A PROJECT REPORT ON

BANKING & INSURANCE

SUBMITTED BY

ILYAS KHAN
T.Y.B.M.S. (Semester V) BURHANI COLLEGE OF MANAGEMENT STUDIES Nesbit Road Mazgaon, Mumbai 4000 10

SUBMITTED TO

UNIVERSITY OF MUMBAI
ACADEMIC YEAR

2009 - 2010
PROJECT GUIDE
MEHTAB AHMED

One blank page

DECLARATION

I, Mr. Ilyas khan, of Burhani College of TYBMS [Semester V] hereby declare that I have completed my project, titled Banking & Insurance in the Academic Year 2009-2010. The information submitted herein is true and original to the best of my knowledge.

Signature of Student [Ilyas khan]

Certificate

ACKNOWLEDGEMENTS
In preparation of this report by me, I feel great pleasure because it gives me extensive practical knowledge in my career. I get idea about BANKING & INSURANCE. I am thankful to Mr. MEHTAB AHMED (Faculty Guide) for valuable inspiration and guidance provided me through out the course of this project. They have patient and critically gone the subject matter. I would like to take opportunity to express my gratitude towards all of them who have contributed directly or indirectly in my project work.

_______________________ ILYAS KHAN

EXECUTIVE SUMMARY
The banking sector is a very important sector of the Indian economy. The sector has made a marked improvement in the liberalization period. There has been extraordinary progress in the financial health of the commercial banks with respect to capital adequacy, profitability, and asset quality and risk management. Deregulation has opened new doors for banks to increase revenues by entering into investment banking, insurance, credit cards, depository services, mortgage, securitization, etc. The insurance business is one of the most rapidly growing areas in the financial sector. As an economy grows over the years, insurance sector intensifies and broadens its reach. Every practical and futuristic individual would want himself, his family and his assets to be insured. Insurance deals mainly with life and general insurance. India has a large insurance market commensurate with its population. The IRDA Act 1999 (Insurance Regulatory and Development Authority of India Act) has given new opportunities to private players to enter into the market on the fulfilment of certain prerequisites.

INDEX
SR.NO. CONTENTS SECTION-I 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. BANKING INTRODUCTION HISTORY BANKING CONCEPTS FEATURES OF BANKING FUNCTION OF BANKING INNOVATION IN BANKING NON-FUND BASED ACTIVITIES & SERVICES OF THE BANKS BANK GUARANTEE STRUCTURE OF BANK TYPES OF BANK LIST OF BANKS IN INDIA STATE BANK OF INDIA INTERVIEW 0-1 1-6 6-7 7-9 9-10 10-11 11-12 12-13 13-14 14-16 16-17 17-48 48-51 PAGE NO.

SECTION-II 14. 15. INSURANCE INTRODUCTION HISTORY 51-53 53-58

16. 17. 18. 19. 20. 21. 22. 23. 24.

CONCEPTS OF INSURANCE FUNCTION OF INSURANCE OBJECTIVE OF INSURANCE PRINCIPLE OF INSURANCE TYPES OF INSURANCE LIFE INSURNCE CORPORATION OF INDIA INTERVIEW CONCLUSION BIBLIOGRAPHY

58-59 59-61 61-63 63-65 65-68 68-97 97-100 100-101 101-102

SECTION I BANKING

INTRODUCTION
Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a governmentowned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In

1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980. Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks, 31 private banks and 38 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Definition An establishment for the custody, loan, exchange, or issue, of money, and for facilitating the transmission of funds by drafts or bills of exchange; an institution incorporated for performing one or more of such functions, or the stockholders (or their representatives, the directors), acting in their corporate capacity.

HISTORY
Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters

from the British East India Company. The three banks merged in 1925 to form the Imperial Bank of India which, upon India's independence, became the State Bank of India. Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. That honour belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla.

The Bank of Bengal, which later became the State Bank of India.

2 The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India. The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank

of Baroda, Canara Bank and Central Bank of India.and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918. The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,banking activities for months. India's independence marked the end of a regime for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." 3 The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors. However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalisation of major banks in India on 19 July, 1969. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it

had emerged as a large employer, and a debate had ensued about the possibility to nationalise the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation". Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity". Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August, 1969.

4 The nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. the GOI controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

The nationalised banks were credited by some, including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009. In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized 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 setup with the proposed relaxation in the norms for Foreign Direct Investment, 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. 5 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 a 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. In recent years critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans.

BANKING CONCEPTS
It is necessary to understand the basic concept used in banking. These are as under are as follows:1.Banking 2.Banker 3.customer 4.Banking Company

1. Banking Banking has been defined as According for the purpose of lending and investment, of deposits of money from the public, repayable on demand, order or otherwise and withdraw able by cheque, draft or otherwise. 2. Banker Banker is a person who accepts deposits, money on current acconts, issue and pay cheques and collects cheques for his customers. 3. Customer A customer is a person who has an account with the bank, performs,at least a transaction of a banking activity nature. 4. Banking Company Banking company means any company,which transacts the business of banking in India.

FEATURES OF BANKING
The essential features of Banking are as follows: 1.Dealing in money 2.Agency 3.Credit Creation 4.Commercial Nature 5.Withdrawls Deposits 1. Dealing in money

The bank deals in money. They accept deposits from the public. There are different types of deposits such as savings, current, fixed, recurring, etc. Banks advance money as loans to the needy people. There are different types of advances such as cash, credit, term loans, bill discounting, overdrafts, etc. 2. Agency Banks act as an agent of the customer. They provide variety of agency services, besides the basic function of accepting deposits and lending money. Fund transfer, credit cards, Telebanking, cheque clearing, bills collection is some of the services provided by the banks as an agent. 3. Credit Creation The banks can create credit. It is an additional function of bank. Creating of credit is a unique feature of banking. Every deposit can create credit. Additional money can be created for the purpose of lending. However, there is a limit for such credit. 8 4. Commercial Nature All the banks functions are carried out with the aim of making profit. Therefore, tae nature of business of banks is commercial. They pay interest on deposits and these deposits are advanced to the needy persons at a higher rate of interest. 5. Withdraw able Deposits Cheques draft or otherwise, can withdraw the deposits made by the customers. The banks issue cheques books to their customers. The

customers have an option to withdraw money either by cheque or withdraw slips.

FUNCTION OF BANKING
Banking Regulation Act of India, 1949 defines banking as "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheques, draft or order." Deriving from this definition and viewed solely from the point of view of the customers, Banks essentially perform the following functions:-

1.Accepting Deposits from public/others (Deposits) 2.Lending money to public (Loans) 3.Transferring money from one place to another 4.Acting as trustees 5.Keeping valuables in safe custody 6.Government business

10

INNOVATION IN BANKING
The Banking has given every time new technology to the consumer. Innovations in modern banking are as follows: 1.Merchant Banking 2.Leasing 3.Mutual Funds 4.Money Transfer 5.Factoring 6.Housing Finance

7.Credit Cards 8.Portfolio Management 9.Automated Teller Machine (ATM) 10.Tele Banking 11.Internet Banking

11

NON-FUND BASED ACTIVITIES & SERVICES OF THE BANKS

The banks carry out important functions of providing non-fund and based services to the customers. The banks perform these services as an agent. The following are the non-fund based services provided by the Indian banks are as follows: 1.Collection of Cheques, Bills and Promissory Notes 2.Collection of Dividend and Interest 3.Execution of standing Orders

4.Remittance of Funds There are the following important methods of transfer of funds from place to place are as follows: Banks Drafts Mail Transfer Telegraphic Transfer 5.Safe deposit Vault 6.Automated teller Machine (ATM) 7.Tele Banking 8.Internet Banking 9.Credit Cards 10.Merchant Banking

12

BANK GUARANTEE
A Contract to perform the promise or discharge the liability of a third person in case of his default. The person who gives the guarantee is called the surety. The person in respect of whose default the guarantee is given is called the Principal Debtor and the person to whom the guarantee is given is called the creditor. A guarantee may be either oral or written. The following are the different types of guarantees a bank is often required to issue are as follows: 1.Finanacial Guarantees

2.Performance Guarantees 3.Deferred Payment Guarantees 4.Advance Money Guarantees 5.Tendor Money Deposit Guarantees 6.Bid Bond Guarantees 7.Custom/ Excise Duty Guarantees

13

STRUCTURE OF BANK
Structure of the organised banking sector in India. Number of banks are in brackets. In the year 1998-1999 the following banks are there:

14

TYPES OF BANK
There are five different types of Bank are as follows: 1. Central Bank 2. Public Sector Bank 3. Private Sector Bank

4. Co-operative Sector 5. Development Banks/Financial Institutions 1. Central Bank The Reserve Bank of India is the central Bank that is fully owned by the Government. It is governed by a central board (headed by a Governor) appointed by the Central Government. It issues guidelines for the functioning of all banks operating within the country.

2. Public Sector Banks State Bank of India and its associate banks called the State Bank Group. 20 nationalized Banks. Regional rural banks mainly sponsored by public sector banks.

15 3. Private Sector Banks Old generation private banks. New generation private banks. Foreign banks operating in India. Scheduled co-operative banks. Non-scheduled banks.

4. Co-operative Sector The co-operative sector is very much useful for rural people. The cooperative banking sector is divided into the following categories. State co-operative Banks Central co-operative banks Primary Agriculture Credit Societies 5. Development Banks/Financial Institutions IFCI IDBI ICICI IIBI SCICI Ltd. NABARD Export-Import Bank of India National Housing Bank Small Industries Development Bank of India 16

LIST OF BANKS IN INDIA

Banks in India is divided into three category are: FOREIGN BANKS IN INDIA PRIVATE BANKS IN INDIA NATIONALISED BANKS IN INDIA

1. ABN-AMRO Bank 2.Abu Dhabi Commercial Bank Ltd. 3.American Express Bank Ltd 4.BNP Paribas 5.Citibank 6.DBS Bank Ltd 7.Deutsche Bank 8.HSBC Ltd 9.Standard Chartered Bank

1.Bank of Rajasthan 2.Bharat Overseas Bank 3.Catholic Syrian Bank 4.Centurion Bank of Punjab 5.Dhanalakshmi Bank 6.Federal Bank 7.HDFC Bank 8.ICICI Bank 9.IDBI Bank 10.IndusInd Bank 11.ING Vysya Bank 12.Jammu & Kashmir Bank 13.Karnataka Bank 14.Karur Vysya Bank 15.Kotak Mahindra Bank 16.SBI Commercial and International Bank 17.South Indian Bank 18.United Western Bank 19.UTI Bank 20.YES Bank

1. Allahabad Bank 2.Andhra Bank 3.Bank of Baroda 4.Bank of India 5.Bank of Maharashtra 6.Canara Bank 7.Central Bank of India 8.Corporation Bank 9.Dena Bank 10.Indian Bank 11.Indian Overseas Bank 12.Oriental Bank of Commerce 13.Punjab and Sind Bank 14.Punjab National Bank 15.State Bank of Bikaner & Jaipur 16.State Bank of Hyderabad 17.State Bank of India (SBI) 18.State Bank of Indore 19.State Bank of Mysore 20.State Bank of Patiala 21.State Bank of Saurashtra 22.State Bank of Travancore 23.Syndicate Bank 24.UCO Bank 25.Union Bank of India 26.United Bank of India 27.Vijaya Bank

17

SBI STATE BANK OF INDIA

Type Founded Head quarters Key people

Public (BSE, NSE: SBI) & (LSE: SBID) Kolkata 1806 (as bank of Calcutta) Corporate Centre, Madam Cama road, Mumbai 400 021 India. Chairman: Om Prakash Bhatt, Mang Dir. & Group Exec. (Corp. Banking): Tara Shankar (T.S.) Bhattacharya Deputy Managing Director and CFO: Ashok Mukand. Banking, Insurance & Capital Markets & allied industries. Loans, Credit Cards, Savings, Investment Vehicles, SBI Life (Insurance), etc. $ 9,674.5M Total 8.7% Total 7.2% $ 2,141.9M 205,896 StateBankofIndia.com Bank of India, ICICI Bank, Union Bank of India. 18

Industry Products . Total Sales One year growth Income growth Net income Employees Websites Competitors

SBI STATE BANK OF INDIA

The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921. An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries. 19 Subsidiaries The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries. Through the establishments, it offers various services including merchant banking services, fund

management, factoring services, primary dealership in government securities, credit cards and insurance. The eight banking subsidiaries are: 1.State Bank of Bikaner and Jaipur (SBBJ) 2.State Bank of Hyderabad (SBH) 3.State Bank of India (SBI) 4.State Bank of Indore (SBIR) 5.State Bank of Mysore (SBM) 6.State Bank of Patiala (SBP) 7.State Bank of Saurashtra (SBS) 8.State Bank of Travancore (SBT)

20 The State Bank of India emerged as a pacesetter, with its operations carried out by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties, the State Bank of India catered to the needs of the

customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development. ATM Services SBI provides easy access to money to its customers through more than 8500 ATMs in India. The Bank also facilitates the free transaction of money at the ATMs of State Bank Group, which includes the ATMs of State Bank of India as well as the Associate Banks State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You may also transact money through SBI Commercial and International Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card.

21 Growth State Bank of India has often acted as guarantor to the Indian Government, most notably during Chandra Shekhar's tenure as Prime

Minister of India. With 11,448 branches and a further 6500+ associate bank branches, the SBI has extensive coverage. State Bank of India has electronically networked all of its branches under Core Banking System(CBS). The bank has one of the largest ATM networks in the region. More than 8500 ATMs across India. The State Bank of India has had steady growth over its history, though it was marred by the Harshad Mehta scam in 1992. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. Group companies 1.SBI Capital Markets Ltd 2.SBI Mutual Fund (A Trust) 3.SBI Factors and Commercial Services Ltd 4.SBI DFHI Ltd 5.SBI Cards and Payment Services Pvt Ltd 6.SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance) 7.SBI Funds Management Pvt Ltd 8.SBI Canada 22

KEY DATES OF STATE BANK OF INDIA

1806: The Bank of Calcutta is established as the first Western-type bank.

1809: The bank receives a charter from the imperial government and changes its name to Bank of Bengal. 1840: A sister bank, Bank of Bombay, is formed. 1843: Another sister bank is formed: Bank of Madras, which, together with Bank of Bengal and Bank of Bombay become known as the presidency banks, which had the right to issue currency in their regions. 1861: The Presidency Banks Act takes away currency-issuing privileges but offers incentives to begin rapid expansion, and the three banks open nearly 50 branches among them by the mid-1870s. 1876: The creation of Central Treasuries ends the expansion phase of the presidency banks. 1921: The presidency banks are merged to form a single entity, Imperial Bank of India.

23 1955: The nationalization of Imperial Bank of India results in the formation of the State Bank of India, which then becomes a primary factor behind the country's industrial, agricultural, and rural development. 1969: The Indian government establishes a monopoly over the banking sector.

1972: SBI begins offering merchant banking services. 1986: SBI Capital Markets is created. 1995: SBI Commercial and International Bank Ltd. are launched as part of SBI's stepped-up international banking operations. 1998: SBI launches credit cards in partnership with GE Capital. 2002: SBI networks 3,000 branches in a massive technology implementation. 2004: A networking effort reaches 4,000 branches.

24

PRODUCTS & SERVICES

Personal Banking

1.SBI Term Deposits SBI Loan For Pensioners

2.SBI Recurring Deposits Loan Against Mortgage Of Property 3.SBI Housing Loan Loan Against Shares & Debentures 4.SBI Car Loan Rent Plus Scheme 5.SBI Educational Loan Medi-Plus Scheme

Other Services

1.Agriculture/Rural Banking 3.ATM Services 5.Corporate Banking 7.Mobile Banking 9.Safe Deposit Locker 11.E-Pay

2.NRI Services 4.Demat Services 6.Internet Banking 8.International Banking 10.RBIEFT 12.E-Rail

13.SBI Vishwa Yatra Foreign Travel Card 14.Broking Services 15.Gift Cheques 25

SERVICES TO CUSTOMER
Services Card To Card Money Transfer, Currency Exchange, Demat Services, Direct Tax Payment, Electronic Clearing Service, Mobile Phone Banking, Multi City Cheque Facility, Net Banking, Pension Disbursement,

Personal Tax Assistance & Investment, Portfolio Management, Retail Sale Of Gold Coin, Wealth Management Service. Investment products Bonds, Equity, Fixed Deposit, Flexible Deposit, Insurance, Mutual Fund, Stock Invest. Business loans Business Loans, Loan Against Deposit, Professional Loan, Project Finance, Self Help Group Finance, Term Finance, Trade Finance. Card Corporate Credit Card, Credit Card, Debit Card, E-Shop Card, Loyalty Cards, Remittance Card, Travel Currency Card. Account type Current Account, Demat Account, Fixed Deposit Account, Recurring Deposit Account, Saving Account. Other Loans Agricultural Loan Schemes, Commercial Vehicle Loan, Consumer Goods Loan, Educational Loan, Four Wheeler Loan, Home Improvement Loan, Housing Loan, Loan Against Deposit, Loan Against Gold, Loan Against Property, Loan Against Share, Loan Against Vehicle, Personal Loan, Two Wheeler Loan. 26

SBI ACCOUNT
The State Bank of India provides a wide range of accounts, which are easy to open and use. The bank also allows online operation of the accounts. Any body that desires to have SBI bank account can easily open an account. SBI bank accounts are now available for all like senior

citizens, employed people, students, in short for each and every citizen of India. SBI allows different types of bank account each with their respective features, some are given below: 1. SBI Savings Account Safe deposits of savings, earning interest on the deposits. 2. SBI Salary Account Managing the salary, quick and easy credit of the amount. 3. SBI NRI Account Transactions and savings transfer of currencies. 4. SBI Business Account Easy transfer of money, outstation usable cheque facilities. 5. SBI Current Account Easy transfer of money among different branches, availability of ATM cum debit card. 6. SBI No-frills Account Zero balance account, low service charges. 7. SBI Internet Banking Fast and easiest method of money transfer and transaction. 27

SBI LOAN
SBI Home Loan

SBI Home loan provides probably the most sought after housing finance options available in India. Being India's largest nationalized bank the

State Bank Of India with its huge network of branches is known for offering cheap home loans to masses helping them construct their dream home. SBI reckons the amount of efforts involved in building a house or a flat and considering the needs of different people SBI offers home loan for a diverse objectives ranging from: Buying or building a new house/flat buying a present house/flat Buying land for the construction of a house

28 Certain specific details of SBI home loan are as follows: 1.There is no upper limit on maximum amount of loan for buying/building a new home. 2.No charges for administration or application fees. 3.A free personal accident insurance cover is also provided under the SBI home loan scheme.

4.The loans can be replayed up to the age of 70 years. 5.Choice being offered to avail loan at the location of employment or construction. 6.A cap of Rs.10, 000 is provided along with service tax and 0.50% of the amount of loan is charged as part of the processing fee. 7.The maximum amount of loan for the NRI customers to buy land to build a house is Rs.20lacs, 3lacs for purchase of household commodities and 10lacs for re-storage or renovation purposes. 8SBI also offers SBI home loan insurance along with the SBI life insurance so as to consolidate the EMI amount and the insurance premium to be paid towards the home loan insurance policy. 8.SBI home loan transfer scheme provides the facility for balance transfer of the home loan.

29 Following are the details of eligibility criteria to avail SBI home loan The applicant should be at least 18 years old from the date of loan sanction. The loan applicant should have a source of regular income.

 In case of NRI the applicant should be holding a legitimate Indian passport or a legitimate foreign passport along with a legitimate work permit and should have been employed overseas for at least 2 years. Types of Home Loans offered by State Bank Of India: SBI also offers various finance options to restore, reconstruct, renovate a present house/flat and also if you wish to purchase household goods like furnishings, furniture and other movable articles. SBI offers basically four types of home loan, which are as under: 1.SBI Max gain home loan 2.SBI Flexi home loan 3.SBI Freedom home loan 4.SBI Realty home loan

30 SBI home loan interest rate The bank charges the interest on its home loan schemes at fixed rate of interest and the floating rate of interest on the following basis: -

 Floating interest rate - The floating interest rate is connected to State Bank Advance Rate and the amount of interest charged is 8% at floating rate. Fixed interest rate The rate of interest under fixed interest rate for the first year is 8% and 9.5% at a fixed rate for subsequent period.

Loan repayment SBI lays down certain rules and regulations pertaining to the repayment of loans. The loan applicants can repay the amount in the form of equated monthly instalments and the repayment is allowed up to the age of 70 years. The maximum repayment period for the applicants aged below 45 years is 20 years and for the applicants above the age of 45 years the maximum period is 15 years.

31

SBI CARD
The State Bank Of India has surely made the financial operations easy for lakhs of its customers, providing them with a revolution in terms of usage

of plastic money. The bank through its lucrative schemes provides various offers to its customers like concessions, low fees and various other privileges that come along with a SBI card. SBI credit cards are the combined work of the State Bank of India, one of the country's largest banks, and GE Capital Services. The two companies recognized a growing need in the credit card industry in India and merged to form SBI Cards and Payment Services Ltd. (SBICPSL). Using the Indian currency of Rupees (Rs.), credit card holders can use a broad range of benefits and advantages that vary depending on the type of SBI credit card they apply for.

32 Certain benefits and offers for the SBI cardholders are as follows: 1.Global acceptance The SBI credit card is duly accepted at more than 110,000 VISA outlets and ATMs throughout the world.

2.Anywhere/Anytime cash receipt A vast number of SBI ATMs, VISA ATMs and other cash points enable its customers to access their cash anywhere in India and abroad. 3.Utility to transfer balance The bank charges an interest rate of 1.75% p m to avail the facility to transfer current balance of credit card to another card. The amount to transfer should be nothing less than 5000 and the maximum amount that can be transferred should not be more than 75% of available credit limit. 4.Purchase fuel The customer can use his credit card to buy fuel if the amount is more than Rs.400 and up to Rs.2000 every time thus saving transaction fee from Indian oil and IBP petrol pumps. 5.Other miscellaneous offers on SBI card Cash back facilities on purchase of goods abroad, gift vouchers on purchase of International brands like Nike, Hide sign, Levis etc. Services like flower & gift delivery, movie tickets, hotel, and train and airline ticket reservations. SMS alerts to keep yourself up to date with your SBI card status. The card holder is also entitled to a few other benefits like one can access his account online using his card, travelling advantages, cash offer, saving offers, easy bill payment options etc. 33 Types of SBI Card 1. SBI Platinum Card 2. SBI Gold Card 3. SBI Silver Card 4. SBI Advantage card (FOR GENERAL USE)

5. SBI Employee Card 6. SBI Partnership Card 7. SBI Go Air Card 8. SBI LG Card 9. SBI Railway Card 10. SBI Lifetime Free Card 11.SBI Doctors Card for Doctors 12.SBI Travellers Card for Travellers

Eligibility of SBI Credit Card To receive any of the features and benefits offered with SBI credit cards, your account must be valid and in good standing. Additionally, an "eligible transaction" for benefits rewards can't be a cash withdrawal, cash advance or loan, and must be part of the selected promotion, charged to the credit card successfully and not charged back to the card (such as a returned item or purchase credit). The SBI Rewards program is available to holders of SBI Platinum Cards, SBI Gold & More Cards, SBI Doctors Cards or SBI Employee Cards. 34 Considerations SBI Cards have joining fees, annual fees and renewal fees, which differ depending on the type of card you hold and the promotion or offer you participate in. The one-time joining fee can be up to Rs.5, 000 and the annual fee up to Rs.1, 500. There is a 20- to 50-day interest-free period

on retail purchases, but it is only applicable if you pay the previous month's statement in full. Finance charges can be up to 3.35 percent per month (40.2 percent per annum) and the minimum payment due each month is 5 percent of the outstanding balance (minimum of Rs.200) plus the current government service tax. There are also fees associated with cash advances and card protection or other bonus programs you may choose to participate in. SBI card online The bank allows the SBI card holders to access their account on internet thus making it simple for them to keep a track of their card usage by logging on to their website. SBI card statement The cardholders can access their card statement online, as its a simple way to go through the card statement, which can be directly received in your inbox of your active e-mail id.

35 SBI card payment The bank provides its credit card customers with a host of payment options. The customers can make cash payment at easy-bill outlets referring their card number, contact number and amount payable. The net savvy customers can utilize the Internet to pay for their card. All one has

to do is feed in their credit card and payment details and the bank directs them to e-banking option where after reconfirming the requisite details the amount is debited to the online account. A confirmation of transaction along with the reference number is provided and e-mail is sent to the customer's mail id. Another easy mode using which the card holder can make payments is by dropping the cheque with SBI credit card number mentioned on it in the drop boxes placed at various locations. The customer can also make payment of his SBI credit card through his SBI ATM cum debit card at various SBI ATM located throughout India. SBI card reward points SBI provides its card customers with reward points under its triple advantage rewards program. The card holders can gather these reward points on retail purchase using their SBI card. The points collected are mentioned in the monthly statements of the credit card and can be recovered in the form of gifts, vouchers, cash etc. For every purchase of goods worth Rs. 125 one reward point is awarded. The card holder can discontinue his/her participation in the SBI reward points program by informing the bank on phone or through written communication The bank charges a participation fee annually. 36

SBI SAVINGS A\C IS THE BEST SAVINGS A\C

Here is a quick list of things which u think make SBI is the best bank, or rather the savings account offered by SBI is the best savings account.

1. SBI has good online banking system You can do all transactions - check balance, transfer money to your account in other banks, transfer money to anyone's account in SBI, make online fixed deposits, make recurring deposits online, order checks, demand drafts - virtually you can do everything online. Just remember to fill the online banking form when you open your account and ask them to give you "Transaction Rights". Also remember to keep you password very safe and private in order to avoid misuse. SBI Online banking that you see after logging in. 2. SBI has lots of ATMs The most number of ATMs for a single bank in India. In any case you can always withdraw money from any ATM for a fee of around 20 to 25 rupees in case of emergency. 3. SBI International Debit Card SBI comes with a default Maestro debit card. But you can apply for an international VISA or MasterCard Debit card if your average balance is Rs.50, 000. Visa and MasterCard debit cards can be used worldwide, just like a credit card.

37 4. Customer Service of SBI Although I have usually had good experience about customer service in SBI, it can vary from branch to branch depending on lot of factors like work load in that branch etc. 5. Minimum Balance requirement for SBI

The minimum balance required in your SBI Savings account is Rs.1000/if you have a checkbook and Rs.500/- if you dont have a checkbook. My balance had fallen below the minimum balance on a couple of occasions but I realised they dont immediately impose a fine or anything. I have not discovered any hidden charges yet. 6. SBI Demat Account, SBI Forex Services

The Demat Account of SBI is 'integrated' with your savings account and hence you can manage both after just one log in. Demat Account with SBI is especially useful if you have an online trading account with SBICAP Securities. Read my other posts on SBICAP Securities in this blog. I had just one experience with Forex Service - I had to get a check in US dollars. All I can say is I was satisfied, but remember actual customer service depends on the particular branch you are dealing with. 7. SBI Remittance

SBI Remit to India Service or SBI Global Link Service - If you are in the US- it is very easy to send money to India using SBI remittance. You can send money for free and with competitive foreign exchange rates. Click on SBI Forex rates to know the latest rates.

38

INTERNATIONAL PRESENCE
Regional office of the State Bank of India (SBI), India's largest bank, in Mumbai. The government of India is the largest shareholder in SBI. The bank has 52 branches, agencies or offices in 32 countries. It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong,

Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. SBI operates several foreign subsidiaries or affiliates. In 1990 it established an offshore bank, State Bank of India (Mauritius). It has two subsidiaries in North America, State Bank of India (California), and State Bank of India (Canada). In 1982, the bank established its California subsidiary, which now has seven branches. The Canadian subsidiary was also established in 1982 and also has seven branches, four in the greater Toronto area, and three in British Columbia. In Nigeria, it operates as INMB Bank . This bank was established in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria. In Nepal SBI owns 50% of Nepal SBI Bank, which has branches throughout the country. In Moscow SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia it owns 76% of PT Bank Indo Monex. State Bank of India already has a branch in Shanghai and plans to open one up in Tianjin. State Bank of India has presence in Dubai International Financial Centre, Dubai, United Arab Emirates. (www.sbi.ae) 39

SBI NRI SERVICES

SBI NRI Services SBI offers specifically designed banking services to the expatriate Indians settled in various parts of the world in the name of SBI NRI services or

SBI NRI Banking services with over 73 SBI NRI branches in 30 countries along with representative offices and off shore banking units across the globe. NRI accounts, deposit schemes, loans, remittance, investments, are some of the services being offered by the state bank of India to its NRI customers throughout the world. Being India's largest and the most trusted bank State bank of India provide special services through SBI Online to its NRI customers spread across the globe.

40 SBI NRI Account The bank through its SBI NRI account facility provides a host of account/deposit schemes providing interest earnings free from tax and facility to keep savings in form of foreign currency. There are four types of NRI accounts that can be opened with the state bank of India, namely:

1.Foreign Currency Non-Resident Account (FCNR) 2.Non-Resident External (NRE) Rupee Account 3.Non-Resident Ordinary Account (NRO) for crediting income in India 4.Resident Foreign Currency (RFC) Account for Indians returning 5.Online NRI e-Z trade 3 in 1 account with SSL (SBICAP Securities Limited) for online share trading The interested NRI can open a current a/c, savings a/c, term deposit a/c and special term deposit a/c and the applicant can download the SBI NRI account opening form from the bank's website.

41 SBI NRI Account opening In order to open an NRI account with SBI the interested applicant must download the SBI NRI account opening form and mail the same duly filled up at your nearest branch along with a copy of your passport, visa or residence permit, 2 photos and initial money remittance. The verification of your signature may be down by Indian Embassy or Consulate, any SBI foreign office, notary public or any person known to

the bank. An NRI can open NRE, NRE Rupee accounts, savings bank a/c or current a/c, FD in Indian or foreign currency, term deposits, special term deposits, resident foreign currency accounts, NR (ordinary) account, foreign currency non-resident account, FD in US Dollar, Euro, Australian Dollar, Canadian Dollar.

42 SBI NRI loan SBI offers three kinds of loans - car loan, home loan, loan against deposits to its NRI customers. These types of loans are briefly discussed below. SBI NRI Car loan/vehicle loan: NRI car loans are tailor made for an Indian resident with an NRI relative who acts as both sponsor and guarantor. The SBI NRI vehicle loan is offered for buying LMVs, MUVs and SUVs.

SBI NRI Home loan State bank of India provides SBI NRI home loan for building a new house/flat, buying an old house/flat or repair and reconstruction of house. However, SBI lays down certain pre-conditions for NRIs to avail home loan like the loan seeker should have stayed in India for at least 182 days or more, the loan seeker should be at least 21 years old, should be holding a valid Indian passport, should have been working abroad for at least 2 years with valid job contract and should have a steady flow of monthly income with stable employment/business to ascertain the repayable capacity of the loan applicant. The loan seeker can submit the required documents at the bank's foreign office and the loan acquired against deposits can be availed to carry on business operations, for sudden financial needs/requirements or may be to even buy a home/flat in India.

43 SBI NRI Loan against deposits The loan seeker can avail SBI NRI loan against security of their STDR/FCNR or NRE TDR deposits. This type of loan can be acquired for further expansion of business operations, for direct investment in India like buying a flat or a home or in case of urgent financial operations.

SBI NRI Remittance facility: Instant money transfer SBI provides customized remittance services to NRIs on the basis of needs of individual customers. The individual can choose the remittance mode and the duration during which you want to remit the amount to India. SBI offers a rupee remittance service to its customers through its net of branches in 18 countries across the globe to your relative's SBI account in India out of 9000 SBI CBS branches and 4500 branches of SBI associate banks. This is probably the easiest and the fastest way to transfer money and this facility is charged at an amount that varies from branch to branch. One can contact the SBI branch in a foreign country for further inquiry about the bank's remittance facility. There is an option to send remittances online so you can remit to India from US or UK using SBI EXPRESS REMIT which provides best exchange rates, hardly any transaction fees, credit facility to accounts held in other banks in India including direct credit facility to all SBI branches in India.

44 SBI NRI Demat facility The bank offers demat facility to NRIs wishing to invest in share market, debentures, securities, bonds of other Indian organizations converting physical holding of securities to electronic balance held in the demat account. Apart from the common products related to finance and savings the SBI offers a host of other services to its NRI customers, which include

investment and specially customized tax benefit schemes. Liberty to keep up property or assets purchased abroad, to keep up the foreign currency in foreign banks etc. The bank through its vast network of branches and over 73 foreign offices in 30 countries is able to serve the largest number of NRIs.

45

SBI BRANCH
SBI Branch network is the largest branch network in India as compared to the rest of the private and public sector banks in India and this is what makes State Bank Of India nation's most sought after commercial public sector bank of the country. With a view to reach more and more customers and to expand its customer base all over India and even abroad SBI has increased its strength to 16000 branches in India both in rural and urban areas since its establishment. The bank has over 50 branches in

around 30 countries across the globe. The SBI Bank branches have the largest network in entire Asia. With its extensive reach bank has touched millions of lives throughout the world. SBI has always been monumental contributor to India's banking and financial sector. SBI branches have a widespread coverage of all the cities/towns and whole of the rural and urban sector making SBI unanimous choice to top India's banking sector. All of the SBI branches are CBS (Core Banking Solution) branches so that the customer can access his account details from anywhere.

46

SBI BRANCH CODE

Another main element of SBI branch is that they have a separate branch for particular banking service, like there is a different branch for personal loan, a different branch for industrial finance, a particular branch for NRI banking, a commercial branch, a main branch, SBI core banking branch, Domestic forex branch, internet banking branch etc. And thus each SBI branch is provided with a unique identification branch code. In order to avail the access to different SBI Branch code/codes you can get in touch

with the SBI bank customer care and contact the help desk for any query or can even call up, go in person to meet the SBI customer care executives or can even log on to the SBI website.

47

SBI BRANCH LOCATOR

State Bank Of India provides its existing and potential customers with an online tool of 'SBI BRANCH LOCATOR' to help them find the nearest SBI branch. Follow the instructions mentioned as under and you will be able to locate your nearest SBI branch: 1.Select the branch code/branch name/city/pincode/district/state/circle/forex/swift/ IFSC code etc. from the drop-down menu of the locator.

2.Enter the text you want to search or select from the options for advance search. 3.Select the branch type from the categorized menu of the banking services provided by SBI. 4.Select the SBI Branch offering any particular banking product or service you want to avail. You can get an entire list of SBI branch locations provided on the bank's website using the SBI Branch locator. The SBI Branch address and other details of some of the SBI branches along with their respective branch Codes located in primary locations both in India and abroad.

48

INTERVIEW
STATE BANK OF INDIA

INTRODUCTION : I truly and originally experience in this interview. Mr.Amit Yadav is a Senior Manager in Account Opening department he is a person with great experience in banking field. Mr. Yadav shared his experience towards SBI Bank and acknowledges me about SBI Bank. He was very co-operative to me and explains me with detailed explanation and he gives information for every question asked by me.

(1)

What is your name? Ans: Mr. Amit Yadav

(2)

What is your post in this organisation? Ans: Senior Manager.

(3)

Are you married? Ans: No.

(4)

Do you find any difficulty in your job? Ans: No.

(5)

Is your staff co-operative to u? Ans: Yes.

49 (6) What is your qualification? Ans: Post Graduation in Banking. (MBA)

(7)

Who is your role model? Ans: Mr. Ratan Tata.

(8)

What is your desire to be in future? Ans: In future I will become to be a chief manager of this Branch.

(9)

What suggestion would you like to give to the upcoming generation? Ans: I advice to the upcoming generations to be true, sincere, & specially to be humble in their jobs and tasks.

(10) How many people work in this branch? And under u? Ans: In this branch 35 people are working. And Under me 10 people are working.

(11) Since how many years are you working here? Ans: 2 years

50 (12) Did you work in any other firm than this? Ans: Yes. In ICICI Bank.

(13) How many years of experience you have? Ands: 5 years in the Banking field.

(14) What are your long-term objectives?

Ands: If in terms official work I cannot tell you its confidential.

(15) Can you give some tips for becoming successful to the youth? Ands: I will suggest to the youth that focus to your work, hard working and achieve the goals and target in time.

SECTION II INSURANC E
51

INTRODUCTION
Insurance is a cover used for protecting oneself from the risk of a financial loss. It is important to understand that risk is a part of any persons life and that it increases as a person increases in age,

responsibility and wealth. Insurance is risk coverage against financial losses and should not be taken as an investment instrument. There are mainly two parties involved in this the insurer and the insured. The insurer is the insurance company who will provide the cover to the insured against any financial losses. The insured may be an individual person or a group of people like an employer, members of a society, etc. A policy is the contract between the insurer and the insured, which states the risks covered, the exclusions, if any, and the benefits reimbursed on the happening of an event like death, illness etc. The policy is paid through what is called a premium, which is a set amount that must be paid by the insured on a monthly, semi-annual or annual basis. On the happening of an event like death, disability, fire, etc, for which the insured is covered, the benefit amount stated in the policy contract can be claimed by the insured.

52 Insurance is a social device to reduce or eliminate risk of loss to life and property. A group of individual transfer risk to another party in order to combine loss incurred. It includes statistical prediction of losses and provides for payment of losses from funds contributed by all members who transferred risks. Thus collective Bearing of risks is immense.

When Indias growing exposure to global markets it is now being appreciated that the business of insurance with its unique features has a special place in the economy of our country, Insurance is essentially an arrangement for paying for losses if they occur and thus is a risk- which provides a much-needed cover to industry thereby economizing its growth. Society cannot ignore risks or negative surprises, which are ever, present but can learn to live with them. Definition Insurance is a contract between the insurer and the insured under which the insurer undertakes to compensate the insured for the loss arising from the risk insured. In consideration the insured agrees to pay a premium regularly.

53

HISTORY
The Insurance sector in India prior to its nationalisation is the history of a dismal performance by the private insurance companies characterised by insolvencies, frauds and widespread malpractice. While this scenario led

to the nationalisation of life insurance business in 1956 and that of general insurance in 1972, the nationalisation of insurance industry was also visualized to play a key role in channelising public savings for nation-building. The Life Insurance Corporation of India (LIC), in its more than four decades of existence as a public sector monopoly, has played an important role in the economy in mainly two ways. First, it has performed its role of pooling and redistributing risks (associated with its policy holders) across millions of households all over the country. Secondly, it has acted as a major financial intermediary for mobilising contractual savings and channelising its investible surpluses into infrastructure development and other socially desirable avenues. In this backdrop, the policy of the Government of India to privatise the insurance sector and allow foreign participation in the same has raised doubts about the ability of Indian life insurance industry to fulfil its social objectives in future.

54 In the Pre-Nationalisation Era A British company called the Oriental Life Insurance Company, established in 1818, marked the beginning of life insurance business (in its modern form) in India. This was followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829. However, while these companies operated in

India they did not insure the lives of Indians. They only insured the lives of Europeans living in India. This discrimination against Indians went on for quite some time, as some of the companies which started later, although provided insurance to Indians, charged an extra premium of 20 percent or more from them. The first company that did away with such discrimination was the Bombay Mutual Life Assurance Society started in 1871. By 1938, there were as many as 176 insurance companies (both life and non-life) operating in India. However, the industry was plagued by frauds, misappropriations, mismanagement and arbitrary investments. This led to the passage of the Insurance Act of 1938, which was a comprehensive Act to regulate insurance business in India. Even after 1938, the dismal state of the insurance industry continued in India, and frauds and bankruptcies remained as regular features of the private insurance companies.

55 Apart from the bankruptcies and frauds, there was another characteristic feature of the insurance industry in the pre-nationalisation era. By 1956, there were 154 Indian insurance companies, 16 non-Indian insurance companies and 75 provident societies that were issuing life insurance policies. However, the operations of most of these companies were based in the big cities only, like, Bombay, Calcutta, Delhi and

Madras. As a result, the spread of the insurance industry in the rural areas was quite low. In the Liberalisation 1991 marked the beginning of liberalisation of Indian economy along the lines dictated by the International Monetary Fund (IMF). One of the major components of the IMF-style liberalisation was privatisation of and allowing foreign participation in the financial sector. So, the Government set up the Narasimham Committee for suggesting reforms in the banking sector and the Malhotra Committee (led by R.N. Malhotra, former Governor of RBI) to suggest reforms in the insurance sector. And, proving the fears of the critics of neo-liberal reform process true, both the Committees suggested increasing opening upby allowing private participation and presence of foreign companies of the respective sectors.

56 The advocates of liberalisation propagated that opening up the insurance sector to domestic and foreign competition would make the insurance industry much more efficient and ensure much better conditions for consumers. It was argued that more products (in the form of new types of insurance policies) would be available and that premium rates would fall under competition, and also the existing nationalised insurance companies would be forced to raise their efficiency(in terms of

serving the customers). The opening up was also expected to help increase the availability of long-term funds to finance infrastructure through the generation of additional premium income. And, as has already been mentioned, liberalisation of the insurance sector was expected to create a flow of finance for the corporate sector and provide greater liquidity to the long-term capital market. The policy makers also maintained the view that, keeping in mind the structural changes in other parts of the financial system of the economy, it was necessary to make the insurance industry more efficient and competitive (i.e., by allowing private and foreign participation). One argument given in favour of foreign participation in insurance business in India was thatthe long years of LICs and GICs monopoly over this industry had resulted in an absolute lack of expertise and skills on the part of the Indian banks, financial institutions and other parties who were interested in entering this sector.

57 The Malhotra Committee Report, submitted to the Government in 1994, recommended, among other measures, that the insurance market should be opened to private sector competition, and ultimately, to foreign private sector competition. The purpose of setting up the Malhotra Committee, as stated by the Government, was to suggest a structure of the insurance industry in order to have a wide coverage of insurance services, to have a variety of insurance products with a high quality service, and to develop an effective instrument for mobilisation of

financial resources for development. The major recommendations of the Malhotra Committee were: (1) (2) (3) (4) To allow Indian and foreign private companies to enter both life To privatise the LIC and the GIC To establish an Insurance Regulatory Authority and To ensure that insurance companies pay special attention to the and general insurance as joint companies

rural insurance business. In the course of the next five years (i.e., after 1994), most of the recommendations of this committee were accepted, excepting, of course, the one about privatising the LIC and the GIC.

58

CONCEPTS OF INSURANCE
Insurance is a financial service. It is pooling of risks. In a contract of Insurance, the insurer undertakes in consideration of a sum of money to make good the loss suffered by the insured against a specified risk or any other contingency. There are two parties to an insurance contract, insurance company and the insured party. The document laying down the terms of the contract is called Insurance policy. The property, which is

insured, is the subject matter of insurance. It may be insured against loss arising from uncertain events in the form of destruction or damage to the property or death or disablement of a person. The interest, which the insured has in the subject matter of insurance, is known as insurable interest. Depending upon the subject matter, the types of insurance a specified amount becomes payable on the death of the insured or upon the expiry of a specified period. General insurance covers losses caused by fire, accident and marine adventures. Until 1999, Insurance services were provided in India by two monopolistic public sector organizations namely, Life Insurance Corporation of India and General Corporation Of India.

59

FUNCTION OF INSURANCE
Insurance provides insurance policies, which are legally binding contracts for which the policyholders pay insurance premiums. Therefore the functions of insurance are as follows: 1. Certainty 2. Protection

3. Risk Sharing 4. Capital Formation 5. Prevention of Loss

1. Certainty Insurance provides certainty of payment for the risk of loss. There are different types of certainty in a risk. The risk occur or may not, when will it occur, how much loss will be there. There are uncertainties of happenings of time and amount of loss. 2. Protection The main function of the insurance is to provide protection against the probable chances of loss. The insurance guarantees the payment of loss and thus protects the assured from sufferings.

60 3. Risk Sharing In the case of insurance business, there is a risk and when it takes place, all the persons who are exposed to the risk share the loss. The share is obtained from each and every insured in the shape of premium without which the insurer does not guarantee protection. 4. Capital Formation

The insurance provides capital to the society. The surplus funds are invested in productive channel. The investment in insurance minimizes the scarcity of capital of the society. 5. Prevention of Loss The insurance companies assist financially to the health organization, fire brigade, educational institutions and other organizations in the country. These organizations are engaged in preventing the losses of masses from death to damage.

61

OBJECTIVE OF INSURANCE
Insurance is a tool by which risks of a small number are compensated out of funds collected from collected from the insured parties. Insurance companies pay back for financial loses arising out of occurrence of insured events such as accidents, fire, riot, earthquake, etc. The objective of Insurance is as follows: -

1. Risk sharing 2. Co-operative Devices 3. Savings 4. Economic Security 5. Economic Development 6. Capital Formation 1. Risk sharing Insurance is a mechanism adopted to share the losses that might occur to an individual or his family on the happening of a specified event. 2. Co-opertaive Devices Insurance is a co-operative device under which a group of persons who agree to share the financial loss may be brought together voluntarily or through socializations of the agents.

62 3. Savings Insurance is a savings device, particularly the life Insurance. The claim is certain in case of Life Insurance, while it is not certain in general insurance. 4. Economic Security Insurance provides economic security for such losses arising out of happening of insured event such as personal accident; Insurance is a protection against uncertainties of life.

5. Economic Development One of the most important factors contributing to the process of economic development is the capital formation. The relationship between capital formation and Insurance services in both the developed and developing economics of the world has been quite prominent and noteworthy. 6. Capital Formation Capital Formation is an increase in the capital stock of a country consisting of plant, machinery, equipments, tools, factory buildings, raw materials, etc. Capital has always been regarded as a means of increasing Production, in the economy.

63

PRINCIPLE OF INSURANCE
Insurance is a specialized contract. It is an agreement between two parties. One party is an insurance company who takes the insurance of other party known as insured party. Insured party may be individual or a businessman. These are the Basic principals of Insurance contract are as follows: 1.Utmost Good Faith

2.Insurable Interest 3. Indemnity 4. Subrogation 5. Contribution 1. Utmost Good Faith It means a positive duty to disclose accurately and fully all facts material to the risk being proposed, whether requested or not. Every circumstance is material that would influence the judgement of a prudent insurer in fixing the premium or determining to accept the risk. The Beach of utmost good faith arises due to misrepresentation or non-disclosure. 2. Insurable Interest Insurable interest is the legal right of the insurer, arising out of a financial relationship recognized under the law between the insured and the subject matter of insurance. The interest in the subject matter of a contract of insurance provides the insured person with the right to enforce the contract. 64 3. Indemnity The basic purpose of insurance is compensate loss and not to allow profit from insurance contract. The insurance company pays compensation to the insured party only in case of loss due to some perils. If there is no such loss, no compensation is to be paid. 4. Subrogation Subrogation means the automatic transfer of rights and remedies of the insured to the insurer upon the insured having received the benefit of insurance. 5. Contribution

The principal of contribution applies when the insured has taken than one insurance policy for the same risk from more than one insurance company.

65

TYPES OF INSURANCE
There are eight types of Insurance are as follows: 1. Life Insurance 2. General Insurance 3. Fire Insurance 4. Marine Insurance 5. Motor Insurance 6. Crop / Agricultural Insurance

7. Wedding Insurance 1. Life Insurance Life Insurance covers the risk that exists in ones life. These risks may arise due to accident, illness or natural causes like fire, food and earthquake. Life Insured so that they may not suffer from financial consequences on the death or disability of the insured person. 2. General Insurance General Insurance has been evolved with the evolution of business and lifestyle of human beings. It covers everything from space expeditions to the voice of famous singers. It is also called as non-life Insurance.

66 3. Fire Insurance Fire Insurance is the oldest form of Insurance. In the early development of industrial society, fire was the main source of energy. The industrial or commercial activities were not possible without fire. However, there was a need to insure the risk of uncontrolled or uncertain fire. 4. Marine Insurance

Insurance was introduced to the world by the concept of marine Insurance. The object of marine insurance is to make good losses exposed to the seafarers due to sea conditions, war, pirates, weather, disease, spoilage, etc. the legal framework of marine insurance is provided by marine insurance Act, 1963. All the related subjects like the basic principle, basis of valuation under the policies, basis of settlement of losses are laid down in this act. 5. Motor Insurance The Motor vehicles act of 1939, introduced compulsory general insurance to protect those who may get insured in an accident. However, the insurance of damage to the vehicle is not compulsory. Motor insurance is one of the largest non-life insurance businesses in India. Motor insurance is one of the largest non-life businesses in the world. All motor vehicles are required to be registered with the road transport authorities. 67 6. Crop/ Agricultural Insurance Crop Insurance is a contract to provide a measure of financial support to farmers in the event of a crop failure due to draught or flood. 7. Wedding Insurance Wedding Insurance provides cover to protect any untoward incident on or before the wedding. Wedding Insurance is not that big in India as awareness is still quite low, considering the huge amounts at stake

in such a short duration of wedding, it is advisable to protect yourself from any such event. Thus, wedding insurance safeguards you financially against unforeseen events that could postpone or cancel wedding.

68

LIC LIFE INSURNCE CORPORATION OF INDIA

Type Founded

government-owned Corporation September 1,1956

Headquarters Headquarters in Mumbai, India (Various others Locations in India and abroad) Key people T.S Vijayan, (Chairman) D.K.Mehrotra, Thomas Mathew and A. Disrupt (Managing Directors) Industry Products Life Insurance Individual Life Insurance, Group Insurance and Pension Plans Total Sales Employees Subsidiaries Rs.8 Trillion ($173 Billion USD) 112,184 LIC Housing Finance Limited, LIC (Nepal) Ltd, LIC (Lanka) Ltd, LIC (International) BSC(C),Behrain, Website www.licindia.com 69

LIC LIFE INSURNCE CORPORATION OF INDIA

The Life Insurance Corporation of India (LIC) is the largest life insurance company in India and also the country's largest investor.; it is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's expenses. It was founded in 1956. Headquartered in Mumbai, which is considered the financial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different parts of India, at least 2048

branches located in different cities and towns of India along with satellite Offices attached to about some 50 Branches, and has a network of around one million and 200 thousand agents. Current status Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7 % of India's GDP in 2006. The Corporation, which started its business with around 300 offices, 5.6 million policies and a corpus of INR 459 million (US$ 92 million as per the 1959 exchange rate of roughly Rs. 5 for a US $ has grown to 25000 servicing around 180 million policies and a corpus of over INR 8 trillion (US$ 173 billion).

70 The organization now comprises 2048 branches, 109 divisional offices and 8 zonal offices, and employs over 1,002,149 agents.The corporate Office of LIC is in Mumbai. It also operates in 12 other countries, primarily to cater to the needs of Non Resident Indians. With the change in the India's economic philosophy from the early 1990s, and the subsequent relaxation of state control over several sectors of the economy, the monopolistic position of the Life Insurance Corporation of India was diluted, and it has had to compete with a number of other corporate entities, Indian as well as transnational Life Insurance brands. However, it still manages to be the largest player in the Indian market, with the lion's share of 55%.

In 2006-2007 Economic Times Brand Equity Survey rated LIC as the No. 1 Service Brand of the Country.

71 Subsidiaries LIC owns the following subsidiaries:1. Life Insurance Corporation of India International This is a joint venture offshore company promoted by LIC which commenced operations in July, 1989 with the objectives of offering US$ denominated policies to cater to the insurance needs of NRIs and providing insurance services to holders of LIC policies currently residing in the Gulf. LIC International operates in all GCC countries. 2. LIC Nepal

A joint venture company formed in 2001 with the Vishal group of Industries and Nepal 3. LIC Lanka A joint venture company formed in 2003 with the Bartleet Group of Companies, Sri Lanka. 4. LIC Housing Finance: Incorporated in 19 June 1989, its main objective is to provide long term finance for construction or purchase of houses or apartments. It has a Dubai office. 5. LICHFL Care Homes A wholly owned subsidiary of LIC Housing Finance, it builds and operates "Assisted Community Living Centres" for senior citizens. 72

OBJECTIVES OF LIC OF INDIA

These are the main objectives of LIC are as follows: 1. Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. 2. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive.

3. Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. 4. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. 5. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. 6. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. 7. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective. 73

OPERATIONS OF LIC
LIC Operate All Over India

74

CURRENT STATUS OF LIC

Payment of premiums can be made through Internet through service providers, viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of Punjab, Citi Bank, Corporation Bank, Federal Bank and Billdesk. Over its existence of around 50 years, Life Insurance

Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7 % of India's GDP in 2006. The Corporation, which started its business with around 300 offices, 5.6 million policies and a corpus of INR 459 million has grown to 25000 servicing around 180 million policies and a corpus of over INR 8 trillion. The organization now comprises 2048 branches, 109 divisional offices and 8 zonal offices, and employs over 1,002,149 agents.The corporate Office of LIC is in Mumbai. It also operates in 12 other countries, primarily to cater to the needs of Non Resident Indians. With the change in the India's economic philosophy from the early 1990s, and the subsequent relaxation of state control over several sectors of the economy, the monopolistic position of the Life Insurance Corporation of India was diluted, and it has had to compete with a number of other corporate entities, Indian as well as transnational Life Insurance brands. However, it still manages to be the largest player in the Indian market, with the lion's share of 55%. The recent Economic Times Brand Equity Survey rated LIC as the No. 1 Service Brand of the Country. In the financial year 2006-07 Life Insurance Corporation of India's number of policy holders are said to have crossed a whopping 200 million (fourth in terms of population of the countries of the world) 75

PRODUCTS & SERVICES

Plans

1.LIC Insurance Plans 2.LIC Pension Plans 3.LIC Unit Plans 4.LIC Special Plans 5.LIC Group Scheme 6.LIC Withdrawn PLans

Other Services

1.ECS 3.ATM Services 5.Collecting Bank 7.APO online 9.Agents collection 11.SUVIDHAA INFOSERVE

2.EBPP (Bill Pay) 4. PORTAL Payment 6.Internet Services 8.MPO online 10. SMS (Corporation Bank)

12.TICK BUSINESS SOLUTION 13.NRI Centre

76

PRODUCT
LIC PLANS

A. INSURANCE PLANS B. PENSION PLANS C. UNIT PLANS D. SPECIAL PLANS E. GROUP SCHEME F. WITHDRAWN PLANS A. INSURANCE PLANS As individuals it is inherent to differ. Each individuals insurance needs and requirements are different from that of the others. LICs Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement. There are following other plans in insurance plans are as follows: 1. CHILDREN PLANS 2. PLANS FOR HANDICAPPED DEPENDENTS 3. MONEY BACK PLANS
4. ENDOWMENT ASSURANCE PLANS

77 1. CHILDREN PLANS

Jeevan Anurag CDA Endowment Vesting At 21 CDA Endowment Vesting At 18 Jeevan Kishore Child Career Plan Child Fortune Plus

Komal Jeevan Marriage Endowment Or Educational Annuity Plan Jeevan Chhaya Child Future Plan

2. PLANS FOR HANDICAPPED DEPENDENTS

Jeevan Aadhar Jeevan Vishwas

78 3. MONEY BACK PLANS

The Money Back Policy-20 Years The Money Back Policy-25 Years

Jeevan Surabhi-15 Years Jeevan Surabhi-20 Years Jeevan Surabhi-25 Years Bima Bachat

4. ENDOWMENT ASSURANCE PLANS

The Endowment Assurance Policy The Endowment Assurance Policy-Limited Payment Jeevan Mitra(Double Cover Endowment Plan) Jeevan Mitra(Triple Cover Endowment Plan) Jeevan Anand New Janaraksha Plan Jeevan Amrit

79 B. PENSION PLANS Pension Plans are Individual Plans that gaze into your future and foresee financial stability during your old age. These policies are most suited for senior citizens and those planning a secure future, so that you never give up on the best things in life.

Jeevan Nidhi Jeevan Akshay-VI New Jeevan Dhara-I New Jeevan Suraksha-I C. UNIT PLANS Unit plans are investment plans for those who realise the worth of hardearned money. These plans help you see your savings yield rich benefits and help you save tax even if you don't have consistent income.

Market Plus I Profit Plus Fortune Plus Money Plus-I Child Fortune Plus 80 D. SPECIAL PLANS LICs Special Plans are not plans but opportunities that knock on your door once in a lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness! There are following other plans in special plans are as follows:-

1.HEALTH PLAN 2.SPECIAL PLAN

1.HEALTH PLAN

Health Protection Plus Health Plus

2.SPECIAL PLAN

Bima Nivesh 2005 Jeevan Saral Jeevan Madhur

81 E. GROUP SCHEME Group Insurance Scheme is life insurance protection to groups of people. This scheme is ideal for employers, associations, societies etc. and allows you to enjoy group benefits at really low costs. There are following other plans in-group plans are as follows: -

1. GROUP SCHEME 2. SOCIAL SECURITY SCHEME

1.GROUP SCHEME

Group LIC's Superannuation Plus Group Term Insurance Schemes Group Insurance Scheme in Lieu Of EDLI Group Gratuity Scheme Group Super Annuation Scheme Group Savings Linked Insurance Scheme Group Leave Encashment Scheme Group Mortgage Redemption Assurance Scheme Gratuity Plus Group Critical Illness Rider

82 2. SOCIAL SECURITY SCHEME

JanaShree Bima Yojana (JBY)

Shiksha Sahayog Yojana Aam Admi Bima Yojana

F. WITHDRAWN PLANS Jeevan Aastha Jeevan Varsha

83

SERVICES
ECS PAYMENT ECS facility for payment of premium has been started in L.I.C. since March 2004. This is a facility by which premium is deducted by bank at

pre-decided date and remitted to LIC. To avail of ECS facility, policyholder submits mandate form to LIC and also authorizes bank to deduct premium. Bank deducts premium on the basis of invoice received from LIC. Electronic Clearance Service of Reserve Bank of India is a wellestablished, quick, reliable and economic processing for periodic bill payments. LIC is happy to offer this facility to its valued customer totally FREE for payment of premiums. The policyholders having accounts in the banks in the cites, which are members of clearing house can avail of this facility for all policies irrespective of the LIC branch to which these Policies are attached for servicing. EBPP PAYMENT HDFC Bank ICICI Bank Axis Bank Federal Bank Corporation Bank Citibank 84 ATM PAYMENT ATM facility for payment of premium has been introduced in December 2003 with Corporation Bank as Service provider. This is a facility was extended with UTI BANK (now AXIS BANK) from February2004. This facility is absolutely free for all customers. No any charges are to be paid to LIC / Bank for this facility

PORTAL PAYMENT Online Payment Gateway is LICs initiative to provide you with on demand service within a few clicks! You can now have many of the functionalities that were available only at a branch office, online at your fingertips. The payment gateway (PG) initiative is an important component of the offer. It provides for real-time payment of renewal premium-dues through the portal. This functionality is available only to registered customers who have enrolled their policies. COLLECTING BANK PAYMENT Policyholder can pay the premium in CASH or Cheque Drawn on AXIS at any of the AXIS Branch or extend counter. The bank on behalf of LICI will issue signed valid receipt. Single receipt will be issued for more than one policy on same life, if paid at a time. The updation of premium in real time. 85 APONLINE PAYMENT This mode was started on 18/09/2007. Some agents are authorized to collect premium. Agents can collect the premium in cash or cheque and issue a valid receipt with their signature. Facility of premium collection by cheque started from 01/09/2008. The updation of premium in real time.

 The easy pay centres i.e. the franchises collect the premium in cash and issue valid sign e-receipt on behalf of LICI. MPONLINE PAYMENT This mode of payment is started from 07/2008. MPOnline is a joint venture between the Madhya Pradesh State Govenment and Tata Consultancy Services. The easy pay centres i.e. the franchises collect the premium in cash and issue a valid signed receipt on behalf of LICI The updation of premium in real time.

86 AGENT'S COLLECTION PAYMENT This mode was started on 18/09/2007. Some agents are authorized to collect premium, up to a fixed amount for the policies under their organization. Agents can collect the premium in CASH only and issue a valid receipt with their signature. The updation of premium in real time.

S.M.S. PAYMENT This facility of Premium Payment started from 18/02/2008. Common customers of LICI and Corporation Bank having debit card facility can opt for this mode of payment. Customer should pre-register through Corporation Banks ATM under Option "LIC/OTHER SERVICES" and Sub Option "PAYMATE" to receive a dynamic unique PIN. Customer sends simple SMS, which contains the policy number to the mobile interface. The mobile interface connects to LIC Central Server, which send the details and customer confirms the payment using the dynamic PIN in case he wants to make the payment. The mobile interface connects to the bank interface and debits the customers account and bank interface transfers the credit to LICs account. Customer gets confirmation through SMS. The updation of premium in real time. 87 SIPL PAYMENT Suvidhaa Infoserve Pvt. Ltd (SIPL) is a company floated to aggregate, commodities and distribute the services. Customer needs to visit Suvidhaa Point, which is a manned kiosk, a conventional convenience store in friendly neighbourhood like Kirana shop, Communication Centre, Travel Agent, Chemist or a cyber cafe. Premium collection through SIPL started from 24/07/2008.

 It has more than 3000 collection centre across the country and intend to increase the same to 1,00,000 within a year. . The easy pay centres i.e. the franchises collect the premium in cash and issue a valid receipt. Suvidhaa Info serves Help line toll free number is 180022 5225 The updation of premium in real time.

88

LIC IN INFORMATION TECHNOLOGY

LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in servicing and in their business. Data pertaining to almost 10 crore policies is being held on computers in LIC. We have gone in for relevant and appropriate technology over the years.

In 1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950s were phased out in 1980s and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. Standardization of Hardware and Software commenced in 1990s. Standard Computer Packages were developed and implemented for Ordinary and Salary Savings Scheme (SSS) Policies.

89 FRONT END OPERATIONS With a view to enhancing customer responsiveness and services, In July 1995, LIC started a drive of On Line Service to Policyholders and Agents through Computer. This on line service enabled policyholders to receive immediate policy status report, prompt acceptance of their premium and get Revival Quotation, Loan Quotation on demand. Incorporating change of address can be done on line. Quicker completion of proposals and dispatch of policy documents have become a reality. All our 2048 branches across the country have been covered under front-end

operations. Thus all 100 divisional offices have achieved the distinction of 100% branch computerisation. New payment related Modules pertaining to both ordinary & SSS policies have been added to the Front End Package catering to Loan, Claims and Development Officers Appraisal. All these modules help to reduce time lag and ensure accuracy. METRO AREA NETWORK A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in November 1997, enabling policyholders in Mumbai to pay their Premium or get their Status Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in the city. The System has been working successfully. More than 10,000 transactions are carried out over this Network on any given working day. Such Networks have been implemented in other cities also. 90 WIDE AREA NETWORK All 7 Zonal Offices and all the MAN centres are connected through a Wide Area Network (WAN). This will enable a customer to view his policy data and pay premium from any branch of any MAN city. As at November 2005, LIC have 91 centres in India with more than 2035 branches networked under WAN. INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centres all over the country. This would enable customers to ring up LIC and receive information (e.g. next premium due, Status, Loan Amount, Maturity payment due, Accumulated Bonus etc.) about their policies on the telephone. This information could also be faxed on demand to the customer. LIC ON THE INTERNET Our Internet site is an information bank. We have displayed information about LIC & its offices. Efforts are on to upgrade our web site to make it dynamic and interactive. The addresses/e-mail Ids of Zonal Offices, Zonal Training Centres, Management Development Centre, Overseas Branches, Divisional Offices and also all Branch Offices with a view to speed up the communication process.

91 PAYMENT OF PREMIUM & POLICY STATUS ON INTERNET (You have to register for these services) LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free and also view their policy details on Internet premium payments. There are 11 service providers with whom LIC has signed the agreement to provide this service. INFORMATION KIOSKS

We have set up 150 Interactive Touch screen based Multimedia KIOSKS in prime locations in metros and some major cities for dissemination information to general public on our products and services. These KIOSKS are enabling to provide policy details and accept premium payments. INFO CENTRES We have also set up 8 call centres, manned by skilled employees to provide with information about our Products, Policy Services, Branch addresses and other organizational information.

92 Payment Of Premium 1.By cash, local cheque (subject to realization of cheque), Demand Draft at Branch Office. 2.The DD and cheques or Money Order may be sent by post. 3.You can pay your premiums at any of our Branches as 99% of our Branches are networked. 4.Many Banks do accept standing instructions to remit the premiums. So by providing a standing instruction to your Bank to debit your account for the premium amount and send it vide a bankers cheque to LIC, on the due dates and months mentioned on your policy bond.

5.Through Internet: Payment of premiums can be made through Internet through Service Providers viz. HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and Bill Desk. 6.Premium payment can also be made through ATMs of Corporation Bank and UTI Bank. 7.Premium payment can also be made through Electronic Clearing Service (ECS), which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur, Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa and Nagpur, Secunderabad & Visakhapatnam.

93 Loans Loans are granted on policies to the extent of 90% of Surrender Value of the policies, which are in force and 85% of the Surrender Value in case of policies, which are paid-up, inclusive of the cash value of bonus. The rate of interest charged at present is 9% p.a. payable half-yearly. Loans are not granted for a period shorter than six months. The Conditions and Privileges printed on the back of the Policy Bond states whether a particular policy is with or without the loan facility.

Nomination Nomination is a right conferred on the holder of a Policy of Life Assurance on his own life to appoint a person/s to receive policy moneys in the event of the policy becoming a claim by the assureds death. The Nominee does not get any other benefit except to receive the policy moneys on the death of the Life Assured. A nomination may be changed or cancelled by the life assured whenever he likes without the consent of the Nominee. Ensure nomination exists in the policy for easy settlement of claims.

94 Survival Benefit/Maturity Claims 1.LIC settles survival benefit/maturity claims on or before the due date. 2.Policyholder are intimated well in advance by the Branch Office which services the policy regarding the payment, and the necessary Discharge Voucher is also sent for execution by the assured. In case the policyholder does not get any intimation from the Branch Office concerned, he/she should contact them, quoting the Policy Number. 3.Survival Benefit payment up to Rs.60, 000/- are settled without insisting for Policy Bond and Discharge Voucher.

95 Death Claims If the life assured dies during the term of the policy, death claim arises. The death of the policyholder should be immediately intimated in writing to the Branch Office where the policy is serviced along with the following particulars: 1.The No./s of the policy 2.The name of the policyholder 3.Death Certificate issued by concerned Authority 4.The date of death

5.The cause of death and 6.Claimants relationship with the deceased On receipt of the intimation of death, necessary claim forms are sent by the Branch Office for completion along with instructions regarding the procedure to be followed by the claimant. The claims which have arisen after a period of three years are treated as non-early claims and settled within 30 days from the date of receipt of all requirements. The claims that have arisen within a period of two years from the date of commencement of the policy, are treated as early claims and investigation is compulsory in such cases. The claim is usually payable to the nominee/assignee or the legal heirs, as the case may be. However, if the deceased policyholder has not nominated/assigned the policy or if he/she has not made a suitable provision regarding the policy moneys by way of a Will, the claim is payable to the holder of a Succession Certificate or some such evidence of title from a Court of Law. 96 Initiatives In Policy Servicing Areas All 2048 Branches of LIC are fully computerized covering all policy servicing aspects to give prompt computerized services from new policy introduction, acceptance of renewal premium, revivals, loans, etc to final claims settlement. Green Channel facility has been introduced for the speedy completion of proposals. Payment of premiums can be made through Internet through service providers, viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction,

UTI Bank, Bank of Punjab, Citi Bank, Corporation Bank, Federal Bank and Billdesk. The Designated Officers at the various offices of the Corporation are: At Branch Office --- Sr./Branch Manager At Divisional Office --- Marketing Manager At Zonal Office --- Regional Manager (Mktg) At Central Office --- Executive Director (Mktg/IO/CRM)

97

INTERVIEW

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INTRODUCTION : I truly and originally experience in this interview. Mr. Soma Nan don sathpathy is a chief manager in LIC. He is a nice person with great experience in Insurance field. Mr. Nan don shared his experience towards LIC Company and acknowledges me about LIC Company in Mumbai. He was very co-operative to me and explains me with detailed explanation and he gives information for every question asked by me.

(1)

What is your name? Ans: Mr.Sona Nan don Sathpathy.

(2)

What is your post in this organisation? Ans: chief Manager.

(3)

Are you married? Ans: Yes.

(4)

Do you find any difficulty in your job? Ans: No.

98 (5) Is your staff co-operative to u? Ans: Yes.

(6)

What is your qualification? Ans: Master of Science (MSc.)

(7)

Who is your role model? Ans: As of now I have no role model.

(8)

What is your desire to be in future? Ans: Yes all people I have desires and I also have but I Cannot tell u its personal.

(9) What suggestion would you like to give to the upcoming generation? Ans: I advice the upcoming generations to be true, sincere & specially to be humble in their jobs and tasks.

(10) How many people work in this branch? Ans: In this branch 75 people are working.

99 (11) Since how many years are you working here? Ans: 5 and half months.

(12) Did you work in any other firm than this? Ans: I have worked in two or three firms before this.

(13) How many years of experience you have? Ans: 20 years in the Insurance field.

(14) What are your long-term objectives? Ans: If in terms official work I cannot tell you its confidential.

(15) Can you give some tips for becoming successful to the youth? Ans: I will suggest to the youth that focus to your work, hard working and achieve the goals and target in time.

100

CONCLUSION
After processing throughout all the experience of Banking and Insurance I came to a conclusion that today Banking and Insurance is the very important role to developed in Indian economy. Banking and Insurance has become a part of our day-to-day life.

In todays competitive business Banking sector helps every individual to provide loan and other such benefits. Banking have also give benefit to international consumer. Where Insurance business is one of the most rapidly growing areas in the financial sector. Every individual would want himself, his family and his assets to be insured.

101

BIBLIOGRAPHY

Primary data: Internet website:

www.Google.com www.Statebankofindia.com www.licindia.com Secondary data: Mr. Amit Yadav [Senior Manager, A\c SBI] (Fort Branch) Mr. Soma Nan don Satpathy [Chief manager, LIC] (Fort Branch) Other data: Books: Business aspects in Banking and Insurance By P.K. Bandgar Magazines: Business World
102