demand loans are short term loans that are atypical in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime rate. They can be "called" for repayment by the lending institution at any time. Demand loans may be unsecured or secured.

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4. Personal or commercial loan Loans can also be subcategorized according to whether the debtor is an individual person (consumer) or a business. Common personal loans include mortgage loans, car loans, home equity lines of credit, credit cards, installment loans and payday loans. The credit score of the borrower is a major component in and underwriting and interest rates (APR) of these loans. The monthly payments of personal loans can be decreased by selecting longer payment terms, but overall interest paid increases as well. For car loans in the U.S., the average term was about 60 months in 2009. Loans to businesses are similar to the above, but also include commercial mortgages and corporate bonds. Underwriting is not based upon credit score but rather credit rating. Generally there are two type of lending:-

1. 2.

Retail loans Personal Loans Housing Loans Loan against Property Education Loan Car Loan Loan against Shares Loan against Security Business loan

3.7 DEPOSITS

3.7.1 Fixed Deposits Term deposits, also known as Fixed deposits or Time deposits, are deposits kept for fixed period and are repayable on expiry of the fixed period. The bank decides the rates of interest on term deposits of various maturities from time to time by taking into account the directives of the

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Reserve Bank of India in this regard. RBI permitted banks to offer deposit schemes for senior citizens offering higher rates The present RBI guidelines provide discretion to banks to offer term deposits from a minimum period of 7 days to maximum of 120 months. Monthly Interest Certificate (MIC) provides fixed monthly income by the way of interest to the depositor for a specified period leaving the principal amount of deposit intact. The monthly interest installment should be credited to the Savings, Current or Recurring deposit account of the depositor according to his/her instructions. The minimum period for which a deposit under MIC can be accepted is 12 months. Quarterly Interest Certificate (QIC) scheme provides fixed quarterly income by the way of interest to the depositor for a specified period leaving the principal amount of deposit intact. The quarterly interest installment should be credited to the Savings, Current or Recurring deposit account of the depositor according to his/her instructions. The minimum period for which a deposit under QIC can be accepted is 12 months. Re-Investment Certificate (RIC) is a cumulative deposit scheme, where the interest is compounded on quarterly basis and is paid along with the principal on maturity. The minimum period for which the deposits under RIC can be accepted is 6 months. The maximum period is 120 months. 3.7.2 Recurring Deposits Recurring deposits are accepted in equal monthly installments of minimum Rs 1,000 and above in multiples of Rs 500 thereafter. Recurring Deposit accounts can be opened for a minimum period of 12 months and in multiples of 12 months thereafter, up to a maximum of 120 months. The amount of installment once fixed, cannot be changed. Installment for any calendar month is to be paid on or before the last working day of the month. Where there is delay in payment of installment, one can regularize the account by paying the defaulted installment together with a penalty (at present it is at the rate 4 % for the period of delay).Fraction of a month will be treated as full month for the purpose of calculating the penalty. The total amount repayable to a depositor, inclusive of interest, depends on the amount of monthly installments and the period of deposit.

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3.7.3 Encash 24 The Encash 24 (Flexi Deposit) gives you the liquidity of a Savings Account coupled with high earnings of a Fixed Deposit. This is achieved by creating a Fixed Deposit linked to your Savings Account providing you the following unique facilities: Maximum Returns: As soon as the balance in your Savings Account crosses over Rs 25,000, the excess, in multiples of Rs 10,000 will be transferred automatically to a higher interest earning Fixed Deposit Account. The maturity of fixed or term deposits formed as a result of transfer of money from the Savings Bank account will be for a maximum period of 181 days and the interest will be calculated on simple interest rate basis. 3.7.4 Tax Saver Fixed Deposit In the Finance Bill of 2006, the government had announced Tax benefits to Bank Term Deposits which are of over 5 year tenure u/s 80C of IT Act, 1961 vide Notification Number 203/2006 and SO1220 (E) dated 28/07/2006. The salient points of the scheme notification are; (a) Fixed tenure without premature withdrawal. (b) Year is defined as a financial year. (c) Amount limited to Rs. 100 minimum and Rs. 100,000 maximum. (d) Bank will issue a Fixed Deposit Receipt that shall be the basis of claiming tax benefit. (e) Term deposit under this scheme cannot be pledged to secure a loan. Benefits of tax break u/s 80C of IT Act Benefit Illustrator Example Assume that a customer invests Rs 100,000 in this scheme @ 8% p.a. in fixed deposit for five years. He will get a benefit of Rs 30,600 at 30.6 % on the eligible investment of INR 100,000 assuming that he is in Rs 2, 50000 lac to Rs 10, 0000 lac tax bracket, thus his effective investment would be Rs 69,400. He would earn Rs 8000 (08 percent on 1 lac) as interest per annum, which would translate to a return of 11.5 percent on the effective investment of Rs 69,400. 3.8 CUSTOMER REQUESTS The customer can request for the following issues: Change of Address Change of contact details such as Mobile no, Email id Account opening related queries
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Card damaged Reactivation Card duplication

Cheque book Debit card PIN FD receipt not received Debit card related queries Card hot listing Lost card 3.9 Process for the above

New cheque book request Stop payment request Signature verification Update new signature Mobile alerts I-Connect E-Statement

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LOCKER Axis bank provides locker facility as well for the customers only at selected branches. Axis bank lockers ensure the safe keeping of customers valuables. Lockers available in various sizes. Direct debits for locker rentals from customers account and get rid the customers of the hassles in writing out cheques. Extended banking hours to operate lockers. Competitive rentals.

3.10 CASH TRANSACTION GUIDELINES Savings/Current Accounts There is no restriction limit for the amount. If the total amount deposited by way of cash in an account in a day is Rs.50000 and above, PAN of the account holder should be obtained if not taken on record at the time of opening the account. In case, the account holder does not have the PAN, then form 60/61 should be obtained on the day of such deposit. Time Deposits As per the IT rules, cash remittances exceeding Rs.50000 requires the account holders PAN or form 60/61. As per banks internal rules, for opening a fixed deposit account for amounts exceeding Rs.50000 (whether by cash or cheque), PAN or form 60/61 is to be obtained. Cash payment should not be made by a bank to any person whose total holdings of time deposits are Rs.20000 or more as per IT Act. Demand draft/Pay Order/Bankers Check As per the IT rules, cash transaction for Rs.50000 and above per day requires the remitters PAN or form 60/61. However, RBI has permitted cash transactions only for amounts of less than Rs.50000. In Axis bank, for an amount exceeding Rs.20000, the remitter has to be identified. Cash transaction for Rs.50000 and above are therefore, not permitted.

3.11 CLEARING Clearing operations is a process in which bankers exchange the cheques (drawn on other banks) received from their clients and settle the accounts. This is one the most important and popular services. The exchange of cheques amongst banks and settlements of the accounts take
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place at clearing houses. The clearing houses are generally managed by RBI and in certain centers where RBI does not have a presence; the same are managed by SBI. The Bank as a part of the normal banking operations undertakes collection of cheques deposited by their customers, some of which could also be drawn on non-local bank branches. Such cheques are called outstation cheques. In order to facilitate faster collection of outstation cheques, the Reserve Bank of India started a special clearing styled, Speed Clearing by leveraging the core banking solutions implemented in banks In India, as on date, there are about 1047 clearing houses. Bankers in their normal course of business receive millions of cheques from their client from collection. Thus, collection of cheques is one of the prime services provided by bankers. The bankers who extends the service of collecting the funds of the cheques are known as COLLECTING BANKERS. CLEARING speeds up collection of cheques and therefore enhances customer service, reduces the scope for clearing related frauds, minimizes cost of collection of cheques, reduces reconciliation problems, eliminates logistics problems etc. 3.11.1 Inward Clearing When a particular branch receives instruments, which are on themselves and sent by other member bank for collection are treated as Inward Clearing of that branch. This branch is known as paying branch. Process Clearing house receives all the instruments from the member banks every day evening and it has an arrangement which separates all the instruments bankwise as per MICR data and bundles the member banks instruments. These instrument details are recorded into database and uploaded into Clearing houses website for member banks. Every day morning these bundled instruments are collected by the member banks which are drawn on themselves and deposited in other banks for collection. The collected instrument details will be downloaded from the Clearing houses website or will be obtained through floppy drive or pen drive and brought to the service branch by the branch official.

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Once the data is downloaded from the CHs website, it will be uploaded into the in-house software for processing. The software used in Axis bank is Finacle. The instruments above Rs.1 lakh and upto Rs.10 lakh will be processed by officials duly empowered to do so. Within a reasonable time after the instruments are brought from the CH, it should be ensured that all instruments as per the list received. The following cases should be detected while handling the instruments physically. LBNR Listed But Not Received RBNL Received But Not Listed NDOU Not Drawn On Us The UV lamp checking of the instruments above the threshold limit as per compliance must be done by the concerned official for detection of any physical or chemical alteration. The official processing the instrument should put his signature as having processed the instrument and cancel the signature of the customer. All passed cheques should be defaced with an edible pencil before bundling and storage. The following accounts are to be used for Inward clearing accounting a. Inward Clearing Settlement Account To debit the entire amount that is passed b. Clearing Account To park LBNR or Excess claim cases c. Clearing Cheque Returned Account To park the amount of returned cheques d. Clearing Difference Account To park RBNL or Short claim cases e. Clearing House Account To credit the amount which submitted for collection to CH and to debit the amount of those instruments that are passed Once the instrument details are entered into the software, it will be verified and posted by the bank officials who are empowered to do so. The amount will be debited from the customers account against the cheque issued by them to their customers. The presented cheques might get returned in following cases Insufficient amount in the account
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Signature mismatch Damaged instruments Details changed in the instrument but not approved by the customers signature

3.11.2 Inward Returns Clearing returns (inward) consists of those instruments which are presented by collecting bank to other banks for payment but it has been returned and unpaid by them due to specified reason through the clearing house. All returned cheques should be enclosed with system generated return memos. Locally printed or handmade return memos should not be enclosed. The physical returns along with the schedule and floppy, if any, should be delivered to the CH by the bank officials only. Similarly the inward returns along the data should be brought from the CH by the officials only. 3.11.3 Outward Clearing When a particular branch receives instruments drawn on the other bank within the clearing zone and sends those instruments for collection through the clearing arrangement is considered as Outward Clearing for that particular branch. This branch is known as collecting branch. Process The instruments are received from the customer at branches. All received instruments should be affixed with bank special crossing stamp as soon as received from the customers. An outsourced agency collects the instruments along with excel sheet giving details of instruments from the branches at appointed hours and delivers to the service branch. Alternatively, the runner boys of the branches deliver the outward instruments along with pay-in slips to the service branch at fixed intervals. The outward instruments must be sent by the branches in locked boxes where one key of the lock is held at the branch and another is at the service branch. The box is to be opened at service branch by service branch officials only.
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All instruments crossing the threshold limit should be checked through the UV lamp. In case of discrepant instrument matter should be taken up with the depositor immediately by the collecting branch and such instruments should not be presented in outward clearing. All the instruments of high value (above Rs.1 lakh) should be checked by a designated official and should be subjected to double scrutiny if it is in favour of individual customers.

Power encoding machine with requisite software should be used to encode the cheques seamlessly by importing data from Finacle to avoid encoding errors. The data entry, encoding, preparation of presentable batches etc, are done at the Service branch premises. Once the outward batches are prepared, they are lodged by the service branch to the Clearing House.

The following accounts are to be used for Outward Clearing accounting Outward Clearing Settlement Account - To credit the entire amount of the instruments that are received for collection Clearing House Account - To credit the amount which submitted for collection to CH and to debit the amount of those instruments that are passed 3.11.4 Outward Returns Clearing returns (outward) include those cheques that are presented to the paying bank by other banks but we have to return them unpaid to the collecting banks due to various reasons. Outward returns are received from the Clearing House with return memo attached. Along with the returns, data and relevant statements should be brought from the CH by the bank official. The schedules and patties as submitted by the presenting bank should be carefully checked for an missing instruments. The returns are processed in Finacle as inward clearing instruments. The details of the instrument like account number, amount, and reason why it is returned are entered into the software. And same will be verified by the branch official. A schedule of returned instruments branch-wise is to be prepared giving details of the cheques and should be handed over to the runner boy of the concerned branch and they will
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dispatch the instruments to the concerned customers as soon as possible. If the outward cheques returned with technical reasons such as wrong encoding, wrong delivery, wrong listing, inadequate or incorrect stamping etc, it should not be returned to the customers. These cheques should be represented after due corrections. 3.11.5 Electronic Clearing System ECS is a mode of electronic funds transfer from one bank account to another bank account using the services of Clearing house. This is normally for bulk transfers from one account to many accounts or vice-versa. This can be used both for making payments like distribution of dividend, interest, salary, pension etc. by institutions or for collection of amounts for purpose such as payments to utility companies like telephone, electricity, or charges such as house tax, water tax, etc or for loan installments of financial institutions/banks or regular investments of persons. There are two types of ECS called ECS Credit and ECS Debit. ECS Credit is used for affording credit to large number of beneficiaries by raising a single debit to an account, such as dividend, interest or salary payment. ECS Debit is used for raising debits to a number of accounts of consumers/account holders for crediting a particular institution. 3.12 CASH MANAGEMENT SERVICES Axis bank offers a wide range of collection and payment services to meet corporates complex cash management needs. Payments received from companys vendors and made to its suppliers are efficiently processed to optimize cash flow position and to ensure the effective management of business operating funds. Under cash management services, Axis offer corporate and institutional clients customized solutions towards collection, payments and remittance services allowing them to minimize the gap between collections and remittances, thereby improving their cash flows. What is Cash Management Services? A hybrid system of collections and remittances at faster pace with certain value additions Effective and efficient mode of managing the Collections and Receivables

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Objectives of CMS To attract and retain Customers by offering customized products and services To adapt to the changing business environment To provide additional value added facilities to customers To create niche market segments and stay ahead of competition To make the process involved in collections and remittances efficient and effective

Advantages of CMS For Corporates Improved liquidity through faster access to funds Assured funds in the Pooling account Reduced borrowings and lower interest payments Deployment of funds is easier by reduction in accounts maintained with banks for efficient requirements Lower operational costs Greater ease in accounting and reconciliation through client specific MIS, including MIS through web Single window query

For the Bank Client acquisition by offering CMS as an entry strategy Fee as well as Float based income Cross selling of other banking products Developing overall relationships Monitoring of Cash inflows of the Corporate where bank has a Credit exposure Balancing of mismatches at the Branch level from the CMS funds

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3.13 GOVERNMENT BUSINESS Axis bank is the first private sector to be authorized by the Reserve Bank of India and Government of India for collecting Taxes on behalf of State Government with authorization of the bank for collection of commercial taxes in the twin cities of Hyderabad and Secunderabad for Government of Andhra Pradesh since July 2001. Axis bank is authorized as an agency bank of RBI commencing with October 1, 2003. The authorization means that the bank can undertake the following business on behalf of Central Government and State Governments: Collection of Direct Taxes on behalf of Central Board of Direct Taxes Collection of Indirect Taxes on behalf of Central Board of Excise and Customs Disbursement of Central Government Pensions Expenditure related payments of Central Government Ministries or Departments, State Government business including collection of State Taxes based on the recommendation of individual States 3.14FOREIGN EXCHANGE International trade in commodities and services necessitates a method of conversion of value of commodities and services of one country in terms of purchasing power in another country. The mechanism by which such conversion takes place is one of the meanings of Foreign Exchange. Foreign exchange is the method of conversion of one currency into another. The foreign currency in such conversion is treated as a commodity and the home currency as the purchasing power. 1. Vostro Account - Account held by a foreign bank in a domestic bank is called Vostro account. For example UBS of Switzerland opening an account in AXIS BANK in India, this is Vostro account for AXIS BANK in India. 2. Nostro Account - Account held by a particular domestic bank in a foreign bank is called Nostro account. Here in the above example given in Vostro account the same account is a nostro account for UBS Switzerland, or if AXIS BANK India opens an account in UBS Switzerland then that account is a Nostro account for AXIS BANK India. Nostro accounts

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are usually in the currency of the foreign country. This allows for easy cash management because currency doesn't need to be converted. 3. Loro Account - An account held by a domestic bank in itself on behalf of a foreign bank. The latter in turn would view this account as a nostro account.(Generally not in practice) 4. SWIFT: An SWIFT consists of a one-page document containing the name and code of the originating bank, the date and time, the address and code of the receiving bank, the name and internal code of the officer initiating the transmission, the names and numbers of the accounts involved in the transfer, a description of the asset being transferred, the MT category of the transmission, and acceptable, standardized phrases as described above. 5. Direct Import Bill: In direct import bill, supplier supplies the goods and importer receives the goods and also all required document subsequently. After receiving the goods and documents payment is made by the importer. It is a safest method transaction as there is no risk involved in it. 3.14.1 Various BUYING and SELLING rates As all purchase/sale transactions are not alike, there are different buying and selling rates. The principle involved is that an instrument/ transaction involving little expense (work / effort) and risk will be more valuable i.e. it will command a better price for the seller than an instrument costing more to collect and involving greater risk. Different rates are: TT selling rate TT buying rate Bill selling rate Bill buying rate

Apart from the above rates, banks usually quote the following rates: Travelers cheques selling rate Foreign currency note selling rate Clean cheques buying rate Travelers cheques buying rate Foreign currency note buying rate

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3.14.2 Procedure Of Various Forex Transactions

1. Import (Advance Remittance)

Application form of the bank and A1 form is to be filled along with performa invoice should be given IEC (Import Export Code) should be given to the bank for the first transaction and further when the code is identified then it is taken as default IEC code of the respective customer

Then payment is to be done by the Bank on the basis of Performa invoice Note: If below 500000 INR then Bill Sell Rate is taken from the card rate keeping a margin and if above 500000 INR then Treasury decides the rate.

2. Import (Direct Remittance)

Application form of the bank and A1 form is to be filled by the customer IEC (Import Export Code) should be given to the bank for the first transaction and further when the code is identified then it is taken as default IEC code of the respective customer

Customer has to give the Bill of Entry, Packing List, Commercial invoice and Bill of Lading to the bank Then payment is to be done by the Bank on the basis of above details

3. Export (Export Collection)

Exporter gives the Bill to the Bank and then lodgement is done Bank sends the bill to the beneficiary bank Now the Beneficiary Bank will collect all the details from the customer and sends back the credit to the Bank And when the SWIFT comes then customers a/c is credited i.e. it is realized

4. Export (Inward Remittance)

SWIFT related to the transaction comes to the Bank

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Then amount, beneficiary bank and other details given in a SWIFT is matched with the details given by the Head Office about the debit / credit statement in the Nostro Account

If there is an amount less than 500000 INR then TT Buy rate and if above than treasury rate is applied Then the rate is verified by the TFC and the transaction is done which means customer a/c is credited

5.

Selling Of Currencies Application form of the bank along with A2 form should be filled in by the customer and he should be an account holder in the bank The customer has to submit a copy of his passport and visa along with confirm air ticket and if the customer is NRE then only passport According to customer need he is given the currencies which is according to CCY Sell rate keeping a margin and then the respective amount is debited from customers a/c

6.

Issuance Of Letter Of Credit Application is given by the customer with all the terms and conditions along with the insurance contract in case of FOB (Free on Board) On the basis of these documents LC (letter of credit) is opened and supplier is given intimation about this. As per the contract, the beneficiary bank presents the document to importers bank along with the bill of lading, packing list, declaration certificate and all other necessary documents Then importers bank gives an intimation to its importer after receiving the documents and then lodgment is done The importer arranges for the fund and payment has to be done within the due date.

3.14.3 NRI Services Steps Involved In Sending Money

Step 1: Customer registers on Axis Remit site giving basic KYC (Know your customer) information. It must be noted that the information provided by
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customer is cross-checked and the customer id will be disabled later if the KYC check turns negative.

Step 2: Remitter Customer registers one or more beneficiaries for receiving remittances. This can be the remitter himself or his friends/relatives. The only condition is that the beneficiary should have a proper Bank account with a Bank in India.

Step 3: Remitter initiates a remittance transaction in Axis Remit by mentioning the beneficiary & amount. Thereafter he/she uses the electronic clearance service in his country to park money in our designated Nostro Account, the details of which are conveyed to him at Axis Remit site. Such electronic transfer of funds can either be a push transaction (where customer pushes i.e. originates the transfer of funds, as in Power Transfer module of I-connect) or a pull transaction (where the Bank pulls money from the customer account as in ECS debits).

Step 4: Remitter revisits Axis Remit site after completing the transfer (only in the case of CIP (Push) transactions) and keys in the net-transfer reference number in the appropriate module.

Step 5: At the back-end, the service provider (TOML) matches the customer furnished information with Credits in Axis bank Nostro Account and releases payments to beneficiaries. The credits to beneficiaries are passed on by way of account credit (for Axis Bank customers) and NEFT / Demand Draft (for nonAxis Bank beneficiaries).

3.15 CREDIT Credit facilities can be fund based or non fund based. The fund based limits are those where outlay of the banks fund is involved. Such limits are also known as borrowing limits. Non fund based limits are those where the bank has to meet the commitment/promise made by a borrower and endorsed by the bank, only if the borrower fails to honor it. Main types of facilities
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under fund based limits and non fund based limits and the related guidelines for granting advances against them are discussed below in brief. 3.15.1 Fund Based Find based limits are generally granted by way of overdrafts, cash credit, Demand Loans, working capital term loans, bills purchased/ Discounted and terms loans. a. Overdraft and Cash credit - In overdraft/cash credit, the borrower is allowed to carry out debit and credit transactions up to a limit. These are more operative accounts and have cheque book facility .The term overdraft is generally used for continuing limits granted against the security of term deposits and other financial securities ,occasional overdrawing/debits in current accounts and also for continuing limits granted for personal purposes.Cash Credit is generally used for continuing limits granted for working capital requirement of commercial establishments. Cash credit/overdraft limits are repayable on demand. b. Demand Loans/Loans - As the name suggests, are repayable on demand. They are also at times referred to as loans. Though technically repayable on demand, a repayment of the loan in installments spread over a period up to 3 years or so is generally stipulated. Composite loans given for working capital and for fixed assets as also the loans for fixed assets where repayment period is stipulated up to 3 years granted by way of demand loans. c. Bills Purchased /discount are normally meant for financing working capital requirements in the post-scale part of the operating cycle of a unit. The facilities are for purchasing/discounting bills drawn by the customer for goods sold. d. Export Credit is mainly a short term working capital facility extended to an exporter for execution of an export order from the date of receipt of such order till the date of realization of the export proceeds. Mainly the finance is given in the form of pre/post shipment facilities . Pre shipment facilities are extended against export orders and post shipment facilities are exdended against export orders and post shipment faciliteies are extended by way of bill discounting and bill purchase. 3.15.2 Working Capital Funding The Working capital funding requirements for clients are partly met out of the short term funding provided by banks, the balance being funded out of long-term sources of the client. The
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fund based working capital funding limits for each client are determined based on the following standard procedures: Computation of Maximum Permissible Banking Finance (MPBF) under the second Method of lending, Assessed Bank Finance under the cash Flow budgeting method or Nayak Committee Method. The primary security for working capital limits is normally hypothecation of the current assets of the company. Funding requirements in excess of the assessed limits are met out of the long- term sources of the client. Term loans extended by bank toward extending long-term funds to working capital requirements of client are classified as. 3.15.3 Working Capital Term Loans Term Loans: Term Loans are generally granted for acquisition of Fixed Assets. They are repayable by specified number of installments spread over a period of 3 to 5 years or some times more. Normally a term loan which is repayable up to a period 3 to5 years, is called Medium term loan. Where the repayment is longer than 5 years, is called Medium term loan. Where the repayment is longer than 5 years, it is called long term loan. Term loans are mainly granted for acquisition of capital assets. The loans are not repayable on demand, but only in installments ranging over a period of time. The repayment of the loan is generally out of the future earning of the borrowers business The primary security is normally the charge on the fixed assets of the company.

3.15.4 Non Funded based Limits The two main types of non fund based facilities are letter of credit and Bank Guarantees the details of which are given as follows. a. Letter of Credit (LC) is an arrangement where a bank, acting on the request of the customer ( importer/opener of letter of credit), gives and undertaking to a third party ( exporter/beneficiary of the letter of credit) that on his submitting the shipping documents ( drafts, invoices, insurance policy bill of lading), the bank will meet the traders commitment. In International trade, given the fact that the local trader might not be known to the foreign supplier, such assurance from a bank facilitates the business.

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b. Bank Guarantees - Issuing guarantees on behalf of customers is major non-fund based business of banks. A guarantee is a contract to perform the promises or discharge the liability of a third person in case of his/her default. It constitutes a contingent liability that arises in the event of default by the customer.

3.15.5 Credit Products from Offshore branches at Singapore/Hongkong/Dubai During the last one year AXIS bank has opened three offshore branches at Singapore, Hongkong and Dubai. With these overseas banking units it is now possible for AXIS Bank to offer seamless services to its Indian corporate clientele. Some of the opportunities are elicited as below. a. Acquisition Funding - A number of Indian Corporate are interested in raising money in international capital markets to fund acquisition. The overseas branches makes it possible for finance firms interested in acquisition of overseas companies or starting off new joint ventures or subsidiaries. b. External Commercial Borrowing (ECBs) - External commercial borrowing refer to commercial loans, in the form of bank loans, securities instruments (e.g. floating rate notes and fixed rate bonds)] availed from non-resident lenders with minimum average maturity for 3 years. Indian corporate willing to raise international capital can adopt this route. ECBs can be used to fund capital expenditures. c. Credit Linked Note (CLNs) - A security with an embedded credit default swap allowing the issuer to transfer a specific credit risk t credit investors, CLNs being structure securities, the principal and better understanding of Indian corporate is in good position to undertake them as reference assets. Coupled with FCCBs these offer a win-win proposition for banks as well as investors. FCCBs can be used to fund capacity expansion, repaying debt, acquisition funding. d. Credit Derivative - Credit Derivatives are privately held bilateral contracts where the credit, risk is transferred without the transfer of ownership for a pre-agreed amount or fee. Various types of credit derivatives are plain CDs, First-to-default CLN, Basket CLN, CDOs etc. the overseas branches cater to their demand. e. Trade Finance The offshore branches also offer products in Buyers Credit and Seller Credit. Indian importer with requirement for import finance can be catered to without
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any hassles. The International syndication of loans, trade finance can be catered to without any hassles. The international syndication of loans, trade fiancne advisory and offering agency services for loans syndication is also been explored through these branches.

3.15.6 Structure Of Credit Department Corporate Credit Business Unit has been split into three separate segments Large Corporate segment to manage relationships with corporate having

turnover exceeding Rs.500 crores or those with aggregate exposure exceeding Rs.100 crores. This segment is headed by President (Credit). Relationships in LC segment are allocated on the basis of industry sectors and handled by groups led by sectoral Relationship Managers (SRMs). The SRMs are supported by Relationship Managers (RMs) / Assistant Relationship Managers (ARMs) and Credit Analysis. Certain locations, which as yet do not have critical mass of sector based relationships, are covered by RMs/Assistant relationship mangers (ARMs) and credit analysts. Certain locations, which as yet do not have critical mass of sector-based relationships, are covered by RMS/ARMs on geographical basis, with support from sectoral groups. Mid-Corporate segment to manage relations of corporate with net turnover

exceeding Rs.125 crores and up to Rs.500 crores, and aggregate exposure with the Bank above Rs.25 crores and up to Rs.100 crores. New clients with the cost of the project exceeding Rs.50 crores will be treated a part of MC/LC segment even if the turnover of such clients is less than Rs.125 crores and/or the Bankss exposure to such clients is below Rs.25crores. This segment is divided into three groups, one for Western and Eastern Zones ,on for Southern Zone and another for Northern Zone. All the groups are headed by SVPs operating from Mumbai, Chennai and New Delhi respectively. Relationship function in the segment is performed y RMs, Supported by Credit Analyst led by Credit Officers in respect of Credit appraisal. The allocation of corporate amount the RMs/Credit

Officers and Analyst is aligned on the aligned on the basis of industry sector to extent possible. The Heads of Mid-Corporate segment report to the president (Credit)

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Both the LC and MC segments are supported by Special Assets cell in

identifying/monitoring stressed assets and undertaking related worked in this area. Both the Sectoral and Geography-based teams for Large Corporate are assisted by

client service teams at the concerned centers, consisting of identified product specialists in treasury, trade finance and Business banking products. In addition, RMs have been identified in Capital Markets department who will be

attached to various corporate along with the SRMs/RMs for marketing Capital market products. In other words, there will be a dual coverage model for large corporate consisting of corporate banking RMs and Capital market RMs. RMs operating in Mid-Corporate segment is supported by a pool of product by a

pool of product specialists in treasury, trade finance, business banking and capital market products at the respective centers. The organization structure of the department together with the sectoral distributions is depicted below. 3.15.7Credit selection With a view to having a consistent and transparent credit selection process, the following criteria are followed while selecting clients: Acceptable internal credit rating Reasonable pricing Opportunities for boosting return on capital from ancillary business Significant probability of credit rating enhancement in the medium term Good cash flows, rather than mere security backing Satisfactory quality of management in terms of past track record of performance, competence, integrity and corporate governance practices Sustainability of business model in the long term, especially in a past-WTO and trade liberalization regime characterized by lower import duties Market leadership within the segment Likely leadership in the emerging business Acceptable underlying security and credit enhancement measures

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3.15.8 Credit Appraisal Process A detailed assessment of the credit request based on the various parameters of appraisal is carried out to understand the company, the business, the industry, the viability of funding the company etc. Credit assessment is the quite essential part, as it leads to making a business decision as to sanction credit facilities to the company or otherwise. The appraisal process involves the following: Management Analysis It involves analyzing past performance record, code of ethics, vision, strategic and operational competence, innovativeness and team building and success plan. Industry Analysis While funding a business it is essential to analyze the performance of the industry that it function in. this involves analyzing the outlook. Also, the global competitiveness of the industry is examined in view of falling tariff barriers. Business Model Analysis The analysis involves evaluation of the sustainability, scalability and robustness of the business model of the company through an assessment of configuration of elements comprising the companys goals, strategies, processes, technologies and structure that enable the company to create value for the customers and compete successfully in the market place. Competitive Analysis This involves evaluating the competitive positioning of the company with respect to the key success factors of the industry and identifying the distinct competitive advantages available with the company and assessment of its overall competitive strategy. Financial Analysis In financial analysis, the companys past and projected financials are analyzed to ascertain the companys ability to meet its debt obligation. Trends in key financial parameters are studied and detailed cash flow analysis is carried out to gauge the extent of financial flexibility the company enjoys and the margin of safety available for lenders. Sensitivity analysis is carried out to ascertain the ability of the company to withstand adverse business developments. Risk Analysis Every business faces certain inherent internal and external risks. First of all the risks inherent to the industry are identified and then the risk factors resulting from the business model of the company. It is also important to understand the risk mitigants which companys competitive business allows it.
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Credit Rating It is the process of determining the credit worthiness of the borrower. The credit rating of the company refers to both the external rating and also the internal rating carried out based on various qualitative and quantitative parameters. The credit rating is an objective tool that aims at minimizing credit risk that could arise from individual borrowers or the entire portfolio. Rating is assigned based on the ability of the borrower to repay the debt and his willingness to do so. This is determined with respect to the financial performance of the company, the business dynamics of the company and the quality of management. The credit scoring of the company determines the sanctioning authority and the pricing applicable to the exposure. Ratings profile of the credit portfolio serves as a quantitative estimate of portfolio quality and yield.

3.15.9 Risk Management Department Risk is a separate department for managing credit risks, market risks and operational risks. All the proposals prepared by the Credit Department are sent to Risk for independent risk assessment of proposals before these are put up to the sanctioning authority. Risk Department also works towards: Identifying concentration in the portfolio Identify problem credit exposures prior to their becoming NPAs as thrown out by Credit Audit reports and take up with the originating department for suitable exit from such exposures. 3.15.10 Credit Sanction Process With Risk Department inputs the proposals are put up for sanctioning to the appropriate authority depending on the exposure and credit rating of the company. The present committee structure and respective sanctioning authority is summarized as follows:

Committee Central Committee Committee of Executives Office

Members

Sanctioning Authority (Rs. In Crores)

Credit President (Credit) and Senior 25 < Exposures <50 VP (Risk) Executive Director (Credit), 50 < Exposures <75 President (Credit) and Senior
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VP (Risk) Senior Management Committee Managing Director, Executive Director (Credit), President (Credit) and Senior VP (Risk) Committee of Directors Select the members of Board Exposures > 100 of Directors, with MD as Chairman of the Committee 75 < Exposures < 100

3.15.11 Corporate Banking Operations Department Subsequent to sanctioning by the Sanctioning Authority, the branch where the loan is to be parked is advised to contact the client and initiate the documentation process. The Branches carry out entire documentation including security creation, signing of loan agreement etc. The facility is disbursed subsequent to compliance of all the stipulated terms of sanction. The role of CBO is as follows: Execution of documentation as per terms of sanction Completion of post-sanction formalities Receipt of stock statements, calculation, updating and monitoring of Documentation process Making disbursements within Documentation process Updating monitoring tool to capture account contact Monitoring insurance coverage Reporting irregularities Flagging of exceptions or variations from terms and conditions to RMs for frther action Opening of inland LCs, issue of inland guarantees / handling of inward and outward bills and cheques Various facilities are taken up for periodic reviews by both Branches and the Central Office depending upon the risk rating of the account in order to effectively monitor the overall portfolio. An exhaustive credit monitoring tool has been developed for this purpose. The tool is integrated with the existing Credit Rating tool, which enables online availability of the information on the latest position of the account
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3.16 Marketing Department

3.16.1 Marketing Objectives Axis Bank wants to achieve following marketing objectives by the end of the year 2011. To get the market capitalization 500 Crore To get the 200 Crore retail investment. To get 125 Crore Corporate investments. To get the 175 Crore Capital investments.

Bankers Identify Near-Team and Long Term Concerns 1991 Maintaining profitability Credit Portfolio Management Service Quality Regional Economy Cost Management / Expense reduction Declining Earnings/ more failures Market / customer focus Capital adequacy Stock market value Industry Overcapacity 2015 Service quality Maintaining profitability Market / customer focus Operations/systems/technology Credit portfolio management Productivity improvement Investment to stay competitive Stock market value Asset/liability management Electronic Banking

3.16.2 REBRANDING Has retained the burgundy color, but has changed the logo. Spend around Rs50 Crore in the re-branding exercise. Had hired advertising firm O&M.

MARKETING CONCEPTS Its application to Banking, When we apply marketing to the banking industry, the bank marketing strategy can be said to include the following i) A very clear definition of target customers. ii) The development of a marketing mix to satisfy customers at a profit for the bank.

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iii) Planning for each of the source markets & each of the use markets (A Bank needs to be doubly market oriented it has to attract funds as well as were of funds & services. iv) Organization & Administration. 3.16.3 BANK MARKETING We define bank marketing as follows: Bank marketing is the aggregate of functions, directed at providing services to satisfy customers financial (and other related) needs and wants, more effectively and efficiently that the competitors keeping in view the organizational objectives of the bank. Bank marketing activity. This aggregate of functions is the sum total of all individual activities consisting of an integrated effort to discover, create, arouse and satisfy customer needs. This means, without exception, that each individual working in the bank is a marketing person who contributes to the total satisfaction to customers and the bank should ultimately develop customer orientation among all the personnel of the bank. Different banks offer different benefits by offering various schemes which can take care of the wants of the customers. Marketing helps in achieving the organizational objectives of the bank. Indian banks have duel organizational objective commercial objective to make profit and social objective which is a developmental role, particularly in the rural area. Marketing concept is essentially about the following few thing which contribute towards banks success: 1) The bank cannot exist without the customers. 2) The purpose of the bank is to create, win, and keep a customer. 3) The customer is and should be the central focus of everything the banks does. 4) It is also a way of organizing the bank. The starting point for organizational design should be the customer and the bank should ensure that the services are performed and delivered in the most effective way. Service facilities also should be designed for customers convenience. 5) Ultimate aim of a bank is to deliver total satisfaction to the customer. 6) Customer satisfaction is affected by the performance of all the personal of the bank. All the techniques and strategies of marketing are used so that ultimately they induce the people to do business with a particular bank. Marketing is an organizational philosophy. This philosophy demands the satisfaction of customers needs as the pre-requisite for the existence and survival of the bank. The first and most important step in applying the marketing concept is to
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have a whole hearted commitment to customer orientation by all the employees. Marketing is an attitude of mind. This means that the central focus of all the activities of a bank is customer. Marketing is not a separate function for banks. The marketing function in Indian Bank is required to be integrated with operation. Marketing is much more than just advertising and promotion; it is a basic part of total business operation. What is required for the bank is the market orientation and customer consciousness among all the personal of the bank. For developing marketing philosophy and marketing culture, a bank may require a marketing coordinator or integrator at the head office reporting directly to the Chief Executive for effective coordination of different functions, such as marketed research, training, public relations, advertising, and business development, to ensure customer satisfaction. The Executive Director is the most suitable person to do this coordination work effectively in the Indian public sector banks, though ultimately the Chief Executive is responsible for the total marketing function. Hence, the total marketing function involves the following: a) Market research identification of customers financial needs and wants and forecasting and researching future financial market needs and competitors activities. b) Product Development Appropriate products to meet consumers financial needs. c) Pricing of the service Promotional activities and distribution system in accordance with the guidelines and rules of the Reserve Bank of India and at the same time looking for opportunities to satisfy the customers better. d) Developing market Marketing culture among all the customer-consciousness Personnel of the bank through training. Thus, it is important to recognize the fundamentally different functions that bank marketing has to perform. Since the banks have to attract deposits and attract users of funds and other services, marketing problems are more complex in banks than in other commercial concerns.

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3.17 HUMAN RESOURCE 3.17.1 Objectives To initiate & institutionalize globally competitive HR practices in the Bank in our pursuit to become a Bank of international standards and to become an employer of preferred choice. To put in place relevant HRD strategies and use modern methodologies to undertake organizational renewal; identify and nurture talent, bring about marked changes in the mindset of employees at all levels so as to enhance HR Quality. To create a performance-driven culture and an exciting workplace for the employees. To create a pool of entrepreneurial managers and business leaders for future. To inculcate a strong and effective sales and service culture across levels in the organization in order to generate strong stakeholder affiliation. To create a learning organization for employees intellectual growth and creativity; and to re-skill the workforce to operate in digitally enabled modern core banking environment.

The ultimate aim of the Human Resources function is to build and manage a motivated pool of professionals by grooming internal resources and recruiting the right skills from the market, develop a high performance work-ethic and create a culture of continuous learning and skill development. One of the major platforms on which the success of the Bank's corporate strategy rests is bringing on board the requisite skills within the overall ceiling of the manpower budget. Although the economic downturn in the latter half of the year brought in its wake a larger availability of manpower in the market, the challenge that emerged was to ensure against any dilution in the quality of talent while fulfilling the targeted numbers. There was a net staff increase of 5,885 over 2007-08 translating to a growth of 40% compared to a 48% growth in the previous year. The overseas staff complement has grown almost twofold from 44 to 90 in the same period in tune with the growth in businesses at our overseas centers. Besides recruitment, attrition management learning and skill development and management of performance are the other key areas of the Human Resources function. Employee engagement measures like a competitive compensation structure, performance linked rewards and incentives, a merit-based promotion process, ongoing interactions with staff at all levels and providing staff with
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opportunities to seek inspirational roles through internal job postings, contribute to retention of staff at all levels. There has been a significant reduction in the year-end attrition level compared to the previous year. The Bank's Performance Management system, where recognition is directly related to performance, sends a clear message of meritocracy. The ultimate aim of the training process is to create a knowledgeable pool of talent delivering optimum value to customers, which we believe our training initiative has been able to achieve. One of the major challenges in this regard is the requirement to scale up training bandwidth to keep pace with the growing workforce. The training team has lived up to this challenge through focused programmes for newly recruited employees as well as for the more experienced domain specialists. A combination of classroom sessions, external programmes and e-learning initiatives are part of the training module. In the process, training man-days have registered an increase of 71% in the year under review as against 62% in the earlier year. Axis Bank continues to be a young Bank with an average age of 29 years and a talent pool comprising a mix of new recruits and experienced officers. The Bank also continues to espouse the policy of affirmative action by being an equal opportunity employer. Your Bank will continue to pursue the objective of accomplishing its corporate mission and core values through fulfillment of its Human Resources agenda for the eventual purpose of delivering a high level of customer\

3.17.2 FUNCTIONS OF HRD Ultimate aim of the human resources function is to build and manage a motivated pool of professionals delivering optimum value to customers. Major platforms on which the success of the bank's corporate strategy rests is bringing on board the requisite skills. Young bank with an average age of 29 years and a talent pool comprising a mix of new recruits and experienced officers. Training-Scheduling. Performance Management. Compensation/Reward Administration. Grievance Handling.

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3.17.3 RECRUITMENT PROCESS IN AXIS BANK

CV Submission And Application Evaluation

Ability Tests Capability Based Interviews

Reply Letters
Job Offer
Massive Recruitment of Specialist officers and also graduates from B-Schools through campus recruitment To take care of the Banks requirement in different specialized areas like IT, Treasury, HR, Marketing & Sales, Credit, International Business etc (Around 500 officers being recruited). A New Induction cum Grooming Programme for Young Officers With the objective of developing future managers and leaders and for deployment in key areas, a re-vamped Officers Induction cum Grooming Programme is launched. Fast Track Career Growth Opportunities for Executives and Officers In order to provide fast track growth opportunities to aspiring Executives and Officers, promotional opportunities have been provided. Performance Appraisal System for Clerical and Sub-Staff With the objective of bringing an organization wide performance culture in the organization, hitherto uncovered employees in the Clerical and Sub-Staff cadre brought in under a new performance Appraisal system Compensation to employees Salaries & wages
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Bonus & ex gratia Provident fund contribution Gratuities paid Staff welfare Staff training ESOPs Voluntary retirement scheme Payment under VRS (one time Arrears paid during the year Payments / reimbursement of expenses Other expenses on employees

Salaries & wages Salaries and wages refer to the periodic payments made to the employees for the services rendered by them. Employees include all kinds of employees including workers and management employees. If a company reports salaries to employees separate from that paid to managers then the two is combined to derive the total employee compensation. It is often seen that managing director's remuneration and perquisites are disclosed separately and distinct from other salaries. In such cases, we combine the two. Bonus & ex-gratia A bonus payment to all employees including management employees is reported in this data field. It includes the bonus amount paid as per the "Payment of Bonus A-ct", ex-gratia bonus and performance-linked bonuses. Information about bonus payments is generally available in the schedule of employee related expenses. However, it is likely that companies may report this amount along with salaries and wages. Contribution to provident fund The "Employees Provident Fund Act" mandates that employers are required to make a contribution, in favour of the employees, to the Provident Fund Account an amount equal to 12
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per cent (earlier 10 per cent) of the basic pay and dearness allowance. This is a statutory requirement essentially to save for the post-retirement life of employees. Any amount that is contributed by the employer during the year to this account is reported by the companies as contribution to Provident fund. Companies follow a general practice of reporting contribution to employees provident fund as a part of employee related expense/ personnel costs. Gratuities paid Gratuity is a retirement benefit paid to an employee. It is linked to the number of years of service deployed by the employee and is available upon separation. Usually, gratuity is paid only to an employee upon separation only if he/she has completed five years of service in the company. Staff welfare Staff welfare refers to the various amenities that are made available to the employees for their general welfare. These are besides the regular remuneration in the form of salaries, etc. Staff welfare expenses may be in the form of free or subsidized medical treatment, transportation facilities, recreation facilities, staff food, canteen expenses, staff and labor welfare, etc. These expenses do not form a part of the employees salary but are borne by the employer for the benefit of the employees. Staff training Staff training refers to the expenses a company incurs to train its employees. Companies in the technology and pharmaceutical industry generally report expenses incurred on staff training as a separate expense head under the schedule of employee related expenses. Companies often report such an expense under the nomenclature "staff recruitment and training" expenses which is reported in this data field.

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VRS benefit amortized This data field records the amount of voluntary retirement benefit expenditure that is written off, i.e. amortized, during an accounting period. Usually, voluntary retirement benefits are a part of a voluntary retirement scheme aimed at reducing the workforce of a company. The amounts involved at times during such schemes can be quite large. During the early years of introduction of such schemes there were no guidelines on disclosures. Companies thus had the option of amortizing the expenditure over several years or charging the entire expenditure during a single year. Later, ICAI's Accounting Standard 26 recommended that companies should amortize such expenses. Arrears paid during the year Arrears of salary refer to the amount paid by the company to its employees with retrospective effect i.e. salary of the past period paid in the current period. Companies pay arrears either on pay revision or in case of an order of the court of law or on settlement of a dispute with the labour union. The amount, as and when it is determined, is paid to the employees as arrears. Other expenses on employees This data field includes all the other employee related costs which are not included in any other data field under "Compensation to employees". The data field could include information pertaining to provision for leave encashment, pension contribution, ESI, Deposit linked Insurance, Group Insurance etc.

3.18 FINANCE
3.18.1 PROMOTORS: Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crore each. SUUTI - Shareholding 23.60%

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Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a view to encourage savings and investment. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February 2003. In accordance with the Act, the Undertaking specified as UTI I has been transferred and vested in the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), who manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59 crores. The Government of India has appointed Shri K. N. Prithviraj as the Administrator of the Specified undertaking of UTI, to look after and administer the schemes under UTI - I, where Government has continuing obligations and commitments to the investors, which it will uphold.

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Financial position Retail Business The number of Savings Bank accounts grew from 81.22 lacs as on 31st March 2010 to 93.94 lacs as on31st March 2011. Retail advances grew from `20,821 crores as on 31st March 2010 to `27,759 crores as on 31st March 2011, a growth of 33% YOY. Retail advances accounted for 19.49% of the total advances of the Bank as on 31st March 2011. The Bank's International Debit Card base has risen to 10 million debit cards as on 31st March 2011, compared to 8.6 million debit cards as on 31st March 2010. The Bank had over 6.3 lac credit cards in force and an installed base of over 1.8 lac Electronic Data Capture (EDC) machines as on 31st March 2011. The Bank offers personal investment products including life insurance products, general insurance products, online trading accounts and mutual funds of leading manufacturers as also wealth advisory services and Mohur - gold coins and bars - through select branches. International Business The Bank has six international offices - branches at Singapore, Hong Kong and Dubai (at the DIFC) and representative offices at Shanghai, Dubai and Abu Dhabi- with focus on corporate lending, trade finance, syndication, investment banking, risk management and liability businesses. The total assets under overseas operations amounted to USD 4.99 billion as on 31st March 2011 which represents a growth of 61% over the previous year. Capital and Shareholders Funds The Shareholders Fund of the Bank was `18,999 crores as on 31st March 2011, as compared to `16,044 crores as on 31st March 2010, a growth of 18% YOY. The Capital Adequacy Ratio for the Bank was 12.65%, as on 31st March 2011, as compared to 15.80% as on 31st March 2010. The Tier-I capital was 9.41% as on 31st March 2011, as compared to 11.18% as on 31st March 2010. Placement / Syndication and Project Advisory The Bank arranged debt aggregating `83,025 crores during FY11. The Bank was assessed by Prime Database as the No.1 Debt Arranger for the period April 2010 to December 2010 and also by Bloomberg Underwriter league table for the calendar year 2010. The Bank was awarded the Best Domestic Bank in India and Best Domestic Bond House in India awards 2010.

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CHAPTER IV TRAINING EXPOSURE

Work Experiences Marketing I had a field visit with an executive for a day in which I learnt how to approach a
customer and convince him to start an account.

The main marketing strategy followed in Axis bank is that they fix a target to all
employees in operations department that they should market the product and earn points for their promotion.

The way of approaching customers is different to one another. They give priority to
top class customers.

Should be clear in each and every product which they market. Fixing daily targets and work on it. Human resource
Motivating the employees and helping them in reaching their target. Using the manpower in work schedule Learnt how to be patience with their colleagues. Emotional intelligence plays a major role in human resource department. Targets are been fixed and testing their performance. How to relieve the stress for an employee.

Finance
I learnt to do profit and loss analysis and balance sheet analysis with the balance sheet of indo Shell Company. Gained knowledge of how they give credit to corporate and learnt how to make a proposal for loan. I had a study on foreign exchange market and trading. Concept of retail loans and agri loans.

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Processing time for credit sanction is done on the basis of customer which is an drawback for the company.

Operations
Team works helps for speed transactions Servers are too slow for 2-3 hours a day which affects the work. Making the process soon by entering and verification of transaction is been done and two people are been involved in all operations.

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CHAPTER V CONCLUSION
The banking system in India is significantly different from that of other Asian nations because of the countrys unique geographic, social, and economic characteristics. India has a large population and land size, a diverse culture, and extreme disparities in income, which are marked among its regions. The countrys economic policy framework combines socialistic and capitalistic features with a heavy bias towards public sector investment. India has followed the path of growth-led exports rather than the exported growth of other Asian economies, with emphasis on self-reliance through import substitution. The market for NRI services is growing rapidly all over the globe as people migrates all over the world for the purpose of better job and standard living. Bank provides variety of services and benefits to the NRI Axis bank has developed manifold in short period of time due to facilities and services provided to their customer and this growth rate can be keep it up if they start to go in semi-urban areas. In last couple of years they have opened new many branches and they should open many more. The working staffs are very co-operative in nature and due to that the bank will also get good benefit. Axis Bank has provided their customer Net-banking facilities and due to that transactions are done fast. Charges at Axis Bank are on lower side when we compare it with other Banks.

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6. REFERENCES http://www.moneycontrol.com/company-facts/Axisbank/history/AB16 http://www.Axisbank.com/ http://en.wikipedia.org/wiki/Axis_Bank http://ekikrat.in/AXIS-Bank-Agriculture-Loan http://www.rupeetalk.com/bank-account/compare-and-apply-Axis-bank-priority-bankingaccount/ http://archives.chennaionline.com/cityfeature/Chennai/June08/06Axis.aspx http://www.google.co.in/search?q=STRUCTURE%20OF%20BANKING&hl=en&bav=o n.2,or.r_gc.r_pw.&biw=1280&bih=793&um=1&ie=UTF8&tbm=isch&source=og&sa=N&tab=wi http://www.sify.com/finance/stockpricequote/Axis_Bank_Ltd-UTI/boardofdirectors.html

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