Depositry Service Tinu

8/2/2019 Depositry Service Tinu

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A

Project Report

ONA DETAILED STUDY OF DEPOSITORY SERVICES RENDERED BY

PRIVATE SECTOR BANKS

(A CASE STUDY OF ICICI, AXIS, KOTAK MAHINDRA Bank)

Submitted To

Kurukshetra University, Kurukshetra in partial fulfillment for the

degree of Master In Business Administration

(Session 2008-2010)

UNDER THE GUIDANCE OF SUBMITTED BY

Mr. RAMESH CHANDER DALAL (Prof.) ANKUSH VERMA

Ms. SUNIDHI JAIN (T.A.) MBA (gen.) FINAL SEM.

FACULTY (USM) ROLL No. - 77


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DECLARATION

I, Ankush Verma the student of university school of management K.U.K, studying inMBA 4th Semester have submitted a Research Project on the title DETAILED STUDY

ON DEPOSITORY SERVICE RENDERED BY PRIVATE SECTOR BANKS for

the partial fulfilment of the degree of Master in Business Administration (MBA) to

Kurukshetra University, Kurukshetra. I solemnly declare that the work done by me is

original and no copy of it has been submitted to any other University/Institution for an

award of any other degree.

(ANKUSH VERMA)

.


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ACKNOWLEDGEMENT

With the great reverence I bow before The Almighty for blessing me with the zeal to

successfully complete the project. It really makes me privileged to be a student of USM,

KUK that has given me a platform to nurture my aptitude and competency required fordoing this project successfully and capably. I express my deepest gratitude and reverence

to, Mr. RAMESH CHANDER DALAL, MBA Department for there kind consideration,

painstaking efforts, constant encouragement and valuable advice throughout the study of

the present research problem as well as preparation of the project report. I would like to

thank for giving his precious time from her busy schedule to answer my queries and

solving my problems.

I would be failing in my duty if I do not express my thanks to my respondents whom Ivisited and who spared their valuable time to answer my questions. Last but not the least,

my thanks to all the people who helped me in making my efforts fruitful

(ANKUSH VERMA)


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CONTENTS

Page No.

1. Introduction

Profile of the study

Significance of the study

2. Objective of the study

3. Literature Review

4. Research Methodology

Sampling & Sample Design

Analytical Tools

Data Collection

Hypothesis Testing

Limitations of the study

5. Result & Discussions/Findings6. Recommendation

7. Bibliography

8. Annexure


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CHAPTER1ST


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EXECUTIVE SUMMARY

The erstwhile settlement system on Indian Stock Exchange was also inefficient and

increased risk, due to the time that elapsed before trades were settled. The transfer was

by physical movement of papers. There had to be a physical delivery of securities a

process fraught with delays and resultant risks.

The second aspect of the settlement relates to transfer of shares in favour of thepurchaser by the company. The system of transfer of ownership was glossy inefficient

as every transfer involves physical movement of paper securities to the issuer for

registration, with the change of ownership being evidenced by an endorsement on

security certificate. In many cases the process of transfer would take much longer than

two months. Hence cases like theft, forgery, mAXISlation of certificates and other

irregularities were rampant.

To obviate these problems, the Depository Act ,1996 was passed, it provides for the

establishment of depositories in securities in securities with the objective of ensuring

free transferability with speed, accuracy and security.

In earlier days shares are being traded in physical form .In line with the global

phemomenan , Indian capital markets have also moved to rolling settlements on a T+2

basis where trades are settled on the second day after trading. Now share prices are

available on real time basis and there is no rigging in prices of shares due to transporttrading. Due to increase in use of internet and net banking invertors are now trading.

Online thereby saving on time as well as cost coupled with trust of leading names in

financial / banking sector.


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CHAPTER 2ND

CONCEPTUAL

FRAMEWORK


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2.1 INRODUCTION

DEPOSITORY SYSTEM

It is a system whereby the transfer and settlement of scripts take place not through the

traditional method of transfer deeds and physical delivery of scripts but through modern

system of effecting transfer of ownership of securities by means of book entry on the

ledgers or the depository without physical movement of scripts.

The new system thus eliminates paper work, facilitates automatic and transparenttrading in scripts, shortens the settlement period and ultimately contributes to the

liquidity of investment in securities. This system is also known as Scriples trading

system

CONSTITUENTS OF DEPOSITORY SYSTEM:

There are essentially four players in the depository system: -

1. The Depository Participant

2. The Beneficial Owner/Investor

3. The issuer

4. The Depository

FACILITIES OFFERED BY DEPOSITORY SYSTEM :

The following are some of important facilities offered by depository system:-

1. Dematerialization

2. Rematerialisation

3. Electronic settlement of trade

4. Electronic credit of securities allotted in public, rights and bonus issue.


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5. Pledging or hypothecation of dematerialized securities.

6. Freezing of demat account.

ADVANTAGES OF DEPOSITORY SYSTEM :

The system is expected to offer the much-awaited custodial services to Indian and Foreign

investors together. It is likely to bring about the following benefits to various investors,

issuing companies as well as nation:

(A) Advantages to the Investors:

Quick transfer of funds and securities.

Elimination of all risks associated with physical certificates.

Minimized chances of fraud, theft of securities.

Statement of accounts.

(B) Advantages to the issuer :

Costs of registration & transfer of shares get reduced which the issuer

company earlier incurred.

Saving in cost involved at the time of public issues.

Easy to attract foreign investors without any cost of issuance in overseas

market.

(C) Advantages to Intermediaries:

Faster settlement

Less risk of Bad Delivery

Reduced chances of forgery, counterfeit certificates, loss in transit, theft etc.

What is a Depository?

A depository is an organization, which holds securities of investors in electronic form at


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the request of the investors through a registered Depository Participant. It also provides

services related to transactions in securities.

In India, Depository Act defines a depository to mean a company formed and

registered under Companies Act, 1956 and which has been granted a certificate ofregistration under sub section (IA) of section 12 of Securities and Exchange Board of

India Act, 1992

How is a depository similar to a bank?

It can be compared with a bank, which holds the funds for depositors. A Bank

Depository Analogy is given in the following table:

BANK DEPOSITORY

Holds funds in an account Hold securities in an account

Facilitates transfer without having

to handle money

Facilitates transfer of ownership without having

to handle securities

Facilitates safekeeping of money Facilitates safekeeping of securities

How many Depositories are registered with SEBI ?

At present two Depositories viz.

1. National Securities Depository Limited (NSDL) and

2. Central Depository Services (I) Limited (CDSL) are registered with SEBI.


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2.2 SOME IMPORTANT POINTS:

Who is a Depository Participant ?A Depository Participant (DP) is an agent of the depository through which it

interfaces with the investor. A DP can offer depository services only after it gets

proper registration from SEBI. Banking services can be availed through a branch

whereas depository services can be availed through a DP.

What is the minimum net worth required for a depository ?

The minimum net worth stipulated by SEBI for a depository is Rs.100 crore.

How many Depository Participants are registered with SEBI?

As on 31/03/2006, total of 538 DPs are registered with SEBI.

What is required to be done if one has physical certificates with

the same combination of names, but the sequence of names is different

i.e. some certificates with A as first holder and B as second holder

and other set of certificates with B as first holder and A as thesecond holder?

In this case the investor may open only one account with A & B as the account

holders and lodge the security certificates with different order of names for

dematerialization in the same account. An additional form called Transposition

cum Demat form will have to be filled in. This would help you to effect change in

the order of names as well as dematerialise the securities.

Can an investor operate a joint account on either or survivor

basis just like a bank account?

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

bank account.


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Can an investor close his demat account with one DP and

transfer all securities to another account with another DP?

Yes. The investor can submit account closure request to his DP in the prescribed

form. The DP will transfer all the securities lying in the account, as per theinstruction, and close the demat account.

What would be the charges for account closure and securities

transfer due to account closing?

SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005

advised that with effect from January 09, 2006, no charges shall be levied by a

depository on DP and consequently, by a DP on a Beneficiary Owner (BO) when a

BO transfers all the securities lying in his account to another branch of the same DP

or to another DP of the same depository or another depository, provided the BO

Account/s at transferee DP and at transferor DP are one and the same, i.e. identical

in all respects.

In case the BO Account at transferor DP is a joint account, the BO Account at transferee

DP should also be a joint account in the same sequence of ownership.

All other transfer of securities consequent to closure of account, not fulfilling the above-

stated criteria, would be treated like any other transaction and charged as per the schedule

of charges agreed upon between the BO and the DP.

Whether investors can freeze or lock their accounts?

Investors can freeze or lock their accounts for any given period of time, if so

desired. Accounts can be frozen for debits (preventing transfer of securities out of

accounts) or for credits (preventing any movements of hindrances into accounts) or

for both.

What is an ISIN?

ISIN (International Securities Identification Number) is a unique identification

number for a security.


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Do dematerialized shares have distinctive numbers?

Dematerialized shares do not have any distinctive numbers. These shares are

fungible, which means that all the holdings of a particular security will be identical

and interchangeable.

What is Standing Instruction given in the account opening form?

In a bank account, credit to the account is given only when a pay in slip is

submitted together with cash/cheque. Similarly, in a depository account Receipt in

form has to be submitted to receive securities in the account. However, for the

convenience of investors, facility of standing instruction is given. If you say Yes

for standing instruction, you need not submit Receipt in slip every time you buy

securities. If you are particular that securities can be credited to your account onlywith your consent, then do not say yes [or tick ] to standing instruction in the

application form.

Is it possible to give delivery instructions to the DP over Internet and if

yes, how?

Yes. Both NSDL and CDSL have launched this facility for delivering instructions

to your DP over Internet, called SPEED-e and EASI respectively. All registered

users can use the facility after paying the applicable charges.

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

electronic form?

Yes, it is possible to get securities allotted to in Public Offerings directly in the

electronic form. In the public issue application form there is a provision to indicate

the manner in which an investor wants the securities allotted. He has to mention theBO ID and the name and ID of the DP on the application form. Any allotment made

will be credited into the BO account.


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How are cash corporate benefit such as dividend / interest

received?

The concerned company obtains the details of beneficiary holders and their

holdings as on the date of the book closure / record date from Depositories. Thepayment to the investors will be made by the company through the ECS (Electronic

Clearing Service) facility, wherever available. Thus the dividend / interest will be

credited to your bank account directly. Where ECS facility is not available dividend

/ interest will be given by issuing warrants on which your bank account details are

printed. The bank account details will be those, which you would have mentioned

in your account opening, form or changed thereafter.

How would one receive non-cash corporate benefit such as bonusetc.?

The concerned company obtains the details of beneficiary holders and their

holdings as on the date of the book closure / record date from depositories. The

company directly into the BO account will credit the entitlement.

Who should be contacted in case of discrepancies in corporate

benefits?

In case of discrepancies in corporate benefits, one can approach the company / its

R&T Agent.


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2.3 PROFILE

ICICI Bank

ICICI Bank offers a wide range of banking products and financial services to corporate

and retail customers through a variety of delivery channels and through its specialised

subsidiaries and affiliates in the areas of investment banking, life and non-life insurance,

venture capital and asset management. ICICI Bank set up its international banking

group in fiscal 2002 to cater to the cross border needs of clients and leverage on its

domestic banking strengths to offer products internationally. ICICI Bank currently has

subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore,

Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and

representative offices in the United States, United Arab Emirates, China, South Africa

and Bangladesh. Our UK subsidiary has established a branch in Belgium. ICICI Bank is

the most valuable bank in India in terms of market capitalisation.

ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and the

National Stock Exchange of India Limited and its American Depositary Receipts

(ADRs) are listed on the New York Stock Exchange (NYSE).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial

institution, and was its wholly owned subsidiary. ICICI's shareholding in ICICI Bank

was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity

offering in the form of ADRs listed on the NYSE in fiscal 2000.

DEMAT SERVICES:

ICICI Bank Demat Services boasts of an ever growing customer base of over 11.5 lacs

account holders ICICI Bank claims to offer best class services to customers. Services

offered by ICICI Bank to its customer are:-


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e-instructions:-

You can transfer securities 24 hour a day, 7 days a week through internet andinteractive Voice response at a lower cost. Now with speak to transfer you can also

transfer or pledge instructions through our customer care services.

Consolidation Demat Account:-

Dematerialise your physical shares in various holding patterns and consolidate all such

scattered holdings into your primary demat account at reduced cost.

Digitally signed Statement:-

Receive your Account statements and bill by e-mail.

Corporate Benefit Tracking:-

Track your dividend, interest and bonus through your account statements.

Mobile Requests:-.

Access your demat account by sending SMS to enquire about holdings, transactions,

bills and ISIN details.

Mobile Alerts:-

Receive SMS alerts for all debit/ credit as well as for any request, which cannot be

processed. Dedicated customer care executives at call centre to handle all queries.

Countrywide network of branches.


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SCHEDULE OF CHARGES:

Charge Head Standard Charges Frequent/sub

brokerage chargesA/c Opening Nil NilAnnual service charges Rs.500/-(Rs. 450/- For

customers receiving

statements by e-mail)

Rs.1250/-(Rs.1200/- for

customer receiving

statements by e-mail)Agreement Stamp Paper Rs.100/- Rs.100/-Buy-Market & Off

market

Nil Nil

Sell-Market & Off

Market(% of transactionvalue of each ISIN) Max.

Rs.500/- for debt

instrument-For trade done on

www.icicidirect.com

Nil Nil

-For instructions

submitted through

internet(e-instructions)

0.04%

(Min Rs.10/-)

0.02%

(Min Rs.5/-)

-For instructions

submitted through call

centre(e-inst)

0.04%

(Min Rs.15/-)

0.02%

(Min. Rs 10/-)

-For instructions

submitted through

Branches

0.04%

(Min Rs. 30/-)

0.02%

(Min Rs.15/-)

Rejection / Fails Rs. 30/- Rs.15/-Extra charges for

processing of inst.

Submitted on the

execution date late

(accepted at clients risk)


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-For inst submitted

through internet (e- inst.)

Nil Nil

-For inst submitted

through call centre (e-

inst.)

Nil Nil

-For inst submitted

through branches

Rs.10/- per ISIN Rs.10/- per ISIN

Dematerialisation-For each request form Rs.35/- Rs.35/--Extra for each certificate Rs.2/- Rs.2/-Rematerialisation

(for each Request form)

Rs.20/- Rs.20/-

Closure of account Nil Nil-If ICICI Bank is counter

party

0.02%

(Min Rs.15/-)

0.02%

(Min Rs.15/-)-If ICICI Bank is not

counter party

0.04%

(Min Rs.30/-)

0.04%

(Min Rs.30/-)Additional A/c Statement Rs.20/- Rs.20/-


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2.4 AXIS BANK

AXIS Bank was the first of the new private banks to have begun operations in 1994,

after the Government of India allowed new private banks to be established. The Bankwas promoted jointly by the Administrator of the specified undertaking of the Unit Trust

of India (AXIS - I), Life Insurance Corporation of India (LIC) and General Insurance

Corporation Ltd. and other four PSU companies, i.e. National Insurance Company Ltd.,

The New India Assurance Company, The Oriental Insurance Corporation and United

Insurance Company Ltd. The Bank today is capitalized to the extent of Rs. 281.46

Crores with the public holding (other than promoters) at 56.86 %.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at

Mumbai. Presently the Bank has a very wide network of more than 510 branch offices

and Extension Counters. The Bank has a network of over 2200 ATMs providing 24hrs a

day banking convenience to its customers. This is one of the largest ATM networks in

the country. The Bank has strengths in both retail and corporate banking and is

committed to adopting the best industry practices internationally in order to achieve

excellence.

Depository Services Provided:-

Transfer of Shares and settlements:-

All that is required is an instrument slip from you. If you are selling securities then

it has to be a delivery instruction slip . If you are purchasing securities it has to be a

receipt instruction slip or standing instruction for credit.

Receipt of Corporate Benefits:-

Even Securities entitlements like bonus and rights can be credited to your demat a/c

electronically. All you have to do is choose aright option in the share application

form.


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Holdings and Transaction Statement on E-mail:-

AXIS provides statement of transactions of holding on the e-mail id for the clients

registered for the service.

Tele Depository services:-

For customer at Mumbai and Ahmedabad this special service allows for getting

balances of securities in voice/ fax.


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SHEDULE OF CHARGES:-

Charges Charges (per instruction) Basis of RecoveryA/c Opening Nil Nil

A/c Closure Nil NilAnnual Maintenance

Charges

Rs. 600/- p.a. for Non AXIS Bank

Customers

Rs. 400/- for AXIS Bank Customer

Rs. 250/- for senior citizens

To be recovered

upfront in the month of

April to financial year

Demat Request Rs.2.50/- per certificate

Min Rs. 50/-

Monthly

Remat Request Rs. 20/- per certificate

Min Rs. 50/-

Monthly

- Credit Nil Nil

- Debit

0.04% for value of transaction and

minimum Rs. 21/-. Flat Rs. 21/- for

transaction entered through speed-e

Monthly

Failed/ Rejected Rs. 10/- Monthly-Creation 0.02% of value Min Rs. 25/- +

NSDL charges (Rs. 25/-)

Monthly

-Closure Rs.50/- Monthly

Invocation Rs.50/- MonthlyBorrowing Rs. 50/- MonthlyLending Nil Nil

Freezing instructions

on speed-e

instructions on speed-

e

Rs. 125/- per instruction Monthly

2.5 KOTAK MAHINDRA BANK

Kotak Mahindra is one of India's leading financial institutions, offering complete

financial solutions that encompass every sphere of life. From commercial banking, to


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stock broking, to mutual funds, to life insurance, to investment banking, the group caters

to the financial needs of individuals and corporates.

The group has a net worth of around Rs. 3,100 crore, employs around 9,600 people in its

various businesses and has a distribution network of branches, franchisees,representative offices and satellite offices across 300 cities and towns in India and

offices in New York, London, Dubai and Mauritius. The Group services around 2.2

million customer accounts.

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking

and distribution arm of the Kotak Mahindra Group. The company was set up in 1994

Depository ServicesKotak Securities is a depository participant with the National Securities Depository

Limited and Central Depository Services (India) Limited for trading and settlement of

dematerialized shares. Since it is also in the broking business, investors who use its

depository services get a dual benefit. They are able to use its brokerage services to

execute transactions and its depository services to settle these.

SHEDULE OF CHARGES :-

Charges Charges (per

instruction)

Basis of recovery


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A/c Opening Nil NilA/c Closure Nil Nil

Annual Maintenance

charges

Rs. 400/- To be recovered upfront

at the time of opening of

accountDemat Request Rs. 3/- per certificate plus

Rs. 25/- per request

Monthly

Remat Request Rs. 10/- per certificate at

actual as levied by NSDL

Monthly

Transfer of SecuritiesCredit Nil NilDebit 0.04% for value of

transaction

min Rs.20/- per script

Monthly

Failed/ Rejected Not Mention NAPledge Creation 0.02% of transaction

value

min Rs. 50/-

Monthly

Lending Nil Nil

Custody charges Nil Nil


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DEMAT ACCOUNT :

Demat account allows you to buy, sell and transact shares without the endless

paperwork and delays. It is also safe, secure and convenient.

Whats a demat account?

Demat refers to a dematerialized account. Just as you have to open an account with a

bank if you want to save your money, make cheque payments etc, you need to open a

demat account if you want to buy or sell stocks. So it is just like a bank account where

actual money is replaced by shares. You have to approach the DPs (remember, they are

like bank branches), to open your demat account.

Lets say your portfolio of shares looks like this: 40 of Infosys, 25 of Wipro, 45 of HLL

and 100 of ACC. All these will show in your demat account. So you dont have to

possess any physical certificates showing that you own these shares. They are all held

electronically in your account. As you buy and sell the shares, they are adjusted in your

account. Just like a bank passbook or statement, the DP will provide you with periodic

statements of holdings and transactions.

Is a demat account a must?

Nowadays, practically all trades have to be settled in dematerialized form. Although the

market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades

of upto 500 shares to be settled in physical form, nobody wants physical shares any

more. So a demat account is a must for trading and investing.

Why demat?

The demat account reduces brokerage charges, makes pledging/hypothecation of shares

easier, enables quick ownership of securities on settlement resulting in increased

liquidity, avoids confusion in the ownership title of securities, and provides easy receipt

of public issue allotments.It also helps you avoid bad deliveries caused by signature

mismatch, postal delays and loss of certificates in transit. Further, it eliminates risks


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associated with forgery, counterfeiting and loss due to fire, theft or mutilation. Demat

account holders can also avoid stamp duty (as against 0.5 per cent payable on physical

shares), avoid filling up of transfer deeds, and obtain quick receipt of such benefits as

stock splits and bonuses.

Buying & Selling

The procedure for buying and selling dematerialised securities is similar to the

procedure for buying and selling physical securities. The difference lies in the process

of delivery (in case of sale) and receipt (in case of purchase) of securities.

In case of purchase:-

The broker will receive the securities in his account on the payout day

The broker will give instruction to its DP to debit his account and credit investors

account

Investor will give Receipt Instruction to DP for receiving credit by filling

appropriate form. However one can give standing instruction

for credit in to ones account that will obviate the need of giving Receipt Instruction

every time.

In case of sale:-

The investor will give delivery instruction to DP to debit his account and credit the

brokers account. Such instruction should reach the DPs office at least 24 hours

before the pay-in as other wise DP will accept the instruction only at the investors

risk.


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Delivery Instruction Slip

To give the delivery one has to fill a form called Delivery Instruction Slip (DIS). DIS

may be compared to chequebook of a bank account. The following precautions are to

be taken in respect of DIS:-

Ensure and insist with DP to issue DIS book.

Ensure that DIS numbers are pre-printed and DP takes acknowledgment for the DIS

booklet issued to investor.

Ensure that your account number [client id] is pre-stamped.

If the account is a joint account, all the joint holders have to sign the instruction

slips. Instruction cannot be executed if all joint holders have not signed.

Avoid using loose slips

Do not leave signed blank DIS with anyone viz., broker/sub-broker.

Keep the DIS book under lock and key when not in use.

If only one entry is made in the DIS book, strike out remaining space to prevent

misuse by any one.

Demat Benefits:

The benefits are enumerated below:-

A safe and convenient way to hold securities;

Immediate transfer of securities;

No stamp duty on transfer of securities;

Elimination of risks associated with physical certificates such as bad delivery, fake

securities, delays, thefts etc.;

Reduction in paperwork involved in transfer of securities; Reduction in transaction cost;

No odd lot problem, even one share can be sold;

Nomination facility;


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Change in address recorded with DP gets registered with all companies in which

investor holds securities electronically eliminating the need to correspond with each

of them separately;

Transmission of securities is done by DP eliminating correspondence with

companies;

Automatic credit into demat account of shares, arising out of

bonus/split/consolidation/merger etc.

Holding investments in equity and debt instruments in a account.

Demat Conversion:

Converting physical holding into electronic holding (dematerializing securities)

In order to dematerialize physical securities one has to fill in a DRF (Demat Request

Form) which is available with the DP and submit the same along with physical

certificates one wishes to dematerialize. Separate DRF has to be filled for each ISIN

Number.

The complete process of dematerialization is outlined below:

Surrender certificates for dematerialization to your depository participant.

Depository participant intimates Depository of the request through the system.

Depository participant submits the certificates to the registrar of the Issuer

Company.

Registrar confirms the dematerialization request from depository.

After dematerializing the certificates, Registrar updates accounts and informs

depository of the completion of dematerialization.

Depository updates its accounts and informs the depository participant. Depository participant updates the demat account of the investor.


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Demat Options

Banks score over others

Around 200 depository participants (DPs) offer the demat account facility. A

comparison of the fees charged by different DPs is detailed below. But there are three

distinct advantages of having a demat account with a bank quick processing,

accessibility and online transaction. Generally, banks credit your demat account with

shares in case of purchase, or credit your savings accounts with the proceeds of a sale on

the third day.

Banks are also advantageous because of the number of branches they have. Some banks

give the option of opening a demat account in any branch, while others restrict

themselves to a select set of branches. Some private banks also provide online access to

the demat account. So, you can check on your holdings, transactions and status of

requests through the net banking facility. A broker who acts as a DP may not be able to

provide these services.

Fees Involved:

NOW to the crux the cost of opening and holding a demat account. There are fourmajor charges usually levied on a demat account: Account opening fee, annual

maintenance fee, custodian fee and transaction fee. All the charges vary from DP to DP.

Account-opening fee

Depending on the DP, there may or may not be an opening account fee. Private banks,

such as ICICI Bank and AXIS Bank, do not have one. However, players such as Karvy

Consultants and the State Bank of India do so. But most players levy this when you re-open a demat account, though the Stock Holding Corporation offers a lifetime account

opening fee, which allows you to hold on to your demat account over a long period.

This fee is refundable.


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Annual maintenance fee

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

Custodian fee

This fee is charged monthly and depends on the number of securities (international

securities identification numbers ISIN) held in the account. It generally ranges

between Rs 0.5 to Rs 1 per ISIN per month. DPs will not charge custody fee for ISIN on

which the companies have paid one-time custody charges to the depository.

Transaction fee

The transaction fee is charged for crediting/debiting securities to and from the account on a

monthly basis. While some DPs, such as SBI, charge a flat fee per transaction, ICICI Bank

peg the fee to the transaction value, subject to a minimum amount. The fee also differsbased on the kind of transaction (buying or selling). Some DPs charge only for debiting the

securities while others charge for both. The DPs also charge if your instruction to buy/sell

fails or is rejected. In addition, service tax is also charged by the DPs. In addition to the

other fees , the DP also charges a fee for converting the shares from the physical to the

electronic form or vice-versa. This fee varies for both demat and remat requests. For demat,

some DPs charge a flat fee per request in addition to the variable fee per certificate, while

others charge only the variable fee. For instance, Stock Holding Corporation charges Rs 25as the request fee and Rs 3 per certificate as the variable fee. However, SBI charges only the

variable fee, which is Rs 3 per certificate. Remat requests also have charges akin to that of

demat. However, variable charges for remat are generally higher than demat. Some of the

additional features (usually offered by banks) are:

Some DPs offer a frequent trader account, where they charge frequent traders at lower

rates than the standard charges.

Demat account holders are generally required to pay the DP an advance fee for each

account which will be adjusted against the various service charges. The account holder

needs to raise the balance when it falls below a certain amount prescribed by the DP.

However, if you also hold a savings account with the DP you can provide a debit

authorisation to the DP for paying this charge.


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Finally, once you choose your DP, it will be prudent to keep all your accounts with

that DP, so that tracking your capital gains liability is easier. This is because, for

calculating capital gains tax, the DP will determine the period of holding and different

DPs follow different methods. For instance, ICICI Bank uses the first in first out (FIFO)

method to compute the period of holding. The proof of the cost of acquisition will be the

contract note. The computation of capital gains is done account-wise.

How many accounts?

If your shares are held in joint names, be sure to open the account in the same order

of names. If X, Y and Z jointly hold 100 shares in a company and have three share

certificates all listing X, Y and Z as the first, second and third holders respectively, one

account will suffice.

For different combinations of names, open separate accounts for each combination.

If the three certificates are held as XYZ, YXZ and ZYX, three accounts are necessary.

There is no limit to the number of accounts you can open.

There is no limit to the number of DPs you can have accounts with.

You can even open a multiple-sign demat account, which can be operated by

multiple holders, like a joint savings bank account.

You can open a demat account even before you acquire your first security.

Opening an account

Steps involved in opening a demat account

First an investor has to approach a DP and fill up an account opening form. The account


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opening form must be supported by copies of any one of the approved documents to

serve as proof of identity (POI) and proof of address (POA) as specified by SEBI.

Besides, production of PAN card in original at the time of opening of account has been

made mandatory effective from April 01, 2006.

All applicants should carry original documents for verification by an authorized official

of the depository participant, under his signature.

Further, the investor has to sign an agreement with DP in a depository prescribed

standard format, which details rights and duties of investor and DP. DP should provide

the investor with a copy of the agreement and schedule of charges for their future

reference. The DP will open the account in the system and give an account number,

which is also called BO ID (Beneficiary Owner Identification number).

The DP may revise the charges by giving 30 days notice in advance. SEBI has

rationalized the cost structure for dematerialisation by removing account opening

charges, transaction charges for credit of securities, and custody charges vide circular

dated January 28, 2005.

Further, SEBI has vide circular dated November 09, 2005 advised that with effect from

January 09, 2006, no charges shall be levied by a depository on DP and consequently,by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities lying in his

account to another branch of the same DP or to another DP of the same depository or

another depository, provided the BO Account/s at transferee DP and at transferor DP are

one and the same, i.e. identical in all respects.

In case the BO Account at transferor DP is a joint account, the BO Account at transferee

DP should also be a joint account in the same sequence of ownership.

Required Documents


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The extent of documentation required to open a demat account may vary according to

your relationship with the institution. If you plan to open a demat account with a bank, a

savings account holder has an edge over the non-account holder. In fact, banks usually

offer additional incentives to customers who open a demat account with them.

Along with the application form, your photographs (with co-applicants) and proof of

identity/residence/date of birth have to be submitted. The DPs also ask for a DP-client

agreement to be executed on non-judicial stamp paper. Here is a broad list (you wont

need all of them though):

PAN card

Voters ID

Passport Ration card

Drivers license

Photo credit card

Employee ID card

Bank attestation

IT returns

Electricity/ Landline phone bill

While they only ask for photocopies of the documents, they will need the originals for

verification. You will have to submit a passport size photograph on which you sign

across.

Investing Online


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While most of us understand the benefits of investing, we often do not give enough

importance to this process because of the hassles involved and the erroneous belief

that it is not my cup of tea.

This article explains how investing online can be a very easy, convenient and aninformed experience.

Say goodbye to hassles of investing offline. . .

When one has very little time on hand and too many options to choose from, investing

can be a very daunting experience. One faces several issues while investing offline like

maintaining bank and demat accounts separately and manually, lack of proper

information, tools and advice, constant struggle with the paperwork that is generated(try filling an IPO initial public offer form manually), lack of time to plan

investments systematically and finally keeping track of your investment portfolio and

net worth.

This either leads to a situation of too much dependency on someone, total inactivity or

sometimes even taking wrong decisions while planning your investments.

Fortunately, help is at hand through the online investing platforms. Today technologyenables you to completely plan your investing needs in the comfort of your home and at

a time you like, all at the click of the mouse.

All you need is a computer with an Internet connection and a subscription to a 3-in-1

online investing account with any such service providers. Online mode of investing

largely eliminates all major hassles of investing:

It provides a wealth of information, analysis and tools that enable you to take moreinformed decisions,

Virtually no paperwork involved as all transaction records are online and

statements available in digital form,


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You can invest anytime and from anywhere at your convenience (yes, even at

night),

Integrated operations between your bank account, de-mat account and trading

accounts, and

You can track your investment portfolio and net-worth online anytime.

Today, the online mode allows you to invest across different asset classes like equity

shares, mutual funds and IPOs amongst others. You can be your own master in planning

your investments. The online mode provides you the benefit of getting up-to-date

information and analysis, which is often sourced and compiled, in an investor friendly

format, from some of the best information providers in their respective fields.

You are, therefore, not only able to take more informed investment decisions but in the

process is also able to reduce the probability of risk and improve the probability of

earning better returns on your investments.

Services to look out for. . .

To start investing online you would need to register as a member for an integrated 3-in-

1 online trading account with any of the service providers. The three accounts are:

Trading account, which enables you to transact online,

An Internet-enabled bank account for online money transfers with any of the banks

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

Your demat account, where your shares will be deposited.

Tips on choosing your online investing account:


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Credibility and credentials of the service provider : While there are several

service providers, for any retail investor like you, the backing of a reputed bank or

financial institution can always provide that additional safety. Some service

providers also have an ISO certification for their online investing portal.

Investments that you can make online: Are you allowed to invest in equity

shares, mutual funds, futures & options and IPOs fully through the online route or

in only one of them? To derive the full power of online investing it is important you

get to invest in all.

Quality of information and content: Ensure you are getting the best information,

research support and tools in an easy and reader-friendly manner. This would play a

key role in taking informed investment decisions.

Speed of order execution : Are you able to place your equity orders and receive

quick order confirmations during peak hours or are you struggling to access the site

just when you need it most.

Are you getting wide array of products to choose from? A few service providers provide a

choice of products starting from the basic (classic) account to more advanced (trading

platforms with live and streaming market information on equity markets).

Safety: Check for the inbuilt security features.

Customer care: Does the service provider have a dedicated customer care cell to

take care of your queries and problems?

Additional features: Besides the above criteria there are a combination of several

additional features whose importance can be determined based on your own

investing needs - ability to sell shares next day before receiving delivery, SMS

alerts, and intra-day trading in equities.


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Rematerialisation

The process of converting electronic holdings (demat shares) back into

Physical Certificates is calledRematerialisation.

If one wish to get back his securities in the physical form one has to fill in the RRF

(Remat Request Form) and request his DP for rematerialisation of the balances in his

securities account. The process of rematerialisation is outlined below:

One makes a request for rematerialisation.

Depository participant intimates depository of the request through the system.

Depository confirms rematerialisation request to the registrar.

Registrar updates accounts and prints certificates.

Depository updates accounts and downloads details to depository participant.

Registrar dispatches certificates to investor.


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PLEDGE AND HYPOTHECATION

The clients may use the securities held with NSDL as collateral to secure loans and other

credits. In manual environment, borrowers are required to deliver pledged securities inphysical form to lender or its custodian. These securities are verified for authensity and

often need to be transferred in the name of lender. Use of depository services for pledging

and hypothecation the securities make the process very simple and cost effective.

Some important points:-

Can one pledge dematerialized securities?Yes. In fact, pledging dematerialized securities is easier and more advantageous as

compared to pledging physical securities.

What should one do to pledge electronic securities?

The procedure to pledge electronic securities is as follows:

Both investor (pledgor) as well as the lender (pledgee) must have depository

accounts with the same depository; Investor has to initiate the pledge by submitting to DP the details of the securities to

be pledged in a standard format ;

The pledgee has to confirm the request through his/her DP;

Once this is done, securities are pledged.

All financial transactions between the pledgor and the pledgee are handled as per

usual practice outside the depository system.

How can one close the pledge after repayment of loan?

After one has repaid the loan, one can request for a closure of pledge by instructing

the DP in a prescribed format. The pledgee on receiving the repayment will instruct

his DP accordingly for the closure of the pledge.


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Can one change the securities offered in a pledge?

Yes, if the pledgee [lender] agrees, one may change the securities offered in a

pledge.

Who would receive the corporate benefits on the pledged

securities?

The securities pledged are only blocked in the account of pledgor in favour of the

pledgee. The pledgor would continue to receive all the corporate benefits.


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TRANSACTION STATEMENTS:

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

transaction?

The DP gives a Transaction Statement periodically, which will detail current

balances and various transactions made through the depository account. If so

desired, DP may provide the Transaction Statement at intervals shorter than the

stipulated ones, probably at a cost.

At what frequency will the investor receive his Transaction Statement

from his DP?DPs have to provide transaction statements to their clients once in a month, if there

are transactions and once in a quarter, if there are no transactions.

Moreover, DPs can provide transaction statement in electronic form under digital

signature subject to their entering into a legally enforceable arrangement with the

BOs to this effect.

What is to be done if there are any discrepancies in transaction

statement?In case of any discrepancy in the transaction statement, one can contact his/her DP.

If the discrepancy cannot be resolved at the DP level, one should approach the

Depository.

Whom should one contact in case of any investor complaint / problem /

query?

In case of any investor complaint / problem / query one may first contact his DP. If

DP is unable to solve the complaint / problem / query one should approachconcerned depository. If one is not satisfied one may approach SEBI. One may also

approach SEBI directly.


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LENDING AND BORROWING :

What is Lending and Borrowing of Securities?If any person required to deliver a security in the market does not readily have that

security, he can borrow the same from another person who is willing to lend as per the

Securities Lending and Borrowing Scheme.

Can lending and borrowing be done directly between two

persons?

No. Lending and borrowing has to be done through an Approved Intermediary

registered with SEBI. The approved intermediary would borrow the securities forfurther lending to borrowers. Lenders of the securities and borrowers of the securities

enter into separate agreements with the approved intermediary for lending and

borrowing the securities. Lending and borrowing is effected through the depository

system.

Can I lend the securities lying in my account?

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

SEBI.

How would I lend my demat securities?

You may enter into an agreement with the approved intermediary to be a lender under

this scheme. After that, you may lend securities any time by submitting lending

instruction to your DP.

How would I get back the securities lent by me?

Intermediary may return the securities at any time or at the end of the agreed period of

lending. Intermediary has to repay the securities together with any benefits received

during the period of the loan.

How would I receive the corporate benefits, which would accrue

on these securities during the period of lending?

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


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securities are being returned / recalled. Intermediary/borrower will return the securities

together with benefits received.


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NOMINATION:

Who can nominate?

Only individuals holding beneficiary accounts either singly or jointly can makenomination. Non-individuals including society, trust, body corporate, karta of Hindu

Undivided Family, holder of power of attorney cannot nominate.

Who can be a nominee?

Only an individual can be a nominee. A nominee shall not be a society, trust, body

corporate, partnership firm, Karta of Hindu Undivided Family or a power of attorney

holder.

What is transmission of demat securities?

Transmission is the process by which securities of a deceased account holder are

transferred to the account of his legal heirs / nominee. Process of transmission in case of

dematerialized holdings is more convenient as the transmission formalities for all securities

held in a demat account can be completed by submitting documents to the DP, whereas in

case of physical securities the legal heirs/nominee/surviving joint holder has to

independently correspond with each company in which securities are held.

In the event of death of the sole holder, how the successors should claim the

securities lying in the demat account?

The claimant should submit to the concerned DP an application Transmission Request

Form (TRF) along with the following supporting documents

In case of death of sole holder where the sole holder has appointed a nominee:

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

nominee: Notarized copy of the death certificate

Any one of the below mentioned documents


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Succession certificate

Copy of probated will

Letter of Administration

The DP, after ensuring that the application is genuine, will transfer securities to the accountof the claimant.

The major advantage in case of dematerialized holdings is that the transmission formalities

for all securities held with a DP can be completed by interaction with the DP alone, unlike

in the case of physical share certificates, where the claimant will have to interact with each

Issuing Company or its Registrar separately.


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CHAPTER

3RD

LITERATURE

REVIEW

LITERATURE REVIEW

After the formulation of the problem, a brief summary of it should be written down and the

researcher should have to do its extensive literature survey connected with the problem. For

this purpose, abstracting and indexing journals and published or unpublished bibliographies


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are first place to go Academic Journals, Conference proceedings, reports etc. must be

tapped depending upon nature of the problem. The literature for this project will include

various newspapers, magazines

Economic Survey 1for the information regarding the depository services by

depository participants. In the external sector of the Economic survey the trends

over the period of time are given.

RBI bulletin 2 for the information regarding the demat services of different

banks over the period of last years.

C.R Kothari 3 The information regarding the basics of research and researchmethodology, what are the different types of research designs, what is problem

statement, what are the sources of data collection and what are the methods of data

collection is given in this section.

S.P Gupta 4. The information regarding the statistical tools and their

limitations in different fields the research is given in this section. This section

explains why to use correlation and what are the situations in which correlation canbe used, and what does correlation means.

Hooda R.P.5, Statistics for Business and Economics to have information

regarding various statistical tools applied like time series, correlation, and

hypothesis.

S.R rawat 6, information regarding various statistical tools applied like time

series, correlation, and hypothesis.


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S.P Gupta 7. , To have information regarding depositories in India, for the

information regarding the depository services by depository participants. In the

external sector of the Economic survey the trends over the period of time are given

Hooda R.P 8, statistical tools and their limitations in different fields the

research is given in this section.

C K. Gupta9, Financial Institutions And Markets, Kalyani Publications, New

Delhi To have information regarding depositories in India

Bhole L.M.10, Management of Financial institutions, Tata MC Graw Hill,2000 To have information regarding dematerialization and rematerialisation

process.

Khan M.Y.11 , the information regarding the depository services by

depository participants. In the external sector of the Economic survey the trends

over the period of time are given

Sashi K. Gupta 12, Financial Institutions And Markets, KalyaniPublications, New Delhi (Pg.6.1-6.40)

Sharma L.M 13,the information regarding the depository

services. .Punithawathy Pandian, Security Analysis and Investment

Management.

http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm 15 this site has

been used to get information regarding icici bank.

http://www.dfcb.com/aboutus/general/default.htm 16 it is being used to get

information regarding.

http://www.AXISbank.com/Banking/bank.asp 17 to collect information of AXIS

bank.
http://www.icicibank.com/pfsuser/aboutus/overview/overview.htmhttp://www.dfcb.com/aboutus/general/default.htmhttp://www.utibank.com/Banking/bank.asphttp://www.icicibank.com/pfsuser/aboutus/overview/overview.htmhttp://www.dfcb.com/aboutus/general/default.htmhttp://www.utibank.com/Banking/bank.asp


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http://www.turionbop.co.in/site/aboutus.html 18 to collect information regarding the

profile of private companies.

http://www.kotak.com/Kotak_GroupSite/aboutus/default.htm 19to get information

regarding the Kotak Mahindra group this site is being used.

http://www.hdfcsec.com/basics/index.php?section=6 20 To get information

regarding the various dematerialized securities of bank this site is being used.

http://www.nseindia.com/ 21 In order to get information regarding national stock

exchange of India this site is used.

http://content.icicidirect.com/home.asp 22 information regarding the demat

securities of ICICI bank this site is being used.

http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm 23

to collect information of bank

http://wwwaxisbank.com/aboutus/general/default.htm 24 to collect

information of bank .To get information regarding the various dematerialized

securities of bank this site is being used

http://www.nse.com/basics/index.php?section=6 25 to collect information

of stock market

http://content.icicidirect.com/home.asp 26To get information regarding the

various dematerialized securities of bank this site is being used

www.financeindia.com 27 information regarding demat investment.

www.investmentzone.com 28 to get information regarding national stock


www.indiansharemarket.com/ 29 To get information regarding the various

dematerialized securities of bank this site is being used

http://www.nseindia.com/ 30 to get information regarding national stock


http://www.crisil.com/home.asp 31 this site has been used to get information

regarding ranking

http://www.moneycontrol.com/ 32 gets information regarding icici bank.
http://www.turionbop.co.in/site/aboutus.htmlhttp://www.kotak.com/Kotak_GroupSite/aboutus/default.htmhttp://www.hdfcsec.com/basics/index.php?section=6http://www.nseindia.com/http://content.icicidirect.com/home.asphttp://www.icicibank.com/pfsuser/aboutus/overview/overview.htmhttp://wwwaxisbank.com/aboutus/general/default.htmhttp://www.nse.com/basics/index.php?section=6http://content.icicidirect.com/home.asphttp://www.financeindia.com/http://www.investmentzone.com/http://www.indiansharemarket.com/http://www.nseindia.com/http://www.crisil.com/home.asphttp://www.moneycontrol.com/http://www.turionbop.co.in/site/aboutus.htmlhttp://www.kotak.com/Kotak_GroupSite/aboutus/default.htmhttp://www.hdfcsec.com/basics/index.php?section=6http://www.nseindia.com/http://content.icicidirect.com/home.asphttp://www.icicibank.com/pfsuser/aboutus/overview/overview.htmhttp://wwwaxisbank.com/aboutus/general/default.htmhttp://www.nse.com/basics/index.php?section=6http://content.icicidirect.com/home.asphttp://www.financeindia.com/http://www.investmentzone.com/http://www.indiansharemarket.com/http://www.nseindia.com/http://www.crisil.com/home.asphttp://www.moneycontrol.com/


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http://www.marketmaker.com/ 33 this site has been used to get information

regarding icici Kotak, axis bank.

CHAPTER
http://www.marketmaker.com/http://www.marketmaker.com/


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4TH

RESEARCH

METHODOLOGY

4.1 SIGNIFICANCE OF STUDY:

This study can be helpful for knowing about the number of depository services which

can help in increase in number of opening of demat accounts with the different

depository participants. After getting the knowledge about the charge structure ofvarious Private Sector Banks, one can easily compare the charges and select one

participant according to their requirement.


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

Banks and thus by comparing the charges one can easily select one according to his/her

needs.

It will be helpful in helping bankers to maintain customer relationship with their

customers as customers are highly attracted by this service. This helps them to gain a

wider share of the customer wallet.

It will also helpful in knowing more about the various depository services

provided by different Depository Participants.

It will also helpful in determining the various benefits of holding DematAccounts.

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

necessary for the banks to build capabilities in the areas of equity advisory etc.

It will also helpful for the investors to look for a best Depository Participants

offering the various depository services.

The most important part is to look for the hidden cost, as the financial service industry is

really famous for hiding a host of fees and charges under the complex jargons of bulky

terms. So this study helps in clear comparison of various costs such as account opening

cost, a/c maintenance cost, pledging and lending costs and many more.

4.2OBJECTIVE OF STUDY:

The objective of the research means the purpose for which the research is being carried out.

The objectives of this research are as follows:

Primary Objective:-

1. The primary objective of our report is to impart a comparative and analytical study

of the depository and online share trading services of private sector banks in India


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2. Basic understanding of the manner in which they function in this competitive

environment the products and services offered by Private Sector Banks entire

process of share transactions and account openings and brokerage charged and

different software used to facilitate the trading process. To know about the benefits

derived from such system.

Secondary Objective: -

Apart from understanding the stock Exchange terminologies or jargons, we also aimed

about reading of market conditions, the feasibility and growth of depository services of

various depository participants in India. The client servicing offered by the online share

trading sites in real market situations.

4.3RESEARCH METHODOLOGY:-

Research in common parlance refers to a search for knowledge. One can also define

research as a scientific and systematic search for pertinent information on a specifictopic. Infact, research is an art of scientific investigation.

RESEARCH DESIGN


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At the outset may be noted that there are several ways of studying and

tackling a problem. The formidable problem that follows the task of defining the

research problem is the preparation of the design of research project popularly known as

research design.

Decision regarding what, where, when, how much, by what means concerning an

enquiry or a research study constitute a research design. A research design is an

arrangement of conditions for collection and analysis of data in a manner that aims to

combine relevance to research purpose with economy in procedure. More explicitly the

designing decision happened to be in respect of following

What is study about?

Why is study being made? Where will the study be carried out?

What type of data is required

What will be the sample design?

How will the data be collected?

How will the data be analyised?

TYPES OF RESEARCH

DESIGN

EXPLORATORYRESEARCHDESIGN

DESCRIPTIVE&

DIAGNOSTICRESEARCH DESIGN

EXPERIMENTALRESEARCHDESIGN


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EXPLORATORY RESEARCH DESIGN: -

Exploratory research design is termed as formulating researchstudies. The main purpose of study is that of formulating a problem. The major

emphasis in such study is on discovery of new ideas and insights. As such the research

design appropriate for such studies must be flexible enough to provide opportunity for

considering different aspects of problem.

DESCRIPTIVE AND DIAGNOSTIC RESEARCH DESIGN: -

Descriptive research design are those design which are

concerned with describing the characteristics of particular individual or of the group

Whereas diagnostic research studies determine the frequency

with which something occurs or its association with some else. In descriptive and

diagnostic study the researcher must be able to define clearly what he wants to measure

and must find adequate method for measuring it.

EXPERIMENTAL RESEARCH DESIGN: -

These are those studies where the researcher tests the hypothesis

of casual relationship between variables. Such study requires procedure that will not

only reduce biasness and increase reliability but will permit drawing influence about

casuality. Usually experiments meets this requirement, hence these research designs are

prepared for experiment.


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Research design in study: -

In the study I have apply descriptive research design. As descriptive

research designis the description of state of affairs, as ix exists at present. In this type

of research the researcher has no control over the variables; he can only report what ahs

happened or what is happening.

4.4 DATA COLLECTION

After the research problem has been identified and selected the next step is to

gather the requisite data. While deciding about the method of data collection to be used

for the the researcher should keep in mind two types of data VIZ. primary andsecondary

TYPES OF DATA

PRIMARYDATA SECONDRYDATA


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PRIMARY DATA: -The primary data are those, which are collected afresh and

for the first time, and thus happened to be original in character. We can obtain primary

data either through observation or through direct communication with respondent in one

form or another or through personal interview.

SECONDARY DATA: -

The secondary data on the other hand, are those which

have already been collected by someone else and which have already been passed

through the statistical processes. When the researcher utilizes secondary data then he

has to look into various sources from where he can obtain them. For e.g. Books,

magazine, newspaper, Internet, publications and reports.

METHODS USED IN STUDY: -

METHODS OF PRIMARY DATA

OBSERVATIONMETHOD

QUETIONAIREMETHOD

INTERVIEWMETHIOD

SCHEDULEMETHOD


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I will collect the data through the secondary sources such As

Books

Magazines

Newspapers

Internet

CHAPTER


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5TH

DATA ANALYSIS &

INTERPRETATION

STATISTICAL TOOL AND DATA ANALYSIS.

CORRELATION

For analyzing the data I will use correlation and Trend analysis. I will use correlation for

knowing the relationship between the Income levels and numbers of demat account

opened.


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I will use correlation to check whether there is any correlation exists between income levels

and numbers of demat account opened.

In the correlation I will be using Karl Pearsons coefficient of correlation in which

r = xy / x2 y2

for analyzing the data I will be using the software of XLSTAT.

Income

Total No of

Demat Account

(Y)

Mid point

(X) x y x2 y2 xy0-10,000 470 5000 -25000 -568 625 322624 1420010,000-20,000 750 15000 -15000 -288 225 82944 432020,000-30,000 1028 25000 -5000 -10 25 100 5030,000-40,000 1140 35000 5000 102 25 10404 51040,000-50,000 1250 45000 15000 212 225 44944 318050,000 & above 1590 55000 25000 552 625 304704 13800TOTAL 1750 765720 36060

r = xy / x2 y2 r = 36060

1750 765720

r = 0.98

r = 0.98 (approx.)

Where, r = rank coefficient of the correlation


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So, there is a high degree correlation between Income and total no of demat account

opened in private sector banks and conclude that due to increase in income no. of

demat a/c opened also increase.

Since the correlation coefficient calculated lies within the limits I.e. -1 to +1. Hence we can

conclude that the correlation is significant. The variables are positively or directly

correlated.

Correlation between level of income and no. of Demat

A/c . Opened with ICICI Bank

Correlation b/w level of income and no. of Demat Account Opened with ICICI Bank:

Income

No of Demat

Account (Y)

Mid point

(X)

x y x2 y2 xy0-10,000 22 5000 -25000 -32 625 1024 80010,000-20,000 35 15000 -15000 -19 225 361 28520,000-30,000 50 25000 -5000 -4 25 16 2030,000-40,000 62 35000 5000 8 25 64 40


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40,000-50,000 69 45000 15000 15 225 225 22550,000 & above 86 55000 25000 32 625 1024 800TOTAL 1750 2714 2170

r = xy / x2 y2

r = 2170

1750 2714

r = 0.99

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

variables.

Correlation between level of income and no. Of Demat

A/c. Opened with AXIS Bank:

Income

No of Demat

Account (Y)

Mid point

(X)

x y x2 y2 xy0-10,000 15 5000 -25000 -24 625 576 60010,000-20,000 22 15000 -15000 -17 225 289 25520,000-30,000 35 25000 -5000 -4 25 16 2030,000-40,000 44 35000 5000 5 25 25 2540,000-50,000 58 45000 15000 19 225 361 28550,000 & above 60 55000 25000 21 625 441 525

TOTAL 1750 1708 1710

r = xy / x2 y2

r = 1710


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1750 1708

r = 0.989

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

with AXIS.

HYPOTHESIS TESTING


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TREND ANALYSIS :

Time series :

The set of data collected on the basis of time is called as time series. Under time series

there are two types of variables:

(1) Independent variables (this represents time)

(2) Dependent variables (this represents the changes taken place in the value of data with

the passage of time)

XLSTAT 7.1 - Correlation Tests

Significance level: 0.05

Pearson's correlation coefficient test (parametric test):

Observed value 0.985

Two-tailed p-value 0.000Alpha 0.05

Decision:In other words, the correlation is significant.


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A set of data depending on the time is called time series.

-Kenny & Keeping

Utility of time series:

The study of time series has great importance in economic and business world which

is illustrated by the following points:-

1. To study thepast behavior of data:

2. Toforecast future behavior:

3. Estimation of trade cycle:

4. Universal utility:

5. Study of present variations

Methods of measuring trend::

1. Free hand curve method

2. Semi average method

3. Moving average method

4. Least square method


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Trend Analysis

010,00020 00030,00040,00050,00060,00070,00080,000

2005 2006 2007 2008 2009years

no.

of

de

mata/c

Actual valuesPredicted values

With the help of this trend analysis we can predict future values like for the year2007;

Here X=3, Y= 9932.6 + 2194.5(3)

= 16,516.1

Calculations are shown in Annexure 1


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Comparative Table of Demat A/c Charges of ICICI, AXIS, KOTAK

MAHINDRA Bank

Banks:- ICICI AXIS Kotak Mahindra

Annual

Maintenance

Charges

Rs.500/- Rs.400/-normal

and

Rs.250/- senior

citizens

Rs.400/-

Debit Instruction Rs.10/- per ISIN 0.04% of value

or minimumRs.15/-

0.04% of value

or minimumRs.20/-

Dematerialization Rs.35/-+ Rs.22/-

per certificate

Rs.2.5/- per

certificate Min

Rs.50/-

Rs.25/- +Rs.3/-

per certificate

Rematerialisation Rs. 20/- per

certificate

Rs. 20/- per

certificate Min

Rs.50/-

Rs.10/- per

Certificate

Pledge Creation 0.02% Min

Rs.15/-&

0.04% min.Rs.

30/-

0.02%+

Rs.25/-+Rs.25/-

NSDL Charges

0.02% min

Rs.50

Closure Same as above Rs.100/- Same as aboveFailed Instruction Rs.30/- Rs.10/- Not Mentioned

SERVICES ON OFFER:-


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ICICI AXIS Kotak

MahindraVoice

Instructions

Yes No No

E-Statement Yes Yes YesSMS Alerts Yes No NoMobile

Advice

Yes No No

View

Statement on

net

Yes Yes Yes

Speed-e Yes Yes Yes

ICICI Bank clearly enjoys lead over other banks in terms of the services

they offer to Demat Customers

LIMITATIONS:


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Probably the time and money constraints can affect my research

Lack of knowledge about the topic.

Dependency too much on secondary data for conducting the research that is

insufficient for the research.

Difficulty in collection of the data.

Study is conducted in limited area only.

RESULTS& FINDINGS

1. Annual maintenance charges of all banks are equal except AXIS and Kotak

Mahindra wherein the AMC charges are a bit lower at Rs.400/- as compared to


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Rs.500/- charge by other DPs. Also AXIS Bank is offered special charges to senior

citizens at AMC of Rs. 250/-.

2. Debit Instruction charges are lowest @ Rs. 10/- per ISIN in case of ICICI bank

followed by Kotak, AXIS that is costliest in min charges at Rs.25/-.

3. Demat Charges are more or less same for all the banks but AXIS bank is a bit

costlier and minimum charges are highest at Rs. 50/-

4. AXIS Bank is again costliest at monthly Rs. 50/- And Rs. 20/- per certificate for

demat as compared to Rs 10/- (Actual Charges of NSDL) charged by Kotak

Mahindra

5. For failed instructions ICICI is charging highest followed by AXIS

In the nut shell we can say that all banks are charging more and less same to thecustomers If bank is charging less in selling then they are charging higher amount in

Demat or Remat of Securities thereby bringing a balance in tariff structure as compared

with other banks.

I have also find the comparison among three banks.

After analyzing all the parameters I find the results that the services offer by the

icici bank is better then axis and the Kotak bank.

RECOMMENDATIONS: -

To attract the more capital from the country, the govt. procedure regarding setting

of new projects should be simplified. However the Govt. announced several policy


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measures in order to remove the constraints. It is hoped that this will benefit the

Investors.

Technology should be upgraded. There should be programmes for depository

services improvement and programmes for error control. So that the cost ofproduction of the services can be reduced. Reduction in cost will in turn make the

Indian economy competitive in the international market

Dematerialization & Rematerialisation facilities should be proper established by the

all banks.

Annual maintenance charges should be in that manner so that the customer cannot

skip from first service provider to second.

Now with the advent of new and easy technology more and more market players

are moving into the area of depository and online trading. Majority of big brokers,

online trading portals and technologically superior banks are offering demat

services to their clients. Some of them are also moving up in the value chain by

offering online trading services. So the policy of the services provider should be

according to the market conditions

BIBLIOGRAPHY :

BOOKS: -


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

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

S.P Gupta. Statistical Methods, 30th edition, Sultan Chand &sons

Hooda R.P,Indian Financial System, Tata MC Graw Hill, 2000 Bhole L.M., Management of Financial institutions, Tata MC Graw Hill, 2000

Khan M.Y., , Indian Financial System, Tata MC Graw Hill, 2000

Sashi K. Gupta, Financial Institutions And Markets, Kalyani

Publications, New Delhi (Pg.6.1-6.40)

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

Hill, 2000

Punithawathy . Security Analysis and Investment Management.

JOURNALS & NEWSPAPERS

Economic Survey 2005-06, EXTERNAL SECTOR (page no.-131,160)

RBI bulletin, INDIAN TRADE (page no.-887)

M Narasimhulu And Irfana Samdani Southern Economist July 2006, TrendsAnd Pattern Of Fdi In India (page no. 24-28)

SANJEEV KUMAR, Icfai Reader JULY 2006 FDI AND FII(Page no.-35-40)

Ms sidhu & lavleen kaur, southern economist dec 2005, market India someissues (page no.27-30)

M.Narasimhulu And Irfana Samdani, INDIAN JOURNAL Of Finance, AStudy Of banks (Page No.51-60)

S.narashima chary and v. Gangadhar, INDIAN JOURNAL OF FINANCE,D Mat services in India (page no.51-60)


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http://www.dfcb.com/aboutus/general/default.htm

http://www.utibank.com/Banking/bank.asp. http://www.turionbop.co.in/site/aboutus.html

http://www.kotak.com/Kotak_GroupSite/aboutus/default.htm

http://www.hdfcsec.com/basics/index.php?section=6

http://www.nseindia.com/.

http://content.icicidirect.com/home.asp

http://www.icicibank.com/pfsuser/aboutus/overview/overview.htm

http://wwwaxisbank.com/aboutus/general/default.htm

http://www.nse.com/basics/index.php?section=6

http://content.icicidirect.com/home.asp

www.financeindia.com.

www.investmentzone.com

www.indiansharemarket.com

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

http://www.moneycontrol.com/

http://www.marketmaker.com/.

ANNEXURE-1

Year

Total no of Demat A/c

Opened (Y) X XY X2
http://www.dfcb.com/aboutus/general/default.htmhttp://www.utibank.com/Banking/bank.asphttp://www.turionbop.co.in/site/aboutus.htmlhttp://www.kotak.com/Kotak_GroupSite/aboutus/default.htmhttp://www.hdfcsec.com/basics/index.php?section=6http://www.nseindia.com/http://content.icicidirect.com/home.asphttp://www.icicibank.com/pfsuser/aboutus/overview/overview.htmhttp://wwwaxisbank.com/aboutus/general/default.htmhttp://www.nse.com/basics/index.php?section=6http://content.icicidirect.com/home.asphttp://www.financeindia.com/http://www.investmentzone.com/http://www.indiansharemarket.com/http://www.nseindia.com/http://www.crisil.com/home.asphttp://www.moneycontrol.com/http://www.marketmaker.com/http://www.dfcb.com/aboutus/general/default.htmhttp://www.utibank.com/Banking/bank.asphttp://www.turionbop.co.in/site/aboutus.htmlhttp://www.kotak.com/Kotak_GroupSite/aboutus/default.htmhttp://www.hdfcsec.com/basics/index.php?section=6http://www.nseindia.com/http://content.icicidirect.com/home.asphttp://www.icicibank.com/pfsuser/aboutus/overview/overview.htmhttp://wwwaxisbank.com/aboutus/general/default.htmhttp://www.nse.com/basics/index.php?section=6http://content.icicidirect.com/home.asphttp://www.financeindia.com/http://www.investmentzone.com/http://www.indiansharemarket.com/http://www.nseindia.com/http://www.crisil.com/home.asphttp://www.moneycontrol.com/http://www.marketmaker.com/


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2003 5,294 -2 10,588 42004 7,775 -1 -7,775 12005 10,310 0 0 02006 12,260 1 12,260 12007 14,024 2 28,048 4

Total 49,663 0 21,945 10The equation of the straight line is Y= a+bX

Since, X= 0,a = Y/ N ,b = XY/X2

Putting values we get,

a= 49,663/5 = 9932.6

b= 21,945/10 = 2194.5

Hence the equation of straight line trend is Y= 9932.6 + 2194.5X

Origin=2004; X units one year.

For X=-2, Y= 9932.6 + 2194.5 (-2) = 5543.6

X=-1, Y= 9932.6 + 2194.5 (-1) = 7738.1

X= 0, Y= 9932.6 + 2194.5(0) = 9932.6

X=1, Y = 9932.6 + 2194.5(1) = 12127.1

X =2, Y = 9932.6 + 2194.5(2) = 14321.6

REGRESSION

yearTotal three banksd.mat acc(lackh)

Total three banksTrading(crore)

2003 42 90

2004 48 112

2005 65 145

2006 87 183


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2007 118 220

XLSTAT 7.1 - Nonlinear Regression - 6/1/2005 at 10:16:46 PM

Dependent variable: workbook = Book1 / sheet = Sheet1 / range = $E$9:$E$13 / 5 rows and 1 column

Explanatory variables: workbook = Book1 / sheet = Sheet1 / range = $D$9:$D$13 / 5 rows and 1 columnUniform weighting (default)

No missing values

Goodness of fit coefficients:

R (coefficient of correlation) 0.999

R (coefficient of determination) 0.998

SSR 17.117

Model parameters:

Parameters Value Standard deviation

pr1 1322.393 62985.935

pr2 0.169 11.513

pr3 2.984 1320.848

pr4 -1830.416 183394.883

ObservationsWeights d.mat trading trading (Model) Residuals Standardized residuals

Obs1 1 42.000 90.000 91.908 -1.908 -0.461Obs2 1 48.000 112.000 108.766 3.234 0.782

Obs3 1 65.000 145.000 146.713 -1.713 -0.414

Obs4 1 87.000 183.000 182.738 0.262 0.063

Obs5 1 118.000 220.000 219.880 0.120 0.029


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Observations and fitted model

0

50

100

150

200

250

40 50 60 70 80 90 100 110 120

d.mat

trading / Standardized residuals

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

0 50 100 150 200 250

trading


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d.mat / Standardized residuals

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

40 50 60 70 80 90 100 110 120

d.mat

Standardized residuals

-1 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1

Obs1

Obs2

Obs3

Obs4

Obs5

Standardized residuals


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