COMPANY HISTORY

INTRODUCTION

The HSBC group is one of the largest banking and financial services

organisation in the world. The group has around 10,000 offices in 82 countries and

territories in Europe, Asia pacific region, Americas the middle east and Africa, serves

over 125 million customers has assets of US $ 1.861 billion. HSBC Rank’s fifth largest

as a company in Forbes Global 2000; it also has the distinction of being one of the

leading companies in banking. HSBC headquarters is located in the London's Canary

Wharf on the HSBC tower. The founding member of HSBC is The Hongkong and

Shanghai Banking Corporation, which was established by Thomas Sutherland, a Scot, in

1865.

HSBC origins in India date back to 1853, when the mercantile bank of India

was established in Mumbai. The bank has since steadily grown in reach and services

offerings, keeping pace with the evolving banking and financial needs of its customers.

In India the bank offers a comprehensive suite of world class product and

services to its corporate and commercial banking clients as also to a fast growing

personal banking customer base.

HSBC has a history of helping millions of customers globally to meet their

financial goals. They have understood the importance and functioning of different

markets through their experience in international trade. As a result, HSBC has grown into

a company or banking institution that has the deepest respect for different cultures and

people connected to these cultures. Their motto is to look at their customers as

individuals and strive towards providing them with a personalized service that will fit

each of their specific needs.

A GLOBAL PEDIGREE

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HSBC Investments draws upon a long history of serving clients of the

HSBC Group, tracing its roots back to the foundation of the Hongkong and Shanghai

Banking Corporation in 1865. The HSBC Group has identified asset management as a

key constituent of the HSBC Group’s wealth management strategy and at HSBC

Investments; we have been dedicated to managing assets on behalf of our clients for more

than 30 years.

In 1994 the HSBC Group recognised the increasingly global nature of financial markets,

would create the need for a credible global asset management organisation to ensure

delivery of the best possible solutions for clients. In response, the separate regional asset

management businesses of HSBC were unified to create a single powerful investment

manager aimed at delivering global investment capabilities combined with significant

local expertise.

In 2001, following the integration of CCF and its investment businesses into

HSBC, a new global strategy was launched for asset management. The strategy aimed to

create a core proprietary global investment management business – HSBC Asset

Management, operating alongside a series of Specialist investment businesses, namely:

Sinopia for quantitative and structured products, HSBC Specialist Investments for

property and infrastructure investments, and HSBC Multimanager for best-in-class ‘open

architecture’ investments and HSBC Alternative Investments

for single-manager hedge fund strategies. More recently, in 2004, following a strong

period of growth in HSBC’s investment businesses, a new strategy was announced for the

investment businesses of HSBC. The strategy is intended to position HSBC for market

leadership in the provision of investment solutions that meet client needs and involved a

reorganisation of HSBC’s investment businesses including HSBC Asset Management

and HSBC Investment Management, leading to the creation of: HSBC Investments.

A CONCISE HISTORY

1973 HSBC forms Hong Kong based Wardley as a wholly owned merchant banking

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subsidiary.

1986 The European arm of HSBC Asset Management is conceived with the purchase

of James Capel, a leading and well established international securities

company.

The addition of New York based Marinvest establishes the US arm of HSBC

Asset Management.

1992 Consolidation in Europe with the acquisition of the Midland Bank Group.

1994 Regional companies are brought together under the name HSBC Asset

Management, a single investment manager offering global investment

capability combined with significant local expertise.

2000 HSBC Group purchases CCF Bank, France Capital Management in Paris joins

HSBC Asset Management.

2001 The market for asset management solutions has grown rapidly and investors’

requirements have become ever more sophisticated. In response to this, the

asset management business of HSBC was re-organised at the end of 2001 to

provide a full range of sophisticated services under the name Asset

Management Services, comprising the core business, HSBC Asset Management

and several specialist companies offering complementary investment

management services.HSBC Asset Management completed its acquisition of

China Securities Investment Trust Corporation, Taiwan's premier asset

management company, in August.HSBC Asset Management (India) Private

Limited is incorporated in December 2001.

2002 New investment and marketing office established in India. Co-operation with

HSBC Trinkaus Capital Management and its parent HSBC Trinkaus &

Burkhardt.HSBC Asset Management (India) Private Limited, the Investment

Manager to HSBC Mutual Fund launches its first four schemes in December

2002.

2003 Integration of Bital's fund management business in Mexico following its

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purchase by HSBC.

2004 Integration and development of investment management activity in Bermuda

following the acquisition of Bank of Bermuda.

On 1st December HSBC announces a reorganisation of its investment

management businesses as part of a new strategy designed to drive further

growth.

2005 HSBC Asset Management is replaced by HSBC Investments and HSBC Halbis

Partners during 2005

BOARD OF DIRECTORS

S K Green, Group Chairman

Age 58. An executive Director since 1998; Group Chief Executive from 2003 to May

2006. Joined HSBC in 1982. Chairman of HSBC Bank plc, HSBC North America

Holdings Inc. and HSBC Private Banking Holdings (Suisse) SA. A Director of HSBC

France and the Hongkong and Shanghai Banking Corporation Limited. Group Treasurer

from 1992 to 1998. Executive Director, Corporate, Investment Banking and Markets

from 1998 to 2003. Chairman of the British Bankers' Association.

D J Flint, CBE Group Finance Director

Age 52. Joined HSBC as an executive Director in 1995. Non-executive Chairman of

HSBC Finance Corporation. A non-executive Director of BP p.l.c. and a member of the

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Consultative Committee of the Large Business Advisory Board of HM Revenue &

Customs. Chaired the Financial

Reporting Council's review of the Turnbull Guidance on Internal Control. Served on the

Accounting Standards Board and the Standards Advisory Council of the International

Accounting Standards Board from 2001 to 2004. A former partner in KPMG.

KG Morgan

Age 61. A non-executive Director since October 2006. A member of the Remuneration

Committee. Non-executive Chairman of SNC-Lavalin Group Inc. A member of the

Board of Trustees of the Fraser Institute and the Energy Advisory Board of Accenture

Limited. A non-executive Director of HSBC Bank Canada from 1996 to April 2006.

Founding President and Chief Executive Officer of EnCana Corporation until December

2005 and Vice Chairman from December 2005 to October 2006.

D J Shaw, Adviser to the Board

Age 61. An Adviser to the Board since 1998. . A Director of the Bank of Bermuda

Limited and HSBC Private Banking Holdings (Suisse) SA. A non-executive Director of

Kowloon development Company Limited and Shui On Land Limited.

IMPORTANCE AND SIGNIFICANCE OF HSBC

PRODUCTS AND SERVICES

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The banking industry has changed from a conventional banking to a new age modern

banking. Now a customer doesn’t walk into a bank just for depositing the cash or

withdrawal. They go to a bank to avail entire financial planning services ranging from

investing into a equity fund to reducing there tax liability.

HSBC was one of the first bank to understand the ever enhancing need of its customers,

hence HSBC came of with its various products and services which are focused on

providing solutions to there valuable customers.

Our Vision: To be the leading international Bank in Turkey.

Our Mission:Throughout our history, we have been where the growth is, connecting customers to opportunities. We enable businesses to thrive and economies to prosper, helping people fulfill their hopes and dreams and realize their ambitions. This is our role and purpose.

Our Values: Our values describe how we interact with each other, with customers, regulators

and the wider community. Our business principles set the standard by which we set our strategy and make commercial decisions. Together our values and business principles form our character and define who we are as an organisation and what makes us distinctive. They describe the enduring nature of how we do business. Each employee is expected to bring these values and business principles to life through their day-to-day actions and to make a commitment to put these values at the heart of how they behave.

In addition, all employees are expected to act with courageous integrity in all they do. This means having the courage to make decisions based on doing the right thing but without ever compromising the ethical standards and integrity on which the company was built. HSBC's values and business principles are underpinned by this guiding principle.

HSBC Values HSBC Business PrinciplesDependable and do the right thing

Stand firm for what is right, deliver on commitments, be resilient and trustworthy

Take personal accountability, be decisive, use judgment and common sense, empower others

Financial Strength - maintain capital strength and liquidity

Risk-Management - be enterprising and commercial, understand and be accountable for the impact of our actions, take prudent decisions

Speed - be fast and responsive, make principles-led decisions

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HSBC Values HSBC Business PrinciplesOpen to different ideas and cultures

Communicate openly, honestly and transparently, value challenge, learn from mistakes

Listen, treat people fairly, be inclusive, value different perspectives

Connected to customers, communities, regulators and each other

Build connections, be aware of external issues, collaborate across boundaries

Care about individuals and their progress, show respect, be supportive and responsive

Performance-focus - drive leading, competitive levels of performance, act with urgency and intensity , prioritise, simplify

Efficiency - focus on cost discipline and process efficiency

Quality - pursue excellence Customer-focus - provide

outstanding customer experience Integrated - align the Group and

break down silos

Sustainability - take a long-term outlook, understand impact of actions on stakeholders, brand and reputation

Objectives of the companyLike all banks, HSBC is in business to make a profit. Yet returning the maximum

investment to its shareholders is not the sole focus of this global financial institution.

From its roots in rural Asia to its advancement to a global corporation, HSBC has

maintained a core focus on basic principles. Achieving its aims and objectives by

adhering to its values has allowed HSBC to maintain both profitability and high ethical

standards.

HSBC Capital Guard Portfolio

The value of a fine piece of art generally increases over time.

HSBC Portfolio Management Services has introduced HSBC Capital Guard

Portfolio, the first Capital Guaranteed portfolio in India from HSBC. Guaranteed by

HSBC Bank plc, this portfolio is ideal for investors who wish to gain from a potential

equity upside, yet seek a capital guarantee on the investment amount.

The key strengths of this product are:

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o 100% Capital Protection Guaranteed – 100% of initial investment back at

maturity (after 4 years). For the guarantee to be applicable, the investor will need

to remain invested till maturity

o 100% Initial Equity Exposure – We offer optimal allocation to actively

managed equities aimed at Capital Appreciation

o Profit Lock-in Mechanism – The portfolio endeavours to capture upside by

providing a 3% lock-in for every 10% increase in initial portfolio

o Easy Liquidity – 4 year tenor with liquidity provided through the tenor of the

product (subject to applicable exit loads)

o Minimum Investment Amount – Rs 25 lacs

Guarantee has been provided by HSBC Bank plc subject to terms and conditions. Please

refer to Disclosure Document / Client agreement / Risk Factors before investing.

1.1.1 Principal subsidiariesThe HSBC building in Manila, Philippines

Asia Pacific HSBC Bank Armenia HSBC Bank Australia Limited The Hongkong and Shanghai Banking Corporation Ltd

o Hang Seng Bank Ltdo HSBC Bank (China) Company Ltd

HSBC Bank Malaysia Berhad HSBC Bank Philippines Ltd HSBC Bank India HSBC Bank Indonesia HSBC Bank Bangladesh HSBC Sri Lanka HSBC Bank Pakistan HSBC Bank Vietnam

Oraganisation structure

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. Marketing StrategyHSBC should implement the market penetration and product development strategy by capturing current account market share from other financial institutions that have been

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weaken from the economic crisis. Besides that, the launch of the new prepaid card would be a step towards product development that would be useful to counter non-traditional financial institutions that are poise to enter the current account market.The market development strategy can also be carried out at a later date by bringing the new and tested prepaid card product into other geographical markets like China and India. This would be in line with HSBC’s slogan of being the ‘World’s Local Bank’ and would also take advantage of HSBC’s global network in more than 79 countries.[1] In relation to the Porter Generic model, HSBC should aim at using a broad based differentiation strategy to capture market share from ailing financial institutions.4. Target Market4.1. Market Segmentation and TargetingA market segment should consists of a group of customers who share a similar set of needs and wants (Kotler. Etal, 2009).[2] A market segment must be accessible, measurable, large enough and profitable in order to be worth targeted by an institution. The new prepaid card should be offered as a ‘naked solution’ that all segment members value (Anderson & Narus, 1995).[3] Ways of segmenting the market should include geographical and demographic segmentation.The new HSBC prepaid card should be launched in the United Kingdom first before being extended into other geographical regions. A time lag of half a year would be enough to test the effectiveness of the product as a method to obtain a higher market share for current accounts. Demographic segmentation on the other hand should be focussed on age and income. Special attention should be focussed on young individuals opening their first current accounts and high net worth customers.4.2. Market PositioningPositioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market (Ries & Trout, 2000).[4] Data taken from SWOT and PESTEL analysis of HSBC enables marketers to define the points-of-difference and points-of-parity associations. Points-of-difference are attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competitive brand. In the case of HSBC, the bank is known to be a truly global bank with an international branch network.Points-of-parity are associations that are not necessarily unique to the brand but may in fact be shared with other brands (Brunner & Wänke, 2006).[5] There are two types of points-of-parity, namely, category and competitive points-of-parity. Category points-of-parity includes HSBC being a reputable financial institution and also a bank entrusted with fiduciary responsibility. In terms of competitive points-of-parity, HSBC must be seen to ‘break even’ with other financial institutions in terms of service quality.(See appendix 2)5. Marketing MixMarketing for financial services pose distinctive challenges to marketers because services are intangible, inseparable and cannot be inventoried. An expanded marketing mix is required to fully answer the differences between product marketing and marketing for

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financial services. The expanded marketing mix aims to capture the distinctive nature of financial services (Booms & Bitner, 1981).[6]

(See appendix 2)5.1. ProductThe product is the heart of the firm’s marketing strategy. Poorly designed service products that do not create value for customers are destined to fail regardless of how well the other 6 Ps are executed. The goal of the product element is to create a service concept that would offer more value to a market segment than competitors. Working to transform this concept into reality involves designing a cluster of different but mutually reinforcing elements.The product must be a means to solve a problem or satisfy a want in the market. To date, overspending is a major issue in the Western world. This is the reason why the new HSBC prepaid card is included in the new current account package as a means to ensure that customers do not overspend by ensuring prudential budgeting of financial resources.5.2. PriceThe pricing component plays twin roles for HSBC in the sense that it must be able to first attract customers to purchase the service and also generate revenue for HSBC. According to Adrian Palmer (2008), there are five main factors that influence pricing decisions, namely, profit maximisation, market-share maximisation, survival, social considerations and personal objectives.[7]

While pricing strategy is highly dynamic for other products and services, pricing for current account services have become rather static in recent years. Most banks do not require any fees to set up a current account. Banks instead rely on the money that floats in the interval when they are deposited to when they are spent in order to profit from current accounts.It is unlikely that any increases in interest rates would be able to attract customers to open up new current accounts with HSBC. The base lending rate that is now at 0.5% provides little room to manoeuvre for banks and other financial institutions. Adding to that is the credit crunch and declining asset prices that makes borrowing at a higher rate unattractive at the moment. The initial prepaid card issue fee should be around £10. This is in line with what competitors are charging at the moment.The catch with the prepaid card scheme is that it encourages bank customers to save. Any money that is saved is held within the customer’s current account and remains available for banks to provide further lending. This may prove to be highly beneficial to HSBC during times when raising new capital is extremely difficult.

Capital Structure (HSBC InvestDirect (India))Period Instrument Authorized

CapitalIssued

Capital- P A I D U P -

From To (Rs. cr) (Rs. cr) Shares (nos) Face Value

Capital

2009 2010 Equity Share 75 70.57 70566773 10 70.572008 2009 Equity Share 75 69.84 69836273 10 69.84

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2007 2008 Equity Share 75 69.84 69836273 10 69.842006 2007 Equity Share 75 69.84 69836273 10 69.842005 2006 Equity Share 75 66.92 66920716 10 66.922004 2005 Equity Share 50 35 34999716 10 352003 2004 Equity Share 40 35 34999716 10 352002 2003 Equity Share 40 35 34999716 10 35

Balance sheet (Rs crore)

Mar ' 14 Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10Sources of funds Owner's fund Equity share capital 479.81 475.88 469.34 465.23 457.74Share application money - - 0.30 2.91 -Preference share capital - - - - -Reserves & surplus 42,998.82 35,738.26 29,455.04 24,911.13 21,064.75Loan funds Secured loans - - - - -Unsecured loans 3,67,337.48 2,96,246.98 2,46,706.45 2,08,586.41 1,67,404.44Total 4,10,816.10 3,32,461.13 2,76,631.12 2,33,965.67 1,88,926.93Uses of funds Fixed assets Gross block 2,939.92 2,703.08 2,347.19 2,170.65 4,707.97Less : revaluation reserve - - - - -Less : accumulated depreciation - - - - 2,585.16

Net block 2,939.92 2,703.08 2,347.19 2,170.65 2,122.81Capital work-in-progress - - - - -Investments 1,20,951.07 1,11,613.60 97,482.91 70,929.37 58,607.62Net current assets Current assets, loans & advances 25,124.60 2,58,735.05 21,721.64 14,601.08 5,955.15

Less : current liabilities & provisions 41,344.40 34,864.17 37,431.87 28,992.86 20,615.94

Total net current assets -16,219.80 2,23,870.88 -15,710.23 -14,391.78 -14,660.79Miscellaneous expenses not written - - - - -

Total 1,07,671.19 3,38,187.56 84,119.87 58,708.23 46,069.63Notes: Book value of unquoted investments - - - - -

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Mar ' 14 Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10Market value of quoted investments - - - - -

Contingent liabilities 7,44,097.98 7,46,226.39 8,83,985.32 5,88,550.98 4,87,176.37Number of equity sharesoutstanding (Lacs) 23990.50 23794.19 23466.88 4652.26 4577.43

Principal business groups and divisionsHSBC organises its customer-facing activities within four business groups: Commercial Banking; Global Banking and Markets (investment banking); Personal Financial Services (retail banking and consumer finance); and Global Private Banking.[9]

Commercial BankingHSBC provides financial services to small, medium-sized and middle-market enterprises. The group has more than 3 million of such customers, including sole proprietors, partnerships, clubs and associations, incorporated businesses and publicly quoted companies.

Global Banking & MarketsGlobal Banking and Markets is the investment banking arm of HSBC. It provides investment banking and financing solutions for corporate and institutional clients, including corporate banking, investment banking, capital markets, trade services, payments and cash management, and leveraged acquisition finance. It provides services in equities, credit and rates, foreign exchange, money markets and securities services, in addition to asset management services.Global Banking and Markets has offices in more than 60 countries and territories worldwide, and describes itself as "emerging markets-led and financing-focused".[73]

Global Banking and Markets is currently being led by former fixed-income trader Samir Assaf, who was promoted from global head of markets on 10 December 2010.[74]

Global Private Banking

The main London office of HSBC Private Bank in St James'sHSBC Private Bank is the marketing name for the private banking business conducted by the principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank, together with the private banking activities of HSBC Trinkaus, known collectively as Group Private Banking, provides services to high net worth individuals and their families through 93 locations in some 42 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. As of December 2007, profits before tax were US$1,511 million and combined client assets under management were US$494 billion.In September 2008, HSBC announced that it would combine its two Swiss private banks under one brand name in 2009, with HSBC Guyerzeller and HSBC Private Bank to be

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merged into one legal entity, under the newly appointed CEO of HSBC Private Bank, Alexandre Zeller.[75]

Retail Banking and Wealth ManagementHSBC provides more than 54 million[76] customers worldwide with a full range of personal financial services, including current and savings accounts, mortgage loans, car financing, insurance, credit cards, loans, pensions and investments.Retail Banking and Wealth Management (also known as RBWM) was previously referred to as Personal Financial Services (PFS). This rename was announced during HSBC's 2011 Investor Day.[77]

Group Service CentresAs a cost-saving measure HSBC is offshoring processing work to lower cost economies in order to reduce the cost of providing services in developed countries. These locations take on work such as data processing and customer service, but also internal software engineering at Pune (India), Bangalore (India), Hyderabad (India), Vishakhapatnam (India), Calcutta (India), Guangzhou (China), Curitiba (Brazil) and Kuala Lumpur (Malaysia).

The HSBC Global Technology Centre in Pune, IndiaChief Operating Officer Alan Jebson said in March 2005 that he would be very surprised if fewer than 25,000 people were working in the centres over the next three years: "I don't have a precise target but I would be surprised if we had less than 15 (global service centres) in three years' time." He went on to say that each centre cost the bank from $20m to $30m to set up, but that for every job moved the bank saves about $20,000 (£10,400). Trades unions, particularly in the UK and US, blame these centres for job losses in developed countries, and also for the effective imposition of wage caps on their members. Currently, HSBC operates centres out of nine countries, including; United Kingdom (Leeds, Hamilton, Edinburgh, Swansea, Manchester, Coventry & Leicester), Brazil (Curitiba), the Czech Republic (Ostrava), India (Calcutta, Hyderabad, Bangalore, Visakhapatnam, Bombay, Gurgaon and Pune), China (Shanghai, Guangzhou and Shenzhen), Malaysia (Kuala Lumpur), Poland (Krakow), Sri Lanka (Rajagiriya) and the Philippines (Manila). The Malta trial for a UK high value call centre has resulted in a growing operation that country. An option under consideration is reported to be a processing centre in Vietnam to access the French skills of the population and therefore cut costs in the bank's French operations.

Recruitment ProcessMaking the most of the recruitment processWhat we want to see from youOne of our main priorities, when selecting people for roles here, is to make sure they’ll fit in with our way of doing things. That’s why, when it comes to your application and every

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assessment and interview that follows, it’s vital that you show us more than just skills, experience or qualifications. We want to see that you’re an HSBC person before you join us.Let us explain what we mean. At HSBC, we’ve developed three core group values. They define how we think about business and how our people work. Our global success is built on this approach. Your goal is to demonstrate your ability to put our values into practice.The valuesHSBC people are Open. We expect you to be honest and straight talking. You treat others with respect and fairness. You listen to their ideas, show genuine appreciation of their needs and collaborate effectively for the benefit of the team.HSBC people are Connected. We expect you to build relationships with customers, colleagues and the community in which you work. You empathise with others, take care to understand the impact you have on them, and act with their best interests at heart.HSBC people are Dependable. We expect you to be committed to quality in everything you do. You take accountability for the results you deliver, and you can always be relied on to stand up for the right course of action, even in challenging circumstances.How to show us you share our valuesIn interviews, we’ll ask you to tell us about occasions when you have demonstrated the qualities we’re looking for. Start thinking now about some good examples which illustrate your openness, connection and dependability, so you’re well prepared for those questions. Think of one strong example for each value. These don’t have to be drawn from work.Naturally, you should also show us how open, connected and dependable you are through your behaviour and communication with us throughout the recruitment process.We want to make your experience of applying as easy and straight forward as possible. To help make that happen, we've put together this guide for each of the different stages involved in the process. It means that at every step, you'll be aware of precisely where you are. And when we contact you to confirm if you've been successful, you'll know exactly what to expect next.

Application Assessment Values based telephone interview Face-to-face interview Offer

Training and development

Building a bank of knowledge

Our aim is to equip you with a detailed understanding of HSBC, the banking industry and the business area you join. Your induction and onboarding to HSBC will only be the beginning. Your education continues with our comprehensive Learning curriculum which

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comprises a variety of online and face-to-face activities, which are all provided in an environment that supports and encourages employees to drive their own development.

And your development does not stop there. Your manager will help you set performance and career goals and expectations, and evaluate your progress towards achieving them. You will also have the opportunity to learn from knowledgeable and experienced colleagues, many of whom will be experts in their field.

Accessing our global network

From the outset, you will have the support and access to develop your own professional networks with colleagues and clients around the world, which will be crucial to your development.

There will also be a variety of virtual and in-person interactions available with colleagues from other countries around the world through opportunities such as rotations, short-term assignments, as well as the potential to join our Group Graduate Development programme in the UK, or one of our Regional Graduate Development Programmes that focus on providing your further regional exposure.

Continuing the journey

Throughout your early career at HSBC, you’ll be inspired, challenged and developed.

As your career continues, you can choose to remain within your current business stream, change direction or potentially join our International Management Programme. This programme further develops highly talented and mobile international managers to work in any business, in any location around the globe.

Translating CSR into Action Within the Organization

To translate these policies into action, the organization laid a lot of emphasis on

having robust internal systems and procedures.

These internal policies, standards, and procedures applied across business units

worldwide. They were communicated internally through the Group Standards Manual, a

160-page internal publication that covered the roles and functions of key departments.

It also had detailed instructions for individual HSBC businesses, which took into

account the local circumstances, relevant laws, and regulations.

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Employees were expected to take personal responsibility and accountability in adhering

to these policies and standards. These systems enabled HSBC to conduct their businesses

in a responsible manner...

Business Ethics Case Studies | Case Study in Management, Operations, Strategies,

Business Ethics, Case Studies

Investing in Education, Nature and People

HSBC realized that a successful group of their size and scope could make a

significant impact on the world by ensuring the flow of social and economic benefits

through their business.

The bank therefore, began supporting a large number of local community

projects. Employees at HSBC actively involved themselves in volunteer work for various

community programs. These efforts were supplemented by contributions and fund-raising

efforts from corporate houses. Employees were also encouraged to donate from their

salaries to charity. In 2003, employees of Household pledged more than US$ 4.6 million,

resulting in the American Cancer Society naming it as one of the top contributors through

the 'workplace giving' campaign. HSBC's fund-raising efforts in 2003 resulted in

donations of US$ 47.4 million that were used to fund numerous projects in education,

environment, and other areas (Refer to Figure I)...

Business Ethics Case Studies | Case Study in Management, Operations, Strategies,

Business Ethics, Case Studies

HSBC - A Socially Responsible Corporate?

All these initiatives notwithstanding, the HSBC group faced considerable

criticism in October 2003 due to its decision to shift 4000 jobs to less developed nations

as part of its global resource restructuring drive. The trade unions were outraged and

slammed the group's claims of being a model CSR company. HSBC responded by saying

that this move was necessary to remain cost competitive in the global scenario. The

company also said that creation of jobs in emerging market economies definitely made a

positive contribution to society...

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Products and Services offered by HSBC

Bank Accounts

Bank accounts can be majorly classified into four categories:

a) SAVINGS ACCOUNT : This account is suited to those who want to deposit their

small savings in bank, which they need to withdraw only occasionally. The interest rate

on savings account is lower than that allowed on fixed deposits, but higher than that

allowed in current accounts. It is calculated on the lowest balance kept during a month.

The rate of interest to be paid by banks to depositors on saving account is prescribed by

the

Reserve Bank of India. At present the rate of interest on savings account is 3.5 %.

HSBC saving accounts make planning for your regular expenses convenient,

accommodating your financial needs when making big purchases or meeting unexpected

expenses.

Savings accounts with HSBC can further be classified into 3 categories:

i) Premier Accounts – Any relationship (one or more customers usually of the same

family) where the cumulative relationship value is Rs. 2.5 million or more is eligible for

‘Premier’. Premier is a relationship-managed proposition. All wealth management needs

of Premier customers are serviced by dedicated Premier Relationship Managers, who

typically manage 150-200 such relationships. High-end Premier relationships where the

cumulative relationship value is Rs. 25 million or more are also referred to as ‘Private

clients’. Private clients are serviced by Senior PRMs, who typically manage 60-70 such

relationships.

ii) Power Vantage Accounts – Any customer whose cumulative deposit value is Rs. 0.1

million or more is eligible for ‘PowerVantage’. PowerVantage customers are serviced by

PowerVantage Officers for their banking needs.

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iii) Mass-market Accounts – Any customer who is not Premier or PowerVantage is

referred to as ‘Mass-market’. Mass-market customers are serviced by Customer Services

Officers for their banking needs. The minimum balance required for this account is Rs

25,000.

Key Feature:

1) You can automatically transfer extra savings from your savings account to a fixed

deposit, through a standing instruction, to enable you to earn higher interest.

2) You are also eligible for a fee waiver on HSBC credit card.

3) Introducing card-to-card transfer facility – a funds transfers service

that enables you to transfer money in an easy, fast convenient and

safe manner using the visa Money Transfer service from visa.

4) HSBC Demat Account services with wavier on account opening charges.

5) Keep track of your account with free quarterly account statements.

6) Free personalized cheques book.

7) Buy mutual fund products offered by select mutual fund houses.

8) Choose from a range of Insurance products offered by TATA AIG.

9) Manage your account, make transactions, and pay your bills and much more by taking

advantage of HSBC free internet banking facility.

Service Charges

Minimum Average Quarterly Balance (AQB)

Resident Savings Account Rs. 25,000

NRO Savings Account Rs. 10,000

Non-Resident Savings (NRE) Rs. 25,000

Non maintenance of AQB Rs. 750 per quarter

Account not operated for more than 2 years Rs. 150 per quarter

Statement of Accounts each quarter

(mailed to account holders)

Free

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Duplicate Statements Rs.150 per statement

Standing Instructions

(out of pocket expenses will apply)

Setting up Free

Amendments Free

Transactions charges

(Charges for drafts/couriers, etc. will be as applicable.)

Free

All transactions Free

Account closure in less than 6 months Rs. 500

b) CURRENT ACCOUNT

It is usually opened for customers who are into business and requires lot of transaction to

be done. In the case of current accounts the bank incurs the obligation of paying all

cheques drawn against him as long as there is enough money to the credit of his

customer.

The customer is allowed to deposit or withdraw money as and when he likes no interest is

payed on current accounts.

c) FIXED DEPOSITS ACCOUNT

The term fixed deposits means deposits repayable after the expiry of a certain period.

They are also known as time deposits. When it comes to assured returns choosing the

right type of savings scheme makes all the difference. HSBC fixed deposits lets you

make the most of value added benefits as you create wealth at low risk.

Key Features

1) You can now open a fixed deposit with Rs 10,000 only.

2) Enjoy high rate of returns on your HSBC fixed deposits.

3) Choose from a wide range of tenure as per your convenience.

4) Avail of our special rates for select tenures.

d) DEMAT ACCOUNTS

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Manages your securities portfolio at your own convenience. As someone who is

interested in regular trading you need a well resourced account to match your needs in a

dynamic market scenario. As a leading depository participant, we offer you HSBC Demat

accounts, armed with an entire range of convenience specially designed to make your

money work harder.

Key Features:

1) You can purchase, hold and sell shares in electronic form.

2) Get your holding statement every three months, showing current portfolio of shares.

3) Avail of a overdraft up to Rs 20, 00,000 available against demat shares through asset

link.

4) As an NRI, you can easily dematerialize your portfolio of shares in India with HSBC.

5) If you already hold an HSBC current or saving accounts there will be no account

opening charges and no minimum balance requirement for your demat account.

6) You can save on transaction cost with quick transfers.

7) Say good bye to risk of loss, theft and mutilation of shares.

8) Now, stop worrying about bad deliveries, forgeries and duplicate shares certificate.

Service Charges

SERVICE CHARGES

Annual Charges Rs. 750 per annum for

Customer who maintain a

Market Trade/Off Market Trade/

Inter Depository Transaction

Purchase Nil

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Sale Upto 10 ISIN sale transactions

per month

per transaction thereafter

Nil; Rs. 100 per ISIN

Custody Fee Nil

Pledge

(a) HSBC

Creation Nil

Closure Nil

Invocation Nil

(b) Third Party

Creation Rs. 50 per instruction

Closure Rs. 50 per instruction

Invocation Rs. 50 per instruction

Dematerialization Nil

Rematerialisation Rs. 100 per certificate

Ad hoc Statements Mailed Abroad Rs. 50 per statement

Ad hoc Statements Rs. 25 per statement

Personalised Delivery Instruction book Nil

HOME LOAN

Buying a home for the first time can be daunting to any person but in today’s time bank

like HSBC is lending a helping hand to the people to purchase their dream house. Thus

people look forward towards choosing a home loan. The primary concern of bank is to

determine the loan amount that the borrower is comfortably able to repay. The most

popular method of financing a home purchase is with a mortgage. This is a loan that is

secured over the home. As it easier for you to move in as soon as possible without putting

a strain on your wallet.

Feature and Benefits of Home Loan

1) Loan Requirement –We offer loan ranging from Rs 5 lakhs up to Rs 3 crore.

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2) Property types –We offer loans to Resident Indians and NRI’s for ready property,

under construction property, self-construction and home improvement.

3) Loan tenure –Loans are available for tenure up to 25 years.

4) Repayment options – Choose fixed and floating rate home loans. You also have the

option of switching from a floating rate home loan to a fixed rate home loan once a year

at no extra cost.

5) No penalty option – You can opt to pre-pay up to 25% of your loan

every year. Pre- payment is permitted after a minimum of 6 months

following loan disbursal.

6) Free Gold credit card – On approval of your Home Loan. You get a Gold credit card,

Free for the first year with annual charges being waived.

PERSONAL LOANS

Never stop chasing your dreams whether it is renovating your home or your shop, buying

a computer for your child, or celebrating a wedding in family. You can now get a loan for

any need.

Feature and Benefits:

1) Personal loans from Rs 10,000 to Rs 50,000.

2) Flexible repayment period between 12 months to 48 months.

3) No guarantor required.

4) Easy documentations and quick disbursal.

5) Easy monthly repayment through equated monthly installments.

Personal Loan can be used for:

1) Home renovation or other home related expenses.

2) Marriage expenses in the family.

3) Education expenses.

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4) Medical expenses.

5) Purchasing consumer durables or equipments.

6) Retiring other debts.

7) Any other personal need or contingencies.

CREDIT CARD

Different people look at our credit cards differently with special money saving features

and time saving services, it could mean the perfect way to save money for all the precious

things you all ways desired or a convenient way to make time to do more. Get ready to

enjoy more. Two major credit cards that HSBC offers are Gold Card and Classic Card.

Features and Benefits:

1) Cash advance: Get instant access to cash, round the clock, at close to one million

ATM’S world wide.

2) Additional credit cards: Gift your loved ones the freedom of spending by availing of

two or three additional cards.

3) Zero Loss Credit Card Liability Benefit: Credit card holders have zero lost credit

card liability after the loss of the credit card has been reported to the bank in writing or to

the visa / master. Card global emergency assistance helps lines. However, you will liable

for all the charges incurred on your credit card before you report the loss of credit card.

4) Credit Shield extensions: This feature provides a life insurance cover for an amount

of Rs 40,000 for gold credit card holders with Tata Aig Life Insurance Co. Ltd in the

event of death due to non accidental causes.

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5) Global access:

a) Get a cash advance at close to one million ATM’S in India and overseas

b) Withdraw cash from your HSBC account from any visa plus or Master

card in India or overseas. You can also enquire about your balance, transfer funds from

any HSBC ATM’S in India or overseas.

c) The HSBC visa credit card is accepted at over 18 Million establishments over 100,000

establishments in India

DEBIT CARDS

HSBC debit card makes shopping a whole lot more convenient, by enabling you to do

much more than your ATM card. Get electronic access to up to three HSBC savings

/current accounts, wherever and whenever you need the money. Your card is

internationally valid and combines the benefit of domestic and overseas usage in one

card.

Features and benefits :

1) Banking cum Shopping Card: Your HSBC debit card can be used as an ATM card at

any HSBC or visa/plus ATM across the world, as well as for making purchases at

merchant locations. This card is accepted over 3, 20,000 merchants in India. You can also

withdraw cash from any of the 20,000 HSBC /visa/plus ATM’S in India.

2) More safety more convenience: Your HSBC card is extremely versatile and easy to

use it. It allows you the convenience of paying for your purchases directly from your

bank account, without having to carry any cash beside there is no worry of tracking and

making payments for bills every month.

3) Internationally valid and very handy when you are traveling abroad. Get access to over

1 million ATM’s 14 million merchant establishments, worldwide.

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4) Widely accepted: Your HSBC debit card is accepted widely in India and around the

world. Just look out for the Visa/Visa electron logo at ATM’s and merchant

establishments.

5) Itemized Billing; Your HSBC debit card allows you to track your purchases on a

regular basis. The details of the purchases made on your card, long with the date,

merchant name and amount are mentioned in your bank statement.

6) Lost Card Insurance: If your HSBC debit card gets lost or stolen, you are protected

against fraudulent purchase transaction from the moment you report the loss to HSBC in

India or the visa global assistance help lines, if overseas.

7) Unlimited free ATM transactions at non HSBC Visa ATM’s in India (Power

Vantage and Premier Customers only)

8) Two free ATM transactions at other bank Visa ATM’s in India (debit card plus

customers only)

INTERNET BANKING

In today’s demanding world you need instant solution for a better life style. HSBC

presenting online@hsbc, HSBC‘s internet banking service that gives you complete

control over your accounts. Now bank from the comfort of your home or office

anywhere, anytime.

Features and Benefits:

1) View your bank account/credit card balances and transaction at your convenience.

2) Transfer funds online to account with HSBC and other banks in India.

3) Create and manage fixed deposits.

4) Say good bye to queues and miss dates. Pay your credit card and utility bills and

insurance premiums online.

5) Get cashiers orders and demand drafts free.

6) Request for E- Statements for your bank account and credit card.

7) Manage your investments buy, redeem and switch between mutual funds online.

8) You can also stop cheques, order new cheques books, redeem bonus rewards points

and more.

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I) Security Device: The security device, one of the latest technological innovations from

HSBC, takes online security two even higher levels. To log on to your account on

internet banking, you need to enter your existing user name and password or as usual,

followed by the unique security code generated by the security device. The security

device provides you an enhanced level of security. Since the security device is in your

possession and the user name and password is known only to you, only you can access

your account online. Simple to use and easy to carry, the security device ensure you can

access your financial information online in a completely secure environment.

II) Bill Payments: No more bill queues, no more missed due dates, you can now use

HSBC’s convenient and flexible bill payment service to pay your bills. You can pay your

mobile, telephone, gas, electricity bills and insurance premiums.

III) Mobile Alerts: HSBC introduces mobile alerts a service that allows you to stay

updated on your banking transactions. Just register for your free mobile alert service to

receive SMS alerts for select banking transactions, SMS reminders for your payment

dues dates and term deposits maturity dates, and even your mini statement.

Features and Benefits:

1) Keep track of your accounts, loans and investments with HSBC even while you are on

the move.

2) Fast, easy and convenient - no need to visit your branch or call customer service.

3) No more forgetting due dates. Reminder alerts can be scheduled for payments due

dates on your HSBC loans and business overdrafts.

4) You never need to send us an SMS. On your register, mobile alerts will be sent to you

automatically as per your preferences.

5) What’s more, all this comes to you absolutely free.

VI) PHONE BANKING: Phone Banking is yet another banking service offered by

HSBC under this system, like in ATM card, a secret code number is provided to each

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account holder. A customer wanting to know his bank balance or any other information

relating to his account should dial up a particular phone number indicated by the bank.

When the number is dialed, a recorded voice will ask you to identify yourself with your

account number and code number. If the numbers are tallied, you will get all the

information you want to know about your account. Presently many foreign banks

provide this service. You cannot draw cash or deposit cash through phone banking. It is

basically an information service.

FOREIGN EXCHANGE

The term foreign exchange may be defined as a means of payment of an instrument of

short – term credits for various countries with different monetary units, when looked at

from the point of view of their purchase or sale against the national money, or that of

their holdings or reserves. It refers to foreign money which includes notes, cheques, bills

of exchange, bank balances and deposit in foreign currencies. It is often used to denote

the process or system by which the currency of country is converted into that of another

country.

Foreign exchange transaction arises mainly from trade transactions among residents of

different countries. The foreign exchange is the clearing house through which the

purchase and sale of foreign exchange are offset against each other. The main link

between the buyers and sellers of foreign exchange in the foreign exchange market is the

bank

Foreign Facilities for Resident:

1) Foreign exchange up to U$$ 10,000 in any calendar year for tourism or private travel

to any country other than Nepal and Bhutan on the basis of self –certification. For travel

to Nepal and Bhutan Indian currency can be taken without limit except Indian currency

notes of denominations of Rs 500 and above.

2) Foreign exchange up to U $ $ 100,000 on the basis of self certification. For students

the limit of $ 100,000 is applicable for each academic year. For medical treatment in

addition to U$$ 25,000 can be taken for meeting boarding/lodging/travel expenses of the

patient and also the accompanying

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attendant on self – certification. Amounts in excess of the limits can be released on basis

of documentary evidence of requirement.

INTERNATIONAL CREDIT CARDS

1) Meeting expenses/making purchases while abroad without any limit.

2) Making payment in foreign exchange for purchase of books and other items through

internet.

Resident holding a foreign currency account in India or with a bank overseas is

also free to obtain ICC’s issued by overseas banks and other reputed agencies.

REMITTANCE FOR MISCELLANEOUS PURPOSES UPTO US$ 5000

Remittance can be made upto US$5000 for any miscellaneous purpose with out that

production of any document.

GIFTS AND DONATIONS

Gifts/ Donation can be made to any body upto US$5000 every year per remitter on self

certification.

OTHER CURRENT ACCOUNTS TRANSACTION

Foreign can be freely drawn for all other bonafied current account transaction (other than

those which are restricted or are subject to specified limits) on production of

documentary evidence to the satisfaction of the authorized dealer.

SURRENDER OF FOREIGN EXCHANGE ON RETURN

Foreign exchange up to US$2000 in the form of foreign currency notes or traveller’s

cheques (TC’S) can be retained indefinitely for future use. Amounts in excess of US$

2000 have to be surrendered to a bank with in 90 days and TC’s with in 80 days of return

or credited to RFC [D] account. Foreign coins can be retained indefinitely without any

limit.

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RESIDENT FOREIGN CURRENCY ACCOUNT

Resident can open Resident Foreign Currency Account with bank in India for crediting:

1) Unspent balances after travel abroad.

2) Currency, TC s, bank drafts received as gifts from or for services rendered to non

resident while in India.

3) Foreign exchange earnings received, through banking channel, royalty, for any service

or towards exports of goods.

RFC [D] accounts are NOT interest bearing and there is no ceiling on the balances that

can be built up in these accounts. The balances held in these accounts can be used for any

purpose for which foreign exchange can be bought from a bank in India.

THE USERS OF HSBC SERVICES

We find two types of customers using the services of banks, such as general customers

and the industrial customers as given below:

General users: persons having an account in the bank and using the banking facilities at

the term and conditions fixed by a bank are known as general users of the banking

services. Generally they are found to be small sized customers.

Industrial users: the industrialists, entrepreneurs having an account in the bank and

using the credit facilities and other services for the establishment and expansion of their

business are known as industrial users. Generally they are found to be large sized.

Prospects: it is also essential to clarify the term, prospects. The general or industrial

prospects do not use the banking services at the present but they have the potentials to

become a customer if induced or motivated in a right fashion.

Wealth Management Services

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HSBC Investments develops appropriate investment solutions using investment

management expertise from within and outside of the HSBC Group. Our approach is to

present the appropriate combination of investment capabilities, dependent on the

requirements of the client.

HSBC is able to do this by working in partnership with clients and their advisers,

tailoring solutions to their specific requirements without a bias to in-house active

investment capabilities, drawing on our own investment capabilities when appropriate

and external managers when required:

A full range of investment solutions to meet the needs of clients around the world

A focus on what is right for the client rather than what we manage in-house

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Multimanagement from our Multimanager team is a core option for active

investments

Investment & Insurance (I&I) Services is a part of the Wealth Management thrust of the

Bank. The various Investment & Insurance products made available to customers include

mutual funds, fixed income securities (bonds), direct equities and insurance products –

the former three are made available both under advisory as well as non-advisory basis

while insurance products are available only on a non-advisory basis.

Wealth Management Services is spearheaded by the Wealth Management Unit headed by

the Head of Wealth Management who in turn reports into the Senior Manager Personal

Financial Services (SMPFS). The Head of Wealth Management is assisted by a central

team that supports the sales of I&I products to various customer segments.

The various units in the central team are:

1. INVESTMENT ADVISORY UNIT

The centralized Investment Advisory Unit (IAU) is responsible for:

a) Maintaining research on investment products. Their views are expected to be

uniformly disseminated to customers by the front office teams.

b) Providing customized investment proposals and advice to advisory customers. The

advice broadly covers equities, mutual funds, debt products and tax-planning investment

alternatives.

c) Maintaining proposal templates for standardized client profiles ascertained through

client responses through the KYC. The IAU updates these templates for the front offices

on a monthly basis – these updates incorporate relevant changes pertaining to markets,

product developments and product ideas.

32

d) Maintaining the list of approved and recommended investment products. The approved

funds are reflected in the monthly newsletter Fundamental that is prepared by IAU.

e) Supporting the wealth management salespeople with sales material and periodic

updates on investment products.

Investment Research and Advisory

The unit significantly draws upon the knowledge and research that resides within other

arms of the Group - mainly HSBC Securities and HSBC Treasury.

APPROVED AND RECOMMENDED INVESTMENT PRODUCTS

HSBC does not distribute all mutual fund schemes available in the market. The

Investment Advisory Unit (IAU) tracks suitable schemes and selects them for distribution

after a fairly rigorous due diligence process. These schemes are then placed on what is

commonly referred to as the “white list” and are open for distribution by Front Office

Staff, subject to sales franchise limits. “White-listed” schemes are also referred to as

approved schemes (or as schemes distributed on an approved basis). Updates on “white

list” are communicated to sales staff and customers through the monthly newsletter

Fundamental

SALES SUPPORT

IAU is also responsible for the production of sales support products like market

commentaries, event impact notes, equity recommendation notes and updates, newsletters

and model equity portfolios and themes. Extensive use is also made of information from

electronic databases like Capitaline and Bloomberg in the equity research maintenance

effort.

2. INSURANCE PRODUCTS UNIT

The Insurance Products unit is the main driver of the insurance business of the Bank. It is

responsible for liaison with the underwriters, development of suitable products for Bank

customers and follow-up on operational issues with the underwriters.

33

HSBC is the corporate agent for Tata AIG Life Insurance Limited (TAIG). However, we

do not distribute all life insurance products from TAIG. The Insurance product team, as

part of its mandate, designs, studies and selects suitable insurance products for

distribution.

3. CUSTOMER SEGMENTS

PFS customers

The PFS customer base primarily comprises of individuals (including minors) and HUFs

holding bank accounts and is segmented as below:

Premier – Any relationship (one or more customers usually of the same family)

where the cumulative relationship value is Rs. 2.5 million or more is eligible for

‘Premier’. All wealth management needs of Premier customers are serviced by

dedicated Premier Relationship Managers (PRMs), High-end Premier

relationships where the cumulative relationship value is Rs. 25 million or more

are also referred to as ‘Private clients’. Private clients are serviced by Senior

PRMs (SPRMs).

Power Vantage – Any customer whose cumulative deposit value is Rs. 0.1

million or more is eligible for ‘PowerVantage’ .PowerVantage customers are

serviced by PowerVantage Officers (PVRM) for their banking needs.

Mass-market – Any PFS customer who is not Premier or PowerVantage is

referred to as ‘Mass-market’. Mass-market customer is serviced by Customer

Services Officers (CSOs) for their banking needs.

Regulation and Guidelines

& I salespersons must act in accordance with the laws of India. The finance

Ministry through the RBI, SEBI, IRDA, AMFI, Company Law Board, Department

of Company Affairs, Registrar of Companies oversees the various segments of the

financial services industry. In addition there are other entities, as well as various

legislations, which may affect the sales of I&I products. I&I salespersons should ensure

that they have the necessary knowledge and skills to render such services and are

properly licensed to conduct sales of various financial products. This section is designed

I

34

to provide me&me salespersons with an overview of certain legal terms and regulations

that impact their business.

The section covers the following guiding principles

Contracts

Law of Torts

Regulatory requirements for Mutual Fund distributors

Regulatory requirements for sale of insurance policies by corporate agents

SEBI Insider dealing regulations and Staff dealing rules

AFP Professional Standards

Group Guidelines including Cross-border marketing guidelines, vulnerable

customers, inherently-risky sales and blank or partially filled documents.

Applicability to HSBC

The banker-customer relationship is a fiduciary one and the banker significantly

influences the customers’ decisions relating to his finances. With increasing consumer

awareness, financial industry representatives will also become liable for negligence and

malfeasance. Care should be exercised in the following aspects:

Bankers should ensure that they in fact possess the skill and knowledge

that they purport to possess – salespersons should ensure that they have

undergone all training prescribed for their channel and are appropriately

certified or licensed.

Where a banker provides advice (under a advisory proposition) as to

specific investments, it is his duty to ensure that due diligence has been

carried out before arriving at the recommendation – it is vital that

salespersons rely on the central FPS team for any recommendation that is

provided to the customer. At the same time, where ‘information’ is given

during a brief impromptu meeting with regard to a company that a client

was contemplating investing in, it was held that the banker’s duty was

limited.

35

Bankers should not indulge in mis-selling i.e., promoting or suggesting

financial products, which are either unsuitable for the customer or which

the does not fully comprehend, merely for their own selfish reward.

Duties and Responsibilities

Every salesperson has a responsibility to Customers to act within the scope of their

authority from the Group and ensure that the customer relationship is managed in

accordance with appropriate regulatory requirements, professional standards and

acceptable industry practices set out above. Every salesperson should be mindful of the

Group’s Key Business Values of the highest personal standards of integrity at all levels

and commitment to truth and fair dealing. The following, although not exhaustive,

outlines such responsibilities:

Honest and Fair Dealings

Salespersons should be honest and fair in all dealing with customers, staff members,

intermediaries and third parties. This includes all interactions with potential, existing and

previous customers, as well as those customers who have contractual arrangements,

transactions and other forms of trade via other branches of HSBC and/or other

Distributors.

Client Confidentiality

All information gathered in the course of a salesperson’s duty and functions is

confidential and salespersons are responsible for protecting the confidentiality of their

Customers. This includes the collection, use, storage and distribution of the following:

Identity of the Customers, including documents pertaining to the same;

Details regarding their personal, family, financial, health and other information;

Details regarding the recommendations made to them;

Computer records regarding the Customer;

All information held on the Customer files;

All customer files must be maintained in a secure location at the HSBC branch where

their accounts are held or where the salesperson is predominantly located. Access to

customer files and confidential records must be limited to those staff directly involved in

the provision of these services. All staff must be aware of the Privacy requirements.

Acting on Behalf of the Company

36

Please note that no salesperson can sign contracts, agreements or arrangements for

services on behalf of the bank unless authorized by the bank by way of a Power of

Attorney in favour of the salesperson. In the absence of such a power of attorney, PRMs

and SPRMs can only sign correspondence to clients or service providers. Copies of all

correspondence to Clients, whether for the purpose of prospecting, marketing, financial

planning or the provision of services, must be maintained on file. FPMs are not

authorized to sign correspondence.

Integrity

Salespersons have a personal and professional responsibility for maintaining the integrity

of the Group. Whenever a salesperson becomes aware or suspects that any of the

following breaches have taken place, they must immediately report the details to their

superior. The superiors would in turn follow the laid down procedures (stated in Local

Compliance Officers Handbook of the Bank) for reporting such breaches.

Instances where the applicable codes of conduct have not been followed;

Sales which are not in the best interest of the Client;

Knowledge of a Client being disadvantaged, misinformed, tricked or manipulated;

Conduct that has been driven purely to generate or increase any bonus or

incentive;

Sales that shows any unfair and unwarranted bias;

Sales which have been done without following the due sales process;

Appearance and Behavior

To our clients, the salespersons are representatives of the Group. They are thus required

to project a professional, well-groomed image and conduct themselves appropriately at

all times. This includes dress, punctuality and honoring of commitments and promises

made to customers.

Ongoing Professional Development

As part of continued professional development, salespersons and their superior’s

salespersons are required to ensure that their knowledge of I&I Services is relevant,

current and accurate. All I&I salespersons should undergo refresher training once every

six months.

37

Selling to family, friends and staff members

When selling to family, friends and staff members we should afford the same

professionalism and courtesy we do to all other customers. It is not acceptable to short

circuit the established sales processes in these circumstances.

Financial Planning Services

The Hongkong and Shanghai Banking Corporation Limited (the Bank) shall offer

financial planning services – details of which are mentioned below:

1) Financial planning services entail the preparation of a Financial Plan based upon the

mapping of financial goals and resources available and expected as specified by the

customer.

2) The Customer shall complete the Personal Financial Review – which shall provide

HSBC with the requisite information on the Customer’s financial goals, available /

expected resources and risk profile. The Customer certifies that the information provided

in the Personal Financial Review shall be complete and accurate in all respects.

3) The Bank may use a financial planning calculator that will arrive at the rate of return

required to achieve the Customer’s financial goals. The assumptions made regarding

various economic parameters and the expected returns on various asset classes are

indicative in nature and may change based on market conditions.

4) The Bank may suggest an asset allocation for the Customer – using the risk profiling

software that has been internally developed for the purpose. Based on the asset allocation,

the Bank may make available to the Customer model portfolios that have been

constructed based on a ranking of mutual funds (derived from a quantitative analysis of

the funds’ performance) and the Bank may also suggest other securities.

5) The Bank may also make available to the Customer insurance products for the

Financial Plan.

38

6) The Financial Plan is not an agreement but a summary of the details provided by the

Customer in the Personal Financial Review and the asset allocation derived from the risk

profile of the Customer. The Bank cannot be held liable for the achievement/non

achievement of the financial goals identified by the Customer and the Financial Plan

cannot be construed as security for ensuring the achievement of the Customer’s financial

goals.

7) The Bank will review the details provided by the Customer in the Personal Financial

Review, including information on the Customer’s financial goals, available / expected

resources and risk profile, once a year.

8) The Bank will not provide tax advice and the Customer should consult the Customer’s

own tax advisor as appropriate.

Conclusion

I hope that this project has stimulated the reader’s interest in the term “Products and

Services” as a Bank. I have certainly found the task of organizing my own knowledge of

the subject and more of the information from the secondeary sources to make this Project

report, a rewarding one.

New instruments are being developed at an exciting pace ‘there can be little

double that important. New ideas and new result will continue to emerge from this

Project. I had come to know about Bank Products and Services such as various Bank

Account and different types of loans and cards. Banks are providing services to attract

Customers and to stay in the Competition.

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