yes bank report

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INTRODUCTION TO THE REPORT The present Report has been prepared with the objective of searching for the business opportunities for the bank by collecting and analyzing information from various sources and making strategies for the same. Report has valuable information which has been carefully collected and analysis on the same has been made to reach at the appropriate conclusion. Survey has been done of the various charitable institutes with appropriate questionnaire framed with the objective kept in mind. Questions were asked to the officials to the various organizations and necessary information was collected as a primary source to the subject. Detail study of Foreign Contribution Regulation Act 1976 is done to have the deep theoretical and practical knowledge of the project. Project is to study the requirements of the charitable institutions in the banking product which is done by meeting different charitable institutions and asking them about their present banker and their needs. A comparison of the banking product offered by the Standard Chartered Bank 1

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yes bank report

Transcript of yes bank report

Page 1: yes bank report

INTRODUCTION TO THE REPORT

The present Report has been prepared with the objective of searching for the business

opportunities for the bank by collecting and analyzing information from various sources

and making strategies for the same.

Report has valuable information which has been carefully

collected and analysis on the same has been made to reach at the appropriate conclusion.

Survey has been done of the various charitable institutes with appropriate questionnaire

framed with the objective kept in mind. Questions were asked to the officials to the

various organizations and necessary information was collected as a primary source to the

subject. Detail study of Foreign Contribution Regulation Act 1976 is done to have the

deep theoretical and practical knowledge of the project.

Project is to study the requirements of the charitable institutions in the banking product

which is done by meeting different charitable institutions and asking them about their

present banker and their needs. A comparison of the banking product offered by the

Standard Chartered Bank and HDFC Bank is also done by meeting the two Banks

officials in Delhi region.

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1.1 COMPANY PROFILE

Country India

Industry Banking

NSE/BSE Listing NSE Code -532648

Regd.& corporate office Nehru centre,9th floor, Discovery of India,

Dr.A.B.Road, worli, Mumbai 400018 Tel:-

+91(22) 6669 9000

Northern Regional Corporate Office 48,Nyaya Marg, Chanakyapuri, New Delhi

110021 Tel:-+91(11) 6656 9000

Website www.yesbank.in

Table 1.1

Company Detail

Yes Bank, India’s new age private sector Bank is the outcome of the professional

commitment of its founder Mr. Rana Kapoor supported by his highly competent top

management team to establish a high quality, customer centric, service driven, private

Indian Bank catering to the “Future Industries of India”.

Yes Bank has adopted international best practices, the highest standards of service

quality and operational excellence, and offers comprehensive banking and financial

solutions to all its valued customers. A key strength and differentiating feature of Yes

Bank is its knowledge driven approach to banking and an unprecedented customer

experience for its retail and wealth management clients.

Yes Bank is steadily building corporate and institutional banking, financial markets,

investment banking, corporate finance, business (Small &Medium Enterprises) and

transaction banking, international banking, retail banking and wealth management

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business lines across the country. The Bank’s constant endeavour is to provide a

delightful banking experience expressed with simplicity, empathy, and totality.

Yes Bank understands the financial needs of the Government of India, in its progress and

development role of a ‘Growing India’ through Yes Bank’s Knowledge Banking

approach and the objective of being the “Bank for an Emerging India”. Yes Bank

remains committed to serving this specialized segment. Yes Bank’s knowledge Banker’s

deliver innovative, structured and comprehensive solutions through a “Money Doctor”

approach focusing on diagnostic and prescriptive attention to detail. This is facilitated

through Yes Bank’s Technology leadership –delivering proven, easy-to-use solutions for

Government Undertakings and agencies. Yes Bank has provided financial and advisory

services to Ministries of the Union Government, State Governments, Central and State

Public Sector Undertakings (PSU’s) and Agencies.

In a short span of over three and a half years the Government Relationship Management

(GRM) team has developed robust relationships with over 100 entities. The GRM team is

committed to the core values of client orientation, innovation and superior service

experience that exemplify all Businesses at Yes Bank. GRM team is providing the

Knowledge Advisory, Liquidity Management and Investment Products, Transaction

Banking, trade finances, cash management services, Treasury services, Forex

Remittances, debt capital markets, investment managements, corporate salary accounts,

Advisory structured transactions, term loans, and cash credit limits to various

government operations like IFFCO, SAIL, Airport Authority of India, IOCL, NDPL,

HPCL, Bridge & Roof co.(India) ltd and many more.

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1.1.1Business Strategy

Knowledge Banking: -

One of the strengths and differentiating features of Yes Bank is its knowledge banking

approach that is the essence of all offerings to its customers. Knowledge has been

institutionalized as a key ingredient in all internal and external processes and utilized to

create customized solutions for the clients’ specific requirements.

Technology and Operations: -

As a new generation Bank, Yes Bank has the advantage of accessing the latest available

technology. The Bank has taken a calibrated decision to invest in the best IT system and

practices in order to make its technology platform a strategic business tool for building a

competitive advantage.

Responsible Banking: -

Yes Bank has a vision to champion ‘Responsible Banking’ in India, where the concepts

of Corporate Social Responsibility (‘CSR’) and sustainability are integrated in its

Business focus.

Business Lines: -

Yes Bank has four distinct business segments to effectively service the differentiated

needs of its targeted customers.

Corporate and Institutional Banking (C&IB): -

To cater to the needs of large corporate & institutional clients, MNC’s, government

companies and PSU’s. Bank targets C&IB customers through its multifunctional

branches in the key metropolitican cities.

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Emerging Corporate Banking (ECB) : -It is dedicated to partner with growth-focused, fast-paced enterprises, which are emerging

as a leader in their respective business areas.

Business Banking : -To cater to the needs of the small and medium enterprises (SME), Yes Bank has set up a

dedicated business unit to focus on delivering superior banking solutions specially

designed to meet the varying and dynamic needs of its SME clients.

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Retail Banking and Wealth Management : -The Bank intends to develop Retail Banking into a key value driver. Yes Bank offers its

customers choice & convenience, reflected in its branch layout & design, product

feature /design, options of distribution channels and superior technology enabled service

quality. Yes Bank predominantly offers value added retail liability and third party wealth

management products as well as retail asset offerings through its sales and service

network linked to its branches.

Private Banking : - Yes Bank is focusing on personalized relationship banking for its top end High Net

worth customers, supported by structured financial solutions tailor-made to suit the needs

of such customers.

Product lines: -

Yes Bank offers a wide range of fee-based products to corporate and business banking

customers to ensure a high degree of cross-sell to clients.

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Financial Markets : -Yes Bank financial markets was ranked second in the ‘Best for currency strategy’ and

‘best for technical analysis’ categories at the Asia Money 2005 foreign exchange poll for

India.

Transaction Banking : -Yes Bank Transaction banking group has adopted a consultative approach and focus on

knowledge and relationship banking to enable customers to address strategic financial

and operating needs in the domain of:

Working capital and liquidity management

Asset management

Treasury integration

Exposure and risk management

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Yes Bank proposes to apply industry knowledge and superior technology for offering

innovative structured solutions integral to a company’s financial supply chain.

Yes International Banking : - It offers a complete suite of international banking products and services, driven by state-

of-the art technology, which includes Debt, Trade finance, corporate finance, Investment

banking and business advisory services, treasury and global Indian banking. The Bank

also plans to leverage its international presence, for its capital raising activities. These

services will initially be through partnerships with international banks and financial

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institutions followed by the establishments of branches and representative offices, as per

regulatory approvals.

Brand Creation : - The Bank believes that its differentiation begins with its service and trust mark ’YES’.

‘YES’ represents the bank true spirit of being service-oriented. The ‘YES’ brand creation

effort is supported by ‘Triton Communications’, the principal advertising agency and ‘Ad

factors PR’, the Bank’s public relation consultant.

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1.1.2 Key Members of Yes Bank Management Team

NAME DESIGNATION

Mr. Rana Kapoor Managing Director & CEO

Mr. Sunil Gulati Group President - C&IB, Transaction

Banking

Mr. Deepak Gaddhyan Group President GRM Team.

Mr. Sumit Gupta Country Head – Emerging Corporate

Banking

Mr. Alok Gupta Country Head – life sciences &

technology

Mr. Rajnish Datta Country Head –Small business banking

group

Mr. Subir Bisht Chief Risk Officer

Mr. Sanjay Aggarwal Country Head –Credit Risk, Business

Banking

Mr. Varun Tuli President Business Banking

Table (1.2)

Management Team

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1.1.3 Key Highlights & Milestones of Yes Bank.

Nov 2003 Incorporation of YES BANK Limited

May 2004 RBI License to commence banking

business

Dec 2006 Ranked No.3 in the Business World

Survey of India’s Best listed Banks

Mar 2007 Ranked No.2 among New Private Sector

Banks in the Financial Express survey

Dec 2007 Won ‘Best CSR practice award 2007’

Dec 2007 Won ‘IT people award 2007’

Jan 2008 60 operational branches across India

Mar 2008 Ranked No.3 among New Private Sector

Banks in the Financial Express-E&Y

survey & overall #1 on credit quality &

#2 on Growth

Apr 2008 67 operational branches across India

Table (1.3)

Milestones

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1.2 INTRODUCTION TO THE TOPIC

An Overview to the Foreign Contribution (Regulation) Act

FCRA 1976.

Foreign Contribution (Regulation) Act was given by the Parliament in the Twenty-

seventh year of the republic India. It is to regulate the acceptance and utilization of

foreign contribution or foreign hospitality by certain persons or associations, with a view

to ensuring that parliamentary institutions, political associations and academic and other

voluntary organizations as well as individuals working in the important areas of national

life may function in a manner consistent with the values of a sovereign democratic

republic, and for matters connected therewith. FCRA department is situated in New

Delhi, Ministry of Home Affairs, Foreigners division, jaisalmer house, 26, Man Singh

Road every permission for registration is sent here. Application Forms can be

downloaded from website, www.mha.nic.in. Need for the Foreign Contribution

Regulation Act,1976 was felt due to the security considerations and to ensure that foreign

contribution is utilized for genuine activities without compromising on concerns for

national security.

The central government has the power to prohibit any person or organizations from

accepting foreign contribution or hospitality if it is determined that such acceptance

would likely ‘affect prejudicially’

a) the sovereignty and integrity of India,

b) public interest,

c) freedom of fairness of election to any legislature,

d) friendly relations with any foreign state, or

e) harmony between religious, racial, social, linguistic or regional groups, castes or

communities.

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The Act envisages following four broad categories of restrictions on the receipt of

foreign contribution:

Section 4 of the Act precludes the following categories of persons from

receiving foreign contribution:

(a) candidates for election,

(b) correspondents, columnists, cartoonists, editors, owners, printers or

publishers of the registered newspapers,

(c) Judges, Government servants or employees of any

Corporation,

(d) members of any legislature,

(e) political parties or office-bearers thereof.

Section 5 of the Act provides that no organization of political nature shall

accept any foreign contribution without the prior permission of the Central

Government. Such organizations are not permitted to receive any foreign

fund since they are essentially involved in political activities. However,

these organizations, which are notified in the

official Gazette, can receive foreign contribution with the prior approval

of the Central Government.

Registration and permissionAn association having a definite cultural, economic, educational, religious or social

programme can receive foreign contribution after it obtains either

The prior permission of the central Government, or

Gets it self registered with the central Government.

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Prior permissionPrior permission is required

Where the association does not have a FCRA registration ,

Where the association is kept under prior permission category,

Where registration is frozen

Association of political nature not being political party.

AccountsIn the Act it is mentioned that registered associations may only receive foreign

contribution in a single account of a specified Bank branch.

Every association so registered shall give within such time & in such manner as may be

prescribed, intimation to the central government as to the amount of each foreign

contribution received by it.

A separate set of accounts and records shall be maintained, exclusively for foreign

contribution received and utilized. Every account shall be maintained on a yearly basis

duly certified by a chartered accountant along with a balance sheet & statement of

receipt& payment account to MHA.

Foreign HospitalityThe Act regulates receipt and utilization of foreign hospitality by certain individuals

which includes members of legislature, office-bearers of political party, judges,

government servants, employees of Corporation, while visiting any foreign country or

territory outside India. Such individuals can receive foreign hospitality only with the

prior permission of the Central Government. Prior permission is not required when such

individuals are required to receive any emergent medical aid needed on account of

sudden illness contracted during foreign visit, but, they are mandated to intimate the

Central Government within one month from the date of such foreign visit/receipt of

foreign hospitality. The intimation shall include the source from which and the manner in

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which such hospitality was availed by the recipient. Foreign hospitality includes cost of

travel, boarding, lodging, free transportation, free medical treatment, etc.

Over 34,035 associations have been registered under FCRA as on 28 th February, 2007 to

receive and utilize foreign contribution. These associations are broadly divided into 5

categories viz. Religious, Cultural, Economic, Educational & Social. Many of these

associations are simultaneously engaged in activities falling within two or more

categories.

No bank should credit any foreign contribution to the account of an association/NGO

unless it produces documentary evidence of having obtained registration/prior permission

from the Central Government for the same. In case any foreign contribution is credited to

the account of an NGO/Association/Trust directly, the bank should not allow utilization

of such fund and inform the NGO/Association/Trust concerned to obtain necessary

permission/registration from the Central Government for the same. Simultaneously, the

bank should inform the Deputy Secretary (FCRA), Ministry of Home Affairs, Govt. of

India, New Delhi about such receipt. Non-compliance of the above by the bank will

constitute a violation and will render the defaulting bank liable for appropriate action by

the Reserve Bank of India.

Monitoring of utilization of foreign contribution The primary purpose of Foreign Contribution (Regulation) Act, 1976 is to ensure that

the foreign contribution that is received for specific tasks is not misused for activities

detrimental to national interest. The associations registered under FCRA and those

granted prior permission, are required to submit audited FC-3 returns to MHA within 4

months of close of the financial year. The information pertains to details of receipt and

utilization of foreign funds along with corresponding Balance Sheets, Income &

Expenditure Account, Receipts & Payments Account, Schedule of Assets created out of

foreign contribution etc. A certificate from a Chartered Accountant that the accounts of

the association have been maintained as prescribed by the Foreign Contribution

(Regulation) Act, 1976, is mandatory. The accounts are required to be authenticated by the

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Chartered Accountant.

Salient FeaturesData pertaining to receipt of foreign contribution for 2005-06 has been compiled. Its

salient features are as below:

I. As on 31-03-2006, 32,144 associations were registered and 513 were granted

prior permission during the year 2005-06.

II. For the year 2005-06, 18,570 associations reported receipt of foreign

contribution (including those which received NIL amount) amounting to Rs7,877.57

crores.

III. Among the States and Union Territories, Tamil Nadu Rs. 1,609.64 crores

reported the highest receipt of foreign contribution followed by Delhi Rs.1556.46 crores

and Andhra Pradesh Rs 1,011.57 crores.

IV. Among the reporting associations, World Vision of India, Tamil Nadu (Rs.

256.41 crores) received the highest amount of foreign contribution followed

by Caritas India, Delhi (Rs. 193.36 crores) and Rural Development Trust,

Andhra Pradesh (Rs. 126.64 crores).

Analysis of the Last Three Years’ DataAn analysis of the data for the last three years i.e. from 2003-04 to 2005-06 shows

that;

a) United States of America is the top donor country.

b) Foundation Vincent E Ferrer, Spain contributed the highest amount of foreign

contribution.

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c) Tamilnadu received the highest amount of foreign contribution.

d) Chennai district received the highest amount of foreign contribution.

e) World Vision of India, Tamil Nadu received the highest amount of foreign

contribution.

f) Among the purposes, the highest amount was received for Establishment purposes.

RECEIPT OF FOREIGN CONTRIBUTION IN INDIA

Year Amount( Rs. in Crores )

% Increase over previous year

2001-02 4871.90 7.42

2002-03 5046.50 3.58

2003-04 5105.50 1.17

2004-05 6256.68 22.55

2005-06 7877.57 25.91

Table (1.4)

Foreign Contribution in India

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TOP RECEIPTENT ASSOCIATIONS IN DELHI

Foreign Contribution Rs/Crores

NAME OF ASSOCIATION 2005-06 2004-05 2003-04

Caritas India, Delhi 193.36 65.30 37.54

Plan International Inc., Delhi 92.09 64.91 56.80

Oxfam India Trust, Delhi 71.90 52.30 33.93

SOS Children’s Village of India, Delhi 55.91 26.01 38.66

Society for Development Alternatives, Delhi 53.79 28.46 19.32

Table (1.5)

Top Receipt in Delhi

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NUMBER OF ASSOCIATIONS REPORTING TO FCRA DEPARTMENT

YEAR ASSOCIATIONS

2003-04 17145

2004-05 18540

2005-06 18570

Table (1.6)

Number of Association

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FOREIGN FUNDS COMING TO DELHI

Foreign Contribution Rs/crores

2003-04 857.12

2004-05 1075.23

2005-06 1556.46

Table (1.7)

Foreign funds to Delhi

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2.1 INDUSTRY PROFILEThe oldest bank in Indian Banking industry is the “State Bank of India” being established

as the “Bank of Bengal” in Calcutta in June 1806. The first fully Indian owned Bank was

the “Allahbad Bank”, which was established in 1865. By the 1900s, the market expanded

with the establishment of Banks such as “Punjab National Bank”, in 1895 in Lahore and

Bank of India, in 1906, in Mumbai. The “Reserve Bank of India” formally took on the

responsibility of regulating the Indian banking sector from 1935. After India’s

independence in 1947, the Reserve Bank was nationalized and given broader powers. In

the early 1990’s the then Narsimha Rao government embarked on a policy of

liberalization and gave licenses to a small number of private Banks, which came to be

known as New Generation tech-savvy banks, which included banks such as Global Trust

Bank (the first of such generation banks to be set up) which later amalgamated with

Oriental Bank of Commerce, UTI Bank (Now re named as Axis Bank), ICICI Bank and

HDFC Bank. This move, along with the rapid growth in the economy of India, kick

started the Banking sector in India, which has seen rapid growth with strong contribution

from all the three sectors of Banks, namely:

Government Banks,

Private Banks, and

Foreign Banks

The next stage for the Indian Banking has been set up with the proposed relaxation in the

norms for Foreign Direct Investment (F.D.I.), where all foreign investors in banks may

be given voting rights which could exceed the present cap of 10%, at present it has gone

up to 49% with some restrictions. The new policy shocks the banking sector in India

completely. Bankers, till this time, were used to the 4-6-4 method (borrowing at 4%; lend

at 6%; go home at 4) of functioning. The new wave ushered in a modern outlook and

tech-savvy methods of working for traditional Banks. All this led to boom in India.

People just not demanded more from their Banks but also received more.

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In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake

in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor

has been allowed to hold more than 5% in the private sector Bank since the RBI

announced norms in 2005 that any stake exceeding 5% in the private sector banks would

need to be vetted by them. In (2007), banking in India is generally fairly mature in terms

of supply, product range and reach-even, though reach in rural India still remains a

challenge for the private sector and foreign Banks. In terms of quality of assets and

capital adequacy, Indian Banks are considered to have clean, strong and transparent

balance sheets relative to other Banks in comparable economies in its region. The

Reserve Bank of India is an autonomous body, with minimal pressure from the

government. The stated policy of the Bank on the Indian Rupee is to manage volatility

but without any fixed exchange rate and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time

especially in its service sector-the demand for Banking services, especially retail

banking, mortgages and investment services are expected to be strong. One may also

expect M&A’s, takeovers, and asset sales.

Currently, India has 88 scheduled commercial banks (SCBs)

- 28 public sector banks (that is with the government of India holding a stake),

- 29 private banks (these do not have government stake; they may be publicly listed

and traded on stock exchanges)

- And 31 foreign banks.

They have a combined network of over 53,000 branches and 17,000 ATM’s.

According to a report by ICRA limited, a rating agency, the public sector banks hold

75% of total assets of the banking industry, with the private and foreign banks holding

18.2% and 6.5% respectively. The annual growth in bank credit to the commercial sector

is at 25.4% as on March 31, 2007 and was lower than 27.2% against previous year. Till

2010, retail banking is expected to grow at a CAGR (compounded average growth rate)

of 28%

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to touch a figure of INR 9,700 billion. This requires expansion and diversification of

retail product portfolio, better penetration and faster service mechanism.

The report on Retail Banking industry in India covers industry segments like housing

loan, auto loan, personal loan, education loan, consumer durable loan, credit card and

regulatory frame work for retail Banks is also discussed. The report gives retail banking

industry’s current performance and future outlook. Total 22 major retail Banks in India

are covered in terms of their performance, strategy and outlook. In absolute terms,

India’s banking sector enjoyed reasonable growth through the year to December 31 2007.

In local currency terms, total assets, total loans and total deposits increased by 23%,

21%, and 26%, respectively. The loan/deposit, loan/asset ratio fell while the loan/GDP

ratio rose.

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2.1.1 State Bank of India (SBI)

State Bank of India is the India’s largest Bank. It has largest branch network all over the

country with its special products like

Personal Banking

Deposit Schemes

Personal Finance

Agricultural/Rural Banking

Micro Credit

Regional Rural Bank

NRI Services

International Banking

Trade Finance

Merchant Banking

Correspondent Banking

Corporate Banking

Mid Corporate Group

Project Finance

Small & Medium Enterprises (SME’s)

Government Business

Public Provident Fund

SBI e-Tax

Services

Internet Banking

Mobile Banking

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The SBI’s powerful corporate banking formation deploys multiple channels to deliver

integrated solutions for all financial challenges faced by the corporate universe. The

Corporate Banking group and the National Banking group are the primary delivery

channels for corporate banking products. The Corporate Banking Group consists of

dedicated Strategic Business Units that cater exclusively to specific client groups or

specialize in particular product clusters. Foremost among these specialized groups is the

Corporate Accounts Group (CAG), focusing on the prime corporate and institutional

clients of the country’s biggest business centers. The others are the Project Finance unit

and the Leasing Unit. The National Banking Group also delivers the entire spectrum of

corporate banking products to other corporate clients, on a nationwide platform.

Complete Range of Products and Services

The SBI offers an exhaustive range of financial products and services that answers any

business or market circumstance, backed by an assublack expertise in customizing the

product to meet the most sensitive specificities of each client and each business context.

Its team of highly skilled and experienced product specialists can help its customers in

forecast structure complex transaction requirements.

The SBI Edge

Commanding unsurpassed respect and legacy in the Indian financial expanse, the SBI is

committed to provide the financial solutions that extract maximum value from business

and market situations.

While the Bank is strongly positioned to structure financial packages that anticipate the

changing business environment, its vast network-the world’s largest-ensures delivery

channels of unmatched reach, both in India and abroad.

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Working Capital Finance

SBI offers working capital finance to meet the entire range of short term fund

requirements that arise within a corporate day to day operational cycle. The SBI working

capital loans help the companies in financing inventories, managing internal cash flows,

supporting supply chains, funding production, and marketing operations, providing cash

support to business expansion and carrying current assets.

SBI’s working finance products comprise a spectrum of funded and non-funded facilities

ranging from cash credit to structured loans, to meet the different demands from all

segments of industry, trade and the services sector. Funded facilities include cash credit,

demand loan and bill discounting. Demand loans are considered also under the FCNR

(B) (Foreign currency from Non Resident) scheme. Non-funded instruments comprise

letters of credit (inland and overseas) as well as bank guarantees (performance and

financial) to cover advance payments, bid bonds etc.

Project Finance

The SBI has formed a dedicated Project Finance Strategic Business Unit to assess credit

proposals from and extend term loans for large industrial and infrastructure projects.

Apart from this, project term loans for medium sized projects and similar clients are

delivered through the CAG (Corporate Accounts Group) and NBG (National Banking

group).

In general, project finance covers Greenfield industrial projects, capacity expansion at

existing manufacturing units, construction ventures or other infrastructure projects.

Capital intensive business expansion and diversification as well as replacement of

equipment may be financed through the project term loans.

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Project finance is quite often channeled through special purpose vehicles and arranged

against the future cash streams to emerge from the project. The loans are approved on the

basis of strong in house appraisal of the cost and viability of the ventures as well as the

credit standing of promoters.

Deferred Payment Guarantee (DPG)

SBI can extend deferred payment guarantees to industrial projects for obtaining imported

equipment. The DPG is a standby credit guaranteeing deferred payments, usually for

payments for capital goods, turnkey contracts etc.

Corporate Term Loan

The SBI corporate term loans can support company in funding ongoing business

expansion, repaying high cost debt, technology up gradation, R&D expenditure,

leveraging specific cash streams that accrue into the company, implementing early

retirement schemes and supplementing working capital. Corporate term loans can be

structured under the FCNR (B) scheme as well, with the option of switching the currency

denomination at the end of the interest periods. This will help you take advantage of

global interest rate trends vis-à-vis domestic rates to minimize your debt cost. The

Bank’s corporate term loans are generally available for tenures from three to five years,

synchronized with your specific needs. SBI corporate term loans can have a bullet or

periodic repayment schedule as required by the client. The repayment mode may be

linked to the cash accruals of the company. The Bank’s expert credit crew gauges the

applicant’s particular fund requirements and evaluates the company’s credit worthiness,

factoring in the cash flows generated by it.

Structured Finance

SBI structured finance involves assembling unique credit configurations to meet the

complex fund requirements of large industrial and infrastructure projects. Structured

finance can be a combination of funded and non-funded facilities as well as other credit

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enhancement tools, lease contracts for instance, to fit the multi layer financial

requirements of large and long-gestation projects.

Being India’s largest bank and with the rich experience that it brings with it, SBI

commands formidable expertise in engineering financial packages that address complex

requirements with minimum risk. Further, SBI has firm relationships across the financial

map of the world, which can be leveraged to structure solutions that may necessitate the

participation of several credit agencies.

Dealer Financing

SBI extends financial support to the corporate distribution network, by providing both

working capital finance and term loans to select dealers of identified companies. This

gives dealers to leverage their business relationship with major corporate to avail low

cost credit. Also, this type of financial solutions allows the corporate negotiate a better

price with dealers. Dealer financing may be extended in the bill discounting form or

simply as cash credit.

Channel Financing

Channel financing is an innovative finance mechanism by which the bank meets the

various fund necessities along customer supply chain at the supplier’s end itself, thus

helping them sustain a seamless business flow along the arteries of the enterprise.

Channel finance ensures the immediate realization of sales proceeds for the SBI client’s

supplier, making it practically a cash sale. On the other hand, the corporate gets credit for

a duration equaling the tenure of the loan, enabling smoother liquidity management. SBI

has the world’s largest banking network of over 9,000 branches and this enables it to

deliver the financial solution at suppliers doorstep, across the span of the country.

Equipment Leasing

The SBI’s has deployed a dedicated strategic business unit for lease financing that is

richly experienced in arranging lease contracts for procuring expensive equipment for

clients project or plant. At SBI, lease agreements as stand alone contracts or as part of a

structured package are arranged.

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Loan Syndication

The SBI leverages its vast network of relationships to arrange syndicated credit products

for corporate clients and industrial projects. With its rich experience and strong

reputation, SBI’s syndication desk can assemble large loan packages involving a ring of

reputed financial entities, domestic and international, that match the large credit

requirements of infrastructure projects.

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2.1.2 Industrial Credit& Investment Corporation of India

ICICI Bank

ICICI Bank is India’s second largest bank with total assets of Rs.3, 997.95 Billion

(US$100 billion) at March 31, 2008 and profit after tax of Rs.41.58 billion for the year

ended March 31, 2008. ICICI Bank is second amongst all the companies listed on the

Indian stock exchanges in terms of free float market capitalization. The Bank has a

network of about 1308 branches and 3950 ATMs in India and presence in 18 countries.

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

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

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

venture capital and asset management. The Bank currently has subsidiaries in the United

Kingdom, Russia, and Canada, branches in United States, Singapore, Bahrain, Hong

Kong, Sri Lanka, Qatar and Dubai International finance centre and representative offices

in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and

Indonesia. UK subsidiary has established branches in Belgium and Germany.

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

National Stock Exchange of India Limited and its American Depositary Receipts

(ADR’s) are listed on the New York Stock Exchange (NYSE).

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

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

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

offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank’s

acquisition of Bank of Madura Limited in all stock amalgamation in fiscal 2001, and

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secondary market sales by ICICI to institutional investor in fiscal 2001 and fiscal 2002.

ICICI was

formed to in 1955 at the initiative of the World Bank, the Government of India and

representatives of Indian Industry. The principal objective was to create a development

financial institution for providing medium term and long term project financing to Indian

businesses.

In the 1990s, ICICI transformed its business from a development financial institution

offering only project finance to a diversified financial services group offering a wide

range of products and services, both directly and through a number of subsidiaries and

affiliates like ICICI Bank in 1999, ICICI become the first Indian company and the first

bank or financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian Banking industry, and the move towards

universal banking, the managements of ICICI and ICICI Bank formed the view that the

merger of ICICI with ICICI Bank would be the optimal legal structure for the ICICI

group’s universal banking strategy. The merger would enhance value for ICICI

shareholders through the merged entity’s access to low cost deposits, greater

opportunities for earning fee based income and the ability to participate in the payment

system and provide transaction banking services. The merger would enhance value for

ICICI Bank shareholders through a large capital base and scale of operations, seamless

access to ICICI’s strong corporate relationships built up over five decades, entry into new

business segments, higher market share in various business segments, particularly fee-

based services, and access to the vast talent pool of ICICI and its subsidiaries. In October

2001, the boards of directors of ICICI and ICICI bank approved the merger of ICICI and

two of its wholly-owned retail finance subsidiaries, ICICI personal financial services

limited and ICICI capital services limited with ICICI bank. The merger was approved by

shareholders of ICICI and ICICI bank in January 2002, by the high court of Gujarat at

Ahmedabad in March 2002, and by the high court of judicature at Mumbai and the

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Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group’s

financing and banking operations, both wholesale and retail, have been integrated in a

single entity.

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RESEARCH METHODOLOGY

Research in general refers to the search of knowledge. One can also define research as a

scientific & systematic collection of information.

In simple words research is the careful investigation or enquiry of markets especially

through search for new facts in any branch of knowledge.

Analytical Tools

Microsoft Excel (PivotChart Reports). A PivotChart Report is an

interactive chart that quickly combines and compares large amounts of

data from tables in excel. PivotChart report was used here to analyze

related totals, because there was a long list of figures to sum and there

was a need to compare several facts about each figure. Because a

PivotChart report is interactive, it has flexibility to change the

view of the data to see more details or calculate different

summaries, such as counts or averages. Drop fields feature was

extensively used for the report creation. Essentially it is an area in a

PivotChart report where we can drop fields from the Field List dialog

box to display the data in the field.

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3.1 Justification of the Study       

Topic allotted to me for the summer training project completed at YES BANK LTD. is

related to the knowledge of FCRA act i.e. Foreign Contribution Regulation Act 1976, as

the bank is interested to enter into the segment of FCRA I completed my project by three

different surveys i.e. FCRA department at Ministry of Home Affairs, three different

banks, and different charitable institutions. As it was interesting topic to be worked upon,

I learned a lot of new things during this period which will help me in my career.

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3.2 OBJECTIVES OF THE STUDY

Main objective:Objective of the study is to look for the banking opportunities in FCRA accounts of

charitable institutions for the Yes Bank.

With the increasing number of organizations taking the FCRA registration, Bank is

interested in having the business with the NGO’s in Delhi and NCR.

Sub objectives:

1. Objective of the study aims at the 360 degree knowledge to the target business. It

includes the MHA (Ministry of Home Affairs), NGO’s and various banks giving such

type of services to take detail know how and should reach at a decision to be taken by the

bank after concluding the study.

2. To operate the FCRA accounts in accordance with the rules and guidelines mentioned

in the FCRA 1976.

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3.3 DATA COLLECTION

Data can be collected by using two well known methods: Primary & Secondary. In

primary data collection, you collect the data yourself using methods such as interviews

and questionnaires. The key point here is that the data you collect is unique to you and

your research and, until you publish, no one else has access to it. There are many

methods of collecting primary data and the main methods include:

Questionnaires

One-to-one interviews

Group interviews

Observation

Case-studies

Diaries

Critical incidents

Portfolios

Secondary data is data that has already been collected by someone else for a different

purpose to yours. For example, this could mean using:

Data collected by a hotel on its customers through its guest history system

Data supplied by a marketing organization

Annual company reports

Government statistics.

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Primary data collection method used for this project.

I used questionnaire method which is also known as scheduling method for primary data

collection in the research process. To know the exact details regarding FCRA accounts in

Banks 360 degree approach is being used as the FCRA department, Banks, and NGO’s

are surveyed to take the required

Secondary Data is also used for the purpose of completion of project which includes

Internet, Centre for policy Research, and FCRA department.

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3.4 SAMPLING AND SAMPLING DESIGN

The procedure by which a few fields are chosen from the data to be studied in such as

way that the sample can be used to estimate the same characteristics in the total is

referred to as sampling.

The advantages of using samples are that it is much less costly, quicker and, if selected

properly, gives results with known accuracy that can be calculated mathematically. Even

for relatively small samples, accuracy does not suffer even though precision or the

amount of detailed information obtained, might. These are important considerations,

since most research projects have both budget and time constraints.

Sampling process is taking a sample out of the universe population to take a decision

regarding the population. Instead of surveying the whole population we take only a few

persons for our topic to have a general idea of the subject related.

In the project I took a sample of three Banks for a general idea of the FCRA accounts and

made our study reach a conclusion.

These three banks are

1. HDFC BANK

2. STANDARD CHARTERED

3. CORPORATION BANK

For the charitable institutions and NGO’s who are reporting to the FCRA Department to

be studied I took a sample of 11 organizations from the NCR.

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3.5 TIME PERIOD OF STUDY

June, 9-19, 2008

Gathering information regarding the Act, Rules, Bill, with help of the secondary

mediums.

June, 20-30, 2008

Meeting FCRA, Ministry of Home Affairs official

collecting the necessary &current information regarding the Act.

July, 1-11, 2008

Visiting various banks like Standard Charted Bank, HDFC Bank, Corporation Bank and

other banks which offer special services to the charitable institutions in regards to FCRA

& collecting the necessary details.

July, 14-29, 2008

Meeting the officials of various charitable trusts and such institutions who are registered

with FCRA and having the present banking arrangements.

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3.6 AREAS OF STUDY

Study of the project started from the Regional office of the Bank at 48, Nayaya Marg

Chanakyapuri New Delhi. Main centre of the study was around the office like visiting the

FCRA office from the Bank and then meeting the different charitable institutions and

also the different Banks providing the same services in the area of Delhi and NCR.

Area includes the different parts of New Delhi few of them are

Connaught Circus

Safdarjung Enclave

Janakpuri

Ashok palace

Bhai Veer Singh Marg

Lodhi Road

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3.7 LIMITATIONS OF THE STUDY

1. General survey is more biased: General Survey is more biased because few

charitable institutions were not ready to give the exact financial details.

2. Less responsive communication: General Survey was found to be less

responsive because of the reason that institutions &organizations did not want to respond

to the questionnaire due to lack of time & non willingness.

3. Time consuming: The General Survey was time consuming because it take time

to reach to different charitable institutions & ask them certain related questions in there

different areas.

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1. Foreign receipt in the present year.

Figure (4.1)

Percentage of foreign receipt in present

No Foreign Receipt in Present 27%

Foreign Receipt in Present 73%

Never received foreign funds 0%

Table (4.1)

Percentage of foreign receipt in present

Interpretation: This pie chart shows that only 27% of the organizations have not

received any foreign funds in the current year and 73% organizations are receiving funds

continuously and there is no organization (0%) which has never received any foreign

fund so far.

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2. Donor from which country.

Figure (4.2)

Percentage of donor from which country

Donor from all over the world. 55%

Donor only from USA. 27%

Donor from USA & others. 18%

Table (4.2)

Percentage of donor from which country

Interpretation: The figure gives an idea of the sample that 55% of the organizations

surveyed are receiving funds from all over the world where as the 27% organizations are

having foreign receipts or donations or members sending funds to India are only from

USA. 18% of the organizations are as such they receiving funds from USA & others like

UK, Netherlands etc.

3. Dealing with which Bank for FCRA accounts.

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Figure (4.3)

Percentage of dealing with which Bank

Account in Public Bank. 55%

Account in Private Bank. 27%

Account in Foreign Bank. 18%

Table: (4.3)

Percentage of dealing with which Bank

Interpretation: From the study of various organizations it has been concluded that the

55% organizations are dealing with the public sector Banks which include Indian

overseas Bank, State Bank of Hyderabad, PNB, P&S Bank and 27% organizations

reported to have their Bank account with the private sector Banks it has ICICI Bank,

Federal Bank, Catholic Syrian Bank Ltd. Only 18% of the organizations are having Bank

Account in Foreign Banks which has ABN AMRO, American express Bank.

4. Satisfaction level with present Banker.

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Table (4.4)

Percentage of satisfaction level

Poor 9%

Average 9%

Good 73%

Excellent 9%

Table (4.4)

Percentage of satisfaction level

Interpretation: From the figure shown above it is clear that most of the organizations

visited are satisfied with the services of present Banker as the 73% of the institutions

have marked their Banker as good service provider and 9% each has been given to the

Poor service, average,& excellent respectively.

5. Foreign Exchange conversion charges taken by Bank.

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Figure (4.5)

Percentage of For-Ex Conversion Charges

No extra charges. 27%

Charge, but Nominal. 55%

Charge Heavily. 18%

Table (4.5)

Percentage of For-Ex Conversion Charges

Interpretation: Analysis for the foreign exchange charges is shown in the figure that

27% of the organizations are not paying any extra charges for the foreign receipts in their

FCRA accounts, 55% of the organizations are paying the charges but they take them as a

nominal charge for the transaction, only 18% of the organizations are paying heavily on

the foreign exchange conversion to the Banks.

6. More Services desired from the Banking sector.

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Figure (4.6)

Percentage of services Desired

Just Satisfied need more. 46%

Well satisfied. 27%

Desire more benefits. 27%

Table (4.6)

Percentage of services Desired

Interpretation: Most of the Organizations visited report to be just satisfied with the

services provided by their present banker as the figure reaches up to 46% and also they

need more from the banking industry. 27% of the institutions reported to be well satisfied

with their banker, same is the percentage (27%) in the category which desires more from

the banking sector in their product.

7. Investment advisory an important value added.

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Figure (4.7)

Investment advisory a value added Investment advisory required. 55%

Own separate advisory body. 27%

Already getting. 18%

Table (4.7)

Investment advisory a value added

Interpretation: Figure above shows about the 55% of the organizations are interested in

the investment advisory and 27% of the organizations are having their own separate body

for the purpose of investments, 18% of the organizations are already receiving such types

of advices.

8. Reaction to proposed FCR bill 2006.

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Figure (4.8)

Percentage of reaction to proposed FCR bill

In favor of Bill 2006. 18%

Against the Bill 2006. 36%

Partially favor partially against. 46%

Table (4.8)

Percentage of reaction to proposed FCR bill

Interpretation: A major proportion of the organizations have two sided opinion on the

FCR Bill 2006 as few of the proposals like multiple bank accounts instead of single bank

account at present, are good for the organizations but few proposals are not favorable for

the working of the organizations so it is 46% who are partially favoring it and partially

opposing it. But 36% of the organizations are totally against the Bill, & 18% are in the

favor of the Bill they say what government do is fine.

9. Requirement in rules of working with Fcra.

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Figure (4.9)

Percentage of requirement in rules with Fcra

No Requirement to change in Rules. 82%

Required to be amended. 18%

Table (4.9)

Percentage of requirement in rules with Fcra

Interpretation: Most of the organizations are well satisfied with the current rules of the

department as 82% of the organizations do not need any change in rules of FCRA only a

small proportion i.e. 18% wants to have some amendments in the rules of FCRA.

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10. Auditing done by FCRA Department for the organization.

Figure (4.10)

Percentage of auditing done by FCRA Department for organization

No auditing by FCRA. 82%

Auditing in Past. 18%

Table (4.10)

Percentage of auditing done by FCRA Department for organization

Interpretation: According to the 82% organizations in the NCR area no auditing is done

by the FCRA department separately for their organizations, the only thing is they file the

FC-3 return at the end of each year audited by the certified chartered accountant and for

the 18% organizations FCRA department has done auditing some time in past.

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11. Problem faced in working with FCRA.

Figure (4.11)

Percentage of problems faced in working with FCRA

No Problem faced 100%

Problem Faced 0%

Table (4.11)

Percentage of problems faced in working with FCRA

Interpretation: Survey tells there is no problem in working for the organizations with

the FCRA department as 100% of the organizations told that there is no problem in

working as per rules of MHA.

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12. Response level of FCRA department.

Figure (4.12)

Percentage of response level of FCRA department

Poor 0%

Average 18%

Good 82%

Excellent 0%

Table (4.12)

Percentage of response level of FCRA department

Interpretation: Survey shows that FCRA department is very good at response level to

the organizations as 82% of the respondents have marked as good for the FCRA

department & only 18% of the organizations mark them as average as they said officers

sitting in the FCRA office are not fully trained they should be perfect in that.

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13. Use of online services for the filling of returns by the NGO’s.

Figure (4.13)

Use of online services by NGO’s

Using Online Services 45%

Not Using Online Services 55%

Table (4.13)

Use of online services by NGO’s

Interpretation: Figure tells about the use of online services for contacting the FCRA

department for filling the FC-3 returns or other returns is about 45% by the NGO’s and

55% of the NGO’s are just using the traditional way of filling the return to the FCRA

department.

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14. Reaction on the Proposed Renewal Fees on the FCRA registration in

Bill 2006.

Figure (4.14)

Reaction on the Proposed Renewal Fees

Against the Bill. 64%

Favor the Bill. 9%

Neutral for Bill. 27%

Table (4.14)

Reaction on the Proposed Renewal Fees

Interpretation: Figure tells about the view point of the organizations towards the

proposal of renewal fees on the certificate of the FCRA after every five years in order to

eliminate the organizations from the certification those who are not responding to the

department regularly, 64% of the organizations are against the renewal proposal as they

are regularly reporting to the department, 9% are in favor as they say whatever

government do is alright, 27% of the sample respond that they are neutral towards

Bill2006.

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5.1 CONCLUSION

On the basis of study it is concluded that going towards the FCRA product will be a good

move by the bank as there is large number of NGO’s in NCR region which are actively

performing their projects, as they are receiving foreign funds through FCRA accounts in

banks then it can be a source of foreign funds for the bank. There can be large income

source from the float income. All charitable institutions and associations in NCR can be

targeted with the help of special team to gain more business. There is also a benefit of

foreign exchange income and conversion charges in FCRA accounts.

VANI (Voluntary Action Network India) is the active NGO forum in NCR, It is

better to introduce our new product through Forum and target our potential customers

through this platform. In this forum most of the NGO’s and charitable institution are

members, in this way Yes Bank can have business with them.

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59

FCRA

DIFFERENT BANKS

CHARITABLE INSTITUTIONS.

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5.3 Comparison of the FCRA accounts offered by different Banks.

Standard Chartered

Bank

Savings Account

Cash withdrawal

allowed

Special team targeting

NGO’s for FCRA

accounts.

Compliance team at

Bombay is reporting

RBI and central

government for MIS of

the accounts.

Special care in case of

Prior permission

obtained by

organization from

central government.

HDFC Bank

Savings Account

Cash withdrawal not

allowed

Consultancy services as

extra benefits to the

account.

Special team for FCRA

accounts.

Reporting regularly to

central government and

RBI.

Special care in case of

Prior permission

obtained by

organization from

central government.

Corporation Bank

Savings Account

Cash withdrawal

allowed

No special team.

International Banking

Division (IBD) is

contacting central

government for FCRA

accounts MIS.

Special care in case of

Prior permission

obtained by

organization from

central government.

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