Professional Documents
Culture Documents
DEPARTMENT OF MANAGEMENT
Report on Summer Training
Know Your Customer
With special reference to
INDUSIND BANK LTD.
Submitted by:
Name of the student---University roll no. ----------
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
JALANDHAR NEW DELHI GT ROAD
PHAGWARA
PUNJAB
DECLARATION
This is to certify that the project report entitled Know Your Customer
with special reference to Indusind Bank Ltd. submitted in partial
fulfillment of the degree of Master of Business Administration in Lovely
Professional University, Jalandhar by Manpreet kaur , university Roll no.
11303066 .has no part of it been submitted for the award of any other
degree and that the work has not been published in any journal, magazine
or book.
.
Date: 05-08-2014
Signature
Place: Kanpur
ACKNOWLEDGEMENT
PREFACE
We all know that there are different directions in the theoretical and
practical knowledge differs in a great way through its operation and
implementation.Bank is a financial institution, which is a service oriented
as well as Interest orientedorganization.
As a part of it I was really fortunate of getting an opportunity to pursue
my Summer Training in reputed, well established, fast growing and
professionally managed organization like INDUSIND BANK LIMITED.
This report will mainly talk about the KYC (Know Your Customer) and a
short discussion about Indusind Bank. I did a lot of study in department to
get required information. It gave me a great deal of exposure and
practical experience. This practical experience helps the students to view
the real Business World closely.
EXECUTIVE SUMMARY
This Internship report covers the detail of Indusind Bank Ltd. practices
on KYC (Know
the
entire
exercise
by
31.12.2004.
Accordingly,
the
Zones/Branches had been advised to comply with the RBI directive as per
the action plan. All the Zones had confirmed compliance of the KYC norms
for all the accounts based on branch confirmations and the final certificate
was furnished by the Bank to the RBI in April, 2005
sources of funds
An understanding of the factors governing the choice between
different sources of funds.
Introduction to
BANKING INDUSTRY
Banking operation of a company involves deposition of cheques for
clearance and issuance of cheques to various parties on the basis of the
bank balance available with the company. They are leaning on banks for
assistance in managing their payables, receivables and other treasury
functions. The types of activities included in banking department are:
Collection and payments through DD, cash, online, cheque
Preparation Bank reconciliation statement
Preparation Fund flow statements
Bank grantee procedure
Letter of credit processing
Cash credit
Investment
An asset or item is purchased with the hope that it will generate income or
appreciate in future. In an economic sense, an investment is the purchase
of goods that are not consumed today but are used in the future to create
wealth. In finance, an investment is a monetary asset purchased with the
idea that the asset will provide income in the future or appreciate and be
sold at a higher price.
The most common terms that are related to different types of investments:
Bond
A debt instrument, a bond is essentially a loan that you are giving to the
government or an institution in exchange for a pre-set interest rate paid
regularly for a specified term. The bond pays interest (a coupon payment)
while it's active and expires on a specific date, at which point the total
face value of the bond is paid to the investor. If you buy the bond when it
is first issued, the face or par value you receive when the bond matures
will be the amount of money you paid for it when you made the purchase.
In this case, the return you receive from the bond is the coupon, or
interest payment. If you purchase or sell a bond between the time it is
issued and the time it matures, you may experience losses or gains on the
price of the bond itself.
Stock
A type of investment that gives you partial ownership of a publicly
traded company .
Mutual fund
An investment vehicle that allows you to invest your money in a
professionally-managed portfolio of assets that, depending on the specific
fund, could contain a variety of stocks, bonds, market-related indexes, and
other investment opportunities.
MONEY LAUNDERING
Money laundering is the process whereby proceeds of crimes such as drug
trafficking, smuggling (alcohol, arms), kidnapping, gambling, robbery,
can not detect the source or link up with the origin of money
integration.
Integration Placing the laundered proceeds back into the economy in
such
legitimatefunds.
.
Reputation Risk.
Operation Risk. (where chances of fraud come to light)
Legal Risk. (Leads to legal battle.)
Concentration Risk. (affects Balance Sheet)
Compliance Risk. (non-compliance leads to penalties)
CUSTOMER
The term Customer would refer to any person or entity whether a natural
person, a juristic entity, a firm, a trust, an unincorporated association of
persons, acting for itself or in any fiduciary capacity. For the purpose of
KYC policy, a Customer is defined as:
A person or entity that maintains an account and / or has a business
relationship with the bank;
One on whose behalf the account is maintained (i.e. the beneficial
owner who is a natural person who ultimately owns or controls a
client and or the person on whose behalf a transaction is executed,
and includes a person who exercises ultimate effective control over
a juridical person).
Beneficiaries
of
transactions
conducted
by
professional
PURPOSE OF KYC
been
expressing
KYCguidelines.
They had categorically advised that the Bank should adopt
zerotolerance policy in respect of deviation from adherence to KYC
normsin all accounts including existing accounts and confirm
compliance tothem.
It was stated that cash should not be accepted for retirement of
import bills. It was also stated that there must be a reasonable time
(say 6 months) between the time an introducer opens his account
and introduces a prospective account holder. Introduction of an
account should enable the proper identification of the person
opening the account so that the person can be traced if the account
is misused.
Banks were instructed that travelers cheques, demand drafts, mail
transfers and telegraphic transfers for Rs. 50,000 and above should
be by debit to the customers account or against cheques only and
customers.
In April 1994 the RBI clarified that photographs must be obtained for
both residents and non- residents and for those authorized to
operate accounts.
The key principle of the know your customer procedure should be
the identification of an individual/ corporate opening an account.
This should entail an introductory reference from an existing
opened/ consummated.
Transactions of a suspicious nature must be reported to the
appropriate authorities.In May 2004, it was stated that information
collected from the customer for KYC purposes should not be used for
cross selling.
In recent years on account of the proliferation of banks and their
opening branches in locations that they had no branches before, it
has been difficult to adhere strictly to KYC guidelines. In these
instances, introductions by prominent citizens and individuals known
to the bank are considered acceptable. The concern is usually with
respect to accounts introduced by outsiders retained for this
purpose who are remunerated on the basis of the number of
KYC NORMS
Banks should frame their KYC policies incorporating the following four key
elements:
status
etc.
Documentation requirements and other information to be collected
in respect of different categories of customers depending on
to time
Not to open an account or close an existing account where the bank is
unable to apply appropriate customer due diligence measures i.e.
bank is unable to verify the identity and /or obtain documents required
as per the risk categorisation due to non-cooperation of the customer
diligence was carried out based on the risk profile of the customer in
compliance with the extant guidelines in place. Satisfying about the
identity of the customer is a process that requires combination of the
following modalities:
Face to face with the customer mandatory, at his work place or
residence, including walk-in
customers.
Close Relatives
Close relatives, e.g. wife, son, daughter and parents etc. who live with
their husband, father / mother and son, as the case may be, are finding it
difficult to open individual account in some banks as the utility bills
required for address verification are not in their name. In such cases, an
identity document and an address proof in the name of Relative with
whom the prospective customer is living along with a declaration from the
relative that the said person (prospective customer) wanting to open an
account is a relative and is staying with him / her, can be accepted.
Branches can use any supplementary evidence such as a letter received
through post for further verification of the address of the Relative.
Documentation
Sourcing Executives shall obtain satisfactory evidence of the identity of
the customer at the time of commencement of relationship/opening of
account. Such evidences shall be substantiated by reliable independent
documents, data or information or other means like physical verification
etc.
In
order
to
avoid
customer
inconvenience,
under
special
Opening of Accounts
Account opening has been totally centralised at Centralised Processing
Unit (CPU). Account opening process is handled as under:
Sourcing Executives who acquire the new accounts.
Verifiers (MCSOPs/Operations Executives at CAT set up/ Hub Verifiers)
who scrutinize the documents to ensure adherence to KYC Policy.
In the absence of MCSOP at a branch, Branch Manager will be the Verifier.
Once a Customer ID is created in System of a particular customer, all
accounts of the said customer should be opened in this Customer ID.
Therefore, all MCSOPs should note to check the System before allotting an
account number to a customer. For all non-individual accounts CPU will
also run a name check with the existing account in System before opening
the account. As far as possible accounts should be opened at a Branch
near to the applicants correspondence address. .For cases where the
customers
intend
opening
account
outside
the
location/city
of
MONITORING OF TRANSACTIONS
normal
and
expected
activity
of
the
customer
should
to
intensified
monitoring.
Every bank should set key indicators for such accounts, taking note
of the background of the customer, such as the country of origin,
sources of funds, the type of transactions involved and other risk
factors. Banks should put in place a system of periodical review of
risk categorization of accounts and the need for applying enhanced
of
branch
reporting
facilitate
prompt
will
Early
RISK MANAGEMENT
Internal Control Systems
Account opening is now totally centralised at CPU. A dedicated Document
Verification unit (DVU) processes each AOF and verifies the KYC
documents and ensures that the same complies with extant KYC
guidelines. We have introduced a scanning solution (I works) for scanning
documents which include Account opening forms and other documents
sent by Branches to CPU. Exemptions are tracked through this system.
Issuance of Cheques books and other deliverables are also centralised and
is issued only after completion of all account opening formalities.
Customer education
Implementation of KYC procedures requires banks to demand certain
information from a customer which may be of personal nature or which
has hitherto never been called for. This can sometimes lead to a lot of
questioning by the customer as to the motive and purpose of collecting
such information. Therefore, we have issued specific FAQ pamphlets
regarding KYC & AML which are kept at Branches and this has also been
uploaded on our website.
Hiring of employees
Our Bank has put in place adequate screening mechanism as an integral
part of our recruitment/ hiring process of personnel. Our Bank conducts
background check of all employees and all the testimonials/ references
submitted by the employees are independently verified.
New Products
Review
Documents
Accounts of Individuals
(i) Passport
(ii) PAN card
(iii) Voter's Identity Card
(iv) Driving licence
(v) Identity card (subject to the bank's satisfaction)
(vi) Letter from a recognized public authority or public servant
verifying the identity and residence of the customer to the
satisfaction of bank
- Correct permanent
address
Accounts of Companies
- Principal place of
business
- Legal name
- Address
- Telephone numbers of
the firm and partners
- Names of trustees,
settlers, beneficiaries
and signatories
Introduction to
INDUSIND BANK LIMITED
IndusInd Bank Limited is a Mumbai based Indian new generation bank,
established in 1994. The bank offers commercial, transactional and
electronic banking products and services. Indusind Bank was inaugurated
in April 1994 by then Union Finance Minister Manmohan SinghIndusind
Vision
IndusInd Bank (we) will be:
forerunner
terms
of profitability,
Engaged with all our stakeholders and will deliver sustainable and
compliant returns
Mission
We will consistently add value to all our stakeholders and emerge as the
best-in-class in the chosen parameters amongst the comity of banks, by
doubling our profits, clients and branches within the next three years.
Parent Company
Hinduja Group
Category
Sector
Banking
Tagline/ Slogan
We Care Dil Se
USP
STP
Segment
sector
Target Group
Positioning
Board of directors
Mr.RomeshSobtihas joined the bank as Managing Director & CEO, taking
charge from Mr.BhaskarGhose. Mr. R. Seshasayee, a Chartered Accountant
by profession is the current Chairman. The other members on the board
are Dr. T. T. Ram Mohan, Mr. Ajay Hinduja.
Slogan
IndusInd bank has used many slogans to promote their cause. Some of
the slogans used by the bank areWe Care... Dil Se and We Make You Feel
Richer.
Personal Banking
Wealth management services
Corporate Banking
International Banking
Competitors
Sales
(Rs.Million
)
Current
Price
Change
(%)
P/E Ratio
Market
Cap.
(Rs.Million)
52-Week
High/Low
411355.34
812.15
-1.55
23.07
1956375.02
861/528
NA
1355.60
-2.53
15.97
1567022.53
1590/759
306411.55
1816.10
-2.35
13.77
856153.44
1990/764
87671.15
858.75
-0.97
44.04
661774.79
972/588
Indusind Bank
82535.34
536.25
-0.18
18.88
282186.26
587/318
Yes Bank
99813.52
509.95
-3.68
13.07
211481.55
588/216
52052.19
626.15
-1.88
18.06
118791.90
723/406
Federal Bank
69460.81
113.90
-4.29
11.61
97429.99
136/44
Centurion Bk of Punj
12685.30
41.40
0.00
52.93
78932.68
43/41
KarurVysya Bank
42424.29
471.25
-3.40
11.77
50559.01
510/298
NA
32.10
-3.89
8.51
43208.33
35/19
21887.50
74.25
0.34
11.61
40298.46
79/38
Bank of Raj
13594.89
212.10
0.00
0.00
34222.35
214/207
Standard Chartered
90834.94
113.60
-1.26
0.92
27264.00
133/108
Karnataka Bank
41888.28
124.80
-4.51
7.56
23514.40
151/69
Company
HDFC Bank
ICICI Bank
Axis Bank
Kotak Mahindra
Bank
Future Outlook
The Bank is witnessing a high growth phase as it is continuously expanding
its geographical footprint across India. A large number of branches has also
boosted its client acquisition and mobilized low cost CASA deposits. It will
also help in creating a large customer base for cross selling other products.
The Bank maintains its focus on loan books quality which is reflected in
its declining Net NPA ratio. It has a decent share of revenue coming from
its non-core fee based activities. This non-core revenue is mainly
contributed by Corporate and Consumer Segments and helps boosts its
return on assets.
Milestones to success
2013-2014
Banking Frontier- Finnoviti Awards 2013 for my account my number.
Best Initiative of the year- TACK India fat the global world congress
held at Athens for Indus pro.
Fastest Growing Mid-size Bank by Business world PwC Best Banks
Survey 2013
Roll of Honour- Indias Best CEOs by Business Today KMPG India
Listing of Indias top 100 CEOs.
Best Bank Award customer Management and Business Intelligence
Initiatives among small Banks 2012-2013 by IDRBT.
Financial Inclusion Payment Systems Award 2013 organised by
EletsTechnomedia.
Best Bankers Awards 2013-Best Banker- Growth , Mid-sized by the
Sunday standard.
Best Private Sector Bank- Priority Sector Lending for Environmental
Sustainability.
Swot Analysis
STRENGTH:
WEAKNESS:
OPPORTUINITIES:
THREATS: