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7/30/2019 studyoninvestmentbanking-kotak-110627054753-phpapp02

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STUDY OF INVESTMENTBANKING

BY- PRATHMESHKELUSKAR

R No:- 13.T.Y B&I.


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INDEX Introduction to bank.

Indian banking Introduction.

State bank of India.

Function of bank.

Concept of investment bank.

Role of investment bank.

Investment management. Investment managers and portfolio structures.

Recent trends in investment Banking.


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INTRODUCTION*Introduction to Banks:-

The bulk of all money transactions todayinvolve the transfer of bank deposits. Depositoryinstitutions, which we normally call banks, are at thevery centres of our monetary system. Thus a basicknowledge of the banking system is essential to anunderstanding of how money works.


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Indian Banking:- Introduction The Indian banking can be broadly categorized into

nationalized (government owned), private banks andspecialized banking institutions.

The Reserve Bank of India acts a centralized bodymonitoring and shortcoming in the system.

Conservative banking practices allowed Indian banks tobe insulated partially from the Asian currency crisis.

Indian banks are now quoting all higher valuation whencompared to banks in other Asian countries (viz. HongKong, Singapore, Philippines etc.)


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The journey of Indian Banking System can besegregated into three distinct phases. They are

as mentioned below:

Phase I

The General Bank of India was set up in the year 1786.Next came Bank of Hindustan and Bengal Bank.The East India Company established Bank of Bengal (1809),Bank of Bombay (1840)

And Bank of Madras (1843) as independent units and called

it Presidency Banks.These three banks were amalgamated in 1920 and Imperial

Bank of India was established which started as privateshareholders banks, mostly Europeans shareholders.


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Phase II :- The following are the steps taken by theGovernment of India to Regulate Banking Institutions in

the Country:

* 1949 : Enactment of Banking Regulation Act.

* 1955 : Nationalization of State Bank of India.

* 1959 : Nationalization of SBI subsidiaries.

* 1961 : Insurance cover extended to deposits.

* 1969 : Nationalization of 14 major banks.

* 1971 : Creation of credit guarantee corporation. * 1975 : Creation of regional rural banks.

* 1980 : Nationalization of seven banks with depositsover 200 core.


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Phase III

This phase has introduced many more products andfacilities in the banking sector in its reforms measure.

In 1991, under the chairmanship of M Narasimhama, acommittee was set up by his name which worked forthe liberalization of banking practices.


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State Bank of India (SBI):- . The evolution of State Bank of India can be traced back to

the first decade of the 19th century.

It began with the establishment of the Bank of Calcutta inCalcutta, on 2 June 1806.

The bank was redesigned as the Bank of Bengal, threeyears later, on 2 January 1809.

An important turning point in the history of State Bank of Indiais the launch of the first Five Year Plan of independent India, in

1951.


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Functioning of a Bank :-

Banking Regulation Act of India, 1949 defines Banking as "accepting, for

the purpose of lending or investment of deposits of money from the public

. repayable on demand or otherwise and withdrawable by cheques , draft,

order or otherwise."

Banks essentially perform the following functions :-

1. Accepting deposits is one of the two major activities of the

Banks.

2. Lending money to the public.3. Apart from accepting deposits and lending money, Banks

also carry out, on behalf of their customers the act oftransfer of money - both domestic and foreign.

4. To check out and transfer funds.5. Note issuing.


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Branches:- The corporate center of SBI is located in Mumbai.

The bank boasts of having as many as 14 local head

offices and 57 Zonal Offices, located at major citiesthroughout India.

It is recorded that SBI has about 10000 branches, wellnetworked to cater to its customers throughout India.


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Types of service provide:-

ATM Services

SBI provides easy access to money to its customersthrough more than 8500 ATMs in India.

State Bank of India as well as the Associate Banks State Bank of Bikaner & Jaipur, State Bank of

Hyderabad, State Bank of Indore, etc..

Subsidiaries:-

The State Bank Group includes a network of eightbanking subsidiaries and several non-bankingsubsidiaries..


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The Eight banking subsidiaries are:-

* State Bank of Bikaner and Jaipur (SBBJ) * State Bank of Hyderabad (SBH)

* State Bank of India (SBI)

* State Bank of Indore (SBIR) * State Bank of Mysore (SBM)

* State Bank of Patiala (SBP)

* State Bank of Saurashtra (SBS)

* State Bank of Travancore (SBT)


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Products And Services:-

Personal Banking

SBI Term Deposits SBI Loan For Pensioners

SBI Recurring Deposits Loan Against Mortgage OfProperty

SBI Housing Loan Loan Against Shares &Debentures

SBI Car Loan Rent Plus Scheme

SBI Educational Loan Medi -Plus Scheme


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Concept investment banks.

The banking scenario in India is itself huge, coveringthe different facets of the economy.

By and large, investment banks in India are itself an

institution which generates funds in two differentways.

The first manner in which it works is by drawingpublic funds via the capital market by way of sellingstock in their company.

The other way in which it operates is to seek forventure capital or private equity, as a substitute for astake in their company.


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Introduction:-

An individual or institution which acts as anunderwriter or agent for corporations andmunicipalities issuing securities.

Most also maintain broker/dealer operations,maintain markets for previously issued securities, andoffer advisory services to investors.

Investment banks also have a large role in facilitatingmergers and acquisitions, private equity placementsand corporate restructuring.

Unlike traditional banks, investment banks do notaccept deposits from and provide loans to individuals.also called investment banker


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Role of an Investment Bank

The major work of investment banks includes a lot ofconsulting. For instance, they offer advices on mergers and acquisitions

to companies. The role that an investment bank plays sometimes gets

overlapped with that of a private brokerage house. The usual advice of buying and selling is also given by

investment banks. There is no demarcating line between the investment

banking and other forms of banking in India.

This has been observed majorly of late. All banks nowadays want to provide their customers the

best of services and create a niche for themselves and thatis why apart from investment banks, all other banks too areaiming at making it big


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Defining Short Term Investments:-

A short term investment fund is a fund that earns youa return on your money in a short period of time, suchas one to ten years.

This is different than retirement investing, and it canbe a challenge to find short team, high yield

investments. Good short term investments will have a high interest

rate, allowing you to earn substantial moneyimmediately


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The need for short term investment:-

You might need short term investments if you have apressing need coming up in the near future.If, for example, you might need to have a downpayment for a house or car in a year or two, you could

make use out of short term investment options. Also, you might use this type of fund in replacementof a traditional savings account, because you will earna higher rate of return.


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Main activities:-

An investment bank is split into 3 parts .

.

1:-Front office

2:-Middle office

3:-And back office.


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Typically, an investment banking group nowadays provides,

world-wide some or all of the following services, either in

divisions of the bank or in associated companies within the

group:-

1. Mergers and Acquisition Advisory

2. Private Placement of Debt and Equity

3. Securities Underwriting

4. Management of Capital issues

5. Management of Buyback and takeovers

6. Corporate Advisory Services 7. Project Advisory Services

8. Other services like Restructuring/Sales, Real Estate,Loan Syndication and so on.


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The core services provided by the Investment banks are

in the areas of debt market, equity market and advisory

services:-

The phrase mergers and acquisitions refers to the aspect ofcorporate strategy, corporate finance and managementdealing with the buying, selling and combining of different

companies that can aid, finance. In business or economics a merger is a combination of two

companies into one larger company.

Merger is a tool used by companies for the purpose of

expanding their operations often aiming at an increase oftheir long term profitability.

An acquisition, also known as a takeover, is the buying ofone company (the target) by another. An acquisition maybe friendly or hostile.


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STEPS TO REGISTER FOR INVESTMENT BANK

INTERNET BANKING

Login to www.investbank.ae

Click on INTERNET BANKING

Click on REGISTER NOW

Enter the following information Your CIF NUMBER (First six digits of your account

number)

Your EMAIL ID (this email id must have been registered

with the bank) Your desired INTERNET BANKING USERID

Enter your PASSWORD

Re-enter your PASSWORD to confirm


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Click on the "I accept the above terms and conditions

Click on SUBMIT

Click on the PRINT Button to print the Registration Form. Complete the Registration Form (see section below for Access Rights

restrictions) or have it signed by the authorized signatories andsubmit/fax it to the branch where your account is held.

Branch/bank will verify your details and signatures and send you an

email (on your registered email address) which will carry a link. Click on that link to select your desired PIN

Once you have the password and the PIN you are ready to start usingInvestment Bank Internet Banking.

Authorized User should keep his/her USERID and PASSWORD CONFIDENTIALat all times. He/she MUST not share this with or disclose to ANYONE. AuthorizedUser will be responsible for all transactions conducted using this ID andPASSWORD. It is strongly recommended that the password should be changed

frequently to avoid IMPORTANT misuse


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Investment Management:- Investment management is the professional management of various

securities (shares, bonds and other securities) and assets (e.g., realestate) in order to meet specified investment goals for the benefit ofthe investors.

Investors may be institutions (insurance companies, pension funds,corporations etc.) or private investors (both directly via investmentcontracts and more commonly via collective investment schemes

e.g. mutual funds or exchange-traded funds Investment managers who specialize in advisory or discretionary

management on behalf of (normally wealthy) private investors mayoften refer to their services as wealth management or portfoliomanagement often within the context of so-called "private banking

". The provision of 'investment management services' includes

elements of financial statement analysis, asset selection, stockselection, plan implementation and ongoing monitoring ofinvestments.

Coming under the remit of financial services many of the world'slargest companies are at least in part investment managers andemploy millions of staff and create billions in revenue


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Investment managers and portfolio

structures:- At the heart of the investment management industry are the

managers who invest and divest client investments

A certified company investment advisor should conduct nassessment of each client's individual needs and risk profile.

The advisor then recommends appropriate investments.

Asset allocation The different asset class definitions arewidely debated, but four common divisions are stocks,bonds, real-estate and commodities.

The exercise of allocating funds among these assets (andamong individual securities within each asset class) is whatinvestment management firms are paid for. Asset classesexhibit different market dynamics, and different interactioneffects.


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Recent trends in investment Banking:- In the early 1980s, the SEC introduced and made law a rule that permits

well-known companies to register securities without a set sale date anddelay the sale of the securities until the issuers expect their securities

will have strong prices in the market.

These registrations are known as "shelf registrations and have becomean important part of investment banking.

Shelf financing also contributed to the decline of the historicconnections between specific corporations and investment banks.Nevertheless, it did not change the basic structure of the industry,

which has retained the pyramid shape.

The apex investment houses before the introduction of shelf financing

by and large remained the apex houses afterwards. Contemporaryinvestment banking is also influenced by the growth of institutionalinvestors as key players in the securities market.

Whereas institutional investors accounted for 25 percent of securitiestrade in the 1960s, they accounted for over 75 percent in the 1990s. Inaddition, the securities market has become more global.


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QUESTIONNAIRE

1. What interest rate provided in your bank?2. How to decide marketing strategy by

deciding interest rate?

3. What extra services you provide other thaninvestment banking?

4. What is the scope of investment banking in

future?5. From how many years you doinginvestment banking?


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CONCLUSION


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BIBLIOGRAPHY

REFFERED FROM:-

1. GUIDANCE FROM TEACHERS

2. INTERNET3. BOOKS

4. NEWSPAPER

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