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Chapter - 1 INTRODUCTION 1
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Page 1: Sanjay final project of mahindra finance

Chapter - 1

INTRODUCTION

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Banking Industry

1.1 Introduction

This project is about the investment preference of the customers in fixed deposit and

mutual fund. These are the investment instrument which bears comparatively low risk

and gives higher and sometimes moderate return. There are a large number of Banks and

other financial institutions which provide these investment facilities. In investors point of

view this report will be beneficial in terms of providing information that between these

instruments which investment will cover less risk of sinking of invested fund and

generate more return. In this study the analysis of various institutions has done which will

help the investor to stand on right choice. In company point of view this report will help

in terms of providing the information that how much population is aware about these

instruments and how many are interested in investment through these instruments.

Accordingly company can plan their promotional activities, promote their existing

schemes and plan their future products. This will help company to formulate new market

policies and launching new products in market. This will provide competitive benefit to

the company in market. This report includes the sufficient information about company,

existing products of company, performance of company and its products, relative

comparison of Mutual Fund and Fixed Deposit, relative comparison of investment

products of this company and other companies in the market. This report also includes

the recommendations and suggestions in order to increase marketing efficiency of the

company.

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1.2 WHAT IS BANKING

A bank is a financial institution and a financial intermediary that accepts deposits and

channels those deposits into lending activities, either directly by loaning or indirectly

through capital markets. A bank is the connection between customers that have capital

deficits and customers with capital surpluses. Learn the simple and concise definition of

banking. The definition of banking varies from country to country and in this example we

are trying to define banking in most simple and generic terms.

The banking industry is a dynamic and significant component to individuals, corporates,

small and medium businesses, national and global, economic, socio and financial well-

being. This industry cultivates financial relationships with customers of all sizes to

supply financial products and services that stimulate economic growth, and act as a

catalyst to national and global economics. The industry players produce a variety of

services from savings accounts to home and business loans and mortgages, and from fund

mobilization to handling global mergers and acquisitions. This industry is sensitive to

regulatory, technological, and economic factors and has its own share of challenges

largely attributable to these factors. New developing economies are changing the global

landscape of economic wealth and economic instruments and banking industry is

adapting very fast to provide new generation of innovative banking products and

services. Banking industry is adopting unique strategies to overcome these challenges and

move forward to deliver financial objectives to people and organizations..

According to banking regulation act 1949 - “Banking is accepting of deposits for

the purpose of lending and investing from the people or public which are repayable on

demand or otherwise and withdrawal by cheque draft and otherwise.”

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1.2.1 Banking Industry

A bank is a financial institution and a financial intermediary that accepts deposits and

channels those deposits into lending activities, either directly by loaning or indirectly

through capital markets. A bank is the connection between customers that have capital

deficits and customers with capital surpluses.

Due to their influence within a financial system and the economy, banks are highly

regulated in most countries. Most banks operate under a system known as fractional

reserve banking where they hold only a small reserve of the funds deposited and lend out

the rest for profit. They are generally subject tominimum capital requirements which are

based on an international set of capital standards, known as the Basel Accords.

Banking in its modern sense evolved in the 14th century in the rich cities of Renaissance

Italy but in many ways was a continuation of ideas and concepts ofcredit and lending that

had its roots in the ancient world. In the history of banking, a number of banking

dynasties have played a central role over many centuries.

1.2.2 HISTORY OF BANKING-

Banking in the modern sense of the word can be traced to medieval and

early Renaissance Italy, to the rich cities in the north

like Florence, Lucca, Siena, Veniceand Genoa. The Bardi and Peruzzi families dominated

banking in 14th century Florence, establishing branches in many other parts

of Europe. One of the most famous Italian banks was the Medici Bank, set up

by Giovanni di Bicci de' Medici in 1397. The earliest known state deposit bank, Banco di

San Giorgio (Bank of St. George), was founded in 1407 at Genoa, Italy.

The oldest bank still in existence is Monte dei Paschi di Siena, headquartered

in Siena, Italy, which has been operating continuously since 1472. It is followed by

Berenberg Bank of Hamburg (1590) and Sveriges Riksbank of Sweden (1668).

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The origins of banking can be traced to ancient times, starting with rudimentary money

lending and bartering practices for agricultural and other commodities. But it gained great

momentum only after industrial revolution which commenced in Europe in the 17 th

century, when Europeans started establishing colonies around the world and the need for

credit for trade was felt like never before.

Ever since bank started operating, their essential mode of operations remained much the

same until late into 20th century. But the arrival of Internet in 1990s changed all that. A

plethora of possibilities emerged for worldwide commerce, which naturally impact the

functioning of banks as well. Even now, technology evolution shape the nature and extent

of global economic activity and continuous to fundamentally alter the global banking

landscape.

1.2.3 BANKING IN INDIA-

In India, banking as an institution originated in the late 18 th century and primarily catered

to needs of the British. Post-independence, the nationalization of major private sector

banks in 1969 – an important milestone in Indian banking system – made banking

accessible to the unbanked population in India.

The economic liberalization in early 1990s ushered in the era of privatization wherein

new private banks – the ‘new generation tech-savvy banks’ – were launched. A few

foreign banks commenced their India operation as well. All these banks were quick to

leverage emerging technology, were competitive in wooing them over by providing

professional services. This helped infuse a sense of urgency in public sector banks and

older private sector banks to mend their ways, which in turns completely revitalized

banking operation in India.

India’s banking sector is growing at a fast pace. It has become one of the most preferred

banking destinations in the world. Indian markets provide growth opportunities, which

are unlikely to be matched by the mature banking markets around the world. FICCI

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conducted a survey to analyze the potential offered by Indian Banking System and

achievement of global competitiveness by Indian banks.

 Some of the major strengths of the Indian banking industry, which have helped mark its

place on the global banking scene as highlighted by our survey respondents were

Regulatory Systems (84.21%), Economic Growth Rate   (63.15%), Technological

Advancement (52.63%), Risk Assessment Systems (47%) and Credit Quality (42.1%)

Some of the areas that need to be geared up for future growth, identified by the survey

respondents are Diversification of markets beyond big cities (84.2%), HR Systems

(63.15%), Size of banks (52.63%) High Transaction Costs (47.3%), Banking

Infrastructure (42%) and Labour Inflexibilities (42%).

To a question on achieving global competitiveness, Consolidation in the financial sector

has emerged to be the most significant measure required to create world class banking

system followed by Strict Corporate Governance Norms, Regional Expansion, Higher

FDI limits and FTA’s.

To a question on achieving global competitiveness, Consolidation in the financial sector

has emerged to be the most significant measure required to create world class banking

system followed by Strict Corporate Governance Norms, Regional Expansion, Higher

FDI limits and FTA’s.

1.3 NBFC-Non-Banking Financial Company

Non-bank financial companies (NBFCs) are financial institutions that

provide banking services without meeting the legal definition of a bank, i.e. one that does

not hold a banking license. These institutions are not allowed to take deposits from the

public. Nonetheless, all operations of these institutions are still exercised under bank

regulation. However this depends on the jurisdiction, as in some jurisdictions, such as

New Zealand, any company can do the business of banking, and there are no banking

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licenses issued. If an organisation in New Zealand intends to describe itself as a bank and

intends to use the word bank in its title it must first receive approval and official

registration and thus licence from the nation's central bank, the Reserve Bank of New

Zealand.

NBFCs offer most sorts of banking services, such as loans and credit facilities, private

education funding, retirement planning, trading in money markets, underwriting stocks

and shares, TFCs(Term Finance Certificate) and other obligations. These institutions also

provide wealth management such as managing portfolios of stocks and shares,

discounting services e.g. discounting of instruments and advice on merger and

acquisition activities. The number of non-banking financial companies has expanded

greatly in the last several years as venture capital companies, retail and industrial

companies have entered the lending business. Non-bank institutions also frequently

support investments in property and prepare feasibility, market or industry studies for

companies.

However they are typically not allowed to take deposits from the general public and have

to find other means of funding their operations such as issuing debt instruments.

1.3.1 Difference between banks & NBFCs

An often heard question from the laymen is what is the difference between a bank and a

non banking finance company? Say for example, what would be the difference between

ICICI Bank and Mahindra Finance. Yes, banks and other non banking financial

institutions differ in some functional area.

NBFCs lend and make investments and hence their activities are akin to that of banks.

However there are a few differences as given below:

NBFC cannot accept demand deposits;

NBFCs do not form part of the payment and settlement system and cannot issue

cheques drawn on itself

NBFC cannot issue Demand Drafts like banks

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Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation

is not available to depositors of NBFCs, unlike in case of banks.

While banks are incorporated under banking companies act, NBFC is

incorporated under company act of 1956

Other features of NBFCs are

The NBFCs are allowed to accept/renew public deposits for a minimum period of

12 months and maximum period of 60 months. They cannot accept deposits

repayable on demand.

The deposits with NBFCs are not insured. The repayment of deposits by NBFCs

is not guaranteed by RBI.

1.4 Mahindra & Mahindra Financial Services

1.4.1 Company History -

We were incorporated on January 1, 1991 as Maxi Motors Financial Services Limited

and received certificate of commencement of business on February 19, 1991. The name

was changed to Mahindra & Mahindra Financial Services Limited on November 3, 1992.

We are registered with the RBI as an NBFC with effect from September 4, 1998 under

Section 45IA of the Reserve Bank of India Act 1934.

On October 2nd, 1945, Mahindra & Mohammed was set up as a franchise for assembling

jeeps from Willys, USA.

Two years later, Mahindra & Mohammed changed its name to Mahindra & Mahindra.

Ghulam Mohammed migrated to Pakistan post-partition and became the first Finance

Minister of Pakistan. Mahindra and Mahindra started trading steel on behalf on European

suppliers. In 1955, Mahindra and Mahindra was converted to a public limited company.

Soon after that the Mahindra tools division started. After the formation of Mahindra

tools,

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Mahindra Engineering and Chemical products was formed. In 1983, M&M led the Indian

tractor segment. Post that incident they formed a joined venture with British

Telecommunications to form Mahindra British Telecom.

Keshub Mahindra was made the Chairman of Mahindra in 2007 from the post of Vice-

Chairman and Managing Director. Mahindra has total revenues of US 12.5 billion dollars

and employs more than 1,19,900 people around the world. The company has coverage in

the vehicles market, the tractor market, information technology as well as significant

present in financial services, leisure and hospitality.

1.4.2 Company Background

Mahindra and Mahindra Financial Services Limited is one of India’s leading non-

banking finance companies. Through a vast network of branches, they provide

personalised finance for the widest range of utility vehicles, tractors and cars, focusing on

the rural and semi-urban sector.

MMFSL’s rural financing is considered as the cornerstone of poverty reduction, rural

development and inclusive growth in many parts of the country. With a majority of our

country’s population living in rural India, their loans to over 10,00,000 customers

belonging to the low income groups have proved to be a catalyst in helping rural India

surge ahead in a big way.

Financials :-

F-2011 F-2010 F-2009

Total Income 2,01,258 1,56,880 1,38,446

Profit after Tax 46,311 34,271 21,452

Earning per share

Basic (Rs.)

47.85 35.75 22.46

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MAHINDRA FINANCE

TYPE PUBLIC COMPANY

TRADED AS NSE: M&MFIN

BSE: 532720

INDUSTRY FINANCE

FOUNDED 1991

HEADQUARTERS MUMBAI, MAHARASHTRA, INDIA

AREA SERVED INDIA

KEY PEOPLE BHARAT N DOSHI, CHAIRMAN

U Y PHADKE, DIRECTOR

RAMESH IYER, MD

PRODUCTS FINANCIAL SERVICES

REVENUE 27,945.9 MILLION (US$480 MILLION) (2012)

TOTAL ASSETS   18,5615.6 MILLION (2012)

TOTAL EQUITY   1026.9 MILLION (2012)

EMPLOYEES 9,700+ (2012)

PARENT MAHINDRA GROUP

SUBSIDIARIES MAHINDRA INSURANCE BROKERS LIMITED

MAHINDRA RURAL HOUSING FINANCE

WEBSITE MAHINDRAFINANCE.COM

Vision

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“TO BE A LEADING FINANCIAL SERVICES PROVIDER IN SEMI-URBAN AND RURAL

INDIA.”

Mission

“TO TRANSFORM RURAL LIVES AND DRIVE POSITIVE CHANGE IN THE

COMMUNITIES.”

Board of Directors

1 } Bharat N Doshi Chairman

2 } Uday Y Phadke Director

3 } Dhananjay Mungale Director

4 } Manohar G Bhide Director

5 } Piyush Mankad Director

6 } Ramesh Iyer Managing Director

7 } Rama Bijapurkar Director

8 } Arnavaz M Pardiwala Company Secretary

9 } Pawan Kumar Goenka Director

1.4.3 Corporate Profile

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In 1945, Mahindra assembled the Willys Jeep in India and is now a US $7.1 billion

Indian multinational. The total workforce caps at 1,11,900 people in over 100 countries

and the company is a leader in utility vehicles, tractors and information technology, with

a significant and growing presence in financial services, tourism, infrastructure

development, trade and logistics. Mahindra’s headquarters are in Mumbai India.

Mahindra is among the top tractor brands in the world. It sells everything from two-

wheelers to CVs, UVs, SUVs and the sedan. Mahindra recently acquired a majority stake

in REVA Electric Car Co Ltd. (now called Mahindra REVA), strengthening its position

in the Electric Vehicles domain.

Tech Mahindra acquired the leading global business and information technology services

company, Satyam Computer Services. The company is now known as Mahindra Satyam.

Mahindra is also one of the few Indian companies to receive an A+ GRI checked rating

for its first Sustainability Report for the year 2007-08 and has also received the A+ GRI

rating for the year 2008- 09.

Financial Service

The necessity of a financial base for the groups' operations led to the foray into financial

services through Mahindra Finance and its subsidiaries. Together, a cluster of these

companies forms the Trade and Financial Services Sector of the Mahindra Group.

Mahindra & Mahindra Financial Services Ltd (Mahindra Finance) is one of India's

leading non-banking finance companies focused on providing finance for utility vehicles,

tractors and cars in the rural and semi-urban sector. Mahindra Finance currently has the

largest network of over 436 branches all over India. It has entered into more than 600,000

customer contracts and has disbursements of around Rs. 21000 crore since inception.

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Mahindra Rural Housing Finance Ltd (MRHFL) is a wholly owned subsidiary of

Mahindra & Mahindra Financial Services (MMFSL). It has been set up with an objective

of meeting the housing finance needs of the rural/semi urban customers across the

country.

Automotive

Mahindra is the market leader for utility vehicles in India and also exports to several

countries in Europe, Africa, the Americas, South Asia and the Middle East. The

automotive unit, backed by a cutting edge R&D lab staffed by more than 300 engineers,

has a diverse product portfolio ranging from mass transport solutions to sports utility

vehicles like the Scorpio and Bolero and multi-utility vehicles like the Xylo.

Mahindra Defense Systems provides total solutions for the entire range of light combat /

armored vehicles and their derivatives for defence / security forces. It has incorporated

state-of-the-art technology into its products at a reasonable cost and has emerged as the

largest private sector company for the supply of bullet-proof vehicles.

Mahindra Renault Pvt. Ltd. (MRPL), Mahindra in collaboration with Renault

launched India's first wide body car, Logan. The widely acclaimed Logan redefines its

segment in terms of spaciousness as well as performance and technology with the latest

generation dci common rail engine.

Mahindra Navistar Automotives Ltd. (MNAL), a joint venture between Mahindra &

Mahindra Limited and International Truck and Engine Corporation of USA,

manufactures trucks and buses for Indian and export markets. It also provides component

sourcing and engineering services to International Truck and Engine Corporation.

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Mahindra Navistar Engines Pvt. Ltd. (MNEPL), a second joint venture, focuses on

producing diesel engines for Medium and heavy Commercial vehicles in India.

1.4.4 Company Founder(s)

Mahindra & Mahindra was founded by two brothers - Jagdish Chandra Mahindra &

Kailash Chandra Mahindra. KC Mahindra went to the United States of America as

Chairman of the India Supply Mission. He met Barney Roos, inventor of the rugged

'general purpose vehicle' or Jeep and had a flash of inspiration: wouldn't a vehicle that

had proved its invincibility on the battlefields of World War II become ideal for India's

rugged terrain, he thought. The Mahindra brothers joined hands with Ghulam

Mohammed to become a franchise for assembling jeeps from Willy, USA. In the North

Indian city of Ludhiana in Punjab, Jagdish Chandra Mahindra was born. The eldest of

nine children, he lost his father at an early age. He believed strongly in education and

made sure that his brothers and sisters studied hard. Jagdish Chandra studied at Veermata

Jijabai Technological Institute (VJTI) Mumbai, one of India's premier engineering and

technical institutes. JC’s first stop job was with Tata Steel as the senior Sales Manager

from 1929 to 1940.

KC Mahindra was also born in Punjab. KC studied at the Government College, Lahore

and Cambridge, UK. When he graduated from Cambridge, Mr. Sachinanda Sinha, Vice

Chancellor of Patna University, introduced him to Mr. R.N. Mukherjee, Senior Partner of

Messrs. Martin & Company. He started editing the monthly magazine INDIA and the

Hindustan Review.

KC moved to Bombay with his brother JC in 1946 to found Mahindra & Mohammed.

Under his leadership as Chairman, Mahindra & Mahindra established itself as a major car

player in the Indian market. He also served as Director of RBI, Air India, and Hindustan

Steel and Chairman of Indian Aluminum Company.

JC died in 1951 while KC died in 1963.

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Mahindra has seven auto manufacturing facilities

Igatpuri (Engine Plant)

Haridwar (3 wheeler / GiO plant)

Kandivli (utility vehicles)

Nasik (utility vehicles)

Chakan

Zaheerabad (LCVs & 3 wheelers)

Completely Knocked Down Unit Plants in Egypt and Brazil

1.4.5 Recognition

Anand Mahindra won the Qimpro Platinum Standard (Business) 2008 award for

excellence in business practices.

Mahindra Holidays & Resorts India Limited (MHRIL) won the CNBC AWAAZ Travel

Award for its LakeView Resort, Munnar. The award was received in the category of

‘Best Resort for Health and Rejuvenation.’ Ulrich Wolffram, Head of Operations of

MHRIL received the award.

Mahindra was felicitated with the 'Brand Communicator of the Year' at the 9th Asia

Pacific PR Award. The award was received by Roma Balwani, head of corporate

communications of Mahindra and Mahindra.

Mahindra & Mahindra was awarded the ICSI National Award for Excellence in

Corporate Governance for the year 2008 at a function held in Vigyan Bhawan, New

Delhi. The award is for companies which follow the highest standards of corporate

governance and best practices which are worthy of notice. The Institute of Company

Secretaries of India (ICSI), a premier professional body has been set up under an Act of

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Parliament to develop and regulate the profession of Company Secretaries. The award

was received by Arun Nanda, Executive Direcotr of Mahindra and Mahindra Limited.

There were many jury members present at the award ceremony.

1.4.6 International Operations

Mahindra and Mahindra has been connected globally since its founding in 1945. It has a

setup in North America, South America, Europe, Middle East, Africa, Asia and Australia.

In the US market Mahindra works with Caterpillar and John Deere and GE. The company

also helps American companies to source materials from India. The company also

consults various other consulting companies from the Silicon Valley.

The company also works with agribusiness and farm equipment, automotive,

components, consulting services, energy and IT. The company sells tractors in China, and

also sells fresh products to South East Asia. They also help Bangladesh and Nepal with

generator sets so that there is supply of power at the homes in these countries improving

the standard of living at home.

1.4.7 Awards and Achievements- Key Events in our business history

Calendar Year Event

1993 Commenced financing of M&M UVs

1995 First branch opened outside Mumbai, at Jaipur

1996 Commenced financing M&M dealers for purchase of Tractors.

1998 Launched pilot project for retail tractor Financing.

1999 Commenced tractor retail financing in rural and semi-urban areas.

2001 Total Assets crossed Rs. 10 billion

2002 Commenced financing of non-M&M vehicles Received Tier II debt

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from International Finance Corporation. Our first securitization

transaction of Rs. 434.8 million

2004 Long term credit rating of AA+/Stable Branch opened in Port Blair

Listing of non convertible debentures on BSE on the wholesale debt

market segment Securitisation of tractor assets of Rs. 256.6 million.

2005 Tie-up with HPCL MIBL became our wholly owned subsidiary

Commenced distribution of

Third party mutual funds.

2006 -Following a successful IPO, subscribed nearly 27 times more,

Mahindra & Mahindra Financial Services Ltd (MMFSL) priced its shares

at Rs 200 each. The original price band for the issue of two crore

shares of Rs 10 each, for cash at a premium decided through the

book-built process, had been fixed at Rs 170-200 a share.

-Mahindra & Mahindra Financial Services Limited has informed that Mr.

Narayan Shankar has ceased to be the Company Secretary of the company

with effect from October 26,2006. Ms. Angarika Baviskar continue to

hold the post of Deputy Company Secretary and Compliance Officer of

the company.

-Tied up with Maruti Udyog Limited.

-Reached a new benchmark with 400 branches.

2007 -Commenced Home Loans Business through our subsidiary Mahindra

Rural Housing Finance Limited.

2008 -Received 12.5% equity participation from NHB for our Subsidiary

Mahindra Rural Housing Finance Ltd.

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-Preferential allotement of shares to Standard Chartered Private

Equity Ltd. & TPG Axon Private Equity Ltd.

2009 -Commenced Fixed Deposits Program.

2010 - More than 2 lakh new customer contracts in a financial year for the

first time.

- Branch network crosses 550 branches.

2011 - Maiden QIP Issue.

- Joint Venture with Rabobank subsidiary for tractor financing in USA.

2012 - Mahindra Finance wins the inaugural Porter Prize in the category of

Creating Distinctive Value.

- Mahindra Finance are first runners up at CNBC TV18 Best Bank &

Financial Institution awards.

- Ranked 9th in the prestigious Dun & Bradstreet's India's Top 500

Companies 2011(released on 1st June, 2012), based on the total income

in the FIs/ NBFCs/ Financial Services Sector.

2013 -Company has splits its Face value of Shares from Rs 10 to Rs 2.

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1.4.8 Products:

Mahindra Finance is a Non Banking Financial Organisation (NBFC). The main areas in

which it deals are Financing, Fixed Deposit and Pan India distributor of Mutual Funds.

In financing activities it includes-

MMFSL Group Structure

Mahindra &Mahindra Financial Services(MMFSIL)

1. Mahindra Insurance Brokers Ltd (100%)

2. Mahindra Rural Housing Finance Ltd (87.5%)

3. Mahindra Finance USA LLC (49%)

4. Mahindra & Business Consulting Services Pvt. Ltd (100%)

5. 12.5% with National Housing Bank.

Asset finance- As a part of its core business it provides loan for utility vehicles as

well as construction equipment. It offers loan for both, new as well as pre-owned

vehicles.

Personal loan- It offers loan to fund medical treatment, wedding, education,

working capital of farming needs, purchase of furniture and consumer durables

and so on.

Insurance broking- Mahindra Insurance Brokers Limited, a wholly owned

subsidiary of Mahindra Finance, mainly deals with offering direct life and non-

life insurance broking for corporations and retail customers.

Housing finance- We are catering to the high demand for home loans from semi-

urban and rural areas through our wholly owned subsidiary- Mahindra Rural

Housing Finance Limited, which was incorporated during the year. With this we

intend to capitalize on our distribution reach for creating a niche in this sector.

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Mutual fund distribution- Mutual fund is a trust that pools the saving of a

number of investors who share a common financial goal. The money thus

collected is then invested in invested in capital market instruments such as shares,

debentures and other securities. The income earned through these investments and

the income appreciation realised by its unit holders in proportion to the number of

units owned by them.

The Mahindra Finance Mutual Fund distribution offers investment advisory

services through its brand “Finsmart”, with a team of AMFI certified

professionals. It is vigorously pushing forth to make mark on mutual fund arena.

Since its inception in 2006 the division has grown in reach from 5 states to 10 and

caters to over 20000 customers.

Mahindra Finance encompasses needs of clients. So while it believes in

making assets easily available, it also believes in catering to those who want to

create wealth from these assets. Its Investment Advisory Services acts as an

avenue to help create and multiply wealth. Recently it has received the necessary

permission from Reserve Bank of India (RBI) to start the distribution of Mutual

Fund products through its network. Earlier it was only participating in the liability

requirements of our customers but with a mutual fund distribution business, it is

participating in their asset allocation.

When it comes to investing, everyone has unique needs based on their

own objectives and risk profile. While many investment avenues such as fixed

deposits, bonds etc. exist, it is usually seen that equities typically outperform

these investments, over a longer period of time. Hence company makes

suggestion that, systematic investment in equity allows one to create substantial

wealth.

However, investing in equity is not as simple as investing in bonds or

bank deposits, because only proper allocation of portfolio gives maximum returns

with moderate risk, and this requires expertise and time. Its Investment Advisory

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Services help investors to invest their money in equity through different Mutual

Fund Schemes. It ensures the best for its clients by identifying products best

suited to individual needs.

Fixed Deposit- Fixed Deposit is a scheme in which a definite amount is invested

for a certain period. The institution in which the money has been invested

provides fixed interest to the investor. Different institutions offer different interest

rates.

1.4.9 Mahindra Finance offers-

(1) Personalised Service- We believe in providing personalised service and

individual attention to each client to ensure that we understand their investment

goals and help them achieve it.

(2) Professional Advice- We offer expert advice on equity and debt portfolios with

an objective to provide consistent long-term return while taking calculated market

risks. Our approach helps our clients build a proper mix of products, and not

concentrate on just one individual product. Hence, serving their long-term

objectives in the best way.

(3) Long-term Relationship- We believe that long-term vision is the only means to

steady wealth creation. However to achieve this one also needs to take advantage

of short-term market opportunities while not loosing sight of long-term

objectives. Hence we partner all our clients in realising their long-term vision.

(4) Personalised Service- We believe in providing personalised service and

individual attention to each client to ensure that we understand their investment

goals and help them achieve it.

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(5) Professional Advice- We offer expert advice on equity and debt portfolios with

an objective to provide consistent long-term return while taking calculated market

risks. Our approach helps our clients build a proper mix of products, and not

concentrate on just one individual product. Hence, serving their long-term

objectives in the best way.

(6) Long-term Relationship- We believe that long-term vision is the only means to

steady wealth creation. However to achieve this one also needs to take advantage

of short-term market opportunities while not loosing sight of long-term

objectives. Hence we partner all our clients in realising their long-term vision.

(7) Access to Research Reports- We provide our clients with access to the expert

opinion of economists and analysts from CRISIL, one of the leading financial

research and rating companies of India. This is because, we believe that unbiased

research is the key to providing sound advice in making informed investment

decisions.

(8) Transparency and Confidentiality- Our clients receive regular portfolio

statements from us via email. They can also view the detailed performance of

their investment portfolio on the web, the access to which is restricted to the client

only. Moreover, our monitoring system enables us to detect any unauthorised

access to the portfolio.

(9) Flexibility- To facilitate smooth dealing and consistent attention, all our clients

are by their individual Relationship Executives. Relationship Executives provide

you with completely hassle-free, customised services taking care of all the

administrative aspects of your investments. This includes submission of

application forms to fund houses and a monthly report on the overall performance

of your investment portfolio.

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1.4.10 Company’s clients also enjoy :

(1) Information updates on a daily basis through email

(2) Ease of viewing their portfolio on the internet

(3) Investment advice at their convenience

(4) Weekly, fortnightly and monthly reports sent to them via email, on request

(5) The freedom to contact us, anywhere in India

(6) Access to the multiple products offered by Mahindra Finance through their

Relationship Executive.

1.4.11 Credit Rating – FAAA by Crisil (indicates highest safety). The Credit Rating

Information Services of India Limited (CRISIL). The rating provides an independent

assessment of an entity's current performance and an expectation on its "balanced value

creation and corporate governance practices" in future. The bank was assigned a 'CRISIL

GVC Level 1' rating in January 2007 which indicates that the bank's capability with

respect to wealth creation for all its stakeholders while adopting sound corporate

governance practices is the highest.

CREDIT RATING

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1.4.12 Competitors of Mahindra & Mahindra Financial Services

Limited-

Name Of Bank

6 Month -

1 Year

1-2

Years

2-3

Years

3-5

Years

Above 5

years

Axis Bank 7.50%

8.50-

8.75% 8.75% 8.75% 8.50%

Bank Of

Baroda

7.30 -

7.75% 8.75% 8.75%

8.75-

8.90% 8.75%

Bank of India 8.00% 9.00% 9.00% 9.00%

8.75-

9.00%

Bank of

Maharastra

7.50-

8.50%

9.00-

9.10% 9.00%

9.00-

9.10% 9.00%

Canara Bank

7.25-

8.50%

9.00-

9.10% 9.00% 9.00%

8.75-

9.00%

Central Bank

Of India 7.75%

9.00-

9.15% 8.75% 8.50% 8.50%

Corporation

Bank

8.75-

9.00% 9.00% 9.00% 9.00% 8.75%

Dena Bank 8.50% 9.00%

8.75-

9.25% 9.00%

8.75-

9.00%

Development

Credit Bank 6.75%

8.75-

9.00% 9.30% 8.75% 8.75%

Dhanlaxmi

Bank

8.50-

8.75%

8.50-

9.25% 9.00% 9.00% 9.00%

HDFC Bank

7.50-

8.00%

8.00-

8.75% 8.75% 8.75% 8.25%

ICICI Bank

7.00-

7.25%

7.50-

9.00% 8.75% 8..75% 8.50%

IDBI Bank

8.65-

8.75%

8.75-

9.00% 9.00% 9.00%

8.50-

8.75%

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Indian

Overseas Bank 8.50% 9.00% 9.00% 9.00% 9.00%

ING Vysya 8.70% 9.25% 9.25% 9.00% 8.50%

Kotak

Mahindra

Bank

8.50-

9.00% 9.00%

8.75-

9.00% 8.75% 8.50%

Oriental Bank

of Commerce 8.50% 9.00% 9.00% 9.00% 9.00%

State Bank Of

India 6.50% 8.75% 8.75% 8.75% 8.75%

Syndicate Bank

7.75-

9.00%

8.50-

9.00% 8.00% 8.00% 8.00%

The Federal

bank

7.00-

8.50% 9.00% 9.00% 8.75% 8.75%

Union Bank of

India 8.50% 9.00% 9.00% 9.00%

8.75-

9.25%

Vijaya Bank 8.50% 9.00% 9.00% 9.00% 9.00%

Shriram 9.25% 9.75% 10.75% 10.75% 10.75%

Mahindra &

Mahindra

Financial

Services Ltd. 9.00%

9.25-

9.75% 10.00% 10.25% 9.75%

1.4.13 S.W.O.T. ANALYSIS OF MAHINDRA FINANCE

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STRENGTHS  

Mahindra Finance has advantage of brand name of Mahindra &Mahindra Group.

Mahindra Finance has large asset base of Rs.5000 crores.

It has large distribution channels with 350 branches all over the nation.

Company has large financial base as its IPO was subscribed 26.88 times.

Mahindra Finance is leading company in NBFCs.

Mahindra Finance has advantage of brand name of Mahindra & Mahindra Group.

The credit rating of this company is very high.

It has CRISIL FAAA credit rating.

There are lot of branches in India.

The main advantage is that Mahindra Finance has many type of product which

help the financial sector.

Customers typically rebel against price increases by switching to competing

products, but if a company has pricing power, customers will continue

using Mahindra finance’s products and services.

Superior technology allows Mahindra finance to better meet the needs of their

customers in ways that competitors can’t imitate.

A strong supply chain helps Mahindra finance obtain the right resources from

suppliers and delivery the right product to customers in a timely manner.

Financial leverage allows Mahindra finance to use their balance sheet to expand

their business and increase their profits.

Lower costs lead to higher profits for Mahindra finance. A low cost leader can

undercut rivals on price.

 Mahindra finance only needs to target new customers in order to grow their

business.

WEAKNESSES  

Mahindra Finance provides advisory service and they do not have share broking facility

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which their competitors have.

Mahindra Finance is not known to the people.

Mahindra Finance does not make advertisement of its product.

A tarnished reputation can hurt Mahindra finance’s brand in the eyes of a

consumer.

A tarnished reputation can hurt Mahindra finance’s brand in the eyes of a

consumer.

A lack of scale means Mahindra finance’s cost per unit of output is very high

Increasing volume, while maintain quality, would help reduce those costs.

Weak customer service hurts Mahindra finance’s reputation and causes customers

to flee to competitors, who are more respondent.

Bad acquisition can hurt Mahindra finance by increasing their costs and reducing

the value of their combined businesses.

A weak brand means Mahindra finance can’t charge the same prices for goods

and services as their competitors, because consumers don’t value the brand.

OPPORTUNITIES

Mahindra Finance has entered into mutual fund distribution which is growing as per

Indian market development. Automobile sector in India is growing as foreign companies

entering in India which is useful for Mahindra Finance as it provides vehicle loans.

Mahindra Finance helps individuals in making financial planning which is most

profitable in as investment trend is changing in India.

Fragmented markets provide many opportunities for Mahindra finance to expand

and increase market.

Leveraging the balance sheet allows Mahindra finance to quickly expand into

other markets.

The online market offers Mahindra finance the ability to greatly expand their

business. Mahindra.

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Greater innovation can help Mahindra finance to produce unique products and

services that meet.

New services help Mahindra finance to better meet their customer’s needs.

New technology helps Mahindra finance to better meet their customer’s needs

with new and improved.

New products can help Mahindra finance to expand their business and diversity

their customer base.

THREATS

The biggest threat for Mahindra Finance in the market is new entry of foreign non-

banking financial institutions.

In case of vehicle financing company has tough competition from large banks like State

Bank of India, ICICI etc.

A bad economy can hurt Mahindra finance’s business by decreasing the number

of potential.

The availability of substitute products hurts Mahindra finance’s ability to raise

prices.

Consumers can change their tastes very quickly.

Politics can increase Mahindra finance’s risk factors, because governments can

quickly change.

Changes to government rules and regulations can negatively affect Mahindra

finance.

Intense completion can lower Mahindra finance’s profits, because competitors can

entice consumers.

1.5 My work during the Internship:

I have worked on these two parameters:

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1. Fixed deposit

2. Broker empanelment

Fixed deposit:-

I have worked on fixed deposit and broker empanelment got the data of 238 people and I

called them told about the scheme of fixed deposit both cumulative and non cumulative

scheme. The initial starting rate of interest of Mahindra and Mahindra financial service

ltd is 9.25% in cumulative scheme for one year and in non cumulative scheme is 9% in

half yearly and in quarterly it is 8.90% with this I went to people by taking a appointment

from them.Now a days it is very difficult to convince a customer for FD because .People

are more interested in govt bonds and securirties. The main reason behind it is the

security concern . So people are not willing to pay the money or we can say store their

money in the reputed organizing which is ensuring the highest security through FAAA

CRISIL rating. This is because of our traditional culture because people still believe in

depositing their money into banks where the rate of interest is less or if they willing to

store their money they will give it to the Govt. banks rather than these kinds of private

organizing. On the other way if they are ready to invest in FD, the interest factor

comesinto existence where Mahindra Finance is lacking behind because SHRIRAM is

giving more than Mahindra. So I took a knowledge of that also and got to know the rate

of interest. And what are the loop holes of other company’s’ scheme. Yes shriram is

giving more rate of interest but they deal in NCD the customer can not redeem their

amount before the maturity period In NCD . So I take the advantage of this Information

to convince people that this will not happen in Mahindra and Mahindra you can redeem

your amount at any time.and this is my second week experience in the field.

Documents required in broker empanelment’s are:-

1. Application Form

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2. Resident Proof

3. Photo Identity Proof

4. Pan Card

5. Passport Size Photo

6. Cancelled Cheque

Process Of Fixed Deposit:-

1. I was Given the data of some good customers of Mahindra Finance.

2. I made a call to customers

3. Took the appointment for meeting of interested customers

4. Made them understand about the product

5. Made them convince to buy this product

6. Finally sold the products to some of customers and took their documents and sent

them to Patiala Branch for further process because this FD process is not localized

based process.

Process Of Empanelment :-

1. I was given the data of 238 AMFI certified people of Jalandhar.

2. Firslty make a call to them.

3. Take the appointment of meeting.

4. Make them clear on each and every aspect of fixed deposit.

5. Took the required documents of those who are ready to sell this product.

6. Finally I did the empanelment’s and sent the documents to Patiala Branch.

Broker Empanelment:-

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Anyone can become the broker of the Mahindra Finance. But the person who is

registered under AMFI will get the extra benefits. So the reason behind broker

empanelment is because these brokers have better customer relations than the company

itself so they can easily convince the customer for the FD. On the other hand company

will take time to make such kind of networking which the broker already has sowith the

help of brokers company target the customers and in retun broker gets the commission on

each and every FD. So I got to understand about the brokerage system of Mahindra amd

Mahindra financial service ltd. With this knowledge I convinced some AMFI AND NON

AMFI certified broker to do a work with Mahindra and Mahindra and provide good

services by providing all the documents time to time, solve their queries and also meet

their customers. So this helps me a lot to create a healthy relation with that people.

Commission of the Brokers

Time Period                 Rate of Interest

12 month                      0.25% of the deposit amount

18 month                      0.50% of the deposit amount

24 month                      0.75% of the deposit amount

36, 48, 60 month          1.00% of the deposit amount

1.25% of the deposit amount (If you are AMFI certified)

Documents required in broker empanelment’s are:-

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1.Pan Card (Compulsory)

2. Address Proof

3.Cancelled Cheque

4. ARN Number (IF AMFI CERTIFIED)

At present Mahindra Finance has started to accept fixed deposit from public from

1st January 2009. The brief details of the FD scheme are as below-

Non-cumulative half yearly scheme-

Minimum 

Amount 

Period 

(Months)

Interest *#

p.a.

Rs. 25,000

12 9.00%

24 9.75%

36 10.00%

Cumulative scheme-

Minimum 

Amount 

Period 

(Months)

Amount 

Payable

Interest*

p.a.

Effective 

Yield p. a.**

Rs. 10,000

12 Rs. 10,925 9.25% 9.25%

18 Rs. 11,510 9.75% 10.07%

24 Rs. 12,202 10.00% 10.50%

36 Rs. 13,401 10.25% 11.34%

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Chapter 2

RESEARCH METHODOLOGY

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2.1 Research Methodology

Research is a common parlance which refers to search for knowledge. It is a procedure

of logical and systematic application of the fundamentals of science to the general and

overall questions of a study and scientific technique, which provide precise tools, specific

procedures, and technical rather philosophical meaning for getting and ordering the data

prior to their logical analysis and manipulating different type of research designs is

available depending upon the nature of research project, availability of manpower and

circumstances.

Research methodology is a way to systematically solve research problem In it. we study

the various steps that are generally adopted by researcher in studying his research

problem along with the logic behind them. It is necessary for a researcher to know not

only the research methods/techniques but also the methodology. It may be noted, in the

context of planning & development, that the significance of research lies in its quality

and not in quantity. Researchers should know how to apply particular research

techniques, but they also need to know which of these methods or techniques, are

relevant and which are not, and what would they mean and indicate and why.

2.2 RESEARCH DESIGN-

A Research Design is the arrangement of conditions for collection and analysis of data in

a manner that aims to combine relevance to the research purpose with economy in

procedure. Infact, the research design is the conceptual structure within which the

research is conducted. This research was descriptive in nature.

I proposed to first conduct a intensive secondary research to understand a the full impact

and implication of the industry, to review and critique a industry, norms and reports, on

which certain issue shall be selected, which I feel remain unanswered or liable to change,

this shall be further taken up in the next stage of exploratory research. This stage shall

help me to restrict and select only the important questions and issue. Which inhabit

growth and segmentation in the industry.

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There are various stages to solve the research problem as shown in following

program:

2.3 DESCRIPTIVE RESEARCH-

The research undertaken was a descriptive research as it was concerned with specific

predictions, with narration of facts and characteristics concerning Fixed Deposits Product

provided by Mahindra & Mahindra Financial Services Ltd.

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2.4 SAMPLING DESIGN-

The following factors have been decided within the scope of sample design:

2.4.1 Sample Size- A Sample of minimum respondents was selected from the Jalandhar

Region. An effort was made to select respondents evenly. The survey was carried out on

50 respondents.

2.4.2 Sample Unit- In this project sampling unit consisted of the various individuals,

businessman and services.

2.4.3 Sampling Technique- For the purpose of research Convenient Sampling Technique

was used.

2.4.4 Sampling Frame- It consisted of various sources from where information about the

respondent is extracted. Mainly personal links, customers of Mahindra Finance and

common people are used for getting information about the respondents.

2.5 DATA COLLECTION AND ANALYSIS- There were 2 types of data sources used

in this research. These were:-

2.5.1 SECONDARY DATA-It is the data collected for already being used or published

information like Journals, Magazines, Research Papers, Internet, Books etc. In this

research project secondary source used were various journals, research papers, Books etc.

In this project report, the secondary data was given to me by mentor. It contains a list of

238 AMFI certified peoples in Jalandhar.

2.5.2 PRIMARY DATA-It is the data collected for the first time from the source and

never have been used earlier. The data can be collected through interviews, observations

and questionnaires. In this project, an appropriate questionnaire was designed which was

filled by the customers of Mahindra Finance, the investors and others people who want to

invest their money. In this project report, the primary data has been collected through the

questionnaires which helped in the analysis and the interpretation part.

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2.6 Co n tact Method:

Personal approach to each and every customers for all surveys and interviews was the

contact method used for obtaining a proper and detailed feedback. A face-to-face

interaction took place with each sample representative.

The data collected through questionnaire was properly classified and tabulated in the

form of a report. These reports formed the basis for the comparative analysis and drawing

inferences there from. From the inferences drawn certain conclusions and

recommendations were made.

2.7 Field Work:

The fieldwork was conducted for a period of 15 to 20 days.

2.8 Mahindra and Mahindra finance brand awareness:

People are aware of Mahindra Finance but somewhere it is lacking due to its less rate of

interest than “SHRIRAM” and fast FD processing like “HDFC”, Mahindra and Mahindra

finance have very good reputation in the minds of the customers and mostly the people

know Mahindra and Mahindra is a good reputed company.So people are very well aware

of this brand rather than its product.

2.9 Distribution channel of Mahindra and Mahindra finance ltd:

The Mahindra and Mahindra finance have a very large network of distribution channel.

They have some tie up with some large broking companies. Who work as principal

brokers/ agents to the fixed deposit scheme. The name of that companies are as follows.

1. Jm financial services private ltd.

2. RR investors capital services pvt ltd.

3. ICICI securities ltd.

4. Karvy stock broking ltd.

5. Bajaj capital.

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6. Integrated enterprises (india) ltd.

7. ING financial service pvt ltd.

8. HDFC securities

9. Kotak securities

10. Stock holding corporation of india ltd.

11. Brokers and sub-brokers

2.10 Investment pattern of Mahindra and Mahindra financial service ltd:

Mahindra and Mahindra finance investment pattern in which they deal are as follows.

1. Fixed deposit

2. Mutual fund distribution

3. Personal loan

4. vehicle loan (utility vehicles, commercial vehicles, tractors, cars, two-wheelers

and used vehicles)

5. Auto loan

6. Refinancing

7. Housing finance

8. SME financing

9. Insurance broking

10. Loan against gold

11. Construction equipment loan

But I have mainly work on first two investment pattern and broker empanelment of

Mahindra and Mahindra financial service ltd during my intership programme.

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2.11 DATA ANALYSIS-

2.11.1 TOOLS OF PRESENTATION-It means what all tools are used to present

the data in a meaningful way so that it becomes easily understandable

2.11.2 TOOLS OF ANALYSIS- In this research the tools of analysis used was SPSS

software.

2.12 LIMITATIONS OF THE STUDY- This study will facilitate in understanding the

consumer preferences towards the MAHINDRA AND MAHINDRA FINANCE fixed

deposit, and broker emapanelment. There are certain limitations of this studies are :

This study will be limited to only some areas of Jalandhar city.

It is only for short period of time.

Survey to a only limited numbers of people.

The sample size is only 50 so the sample may not be truly representative

of Jalandhar population.

Some respondents did not provide the all and accurate data.

There may be some biased response from the respondets.

1. SHORTAGE OF TIME- The time period of study was very limited. A period of

4-6 weeks is not enough for the proper study of the project.

2. BIASNESS IN THE RESPONSES-The answers provided by the respondents

suffer from biasness.

3. COST FACTOR- It was not possible to conduct extensive research due to paucity

of funds.

4. INADEQUATE DATA-The data provided was not up to the mark due to which

we faced problems in our research.

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Chapter 3 DATA INTERPRETATION AND

ANALYSIS

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\3.1 Analysis and Interpretation-

This survey is designed to understand Internet users’ perspectives on Internet banking, their experiences with and their expectations from Internet banking services.

Table 1- Gender of Respondents :

Gender

Frequency Percent Valid Percent Cumulative Percent

Valid

Male 37 74.0 74.0 74.0

Female 13 26.0 26.0 100.0

Total 50 100.0 100.0

male female0

10

20

30

40

50

60

70

80

frequencypercentage

Table 1 represents the Gender of the respondents. 74% of the respondents are male. 26% from the respondents are female. Gender deference also affects the perception of service.

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Table 2- Occupation of Respondents Occupation

Frequency Percent Valid Percent Cumulative Percent

Valid

Business 25 50.0 50.0 50.0

Private Service 22 44.0 44.0 94.0

Govt. Employee 3 6.0 6.0 100.0

Total 50 100.0 100.0

Business Private Service Govt.Empolees0

10

20

30

40

50

60

FrequencyPercentage

The occupation of the respondents affects their perception. The table 1 reveals that out of 50 customers 50% people from business background. They are doing different types of business. 44% respondents belong to employee category. Remaining 6% respondents are from Govt. empolees.

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Table 3- Age Group of respondent-

Age Group

Frequency Percent Valid Percent Cumulative Percent

Valid

20-30 yrs 18 36.0 36.0 36.0

30-40 yrs 15 30.0 30.0 66.0

40-50 yrs 15 30.0 30.0 96.0

Above & 50 2 4.0 4.0 100.0

Total 50 100.0 100.0

20-30 yrs 30-40 yrs 40-50 yrs 50 & Above0

5

10

15

20

25

30

35

40

FrequencyPercent

The result in table 3 reveals that out of 50 customers. 36% of the respondents belong to the age group of less than 30 years. 30% of the respondents belong to the age group of below 40 years. 30% of respondents lie between the age group of 40–50 years. And 4% categories of above belong to the age group of above 50 years.

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Table 4- Annual Income of Respondent-

Annual Income

Frequency Percent Valid Percent Cumulative Percent

Valid

1-1.5 Lacs 8 16.0 16.0 16.0

1.5-3 lacs 18 36.0 36.0 52.0

3 Lacs & Above 24 48.0 48.0 100.0

Total 50 100.0 100.0

1-1.5 Lacs 1.5-3 lacs 3 Lacs & Above0

10

20

30

40

50

60

FrequencyPercent

Interpretation:- Out of 50 people approximately 48 % people are earning more than 3 Lacs. Which shows people are saving more from their income to invest in other sources whether it is fixed deposit of saving accounts or PPF ets.

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3.2 RESEARCH OBJECTIVES:

To examine the association between income & investment.

To study the awareness component in regard to FDs.

To reveal the underlying satisfaction of the customers.

1. To Examine the association between annual income & investment.

Table 5.

Statistics

Annual income Saving

N Valid 50 50

Missing 0 0

Mean 2.32 2.36

Median 2.00 3.00

Mode 3 3

Std. Deviation .741 .776

Variance .549 .602

Skewness -.599 -.737

Std. Error of Skewness .337 .337

Kurtosis -.923 -.933

Std. Error of Kurtosis .662 .662

Range 2 2

Minimum 1 1

Maximum 3 3

Percentiles 25 2.00 2.00

50 2.00 3.00

75 3.00 3.00

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Interpretation : The Mode of annual income and savings are 3 so the diagram shows

that the maximum no of people who lies in 3 lacs & above annual income and saving 20

& above. The Std. Deviation of the annual income and saving are 0.741 & 0.746 so that show that the variation of both are very high.

Interpretation:- Out of 50 people approximately 48 % people are earning more than 3 Lacs. Which shows people are saving more from their income to invest in other sources whether it is fixed deposit of saving accounts or PPF ets.

Interpretation:- According to my study people are saving approximately 20 and above% of their income because they have to save the money for the future use and comports so and rest they spend on their own life or comforts etc . and the part of the income they save, invest in other things such as FD, Deposit in Bank or Post office etc.

Table 6. Correlations

Annual income Saving

Annual income

Pearson Correlation 1 .790**

Sig. (2-tailed) .000

N 50 50

Saving Pearson Correlation .790** 1

Sig. (2-tailed) .000

N 50 50

**. Correlation is significant at the 0.01 level (2-tailed).

Correlation is 0.790. It is High posiive correlation.

In this table shows that the no of people income is high and those person saving is more. And the saving is based on annual income.

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2. To study the awareness component in regard to FDs.

Table 7.Statistics

Awareness Media Product used FD awareness

N Valid 50 50 50 50

Missing 0 0 0 0

Mean 1.38 3.50 2.62 3.68

Median 1.00 3.50 3.00 4.00

Mode 1 3 3 5

Std. Deviation .490 1.015 .945 1.696

Variance .240 1.031 .893 2.875

Skewness .510 -.183 -.663 -.362

Std. Error of Skewness .337 .337 .337 .337

Kurtosis -1.814 -.541 -.535 -1.383

Std. Error of Kurtosis .662 .662 .662 .662

Range 1 4 3 5

Minimum 1 1 1 1

Maximum 2 5 4 6

Percentiles 25 1.00 3.00 2.00 2.00

50 1.00 3.50 3.00 4.00

75 2.00 4.00 3.00 5.00

Inerpretation- In table no 6 shows us the mode of awareness, media, product used and FD

awareness are 1, 3, 3 and 5 that means most of people are aware of Mahindra Finance

(i.e 62% people are aware), 34%through the friends and 32% through the online websites

58% people are used the insurance product because it is very beneficial product and it has

high securities and last 36% and 22% people are aware of the Shriram and LIC Home

Finance.

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Table 8. Awareness

Yes No0

10

20

30

40

50

60

70

FrequencyPercent

Interpretation:- Out of 50 people approximately 62 % people are aware of Mahindra finance which shows the majority of people are aware of this brand so it needs to maintain and stable its standard .

48

Frequency Percent Valid Percent Cumulative Percent

Yes 31 62.0 62.0 62.0

No 19 38.0 38.0 100.0

Total 50 100.0 100.0

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Table 9. Media

Frequency Percent Valid PercentCumulative Percent

Valid Newspaper 1 2.0 2.0 2.0

Advertisements 7 14.0 14.0 16.0

Friends 17 34.0 34.0 50.0

Online Websites 16 32.0 32.0 82.0

Others 9 18.0 18.0 100.0

Total 50 100.0 100.0

NewspaperAdvertisements Friends Online Websites Others0

5

10

15

20

25

30

35

40

FrequencyPercent

Interpretation:-In this era most of people use social networking sites because of easy fast and cheapest source so majority of the people came to know about this organization from internet and the circle of friends are so important to know about the latest product of company in the market.

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Table 10. Product Used

Frequency Percent Valid PercentCumulative Percent

Valid Fixed Deposits 10 20.0 20.0 20.0

Mutual Funds 5 10.0 10.0 30.0

Insurance 29 58.0 58.0 88.0

Loans 6 12.0 12.0 100.0

Total 50 100.0 100.0

Fixed Deposits Mutual Funds Insurance Loans0

10

20

30

40

50

60

70

FrequencyPercent

Interpretation – In my survey the no of people use the insurance because it is very safe and people invest your money in safe side so the company should adopt the methods or techniques of the insurance company.

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Table 11. FD Awareness

Frequency Percent Valid PercentCumulative Percent

Valid Mahindra Finance 7 14.0 14.0 14.0

Sri Ram Finance 11 22.0 22.0 36.0

Muthoot Finance 1 2.0 2.0 38.0

HDFC LTD 8 16.0 16.0 54.0

LIC home Finance 18 36.0 36.0 90.0

Others 5 10.0 10.0 100.0

Total 50 100.0 100.0

Mahindra Finance

Sri Ram Finance

Muthoot Finance

HDFC LTD LIC home Finance

Others0

5

10

15

20

25

30

35

40

FrequencyPercent

Interpretation: The no of people aware about the Shriram and LIC Home finance and they like to invest their money in both company so the Mahindra company should adopt their policies and awareness through the media, advertisement for the people so they could aware about this product.

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3. To reveal the underlying satisfaction of the customers.

Table 12.

Statistics

Customer service Products Add on services Interest provided

N Valid 50 50 50 50

Missing 0 0 0 0

Mean 3.22 3.78 3.46 3.66

Median 3.00 4.00 3.00 4.00

Mode 3 4 3 3a

Std. Deviation .648 .708 .734 .895

Variance .420 .502 .539 .800

Skewness .694 -.374 -.018 -.327

Std. Error of Skewness .337 .337 .337 .337

Kurtosis 1.134 .314 -.192 .340

Std. Error of Kurtosis .662 .662 .662 .662

Range 3 3 3 4

Minimum 2 2 2 1

Maximum 5 5 5 5

Percentiles 25 3.00 3.00 3.00 3.00

50 3.00 4.00 3.00 4.00

75 4.00 4.00 4.00 4.00

a. Multiple modes exist. The smallest value is shown

Interpretation: All of these lie in 3 to 4 (i.e Average & Good) so most of people like the product and their services.. But the company have to take some decision for their services so the company could reach or achieve the good rating (i.e Good & Excellent)

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Table 13. Customer Services

Frequency Percent Valid Percent Cumulative Percent

Valid Poor 4 8.0 8.0 8.0

Average 33 66.0 66.0 74.0

Good 11 22.0 22.0 96.0

Excellent 2 4.0 4.0 100.0

Total 50 100.0 100.0

Poor Average Good Excellent0

10

20

30

40

50

60

70

FrequencyPercent

Interpretation: Most of people are satisfied to the customer services (i.e 66% average, 22% good and 4% excellant)

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Table 14. Products

Frequency Percent Valid Percent Cumulative Percent

Valid Poor 2 4.0 4.0 4.0

Average 13 26.0 26.0 30.0

Good 29 58.0 58.0 88.0

Excellent 6 12.0 12.0 100.0

Total 50 100.0 100.0

Poor Average Good Excellent0

10

20

30

40

50

60

70

FrequencyPercent

Interpretation: 30% people are not satisfied from the products of Mahindra Finance but most of people are satisfied (i.e. 70%)

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Table no 15. Add on services

Poor Average Good Excellent0

5

10

15

20

25

30

35

40

45

50

FrequencyPercent

Interpretation: 52% people are not satisfied from the add on services rest of satisfied…

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Frequency PercentValid Percent Cumulative Percent

Valid Poor 4 8.0 8.0 8.0

Average 22 44.0 44.0 52.0

Good 21 42.0 42.0 94.0

Excellent 3 6.0 6.0 100.0

Total 50 100.0 100.0

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Table 16. Interest Provided

Frequency Percent Valid Percent Cumulative Percent

Valid Very Poor 1 2.0 2.0 2.0

Poor 2 4.0 4.0 6.0

Average 19 38.0 38.0 44.0

Good 19 38.0 38.0 82.0

Excellent 9 18.0 18.0 100.0

Total 50 100.0 100.0

Very Poor Poor Average Good Excellent0

5

10

15

20

25

30

35

40

FrequencyPercent

Interpretation: 6% people are not satisfied from their interest rate but rest of them are satisfied from their interest rate. 38% average, 56% lies in good and exellant.

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3.3 FINANCIAL HIGHLIGTHS

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Chapter 4

Summary, Conclusions

and Recommendation

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4.1 FINDING OF THE STUDY

Almost all the people are aware of Mahindra finance. 62% people are aware of the

Mahindra Fianace.

Not all the people know about FD scheme of Mahindra Finance in Jalandhar. 14%

of people are aware of Mahindra Finance.

Only few people are aware of its competitors due to lacking of a department in the

city.

Study shows that people’s perception about Mahindra Finance is highly positive so

it should adopt the steps to maintain that position.

The profits and net worth are increasing every year.

The number of contracts have also increased.

92% people are highly satisfied with its customer care service.

People are saving a huge part of their income for investment in long term because

of high rate of return.

Most of the people now a days are preferring in fixed deposit because of less risky

than shares or other investmenst.

The study shows that the customers know that the Mahindra is proving good

products and there are very less no. of people who says that the interest rate is

good. But they say the brand name is very good.

According to the survey respondents are of the opinion that they look for the

returns before investing in any company.

The study reveals that the 68% are happy with the services of Mahindra and

Mahindra and mostly the people like the quality so overall evaluation is also good.

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What should the Company do to promote their FD in Jalandhar.?

To start dealing of Fixed deposit at Local level:-As I have worked there for 2 months I

have concluded that brokers are not so willing or we can say that they are facing

problems because of not having any employee at local branch. He himself has to collect

and deposit the FD in Jalandhar. So sometimes brokers ignore these kind of tasks which

is directly a loss for the this kind of organization. So Mahindra should set up Mutual

Fund department in local branch which should take care of each and every thing of its

city because jalandhar is a big city and there are so many investors who are ready to

invest in Mahindra Finance.

To increase the number of broker :- As in Jalandhar even brokers are not aware about

the Mahindra Finance Fixed deposit . So first of All they shoud be aware of this product

even then they can sell it to the customers and if the number of brokers are more the sale

will also be more.

To Increase the commission of brokers:- According to me Mahindra should slightly

increase the Commission on FD because the broker is getting only 0.25% commission.

So only for this amount broker is not willing to do this kind of work. Other competitors

are giving higher rates of interests so naturally they will attract more to those companies.

By Targetting Appropriate market:- Mahindra is in so many other businesses also such

as two wheelers, automobiles, loans etc and now a days each and every people wants to

save and invest their moneey so it should conatact all of its customers about its new

product so that they can easily deposit their money.

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4.2 My Woking Experience in Mahindra & Mahindra Financial

Services Ltd.

My working experience in this kind of organization is very good because before

joining this organization I was feeling not so good because I was not familiar with

this kind of organizational environment and I did not know that how this

organization runs. But when I joined this company I was assigned, we can say the

whole department of Fixed Deposit of Jalandhar city. Because there is not any

separate department of FD in the city so in this 2 months I was the person who

was handling each and everything regarding fixed deposit so it was a very big

achievement for me. My parents have their own FD’s in banks but at that time I

was not aware about fixed deposit but after this internship and by practical

knowledge I came to almost all the aspects of FD.

On the first day I was feeling so nervous when the data was

provided to me for calling. But when I started doing this it was started becoming

interested for me because every day I made calling to different persons and in the

evening I met out of those people who were interested for Fixed Deposit or

Empanelment.

As the rightly said we learn something from everything, same as I

have learned so many things in these 2 months e.g. professional ethics how to talk

on phone, how to take appointments from client, how to deal with them, how to

behave when somebody insults about your product, we can say how to show

patience to clients. These all things would definitely help me in my career.

On the starting days it was so difficult to deal with a customer because now a days

every persons analyze each and everything before investing into any type of

investment, so then I searched about its competitors and their rates and ratings so

before reading that data I started visiting clients so that I should have enough

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knowledge to keep my product different from its competitors, and solve the

queries of clients.

These things I have learned about FIXED DEPOSIT:

Process of Fixed Deposit

Reason behind why the company has started this scheme

Benefits of Pan card

How to maintain documents

How to deal with clients

Cumulative and Non Cumulative Interest plans

Different kinds of Forms e.g. 15 G and 15 H.

Knowledge about mutual Funds

These things I have learned through Empanelment Process:

How to fix a meeting or how to take appointments.

Most of the brokers start questioning so we should have each and every

knowledge before going to meet him/her.

How to show patience because brokers always try to demoralize.

When I met some of the brokers, they were very kind to me and told me some

practical concepts about some financial terms and specially about Mutual Fund.

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4.3 Conclusion of the Study

Mahindra and Mahindra have very high market share. The company is offering good

services which reflected on the satisfaction of the customers. Mahindra and Mahindra

providing better facility than the other .

On the first mostly the people are preferring FD with good rate of interest rather

than any other scheme So Mahindra is competing with two organizations in the

terms of Fixed Deposit, these are

HDFC Bank ( Because of CRISIL FAAA rating) and

Shriram Transport Finance Ltd. ( Because of Higher rate of interest)

The second thing I have found that brokers are not so willing to sell this product

because of less interest rates as compared to its customers.

In the city like Jalandhar, as one of the major city of state Punjab, does not have

any FD department, which is resulting the problem for those who are ready to

invest in FD

Another thing is found that some people are still stuck with govt. banks for their

investment.

To conclude we can say that people prefer more branded and variety of products with

good rate of interest. Customers also feel that there should be proper customer service. As

customer satisfaction plays a vital role, it has to be concentrated on seriously. The report

reveals that there is huge scope for the growth of organized retailing. The main factor that

affects the business is location.They seek value for money so also matter for customers

to focus mainly on the service part. The reason for which people prefer to buy from

organized and reputed company’s’ product available under one roof and customer has

not to move to other as it has its department in Amritsar, Ludhiana, Patiala and

Chandigarh but not in local branch.

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4.4 Suggestions and Recommendations

Mutual Fund department in local Jalandhar branch.

More focus on quality product with best services.

Providing after sales services to build a brand.

To increase the number of brokers.

Customer service should be improved.

Proper training should be given to employees as to how to attract more customers

and how to retain them.

All the employees should have proper knowledge of every product so they can

easily fetch the customer needs.

Keep update their customers about their new schemes.

It should revise its interest rates and commissions.

It should reduce its time period of making a FD Which is Minimum 15 days

As the Jalandhar City is not so much aware of Mahindra Finance Fixed Deposit ,

It should start and campaign at local level to aware the people about its products.

Most of the people are not aware of CRISIL or Its FAAA rating which is the best

thing in this product because safety of the money come first rather than the

interest rates

It should take timely feedback from its customers as well as its brokers also

A special training program should be there for its customers.

The people should be well intelligent to solve each query of the customer.

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Chapter 5

Bibliography & References

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BIBLOGRAPHY & REFERENCES

1. “Introduction, Products and services” www. Mahindra.com Mahindra

org, inc 2010 http://www. mahindra.com//

2 ( Sharma and Joshi 2012) http://ijmr.net/wp

content/uploads/2013/03/Demogpaphic Concept of rural marketing for

Mahindra-india.pdf

3. http :// www.goodreturns.in/ Reasons to invest in Mahindra finance FD’s

( www.Good returns.in)

4. http://www.imf.org/external/pubs/ft/fandd/2002/09/nsouli.htm

(www.imf.org)

5. (myinvestmentideas.com/.../, 2013) major companies of fixed deposits

http://www.Investmentideas.com//.

6. (economictimes.com// markets and stocks, 2010) company history

http://www.Economictimes.com//

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Appendices

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MAHINDRA FINANCE BRAND AWARENESS QUESTIONNAIRE

DEMOGRAPHIC DATA

1. Name of the customer_________________ 2. Contact No. __________________

3. Occupation ________________________ 4. Gender ________________

5. Education ________________________ 6. Age _________

7. Family income (approx) ______________ 8. Family Size ________________

1) What is your annual Income?(a) 1-1.5 Lacs( ) (b)1.5 to 3 Lacs( ) (c)3 Lacs and Above( )

2) What percentage of your annual income do you save to Invest ?

(a) 5 to 10%( ) (b)10 to 20%( ) (c) 20% and above( )

3) Do you prefer to invest for long term or short duration? (a) Long Term( ) (b) Short Term( )

4) Where do you prefer to invest your money? (a) Mutual Funds( ) (b) Fixed Deposit( ) (c) Post Office Deposit( )

(d) Share / Commodity Market( ) (e) Other Investment Options( )

5) Are you aware about Mahindra Finance?

(a) Yes( ) (b) No( )

6) How you came to know about Mahindra Finance?

(a) Newspaper( ) (b) Advertisements( ) (c) Friends( )

(d) Online websites( ) (e ) Others ( )

7) Which products do you use?

(a) Fixed Deposits( ) (b) Mutual funds( )

(c) Insurance ( ) (d) Loans( )

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8) According to you which investment option has less risk ?

(a) Mutual Funds ( ) (b ) fixed deposit ( ) (c) Post office deposit ( )

(d)Realestate ( ) (e) share/commodity market ( )

9) Which of the following FDs are you aware of?

(a) Mahindra finance ( ) (b) Sri Ram finance ( ) (c) Muthoot finance ( )

(d) HDFC LTD ( ) (e) LIC home finance ( ) (f) Others ( )

10) If you invest in fixed deposit which gives better returns?

(a) SBI ( ) (b) HDFC ( ) (c) Mahindra ( )

(d) Shriram ( ) (e)Muthoot finance ( ) (f) others ( )

11) Rate Mahindra Finance on the following on a scale of 1 – 5: - Very Poor Poor Average Good Excellent (1) (2) (3) (4) (5)

a) Customer service ( ) ( ) ( ) ( ) ( ) b) Products ( ) ( ) ( ) ( ) ( ) c) Add on Services ( ) ( ) ( ) ( ) ( )

d) Interest provided ( ) ( ) ( ) ( ) ( )

12) Would you like to know more about Mahindra Finance FD?

(a)YES ( ) (b)NO ( )

13) Any suggestions ____________________________________________________________________________________________________________________________________________________________

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