A REPORT ON

NON-RESIDENT INDIAN (NRI) BANKING

AT

KOTAK MAHINDRA BANK LIMITED

BY

SIDHI MEHTA

Under the guidance of

Mr. Anup Pal

A report submitted in Partial Fulfillment of the requirements of

MBA Program of

FACULTY OF MANAGEMENT STUDIES,UDAIPUR

(FINANCIAL SERVICE MANAGEMENT)

ACKNOWLEDGEMENT

I express my sincere gratitude to Kotak Mahindra Bank and Faculty

Of management studies, UDAIPUR which gave me this opportunity to

Carry on my Summer Internship Project.

I am greatly indebted to my project supervisor Mr. Anup Pal for

constant guidance throughout the course of this work and for

providing me all necessary information for my project work. I am also

thankful to Mrs. Chaitali Thakor (assistant manager) for giving me

necessary information at any time.

TABLES OF CONTENTS

Introduction

History of Kotak Mahindra Bank Ltd.

NRI Banking

Types of NR accounts

NRO Account & its benefits

NRE Account & its benefits

FCNR Account & its benefits

Click2remit portal site

Remittances

Modes of Transfer

Transfer charges

Practical experience

Conclusion

Bibliography

KOTAK MAHINDRA BANK:

Established in 1985, The Kotak Mahindra group has long been one of India's most reputed

financial organizations. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship

company was given the license to carry on banking business by the Reserve Bank of India

(RBI). This approval creates banking history since Kotak Mahindra Finance Ltd. is the first

company in India to convert to a bank.

In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the

license to carry on banking business by the Reserve Bank of India (RBI). This approval

created banking history since Kotak Mahindra Finance Ltd. is the first non-banking finance

company in India to convert itself in to a bank as Kotak Mahindra Bank Ltd. The bank has a

base of 8000+ employees.

The Bank offers comprehensive business solutions that include Trade Services, Cash

Management Service and Credit facilities, keeping in mind the needs of the business

community.

HISTORY:

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance

Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak &

Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and

that's when the company changed its name to Kotak Mahindra Finance Limited. Since then

it's been a steady and confident journey to growth and success. 1986 Kotak Mahindra Finance

Limited starts the activity of Bill Discounting

1987

Kotak Mahindra Finance Limited entered the Lease and Hire Purchase market

1990

Started the Auto Finance division

1991

Started the investment banking division. Took over FICOM, one of India's largest financial

retail marketing networks

1992

Entered the Funds Syndication sector

1995

Brokerage and Distribution businesses incorporated into a separate company - Kotak

Securities. Investment banking division incorporated into a separate company - Kotak

Mahindra Capital Company.

1996

The Auto Finance Business had been hived off into a separate company - Kotak Mahindra

Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra took a

significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The

launch of Matrix Information Services Limited marked the Group's entry into information

distribution.

1998

Entered the mutual fund market with the launch of Kotak Mahindra Asset Management

Company.

2000

Kotak Mahindra tied up with Old Mutual plc.for the Life Insurance business. Kotak

Securities launched its on-line broking site (now www.kotaksecurities.com).

Commencement of private equity activity through setting up of Kotak Mahindra Venture

Capital Fund.

2001

Matrix sold to Friday Corporation Launched Insurance Services

2003

Kotak Mahindra Finance Ltd. converted to a commercial bank - the first Indian company to

do so.

2004

Launched India Growth Fund, a private equity fund.

2005

Kotak Group realigned joint venture in Ford Credit; Bought Kotak Mahindra Prime (formerly

known as Kotak Mahindra Primus Limited) and sold Ford credit Kotak Mahindra. Launched

a real estate fund

2006

Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and

Kotak Securities.

INTRODUCTION:

NRI BANKING:

NRI Baking is for those people who are non-resident Indian. Basically the product range includes NRE accounts, NRO Accounts and FCNR Accounts.

While opening a NRI accounts, customer requires the following documents:

(a). Copies of passport pages where name ,address, specimen signature , photograph and visa details are recorded and copy of valid visa/work permit(the visa could be either in the passport or given separately).

(b). Details of existing bank account in India like

Account number Type of account Branch name with full postal address including PIN Code

and telephone number of the branch.

TYPES OF NRI ACCOUNTS

1. NON-RESIDENT ORDINARY(NRO) ACCOUNTS2. NON-RESIDENT EXTERNAL(NRE) ACCOUNTS3. FOREIGN CURRENCY NON RESIDENT(FCNR)

NON-RESIDENT ORDINARY (NRO) ACCOUNTS:

It is ideal way to manage your income originating in India.NRO Accounts available in form of Savings and Term Deposits to manage your income in India. It is partially repatriable. An NRO account accepts both foreign currency and Indian rupee. The time period of an NRO Accounts is from 14 days to 10 years. There are also special products like Max Yield Deposits where a customer can earn a higher return on NRO deposits through DTAA benefits. Taxes currently at 30% plus service tax and education cess on DTAA rates. This account includes checking, saving and fixed accounts. Purpose of NRO account is to deposit the dues earned in India in Rupees and foreign exchange funds. In NRO accounts, minimum balance is to be require to maintained that is of Rs. 10,000/- and deposits of Rs.50,000/- . In NRO Accounts, repatriation is up to USD q million per financial year subject to documentation and conditions current income like rent, dividend, and pension is repatriable subject to CA certificate and proof of nature of income. Loan (against Fixed Deposit) is available up to 85% of the loan amount subject to RBI guidelines. In NRO Accounts joint holder can be Indian residents or NRIs both. Frequency of interest (Fixed Deposit) is quarterly. NRO accountholder can access India (local) debit cum ATM card.

BENEFITS OF NRO ACCOUNTS

1. Two sweep-in facility:

The dual advantage of the attractive returns of a term deposit and the liquidity of saving account. Fund above a pre-set limit in customer saving account are automatically swept into high interest term deposit account. Customer money is, however, completely liquid as they can access their funds in the term deposit account anytime they choose.

2. Auto Renewal of Term Deposits:

Automatically renew the customer deposit on maturity. This ensures that the interest earned is maximized.

3. Overdraft against deposit:

An overdraft of up to 85% against Rupee/forex term deposit. This special overdraft facility against term deposit means that funds maximum liquidity.

4. Repatriation:

Repatriation is up to USD 1 million per financial year subject to documentation and conditions current income like rent, dividend, and pension is repatriable subject to CA certificate and proof of nature of income.

5. Loans (against Fixed Deposits):

Loan (against Fixed Deposit) is available up to 85% of the loan amount subject to RBI guidelines.

NON-RESIDENT EXTERNAL (NRE) ACCOUNTS:

NRE Accounts are fully repatriable. NRE Accounts accepts only foreign currency. Transfers can be done in NRE Accounts from overseas or through NET BANKING and portal website of Kotak Mahindra Bank that is “Click2Remit”. The term period of an NRE Account is 1 year to 3 year. The principal and interest earned in an NRE Account are completely tax free and exempt from Income Tax in India. This Account includes checking, savings, and fixed accounts. Purpose of Account is to deposit foreign funds received from any

travels cheques, foreign currency brought through normal banking channels into account. Accepts maturity proceeds of investments purchased from even NRE/FCNR Accounts. In NRE Accounts, minimum balance is require to maintained of RS.10, 000/- and Deposits of Rs.50, 000/-. In NRE Account, joint holder can only be NRIs. Loan is available up to 85% for loan value up to an upper limit of Rs.100 lakh per RBI guidelines. A chequebook for savings accounts is available. Frequency of interest (Fixed Deposit) is quarterly.NRE Accountholder can access international debit cum ATM card.

BENEFITS OF NRE ACCOUNTS :

1. Net Banking:

Log to www.kotak.com to have complete access and control over finances, anytime,and from any place in the world.

2. Global Debit Card: This account holder can access international debit cum ATM Card. They can access this card any where in the world.

3. Tax On Interest:

The principal and interest earned in an NRE Account are completely tax free and exempt from Income Tax in India.

4. REPATRIATION:

Its is freely repattriable.

5. LOAN(against Fixed Deposits) : Loan is available up to 85% for loan value up to an upper limit of Rs.100 lakh per RBI guidelines.

FOREIGN CURRENCY NON RESIDENT(FCNR):

FCNR Deposits delivers the three way benefits of attractive returns,complete repatriation and zero tax liabilities. It maintain the accounts in the following major currencies which are as follows:

a) USDb) GBPc) EURd) JPY

It protect the money from exchange rate fluctuations. Tax deducted at source (TDS) certificates are issued. Purpose of account is to deposit foreign funds received from any travel’s cheques, foreign currency, other NRE/FCNR accounts and proceeds of repatriable investment. The term period of FCNR is 1 year to 5 year. It is fully repatriable. Loan against fixed deposit is available up to 85% for loan value upto an upper limit to Rs. 100 lakhs per RBI guidelines. In this, minimum balance is require to maintain that is USD 1000, GBP 500, EUR 1000 , JPY 110,000. In this joint holders can only be non-indian residents(NRIs).

BENEFITS OF FOREIGN CURRENCY NON-RESIDENT:

1) TENURE:

The FCNR Term Deposit can be held for minimum period of one year and maximum period of five years.

2) MANDATE FACLITY:Appoint a family member or trusted friend to manage the account.

3) AUTO RENEWAL: automatically renew the deposit on maturity. This ensures that the interest earned is maximized.

4) OVERDARFT AGAINST DEPOSIT: an overdraft of up to 85% against Rupee/forex term deposit. This special overdraft faclility against term deposit means that funds maximum liquidity.

5) REPATRIATION:It is freely repatriable.

6) CONVIENCE BANKING:Manage customer term deposit account with ease and efficiency.

7) NET BANKING:Time and place is of no consequence when customer want to access their finance. Just log on to www.kotak.com

8) PHONE BANKING:Just dial 91-22-55006022 from any corner of the world for account inquires, transaction and details on services offers by kotak bank.

Features of NRE , NRO and FCNR:

CLICK2REMIT:

www.Click2remit.com is portal website of kotak Mahindra bank limited through which customers can transfer money easily. This is completely online mode of sending money from overseas to india. Customers needs to follow three steps to transfer money to india that is:

Firstly they have register on www.click2remit.com by providing important details about themselves.

Secondly, they have to provide their bank details. Thirdly, provide the information about the receiver’s account

details(with any bank) in india.

Any person who wishes to make payment (in foreign currency) to an individual in india (in Indian rupees) can use click2remit money transfers. Customer can make remittance in nine currencies that is U.S.Dollars, Canadian Dollars, Singapore Dollars, Pound Sterling, Euro, Japanese Yen, UAE Dirhams, Swiss Franc and Australian Dollars.

REMITTANCES:

Following are four online remittances through which customer can easily transfer the money by using the portal website of kotak Mahindra bank limited that is www.click2remit.com.

Direct Transfer

Bank Transfer

Wire Transfer

Cheque Transfer

DIRECT TRANSFER:

Direct transfer uses ACH clearing, full form of ACH is Automated Clearing House. In the United States, the ACH Network is highly reliable and efficient nationwide electronic funds transfer system which enables interbank clearing of transactions among participating financial institutions. customer may use their checking account or their saving account with US Bank affiliated to the ACH network.

PROCEDURE TO MAKE DIRECT TRANSFER: Customer have to register themselves their personal details on

click2remit. They also need to enter their bank account details that is bank account number and ABA Routing number that would enable them directly debit their account using the ACH facility.

On the basis of customer authorization bank would initiate two-sub dollar credits and one sub-dollar debit(equivalent to sum of the two sub-dollar credits) on their account.

Once the sub dollar entries are reflected in customers account, they need to verify the same on click2remit, and after successful verification , the account is immediately activated. On activation they can initiate a transaction.

ABA/ROUTING NUMBER

The American Bankers Association Number(ABA) or Routing number is also called Routing Transit number. It is nine digit identification number assigned to each financial institution and each branch office of that financial institution. Without the ABA/Routing number, transmitting funds is not possible. The ABA number can be found on the bottom of the cheque.

WHEN WILL THE MONEY BE DEBITED FROM THE CUSTOMER ACCOUNT:

Money will be debited from customer account on the second or third working day from the date when the customer make the transaction.

Do take account all holidays like weekends, public holidays, in india ans the US while calculating working days.

CHARGES FOR USING DIRECT TRANSFER: Remittance Service charge:

A nominal USD 2 charges (inclusive of service tax 10.3%) for amounts of USD 1000 or below for electronic credits into bank accounts( over100 key banks in india), for credit to credit card accounts no remittance service charge applicable for higher amounts.

Foreign Currency Conversion Charge:A nominal charge of rs.25 ( service tax @ 10.3% will be additional) will be levied on every remittance request where foreign currency conversion is carried out. This charge would be deducted from the amount to be paid to the beneficiary.

EXCHANGE RATE USED IN DIRECT TRANSFER: Direct transfer from click2remit offers customer the best

exchange rates. They check indicative exchange rates by clicking on the transfer charges link on the click2remit home page. Actual rates applied while converting the dollar amount transferred by customer into Indian rupees may be different from displayed rates because of intra-day movements in the rupee dollar exchange rate.

For guaranteed rate transfer customer get comfirmed USD/INR rates during the course of their transaction for current dated requests. The exchange rate that is applied fir their current dated guaranteed rate transfer transaction may be different from the

indicative exchange rates displayed on the exchange rate calculator.

BANK TRANSFER:

Bank transfer is online money transfer facility for remitters in Europe. Remitters having internet banking facility for their checking accounts with banks in UK/Germany can use this bank transfer.

Additionally, only customers of banks offering the following will be able to use this facility:

Online third –party funds transfers/payments on their internet banking website

A “Remarks or “message to receipt” field while making the online third- party transfer, to enter the tracking number generated on click2remit.

Currencies supported GBP and EURO.

BENEFITS OF BANK TRANFERS:

Electronic transfers into any kotak Mahindra bank account with 250 branches in india.

Electronic transfers into accounts with nearly 100 other banks and over 70,000 banks branches in india.

Electronic transfers into any Visa Debit/ credit card account in india.

CUSTOMER NEED TO ENTER A NEW TRACKING NUMBER ON THEIR INTERNET BANKING ACCOUNT FOR EVERY NEW TRANSACTION:

If customer are sending money to the same beneficiary again, they must make a new request on money transfer and enter the new tracking number in their internet banking account.

WHEN BENEFICIARY RECEIVE THE MONEY:

It will take upto 2 days working days to credit an kotak ank account from the moment customer transfer the funds from the overseas bank account.

For the third party banks a additional working day or more may be taken depending on the policies of that bank.

WIRE TRANSFER:

It is easy transfer. Internet-based wire transfer mechanism that’s much more efficient than offline wire transfers. Errors are minimized with a unique tracking number- given to cutomer each time customer use.

Online wire transfer that allows customer to check the status of their remittance online at any time. Currently, customer can remit money in nine currencies which are AED, AUD, CAD, CHF, EURO, GBP, USD, SGP. However, payments to their beneficiary in india will be made only in Indian rupees.

EXCHANGE RATE WILL BE APPLIED ON CUSTOMER REMITTANCE:

The exchange rate prevalent on the day their funds are converted to Indian rupees is the rate that will be applied on their remittance. Bank online calculator will let know the customer about the prevailing exchange rate whenever customer book their remittance in order that customer have fair idea of how much their beneficiary in india can expect to receive in Indian rupee.

CUSTOMER HAVE TO INFORM TO THEIR LOCAL BANK:

Once the transaction process is complete on the site, customer will get a screen showing the remittance instruction with bank copy and a customer copy. Customer need to take a printout of bank copy, fill in the necessary details, and submit it to their local bank with their sign, along with their payment instructions. The customer copy is for their reference and customer can keep it with them.

WHEN WILL BENEFICIARY WILL RECEIVE THE MONEY:

It will typically take upto 2 working days to credit and kotak bank account from the moment customer transfer funds from their overseas bank account.

For third party a additional working day or more may be taken depending on the policies of that bank.

CHEQUE TRANSFER:

Cheque transfer is money transfer option through which customer can send money to india by mailing a foreign currency cheque – drawn on any local bank- to P.O Box in their country. It is currently available for remiiters in the United States. Customer should not send Cashier’s cheques since they will not be processed.

PROCEDURE OF CHEQUE TRANSFER : Register on click2remit, click on check option providing

relevant dtails pertainting to the amount customer would like to send, their bank details and their beneficiary’s details.

Print the remittance instruction form after customer complete their transaction and attach it to their check.

Post both the remittance instruction form and their check to bank collection boxes in their country at the address provided.

The bank will clear their check in their country and bank will dispatch their remittance to their beneficiary once the bank receive clear funds.

BEFORE MAILING CHECK TO ANY OF KOTAK BANK COLLECTION BOXES ENSURES FOLLOWING: Write the date in keeping with the format in their country. The cheque is payable in to ‘Kotak bank a/c beneficiary name. Check amount should state the exact amount customer entered

on this site while booking their remittance. On the memo area of their check, mention their unique

“transaction Reference Number” Ensure that check is not post dated Mailing address for the check “Kotak Mahindra Bank,PO Box

11448A New York 10286 1448”

CLICK2REMIT-MODES OF TRANSFER:

WIRE TRANSFER

BANK/DIRECT TRANSFER

CHECK LOCK BOX

REMARKS

US Available Available(ACH)

Available All modes have been activated

UK Available Available(Net Transfer)

NA Popular modes available

GERMANY Available Available(Net Transfer)

NA Popular modes available

CANADA Available NA NA ACSS will be enabled

SINGAPORE Available NA NA GIRO will be enabled

AUSTRALIA Available NA NA Bank transfer will be enabled

JAPAN/SWISS/UAE

Available NA NA Popular modes available

CLICK2REMIT-TRANSFER CHARGES:

CURRENCY

TRANSACTION AMOUNT SLABS

C2R R2I M2I

USD 0-500 USD 2 USD 3 USD 2501-1000 USD 2 USD 5 USD 21000 and above No charge USD 9 No charge

GBP 0-500 GBP 2 GBP 3 GBP 2501-1000 No charge GBP 5 No charge1000 and above No charge GBP 5 No charge

EUR 0-800 EUR 2 EUR 2 EUR 2800 and above No charge EUR 3 No charge1000 and above No charge EUR 5 No charge

JPY 0-10,000 JPY 1000 JPY 1000 NA10,000 & above JPY1000 JPY 1000 NA

AUD 0-1500 AUD 5 AUD 6 AUD 51500 & above No charge AUD 12 No charge

SGD 0-1000 SGD 5 SGD 6 SGD 51001-2000 SGD 5 SGD 6 SGD 52000 & above No charge SGD 6 No charge

PRACTICAL WORK DONE:

According to work allotted to me, I need to update the customer’s data regarding their current balance as well as updating their preferred

contact number to get in contact with the customer and inform them regarding their account status.

I made interaction with customer informed them about their account details and even explained them about non- maintenance charges if an average balance is not maintained in their respective account.

Get in calling them and told them about the transfer procedure. Also explain about the how they can make online transfer through overseas.

Call to customer at their convenient time as per informed by international calling codes and their timing to call respective country that is as follows:

CONCLUSION

As per my experience in the NR banking department I came to know about the various transfer procedures that are at present available in the international market i.e. the remittances available. Also I came to know about the problems & difficulties that the NR customers face while making online transfers.

Kotak Mahindra Bank ltd. is having widespread transfer modes & NR products. It has various facilities that provide convenience to the customers residing in far-away countries for remitting their money to India.

BIBLIOGRAPHY

1.)www.kotak.com

2.)www.google.com

3.)www.wikipedia.com

4.)www.click2remit.com