Summer Training Project 2

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SUMMER TRAINING PROJECT REPORT ON

KEY MARKETING STRATEGIES ON PROMOTING

HEALTH INSURANCE

IN

RELIANCE MONEY SOLUTION

FOR THE PARTIAL FULF I LL M ENT OF THE REQUIREMENT

F OR TH E AWARD OF

POST GRADUATE DI PLOM A I N BU SI NESS M ANAGEM ENT

UNDER THE GUIDANCE OF: UNDER THE SUPERVISION OF:MR MR

SUBMITTED BY:ASHISH KUMAR

PGDBM 2012-14

BAHRA UNIVERSITYWAKNAGHAT, DISST. SOLAN (H.P.)-173234


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CERTIFICATE

This is to certify that the project work done on (KEYMARKETING STRATEGIES ON PROMOTINGHEALTH INSURANCE) is a bonafide work carried out by

Mr./Ms.----------------------- under my supervision andguidance. The project report is submitted towards the

partial fulfillment of full time MBA & BBA

This work has not been submitted anywhere else for anyother degree. The original work was carried during -------------------to ------------------- in (RELIANCE MONEYSOLUTION).

Name & Sign of Industry GuideDate: Name & Sign of Faculty

Students Name and Sign

Roll No.

Session -


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ACKNOWLEDGEMENT

This research was made possible as per the requirement of the MBA course under BAHRA UNIVERSITY. Manyindividual took interest and were supportive of my effort.In fact, many have given me their time generously and it isnot possible to mention all of them here and there act of goodness. I take the opportunity to place and record mydeep sense of gratitude to all who have helped me incompletion of my study.

I express my heartiest thanks to Mr. Bhupinder Singh(Trainer) of Reliance Money Solution, who took keeninterest towards my project and provided me with deepinsight on R.MONEY.

I am deeply indebted to my mentor and guide Mr. Farrukh Nadeem.

I would be failing in my duties if I dont express my sinceregratitude to my parents for their constant support andguidance.


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DECLARATION

I do hereby declare that this project entitle key marketingstrategies on promoting health insurance is a record Of independent work carried out by me under the guidance of

Mr. Rohit Sublaik (Assistant Professor School of Management Bahra University) as per the curriculumsrequirement in master in MBA.

Name: Ashish Kumar Specialization: Marketing & HRMBahra University.


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PREFACE

This training undergone at reliance money solution(Chandigarh) within a period of nine (01.07.2013 to31.08.2013) has imparted me in depth of knowledge onvarious aspect of corporate governance and marketingchannel. Cost effectiveness is the buzz word today. So,efficient use of working capital is important from the pointof view of both profitability and liquidity. An effort has

been made in the present study Key Marketing Strategieson Promoting Health Insurance with respect to RelianceMoney Solution (Chandigarh), to understand the different

policy of health insurance and to make and in-depth studyof various marketing strategies of health insurance.


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INTRODUCTION

Introduction of the organization:

Reliance Anil Dhirubhai Ambani Group (Reliance ADAG)ranks among India's top three private sectors businesshouses. The group has a market capitalization of US$ 22

billion, net assets in excess of US$ 7 billion, and net worthto the tune of US$ 6 billion. Reliance Anil DhirubhaiAmbani Group has a customer base of over 50 million, thelargest in India, and a shareholder base of over 8 million,among the largest in the world. R-ADAG has a business

presence that is spread over 4,500 towns and 300,000villages in India, and 5 continents across the world.

Reliance Anil Dhirubhai Ambani Group came intoexistence when the business empire of the Reliance Groupfounded by Dhirubhai Ambani was split between his twosons, Mukesh and Anil. Mukesh Ambani, the elder

brother, retained Reliance Industries Limited (RIL), theflagship company of the Reliance Group. The part of theempire that was inherited by the younger brother AnilAmbani was christened as Reliance Anil DhirubhaiAmbani Group. Hence, one can say that the founder of Reliance ADAG was Dhrubhai Ambani. The interests of

the Reliance Anil Dhirubhai Ambani span communications,financial services, generation, transmission and distributionof power, infrastructure and entertainment.

Reliance Anil Dhirubhai Ambani Group (usually referredas Reliance Group and legally Anil Dhirubhai AmbaniVentures Limited) is an Indian conglomerate headquarteredin Navi Mumbai, India. The company, which was formedafter Dhirubhai Ambani's business empire was divided up,is headed by his younger son Anil Ambani. It has a marketcapitlisationo f 89,000 crore (US$15 billion) and net assetsworth 180,000crore (US$30 billion). The Reliance Grouphas a business presence that extends to over 20,000 townsand 450,000 villages in India, and across the globe. Theshareholder base is over 12 million, among the largest inthe world. The group is present in many sectors including
http://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupeehttp://en.wikipedia.org/wiki/Indian_rupee


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Telecom, Capital, Power, Infrastructure, Entertainment andHealth.

Reliance Group (Anil Dhirubhai Ambani)

Type PrivateIndustry Conglomerate

Predecessor(s ) Reliance CommercialCorporationFounded 1966Founder(s) Dhirubhai Ambani

Headquarters Navi Mumbai,Maharastra,IndiaChairman Anil Ambani

Products

Communication, infrastructure,financial services,entertainment, power, naturalresource, petrochemical, BPO,healthcare

Revenue US$15.4 billion (2012)Operating income US$2 billion (2012)Profit US$3.5 billion (2012)Total Assets US$29 billion (2012)Total equity US$40 billion (2012)Employees 120,000 (2012)

Subsidiaries

Reliance power, RelianceCommunication, RelianceInfrastructure, Reliance Capital,Reliance Entertainment,Reliance Health, Reliance

Natural Resources, RelianceVenture, Reliance Media Work Ltd.
http://en.wikipedia.org/wiki/File:RADAGroup.svg


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History of Reliance Group (Anil DhirubhaiAmbani)

Reliance group was founded by: Dhirubhai Ambani in 1966as a polyester firm. Dhirubhai started the equity cult inIndia. Reliance later entered into financial services,

petroleum refining, power sector. By 2002 Reliance hadgrown into a U$15 billion conglomerate. After the death of Dhirubhai Ambani on 6 July 2002, Reliance was headed byhis sons. The group was formed after the two feuding

brothers Mukesh Ambani and Anil Ambani, split RelianceIndustries. Anil Ambani got the responsibility of RelianceInfocomm, Reliance Energy, Reliance Capital and RNRL.This led to a new beginning called RELIANCE. Later thisgroup entered the power sector through Reliance Power,and the entertainment sector by acquiring Adlabs.

Companies of Reliance ADAG:

Reliance Communications Limited:Reliance Communications Limited is the flagship

company of the Reliance - ADA Group. The company isthe culmination of Dhirubhai's dream of bringing about adigital revolution that will provide every Indian withaffordable means of communication and a ready access toinformation. Reliance Communications Limited startedoperations in 1999 and has over 20 million subscriberstoday. It offers a complete range of integrated telecomservices such as mobile and fixed line telephony,

broadband, national and international long distance


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services, data services and a wide range of value addedservices.

Communications Reliance Globalcom Reliance Infratel Vanco Reliance World Reliance Globalcall Reliance Icall Reliance Digicom Reliance BPO

Reliance Capital: Reliance Capital is one of India'sleading private sector financial services companies.Reliance Capital deals in asset management andmutual funds, life and general insurance, privateequity and proprietary investments, stock brokingand other activities in financial services.

Capital Reliance Life Insurance Reliance General Insurance Reliance Venture Reliance Mutual Fund Reliance Money Reliance Securities Reliance Commercial Finance Reliance Venture Capitalist Reliance Asset Reconstruction Reliance PMS ICEX - Stock exchange

Reliance Energy Limited:Reliance Energy Limited is a fully integrated utility

engaged in the generation, transmission and distribution of electricity. The company distributes more than 21 billionunits of electricity to over 25 million consumers inMumbai, Delhi, Orissa and Goa. Reliance Energy Limitedcurrently generates 941 MW of electricity, through its


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power stations located in Maharashtra, Andhra Pradesh,Kerala, Karnataka and Goa. It is currently pursuing anumber of gas, coal, wind and hydro-based power generation projects in Maharashtra, Uttar Pradesh,Arunachal Pradesh and Uttaranchal with total capacity of

over 12,500 MW.

Electricity transmission grid ineastern India .

Reliance Natural Resources Limited (RNRL) Reliance Coal Resources Tilaya UMPP - 4000MW Krishanapatnam UMPP - 4000MW - on hold Sasan UMPP - 4000MW FIRST UNIT OPERATIONAL Dadri power plant - 8000MW - On hold

Chitrangi power project - 4000MW Rosa Power Project - 1200MW OPERATIONAL Butibori power Project, Nagpur - 600MW

OPERATIONAL Samalkot Power Project - 2400MW.. AWAITING GAS

FROM GOI Dhirubhai Ambani Solar Park- 40MW OPERATIONAL Wind Power- 400MW Solar Power - 500MW Hydropower- 2500MW

Reliance Media & Entertainment: Reliance Media &Entertainment has interest in Movies, Music, Sports,Gaming, Internet & mobile portals, Digital cinema, IPTV,DTH and Mobile TV. In 2005, Reliance ADA Groupacquired Adlabs Films Limited, one of the largestentertainment companies in India, which has interests infilm processing, production, exhibition & digital cinema.Reliance Entertainment has also forayed into the FM Radio

business through BIG 92.7 FM.

Reliance Entertainment

Movies and Television Dream Works SKG Studios (Co-Partnership) Reliance Pictures Reliance Media Works (formerly Adlabs)
http://en.wikipedia.org/wiki/File:Choudwar_Cuttack.jpg


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Reliance MediaWorld (formerly Lowry Digital ) Reliance Synergy Reliance Animation BIGFlix - Movies on rent BIG Cinemas

BIG Music & Video Reliance Home Video Reliance ND Studio RMW Studio

Broadcasting BIG FM 92.7- Radio stations operating in more

than 50 cities. Reliance Broadcasting (RBNL) Reliance Digicom Reliance Digital TV BIG TV -DTH service

Imagine Showbiz BIG Magic

BIG -CBS channels Big CBS Prime Big CBS Spark Big CBS Love

Gaming Zapak Codemasters Jump Games

Reliance Health: Reliance Health aims at providingintegrated health services and plans to venture intodiversified fields like Insurance Administration, Health

care Delivery and Integrated Health, Health Informaticsand Information Management and Consumer Health.


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Reliance Group (Anil Dhirubhai Ambani)

Communication

Reliance Communication Zapak Java Green Reliance World Fiber-Optic Link Around

the Globe

Power

Reliance Power Reliance Natural

Resources Ddirubhai Ambani Solar

Park

Infrastructure

Reliance Infrastructure Mumbai Metro One Delhi Airport Metro

Express Nanded Airport

Knowledge

Dhirubhai AmbaniKnowledge Center

Reliance Venture Reliance Health

Media DeliveryChannels

BIG Cinemas BIG Flix BIG FM 92.7 BIG TV BIGADDA BIG Star Entertainment

Awards

Media Software

Reliance Media Works BIG Entertainment Big CBS Prime Big CBS Spark Big CBS Love


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FinanceCompanies

Reliance Capital Reliance General Insurance

Reliance Life Insurance

Fig-1 Reliance Group Structure


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PART-1(ON THE JOB TRAINING)

PRODUCT-1

MY GOLD PLAN :

In India, there are currently various ways to invest andaccumulate gold which includes physical gold bars, goldcoins, jewellery, gold ETFS, gold fund of funds and goldfutures. The majority of the demand is for physical gold,the market for which is highly unorganized. Moreover therehas been a distinct increase in the demand for physical gold

backed savings product in the last few years.So as to assist in the development of a mature gold marketin India, Reliance Money along with World Gold Councilas its marketing associate has launched MY GOLD PLAN,which is a next generation Gold Savings Product.This revolutionary new plan lets customers buy goldconveniently in small amounts, based on a Daily AveragePricing Methodology. The plan makes gold accumulationtransparent and straightforward, allowing customers toconvert accumulated gold grams into coins or jewellery atmultiple outlets across India.Reliance My Gold Plan offers customers the uniqueopportunity to start accumulating physical gold using adaily average pricing methodology. A minimumsubscription of Rs.1000 per month translates toaccumulation of gold for as low as Rs. 50 per day.

What is Reliance My Gold Plan?

Reliance My Gold Plan (R -MGP) is a product offered byReliance Money Precious Metals Private Limited (RMPM)to enable systematic purchase of gold by customers for their personal requirements. Under the plan a customer would remit / pay a fixed sum of money on a monthly basisfor a fixed period of time to RMPM, as advanceconsideration towards purchase of the contracted value of


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gold. The customer receives credit for accumulations, of gold purchased by RMPM, at periodic intervals through aDaily Averaging Methodology. The sale shall becompleted only upon payment of all the monthlyinstallments and other charges as may be specified. R-

MGP accumulated gold grams can be converted into goldcoins at the end of the tenure from multiple specifiedoutlets across the country. R-MGP is neither a financial

product nor a deposit but a method of purchasing goldthrough periodic accumulations for the personal needs of the customer. Neither RMPM nor World Gold Council(WGC), or any of their associates, offers any investmentadvice or promises /forecasts any assured return through R-MGP while promoting the product.

Partnership between World Gold Council andReliance GoldOur partnership with World Gold Council is not new andwe have been jointly making Gold Coins accessible to themasses PAN India through India Post Offices and our owndistribution strength. Reliance experience in the gold

business and WGC research on Indian Consumer bothindicated a need for a simple gold accumulation productwhich is affordable, is safe and can be easily fulfilled.WGC is the marketing associate for R-MGP. It will assist

RMPM in marketing and promoting R-MGP. RMPM will provide the R-MGP product and is responsible for day-to-day management which includes procurement of gold,dealing with the service providers, servicing customers,distributors and fulfillment partners pan India. Marketingefforts are shared, and we are confident that the productwill be an efficient solution to the customers looking toaccumulate gold.

Benefit for Reliance Gold and World Gold

CouncilWorld Gold Council is a market development organizationfor the gold industry and the global voice of authority for gold. It is a non-profit organization whose sole purpose is

promotion of gold across the world. Through this productwe aim to provide access to good quality gold to the massesin India and make accumulation of gold accessible, secureand transparent


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Making charges on CoinsThe making charges include the labor charge, packaging chargeand the cost of assay certification. Please find below the coinmaking charges for coins of various denominations:

Denomination Making Charge (Rs)

0.5gm 751gm 1002gm 1205gm 1608gm 20010gm 20020gm 30050gm 450

Account Opening and Subscription

The customer has to submit a completely filled andsigned application form along with valid acceptableKYC proof, duly self attested and initial payment atRMPM collection centers.

Acceptable Proof of Identity and Address (any oneof the following) are as follows:

Identity Proof:(i) UID (Aadhar);(ii) Passport;(iii) Voter Id;(IV) Driving License;(v) Identity card/document issued by Govt/

Regulatory/ Statutory Authorities.

Address Proof:

(i) UID (Aadhar);(ii) Passport;(iii) Voter Id;(iv) Driving License;(v) Ration Card;(vi) Registered Lease/Sale Agreement;(vii) Latest Bank Statement/Passbook;(viii) Latest Utility Bill;


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(ix) Identity card/document with address issued byGovt/ Regulatory/Statutory Authorities. One passportsize photo. In case Applicant is minor then, photo of guardian is necessary.

Initial subscription remittance should be made by asingle cheque/DD and must be payable at locally.

The cheque/DD should be crossed/markedAccount payee and drawn in favour of RelianceMy Gold Plan Appli cation No

In case payment is made through Demand Draft or Pay Order remittance should be GROSSSUBSCRIPTION AMOUNT.

Terms & Conditions- My Gold Plan:

1. Reliance My Gold Plan is offered by Reliance MoneyPrecious Metals (RMPM) to enable disciplinedaccumulation of Gold Grams by customers for their

personal requirements. The plan enables customers toaccumulate physical gold in small quantities at periodicintervals through a Daily Cost Averaging.2. The Plan is NEITHER a financial product NOR a deposit

but a method of accumulating gold for the personalrequirements of the customer. RMPM offers noinvestment advice or any assured returns while promotingthe Plan.3. A Trustee has been appointed by RMPM who shall actfor and on behalf of the customers. On the occurrence of an event of default as described under the provision of thesecurity documents, more particularly described in theTrustee Agreement between RMPM and Trustees, theTrustee shall take all such steps to enforce the securityinterest and distribution of compensation in the manner setout under said security documents.4. Participation in this plan is voluntary on the part of thecustomer. The Plan is NON TRANSFERRABLE andfulfillment of the Plan would be made solely to thecustomer/his nominee in Person.5. The gold offered under this Plan is of 24 Karat 995fineness. Customer can opt for fulfillment of his/her


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accumulated Gold Grams in coins or jewelry through theregistered fulfillment partners. No claims whatsoever will

be entertained by RMPM once the gold coin(s) or jewelryhas been collected by the customers from the fulfillment

partners.

6. Participation under this Plan is open to Resident and Non-Resident Individuals including minors (through their guardians) and Hindu Undivided Families (HUF) only.7. By participating in this plan the customer is deemed tohave read, understood and accepted the Terms andConditions of the Plan as contained herein. These Termsand Conditions are binding on the customers upon their signing the Application Form and tendering paymentthereof.

8. Subscription Detailsa) Customers are required to indicate their choice of tenureand monthly subscription amount at the time of filling theapplication form.

b) The various tenures available under the Plan are 1 year to 15 years with interval of 1 year.c) The lock-in period of the Plan is 6 months. Customer cannot put a fulfillment request before the completion of the lock-in period.d) The minimum monthly subscription amount which thecustomer has to commit at the time of registration shall beRs. 1000/- and in multiples of Rs. 100/- thereafter.e) The customer cannot change the Monthly SubscriptionAmount and the Tenure selected at the time of registration.f) The customer may make additional subscriptions of aminimum of Rs. 1000/- and in multiples of Rs. 100/-thereafter.g) The remittance of the initial monthly subscriptionamount shall be made by a single cheque/DD /cash payablelocally, in the city where the collection centre of RMPM is

located/where the application is submitted. OutstationCheques/DD will not be accepted.


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9. Renewal OptionCustomer has the option to renew his/her subscription bysubmitting a renewal request form along with a newECS/Direct Debit Mandate or by giving PDCs. Anyrequest for renewal of subscription needs to be received

latest 45 days prior to the Maturity Date at the OfficialPoints of presence. No requests for renewal of subscriptionshall be entertained post this deadline.

10. Rejection of Applicationa) Application Form shall not be returned once theApplication Form has been received at any of the official

points of presence and is under review. b) RMPM reserves the right to reject any application onany ground for non compliance of requisite norms. In theevent of rejection of application, RMPM will refund the

advance amount received directly to the customer.However, once the application is accepted the subscriptionamount paid by the customer under the Plan shall not berefunded.c) RMPM shall not accept requests for exchange of GoldCoins once fulfillment is done under this plan.d) RMPM shall not accept requests for transfer or assignment of any payment made by the customer.

12. Customer Communication

a) It is mandatory for the customer to provide his/her mobile phone number. Customer should also preferablymention a valid Email ID in the Application Form. Uponenrollment in the Plan, the customer shall be sent a physicalWelcome Letter, Statement of Holdings on his/her EmailID.

b) The customer shall be sent a Statement of Holdings tohis registered Email ID on a monthly basis. The Statementof Holdings shall reflect the monthly/additional.


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Features of MGP:

Daily Cost Averaging Clear funds from Monthlyand AdditionalSubscriptions shall be split

into 20 equal trancheswhich shall be utilized over 20 successive business daysfor allotment of GoldGrams as per the DailyGold Price.

InitialSubscriptionAmount

Rs. 1000/- and in multiplesof Rs. 100/- thereafter.Initial Subscription can behigher than the monthlysubscription amount

MonthlySubscriptionAmount

Rs. 1000/- and in multiplesof Rs. 100/- thereafter

Tenure 1 year to 15 years withinterval of 1 year

Daily GoldPrice

Daily Gold Price (up to 2decimal points) in Rupees

per gram for 24 Carat Goldof 995 fineness shall bedeclared by RMPM on or

before 11:00 am for all

business days.Lock-in period 6 months from the date of initial subscription.Fulfillment of Gold Gramsshall not be permittedduring the Lock-in period.

Payment Mode Cheque / DD / Pay Order /ECS / Direct Debit.

Fulfillment Options 24 Carat Gold of 995fineness or more availablein Gold Coins of

denominations of 0.5 / 1 / 2/ 5 / 8/ 10 / 20 / 50 grams.Jewelry option alsoavailable throughempanelled jewelers.

Charges 1.5% Administrative charge. This charge shall

be levied on every Gold


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Grams Allotment byeffecting a mark-up of 1.5% on the Daily GoldPrice. This is a non-refundable fee paid towards

setup/ administration costs. No Pre-Terminationcharges post 1 year of subscription .Pre-maturetermination charge of 2.5%of the cumulativesubscription amount paidshall apply only onfulfillment within 1 year of Customer ID generation if the cumulative subscription

amount is less than 12times the monthlysubscription amount.In case the customer doesnt take delivery of coins/jewellery during thevalidity period of thevoucher then the customer will have to request for anew fulfillment voucher.The customer shall be

liable to pay "SafekeepingCharge" (towards the costof storage and Insurance) atthe rate of 0.50% per annum on the Invoiceamount. This charge shall

become applicable from thedate of issue of originalvoucher till the date of request for duplicatevoucher.

Statement of Holding Statement of Holding will be issued only by email ona monthly basis.Physical copy of theStatement of Holdings ason the 31st of March will

be dispatched within 20Business days.


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Benefits of Gold Saving Plan at Reliance MGP

DISCIPLINED GOLD ACCUMULATION :A disciplined accumulation technique under which youaccumulate gold grams by making small but regular subscriptions.

COST AVERAGING METHODOLOGY :All subscriptions made will be split into 20 daily purchasesthus reducing the risk of timing the markets. More GoldGrams will be credited during falling markets and lessduring rising markets.

PLANNING FOR SPECIAL EVENTS :Plan for a large Gold purchase in the future for specialevent s like daughters wedding, your wedding anniversaryor any other joyous occasions by making regular subscriptions.

ZERO DEFAULT RISK:Appointment of an Independent trustee to manage the bank accounts in which Customer funds are deposited, ensuringsafekeeping of Gold by a Safekeeping agency havinginsured vaults as per RBI specifications and ensuringdelivery of Gold to the end customers helps create a ZeroDefault risk structure.

ASSURED PURITY:24 Karat Gold of 995 fineness or more credited to thecustomers account up to 4 decimals.

MULTIPLE PAYMENT MODES :Cheque/DD/Pay Order/ECS/Direct Debit

FLEXIBILITY:Choice of obtaining the accumulated Gold grams in theform of coins and/or bars across multiple outlets.


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PRODUCT-2

DEMAT ACCOUNT:

Definition Demat account is a safe and convenient means of holdingsecurities just like a bank account is for funds . Today,

practically 99.9% settlement (of shares) takes place ondemat mode only. Thus, it is advisable to have aBeneficiary Owner (BO) account to trade at the exchanges.

Bank Account Vs Demat Account

S. N Basis Of Differentiation Bank Account Demat Account

1 Form of Holdings/Deposits

Funds Securities

2Used for

Safekeeping of money

Safekeeping of shares

3Facilitates

Transfer of money

Transfer of shares

4 Where toopen

A bank of choice

A DP of choice(can be a bank)

5 Requirementof PANNumber

Not Mandatory Mandatory(effective fromApril 01, 2006)

6Interestaccrual onholdings

Interest incomeis subject tothe applicablerate of interest

No interestaccruals onsecurities heldin demataccount

7

Minimum

balancerequirement

AverageQuarterlyBalance

maintainanceis specified for certain bank accounts

No suchrequirement

8 Either orSurvivorfacility

Available Not available


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BASIS OF SIMILARITY :

S. N

O

BASIS OFSIMILARITY PARTICULARS

1Security andConvenience

Both are very safe andconvenient means of holding deposits/securities

2Number of accounts

No legal barrier on thenumber of bank or demataccounts that can be opened

3Transfer of deposits (funds orsecurities)

Funds/securities aretransferred only at theinstruction of the accountholder

4 Physical transfer of money/securities

Physical transfer of money/securities is notinvolved

5 NominationFacility

Available

Benefits Of Demat Account

1. A safe and convenient way of holding securities (equityand debt instruments both).

2. Transactions involving physical securities are costlier thanthose involving dematerialised securities (just like thetransactions through a bank teller are costlier than ATM

transactions). Therefore, charges applicable to an investor are lesser for each transaction.3. Securities can be transferred at an instruction immediately.4. Increased liquidity, as securities can be sold at any time

during the trading hours (between 9:55 AM to 3:30 PM onall working days), and payment can be received in a veryshort period of time.

5. No stamp duty charges.


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6. Risks like forgery, thefts, bad delivery, delays in transfer etc, associated with physical certificates, are eliminated.

7. Pledging of securities in a short period of time.8. Reduced paper work and transaction cost.9. Odd-lot shares can also be traded (can be even 1 share).

10. Nomination facility available.11. Any change in address or bank account details can beelectronically intimated to all companies in which investor holds any securities, without having to inform each of themseparately.

12. Securities are transferred by the DP itself, so no need tocorrespond with the companies.

13. Shares arising out of bonus, split, consolidation, merger etc.are automatically credited into the demat account of theinvestor.

14. Shares allotted in public issues are directly credited into

demat account of the applicants in quick time

Opening a Demat Account :To start dealing in securities in electronic form, one needsto open a demat account with a DP of his choice. Aninvestor already having shares in physical form shouldensure that he gets the account opened in the same set of names as appearing on the share certificate; otherwise a

new account can be opened in any desired pattern by theinvestor.

Getting started

1. Choose a DP2. Fill up an account

opening form provided by DP,and sign anagreement with

DP in a standardformat prescribed

by the depository.3. DP provides the

investor with acopy of theagreement andschedule of

Documents to be attached

1. Passport size photographs

2. Proof of residence(POR) - Any one of Photo Ration Cardwith DOB / Photo

Driving License withDOB / Passport copy /Electricity bill /Telephone bill

3. Proof of identity (POI)- Any one of Passportcopy / Photo DrivingLicense with DOB /


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charges for hisfuture reference.

4. DP opens theaccount and

provides the

investor with aunique accountnumber, alsoknown asBeneficiaryOwner Identification

Number (BO ID).

Voters ID Card / PANCard / Photo RationCard with DOB

4. PAN card

Note:

1. The agreement required to be signed by the investor detailsthe rights and duties of the investor and DP.

2. DP may revise the charges by giving a 30 days prior notice.SEBI has rationalized the cost structure for dematerialization by removing account opening charges,transaction charges for credit of securities and custodycharges, effective from January 28, 2005.

Maximum Number of holders in a DematAccount :A maximum of three persons are allowed to open a jointdemat account in their names.


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DEMATERIALIZATION

Definition Dematerialization is the process of converting physicalshares (share certificates) into an electronic form. Sharesonce converted into dematerialized form are held in aDemat account.

Dematerialization Process

An investor having securities in physical form must getthem dematerialized, if he intends to sell them. Thisrequires the investor to fill a Demat Request Form (DRF)which is available with every DP and submit the samealong with the physical certificates. Every security has anISIN (International Securities Identification Number). If there is more than one security than the equal number of DRFs has to be filled in. The whole process goes on in thefollowing manner:


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Fig-2 Dematerialization Process


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THINGS INVESTORS SHOULD KNOWABOUT ACCOUNT OPENING ANDDEMATERIALISATION

Providing the bank account details at the timeof account opening : It is mandatory for an investor to provide his bank accountdetails at the time of opening a demat account. This isdone to safeguard investor's own interests. There are twomajor reasons for this:

1. The interest and dividend warrants can't be en-cashed byany unauthorized person, as the bank account number ismentioned on it.

2. It is convenient and time saving, as dividends and interestsgiven by the companies can be directly credited to theinvestor's bank account (through ECS facility, wherever available).

Change in bank account details: It is possible for an investor to make changes to the detailsof his bank account. The investor must inform any changein his bank account details to his DP. This enables him toreceive the cash corporate benefits (such as dividends,interests) directly into his account in time and discouragesany unauthorized use by any second party.

Change in the address of investor as provided tothe DP :Any change in your address should be immediatelyinformed to DP. This enables DP to make necessarychanges in the records and informing the concernedcompanies about the same.

Opening multiple accounts: An investor is allowed to open more than one account withexisting DP or with different DPs.

Minimum balance of securities required indemat account :There is no stipulated minimum balance of securities to bekept in a demat account.


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Account opening and ownership pattern of securities: One must make sure to open a demat account in the sameownership pattern in which the physical securities are held.For example: If you have two share certificates, one in your

individual name (say 'X') and the other held jointly withsome other individual (say 'XY'), then in such a case youwill have to open two different accounts in respectiveownership patterns (one in your name i.e. 'X' and the other account in the name of 'XY').

Same combination of names on certificates butdifferent sequence of names on the certificatesor demat account :Regulations provide that the client receives a contract noteindicating details like order number, trade number, time,

price, brokerage, etc. within 24 hours.of the trade. In caseof any doubts about the details of the contract note, you(investor) can avail the facility provided by NSE, whereinyou can verify the trades on NSE's website. The Exchangegenerates and maintains an audit trail of orders/trades for anumber of years.and you can counter check detais of order/trade with the Exchange.

Allowing somebody else to operate your Demat

account :It is possible for an account holder (Beneficiary Owner) toauthorize some other person to operate the demat accounton his behalf by executing a power of attorney. After submitting the power of attorney to the DP, that person canoperate the account on behalf of the beneficiary owner (BO)...

Addition/deletion of the names of the accountholders after opening the account :It is not possible to make changes in the names of the

account holders of a BO account. A new account has to beopened in a desired holding/ownership pattern.


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Closing a demat account and transfer of securities to another account with same ordifferent DP: An investor, if he wants, can also close his demat accountwith one DP and transfer all the securities to another account with existing or a different DP. As per a SEBIcircular issued on November 09, 2005, there are no chargesfor account closure or transfer of securities by an investor from one DP to another

Dematerialised shares do not have anydistinctive number :Dematerialised securities are fungible assets. Thereforethey are interchangeable and identical.

Dematerialization :The process of getting the securities in an electronic form,converted back into the physical form is known asDematerialization. An investor can rematerialize hisshares by filling in a Remat Request Form (RRF). Thewhole process goes on as follows:


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Fig-3 Dematerialization Process

Note:

1. Depository - An organization that facilitates holding of securities in the electronic form and enables DPs to provideservices to investors relating to transaction in securities.There are two depositories in India, namely NSDL andCDSL. As per a SEBI guideline, the minimum net worthstipulated for a depository is Rs.100 crore.


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2. NSDL/CDSL - The securities are held in depositoryaccounts, like the funds are held in bank accounts. Thereare two depositories in India namely NSDL and CDSL.

NSDL (National Securities Depository limited) wasestablished in August 1996 and is the first depository in

India. CDSL (Central Depository Securities Limited) is theother depository and was established in 1999.3. DP (Depository Participant) - A Depository Participant

can be a financial organization like banks, brokers,financial institutions, custodians, etc., acting as an agent of the Depository to make its services available to theinvestors. There are a total of 538 DPs registered withSEBI, as on March 31, 2006 and each DP is assigned aunique identification number known as DP-ID.


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PRODUCT -3

Birla Sun Life Insurance

VISION PLAN

This life insurance plan offers cover to Age 100 plus a payable at the end of the term selected by you. Both your life cover and your survival benefit will grow with accruedat the end of each policy month as long as you pay your due premiums.You customize your policy to suit your particular insuranceand savings needs by choosing:The Sum Assured which represents the amount of lifeinsurance cover to Age 100.

The GSB Term which represents the accumulation periodof your policy. During this period, your premiums are payable every year and at the end of this period, theGuaranteed Survival Benefit shall be paid to you.In the event the life insured dies during the GSB Term, weshall pay to the nominee.The Sum Assured plus Monthly Additions accrued to dateIn the event the life insured survives to the end of the GSBTerm, we shall pay to you The Guaranteed Survival Benefit

plus Monthly Additions accrued to date; plus If the life insured subsequently dies, the Sum Assured shall

be paid to the nominee; or If the life insured survives to Age 100, then the SumAssured shall be paid to you. The premium is payableduring the GSB Term only. If you discontinue paying

premiums after having paid for at least three full years,your policy will not lapse but continue on a Reduced paidup basis.

ELIGIBILITY CRITEION:

Entry Age (age last birthday)

1 to 65 years

Policy Term Whole Life to Age 100Minimum SumAssured

Rs 100,000

GSB Term 5 to 35 years


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Minimum GSB Term Attained Age at GSB Term is 18or more

Maximum GSB Term Attained Age at GSB Term is 75or less

Premium Paying Term Regular Pay during the GSB

Term

Your premium and your policy benefits will depend on theamount of the Sum Assured you select. For easy reference,your Sum Assured is banded as follows:Sum

Assured Band

Band 1 Band 2 Band 3 Band 4

SumAssured(Rs.)

100,000to199,999

200,000to399,999

400,000to799,999

800,000+

GURANTEED BENEFITS OF VISION PLAN:Guranteed Death Benefit:In the event the life insured dies during the policy term, weshall pay the Sum Assured to the nominee as the DeathBenefit. The policy shall be terminated once the DeathBenefit is paid.

Guranteed Survival Benefit:

In the event the life insured survives to the end of the GSBTerm, we shall pay to you as a Survival Benefit. The

policy continues even after the Survival Benefit is paid.


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Guranteed Maturity Benefit:

In the event the life insured survives to the end of the policy term, we shall pay to you the Sum Assured as theGuaranteed Maturity Benefit. The policy shall be

terminated once the Maturity Benefit is paid.

Reduced Paid-Up Benefits

Under Reduced Paid-Up, all your Guaranteed Benefits shall be reduced in proportion to the premiums actually paid tothe total premiums payable during the GSB Term. For example using a GSB Term of 25 years, if youdiscontinue premiums after 5 full years, then theGuaranteed Benefits shall be reduced to 5/25 or 20% of their original values.

MONTHLI ADDITIONDuring the GSB Term and while due premiums have been

paid in full, your guaranteed benefits will grow withMonthly Additions accrued at the end of each policymonth. The total Monthly Additions accrued to date shall

be payable at the end of the GSB Term or upon death of thelife insured if sooner.

At the beginning of each policy year, your policy will beassigned the latest Monthly Addition Rate declared by us.Once this Monthly Addition Rate is assigned to your policyat the beginning of its policy year, it shall be guaranteed for the next 12 months and used to calculate your MonthlyAdditions during the upcoming policy year. Depending onour expectations with regards to future economicconditions, we shall declare new Monthly Addition Rateson April 1st of every calendar year.The currently declared Monthly Addition Rates are asfollows (annual rate per 1000 of

Sum Assured):GSBTerm

5 to 10Years

11 to 15Years

16 to 20Years

21+Years

CurrentlyDeclared

39.0 39.0 41.4 45.0

Enhancement to Monthly Addition:


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For GSB Terms beyond 21 years and if Monthly Additionshave accrued for more than 21 policy years, the accruedMonthly Additions payable as a Death Benefit or aSurvival Benefit shall be enhanced by the following

percentage:

SumAssuredBand

Band 1 Band 2 Band 3 Band 4

For EachPolicyYear Exceeding21

2.50% 5.00% 6.25% 6.75%

For a GSB Term of 25 years, Sum Assured of 250,000

(Band 2) and assuming that the Monthly Addition Rateremains unchanged, the Monthly Additions accrued after 23 years and 3 months is 250,000 x 233/12 x 45.0 / 1000 =261,563. This amount will be enhanced by 5% for each

policy year exceeding 21 or by (24 21) x 5% = 15%. As aresult, the total amount payable is 261,563x 115% =300,797.

TOTAL BENEFITS:

DEATH BENEFIT:In the event the life insured dies during the GSB Term, weshall pay to the nominee

Guaranteed Death Benefit; plus Monthly Additions accrued to date; plus Enhancement to Monthly Additions, if applicable

In the event the life insured dies after the GSB Term, the

nominee shall receive the Guaranteed Death Benefit.The policy shall be terminated once the Death Benefit is paid.


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SURVIVAL BENEFIT:In the event the life insured survives to the end of the GSBTerm, we shall pay to you

Guaranteed Survival Benefit; plus Monthly Additions accrued to date; plus

Enhancement to Monthly Additions, if applicable The policy continues even after the Survival Benefit is paid.

MATURITY BENEFIT:In the event the life insured survives to the end of the

policy term, we shall pay to you the Guaranteed MaturityBenefit. The policy shall be terminated once the MaturityBenefit is paid.

ADDITIONAL INSURANCE BENEFIT:Furthermore, you can enhance your insurance coverageduring the GSB Term by adding one or more of thefollowing riders:

BSLI Accidental Death and Disability Rider (UIN:109C018V01)

BSLI Critical Illness Rider (UIN: 109C019V01) BSLI Surgical Care Rider (UIN: 109C015V01) BSLI Hospital Care Rider (UIN: 109C016V01) BSLI Waiver of Premium Rider (UIN:

109C017V01)

TERMS & CONDITIONS:

FREE LOOK PERIOD:You will have the right to return your policy to us within 15days from the date of receipt of the policy, in case you arenot satisfied with the terms & conditions of your policy.

We will refund all premiums paid till date once we receiveyour written notice of cancellation (along with reasonsthereof) together with the original policy documents.Depending on our then current administration rules, wemay reduce the amount of the refund by expendituresincurred by us in issuing your policy and as permitted bythe IRDA and in accordance to IRDA (Protection of Policyholders Interest) Regulations, 2002.


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GRACR PERIOD & REINSTATEMENT:If you are unable to pay your premium by the due date, youwill be given a grace period of 30 days and during thisgrace period all coverage under your policy will continue.If you do not pay your premium within the grace period,the following will be applicable:a) In case you have not paid premiums for three full years,then all benefits under your policy will cease immediatelyand your policy shall be terminated without value.

b) In case you have paid premiums for at least three fullyears, then your policy will be continued on a ReducedPaid-Up basis.You can reinstate your policy for its full coverage withintwo years from the due date of the first unpaid premium by

paying all outstanding premiums together with interest asdeclared by us from time to time and by providing evidenceof insurability satisfactory to us. Upon reinstatement, your Sum Assured, Guaranteed Survival Benefit and accruedmonthly Additions to date of reinstatement shall be restoredto their full value.

TAX BENEFITS:As per extant tax laws, this plan offers tax benefits under Section 80C, 80D and Section10 (10D) of the Income TaxAct, 1961.

Under Section 80C, premiums up to Rs. 1, 00, 000are allowed as a deduction from your taxableincome each year

Under Section 80D premium paid for riders(Critical illness, Surgical Care and Hospital Care)up to Rs. 15,000 are allowed as a deduction fromyour taxable income each year

Under Section 10 (10D), the benefits you receivefrom this plan are exempt from tax, subject tomentioned exclusions.

TERMS & CONDITIONSEEEEEEEE


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E XCLUSIONS :We will only refund the premiums paid to date (excludingany premiums paid towards riders) in the event the lifeinsured dies by suicide, whether medically sane or insane,within one year after the issue date or the reinstatement

date of the policy.

NOMINATION &ASSIGNMENT:In case you the policyholder are also the life insured, youneed to nominate a person who shall be entitled to the death

benefit in case of death. This nomination shall be inaccordance with Section 39 of the Insurance Act, 1938.You also have the right to assign your policy in accordancewith Section 38 of the Insurance Act, 1938

PROHIBITION OF REBATES-Section 41 of the Insurance Act 1938:

No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take or renewor continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of thewhole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any persontaking out or renewing or continuing a policy accept any

rebate, except such rebate as may be allowed in accordancewith the published prospectuses or tables of the insurer.Any person making default in complying with the

provisions of this section shall be punishable with a finewhich may extend to five hundred rupees.

NON-DISCLOSURE-Section 45 of theInsurance Act 1938:

No policy of life insurance effected after the coming intoforce of this act shall, after the expiry of two years from thedate on which it was effected be called in question by aninsurer on the ground that statement made in the proposalor in any report of a medical officer, or referee, or friend of the life insured, or in any other document leading to theissue of the policy, was inaccurate or false, unless theinsurer shows that such statement was on a material matter


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or suppressed facts which it was material to disclose andthat it was fraudulently made by the policyholder and thatthe policyholder knew at the time of making it that thestatement was false or that it suppressed facts which it wasmaterial to disclose.

Provided that nothing in this section shall prevent theinsurer from calling for proof of age at any time if he isentitled to do so, and no policy shall be deemed to be calledin question merely because the terms of the policy areadjusted on subsequent proof that the age of the life insuredwas incorrectly stated in the application.


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PRODUCT-4

MUTUAL FUNDS:

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Themoney thus collected is then invested in capital marketinstruments such as shares, debentures and other securities.The income earned through these investments and thecapital appreciations realized are shared by its unit mutualthe most suitable investment for the common man as itoffers an opportunity to invest in a diversified,

professionally managed basket of securities at a relativelylow cost. The mutual fund industry is lot like the film star of finance business. Though it perhaps the smallestsegment of the industry, it also the most glamorous in thatit is young industry where there are changes in the rules of the game every day and there are constant shifts andupheavals.

The Mutual Fund is structured around a fairly simpleconcept, the mitigation of risk through the spreading of investments across multiple entities, which is achieved bythe pooling of a number of small investments into a large

bucket. Yet it has been the subject of perhaps the mostelaborate and prolonged regulatory effort in history of thecountry.

The Mutual Fund industry started in India in a small waywith the UTI act creating what a small division waseffectively with in the RBI. Over a period of 25 years thisgrew fairly successfully and grave investors a good return,and therefore in 1989, as the next logical step, public sector

banks and financial institutions were allowed to floatmutual funds and their success emboldened the governmentto allow the private sector to foray into this area. Theinitial years of the industry also saw the emerging years of the Indian equity market, when a number of mistakes weremade and hence the mutual fund schemes, which investedin lesser-known stocks and at very high levels, became lossleaders for retail investors. From those days to today theretail investor, for whom the mutual fund is actuallyintended, has not yet returned to the industry in a big way.But to be fair, the industry too has focused on bringing inthe large investor, so that it can create a significant base


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corpus, which can make the retail investor feel moresecure.

The Indian MF industry has Rs 5.67lakh crores of assetsunder management. As per data released by Association of

Mutual Funds in India (AMF), the assets base of all mutualfunds combined has risen by 7.32% in April, the firstmonth of the current fiscal. As of now 16 joint venturesand 3 wholly owned foreign asset managers.

WORKING OF MUTUAL FUNDS:

Mutual Funds act as financial intermediaries by building aliaison between financial market and small investors.Mutual funds are financial intermediaries which mobilizethe smaller savings of scattered investors and invest intosecurities in capital market and earn income over it. Theunits holders are given the share in the total funds investedwhich is proportionate to the investment objective and theinvestment is made to cope up with the requirements.Mutual funds are collective investment vehicles which

mobilize funds from investors and professionally manageand invest in securities. These are the investment projectswhich believe in the principle of Strength in Number.

According to SEBI, Mutual Fund Regulation Act 1983, Mutual fun d is a fund established in the form of trustee bya sponsor to raise money by the trustee through the sale of units to the public under one or more schemes for investingin securities in accordance with these regulations .

Mutual Funds act as financial intermediaries by building a

liaison between financial markets &small investors. MFare financial intermediaries which mobilize the smallsaving of scattered investors and invest into securities incapital market.


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CHARACTERSTICS OF MUTUAL FUND:

(a) It is pool of money, collected from investors, investedaccording to certain investment objectives.(b) The ownership of the fund is thus joint or mutual;

the fund belongs to all investor.(c) Mutual funds are also known as FinancialIntermediaries.(d) In India, Mutual funds are constituted as Trust.(e) The investors share is denominated by units whosevalue is called as Net Asset Value (NAV) which changesevery day.(f) The investment portfolio is created according to thestated investment objectives of the fund.(g) The ownership is in the hands of the investors who have

pooled in their funds.

(h) It is managed by a team of investment professionals &other service providers.(i) An equity fund will invest in Equity shares, PreferenceShares, warrants etc.(j) A Debt fund will invest in Debt Instruments only.

TYPES OF MUTUAL FUNDS:

In India, there are many companies, both public and privatethat are engaged in the trading of mutual funds. Widevarieties of mutual fund schemes exist to cater to the needssuch as financial position, risk tolerance & returnexpectations etc. Investment can be made either in the debtSecurities or equity.

The table below gives an overview into the existing typesof schemes in the Industry.


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Fig -4 Types of Mutual Fund Scheme:

By Structure By Investment

Objectives

Other

Schemes

Open-endedSchemes

Close-endedSchemes

IntervalSchemes

Taxsavingfund

Sector

specific

IndexSchemes

DebtSchemes

EquitySchemes

MMMutualfund

Large capfund

Income/AccrualFund

Mid capfund

FMP Small capfund


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According to structure:

a) Open - Ended Funds: An open - ended fund is one that is available for

subscription all through the year. These do not have a fixedmaturity. Investors can conveniently buy and sell units at

Net Asset Value (NAV) related prices. The key feature of open - ended schemes is liquidity.

b) Close Ended Funds: A close ended funds have a stipulated maturity period

which generally ranging from 3 to 15 years. The fund isopen for subscription only during a specified period.Investors can invest in the scheme at the same time of theinitial public issue and thereafter they can buy and sell theunits of the scheme on the stock exchanges where they arelisted.

c) Interval funds :interval funds combine the feature of open ended and

close ended schemes. They are open for sales or redemption during pre determined intervals at their NAV.

ACCORDING TO INVESTMENTOBJECTIVE:

a)Debt Schemes:The aim of income funds is to provide regular and steadyincome to investors. Such schemes generally invest infixed income securities such as bonds, corporatedebentures, Government securities and money marketinstruments. Such funds are less risky compared to equityschemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The

NAVs of such funds are affected because of change ininterest rates in the country. If the interest rates fall, NAVs


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of such funds are likely to increase in the short run and viceversa. However, long term investors may not bother aboutthese fluctuations.

Under this scheme there are three types funds:

Money Market Fund/Liquid Fund: The main aim of money market is to provide easy liquidity,

preservation of capital and moderate income. Theseschemes generally invest in safe short term investment suchas treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these schemes mayfluctuate depending upon the invest rate prevailing in the

market. These are ideal for corporate and individualinvestors as a means to perk their surplus fund for short

period. These funds invest in highly liquid money marketinvestments and provide liquidity. The period of investment in these funds could be as short as a day.

Income/Accrual Funds:Income funds invest in corporate bonds. Government

bonds & money market investment. However, they arehighly vulnerable to the changes in invest rates & aresuitable for investors who have a long term investmenthorizon & higher risk taking ability. Entry & exit fromthese funds needs to be timed appropriately. The correcttime to invest in these funds is when the market view is thatinterest rate has touched their peak & is poised to reduce.

Fixed Maturity Plan(FMP):

FMPs are closed ended debt funds that invest in debtinvestment with a specific date of maturity that is less thanor equal to the maturity date of the scheme. Securities areredeemed on or before maturity & proceeds are paid to theinvestors.


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FMPs are similar to passive debt funds, where the portfoliomanager buys & holds the debts securities for the entireduration of the product. FMPs are good option for conservative investors, as they do not carry & interest raterisk provided the investor stays invested until the maturityof the product. They are also tax efficient investmentoption.

b) Equity Schemes:Equity is Stock or any other security representing anownership interest. Equity is a term whose meaningdepends very much on the context. In general, you can

think of equity as ownership in any asset after all debtsassociated with that asset are paid off. An Investor caninvest his money in Equity in two ways i.e. Online or Offline and for both, he needs a D-Mat A/C.The aim of growth funds is to provide capital appreciationover the medium to long- term. Such schemes normallyinvest a major part of their corpus in equities. Such fundshave comparatively high risks. These schemes providedifferent options to the investors like dividend option,capital appreciation, etc. and the investors may choose an

option depending on their preferences. The investors mustindicate the option in the application form. The mutualfunds also allow the investors to change the options at alater date. Growth schemes are good for investors having along-term outlook seeking appreciation over a period of time.Under this scheme there are three types funds:

Large Cap Funds:Large cap funds are funds that are invested in largecompanies like, Reliance, ONGC, Infosys, and Tata etc.These companies are less likely to go bankrupt. Soinvesting in large cap funds will not make you suffer hugelosses. On the other hand companies like, Reliance &Infosys are already will established in the stock market, sotheir chances growing further are less. These companieshave reached a saturation point so do not expect huge


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profits from them as the scope is limited. Large cap fundsare also known as Blue Chip Funds & Mega Cap Funds.

Mid Cap Funds:Mid cap funds are funds that fall in the bracket which is

between the large cap funds & small cap funds. Thesefunds are invested in a medium scale companies. The risk associated with these funds is comparatively more thanlarge cap funds but lesser then small cap funds.

Small Cap Funds:Small cap funds are invested in small companies. Smallcompanies are more likely to go bankrupt. So the risk associated with this category of equity mutual fund is veryhigh as compared to large cap & mid cap funds. Small capfunds are exactly opposite to large cap funds. Even thoughthe risk is high, there are equal chances of the companies tomake huge profits. This is because small cap companieshave a scope of growing into a big coming in near future.

c) Other Schemes:

Tax Saving Schemes:These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as thegovernment offers tax incentives for investment inspecified avenues. Investments made in Equity LinkedSaving Schemes (ELSS) and pension schemes are allowedas under section 88 of the Income Tax Act, 1961. The Actalso provides opportunities to investors to capital gains.


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Sector Specific Schemes:Sector funds are those which invest exclusively in aspecified industry or a group of industries of varioussegments such as A group shares or initial publicofferings. Sector funds are sensitive to various factors such

as interest in a sector rate & currency rate. It is beneficialnot to invest in a sector funds if you are not regular investors. A utility sector fund invests only in utilitysector.

Index Schemes:Index funds attempt to replicate the performance of a

particular index such as the BSE or NSE50. The portfolioof this fund comprises of the same companies that formsthe index. It is constituted in the same proportion as theindex. The risk associated is similar to the benchmark index. However a broader indices is less risk then a narrow

indices.

Benefits of Mutual Funds:The various benefits of investing in Debt Mutual funds are

listed below:

Your investments are not affected by marketvolatility:

Debt mutual funds invest in a range of bearing instrumentssuch as treasury bills, government securities, corporate

bonds, money market instruments & other debt securities.

Add stability to investment portfolio: As Debt Mutual Funds mainly invest in debt securities, therelatives more stable then equity investments. They canalso lend stability to your equity portfolio by reducing therisk associated with your complete investment portfolio.

Freedom to withdraw your money required:

All open ended mutual funds give you the freedom towithdraw your money as and when required, although your investments may be subject to an exit load. Close endedmutual funds have a defined maturity date. Such funds arelisted and can be traded on the stock exchange.


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You can aim for better post tax returns: Earnings from debt instruments can come in two forms:

Dividend or interest payments. Capital gains based on the difference between the purchase price and the sale price of the debt security.

Benefits of Equity Mutual Funds:The various benefits of investing in Equity Mutual fundsare listed below:

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