Summer Training Report On Business Opportunity for Yes Bank Ltd in FCRA Accounts of Charitable Institutions

Submitted in the partial fulfillment for the award of Masters Degree in Business Administration (2007-2009).

Under Supervision Mr. Jatindeep Sachdeva Vice President Government Relationship Management Yes Bank Ltd.

Submitted By Saravpreet Singh Roll No.747 MBA 3rd Sem

PANIPAT INSTITUTE OF ENGINEERING & TECHONOLGY KURUKSHETRA UNIVERSITY KURUKSHETRA

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INDEX

1. Acknowledgement

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2. Preface

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3. Executive Summary

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3. Introduction

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4. Overview of FCRA

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5. Company Profile

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6. Industry Profile

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7. Objective of Study

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8. Research Methodology

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9. Sampling

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10. Time Period

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11. Areas of Study

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12. Analysis & Interpretation

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13. Comparison of Banks Products

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14. Conclusion & Suggestion

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15. Problems & Limitations

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16. Annexure

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17. Bibliography

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ACKNOWLEDGEMENT

I would like to thank all the people without those help this project could not have been completed. Mr. Jatindeep Sachdeva, Vice president GRM (Government Relationship Management) Team who was my guide, was extremely patient and open to what ever suggestion I had to make and in the process gently guide me whenever I went wrong. I would like to thank Mr. A.S.Khurana Senior Advisor YBL (Yes Bank Ltd.) who gave me chance to work in a Bank as reputed as YES BANK LTD. The people without whom I could never managed this far as Mrs. Puja Walia H.O.D. MBA Department.

I would be failing in my duty if I do not express my thanks to my respondents whom I visited and who spared their valuable time to answer my questions. Last, but not the least, my thanks to all the people who helped me in making my efforts fruitful.

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PREFACEPractical exposure in the field of management is extremely important as it gives a close view of the real business issues. It helps to cover all part that remained uncovered in the classroom. It helps to gain experience. Just theoretical knowledge is not sufficient for the success of any business student. So one should have practical knowledge about each aspect of life.

I learnt lot of new things from this project, which could never have been learnt from theory classes.

If any findings & recommendations go in any way to prove some new ground in helping the commodity future sector, I shall deem my efforts have duly served the purpose. In the forthcoming pages an attempt has been made to present report covering different aspects of my project.

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EXECUTIVE SUMMARY

MAIN OBJECTIVE:Objective of the study is to search Business opportunities in foreign contribution Regulation Act 1976, (FCRA) accounts of charitable institutions in Delhi NCR for the Yes Bank Ltd. and forming strategies to target this segment for the bank.

SUB OBJECTIVES:1. To make a comparative analysis of the Banking product offered by the Banks in FCRA accounts to the charitable institutions. 2. To take an overview of the needs of the charitable institutions in banking industry. 3. To recommend a product in accordance to the rules of FCRA 1976 and as per the guidelines of the RBI.

METHODOLOGY: Approach to the project starts from the deep theoretical knowledge of the Act with the help of internet following the visits to the office of FCRA at Ministry of Home Affairs (MHA) New Delhi. Then visiting to the different type of Non Governmental Organizations (NGOs) in the Delhi and NCR and collecting the required information for the project report by asking the questions to the respondent institutional executives or their members.

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INTRODUCTION TO THE REPORT

Report has been prepared with the objective of searching for the business opportunities for the bank by collecting and analyzing information from various sources and making strategies for the same. Report has valuable information which has been carefully collected and analysis on the same has been made to reach at the appropriate conclusion. Survey has been done of the various charitable institutes with appropriate questionnaire framed with the objective kept in mind. Questions were asked to the officials to the various organizations and necessary information was collected as a primary source to the subject. Detail study of Foreign Contribution Regulation Act 1976 is done to have the deep theoretical and practical knowledge of the project.

Project is to study the requirements of the charitable institutions in the banking product which is done by meeting different charitable institutions and asking them about their present banker and their needs. A comparison of the banking product offered by the Standard Chartered Bank and HDFC Bank is also done by meeting the two Banks officials in Delhi region.

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An Overview to the Foreign Contribution (Regulation) Act FCRA 1976.

Foreign Contribution (Regulation) Act was given by the Parliament in the Twentyseventh year of the republic India. It is to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain persons or associations, with a view to ensuring that parliamentary institutions, political associations and academic and other voluntary organizations as well as individuals working in the important areas of national life may function in a manner consistent with the values of a sovereign democratic republic, and for matters connected therewith. FCRA department is situated in New Delhi, Ministry of Home Affairs, Foreigners division, jaisalmer house, 26, Man Singh Road every permission for registration is sent here. Application Forms can be downloaded from website, www.mha.nic.in. Need for the Foreign Contribution Regulation Act,1976 was felt due to the security considerations and to ensure that foreign contribution is utilized for genuine activities without compromising on concerns for national security.

The central government has the power to prohibit any person or organizations from accepting foreign contribution or hospitality if it is determined that such acceptance would likely affect prejudicially a) the sovereignty and integrity of India, b) public interest, c) freedom of fairness of election to any legislature, d) friendly relations with any foreign state, or e) harmony between religious, racial, social, linguistic or regional groups, castes or communities. The Act was essentially designed to prevent flow of foreign funds to political parties in India.

Registration and permissionAn association having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains either The prior permission of the central Government, or Gets it self registered with the central Government.

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Prior permissionPrior permission is required Where the association does not have a FCRA registration , Where the association is kept under prior permission category, Where registration is frozen Association of political nature not being political party.

AccountsIn the Act it is mentioned that registered associations may only receive foreign contribution in a single account of a specified Bank branch. Every association so registered shall give within such time & in such manner as may be prescribed, intimation to the central government as to the amount of each foreign contribution received by it. A separate set of accounts and records shall be maintained, exclusively for foreign contribution received and utilized. Every account shall be maintained on a yearly basis duly certified by a chartered accountant along with a balance sheet & statement of receipt& payment account to MHA.

Foreign HospitalityThe Act regulates receipt and utilization of foreign hospitality by certain individuals which includes members of legislature, office-bearers of political party, judges, government servants, employees of Corporation, while visiting any foreign country or territory outside India. Such individuals can receive foreign hospitality only with the prior permission of the Central Government. Prior permission is not required when such individuals are required to receive any emergent medical aid needed on account of sudden illness contracted during foreign visit, but, they are mandated to intimate the Central Government within one month from the date of such foreign visit/receipt of foreign hospitality. The intimation shall include the source from which and the manner in which such hospitality was availed by the recipient. Foreign hospitality includes cost of travel, boarding, lodging, free transportation, free medical treatment, etc.

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Over 34,035 associations have been registered under FCRA as on 28 th February, 2007 to receive and utilize foreign contribution. These associations are broadly divided into 5 categories viz. Religious, Cultural, Economic, Educational & Social. Many of these associations are simultaneously engaged in activities falling within two or more categories. No bank should credit any foreign contribution to the account of an association/NGO unless it produces documentary evidence of having obtained registration/prior permission from the Central Government for the same. In case any foreign contribution is credited to the account of an NGO/Association/Trust directly, the bank should not allow utilization of such fund and inform the NGO/Association/Trust concerned to obtain necessary permission/registration from the Central Government for the same. Simultaneously, the bank should inform the Deputy Secretary (FCRA), Ministry of Home Affairs, Govt. of India, New Delhi about such receipt. Non-compliance of the above by the bank will constitute a violation and will render the defaulting bank liable for appropriate action by the Reserve Bank of India.

Salient FeaturesData pertaining to receipt of foreign contribution for 2005-06 has been compiled. Its salient features are as below: I. As on 31-03-2006, 32,144 associations were registered and 513 were granted prior permission during the year 2005-06. II. For the year 2005-06, 18,570 associations reported receipt of foreign contribution (including those which received NIL amount) amounting to Rs7,877.57 crores. III. Among the States and Union Territories, Tamil Nadu Rs. 1,609.64 crores reported the highest receipt of foreign contribution followed by Delhi Rs.1556.46 crores and Andhra Pradesh Rs 1,011.57 crores. IV. Among the reporting associations, World Vision of India, Tamil Nadu (Rs. 256.41 crores) received the highest amount of foreign contribution followed by Caritas India, Delhi (Rs. 193.36 crores) and Rural Development Trust,

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Andhra Pradesh (Rs. 126.64 crores).

Analysis of the Last Three Years DataAn analysis of the data for the last three years i.e. from 2003-04 to 2005-06 shows that; a) United States of America is the top donor country. b) Foundation Vincent E Ferrer, Spain contributed the highest amount of foreign contribution. c) Tamilnadu received the highest amount of foreign contribution. d) Chennai district received the highest amount of foreign contribution. e) World Vision of India, Tamil Nadu received the highest amount of foreign contribution. f) Among the purposes, the highest amount was received for Establishment purposes.

RECEIPT OF FOREIGN CONTRIBUTION IN INDIAYear 2001-02 2002-03 2003-04 2004-05 2005-06 Amount ( Rs. in Crores ) 4871.90 5046.50 5105.50 6256.68 7877.57 % Increase over previous year 7.42 3.58 1.17 22.55 25.91

TOP RECEIPTENT ASSOCIATIONS IN DELHINAME OF ASSOCIATION Caritas India, Delhi Foreign Contribution Rs/Crores 2005-06 2004-05 2003-04 193.3665.3037.54

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Plan International Inc., Delhi Oxfam India Trust, Delhi SOS Childrens Village of India, Delhi Society for Development Alternatives, Delhi

92.09 71.90 55.91 53.79

64.91 52.30 26.01 28.46

56.80 33.93 38.66 19.32

NUMBER OF ASSOCIATIONS REPORTING TO FCRA DEPARTMENTYEAR 2003-04 2004-05 2005-06 ASSOCIATIONS 17145 18540 18570

FOREIGN FUNDS COMING TO DELHI2003-04 2004-05 2005-06 Foreign Contribution Rs/crores 857.12 1075.23 1556.46

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COMPANY PROFILECountry Industry NSE/BSE Listing Regd.& corporate office India Banking NSE Code -532648 Nehru centre,9th floor, Discovery of India, Dr.A.B.Road, worli, Mumbai 400018 Tel:Northern Regional Corporate Office +91(22) 6669 9000 48,Nyaya Marg, Chanakyapuri, New Delhi 110021 Tel:-+91(11) 6656 9000

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Website

www.yesbank.in

Yes Bank, Indias new age private sector Bank is the outcome of the professional commitment of its founder Mr. Rana Kapoor supported by his highly competent top management team to establish a high quality, customer centric, service driven, private Indian Bank catering to the Future Industries of India.

Yes Bank has adopted international best practices, the highest standards of service quality and operational excellence, and offers comprehensive banking and financial solutions to all its valued customers. A key strength and differentiating feature of Yes Bank is its knowledge driven approach to banking and an unprecedented customer experience for its retail and wealth management clients.

Yes Bank is steadily building corporate and institutional banking, financial markets, investment banking, corporate finance, business (Small &Medium Enterprises) and transaction banking, international banking, retail banking and wealth management business lines across the country. The Banks constant endeavour is to provide a delightful banking experience expressed with simplicity, empathy, and totality.

Yes Bank understands the financial needs of the Government of India, in its progress and development role of a Growing India through Yes Banks Knowledge Banking approach and the objective of being the Bank for an Emerging India. Yes Bank remains committed to serving this specialized segment. Yes Banks knowledge Bankers deliver innovative, structured and comprehensive solutions through a Money Doctor approach focusing on diagnostic and prescriptive attention to detail. This is facilitated through Yes Banks Technology leadership delivering proven, easy-to-use solutions for Government Undertakings and agencies. Yes Bank has provided financial and advisory services to Ministries of the Union Government, State Governments, Central and State Public Sector Undertakings (PSUs) and Agencies.

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In a short span of over three and a half years the Government Relationship Management (GRM) team has developed robust relationships with over 100 entities. The GRM team is committed to the core values of client orientation, innovation and superior service experience that exemplify all Businesses at Yes Bank. GRM team is providing the Knowledge Advisory, Liquidity Management and Investment Products, Transaction Banking, trade finances, cash management services, Treasury services, Forex Remittances, debt capital markets, investment managements, corporate salary accounts, Advisory structured transactions, term loans, and cash credit limits to various government operations like IFFCO, SAIL, Airport Authority of India, IOCL, NDPL, HPCL, Bridge & Roof co.(India) ltd and many more.

Business Strategy

Knowledge Banking: - One of the strengths and differentiating features of Yes Bank is its knowledge banking approach that is the essence of all offerings to its customers. Knowledge has been institutionalized as a key ingredient in all internal and external processes and utilized to create customized solutions for the clients specific requirements.

Technology and Operations: - As a new generation Bank, Yes Bank has the advantage of accessing the latest available technology. The Bank has taken a calibrated decision to invest in the best IT system and practices in order to make its technology platform a strategic business tool for building a competitive advantage.

Responsible Banking: -Yes Bank has a vision to champion Responsible Banking in India, where the concepts of Corporate Social Responsibility (CSR) and sustainability are integrated in its Business focus.

Business Lines: -Yes Bank has four distinct business segments to effectively service the differentiated needs of its targeted customers.

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Corporate and Institutional Banking (C&IB): -To cater to the needs of large corporate & institutional clients, MNCs, government companies and PSUs. Bank targets C&IB customers through its multifunctional branches in the key metropolitican cities.

Emerging Corporate Banking (ECB): -It is dedicated to partner with growth-focused, fast-paced enterprises, which are emerging as a leader in their respective business areas.

Business Banking: -To cater to the needs of the small and medium enterprises (SME), Yes Bank has set up a dedicated business unit to focus on delivering superior banking solutions specially designed to meet the varying and dynamic needs of its SME clients.

Retail Banking and Wealth Management: -The Bank intends to develop Retail Banking into a key value driver. Yes Bank offers its customers choice & convenience, reflected in its branch layout & design, product feature /design, options of distribution channels and superior technology enabled service quality. Yes Bank predominantly offers value added retail liability and third party wealth management products as well as retail asset offerings through its sales and service network linked to its branches.

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Private Banking: - Yes Bank is focusing on personalized relationship banking for its top end High Net worth customers, supported by structured financial solutions tailor-made to suit the needs of such customers.

Product lines: - Yes Bank offers a wide range of fee-based products to corporate and business banking customers to ensure a high degree of cross-sell to clients.

Financial Markets: -Yes Bank financial markets was ranked second in the Best for currency strategy and best for technical analysis categories at the Asia Money 2005 foreign exchange poll for India.

Transaction Banking: -Yes Bank Transaction banking group has adopted a consultative approach and focus on knowledge and relationship banking to enable customers to address strategic financial and operating needs in the domain of: Working capital and liquidity management Asset management Treasury integration Exposure and risk management

Yes Bank proposes to apply industry knowledge and superior technology for offering innovative structured solutions integral to a companys financial supply chain.

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Yes International Banking: - It offers a complete suite of international banking products and services, driven by state-of-the art technology, which includes Debt, Trade finance, corporate finance, Investment banking and business advisory services, treasury and global Indian banking. The Bank also plans to leverage its international presence, for its capital raising activities. These services will initially be through partnerships with international banks and financial institutions followed by the establishments of branches and representative offices, as per regulatory approvals.

Brand Creation: - The Bank believes that its differentiation begins with its service and trust mark YES. YES represents the bank true spirit of being service-oriented. The YES brand creation effort is supported by Triton Communications, the principal advertising agency and Ad factors PR, the Banks public relation consultant.

Key Members of Yes Bank Management Team

NAME Mr. Rana Kapoor Mr. Sunil Gulati Mr. Deepak Gaddhyan Mr. Sumit Gupta

DESIGNATION Managing Director & CEO Group President - C&IB, Transaction Banking Group President GRM Team. Country Head Emerging Corporate Banking

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Mr. Alok Gupta Mr. Rajnish Datta Mr. Subir Bisht Mr. Sanjay Aggarwal Mr. Varun Tuli

Country Head life sciences & technology Country Head Small business banking group Chief Risk Officer Country Head Credit Risk, Business Banking President Business Banking

Key Highlights & Milestones of Yes Bank.Nov 2003 May 2004 Dec 2006 Mar 2007 Dec 2007 Dec 2007 Jan 2008 Incorporation of YES BANK Limited RBI License to commence banking business Ranked No.3 in the Business World Survey of Indias Best listed Banks Ranked No.2 among New Private Sector Banks in the Financial Express survey Won Best CSR practice award 2007 Won IT people award 2007 60 operational branches across India

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Mar 2008

Ranked No.3 among New Private Sector Banks in the Financial Express-E&Y survey & overall #1 on credit quality &

Apr 2008

#2 on Growth 67 operational branches across India

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INDUSTRY PROFILE

The oldest bank in Indian Banking industry is the State Bank of India being established as the Bank of Bengal in Calcutta in June 1806. The first fully Indian owned Bank was the Allahbad Bank, which was established in 1865. By the 1900s, the market expanded with the establishment of Banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After Indias independence in 1947, the Reserve Bank was nationalized and given broader powers. In the early 1990s the then Narsimha Rao government embarked on a policy of liberalization and gave licenses to a small number of private Banks, which came to be known as New Generation tech-savvy banks, which included banks such as Global Trust

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Bank (the first of such generation banks to be set up) which later amalgamated with Oriental Bank of Commerce, UTI Bank (Now re named as Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, kick started the Banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of Banks, namely Government Banks, Private Banks, and Foreign Banks The next stage for the Indian Banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment (F.D.I.), where all foreign investors in banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 49% with some restrictions. The new policy shocks the banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (borrowing at 4%; lend at 6%; go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional Banks. All this led to boom in India. People just not demanded more from their Banks but also received more.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in the private sector Bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. In (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even, though reach in rural India still remains a challenge for the private sector and foreign Banks. In terms of quality of assets and capital adequacy, Indian Banks are considered to have clean, strong and transparent balance sheets relative to other Banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time especially in its service sector-the demand for Banking services, especially retail banking,

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mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. Currently, India has 88 scheduled commercial banks (SCBs) 28 public sector banks (that is with the government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) And 31 foreign banks.

They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA limited, a rating agency, the public sector banks hold 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. The annual growth in bank credit to the commercial sector is at 25.4% as on March 31, 2007 and was lower than 27.2% against previous year. Till 2010, retail banking is expected to grow at a CAGR (compounded average growth rate) of 28% to touch a figure of INR 9,700 billion. This requires expansion and diversification of retail product portfolio, better penetration and faster service mechanism.

The report on Retail Banking industry in India covers industry segments like housing loan, auto loan, personal loan, education loan, consumer durable loan, credit card and regulatory frame work for retail Banks is also discussed. The report gives retail banking industrys current performance and future outlook. Total 22 major retail Banks in India are covered in terms of their performance, strategy and outlook. In absolute terms, Indias banking sector enjoyed reasonable growth through the year to December 31 2007. In local currency terms, total assets, total loans and total deposits increased by 23%, 21%, and 26%, respectively. The loan/deposit, loan/asset ratio fell while the loan/GDP ratio rose.

State Bank of India (SBI)

x State Bank of India is the Indias largest Bank. It has largest branch network all over the country with its special products like

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Personal Banking Deposit Schemes Personal Finance

Agricultural/Rural Banking Micro Credit Regional Rural Bank

NRI Services International Banking Trade Finance Merchant Banking Correspondent Banking

Corporate Banking Mid Corporate Group Project Finance Small & Medium Enterprises (SMEs)

Government Business Public Provident Fund SBI e-Tax

Services Internet Banking Mobile Banking

The SBIs powerful corporate banking formation deploys multiple channels to deliver integrated solutions for all financial challenges faced by the corporate universe. The Corporate Banking group and the National Banking group are the primary delivery channels for corporate banking products. The Corporate Banking Group consists of dedicated Strategic Business Units that cater exclusively to specific client groups or specialize in particular product clusters. Foremost among these specialized groups is the Corporate Accounts Group (CAG), focusing on the prime corporate and institutional clients of the countrys biggest business centers. The others are the Project Finance unit

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and the Leasing Unit. The National Banking Group also delivers the entire spectrum of corporate banking products to other corporate clients, on a nationwide platform.

Complete Range of Products and Services The SBI offers an exhaustive range of financial products and services that answers any business or market circumstance, backed by an assublack expertise in customizing the product to meet the most sensitive specificities of each client and each business context. Its team of highly skilled and experienced product specialists can help its customers in forecast structure complex transaction requirements.

The SBI Edge Commanding unsurpassed respect and legacy in the Indian financial expanse, the SBI is committed to provide the financial solutions that extract maximum value from business and market situations.

While the Bank is strongly positioned to structure financial packages that anticipate the changing business environment, its vast network-the worlds largest-ensures delivery channels of unmatched reach, both in India and abroad.

Working Capital Finance SBI offers working capital finance to meet the entire range of short term fund requirements that arise within a corporate day to day operational cycle. The SBI working capital loans help the companies in financing inventories, managing internal cash flows, supporting supply chains, funding production, and marketing operations, providing cash support to business expansion and carrying current assets.

SBIs working finance products comprise a spectrum of funded and non-funded facilities ranging from cash credit to structured loans, to meet the different demands from all segments of industry, trade and the services sector. Funded facilities include cash credit, demand loan and bill discounting. Demand loans are considered also under the FCNR (B)

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(Foreign currency from Non Resident) scheme. Non-funded instruments comprise letters of credit (inland and overseas) as well as bank guarantees (performance and financial) to cover advance payments, bid bonds etc.

Project Finance The SBI has formed a dedicated Project Finance Strategic Business Unit to assess credit proposals from and extend term loans for large industrial and infrastructure projects. Apart from this, project term loans for medium sized projects and similar clients are delivered through the CAG (Corporate Accounts Group) and NBG (National Banking group).

In general, project finance covers Greenfield industrial projects, capacity expansion at existing manufacturing units, construction ventures or other infrastructure projects. Capital intensive business expansion and diversification as well as replacement of equipment may be financed through the project term loans.

Project finance is quite often channeled through special purpose vehicles and arranged against the future cash streams to emerge from the project. The loans are approved on the basis of strong in house appraisal of the cost and viability of the ventures as well as the credit standing of promoters.

Deferred Payment Guarantee (DPG) SBI can extend deferred payment guarantees to industrial projects for obtaining imported equipment. The DPG is a standby credit guaranteeing deferred payments, usually for payments for capital goods, turnkey contracts etc.

Corporate Term Loan The SBI corporate term loans can support company in funding ongoing business expansion, repaying high cost debt, technology up gradation, R&D expenditure, leveraging specific cash streams that accrue into the company, implementing early retirement schemes and supplementing working capital. Corporate term loans can be

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structured under the FCNR (B) scheme as well, with the option of switching the currency denomination at the end of the interest periods. This will help you take advantage of global interest rate trends vis--vis domestic rates to minimize your debt cost. The Banks corporate term loans are generally available for tenures from three to five years, synchronized with your specific needs. SBI corporate term loans can have a bullet or periodic repayment schedule as required by the client. The repayment mode may be linked to the cash accruals of the company. The Banks expert credit crew gauges the applicants particular fund requirements and evaluates the companys credit worthiness, factoring in the cash flows generated by it.

Structured Finance SBI structured finance involves assembling unique credit configurations to meet the complex fund requirements of large industrial and infrastructure projects. Structured finance can be a combination of funded and non-funded facilities as well as other credit enhancement tools, lease contracts for instance, to fit the multi layer financial requirements of large and long-gestation projects. Being Indias largest bank and with the rich experience that it brings with it, SBI commands formidable expertise in engineering financial packages that address complex requirements with minimum risk. Further, SBI has firm relationships across the financial map of the world, which can be leveraged to structure solutions that may necessitate the participation of several credit agencies.

Dealer Financing SBI extends financial support to the corporate distribution network, by providing both working capital finance and term loans to select dealers of identified companies. This gives dealers to leverage their business relationship with major corporate to avail low cost credit. Also, this type of financial solutions allows the corporate negotiate a better price with dealers. Dealer financing may be extended in the bill discounting form or simply as cash credit.

Channel Financing

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Channel financing is an innovative finance mechanism by which the bank meets the various fund necessities along customer supply chain at the suppliers end itself, thus helping them sustain a seamless business flow along the arteries of the enterprise. Channel finance ensures the immediate realization of sales proceeds for the SBI clients supplier, making it practically a cash sale. On the other hand, the corporate gets credit for a duration equaling the tenure of the loan, enabling smoother liquidity management. SBI has the worlds largest banking network of over 9,000 branches and this enables it to deliver the financial solution at suppliers doorstep, across the span of the country.

Equipment Leasing The SBIs has deployed a dedicated strategic business unit for lease financing that is richly experienced in arranging lease contracts for procuring expensive equipment for clients project or plant. At SBI, lease agreements as stand alone contracts or as part of a structured package are arranged.

Loan Syndication The SBI leverages its vast network of relationships to arrange syndicated credit products for corporate clients and industrial projects. With its rich experience and strong reputation, SBIs syndication desk can assemble large loan packages involving a ring of reputed financial entities, domestic and international, that match the large credit requirements of infrastructure projects.

Industrial Credit& Investment Corporation of India ICICI Bank

ICICI Bank is Indias second largest bank with total assets of Rs.3, 997.95 Billion (US$100 billion) at March 31, 2008 and profit after tax of Rs.41.58 billion for the year ended March 31, 2008. ICICI Bank is second amongst all the companies listed on the

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Indian stock exchanges in terms of free float market capitalization. The Bank has a network of about 1308 branches and 3950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of Investment banking, life and non life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia, and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International finance centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. UK subsidiary has established branches in Belgium and Germany.

ICICI Banks equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICIs shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Banks acquisition of Bank of Madura Limited in all stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investor in fiscal 2001 and fiscal 2002. ICICI was formed to in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian Industry. The principal objective was to create a development financial institution for providing medium term and long term project financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide range of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank in 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE.

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After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian Banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal legal structure for the ICICI groups universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entitys access to low cost deposits, greater opportunities for earning fee based income and the ability to participate in the payment system and provide transaction banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICIs strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly feebased services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the boards of directors of ICICI and ICICI bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI personal financial services limited and ICICI capital services limited with ICICI bank. The merger was approved by shareholders of ICICI and ICICI bank in January 2002, by the high court of Gujarat at Ahmedabad in March 2002, and by the high court of judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI groups financing and banking operations, both wholesale and retail, have been integrated in a single entity.

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OBJECTIVE OF THE STUDYMain objective:Objective of the study is to look for the banking opportunities in FCRA accounts of charitable institutions for the Yes Bank. With the increasing number of organizations taking the FCRA registration, Bank is interested in having the business with the NGOs in Delhi and NCR.

1. Objective of the study aims at the 360 degree knowledge to the target business. It includes the MHA (Ministry of Home Affairs), NGOs and various banks giving such type of services to take detail know how and should reach at a decision to be taken by the bank after concluding the study.

2. To operate the FCRA accounts in accordance with the rules and guidelines mentioned in the FCRA 1976.

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RESEARCH METHODOLOGYResearch in general refers to the search of knowledge. One can also define research as a scientific & systematic collection of information. In simple words research is the careful investigation or enquiry of markets especially through search for new facts in any branch of knowledge.

Analytical ToolsMicrosoft Excel (PivotChart Reports). A PivotChart Report is an interactive chart that quickly combines and compares large amounts of data from tables in excel. PivotChart report was used here to analyze related totals, because there was a long list of figures to sum and there was a need to compare several facts about each figure. Because a PivotChart report is interactive, it has flexibility to change the view of the data to see more details or calculate different summaries, such as counts or averages. Drop fields feature was

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extensively used for the report creation. Essentially it is an area in a PivotChart report where we can drop fields from the Field List dialog box to display the data in the field.

DATA COLLECTIONData can be collected by using two well known methods: Primary & Secondary. In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods include: Questionnaires One-to-one interviews Group interviews Observation Case-studies Diaries Critical incidents Portfolios

Secondary data is data that has already been collected by someone else for a different purpose to yours. For example, this could mean using: Data collected by a hotel on its customers through its guest history system

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Data supplied by a marketing organization Annual company reports Government statistics.

Primary data collection method used for this project.

I used questionnaire method which is also known as scheduling method for primary data collection in the research process. To know the exact details regarding FCRA accounts in Banks 360 degree approach is being used as the FCRA department, Banks, and NGOs are surveyed to take the required

Secondary Data is also used for the purpose of completion of project which includes Internet, Centre for policy Research, and FCRA department.

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SAMPLING AND SAMPLING DESIGNThe procedure by which a few fields are chosen from the data to be studied in such as way that the sample can be used to estimate the same characteristics in the total is referred to as sampling. The advantages of using samples are that it is much less costly, quicker and, if selected properly, gives results with known accuracy that can be calculated mathematically. Even for relatively small samples, accuracy does not suffer even though precision or the amount of detailed information obtained, might. These are important considerations, since most research projects have both budget and time constraints.

Sampling process is taking a sample out of the universe population to take a decision regarding the population. Instead of surveying the whole population we take only a few persons for our topic to have a general idea of the subject related. In the project I took a sample of three Banks for a general idea of the FCRA accounts and made our study reach a conclusion. These three banks are

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1. HDFC BANK 2. STANDARD CHARTERED 3. CORPORATION BANK

For the charitable institutions and NGOs who are reporting to the FCRA Department to be studied I took a sample of 11 organizations from the NCR.

TIME PERIOD OF STUDYJune, 9-14, 2008

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

June, 16-18, 2008

Meeting FCRA, Ministry of Home Affairs official collecting the necessary &current information regarding the Act.

June, 19-23, 2008

Visiting various banks like Standard Charted Bank, HDFC Bank, Corporation Bank and other banks which offer special services to the charitable institutions in regards to FCRA & collecting the necessary details.

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June, 24-4 July, 2008

Meeting the officials of various charitable trusts and such institutions who are registered with FCRA and having the present banking arrangements.

AREAS OF STUDYStudy of the project started from the Regional office of the Bank at 48, Nayaya Marg Chanakyapuri New Delhi. Main centre of the study was around the office like visiting the FCRA office from the Bank and then meeting the different charitable institutions and also the different Banks providing the same services in the area of Delhi and NCR. Area includes the different parts of New Delhi few of them are Connaught Circus Safdarjung Enclave Janakpuri Ashok palace Bhai Veer Singh Marg Lodhi Road

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ANALYSIS AND INTERPRETATION

1. Foreign receipt in the present year.

no foreign foreign reci never

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No Foreign Receipt in Present Foreign Receipt in Present Never received foreign funds

27% 73% 0%

This pie chart shows that only 27% of the organizations have not received any foreign funds in the current year and 73% organizations are receiving funds continuously and there is no organization (0%) which has never received any foreign fund so far.

2. Donor from which country.

Donor from all over the world. Donor only from USA. Donor from USA & others.

55% 27% 18%

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The figure gives an idea of the sample that 55% of the organizations surveyed are receiving funds from all over the world where as the 27% organizations are having foreign receipts or donations or members sending funds to India are only from USA. 18% of the organizations are as such they receiving funds from USA & others like UK, Netherlands etc.

3. Dealing with which Bank for FCRA accounts.

Public Sector Private Sector Foreign Bank

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Account in Public Bank. Account in Private Bank. Account in Foreign Bank.

55% 27% 18%

From the study of various organizations it has been concluded that the 55% organizations are dealing with the public sector Banks which include Indian overseas Bank, State Bank of Hyderabad, PNB, P&S Bank and 27% organizations reported to have their Bank account with the private sector Banks it has ICICI Bank, Federal Bank, Catholic Syrian Bank Ltd. Only 18% of the organizations are having Bank Account in Foreign Banks which has ABN AMRO, American express Bank.

4. Satisfaction level with present Banker.

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Poor Average Good Excellent

9% 9% 73% 9%

From the figure shown above it is clear that most of the organizations visited are satisfied with the services of present Banker as the 73% of the institutions have marked their Banker as good service provider and 9% each has been given to the Poor service, average,& excellent respectively.

5. Foreign Exchange conversion charges taken by Bank.

No charges Nominal Heavily

No extra charges. Charge, but Nominal. Charge Heavily.

27% 55% 18%

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Analysis for the foreign exchange charges is shown in the figure that 27% of the organizations are not paying any extra charges for the foreign receipts in their FCRA accounts, 55% of the organizations are paying the charges but they take them as a nominal charge for the transaction, only 18% of the organizations are paying heavily on the foreign exchange conversion to the Banks.

6. More Services desired from the Banking sector.

Just Satisfied need more. Well satisfied. Desire more benefits.

46% 27% 27%

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Most of the Organizations visited report to be just satisfied with the services provided by their present banker as the figure reaches up to 46% and also they need more from the banking industry. 27% of the institutions reported to be well satisfied with their banker, same is the percentage (27%) in the category which desires more from the banking sector in their product.

7. Investment advisory an important value added.

Investment advisory required. Own separate advisory body. Already getting.

55% 27% 18%

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Figure above shows about the 55% of the organizations are interested in the investment advisory and 27% of the organizations are having their own separate body for the purpose of investments, 18% of the organizations are already receiving such types of advices.

8. Reaction to proposed FCR bill 2006.

In favor of Bill 2006. Against the Bill 2006. Partially favor partially against.

18% 36% 46%

A major proportion of the organizations have two sided opinion on the FCR Bill 2006 as few of the proposals like multiple bank accounts instead of single bank account at

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present, are good for the organizations but few proposals are not favorable for the working of the organizations so it is 46% who are partially favoring it and partially opposing it. But 36% of the organizations are totally against the Bill, & 18% are in the favor of the Bill they say what government do is fine.

9. Requirement in rules of working with Fcra.

No Requirement to change in Rules. Required to be amended.

82% 18%

Most of the organizations are well satisfied with the current rules of the department as 82% of the organizations do not need any change in rules of FCRA only a small proportion i.e. 18% wants to have some amendments in the rules of FCRA.

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10. Auditing done by FCRA Department for the organization.

No Auditing by FCRA Auditing by FCRA in Past

No auditing by FCRA. Auditing in Past.

82% 18%

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According to the 82% organizations in the NCR area no auditing is done by the FCRA department separately for their organizations, the only thing is they file the FC-3 return at the end of each year audited by the certified chartered accountant and for the 18% organizations FCRA department has done auditing some time in past.

11. Problem faced in working with FCRA.

Problem faced No problem.

No Problem faced Problem Faced

100% 0%

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Survey tells there is no problem in working for the organizations with the FCRA department as 100% of the organizations told that there is no problem in working as per rules of MHA.

12. Response level of FCRA department.

Poor Average Good Excellent

0% 18% 82% 0%

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Survey shows that FCRA department is very good at response level to the organizations as 82% of the respondents have marked as good for the FCRA department & only 18% of the organizations mark them as average as they said officers sitting in the FCRA office are not fully trained they should be perfect in that.

13. Use of online services for the filling of returns by the NGOs.

Using Online Services Not Using Online Services

45% 55%

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Figure tells about the use of online services for contacting the FCRA department for filling the FC-3 returns or other returns is about 45% by the NGOs and 55% of the NGOs are just using the traditional way of filling the return to the FCRA department.

14. Reaction on the Proposed Renewal Fees on the FCRA registration in Bill 2006.

Against the Bill. Favor the Bill. Neutral for Bill.

64% 9% 27%

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Figure tells about the view point of the organizations towards the proposal of renewal fees on the certificate of the FCRA after every five years in order to eliminate the organizations from the certification those who are not responding to the department regularly, 64% of the organizations are against the renewal proposal as they are regularly reporting to the department, 9% are in favor as they say whatever government do is alright, 27% of the sample respond that they are neutral towards Bill2006.

Comparison of the FCRA accounts offered by different Banks.

Standard Chartered Bank Savings Account Cash withdrawal allowed Special team targeting NGOs for FCRA accounts. Compliance team at Bombay is reporting RBI and central government for MIS of the accounts. Special care in case of Prior permission obtained by organization from central government.

HDFC Bank Savings Account Cash withdrawal not allowed Consultancy services as extra benefits to the account. Special team for FCRA accounts. Reporting regularly to central government and RBI.

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Special care in case of Prior permission obtained by organization from central government.

Corporation Bank Savings Account Cash withdrawal allowed No special team. International Banking Division (IBD) is contacting central government for FCRA accounts MIS. Special care in case of Prior permission obtained by organization from central government.

CONCLUSION AND SUGGESTION

CONCLUSION

On the basis of study it is concluded that going towards the FCRA product will be a good move by the bank as there is large number of NGOs in NCR region which are actively performing their projects, as they are receiving foreign funds through FCRA accounts in banks then it can be a source of foreign funds for the bank. There were 1120 FCRA accounts which reported to the department in year 2005-06 and these accounts have received 1557 crores in NCR.

SUGGESTION

VANI (Voluntary Action Network India) is the active NGO forum in NCR, It is better to introduce our new product through Forum and target our potential customers through this platform. In this forum most of the NGOs and charitable institution are

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members, in this way Yes Bank can have business with them. Special team is required to target the FCRA accounts of public sector banks as they are not having any special team to handle them, but private sector banks like Standard Chartered, HDFC are having special team for this segment. YBL need to have Special FCRA product Special team Target to public sector banks having FCRA accounts Relationship with FCRA department

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CHARITABLE INSTITUTIONS.

FCRA

DIFFERENT BANKS

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LIMITATIONS OF THE STUDY1. General survey is more biased: General Survey is more biased because few charitable institutions were not ready to give the exact financial details.

2. Less responsive communication: General Survey was found to be less responsive because of the reason that institutions &organizations did not want to respond to the questionnaire due to lack of time & non willingness.

3. Time consuming: The General Survey was time consuming because it take time to reach to different charitable institutions & ask them certain related questions in there different areas.

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ANNEXUREIn the project I took the sample of 11 charitable institutions in the NCR for the purpose of know how of the FCRA account working. 1. CARITAS INDIA CBCI Centre, Ashok Palace, Mr. N.M.Valan (Finance Manager) 2. ADOPT 606, Ansal Bhawan K.G.Marg Ms. Alpana Mukherjee 3. DEEPALYA 46, insti. Area, D-Block Janakpuri Mr. Mathew Jose (Deputy Director Finance) 4. CHETANALYA 9-10, Bhai vir Singh Marg Mr. Thomas K.S.(Finance Manager) 5. Centre for Womens Development Studies 25, Bhai vir Singh Marg Mr. V.N. Soumya Narayan (Administrative Officer) 6. Delhi Bible Fellowship 22, Bhai vir Singh Marg Mr. Samson Masih (Administrative Assistant) 7. Marthoma Church Society 26, Bhai vir Singh Marg Rev. Jayan Thomas 8. National Institute of Urban Affairs India Habitat Centre 4B 1st floor Mr. Diwan Singh (Senior Accountant) 9. Bhai Vir Singh Sahitya Sadan

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Bhai vir Singh Marg 011-23363510 10. Foundation for Panjab Studies Bhai vir Singh Marg 011-23347919 11. Science Olympiad Foundation B-8 Taj apartments Safdarjung Mr. Partap

QUESTIONS FOR CHARITABLE INSTITUTIONS.1. Any sort of foreign income to the trust or any foreign donor?

2. Foreign donor is from which country?

3. Dealing with which Bank for the foreign receipt?

4. Satisfaction level with the services provided by your present Banker! a) Poor b) Average c) Good d) Excellent 5. What type of services is desired from the Bank?

6. Reactions to the F.C.R bill, 2006.

7. Any requirement regarding FCRA by you.

8. Any auditing done by the FCRA department?

9. Online services given by the FCRA department is helpful to organization. a) Yes b) No

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10. Fees on the FCRA registration is proposed in the bill 2006.What is your reaction to that? 11. Response level of the FCRA department to the queries and filling of different returns? a) Poor b) Average c) Good d) Excellent 12. Any problem faced in working of organization with rules of FCRA in FC-3 or etc.

FCRA DEPARTMENT QUESTIONS.1. Basic purpose of FCRA 1976?

2. Any change in law after 1976?

3. What is the status of Bill 2006?

4. Reaction of charitable institutions after the proposed Bill 2006?

5. Banks having the FCRA accounts have to report to RBI or to FCRA?

6. Auditing process by the FCRA to the charitable institutions?

7. Single bank account is allowed for receiving the foreign funds. Why?

8. Fees structure for the registration with FCRA or Prior Permission.

9. Any plan for new offices in India?

10. 30321 registered associations in 2005 how many of them are reporting to you?

11. What are the powers to the officer while granting the registration?

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12. Requirements for obtaining the registration from FCRA?

13. Speculative Business is not allowed out of the foreign contribution what is the checking process followed for that?

14. Banks having FCRA accounts have to report regularly are they reporting to you?

15. Any specifications for opening account in specific Bank?

QUESTIONS FOR BANKS.1. What type of services your Bank is providing to the Charitable Institutions and NGOs?

2. Do you have a separate team targeting the NGOs/charitable institutions?

3. Is that different from the regular services on saving/current account?

4. Do you have FCRA account opened for these NGOs/charitable institutions?

5. How difficult is it to change from one Bank to the other for your present customer (NGOs/charitable institutions)?

6. How much is the operation difficulties in the reporting of FCRA accounts?

7. Are you reporting to the FCRA department regularly for your FCRA customers?

8. How much service oriented are these accounts? 9. Where does the Bank earn from these accounts-foreign exchange

conversions/current account floats income/charges on transaction/investment of surplus funds?

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Bibliography

1. KOTLER, PHILIP; Marketing Management, 11th Edition New Delhi, Prentice Hall of India, 2002. 2. RAMASWAMY, VS & NAMAKUMARI, S; Marketing Management: Planning, Implementation & Control, 3rd Edition New Delhi, Macmillan. 3. ZIKMUND, G WILLIAM, Marketing, 7th Edition, Thomson learning, Mumbai. 4. COOPER & SCHINDLER, Research Methodology Method, TMH,6th Edition. 5. KOTHARI, C.R; Research Methodology, Wishawa Parkashan, 2nd Edition. 6. SALKIND, NEIL, Exploring Research, 3rd Edition, Prentice Hall, NJ, 1997. 7. RAJMOHAN, R; Image Retail, 2nd Edition, 2007. 8. www.yesbank.in 9. www.mha.nic.in

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