Professional Documents
Culture Documents
"A Study Mutual Funds
"A Study Mutual Funds
ON
“A STUDY MUTUAL FUNDS AS AN
INVESTMENT OPTION”
A report submitted in partial fulfillment of the requirement of award of degree of
MASTER OF COMMERCE
SBI MUTUAL FUND
Duration- 15.10.2021 to 30.11.2021
Submitted by:
Mohd. Adil
Roll No. 200731780018
M.com (Applied) 3rd Sem.
Session: 2021-22
SHIA PG COLLEGE
UNIVERSITY OF LUCKNOW
1
DECLARATION
I hereby declare that the following project report titled “A STUDY MUTUAL
This is to declare that all the work indulged in the completion of this work such as
Mohd. Adil
M.com. (Applied) 3rd SEM.
Roll No. 200731780018
2
ACKNOWLEDGEMENT
I would like to thank employees of SBI Mutual Funds for giving me an opportunity
to intern with them. The training at the company was held over a period of 45 days.
The project report and the learning process would not have been possible without
his inputs and guidance at critical points of the project. He imparted to me the
knowledge of mutual funds and shared with me the practical marketing techniques
of mutual funds. He also made sure that I was exposed to all the distribution
channels, the operational processes and also was exposed to the sale of mutual
funds. Under his guidance I was able to enhance my marketing and inter-personal
skills.
During the course of the 45 days I also came across other people who put in their
These 45 days were very important to me as it helped me in going beyond the class
Mohd. Adil
M.com. (Applied) 3rd SEM.
Roll No. 200731780018
3
EXECUTIVE SUMMARY
A mutual fund is a scheme in which several people invest their money for a
common financial goal. The collected money invests in the capital market. debt
and the money market. which they earned, is divided based on the number of units
The topic of this project is "Increasing the value of mutual funds in India". The
mutual fund industry in India has seen dramatic improvements in quantity as well
as quality of product and service offerings in recent years. Along with this project
also touches on the aspect of Systematic Investment Plan and Steps of how to
An effort has been made to work on the concepts that have been taught in class
along with other useful parameters so that better study can be done.
4
OBJECTIVE AND SCOPE OF THE STUDY
To find out the preferences of the investors for Asset Management Company.
5
TABLE OF CONTENT
SR NO. TOPIC
1. CERTIFICATE FROM THE DEPARTMENT OF THE
INSTITUTE
2 CERTIFICATE FROM THE COMPANY
3 DECLARATION
4 ACKNOWLEDGEMENT
5 EXECUTIVE SUMMARY
6 OBJECTIVE AND SCOPE OF THE STUDY
7 INTRODUCTION TO SBI MUTUAL FUND
21
BIBLIOGRAPHY
6
INTRODUCTION TO SBI MUTUAL FUND
units owned by them. Thus a Mutual Fund is the most suitable investment
strategy.
A mutual find is the ideal investment vehicle for today's complex and
modern financial scenario. Markets for equity shares, bonds and other fixed
income instruments, real estate. derivatives and other assets have become
mature and information driven. Price changes in these assets are driven by
7
global events occurring in faraway places. A typical individual is unlikely to
fulltinte basis. The large pool of money collected in the fund allows it to hire
such staff at a very low cost to each investor. In fact. the mutual fund
Typically. it pre specifies the investment objective of the fund. the risk
associated. the cost involved in the process and the broad rules for entry
into and exit front the fund and other areas of operation. In India. as in most
case. SEBI looks at track records of the sponsor and its financial strength
custodian of the assets of the fund and perhaps a third one to handle
8
registry work for the unit holders of the fundin the Indian context. the
majority stake. In many cases a sponsor can hold a 100% stake in the
sponsor of the Birla Sun Life Asset Management Company Ltd.. which has
floated different mutual funds schemes and also acts as an asset manager
As per SEBI regulations. mutual funds can offer guaranteed returns for a
maximum period of one year. In case returns are guaranteed. the name of
industries and sectors and thus the risk is reduced. Diversification reduces
the risk because all stocks may not move in the same direction in the same
proportion at the same time. Mutual fund issues units to the investors in
9
THE CONCEPT OF MUTUAL FUND IN DETAIL
10
A mutual fund uses the money collected from investors to buy those assets
equity fund would buy equity assets – ordinary shares, preference shares,
warrants etc.
Any change in the value of the investments made into capital market
Value (NAV) of the scheme. NAV is defined as the market value of the
shareholder participates in the gain or loss of the fund. Units are issued
and can be redeemed as needed. The funds Net Asset value (NAV) is
11
When an investor subscribes to a mutual fund. he or she buys a part of the
different from buying "shares" of joint stock Company, in which case the
12
purchase makes the investor a part owner of the company and its assets.
However, whether the investor gets fund shares or units is only a matter of
legal distinction.
who share a common financial goal. The money thus collected is then
other securities. The income earned through these investments and the
cost.
13
From the above chart . it can be observed that how the money from the
investors flow and they get returns out of it. With a small amount of fund.
investors pool their money with the funds managers. Taking into
consideration the market strategy the funds managers invest this pool of
money into reliable securities. With ups and downs in market returns are
generated and they are passed on to the investors. The above cycle
consideration various factors like time. risk. return. etc. so that he can
· Professional management
· Portfolio Divercification
· Liquidity
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· Safety of regulated environment
· Choice of schemes
· Transparency
· No tailor-made Portfolios
15
HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY
The mutual fund industry in India started in 1963 with the formation of Unit
Bank. 'though the growth was slow. but it accelerated from the year 1987
In the past decade, Indian mutual fund industry had seen a dramatic
monopoly of the market had seen an ending phase: the Assets Under
Management (AUNT) was Rs67 billion. The private sector entry to the fund
titmilp raised the Aum to Rs. 470 billion in March 1993 and till April 2004: it
the mutual fund industry can be broadly put into four phases according to
by the Reserve Bank of India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In 1978 UTI was de-
linked from the RBI and the Industrial Development Bank of India (IDBI)
took over the regulatory and administrative control in place of RBI. The first
16
scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI
1987 marked the entry of non- UTI. public sector mutual funds set up by
public sector banks and Life Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC). SBI Mutual Fund was the
first non- UTI Mutual Fund established in June 1987 followed by Canbank
Mutual Fund (Dec 87). Punjab National Bank Mutual Fund (Aug 89). Indian
Bank Mutual Fund (Nov 89). Bank of India (Jun 90). Bank of Baroda Mutual
Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had
set up its mutual fund in December 1990.At the end of 1993. the mutual
1993 was the year in which the first Mutual Fund Regulations came into
being. under which all mutual funds. except UTI were to be registered and
Templeton) was the first private sector mutual fund registered in July 1993.
now functions under the SEBI (Mutual Fund) Regulations 1996. As at the
17
end of January 2003, there were 33 mutual funds with total assets of Rs.
1.21.805 crores.
In February 2003. following the repeal of the Unit Trust of India Act 1963
UTI was bifurcated into two separate entities. One is the Specified
18
CATEGORIES OF MUTUAL FUND:
· Open-ended funds: Investors can buy and sell the units from the fund, at
any point of
time.
Close-ended funds: These funds raise money from investors only once. Therefore. after
the offer period, fresh investments can not be made into the fund. II the fund is listed on
a stocks exchange the units can be traded like stocks (E.g.. Morgan Stanley Growth
Fund). Recently. most of the New Fund Offers of close-ended funds provided
19
liquidity window on a periodic basis such as monthly or weekly.
Redemption of units
instruments.
With fluctuating share prices, such funds show volatile perlOrmance, even
losses.
the long term. thereby offering higher returns at relatively lower volatility ,. At
the same time. such funds can yield great capital appreciation as,
historically, equities have outperformed all asset classes in the long term.
classified as:
i) Index funds- In this case a key stock market index. like BSE
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ii) Equity diversified funds- 100% of the capital is invested in
Hill Dividend yield funds- it is similar to the equity diversified funds except
iv) Thematic funds- Invest 100% of the assets in sectors which are related
etc.
vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the
result. on the risk-return ladder. they fall between equity and debt funds.
Balanced funds are the ideal mutual funds vehicle for investors who prefer
funds classes:
21
i) Equity-oriented funds -Invest at least 65% in equities. remaining
in debt. C) Debt fund: They invest only in debt instruments, and are a good
option for
commercial paper (CP) and call money. Put your money into any of these
22
ill) Floating rate funds - Invest in short-term debt papers. Floaters invest in
iv) Gilt funds LT- They invest 1009 of their portfolio in long-term
government securities.
INVESTMENT STRATEGIES
month on a
23
fixed date of a month. Payment is made through post dated cheques or
direct debit facilities. The investor gets fewer units when the NAV is high
the NAV is low. This is called as the benefit of Rupee Cost Averaging
(RCA)
Mutual funds offer benefits, which are too significant to miss out. Any
returns are the tows opposite goals and investors cannot be nearer to both
at the same time. The crux of mutual fund investing is averaging the risk.
24
Many investors possibly don't know that considering returns alone_ many
25% over a medium to long time frame. The duration is important because
like wise, mutual funds return taste bitter with the passage of time.
25
MUTUAL FUND RISK:-
Mutual funds face risks based on the investments they hold. For example.
a bond fund faces interest rate risk and income risk. Bond values are
inversely related to interest rates. If interest rates go up, bond values will go
down and vice versa. Bond income is also affected by the changes in
interest rates. Bond yields are directly related to interest rates falling as
Similarly. a sector stock fund is at risk that its price will decline due to
Follow ings are glossary of sonic risks to consider when investing in inutual
funds:-
· COUNTRY RISK :-
decline.
· INCOME RISK :-
26
The possibility that political events (a war, national election), financial
decline.
· MARKET RISK :-
The possibility that stock fund or bond fund prices overall will decline over
short or even extended periods. Stock and bond markets tend to move in
cycles, with periods when prices rise and other periods when prices fall.
27
RISK RETURN REWARD IN MUTUAL FUND
This graph shows risk and return impact on various mutual funds. There is
a direct relationship between risks and return. i.e. schemes with higher risk
28
OBJECTIVES OF THE STUDY
company.
A big boom has been witnessed in Mutual Fund Industry in resent times. A
large number of new players have entered the market and trying to gain
The study will help to know the preferences of the customers, which
they prefer. This project report may help the company to make further
29
HISTORY OF SBI BANK:-
The evolution of State Bank of India can be traced back to the first decade
of the 19th century. It began with the establishment of the Bank of Calcutta
Bengal, three years later, on 2 January 1809. It was the first ever joint-
stock bank of the British India, established under the sponsorship of the
An important turning point in the history of State Bank of India is the launch
of the first Five Year Plan of independent India, in 1951. The Plan aimed at
serving the Indian economy in general and the rural sector of the country,
in particular. Until the Plan, the commercial banks of the country, including
the Imperial Bank of India, confined their services to the urban sector.
Moreover, they were not equipped to respond to the growing needs of the
economic revival taking shape in the rural areas of the country. Therefore,
The All India Rural Credit Survey Committee proposed the take over of the
Imperial Bank of India, and integrating with it, the former state-owned or
30
state-associate banks. Subsequently, an Act was passed in the Parliament
of India in May 1955. As a result, the State Bank of India (SBI) was
established on 1 July 1955. This resulted in making the State Bank of India
Indian banking system were controlled directly by the State. Later on, the
carried out by the 480 offices comprising branches, sub offices and three
Local Head Offices, inherited from the Imperial Bank. Instead of serving as
parties, the State Bank of India catered to the needs of the customers, by
banking purposefully.
State Bank of India (SBI) (LSE: SBID) is the largest bank in India.
The bank traces its ancestry back through the Imperial Bank of India to the
Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60%
stake, and renamed it the State Bank of India. In 2008, the Government
31
SBI provides a range of banking products through its vast network in India
$126 billion and its reach, it is a regional banking behemoth. SBI has laid
schemes, which led to a flight of its best and brightest managers which took
The roots of the State Bank of India rest in the first decade of 19th century,
when the Bank of Calcutta, later renamed the Bank of Bengal, was
established on 2 June 1806. The Bank of Bengal and two other Presidency
received the exclusive right to issue paper currency in 1861 with the Paper
Currency Act, a right they retained until the formation of the Reserve Bank
reorganized banking entity took as its name Imperial Bank of India. The
Pursuant to the provisions of the State Bank of India Act (1955), the
interest in the Imperial Bank of India. On 30 April 1955 the Imperial Bank of
32
India became the State Bank of India.In 1959 the Government passed the
State Bank of India (Subsidiary Banks) Act, enabling the State Bank of
On Sept 13, 2008, State Bank of Saurashtra, one of its Associate Banks,
Associate banks:-
There are six associate banks that fall under SBI, and together these six
banks constitute the State Bank Group. All use the same logo of a blue
keyhole and all the associates use the "State Bank of" name followed by
the regional headquarters' name. Originally, the then seven banks that
government nationalized them in 1959. In tune with the first Five Year Plan,
these banks into State Bank of India to expand its rural outreach. There
has been a proposal to merge all the associate banks into SBI to create a
"mega bank" and streamline operations. The first step along these lines
State Bank of India, which reduced the number of state banks from seven
to six.
33
State Bank of Indore
Growth:-
State Bank of India has often acted as guarantor to the Indian Government,
With more than 11,111 branches and a further 6500+ associate bank
branches, the SBI has extensive coverage. State Bank of India has
System(CBS). The bank has one of the largest ATM networks in the region.
More than 8500 ATMs across India. The State Bank of India has had
steady growth over its history, though it was marred by the Harshad Mehta
scam in 1992. In recent years, the bank has sought to expand its overseas
34
the top 100 world banks in the Fortune Global 500 rating and various other
SBI Canada
Establishment:-
banking, viz. the decision to allow the Bank of Bengal to issue notes, which
geographical area. This right of note issue was very valuable not only for
the Bank of Bengal but also its two siblings, the Banks of Bombay and
35
Madras. It meant an accretion to the capital of the banks, a capital on which
spread as a general habit in most parts of India. But, for a long time, and
especially upto the time that the three presidency banks had a right of note
issue, bank notes and government balances made up the bulk of the
The three banks were governed by royal charters, which were revised from
time to time. Each charter provided for a share capital, four-fifth of which
were privately subscribed and the rest owned by the provincial government.
The members of the board of directors, which managed the affairs of each
invariably civil servants, one of whom was elected as the president of the
board.
Business:-
36
exchange or other negotiable private securities, keeping cash accounts and
receiving deposits and issuing and circulating cash notes. Loans were
three months only. The security for such loans was public securities,
a rate of twelve per cent. Loans against goods like opium, indigo, salt
woollens, cotton, cotton piece goods, mule twist and silk goods were also
granted but such finance by way of cash credits gained momentum only
from the third decade of the nineteenth century. All commodities, including
tea, sugar and jute, which began to be financed later, were either pledged
Bombay and Madras occurred after 1860. With the passing of the Paper
Currency Act of 1861, the right of note issue of the presidency banks was
abolished and the Government of India assumed from 1 March 1862 the
sole power of issuing paper currency within British India. The task of
37
management and circulation of the new currency notes was conferred on
Treasury balances to the banks at places where the banks would open
branches. None of the three banks had till then any branches (except the
sole attempt and that too a short-lived one by the Bank of Bengal at
Mirzapore in 1839) although the charters had given them such authority.
But as soon as the three presidency bands were assured of the free use of
government
The presidency Banks Act, which came into operation on 1 May 1876,
brought the three presidency banks under a common statute with similar
the public debt offices in the three presidency towns, and the custody of a
part of the government balances. The Act also stipulated the creation of
at only their head offices were to be lodged. The Government could lend to
38
the presidency banks from such Reserve Treasuries but the latter could
Bank of Madras:-
Treasuries outside the normal control of the presidency banks and the
the previous decade fell sharply although, in the case of the Bank of
mainly derived from trade dispersed among a number of port towns and
century as its railway network expanded to cover all the major regions of
crops, a portion of which found its way into the foreign markets. Tea and
coffee plantations transformed large areas of the eastern Terais, the hills of
Assam and the Nilgiris into regions of estate agriculture par excellence. All
these resulted in the expansion of India's international trade more than six-
39
fold.
The three presidency banks were both beneficiaries and promoters of this
continent.
While the Banks of Bengal and Bombay were engaged in the financing of
large modern manufacturing industries, the Bank of Madras went into the
industries in a way which had no parallel elsewhere. But the three banks
Not only was such business considered risky for these banks, which held
banks which had by then arrived in India. This exclusion continued till the
branches were merged in 1921 to form the Imperial Bank of India. The triad
40
commercial banks had emerged. The new bank took on the triple role of a
But this creation was preceded by years of deliberations on the need for a
The establishment of the Reserve Bank of India as the central bank of the
country in 1935 ended the quasi-central banking role of the Imperial Bank.
But it continued to maintain currency chests and small coin depots and
operate the remittance facilities scheme for other banks and the public on
holding their surplus cash and granting them advances against authorized
securities.
many places where the Reserve Bank did not have offices. The bank was
also the biggest tendered at the Treasury bill auctions conducted by the
41
amendments being made to the constitution of the Imperial Bank
The Imperial Bank during the three and a half decades of its existence
The financial status and security inherited from its forerunners no doubt
provided a firm and durable platform. But the lofty traditions of banking
which the Imperial Bank consistently maintained and the high standard of
that no other bank in India could perhaps then equal. All these enabled the
industry and also secure a vital place in the country's economic life.
42
Stamp of Imperial Bank of India
Subsidiaries: -
The State Bank Group includes a network of eight banking subsidiaries and
cards.
43
5. State Bank of Mysore (SBM)
Products
Personal Banking:-
Other Services:-
Agriculture/Rural Banking
NRI Services
ATM Services
Demat Services
44
Corporate Banking
Internet Banking
Mobile Banking
International Banking
RBIEFT
E-Pay
E-Rail
Broking Services
Gift Cheques
SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves
Few of the countries where SBI Bank has branches are as under:
Australia
45
Bahamas
Bahrain
Bangladesh
Belgium
Bhutan
Canada
France
Germany
Hong Kong
Japan
Maldives
Mauritious
Muscat
Nepal
Nigeria
46
Oman
Russia
Singapore
Sri Lanka
South Africa
UK
USA
47
48
COMPANY PROFILE OF SBI BANK
The origin of State Bank of India goes back to the first decade of the
on second June 1806 Three years late the bank received its charter and
institution, it was the first joint stock bank of British India sponsored by the
Government of Bengal The Bank of Bombay (15 'h April 1840) and the
Bank of Madras (1St July 1843; followed the Bank of Bengal_ These three
India. The new bank took on the triple role of a Commercial bank, a
banker's bank and a banker to the Government. But this creation was
49
commercial bank and a quasi central bank.
The establishment of the Reserve Bank of India as the Central Bank of the
country in 1935 ended the quasi-central banking role of the imperial Bank.
business at centres at which the central bank was not established. But it
continued to maintain currency chests and small coin depots and operate
the remittance facilities scheme for other banks and the public on terms
holding their surplus cash and granting them advances against authorized
with it at many places where the Reserve Bank did not have offices. The
bank was also the biggest tenderer at the Treasury bill auction conducted
Bank converting it into a purely commercial bank. The bank was permitted
business for the first time The Imperial Bank during the three and a half
banking industry and also to secure a vital place in the country's economic
life.
When India attained freedom, the Imperial Bank had a capital base
275.14 crores and 72.94 crones respectively and a net work of 172
branches and more than 200 sub offices extending all over the country.
In 1951, when the First Five Year Plan was launched, the development of
rural India was given the highest priority. The commercial banks of the
country including Imperial Bank of India had till then confined their
operations to the urban sector and were not equipped to respond to the
serve the economy in general and the rural sector in particular, the All
partnered and state sponsored bank by taking over the Imperial Bank of
India, integrating with it, the former state owned or state associate banks.
Accordinglt an Act was passed in Parliament in May 1955 and the State
Bank of India was constituted on 1st July 1955. Later, the State Bank of
India (Subsidiary Banks) Act was passed in 1959, enabling the State Bank
51
of Ino}a to lake over seven former State associated banks as its
subsidiaries (later named Associates) S.B.I. holds not less than 55 per cent
T h e State Bank of India was thus born with a new sense of social purpose
Head
Offices inherited from the imperial Bank. The concept of banking as mere
depositories of the community's savings and lenders to creditworthy
parties was soon to give way to the concept of purposeful banking by
serving the growing and diversified financial needs of planned economic
development.
52
ORGANISATIONS AND STRUCTURE OF SBI
The State Bank of India has an authorized capital of Rs.1000 crores, which
has been divided into 100 crores shares of Rs. 10 each. The issued capital
of State Bank of India is Rs.526.30 crores The shares are held by the
Reserve Bank, Insurance Companies and the general public. At the end of
March 2000, the paid up capital and reserves of the Bank were Rs. 12,147
crores.
State Bank of India is the lar g est Commercial bank in India in terms
53
of profits, assets, deposits. branches aria employees, On March
31st 2001, the Bank had total assets of Rs 3,15,644 crore, total
Award staff category, and the remaining 55.655 (25 9%) were sub-
staff.
STRUCTURE OF SBI
structure, system and strategies enah!ing the Bank to effectively meet the
54
and inspection and audit.
Group have been set up for focused attentior to very large corporate
customers, lease finance and project finance, all re porting directly to the
profitab * =y
approach has been adopted, both at the Apex and Circle levels, for
sanction of large advances. For this purpose, Central Office Credit iTmmittee
The RBI required that S.B.I. and other Indian banks having foreign
55
offices maintain a total adequacy ratio of eight per cent by March 31 sr
1994 and nine per cent by May 31st, 2000 Subsequently SBI was the first
public sector bank to shore up its capital base and its capital adequacy
ratio has consistently remained above the minimum eight per cent. In
Fiscal Year 1994, the Bank raised Rs. 22,104 million through the issue of
successfully floated the GDR issue as the 'Asian Equity issue of the year'
for its being a well planned, well priced and well executed issue that
During the year 1999-2000, the Bank augmented its Tier II capital by
SBl's shares and bonds are listed for trading on all the major Indian
56
has one of the largest market capitalization of a ,l companies traded
Reserve Bank of India owns 59 73 per cent shares of SBI. 18.31 per cent
cent by mutual funds / banks and Government companies, 6.24 per cent
57
Table Market Price Data ('Closin2 Values) (From April 2000-March 01
Market price at closing values of SBI share price at high level of 267.45 on
March 2001 and low Level of 155-95 on October 2000 recorded Market
price data at BSE sensex. high value recorded at 5,541.54 on April 2000
58
The Bank provides financial sere f;es through its Non-Banking
the UTl
46 per cent of the Bank's branches are located in urban and metropolitan
areas respectively. This wide spread branch network enables the Bank to
lending products and other financial services and to diversify lending risks
ability to diversify and enhance the quality of service related to its deposit:
59
i) The National Banking Group (NBG)
The NBG commands about 99 per cent of the domestic deposits and 84
Network.
the backbone of the Bank and encompasses the vast majority of the
less than Rs. 2.5 million. as well as other services such as cash
The NBG give high priority to personal banking. The Bank's sixty Personal
Banking Branches targets high net worth individuals for the personal
Units (SBUs) created to services the Banks top 150 to 200 corporate
customers. SBUs are the Corporate Accounts Group, Leasing Group and
The Corporate Account Group is an exclusive unit for top corporate and is
customers able to access their accounts at the Bank via computer. The
March 2000.
National Banking Group The Group offers all types of financial leases,
61
particularly tax-based structures. each of which is tailored to suit the
fifth of all domestic deposits. About three-fourth of the Bank's deposits are
from its retail customers, reflecting its large customer base. Around 14 per
cent of its domestic deposits are in the form of interest free current
per cent are in the form of low interest savings account. This access to
millions of small deposits throughout the country provides SB1 with a stable
The Bank makes to a wide range of public sector and private sector
62
maturity are extended to finance capital investment including home loans to
individuals.
The Bank's retail banking activities are wide spread cover among others,
sector lending accounted for 40.42 per cent of its net bank credit
where in it will offer 26 per cent equity to the foreign partner. The Bank
Bank, the Dun and Bradstreet and the Trans Union for setting up a world-
class credit information Bureau in India. The main objective of the Bureau
63
iv) SBI's Deposit & Loan Schemes
a) Deposit Schemes
transactions.
Term Deposits designed for fixed periods. Accepted term deposits for any
periodicity (monthly / quarterly etc for deposits of 1 year and above. Earns
higher interest at rates ranging from 5 per cent to 10.75 per cent.
64
vi) Mufti Option Deposit Scheme available at computerised branches.
b) Advance Schemes
vehicles i setting up of clinics etc. Both term loan and working capital
facilities available.
to 20 years allowed.
65
iv) Car Loan Scheme for purchase of new cars I jeeps f second
hand cars not more than 3 years old maximum loan oc to 8 lakhs.
from Rs. 4,0001- to Rs. 10,00,000/-. Easy repayment terms for loans
allowed.
66
for employees of State
terms.
The deposits and loans increase from year to year. The Net Profit varied.
INTERNATIONAL BANKING
The Bank is also engaged in international banking principally for its Indian
well as its 720 correspondent Banks. The bank's products include foreign
67
collections. Its loan syndication activity covers arranging, participating and
through buyer and supplier's credit. The Bank has foreign offices n 31
include branches at London, New York, Frankfurt, Paris, Hong Kong and
'Tokyo With the introduction of Euro in January 1999, the Bank's offices in
INTERNATIONAL CONSULTANCY
institutions including the World Bank, the Common Wealth Fund for
The Bank's new irk office, Global Link Service was set up in 1997 to
"To retain the Banks position as the premier Indian Financial Services
Group, with the world class standards and significant global business,
role." This is the Mission of State Bank of India The SBI's visions are
institutional values.
share.
69
and exciting work environment and continuous learning opportunities.
TECHNOLOGY ORIENTATION
The Bank's effort to improve efficiency and customer service through use of
the end of March 2001 the Bank had 2555 fully computerized branches,
covering 71 per cent of the Bank s business. The Bank has 139 ATMs, in
(SWIFT) network of the Bank handling 85 per cent of the Bank's forex
remittances, cover 146 branches and the SBI Data net (a PC-Modem telex
through Internet, the Bank has introduced `Online SBI' from the 1st
Mumbai, two in New Delhi, and one each in Bangalore, Calcutta and
70
ELENOR dealing with on-line nostro account reconciliation enabled online
are:-
Banking.
71
Tele Banking introduced on a Pilot basis at 38 branches in Mumbai
The 46 VSATs of the Bank unde I idian Financial Network (INFINET) set
up by RBI were merged with 11` nSA -s of the Bank under its Corporate
Banking Group Network. The Bank now has a network covering 161
country.
centres, equipped with Toll-Free Telephone Lines, Fax and E-Mail for
mail.
during the year. The site facilities attracted a large number of visitors
to the site.
NPA MANAGEMENT
72
The SBl's NPA management policy lays stress on early identification of
the time norms for corrective action and recovery including one-time
settlement for Rs. 718 crore in respect of 1.95 lakh accounts with NPAs
upto Rs. 5 crore and made cash recovery of Rs. 384 crores At the end of
March 2001, the Bank's gross and net NPA stood at 12.93 per cent and
6.03 per cent, respectively as against 14.25 per cent and 6.41 per cent
rehabilitation of the units having potential for turnaround as also appro', ,ed
by the BIFR. The BIFR has identified 512 units (including 59 Public Sector
Rs.763 crore Table 3,5 explains the Net NPA Ratio of SBI for last three
years.
The State Bank of India is the first public sector bank to start rnttual fund.
fund business. Till 1987. Unit Trust of India was the only Mutual Fund
73
for investors and SBI Mutual Fund was born SBI Capita; Markets Ltd., a
Trustees and Managers to the fund. SBI Mutual Fund was the first bank
potential.
The SBI Mutual Fund launched its first scheme- 'Magnum Regular
Income Scheme 87' in 1987 and mobilized Rs 131 crore from 90,000
investors while in 2000, the Fund with an investor base of over 2.8
million spread over 23 schemes mobilized Rs.2079 crores Till 1992, SB1
took over the management of the Fund witn effect from 14th May 1993.
State Bank of India now operates as Principal Trustee to the fund The
74
The Board of Directors of SBI Fund Management Ltd. includes reputed
Managing Director, Shri. S I . Rao. Shri. R.G Kare, Shri. (Dr) Ajay Shah,
Shri. Manu Chadha, Shri. D.P Roy and Shri. Biredra Kumar as Directors.
75
SBI MUTUAL FUND SCHEMES
Magnum Regular Income Schema 87 (MRIS 1987) was the first scheme
launched by the fund ano rt comm E ec,tA from 1st January 1988. This
which commenced from 1st April 1989. Magnum Regular income Scheme
1990 which commenced from 1st August 1990 and MRIS 1993 launched
There are four schemes which fall under this head, namely, Magnum
September, 1989, MMIS 91, which commenced from 1st July 1991, MMIS
98(i) which commenced from 3rd February 1996 and MMIS 98(ii) which
of 12 per cent per annum monthly pay out. Scheme, which was to be
1996 at a higher monthly pay out of 15 per cent per annum for those
a return of 13 per cent per annum with monthly pay out. MMIS 98(i)
assured a monthly income of 12.5 per cent per arnum. MMIS 980i)
80 CC Schemes
Magnum Tax Saving Scheme 88-89 MISS 88-89 which commenced from
1st April 1989, and MTSS 90 are the schemes failing into this category.
MTSS 88-89 were redeemed on 31si: Marcn 994 at Rs. 2221- with a
capital appreciation of 122 per cent and MTSS 90, redeemed on 31st
benefit under Sec 80 CC of the Income Tax Act 1961. The policy followed
77
was to invest in eligible issues of the capital under Section 80 CC and
trouble of seeking issues eligible under section 80CC of the Income Tax
act 1961.
80 CC B Schemes
(MELS 91), which commenced from st April 1991 and Magnum Growing
Plan A), which commenced from 1st April 1992, offer benefits to investors
Income Tax Act. MELS-95 launched in 1st April 1995 and MELS-96
Income tax Act 1961 and aims at achieving substantial realized income
are mainly made ,o equities and equity related instruments and also in
Growth Schemes
78
Magnum Multiplier Scheme, 1990 (MMS-90) which commenced fromist
launched onist October 1994 are the growth schemes of the fund. These
instruments.
79
Magnum Equity Fund
Magnum Equity Fund was converted into open-end scheme with effect
from 1st January 1998 The aim of this fund is to provide capital
Magnum Liqui Bond s a hundred per cent debt fund that provides investors
superior risks adjusted returns l" he fund offers high degree of safety is 80
per cent of the investments are made in Government Securities and Triple-
A rated papers. Maximum market liquidity is the objective of the fund. This
MTGS-93 is a tax saving scheme: which was launched to offer tax benefits
to investors under Sec. 88 of the Income Tax Act. This was converted into
MBALF-95 was launched on 31st August 1995. The main objective of the
80
scheme is to provide growth through appreciation of capital. It may also
MSFU-99 is an umbrella fund, which covers under its fold four sub-funds,
Goods, and Contra fund. Investors will have the option of choosing one or
more sector for investing and will be able to freely switch across sectors,
similar nature. Some sectors have a higher growth potential because of the
nature of business they are in. A sector fund focuses on investing in shares
investible amount within his range The four important funds under MSFU
are- IT FUND is a part of sector fund umbrella launched with the objective
the IT sector.
i) Pharma fund is the part of the sector fund umbrella, which aims at
iii) Contra Fund is the part of sector fund umbrella, with a view to
currently out of favour but are likely to gain returns in long term.
Magnum Insta Cash Fund was Iauncned onl3th May 1999. The main
fund offers two options to investors - Cash Plan and Dividend Plan.
Cash Plan is highly liquid income scheme The main objective is to provide
Dividend Plan, the average maturity of assets is longer than that of cash
82
Magnum Rising income Scheme 1993 (MRIS-93)
MRIS-90 were also regular income schemes but these schemes redeemed
83
RESEARCH METHODOLGY
This report is based on primary as well as secondary data .One of the most
out the actuality from the investors about what they think about various
investment options.
Data source:-
Research is totally based on primary data. Secondary data is used only for
the reference. The research has been done by the primary data by
interacting with various people. The secondary data has been collected
Duration of study :-
The study was carried out for a period from 10th June to 20 July 2014.
Research Objective
84
d) To know various regulatory firm of mutual funds in India.
investment plan.
possible that all the related and concerned aspects may not be
85
DATA ANALYSIS
INVESTMENTS
in Mutual Fund.
15% of them have invested in real estate and 14% of them have
office.
86
PREFERENCE OF RESPONDENTS WHILE INVESTING
Whereas. 34% of them prefer low risk and 18% of them prefer liqidity
while investing.
87
AWARENESS ABOUT MUTUAL FUNDS AND THEIR OPERATIONS
60% of them are aware about Mutual FUdns Whereas 40% of them
people are not aware about the Mutual Funds and their operations
88
INVESTORS INVESTMENT IN MUTUAL FUND
Bank.
89
PREFERENCE OF THE INVESTORS FOR FUTURE INVESTMENT IN MUTUAL
FUND
90
MODE OF INVESTMENT PREFERRED BY INVESTORS
time investment.
91
PORTFOLIOS THAT WOULD BE PREFERRED BY THE RESPONDENTS
equity profolios as 40 of tem chose this option, while 27 went with the
balanced option of having debt and equity while 22 of them went for
debt portfolio
92
PREFERENCE OF INVESTORS WHETHER TO INVEST IN SECTORIALFUND
Wh
be investing in it,
93
REASONS FOR NOT INVESTING IN SECTORIAL FUNDS
funds when asked the reasons for not investing. While 13 of them
said that there is risk, 8 of them gave reason that it is a long process
94
FINDINGS
In Panchkula; the age group of 51-60; were more in numbers. The second
most investors were in the age group of 20- 30years and the least were in
Therefore, according to the latest news, more and more investors today are
investing in MF expecting high returns and low risk coverage and 34% of
Among 60% of the people who are aware of the mutual funds and their
operations, when asked about the source of information; 23% said from
About 28% of them have invested in SBI Mutual fund and when asked
about the reasons of investment about 25% gave reason that SBIMF is
associated with SB I.
95
33%).
basis while the means to check the returns is email at about 40%.
said no and when asked for the reason about 44% of them had no
awareness.
96
CONCLUSION
The study shows that most of respondents are still confused about the mutual funds
and have not formed any attitude towards the mutual fund for investment purpose.
It has been observed that most of the respondents having lack of awareness about
the various function of mutual funds. Moreover, as far as the demographic factors
are concerned, gender, income and level of education have significantly influence
the investors’ ’ attitude towards mutual funds. On the other hand the other two
demographic factors like age and occupation have not been found influencing the
mutual funds are concerned, return potential and liquidity have been perceived to
affordability. Apart form the above, in India there is a lot of scope for the growth
of mutual fund companies provided that the funds satisfy everybody’s needs and
97
SUGGESTIONS
• All the company should come out of a unit link product that
should aid every selection of the society.
98
RECOMMENDATIONS
Mutual Fund offers a lot of benefits: there are many people who just see it
as another option. Therefore' the advisor should target more of the young
investors.
the fund/scheme because they are the main source to influence the
investors.
The advisor should focus on the balanced portfolios and should encourage
The staff members are required so that a customer should get more
The advisors should have full knowledge about the investments and the
risks involved
Thereafter, when the branches were visited there was no display about MF
Investors arc totally unaware of sectorial funds: the AMCs should also
99
encourage their customers for sectorial funds have more of Risk but more
The customers should first he encouraged in SIP: and should more targets
on the age group of 35 years around and more of graduates as they can he
100
QUESTIONNAIRE
2. 5 4 3 2 1
The brand image of the company helps to
easily convince the customers about its
products.
3. 5 4 3 2 1
Funds of SBI MF have given consistent
returns over the years.
4. 5 4 3 2 1
There is continuous interaction through
emai Is, telephone or personal visit.
5 5 4 3 2 1
The company responds quickly to the
complaints and queries.
6. 5 4 3 2 1
I have friendly relations with the
employee at SBI MF.
101
7. 5 4 3 2 1
Customer's queries and other
transactional requests like redemption,
switch etc. are actively resolved.
8. 5 4 3 2 1
SBI MF in Indere is led by an effective
manager.
1
9. SBI MF has skilled fund managers 5 4 3 2
10. 5 4 3 2 1
Policies of SBI MF are more transparent
and fair as compared to other AMCs.
11. 5 4 3 2 1
Systematic investment plan is a batter
investment plan for future.
12. 5 4 3 2 1
Mutual funds investment are risk free
investment.
13. 5 4 3 2 1
Mutual funds scheme are always perform
batter.
102
BIBLIOGRAPHY
Websites:
www.sbimf.com
www.google.co.in
www.mutualfundsindia.com
www.moneycontrol.com
www.assocham.org
www.amfindia.com
Books:
103