SUMMER TRAINING PROJECT REPORT

ON
“OVERALL ANALYSIS OF VARIOUS MUTUAL
FUNDS,DEMAT ACCOUNT AND LIFE INSURANCE
POLICIES OF RELIANCE MONEY, MORADABAD”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE MASTER’S DEGREE IN BUSINESS ADMINISTRATION
OF

UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN

SUBMITTED TO:
INTERNAL GUIDE EXTERNAL GUIDE
Name: Ms Nebidita Biswas Name:Ms Payal Agarwal
Designation: Lecturer Designation: Centre Manager
IMS Company Name: Reliance Money
Dehradun Location: Moradabad

SUBMITTED BY:
NAVEEN CHANDRA JOSHI
(MB08037)

INSTITUTE OF MANAGEMENT STUDIES-DEHRADUN

BATCH 2008-2010

1
ACKNOWLEDGEMENT

In completing my project, I am very fortunate to have the Result of an extensive

survey whose participants offered suggestions based on their actual use of product.

My first appreciation and thanks goes to

Cluster Managers

Centre Managers

Employees of reliance money

They have given their precious time in a very polite and co operative manner for my

internship and the project.

In the chain I am also immensely thankful to my summer internship guide

Ms. Payal Agarwal, Center Manager Reliance Money, Dehradun and my internal guide Ms.

Nebidita Biswas (Lecturer, IMS-Dehradun), for their enlightening guidance and constant

inspiration and keen interests shown during my summer internship and in preparing of my project.

I deliberately profound my gratitude to her.

NAVEEN CHANDRA JOSHI

2
 CERTIFICATE

I have the pleasure in certifying that Mr. NAVEEN CHANDRA JOSHI is a bonafide student of

MBA IInd Semester of the Master’s Degree in Business Administration (Batch2008-10)of Institute

of Management Studies, Dehradun under Uttarakhand University Roll No. MB08037

He/She has completed his project work entitleled OVERALL ANALYSIS OF VARIOUS

MUTUAL FUNDS, DEMAT ACCOUNT, AND LIFE INSURANCE POLICY OF

RELIANCE MONEY under my guidance.

I certify that this is his original effort & has not been copied from any other source. This project

has also not been submitted in any other Institute / University for the purpose of award of any

Degree.

This project fulfils the requirement of the curriculum prescribed by this Institute for the said

course. I recommend this project work for evaluation & consideration for the award of Degree to

the student.

Signature : ……………………………………

Name of the Guide : Nebidita Biswas

Designation :

Date : ……………………………………

3
COMPANY CERTIFICATE

4
Executive summary

With gratitude to almighty I thank this opportunity to pen down my experience during the

execution of summer training and presenting the project report. The project is the

part of my partial fulfilment of my MBA curriculum.

As RELIANCE is doing splendidly well in the sector of MUTUAL FUNDS, DMAT

ACCOUNT, LIFE INSURANCE but staying competitive in today’s dynamic business

environment means finding new ways to reduce cost while maximizing the value

of your resources.

I took the responsibility to sell the various financial products like MUTUAL FUNDS, DMAT

ACCOUNT, LIFE INSURANCE offered by reliance money.

After undergoing the training about the product and operational features I started

exploring the product and contacted the prospective customer by way of tele calling,

e-mails, corporate presentation, my primary aim was to give better options to the

prospective customers by offering them products specialized features & its unique

Incomparable qualities in the services provided by Reliance Money in MUTUAL

FUNDS, DMAT ACCOUNT, LIFE INSURANCE.

5
Table of Content

Sr. No. Details Page No.

1 Introduction about the industry 9

2 Introduction about the company 14

3 SWOT Analysis 29

4 Demat Account 33

5 Mutual Fund 38

6 Insurances 54

7 Strategies 67

8 Achievements 74

9 Research Methodology 75

10 Learning and experiences 80

11 Finding and analysis 83

12 Limitations 89

13 Conclusion 92

14 Recommendations 94

15 Bibliography 96

15 Annexure 97

6
TABLE OF FIGURES

Sr. No. Details Page No.

1 Figure 1(a) 77

2 Figure 1(b) 78

3 Figure 1(c) 78

4 Figure 1(d) 79

5 Figure 1 84

6 Figure 2 85

7 Figure 3 86

8 Figure 4 87

9 Figure 5 88

7
INTRODUCTION

8
ABOUT THE INDUSTRY

The Indian financial sector is on a roll. Driven by a strong investor interest and an expanding
market, the Indian stock market rose to record levels, with the popular sensex crossing 21,000 and
Nifty crossed the 6,000 mark for the first time.

The industry was also becoming more vibrant, with new types of products and services being
offered to meet the needs of the booming economy. For example, in the derivatives market, the
notional principal amount outstanding has more than trebled between March 2005 and June 2007
to US$ 24.09 billion from US$ 6.836 billion.

The buoyancy in the economy was also estimated to lead to a four-fold increase in India's
investable wealth from US$ 250 billion in 2007 to US$ 1 trillion. Simultaneously, according to a
report by Client, an international consultancy firm, India's wealth management will rise to an
estimated 42 million by 2012 from about 13 million in 2007.

Clearly, there is huge potential in this segment. Significantly, wealth management revenues are
expected to account for 32-37 per cent of the total full-service financial institutions by 2012. The
market is also expected to undergo a structural transformation with organized players increasing
their market share.

Stock Markets

The year 2007 saw Indian stock markets scaling new peaks. It has emerged as the third best
performing market in the world with a dollar return of 71.23 per cent. The popular Bombay Stock
Exchange (BSE) benchmark index, sensex, also posted its highest ever absolute gain of 6500
points in over two decades.

9
This performance of Indian stock markets has led to the total investor wealth of Bombay Stock
Exchange (BSE) surging to a record high of over US$ 1.7 trillion, with an average increase of over
US$ 10.18 million in every minute of trading during 2007. At the end of 2006, the total market
capitalization stood at US$ 812 billion.

Simultaneously, the National Stock Exchange (NSE) has climbed to the top spot in stock futures
contracts and number-two slot in the index futures segment in the world.

According to Ernst & Young, India was also the fifth largest market in terms of number of IPOs
and seventh largest in terms of the proceeds for the year. Indian companies raised a whopping US$
11.48 billion through public issues in 2007, which is 83 per cent higher than US$ 6.28 billion
mobilized in 2006.

The robust performance of the Indian stock markets can also be seen in the huge increase in the
funds mobilised by the corporate India. During 2007-08, India Inc mobilised a whopping US$ 8.13
billion through issue of shares on rights issue, which is almost an eight-fold increase over US$
926.32 million raised in 2006-07. In fact, the mobilisation of the funds in 2007-08 was more than
the combined mobilisation of the preceding 12 years. Simultaneously, a whopping US$ 13.07
billion has been raised through by India Inc through public issues, according to data compiled by
Prime Database. This is almost twice that of US$ 6.25 billion mobilised in 2006-07 and the highest
ever in the last six years. While initial public offerings mobilised US$ 10.34 billion (about 79.14
per cent), follow-on public issues mobilised US$ 2.53 billion.

Private Equity

The year 2007 was a watershed for private equity market, which has emerged as the most preferred
mode of fund mobilization for India Inc. The capital mobilised through this route was higher than
the funds mobilized through IPOs, follow-on issues and qualified institutional placements put
together.

India, in fact, topped the Asia private equity chart for the first time in 2007 in terms of aggregate
deal value. According to Grant Thornton, a total of US$ 17.14 billion was mobilised through 386
deals by India Inc in 2007, compared to US$ 7.8 billion in 2006. Real estate, infrastructure,
10
banking and financial services were the dominant sectors attracting about 55 per cent of the total
private equity investments.

The growth continues apace in 2008. During January-March 2008, private equity firms invested
about US$ 3.3 billion across 97 billion, which was 22.22 per cent higher than the US$ 2.7 billion
clocked in the corresponding period last year.

A study by global consulting firm Boston Analytics, the average deal size has increased from US$
8.4 billion in 2003 to US$ 36.8 billion in 2007. And driven by the robust economic growth and
attractive market valuations, private equity investments are estimated to continue strongly through
2010.

Structured Finance

India has emerged as the fastest growing market in the Asia-Pacific region for structured finance, a
process of arranging funds by banks and other entities through partly selling their loan books. It
was also the second largest market for domestic issuance in the structured finance market.

Within this market, Asset Backed Securities (ABS) market has been the dominant segment than
Residentially Market Backed Securities (RMBS). This market has been growing at a frenetic pace
ever since the RBI issued revised guidelines on securitisation in 2006.

For example, according to Moody's Investors service, domestic structured finance transactions
grew by a whopping 90 per cent during the first half of 2007 to US$ 5.5 billion compared to US$
2.9 billion in the corresponding period in 2006. While ABS accounted for 64 per cent of the total
issuances, securitisation of single corporate loans accounted for 20 per cent.

Mutual Funds
11
India is also one of the fastest growing market for mutual funds industry attracting a host of global
players. The combination of increasing number of fund houses (along with new schemes) and
increase in the number of people parking their savings in mutual funds has resulted in total funds
mobilisation increasing at a whopping 124.93 per cent during 2007-08 to stand at US$ 1.11 trillion
as against US$ 485.13 billion in 2006-07.

The average assets under management (AUM) of the mutual fund industry for March 2008 stood at
US$ 134.76 billion as against US$ 89.86 billion at the end of 2006, representing a year on year
growth of 49.96 per cent. Continuing the growth, the Indian mutual funds industry is expected to
grow at a CAGR of 30 per cent in the next three years to become a US$ 241.79 billion industry by
2010 from US$ 118.85 billion in July 2007. This would be on the back of 25 per cent growth rate
between 1999 and 2007. Consequently, market penetration in the MF industry would more than
double by 2010 from about 4 per cent in 2007.

Banking

The burgeoning economy, surging foreign investment, financial sector reforms and a favourable
demographic profile has led to the Indian banking industry emerging as one of the fastest growing
in the world. The industry's business grew at a CAGR of 20 per cent from US$ 471.11 billion as of
March 2002 to US$ 1175.61 billion by March 2007. Significantly, the newly licensed private
sector business has grown almost twice (1.75 times) as that of banking industry as a whole, leading
to their share in total banking business increasing from 9 per cent in 2001-02 to 16 per cent in
2006-07.

This boom in the banking industry has propelled nine Indian banks to the list of top 50 Asian
Banks, as per this year's Asian Banker 300 report. Similarly, seven Indian microfinance institutions
find place in Forbes list of World's Top 50 Microfinance Institutions. Despite such impressive
performance, the potential for further growth is huge considering the fact that India has second
largest financially excluded households (about 135 million) in the world. In fact, according to
Boston Consulting Group, India is the fastest growing incremental revenue pool in the world.

Insurance

12
The liberalization of the rules for the entry of domestic and foreign players has had a favorable
impact on this sector, leading to premium collections growing by 19.9 per cent in 2006-07,
compared to the world average of 2.9 per cent. Consequently India became the 15th largest
insurance market from 19th in 2005.

This growth looks particularly impressive when seen against the fact that the combined penetration
of both life and non-life is less than 2 per cent of the GDP compared to world average of 7.52 per
cent. Clearly, the scope for growth is enormous.

With increasing per capita income, insurance penetration and entry of new players, the Indian
insurance industry is estimated to grow to US$ 50.9 billion by 2010 from around US$ 12.72 billion
in 2007. The private players are likely to see a growth rate of 140 per cent during this period.

Debt Market

While the Indian financial sector was dominated by the stellar performance of the stock markets,
the Indian debt market had its own share of excitement. India Inc increased its collections through
the debt market by as much as 53.84 per cent to US$ 20 billion in 2007 from US$ 13 billion in
2006. According to a report by Goldman Sachs, with insurance, mutual funds and pension sector
experiencing rapid growth, India's debt market is estimated to grow four fold, from about US$ 400
billion (45 per cent of GDP) in 2006 to about US$ 1.5 trillion (about 55 per cent of GDP) by 2016.
Significantly, the non-government sector is expected to grow from US$ 100 billion in 2006 to US$
575 billion in 2016, increasing its share in GDP from 10 per cent to 22 per cent.

ABOUT THE COMPANY

13
Company Profile

The Reliance – Anil Dhirubhai Ambani Group is among India’s top three private sector business

houses on all major financial parameters, with a market capitalization of Rs 100,000 crore (US$ 22

billion), net assets in excess of Rs 31,500 crore (US$ 7 billion), and net worth to the tune of Rs

27,500 crore (US$ 6 billion)

Across different companies, the group has a customer base of over 50 million, the largest in India,

and a shareholder base of over 8 million, among the largest in the world.

Through its products and services, the Reliance - ADA Group touches the life of 1 in 10 Indians

every single day. It has a business presence that extends to over 4,500 towns and 300,000 villages

in india and five(5) continents across the world. The interests of the group range

from communications (Reliance Communications) and financial services (Reliance Capital Ltd), to

generation, transmission and distribution of power (Reliance Energy), infrastructure and

entertainment.

Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader

in the materials and energy value chain businesses. He is credited to have brought about the equity

cult in India in the late seventies and is regarded as an icon for enterprise in India. He epitomized

the spirit 'dare to dream and learn to excel'.

14
Reliance Today –

* The name of Reliance Trade has been changed to Reliance Securities.

History of Reliance Capital Ltd.

15
Reliance Capital is one of India’s leading and fastest growing private sector financial services

companies, and ranks among the top 3 private sector financial services and banking companies, in

terms of net worth.

The company has interests in asset management and mutual funds, life and general insurance,

private equity and proprietary investments, stock broking and other activities in financial services.

RCL is registered as a depository participant with National Securities Depository Ltd (NSDL) and

Central Depository Services Ltd (CDSL) under the Securities and Exchange Board of India

(Depositories and Participants) Regulations, 1996.

RCL has sponsored the Reliance Mutual Fund within the framework of the Securities and

Exchange Board of India (Mutual Fund) Regulations, 1996.RCL primarily focuses on funding

projects in the infrastructure sector and supports the growth of its subsidiary companies, Reliance

Capital Asset Management Limited, Reliance Capital Trustee Co. Limited, Reliance General

Insurance Company Limited and Reliance Life Insurance Company Limited.

As of March 31, 2005, the company’s investment in infrastructure projects stood at Rs. 1071

Crores. The investment portfolio of RCL is structured in a way that realizes the highest post-tax

return on its investments.

THEIR PARENTAGE

 Reliance Money is a part of Reliance Capital Limited

 One of India's leading & fastest growing private sector financial services companies
16
  Ranks among the top 3 private sector financial services companies, in terms of net worth

 With interests in Asset Management and Mutual Funds, Life and General Insurance, Credit

Cards and other activities in financial services.

Reliance Capital

Reliance Money Reliance Mutual Fund Reliance Consumer

Finance

Reliance Life Insurance Reliance General Insurance

About Reliance Money:-

The official launch of Reliance Money was announced on Third of May 2007.Reliance Money is a

group company of Reliance Capital; one of India's leading and fastest growing private sector
17
financial services companies, ranking among the top 3 private sector financial services and

banking companies, in terms of net worth. Reliance Capital is a part of the Reliance Anil

Dhirubhai Ambani Group.

Reliance Money is a comprehensive electronic transaction platform offering a wide range of asset

classes. Its endeavor is to change the way India transacts in financial markets and avails financial

services. Reliance Money is a single window, enabling you to access, amongst others in Equities,

Equity & Commodities Derivatives, Mutual Funds, IPO’s, Life & General Insurance products,

Offshore Investments, Money Transfer, Money Changing and Credit Cards.

Now a day’s Reliance Money is driven by ethical and dynamic process for wealth creation.

Based on this, the company started its endeavor in the financial market.

Reliance Money Limited (A Reliance Capital Company) through Reliance Securities Limited,

Reliance capital Limited, Reliance Commodities Limited and Reliance Insurance Advisory

Services provides integrated financial solutions to its corporate, retail and wealth Management

clients. Today, we provide various financial services which include Investment Banking, Corporate

Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance and Mutual

Funds. Plus, there’s a lot more to come your way.

Reliance Money is proud of being a truly professional financial service provider managed by a

highly skilled team, who have proven track record in their respective domains.

Management:-
18
Reliance Money team is led by a very eminent Board of Directors who provide policy guidance

and work under the active leadership of its CEO & Managing Director and support of its Central

Guidance Team.

Board of Directors

Following is the chart of the Board of directors of Reliance Money Ltd.

 Amitabh Chaturvedi,, Vice-Chairman

Amitabh Chaturvedi, an FCA, has over 24 years of experience in finance and the
capital markets. Amitabh is also the Director of Reliance Capital Asset Management
Limited.

 Shri C. P. Jain

Shri C.P. Jain, aged 61 years, is the former Chairman and Managing Director of
National Thermal Power Corporation (NTPC).

 Rajendra Chitale, Independent Director

Rajendra P. Chitale, an eminent Chartered Accountant, is the Managing Partner of

M/s M. P. Chitale & Co. He is a Director on Boards of the National Stock Exchange
of India (NSE), Asset Reconstruction Company (India) Ltd, Hinduja TMT Ltd and Gujarat Ambuja
Cements Ltd.

19
What does Reliance Money actually deals in?

RELIANCE MONEY SHARE TRADING ACCOUNT:-

Reliance money unlike other brokering houses has introduced a new prepaid system of brokerage
for the share trading in which it provides the lowest form of brokerage charged from an investor.

Reliance money has introduced three prepaid schemes for the stock market investors which work
in the following way:

In the first scheme a fee of Rs. 1000 is charged and a validity of two months is provided in which
an investor is given a limit of one crore (out of which he/she can do a delivery turnover of Rs. 10
lacks and a non delivery of Rs. 90 lacks). In this scheme another offer has been added to investors
in which an investor is charged a fee of Rs. 500 and a validity of one year is given to an investor to
transact up to five lacks including the delivery and non delivery.

In the second scheme a fee of Rs. 2500 is charged and a validity of six months is provided in
which an investor is given a limit of three crore (out of which he/she can do a delivery turnover of
Rs. 30 lacks and non delivery turnover of Rs. 2.7 crore).

In the last two schemes time validity is same, but access fee and turnover validity is different. In
one scheme fee is Rs. 5000 and provided a validity of one year in which investor is given a limit of
Rs. Seven crore (out of which he /she can do delivery turnover of Rs. 70 lacks and non delivery
turnover of Rs. 6.3 crore).

In second scheme fee is Rs.10,000 and provided a validity of one year in which investor is given a
limit of Rs. 20 crore (out of which he/she can do delivery turnover of Rs. 2 crore and non delivery
turnover of Rs. 18 crore).

20
These are the five cards offered by Reliance money to attract totally a large number of potentially
untapped investors. Apart from this the account opening charges are Rs. 750 one time and four
account’s namely Trading Demat Forex and Commodity are provided to the investor. Reliance
Money is offering a brokerage charge of 7.4 paisa on every Rs 100 worth of delivery-based trades,
and 2 paisa on non-delivery trades, which is the lowest in the industry so far.

Currently, the average brokerage charge for delivery-based trades is anywhere between 15 paisa

and 25 paisa for every trade worth Rs 100, while for non-delivery trades it is around 3-5 paisa.

Following are also the main features of this share trading account provided by

Reliance Money: -

1. Flexibility to access Reliance money services in multiple ways through Internet,

Transaction kiosk, Call and transacts or seeks assistance through business partners.

21
 2. This is a safeguarded account Reliance money provided an electronic token that

flashes a unique security number in every thirty two (32) seconds. This number works as a third

level password (including the login ID and password keeping the account safe from any

unauthorized access.

3. Flexibility to transact in Equity and commodity derivatives, offshore investments,

mutual funds, IPO’s, Life insurance and General insurance either through online or through

channel partners.

4. With the help of this account investors can access to their banking, trading and

Demat accounts without the hassle of writing cheques. Reliance money has tied up with AXIS,

HDFC, ICICI, and IDBI bank to link this share trading account for the investors.

5. Annual maintenance charge of just Rs. 50/- per annum and free on mobile tips.

These were some of the features of Reliance money share trading account.

A. Customer can do the share trading through trading kiosks installed by

Reliance money, through internet, through Business associates of Reliance

money.
22
 Working of Reliance money:-

At the Macro Level

At the micro level

At Reliance money MORADABAD the following hierarchy exists:-

1. Three Centre managers.

2. Ten to twelve business development executives under each centre manager.

23
3. Business associates under each centre manager their number depending upon the area

allotted to each centre manager.

4. Remisars under each centre manager.

5. Team leader and PFC’s under him/her for life insurance.

6. One customer support Executive and one Senior Finance executive.

Centre Manager:

The centre manager is the heart of the office who acts as a connection between Head office

(MUMBAI) National head, Regional head. The clients, Remisars , Business associates and

the business development executives. The centre manager is responsible for the following

functions:

1. Organizing all the BDE’s business associates and remisars under one banner.

2. Making sure that the BDE’s, business associates and remisars are carrying out their

functions well i.e. expanding the business in form of selling the shares trading

account’s, mutual funds, selling general along with life insurance policies.

3. Planning strategies for increase the business (i.e. installation of canopies at the right

place, appropriate advertising in different business Expo’s and corporate meets, etc.)

4. Interviewing and selecting business development executive for the organization.

5. Identifying the potential agents in the market and making them the business associate or

remisar of Reliance Money for good business prospects.

24
6. Training and new BDE’s and the remisars about the product and how to approach the

clients.

Business Development Executive (B.D.E):

A business development executive is the main working hand for the company. It is the

B.D.E who is responsible for expanding the business for Reliance money. A B.D.E is

expected to sell the share trading accounts, mutual fund, general and life insurance policies

and other financial products directly to the clients either through cold calling or through

installation of canopies or through references from other clients and many other ways

including the walk-ins.

Business Associates:

The business associates are like an authorized franchisee for company. At Reliance money

the business associates are given the freedom to maintain their own separate office and

appoint staff but not on the roll of the company. They are independent to carry out their

business in their own way under the regular watch of the centre manager. The franchisee

authorized to sell all the financial products of the Reliance money in return they are paid

their respective brokerages as committed by the company. Also they are given the authority

to transact in the stock market on the behalf of the clients i.e. they are responsible for

putting a trade in the stock market on the will of the help of power trade software for which

they are paid per transaction fee by the customer. A business associates is the major

business generating machine for Reliance money and they are major source for client’s

base for the company. Reliance money keeps a special watch on its associate’s; it assists

25
them and provides them with the necessary help they require. Also Reliance money trains

the sales force of these associates and also guides them in carrying out the daily business

activities.

Remisars:

They are direct agents for Reliance money whose work is totally based on commission.

Their work is also like a business associates i.e. selling all the financial products but with

the only difference that they are not authorized to put a trade on the behalf of the customer.

After the B.D.E’s and the business associates the remisars are one of the major business

generating sources for the company and are really very helpful in generating the business

and developing a major client base.

Team leader:

At Reliance money a separate team leader has been appointed for the Reliance life

insurance section that is responsible for developing and expanding the life insurance

business under the banner of Reliance money. The work of the team leader is to look after

the PFC’s working under him/her and assisting them in dealing with the clients and

rectifying the various queries asked by the customers.

PFC’s

A PFC is like a BDE but with the difference that they are appointed to sell the life

insurance policies only. A PFC is required to report on a daily basis to the team leader and

26
 achieve the required target as specified. They are also expected to handle the client queries

and deal with them.

Customer Support Executive:

The work of a customer support executive is as important as that of a centre manager. A

customer support executive is responsible for registering the Accounts, Mutual fund, Life

insurance policies and all the other financial products brought by the BDE’s, Business

associates, Remisars or PFC’s on the MISS of Reliance Money so as to keep a daily record

of the business being generated by Reliance Money.

Senior Finance Executive:

The job of senior finance executive is to look after the payment of brokerage to different

remisars, business associates, and salaries of the B.D.E’s and the other employees of

Reliance Money.

The following diagram gives a brief idea about the working at Reliance Money

Moradabad

27
28
SWOT ANALYSIS

SWOT ANALYSIS OF RELIANCE MONEY:-

STRENGTHS

o Cost-effective: Pay a flat fee of just Rs. 500/- valid for 2 months or specified transactional

value.

o Convenience: Go online, through your broker/agent, Call & Trade or Kiosk.

29
 o 3 in 1 integrated access: Reliance Money offers integrated access to your banking, trading

and demat account. You can now transact without the hassle of writing cheques.

o Security: Dynamic password - keeps the account extra secure

o Widest product range: Equity, Commodities, Derivatives, Mutual Funds, IPO’s,

Insurance, Offshore Investment & Credit card

o Other value-adds: Live news from Dow Jones, research, expert views, etc available free

and in real time

WEAKNESS

o Slow connectivity.

o Less number of branches in India

o Do not have access on Regional Exchanges.

o Competition from banks

o No interest on cash margin.

o Less margin on intraday transactions.

OPPORTUNITIES

Already having a good market access through different products.

Market share of company is increase rapidly.

30
Reliance Securities Ltd is not so longer in the financial securities area but at present it has a very

good response of investors. Since Reliance Money is coming with its own Bank and Stock

Exchange, and is also planning to tie up with other banks the prospects are very good.

THREATS:

New Competitors

A lot of new competitors are trying to enter the market in this bullish run to taste the flavor of this
cherry. This is creating a lot of competition for large players like Reliance Money and it is creating
little confusion in the minds of the customers about the services provided by the broker. Also many
banking firms are entering into the market with huge investment. Competitors like ICICI, kotak,
HDFC, 5-paisa etc. are posing a lot of threats to the company.

Other threats are:

Sub broker, Supplier, Dealer

Reliance Money currently deals in the following financial products:-

Single window for multiple products:

Equity

Equity & Commodity Derivatives

31
 Mutual Funds

IPO’s

Life & General Insurance

Offshore Investments

Money Transfer

Credit Card

Gold

ABOUT THE PRODUCT

DEMAT ACCOUNT
As in a bank, we keep our money in a savings account, similarly demat account is an account

where shares are kept in electronic form. Few years back shares were bought and sold in physical

form which used to lead to huge amount of bad deliveries. So in order to prevent such losses, SEBI

(Securities Exchange Board of India) made to dematerialize the shares.

Basically to buy or sell shares one requires 3 accounts:

32
Saving account: This account is basically required to transfer funds to buy shares.

Trading account: This account is where funds get transferred from saving account to buy shares.

Demat account: The account where bought shares are kept in electronic form to prevent physical

losses.

DOCUMENTATION REQUIRED TO OPEN A DEMAT ACCOUNT

1. The first and the foremost thing required is PAN CARD, that is the person who wants to open a

demat account should be registered under Income Tax department.

2. An address proof

3. An identity proof

4. Photographs

ANALYSIS OF DEMAT ACCOUNT OF RELIANCE MONEY

The features offered by the company in it’s demat are entirely based on innovative ideas. If

compare the features of Reliance Money’s demat account with that of other industry players we

will find it more customer friendly and beneficial.

33
FEATURES RELIANCE MONEY OTHERS

1.Brokerage Flat Fees : 1 Paisa % Brokerage ranging from 0.4 per

cent to 0.85 per cent

2.Security Special security token whose No such facility

password changes after every 32

seconds
3. Service tax Nil due 1 paisa brokerage 12.36% of brokerage

(12.36% of 1 paisa = 0 approx)

4.Annual Rs. 50 Ranging from Rs.200 to Rs.550

maintenance

charge
5.Account Rs. 750(self employed) and Rs. 500 Rs. 900 to Rs. 1250

opening (employed)

charges
6. Recharge Coupons worth Rs. 500, Rs.1000, No such facility

coupon facility Rs. 5000 Rs. 10000 and Rs.2500

So the above table clearly shows the units. Per hand of Reliance Money in its DMAT account as

compared to that of competitors. Value added services provided by Reliance Money are truly great.

How Reliance Money deals with equity trading and the services provided to the

customers:-

Reliance Money Ltd provides best services to its customers for equity trading in comparison to

other Financial Securities Companies.

These services are as follows-

34
Online trading facilities with Instra Trade.

Instra Trade terminal is java based software. Client can easily download the terminal through

Reliance Money web site. No extra charges are taken for the use of this terminal. Through this

terminal/software you execute your order within 2 seconds. In this terminal we get both NSE &

BSE On-line at same time. And the clients can do trading in both NSE & BSE at the same time.

Individual Client:

 Demat A/c opening charges: Rs 750/- (Annual maintenance Charges Rs 50/-)

 Trading A/c, commodities A/c, Forex A/c free for life time

 Trading through offline or website. (www.reliancemoney.com)

 NSE & BSE both are online.

 Live applet for watching prices & trading purposes.

Brokerage: -

Reliance Money works on the pre-paid cards system instead of any cash brokerage and service tax

as illustrated table shows:-

35
Other features-

 For the fund transfer and withdraw, we have tie up with four banks HDFC Bank, IDBI

Bank, ICICI Bank and AXIS Bank. If you are having bank account in one of them, you can

transfer the funds and withdraw the funds online same day.

 Settlement of trades follows T+2 transaction cycle.

 Freedom from paperwork, trading facilities is completely online.

 SMS alerts on your mobile phones.

36
  Apart of that we have our dedicated team to look after your Portfolio, Mutual Funds, and

Commodities.

Document Photocopies Required:-

(A) Three coloured Photographs (self signed).

(B) For identification Proof- Voter ID Card/ Driving License/ Passport/

PAN Card (Compulsory) any one.

(C) For residential proof:- Bank statement/ Voter ID Card/ Ration Card/

Driving License/ Passport/ Telephone or Electricity Bill statement

(any one)

(D) One cancelled cheque leaf (For MICR No. record)

(E) Later Bank Statement/ Front page of passbook (Showing Name,

Address, A/c No.)

(F)You can also deposit the initial margin money at the time of opening of

account.

37
MUTUAL FUNDS

MUTUAL FUNDS
38
MUTUAL FUND INDUSTRY PREVIEW

The mutual fund industry is the perhaps the smallest segment of the finance business segment in

India. It is comparatively a very young industry when compared to the other segments. The mutual

fund is structured around a very simple concept, the mitigation of risk through the spreading of

investments across multiple entities, which is achieved by the pooling of a number of small

investments into a large bucket.

FEATURES OF MUTUAL FUNDS

The essential features of the mutual funds distinguishing from other routes of investments are:-

 The mutual fund is a trust into which many relatively small investors invest their money to

form a large pool of cash which is then invested in securities by the manager of the trust.

 The price at which units can be bought and sold is governed solely by the value of the

underlying securities held by the mutual fund and dealings in units are on the basis of the net

market value of the investment per unit.

 The managers of the mutual funds are obliged to redeem any units in issue on demand or on

certain specified period.

 All dividend income that the mutual fund receives on its investments is paid out to unit holders.

MUTUAL FUND CYCLE

39
While the Indian mutual fund industry has grown in size from March, 1993 (Rs 470 billion) to

December, 2005 (Rs 1992 billion) in terms of AUM, the AUM of the sector excluding AXIS has

grown over 8 times from Rs.152 billion in March 1999 to Rs.1738 billion as at December 2004.

Indian mutual funds (MFs) have rewarded their investors better than any other funds in world.

According to a report3, a leading market research agency, Indian funds have grabbed eight of the

top 10 ranks over a 10year period. If one takes the last five years, they account for seven of the top

10 and over a 3year period, six of the 10 best performing mutual funds are from India.

As of today the size of the asset under management (AUM) in India is $68 billion against the

country's GDP of $ 780 billion. In some developed economies AUM size is close to the GDP

figure. This clearly shows the further scope for growth. If you take the last four year period

(January 2004-2008) the AUM of the mutual fund industry has risen substantially about 277%4.

40
The MF sector has 32 active players and they have mopped up nearly $8 billion through equity

mutual fund schemes. And they are expected to further grow to $ 10-12 billion. Around 45 new

equity schemes were launched in 2008 and garnered around $7.5 billion. New categories of funds,

like capital protection oriented funds and equity derivative funds were launched.

GROWTH IN ASSETS UNDER MANAGEMENT

Advantages of mutual funds

41
If one does not have the time, the inclination or the expertise to make and manage investments in

the complex equity or the debt market directly, should consider investing in mutual funds and reap

the benefits of research and a wider range of low cost information services. A risk-averse investor

can expect above the market returns at a lower cost and lower risk. The major advantages of

investing in mutual funds are:

A. Professional Management-

Mutual funds are managed by highly skilled managers with sound knowledge of the market

and wide experience in investment.

B. Affordability (low initial investment)-

Mutual fund investments are usually very low. For eg: In Franklin Templeton schemes you

can invest minimum Rs.5000 (one time investment) or the Systematic Investment Plan of

Rs.500 every month.

C. Portfolio Diversification and Reduction in Risk-

Individual investors have to face company-related risks and market-related risks. These risks

can be reduced through diversification of portfolios. When an investor invests in mutual fund

his portfolio automatically gets diversified and the risk tolerance capacity of a mutual fund is

much higher.

D. Convenient Record-keeping-

42
 Record keeping is simplified in mutual funds. Bookkeeping of the investments is handled by

the fund.

E. Switching-

Mutual funds allow investors to switch from one fund to another based on their investment

objective at that particular moment.

F. Liquidity-

In case of open ended schemes investors can sell their existing units, or buy new units at any

point of time at related NAV of the fund. This gives investors a high level of liquidity on their

investments.

G. Tax Benefits-

Mutual fund investors all over the world enjoy certain tax benefits which increases the net

yield of investments.

H. Minimize Operating Costs-

Mutual funds having large investible funds at their disposal avail economies of scale. The

brokerage fee or trading commission may be reduced substantially. The reduced operating cost

obviously increases the income available for investors. Investing in securities through mutual

funds has many advantages like – option to reinvest dividends, strong possibility of capital

appreciation, regular returns, etc. Mutual funds are also relevant in national interest. The test of

their economic efficiency as financial intermediary lies in the extent to which they are able to

mobilize additional savings and channelizing to more productive sectors of the economy.
43
Drawbacks Of Mutual Funds

A. No Guarantees:

No mutual funds guarantee you the exact returns. If the entire stock market declines in

value the value of mutual fund shares will go down as well, no matter how balanced the

portfolio. Investors encounter fewer risks when they invest in mutual funds than when they

buy and sell stocks on their own. However, anyone who invests through a mutual fund runs

the risk of losing money.

B. Fees and Commissions:

All funds charge administrative fees to cover their day-to-day expenses. Some funds also

charge entry or exit loads to compensate brokers, financial consultants etc.

C. Management Risk:

Investment in a mutual fund depend on the fund’s manager capability (except in Index

Funds) to make the right decisions regarding the fund’s portfolio. If the manager does not

perform as well as you had hoped, you might not make as much money on your investment

as you expected. Of course, if you invest in Index Funds, you forego management risk,

because these funds do not employ managers.

44
Key Constituents Of Mutual Fund Industry

Despite the differences, all Mutual Funds comprise of four constituents: Sponsors, Trustees, Asset

Management Companies (AMCs) and Custodians.

A. Sponsor:

The sponsor initiates the idea to set up a mutual fund. It could be a registered company,

scheduled bank or financial institution.

45
 A sponsor has to satisfy certain conditions, such as on capital, track record (at least five

years' operation in financial services), default-free dealings and a general reputation of

fairness, has to be ascertained. The sponsor appoints the trustees, AMC and custodian.

Once the AMC is formed, the sponsor is just a stakeholder.

B. Trust/Board of Trustees:

Trustees hold a fiduciary responsibility towards unit holders by protecting their interests.

Sometimes, as with Canara Bank, the trustee and the sponsor are the same. For others, like

SBI Funds Management, State Bank of India is the sponsor and SBI Capital Markets the

trustee. Trustees float and market schemes; and also they secure necessary approvals. They

check whether the investments of the AMC are within defined limits, whether the fund's

assets are protected, and also whether the unit holders get their due returns.

C. Fund Managers/AMC:

They are the ones who manage the investor’s money. An AMC takes investment decisions,

compensates investors through dividends, maintains proper accounting and information for

pricing of units, calculates the NAV, and provides information on listed schemes and

secondary market unit transactions. It also exercises due diligence on investments, and

submits quarterly reports to the trustees.

D. Custodian:

46
 It is often an independent organization, and it takes custody of securities and other assets of

a mutual fund. Among public sector mutual funds, the sponsor or trustee generally also acts

as the custodian.

Classification Of Mutual Funds

Any mutual fund has an objective of earning income for the investors and/ or getting increased

value of their investments. To achieve these objectives mutual funds adopt different strategies and

accordingly offer different schemes of investments. On these bases the simplest way to categorize

schemes would be to group these into two broad classifications:

Operational classification highlights the two main types of schemes, i.e., open-ended and close-

ended which are offered by the mutual funds.

Portfolio classification projects the combination of investment instruments and investment avenues

available to mutual funds to manage their funds. Any portfolio scheme can be either open ended or

close ended.

Operational Classification

A. Open Ended Schemes

47
As the name implies the size of the scheme (Fund) is open – i.e., not specified or pre-determined.

Entry to the fund is always open to the investor who can subscribe at any time. Such fund stands

ready to buy or sell its securities at any time. It implies that the capitalization of the fund is

constantly changing as investors sell or buy their shares. Further, the shares or units are normally

not traded on the stock exchange but are repurchased by the fund at announced rates. Open-ended

schemes have comparatively better liquidity despite the fact that these are not listed. The reason is

that investor can any time approach mutual fund for sale of such units. No intermediaries are

required. Moreover, the realizable amount is certain since repurchase is at a price based on

declared net asset value (NAV).

B. Closed Ended Schemes

Such schemes have a definite period after which their shares/ units are redeemed. Unlike open-

ended funds, these funds have fixed capitalization, i.e., their corpus normally does not change

throughout its life period. Close ended fund units trade among the investors in the secondary

market since these are to be quoted on the stock exchanges. Their price is determined on the basis

of demand and supply in the market. Their liquidity depends on the efficiency and understanding

of the engaged broker. Their price is free to deviate from NAV, i.e., there is every possibility that

the market price may be above or below its NAV.

Portfolio Classification

48
Following are the portfolio classification of funds, which may be offered. This classification may

be on the basis of (a) Return, (b) Investment Pattern, (c) Specialized sector of investment, (d)

Leverage and (e) Others.

A. Return Based Classification

To meet the diversified needs of the investors, the mutual fund schemes are made to enjoy a

good return. Returns expected are in form of regular dividends or capital appreciation or a

combination of these two.

B. Income Funds

For investors who are more curious for returns, Income funds are floated. Their objective is

to maximize current income. Such funds distribute periodically the income earned by them.

These funds can further be split up into categories: those that stress constant income at

relatively low risk and those that attempt to achieve maximum income possible, even with

the use of leverage. Obviously, the higher the expected returns, the higher the potential risk

of the investment.

C. Growth funds

Such funds aim to achieve increase in the value of the underlying investments through

capital appreciation. Such funds invest in growth oriented securities which can appreciate

through the expansion production facilities in long run. An investor who selects such funds

should be able to assume a higher than normal degree of risk.

49
 D. Conservative Funds

The fund with a philosophy of “all things to all” issue offer document announcing

objectives as: (i) to provide a reasonable rate of return, (ii) To protect the value of

investment and, (iii) to achieve capital appreciation consistent with the fulfillment of the

first two objectives. Such funds which offer a blend of immediate average return and

reasonable capital appreciation are known as “middle of the road” funds. Such funds divide

their portfolio in common stocks and bonds in a way to achieve the desired objectives.

Such funds have been most popular and appeal to the investors who want both growth and

income.

Investment Based Classification

Mutual funds may also be classified on the basis of securities in which they invest. Basically, it

is renaming the subcategories of return based classification.

A. Equity Fund

Such funds, as the name implies, invest most of their investible shares in equity shares of

companies and undertake the risk associated with the investment in equity shares. Such

funds are clearly expected to outdo other funds in rising market, because these have almost

all their capital in equity. Equity funds again can be of different categories varying from

those that invest exclusively in high quality ‘blue chip’ companies to those that invest

solely in the new, un-established companies. The strength of these funds is the expected

capital appreciation. Naturally, they have a higher degree of risk.

50
 B. Debt Funds

Such funds have their portfolio consisted of bonds, debentures, etc. this type of fund is

expected to be very secure with a steady income and little or no chance of capital

appreciation. Obviously risk is low in such funds. In this category we may come across the

funds called ‘Liquid Funds’ which specialize in investing short-term money market

instruments. The emphasis is on liquidity and is associated with lower risks and low

returns.

C. Balanced Fund

The funds, which have in their portfolio a reasonable mix of equity and bonds, are known

as balanced funds. Such funds will put more emphasis on equity share investments when

the outlook is bright and will tend to switch to debentures when the future is expected to be

poor for shares.

Sector Based Funds

There are number of funds that invest in a specified sector of economy. While such funds do have

the disadvantage of low diversification by putting all their all eggs in one basket, the policy of

specializing has the advantage of developing in the fund managers an intensive knowledge of the

specific sector in which they are investing. Sector based funds are aggressive growth funds which

51
make investments on the basis of assessed bright future for a particular sector. These funds are

characterized by high viability, hence more risky.

Systematic Investment Plan

Mutual funds are basically collective investment done by thousands of investors and this money is

handled by fund manager who invests it into 8 to 10 sectors. This leads to diversification of risk

that is minimization of risk and maximization of returns

There are two types of investments in mutual funds:

1. Lump sum investment: In such type of investment money is invested in one time only

and NAV (Net Asset Value) of that particular day is allotted.

2. Systematic Investment Plan: It is an investment in which money is invested in

installments that are either monthly or quarterly and NAV is allotted every month.

Reliance money offers mutual funds of around 10 to 12 companies such as

1. RELIANCE

2. ICICI

3. HDFC

4. FRANKLIN TEMPELTON
52
5. SBI

6. KOTAK

7. TATA

8. BIRLA SUNLIFE

BENEFITS AT RELIANCE MONEY

1. Huge choice to invest.

2. Can invest directly through www.reliancemoney.com

3. Free insurance cover with some of the funds.

53
INSURANCE

54
LIFE INSURANCE

What is Insurance?

The business of insurance is related to the protection of the economic values of

assets. The asset would have been created through the efforts of the owner. The

asset is valuable to the owner, because he expects to get some benefits from it. The

benefit may be an income or something else. It is a benefit because it meets some of

his needs. In the case of a factory the product generated by is sold and income is

generated. In the case of motorcar, it provides comfort and convenience in

transportation.

Every asset expected to last for a certain period of time during which it

perform. After that, the benefit may not be available. There is a lifetime for a

machine in a factory or a motorcar. None of them will last for affairs that the end of

the period or the lifetime makes a substitute made available. An accident or some

other unfortunate event may destroy it or make it non functional. In that case the

owner and those deriving benefits therefore, would be deprived of the benefit and

the planned substitute would not have been ready. There is an adverse on unpleasant

situation. Insurance is a mechanism that helps to reduce the effect of such adverse

situations.

Why Insurance?

Insurance is the protection of life and assets against unforeseen circumstance. Whether it is a

general accident policy, a mediclaim policy or a pension policy, an insurance policy helps you to

scope with uncertainty and insecurity.

55
Ever thought about why you should take an insurance policy. For one, it helps you to hedge risks

against unforeseen circumstances and save more. If that's not all, it is:

 Superior to an ordinary savings plan as it provides full protection against risk of death.

 Encourages and forces compulsory savings unlike other saving instruments, wherein the

saved money can be easily withdrawn.

 Provides loan to tie over a temporary difficult phase and is also acceptable as security for a

commercial loan.

 Offers tax relief to policyholders.

 Hedges risk against uncertainty.

 For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is

created for wife and children as beneficiaries.

 Based on the concept of sharing of losses, the society will benefit as catastrophic losses are

spread globally.

Who can buy a life insurance policy?

Any person above 18 years of age, who is eligible to enter into a valid contract, can go for an

insurance policy. Subject to certain conditions, a policy can be taken on the life of a spouse or

children.

How is a life insurance policy useful?

Planning for the financial consequences of a premature death is an essential part of every financial

plan. Generally, the consequences are simply too large to ignore and cannot be totally covered with

your own resources.

56
Life insurance is nothing but a contract with an insurance company under which the insured

(purchaser) pays a premium in exchange for coverage of specified losses. Life insurance protects

your family against the risk of the premature death of you (or your spouse). Life insurance

planning should consider your family's short-term needs (for example, medical expenses) and

long-term needs (for example, replacing your income).

In the course of our life we are accosted by risk-that of failing health, financial losses, accidents

and so on. Insurance is a means by which life's uncertainties are addressed in financial terms. It

offers a monetary compensation against those losses. Insurance is considered more as a hedging

mechanism rather than a true investment avenue. Life insurance, in particular is essentially

acknowledged as a mechanism which eliminates risk substituting certainty for uncertainty

primarily by transferring risk from the insured to the insurer.

Is life insurance a saving instrument by tax?

Life insurance is mainly considered as a saving instrument rather than an investment avenue as it

promotes compulsory savings besides reducing tax burden on the policyholder and protects the

family of the policyholder in the event of unforeseen happening. It is the only saving instrument,

which covers the life risk besides giving tax concession both at entry (premium paid) and at exit

points. The section 10 (D) of the income tax act totally exempts payment of tax on any amount

received as bonus against life insurance policies.

Classification of Life Insurance Products

57
We can classify insurance plan in two categories.
 Traditional
 ULIP
Traditional

Term Insurance :

Under term insurance plan, sum assured is payable only if death occurs during the specified pre-
determined term. If death does not take place during such term the amount of premium stands
forfeited. Thus it can be seen that the term insurance is nothing but the cost of pure protection. It is
a contract, which provides financial protection if death should occur within a specified period. No
survival benefits are provided under the contract.

Whole life insurance:

Whole life insurance provides for the payment of the face value upon the death of the insured,
regardless of when it may occur. This policy furnishes permanent protection to the insured at he
moderate cost. This is highly important for the average man or woman of moderate salary, who
require considerable family protection and whose limited income does not enable him or her both
to pay premiums and to accumulate a large savings fund. The whole life policy provides a capital
sum of money in the event of death of the assured whenever that may occur.

Endowment Policy:
Endowment is a product, which includes Risk cover and saving also. In the pure endowment policy
the sum assured is payable in the event of death or definitely on maturity. In an endowment sum
assured is for sure given to the policyholder on completion of the term. Endowment plans are very
popular in developing nations since they serve a dual purpose of life cover and savings. Many a
people in our country go for endowment products because of the compulsory saving aspect. An

58
endowment plan on the other hand is not a cheap plan since the insurer has a dual liability of
providing life cover and on maturity giving the entire sum assured.

Annuities:

Annuities refer to income or other financial provision usually for retirement or old age. An Annuity
may be defined as a periodic repayment made during a fixed period or for the duration of a
designated life or lives. In one sense the life annuity may be described as the opposite of insurance
protection against death in its pure form a life annuity may be defined as a contract whereby for a
premium consideration one party (the insurer) agrees to pay the other (the annuitant) a stipulated
sum (the annuity) periodically throughout life. The purpose of the annuity is to protect again a risk
—the outliving of one’s income.

UNIT LINKED INSURANCE PLAN (ULIP)

Unit linked insurance plan (ULIP) is a life insurance solution that provides the client with the
benefits of protection and flexibility in investment. It is a solution which provides for life
insurance where the policy value at any time varies according to the value of the underlying assets
at the time .

The investment is denoted as unit and is represented by the value that it has attained called as Net
Asset Value (NAV).

UNIT UNITS UNDERLYING

LINKED
INSURANCE IN INVESTMENT
POLICIES
FUNDS

ULIP came
into play in 1960s and became very popular in Western Europe and America. The reason that is

59
attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility
which it offers to the clients.

As time progressed the plans were also successfully mapped along with life insurance needs to
retirement planning.In today’s times ULIP provides solution for all the needs of a client like
insurance planning, financial needs, financial planning for children’s future and retirement
planning.

Structure Of Ulip

PREMIUM

LESS CHARGE

INVESTMENT LIFE
REPRESENTED AS COVER
UNITS

Benefits of unit linked plan :

ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan is
a one stop solution providing

1. Life protection
2. Investment and Savings
a. Market linked fund based on risk profile
b. Switch option
c. Premium redirection

60
 d. Automatic transfer plan(ATP)
3. Flexibility of cover continuance
4. Transparency
5. Extra protection with riders
a. Death due to accident
b. Disability
c. Critical illness
6. Liquidity
a. During the term partial withdrawals
b. At Maturity
7. Tax planning

THE FACE OF INSURANCE INDUSTRY IN INDIA:

From the Indian Life Insurance Company Act in 1912 to the IRDA Act in 1999, regulation of
insurance business has come a long way. Insurance is a subject of federal law and all insurance in
India has been nationalized. IRDA prohibits 100% foreign ownership of an Indian Insurance
company and thus a foreign insurer can own only maximum of 26% of the shares in a new venture.
The Indian promoter has to sell through public offering after ten years and can retain only 26% of
the shares thereafter.
In India, the two most popular insurance products are “Endowment and Money Back” policies
that together consist more than 80% of life insurance business. Also these days ULIP, (Unit linked
insurance plan) is gaining consumer acceptance and demand. The Different players in this field
include:
 Birla Sun Life Insurance CO. Ltd.
 AVIVA Life Insurance Co. Pvt. Ltd.
 Bajaj Allianz Life Insurance Co. Ltd.
 ICICI Prudential Life Insurance Co. Pvt. Ltd.
 Metlife India Insurance Co. Pvt. Ltd.
 ING Vysya Life Insurance Co. Pvt. Ltd.
 Life Insurance Corporation of India
61
  Max New York Life Insurance Co. Ltd.
 Om Kotak Mahindra Life Insurance Co. Ltd.
 SBI Life Insurance Co. Ltd.
 HDFC Standard Life Insurance Co. Ltd.
 Tata AIG Life Insurance Co. Ltd.
 Reliance Life Insurance co. Ltd
 Sahara Life co. Ltd
 Shriram Life co .Ltd
 Bharti AXA Insurance co. Ltd

Consistent growth has been observed in the private insurance markets. Though LIC has been
in the country for a long time, it didn’t tap much of the rural market. It only concentrates on the
endowment and money back policies. Private insurers had taken advantage of this and had come
with innovative products like Unit Link Insurance Products (ULIPs).

DIFFERENT PLANS OFFERED BY RELIANCE LIFE INSURANCE

Reliance Special Endowment Plan

Reliance Cash Flow Plan

Reliance Child Plan

Reliance EDLI Scheme

Reliance Group Term Assurance Policy

Reliance Market Return Plan

Reliance Simple Term Plan

Reliance Special Credit Guardian Plan

Reliance whole life plan

Reliance golden year plan

62
Reliance term plan

Reliance special Term plan

Reliance credit guardian plan

PRODUCT DETAILS

Reliance life insurance launches maiden insurance product:

Mumbai, august 17: Anil Dhirubhai Ambani group company Reliance Life Insurance today

announced the life launch of Reliance connect 2 life plan, its first product since acquiring the life

insurance business of AMP Sanmar in October last.

Reliance connect 2 life is a 15-year insurance - cum – savings

Plan for individuals in the age group of 18 to 45 years with a minimum sum assured of Rs.1 lakh.

The insurance cover can be upgraded in the second and third year up to a sum of Rs. 10 lakh.

Reliance life insurance has 30,000 insurance advisors spread over 158 branches across 143

locations & a call center to service its customer.

HDFC and AXIS bank would act as a collection network. The company is in the final stages of

negotiation with banks for selling its products through the banc assurance channel.

The company plans to add another 10,000 to 12,000 advisors, who are under training, said

Nandagopal.

63
Reliance capital has infused Rs.166crore in Reliance life insurance, which has a capital base of

Rs.383 crore and employee strength of 3,654 including 822 employee of AMP Sanmar.

RELIANCE ENDOWMENT PLAN:

It takes a lot for a dream to become a reality. And money is surely one of them.

Reliance endowment plan gives you just the financial independence to realize your dreams in the

future. It lets you decide how much you would like to set as your sum assured based on your

current financial position and your expected future expenses.

KEY FEATURE:

1. On maturity receive sum assured plus bonuses.

2. Wealth creation through bonus addition.

3. More value for your money by way of high sum Assured Rebate.

4. Increase, your insurance protection by adding term cover.

5. Choose to pay regular or single premium.

RELIANCE SPECIAL ENDOWMENT PLAN:

Reliance special endowment plan is key to all your financial needs; you get a desired lump sum

after a specified period, however your life insurance protection continues for an extended period. If

anything were to happen to you, your beneficiary will get another sum assured along with the

bonuses. The policy comes with an added feature of a limited premium term, which is always 5

years less than the policy term.

64
KEY FEATURES:

1. Twin benefit of protection & savings.

2. Sum Assured is paid on survival, at the end of the premium paying term life cover for

full sum assured continues beyond premium paying term.

3. Wealth creation through bonus additions.

4. More value for your money by way of high sum Assured Rebate.

5. Choose to add the benefit of two riders-critical illness riders and Accidental death

benefit & total & permanent disablement rider.

6. Choose to avail of a policy loan available after 3 full years of premium payment.

7. Policy participates in profits even after premium paying term.

RELIANCE CASH FLOW PLAN:

While most insurance plans block your money for a certain period of time, Reliance cash flow plan

gives you the double benefit of life insurance along with easy liquidity through lump sum cash. It

provides money periodically when you need it.

It lets you live life to the fullest today and at the same time, helps you stay protected for tomorrow

by giving you the flexibility of receiving a specified percentage of the sum Assured at specified

intervals.

KEY FEATURES:

65
 1. Easy liquidity- gets periodic cash flows at the end of the fourth year and thereafter

at the end of every three years.

2. Wealth creation through bonus additions.

3. On maturity receive accumulated bonuses along with final lump sum payout.

4. More value for your money by way of high sum assured rebate.

5. Full sum assured plus bonuses in case of your unfortunate death. This is over and

above the survival benefits already paid.

RELIANCE CHILD PLAN:

As a parent, it is only natural to dream of a smooth and blissful life for your child. Which is exactly

why you need to secure your child tomorrow, today?

Reliance child plan helps you save systematically so that you can give your child much- needed

financial security in the future. Simply put, Reliance child plan gives you the freedom to enjoy

every moment with your child today, without worrying about his/her tomorrow.

KEY FEATURES:
FEATURES

1. Risk protection for you during the term of the

Policy.

2. Accumulated bonus at the end of the policy term.

3. 25% of sum assured payable every year sum benefit during the last four policy

anniversaries.

4. All future premiums are waived in the event of unfortunate loss of life.

5. Guaranteed fixed benefits continue even after loss of life of the policyholder.

6. More value for your money by way of high sum Assured Rebate.

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STRATEGIES
To get successful in any task one should always device certain strategies before starting. Following

these strategies and working in a systematic manner not only gives good results but also early task

finishing.

STRATEGIES AT PERSONAL LEVEL

To achieve my targets I also devised certain strategies which were really very helpful to me. They

are as follows:

1. Before my summer internship program started I had already gathered information pertaining to

demat account, Mutual funds and Life Insurance of Reliance Money. So I had pre hand knowledge

of the product and pitching the product in the market became easier.

2. I also took data base of residents of Moradabad (mainly CAs) from one of my seniors. That data

base gave me most of my leads.

4. The next thing I did was, I started standing near the ATMs and distributed brochures of Reliance

Money with my phone number.

5. Prepared a chart of one year and corresponding investment and the benefit and showed it to the

customer along with verbal explanation.

6. To sell systematic investment plan I did cross selling across same customer base.

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STRATEGIES AT CORPORATE LEVEL

1. Opening of DMAT account with cancel cheque for one month.

2. Issuance of appreciation letter on opening 100 accounts as a team in one day.

3. Certificate of “HALL OF FAME” and a wall clock on doing 100 Systematic

Investment Plan in Reliance Mutual Fund as a team.

4. Reimbursement of movie tickets.

5. On selling 5 Systematic Investment Plan of Birla Sun life , certificate of appreciation would

be given by Birla Sun life.

MARKET SHARE OF VARIOUS PLAYERS OPERATING IN LIFE

INSURANCE INDUSTRY

Since the advent of the private players in the market the industry has seen new and
innovative steps taken by the players in this sector. The new players have improved the service
quality of the insurance. As a result LIC down the years have seen the declining phase in its career.
The life insurance industry has recorded a growth of 120.41% in premium collection for the period
of April 06 to February 07 over corresponding period in the previous year. The market share was
distributed among the private players.

NAME OF THE TOTAL PREMIUM MARKET SHARE RANKING

COMPANY COLLECTED (IN %)
UPTO February
2007(In Crores)
1.BAJAJ ALLIANZ 2997.1 5.17 3rd

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2.ING VYSYA 349.88 0.6038 12th

3 RELIANCE LIFE 604.55 1.043 9th

4 SBI LIFE 1711.99 2.95 4th

5 TATA –AIG 546.51 0.9432 10th

6 HDFC 1298.1 2.240 5th

STANDARD
7 ICICI 4069.86 7.024 2nd
PRUDENTIAL
8 BIRLA SUNLIFE 651.36 1.1242 7th

9 AVIVA 582.89 1.0060 8th

10 KOTAK 443.66 0.7657 11th

MAHINDRA OLD
MUTUAL
11 MAX 719.89 1.2424 6th
NEWYORK
12 MET LIFE 234.83 0.4053 13th

13 SAHARA LIFE 25.67 0.0443 15th

14 SHRIRAM LIFE 124.63 0.215 14th

15 BHARTI AXA 4.48 0.0077 16th

15 LIC 43573.45 75.20 1St

TOTAL 57938.85 100 --------

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 TOTAL MARKET SIZE: 57938.85 Crores

From the above pie chart and table we can conclude that still LIC is the market leader in
insurance industry as it has a market share of almost 77% in life insurance industry compared to
private players which have only 23% of the total market share (up to March 2007), LIC currently
has a premium collection of 43573.45 Crores compared to 14365.4 Crores of private players but
the point here which is to be noted here is that over a period of time the market share of LIC has
declined and market share of private players have increased it can further be cleared from the table
given below:

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Financial year 2002-03 2003-04 2005-06 2006-2007 (Up
to March)
LIC 92%* 82.33% 71.652% 75%
PRIVATE 8%* 17.67% 28.348% 25%
PLAYERS

GROWTH TREND IN LIFE INSURANCE INDUSTRY

FINANCIAL 2003-04(IN Rs) 2004-05(IN Rs) 2005-06(IN Rs)

YEAR (UPTO
FEBRUARY2006)
TOTAL FIRST 1866939.69 2534287.67 2628630.47
YEAR PREMIUM Lakhs Lakhs Lakhs
(in Lakhs)

From the above table we can see that there is a tremendous growth in insurance business
from year 2003-04 to 2005-06 in year 2003-04 the total premium collected is Rs 1866939.69 lakhs
whereas it is 2628630.47 in the year 2005-06 so there is an increase in premium collected by
761691.78 lakhs i.e. growth in premium collected is 40.79% which shows that insurance industry
in India has grown tremendously in India but still there lies opportunities and challenges in
insurance sector they are as follows

OPPORTUNITIES:

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 1. The major opportunity for insurance business is that still a large portion of population is
uninsured and those who are insured are under insured so there is an opportunity for
insurance companies to increase there revenues by insuring the untapped portion of the
population.
2. The savings of people can be diverted from banking sector to insurance sector by offering
customers higher interest rates through unit-linked plans.
3. There is an opportunity for private players to increase their market share by providing
better products and services than L.I.C.

CHALLENGES:

The five main challenges faced by insurance industry are as follows

1. Low awareness level: large portion of the population of India is still unaware of the
insurance as a whole, so it is a major challenge before all the players in insurance industry
to make the customers aware about insurance and what are their major products.
2. Product innovation: Companies still follow the same old traditional plans with which
the insurance industry started. There is a very little change in the products offered.
Consumers today seek product that offer flexible options, products with benefits
unbundled, products customized to suit their diverse needs. So it is a challenge for
insurance companies to provide such kind of insurance products.
3. Distribution: current distribution channels are not able to serve the rural areas of the
country, so insures need to explore alternative channels of distribution for both urban and
rural area.
4. Customer service: The present communication and promotions about various
insurance products in India are only informative. So what needs to be done is to win the
hearts of the customers by providing them the extra what the customers wants without
asking for i.e. high level of customer service. Trust and confidence: people tend to have
more faith in government

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 5. Sector dealing with insurance e.g. L.I.C, People feel more secure and confident in
investing in plans of L.I.C. rather than in private players.

Apart from the above challenges the major challenge faced by insurance sector is to
increase the penetration rate of insurance which is very low in India it is only 2% of GDP
and still 80% of the population is not insured and those who are insured are not fully
insured.

ACHIEVEMENTS
One has to give his 100% to achieve something worthy. Strong determination and belief in

oneself can make anything that is called impossible possible. As stock market was showing

daily fluctuations, in such a tough scenario it was really tough to sell demat accounts and SIP

in mutual funds. The continuously decreasing index of sensex and nifty made it tougher for me

to take even appointments as people didn’t even want to listen the name of share market but

with my strong will power I continued making efforts and achieved my targets as follows.

TARGETS GIVEN TARGETS ACHIEVED

MUTUAL FUNDS(Systematic 1 MUTUAL FUNDS(Systematic

Investment Plan) Investment Plan)

Life Insurance Products 1 Life Insurance Products

73
 RESEARCH
METHODOLOGY
Problem formulation

In this insurance scenario, there prevails a huge competition between the private players and public
sector players' .Among the private sector itself high degrees of competition exists. In this
perspective Reliance Life Insurance is giving stiff competition to LIC and ICICI prudential. The
people are not much aware of Reliance Life Insurance company as compare to LIC and ICICI
prudential. If the people are not aware of Reliance Life Insurance company then the company will
not able to make a business in this competitive world.

Research Objective

 To compare the scheme and policies of Reliance Life Insurance with ICICI prudential and
LIC.
 To find out the customer awareness of Reliance Life Insurance.

Research design

A Research design is a purely and simply the framework or blueprint that guide us to solve the
problem and completing the study. Descriptive research has been be used in this research because a
large number of respondents are to be studied based upon the various factors. This Descriptive
research is adopted to know that what is happening in the market with respect to products,
customers and their attitude.

Sources of data

Primary data
74
 Secondary data

Primary Data

Primary data is a new and fresh data. It is collected for the first time.

Secondary Data
I am collecting the secondary data from the manuals of company, internet and projects reports.
Secondary data is already exists. I use Secondary data to finding new things that help me in my
research.

Data Collection Methods

Primary data has been collected through the Survey technique by conducting personal interview.
The instrument used for data collection is a structured questionnaire, which has closed ended
questions.

Sample techniques

Under non probability sampling. Convenience sampling was used because it is convenient to me
to choose my respondent as according to my convenience.

Sample Size : 35 Respondents

Sample Area : MORADABAD

DATA ANALYSIS AND INTERPRETATION

Figure 1(a)

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 Awareness about Reliance Life Insurance co.

70% 60%
60%
50% 40%
40% YES
30% NO
20%
10%
0%
YES NO
Reliance Life insurance co.

Out of 35 respondents it shows that 40% have said 'Yes' that they are aware about “Reliance Life
insurance company”, 60% people have said 'No' that they are not aware about “Reliance Life
insurance company”.

Figure 1(b)

Awareness about Mutual Funds

76
 120% 100%
100%
80%
YES
60%
NO
40%
20% 0%
0%
YES NO
Mutual Funds

Out of 35 respondents it shows that 100% people are aware of “Mutual Funds”

Figure 1(c)

Giving better services

60%

50% 47%
40%
Reliance
23% 30%
30% LIC
ICICI Prudential
20%

10%

0%
Reliance LIC ICICI Prudential

Out of 35 respondents it shows that 47% people says that “ICICI Prudential" is giving better
services, 30% people says that “Life insurance coproration” is giving better services and 23%
people says that “Reliance Life insurance” is giving better services.

Figure 1(d)

77
78
LEARNING AND EXPERIENCE

IN 54 DAYS training of Summer Internship Program is truly a learning and knowledgeable

experience. One faces many good and bad experiences in such a training program and learns a lot

through these experiences. Well I faced three kinds of experiences, first with company, second with

clients and third at the college in a period of 6 months.

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Experiences and learning’s at the company: At the company I was given full product

training which not only increased my product knowledge but also helped me to pitch the product in

a better way. Also in company I got chance to meet heads of other departments and got chance to

interact with them. This helped me know about the work culture, code of conduct and various other

working strategies the organization. Many times when I was unable to achieve my targets, the

company guide told us to work on our strategies. This helped me to know my loop and poles.

Experiences and learning’s with the clients: Sometimes I got a chance to meet very

knowledgeable clients and learn new things pertaining to capital market and its fluctuations. Not

only this some clients asked me such questions for which I had to consult my head which seemed

very embarrassing. So such clients also helped me in learning more about the market. This training

also taught me that one should always be prepared pertaining to product knowledge before going

to the customer.

Experiences and learning in the college: In college every Saturday I was given classes of

aptitude, guest lecturers from various industry heads and interview and group discussions. So this

was a very good part of my training as the guest lecturers shared their corporate experience and

how do they handle problems in day to day life. Not only was this, every week top performer

award was given. This motivated me to work in a better way to achieve the awards. The aptitude

class helped in increasing reasoning and aptitude skills. Not only this was the best part the

interview and group discussion sessions done by Career Launcher where I learnt interview skills

and question handling skills.

80
FINDING AND ANALYSIS

81
After pitching 100-130 people in the market my research and findings are:

Figure 1

Figure 2
82
Figure 3

83
84
Figure 4

85
Figure 5

86
LIMITATIONS

87
Nothing in this world is available for free. There are always some or the other constraints which

don’t let one achieve the goals. These constraints not only become obstacle in the way to success

but also decrease the confidence level.

As when my summer internship started, I was very excited about it, about the SIP Company, my

targets and my working as this was my entry to corporate world.

Volatile Share Market:

Our SIP started when the market was very down with high volatility, so it was the biggest

challenge for us to convince people to even talk to us. The share market was not at all responding

and same was the scenario with the people in the market.

Competition:

The next thing that hit my working was competition in the market. Around 32 competitors and

same market, it was really tough to convince the people who were holding a demat account. No

doubt Reliance Money’s product was the cheapest with many value additions but on the grounds of

services people were not ready as they were satisfied with their previous company and were not

sure if my company would give them the same service.

No conveyance charges given:

I was given no allowances for conveyance and other expenses which hampered my working to

some extent. If I had some allowance from the company, I could work in better way.

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Time Constraint:

Time constraint was one of the major constraints as I was to perform just in 8 weeks.

Existing Franchisees:

As for franchisee I also had to give the good hot leads and there were already 1 franchisee in

Haldwani. So whomsoever I targeted, refused by saying that company is already having

franchisees and this will affect their customers as other franchisee will try to pursue them.

Trainee Perspective:

Another thing people were refusing me was on the ground that we were just trainees and would go

after 53 DAYS and then who would provide them service. So this was also a big challenge for me

to handle it by convincing them that I would link them with the company’s franchisees and be in

contact with them even after my training.

Personal Commission:

Most of the clients were asking for commission we were getting and that we would give them. So

it was very hard to convince them that neither we were getting anything nor we can give them any

rebate.

Very Few PAN Card Holders:

One of the biggest limitations was that many people who were interested in buying DMAT

accounts but they did not have PAN cards. So firstly I had to or their PAN cards.

89
CONCLUSION

90
Working with Reliance Money has been a wonderful experience as in Reliance Money I have

realized a complete corporate world scenario, its culture, its aggression, its passion and everything

pertaining to working in a company.

 Immediate changes in the target taught me how to change plans accordingly so that my

productivity is not hampered.

 SIP is truly taught me how to manage things in practical way.

 Terms like cross selling, NAV etc have come to their real picture in summer internship as

their time to time usage has shown me their importance.

This was a very good opportunity for me to hone our skills and knowledge about the fundamentals

of Finance, Sales & Marketing so that when I step into the corporate world I will be able to apply

these experiences to achieve better results thereby adding value to the organization.

91
RECOMMENDATIONS

92
Based on the market study, new clients and existing clients following recommendations can be

given for more satisfaction of customers as well as more sale of product.

Recommendation related to account opening

Time taken to account opening is too long i.e. 8-12 days in comparison with other DP’s

providing the account opening in 5-8 days and sometimes even in 3 days, so the time limit

should be reduced so that users are interested in opening the account.

Documents required for account opening are too unique and confusing

Numbers of signatures, which are made by the clients, are too many, a user has to sign

about 37 signatures, and numbers of signs must therefore be reduced.

Customer care service should be more focus

Customer service should be more focus and organization should take care that customer

TAT (turn around time) in a least period of time.

93
Companies should improve their research and development department

Company should focus on extensive research and development to launch more preferred

and acceptable financial product in this volatile market.

BIBLIOGRAPHY
Websites

www.google.co.in

www.wikipedia.com

www.amfi.com

www.irda.com

www.moneycontrol.com

www.reliancemoney.com

Magazines and Newspaper

Economic Times

Times of India

4 P’s

Mutual funds Insights

94
ANNEXURES
Q.1- Did you do your financial planning?

o Yes ( )

o No ( )

Q.2- What are your investing preferences?

o Bank FD ( )

o Mutual Funds ( )

o Insurance ( )

o Direct equity ( )

o PPF/Post office schemes ( )

Q.3- How much portion of income you invest?

o Below 20% ( )

o 20% to 40% ( )

o Above 50% ( )

Q4- For what objective do you invest?

o Growth ( )

o Saving ( )

95
 o Tax saving ( )

o Financial Security ( )

Q5- Who are your preferred financial advisor?

o R money ( )

o India Bulls ( )

o ICICI ( )

o Karvy ( )

o Religare ( )

o Other brokers ( )

Q6- For how much period you prefer investing?

o Less than 1 yr ( )

o 1 to 5 yrs ( )

o 5 to 10 yrs ( )

o More than 10 yrs ( )

Name………………………..

Contact No…………………

Occupation…………………

Date………………
96