SUMMER TRAINING PROJECT REPORT

ON

OVERALL ANALYSIS OF VARIOUS MUTUAL

FUNDS,DEMAT ACCOUNT AND LIFE INSURANCE
POLICIES OF RELIANCE MONEY, MORADABAD
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE MASTERS DEGREE IN BUSINESS ADMINISTRATION
OF

UTTARAKHAND TECHNICAL UNIVERSITY, DEHRADUN

SUBMITTED TO:
INTERNAL GUIDE
Name: Ms Nebidita Biswas
Designation: Lecturer
IMS
Dehradun

EXTERNAL GUIDE
Name:Ms Payal Agarwal
Designation: Centre Manager
Company Name: Reliance Money
Location: Moradabad
SUBMITTED BY:

NAVEEN CHANDRA JOSHI

(MB08037)

INSTITUTE OF MANAGEMENT STUDIES-DEHRADUN

BATCH 2008-2010
1

ACKNOWLEDGEMENT

In completing my project, I am very fortunate to have the Result of an extensive

survey whose participants offered suggestions based on their actual use of product.
My first appreciation and thanks goes to
Cluster Managers
Centre Managers
Employees of reliance money
They have given their precious time in a very polite and co operative manner for my
internship and the project.
In the chain I am also immensely thankful to my summer internship guide
Ms. Payal Agarwal, Center Manager Reliance Money, Dehradun and my internal guide Ms.
Nebidita Biswas (Lecturer, IMS-Dehradun), for their enlightening guidance and constant
inspiration and keen interests shown during my summer internship and in preparing of my project.
I deliberately profound my gratitude to her.

NAVEEN CHANDRA JOSHI

CERTIFICATE
I have the pleasure in certifying that Mr. NAVEEN CHANDRA JOSHI is a bonafide student of
MBA IInd Semester of the Masters Degree in Business Administration (Batch2008-10)of Institute
of Management Studies, Dehradun under Uttarakhand University Roll No. MB08037

He/She has completed his project work entitleled OVERALL ANALYSIS OF VARIOUS
MUTUAL FUNDS, DEMAT ACCOUNT, AND LIFE INSURANCE POLICY OF
RELIANCE MONEY under my guidance.

I certify that this is his original effort & has not been copied from any other source. This project
has also not been submitted in any other Institute / University for the purpose of award of any
Degree.

This project fulfils the requirement of the curriculum prescribed by this Institute for the said
course. I recommend this project work for evaluation & consideration for the award of Degree to
the student.

Signature

Name of the Guide : Nebidita Biswas

Designation
Date

:
:
3

COMPANY CERTIFICATE

Executive summary

With gratitude to almighty I thank this opportunity to pen down my experience during
the execution of summer training and presenting the project report. The project is the
part of my partial fulfilment of my MBA curriculum.

As RELIANCE is doing splendidly well in the sector of MUTUAL FUNDS, DMAT

ACCOUNT, LIFE INSURANCE but staying competitive in todays dynamic business
environment means finding new ways to reduce cost while maximizing the value
of your resources.

I took the responsibility to sell the various financial products like MUTUAL FUNDS, DMAT
ACCOUNT, LIFE INSURANCE offered by reliance money.

After undergoing the training about the product and operational features I started
exploring the product and contacted the prospective customer by way of tele calling,
e-mails, corporate presentation, my primary aim was to give better options to the
prospective customers by offering them products specialized features & its unique
Incomparable qualities in the services provided by Reliance Money in MUTUAL
FUNDS, DMAT ACCOUNT, LIFE INSURANCE.

Table of Content

Sr. No.

Details

Page No.

Introduction about the industry

Introduction about the company

14

SWOT Analysis

29

Demat Account

33

Mutual Fund

38

Insurances

54

Strategies

67

Achievements

74

Research Methodology

75

10

Learning and experiences

80

11

Finding and analysis

83

12

Limitations

89

13

Conclusion

92

14

Recommendations

94

15

Bibliography

96

15

Annexure

97

TABLE OF FIGURES

Sr. No.

Details

Page No.

Figure 1(a)

77

Figure 1(b)

78

Figure 1(c)

78

Figure 1(d)

79

Figure 1

84

Figure 2

85

Figure 3

86

Figure 4

87

Figure 5

88

INTRODUCTION

ABOUT THE INDUSTRY

The Indian financial sector is on a roll. Driven by a strong investor interest and an expanding
market, the Indian stock market rose to record levels, with the popular sensex crossing 21,000 and
Nifty crossed the 6,000 mark for the first time.
The industry was also becoming more vibrant, with new types of products and services being
offered to meet the needs of the booming economy. For example, in the derivatives market, the
notional principal amount outstanding has more than trebled between March 2005 and June 2007
to US$ 24.09 billion from US$ 6.836 billion.
The buoyancy in the economy was also estimated to lead to a four-fold increase in India's
investable wealth from US$ 250 billion in 2007 to US$ 1 trillion. Simultaneously, according to a
report by Client, an international consultancy firm, India's wealth management will rise to an
estimated 42 million by 2012 from about 13 million in 2007.
Clearly, there is huge potential in this segment. Significantly, wealth management revenues are
expected to account for 32-37 per cent of the total full-service financial institutions by 2012. The
market is also expected to undergo a structural transformation with organized players increasing
their market share.

Stock Markets
The year 2007 saw Indian stock markets scaling new peaks. It has emerged as the third best
performing market in the world with a dollar return of 71.23 per cent. The popular Bombay Stock
Exchange (BSE) benchmark index, sensex, also posted its highest ever absolute gain of 6500
points in over two decades.
This performance of Indian stock markets has led to the total investor wealth of Bombay Stock
Exchange (BSE) surging to a record high of over US$ 1.7 trillion, with an average increase of over
9

US$ 10.18 million in every minute of trading during 2007. At the end of 2006, the total market
capitalization stood at US$ 812 billion.
Simultaneously, the National Stock Exchange (NSE) has climbed to the top spot in stock futures
contracts and number-two slot in the index futures segment in the world.
According to Ernst & Young, India was also the fifth largest market in terms of number of IPOs
and seventh largest in terms of the proceeds for the year. Indian companies raised a whopping US$
11.48 billion through public issues in 2007, which is 83 per cent higher than US$ 6.28 billion
mobilized in 2006.
The robust performance of the Indian stock markets can also be seen in the huge increase in the
funds mobilised by the corporate India. During 2007-08, India Inc mobilised a whopping US$ 8.13
billion through issue of shares on rights issue, which is almost an eight-fold increase over US$
926.32 million raised in 2006-07. In fact, the mobilisation of the funds in 2007-08 was more than
the combined mobilisation of the preceding 12 years. Simultaneously, a whopping US$ 13.07
billion has been raised through by India Inc through public issues, according to data compiled by
Prime Database. This is almost twice that of US$ 6.25 billion mobilised in 2006-07 and the highest
ever in the last six years. While initial public offerings mobilised US$ 10.34 billion (about 79.14
per cent), follow-on public issues mobilised US$ 2.53 billion.

Private Equity
The year 2007 was a watershed for private equity market, which has emerged as the most preferred
mode of fund mobilization for India Inc. The capital mobilised through this route was higher than
the funds mobilized through IPOs, follow-on issues and qualified institutional placements put
together.
India, in fact, topped the Asia private equity chart for the first time in 2007 in terms of aggregate
deal value. According to Grant Thornton, a total of US$ 17.14 billion was mobilised through 386
deals by India Inc in 2007, compared to US$ 7.8 billion in 2006. Real estate, infrastructure,
banking and financial services were the dominant sectors attracting about 55 per cent of the total
private equity investments.
10

The growth continues apace in 2008. During January-March 2008, private equity firms invested
about US$ 3.3 billion across 97 billion, which was 22.22 per cent higher than the US$ 2.7 billion
clocked in the corresponding period last year.
A study by global consulting firm Boston Analytics, the average deal size has increased from US$
8.4 billion in 2003 to US$ 36.8 billion in 2007. And driven by the robust economic growth and
attractive market valuations, private equity investments are estimated to continue strongly through
2010.

Structured Finance
India has emerged as the fastest growing market in the Asia-Pacific region for structured finance, a
process of arranging funds by banks and other entities through partly selling their loan books. It
was also the second largest market for domestic issuance in the structured finance market.
Within this market, Asset Backed Securities (ABS) market has been the dominant segment than
Residentially Market Backed Securities (RMBS). This market has been growing at a frenetic pace
ever since the RBI issued revised guidelines on securitisation in 2006.
For example, according to Moody's Investors service, domestic structured finance transactions
grew by a whopping 90 per cent during the first half of 2007 to US$ 5.5 billion compared to US$
2.9 billion in the corresponding period in 2006. While ABS accounted for 64 per cent of the total
issuances, securitisation of single corporate loans accounted for 20 per cent.

Mutual Funds
India is also one of the fastest growing market for mutual funds industry attracting a host of global
players. The combination of increasing number of fund houses (along with new schemes) and
11

increase in the number of people parking their savings in mutual funds has resulted in total funds
mobilisation increasing at a whopping 124.93 per cent during 2007-08 to stand at US$ 1.11 trillion
as against US$ 485.13 billion in 2006-07.
The average assets under management (AUM) of the mutual fund industry for March 2008 stood at
US$ 134.76 billion as against US$ 89.86 billion at the end of 2006, representing a year on year
growth of 49.96 per cent. Continuing the growth, the Indian mutual funds industry is expected to
grow at a CAGR of 30 per cent in the next three years to become a US$ 241.79 billion industry by
2010 from US$ 118.85 billion in July 2007. This would be on the back of 25 per cent growth rate
between 1999 and 2007. Consequently, market penetration in the MF industry would more than
double by 2010 from about 4 per cent in 2007.

Banking
The burgeoning economy, surging foreign investment, financial sector reforms and a favourable
demographic profile has led to the Indian banking industry emerging as one of the fastest growing
in the world. The industry's business grew at a CAGR of 20 per cent from US$ 471.11 billion as of
March 2002 to US$ 1175.61 billion by March 2007. Significantly, the newly licensed private
sector business has grown almost twice (1.75 times) as that of banking industry as a whole, leading
to their share in total banking business increasing from 9 per cent in 2001-02 to 16 per cent in
2006-07.
This boom in the banking industry has propelled nine Indian banks to the list of top 50 Asian
Banks, as per this year's Asian Banker 300 report. Similarly, seven Indian microfinance institutions
find place in Forbes list of World's Top 50 Microfinance Institutions. Despite such impressive
performance, the potential for further growth is huge considering the fact that India has second
largest financially excluded households (about 135 million) in the world. In fact, according to
Boston Consulting Group, India is the fastest growing incremental revenue pool in the world.

Insurance
The liberalization of the rules for the entry of domestic and foreign players has had a favorable
impact on this sector, leading to premium collections growing by 19.9 per cent in 2006-07,
12

compared to the world average of 2.9 per cent. Consequently India became the 15th largest
insurance market from 19th in 2005.
This growth looks particularly impressive when seen against the fact that the combined penetration
of both life and non-life is less than 2 per cent of the GDP compared to world average of 7.52 per
cent. Clearly, the scope for growth is enormous.
With increasing per capita income, insurance penetration and entry of new players, the Indian
insurance industry is estimated to grow to US$ 50.9 billion by 2010 from around US$ 12.72 billion
in 2007. The private players are likely to see a growth rate of 140 per cent during this period.

Debt Market
While the Indian financial sector was dominated by the stellar performance of the stock markets,
the Indian debt market had its own share of excitement. India Inc increased its collections through
the debt market by as much as 53.84 per cent to US$ 20 billion in 2007 from US$ 13 billion in
2006. According to a report by Goldman Sachs, with insurance, mutual funds and pension sector
experiencing rapid growth, India's debt market is estimated to grow four fold, from about US$ 400
billion (45 per cent of GDP) in 2006 to about US$ 1.5 trillion (about 55 per cent of GDP) by 2016.
Significantly, the non-government sector is expected to grow from US$ 100 billion in 2006 to US$
575 billion in 2016, increasing its share in GDP from 10 per cent to 22 per cent.

ABOUT THE COMPANY

Company Profile
13

The Reliance Anil Dhirubhai Ambani Group is among Indias top three private sector business
houses on all major financial parameters, with a market capitalization of Rs 100,000 crore (US$ 22
billion), net assets in excess of Rs 31,500 crore (US$ 7 billion), and net worth to the tune of Rs
27,500 crore (US$ 6 billion)
Across different companies, the group has a customer base of over 50 million, the largest in India,
and a shareholder base of over 8 million, among the largest in the world.
Through its products and services, the Reliance - ADA Group touches the life of 1 in 10 Indians
every single day. It has a business presence that extends to over 4,500 towns and 300,000 villages
in india and five(5) continents across the world. The interests of the group range
from communications (Reliance Communications) and financial services (Reliance Capital Ltd), to
generation, transmission and distribution of power (Reliance Energy), infrastructure and
entertainment.

Dhirubhai H. Ambani

Founder Chairman Reliance Group

December 28, 1932 - July 6, 2002

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader
in the materials and energy value chain businesses. He is credited to have brought about the equity
cult in India in the late seventies and is regarded as an icon for enterprise in India. He epitomized
the spirit 'dare to dream and learn to excel'.
Reliance Today

14

* The name of Reliance Trade has been changed to Reliance Securities.

History of Reliance Capital Ltd.

15

Reliance Capital is one of Indias leading and fastest growing private sector financial services
companies, and ranks among the top 3 private sector financial services and banking companies, in
terms of net worth.
The company has interests in asset management and mutual funds, life and general insurance,
private equity and proprietary investments, stock broking and other activities in financial services.
RCL is registered as a depository participant with National Securities Depository Ltd (NSDL) and
Central Depository Services Ltd (CDSL) under the Securities and Exchange Board of India
(Depositories and Participants) Regulations, 1996.
RCL has sponsored the Reliance Mutual Fund within the framework of the Securities and
Exchange Board of India (Mutual Fund) Regulations, 1996.RCL primarily focuses on funding
projects in the infrastructure sector and supports the growth of its subsidiary companies, Reliance
Capital Asset Management Limited, Reliance Capital Trustee Co. Limited, Reliance General
Insurance Company Limited and Reliance Life Insurance Company Limited.
As of March 31, 2005, the companys investment in infrastructure projects stood at Rs. 1071
Crores. The investment portfolio of RCL is structured in a way that realizes the highest post-tax
return on its investments.

THEIR PARENTAGE

Reliance Money is a part of Reliance Capital Limited

16

One of India's leading & fastest growing private sector financial services companies

Ranks among the top 3 private sector financial services companies, in terms of net worth

With interests in Asset Management and Mutual Funds, Life and General Insurance, Credit
Cards and other activities in financial services.

Reliance Capital

Reliance Money

Reliance Mutual Fund

Reliance Life Insurance

Reliance Consumer
Finance

Reliance General Insurance

About Reliance Money:-

17

The official launch of Reliance Money was announced on Third of May 2007.Reliance Money is a
group company of Reliance Capital; one of India's leading and fastest growing private sector
financial services companies, ranking among the top 3 private sector financial services and
banking companies, in terms of net worth. Reliance Capital is a part of the Reliance Anil
Dhirubhai Ambani Group.
Reliance Money is a comprehensive electronic transaction platform offering a wide range of asset
classes. Its endeavor is to change the way India transacts in financial markets and avails financial
services. Reliance Money is a single window, enabling you to access, amongst others in Equities,
Equity & Commodities Derivatives, Mutual Funds, IPOs, Life & General Insurance products,
Offshore Investments, Money Transfer, Money Changing and Credit Cards.

Now a days Reliance Money is driven by ethical and dynamic process for wealth creation.
Based on this, the company started its endeavor in the financial market.
Reliance Money Limited (A Reliance Capital Company) through Reliance Securities Limited,
Reliance capital Limited, Reliance Commodities Limited and Reliance Insurance Advisory
Services provides integrated financial solutions to its corporate, retail and wealth Management
clients. Today, we provide various financial services which include Investment Banking,
Corporate Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance and
Mutual Funds. Plus, theres a lot more to come your way.
Reliance Money is proud of being a truly professional financial service provider managed by a
highly skilled team, who have proven track record in their respective domains.

18

Management:Reliance Money team is led by a very eminent Board of Directors who provide policy guidance
and work under the active leadership of its CEO & Managing Director and support of its Central
Guidance Team.

Board of Directors
Following is the chart of the Board of directors of Reliance Money Ltd.

Amitabh Chaturvedi,, Vice-Chairman

Amitabh Chaturvedi, an FCA, has over 24 years of experience in finance and the
capital markets. Amitabh is also the Director of Reliance Capital Asset Management
Limited.

Shri C. P. Jain

Shri C.P. Jain, aged 61 years, is the former Chairman and Managing Director of
National Thermal Power Corporation (NTPC).

Rajendra Chitale, Independent Director

Rajendra P. Chitale, an eminent Chartered Accountant, is the Managing Partner of

M/s M. P. Chitale & Co. He is a Director on Boards of the National Stock Exchange
19

of India (NSE), Asset Reconstruction Company (India) Ltd, Hinduja TMT Ltd and Gujarat
Ambuja Cements Ltd.

What does Reliance Money actually deals in?

RELIANCE MONEY SHARE TRADING ACCOUNT:Reliance money unlike other brokering houses has introduced a new prepaid system of brokerage
for the share trading in which it provides the lowest form of brokerage charged from an investor.
Reliance money has introduced three prepaid schemes for the stock market investors which work
in the following way:
In the first scheme a fee of Rs. 1000 is charged and a validity of two months is provided in which
an investor is given a limit of one crore (out of which he/she can do a delivery turnover of Rs. 10
lacks and a non delivery of Rs. 90 lacks). In this scheme another offer has been added to investors
in which an investor is charged a fee of Rs. 500 and a validity of one year is given to an investor to
transact up to five lacks including the delivery and non delivery.
In the second scheme a fee of Rs. 2500 is charged and a validity of six months is provided in
which an investor is given a limit of three crore (out of which he/she can do a delivery turnover of
Rs. 30 lacks and non delivery turnover of Rs. 2.7 crore).
In the last two schemes time validity is same, but access fee and turnover validity is different. In
one scheme fee is Rs. 5000 and provided a validity of one year in which investor is given a limit of
Rs. Seven crore (out of which he /she can do delivery turnover of Rs. 70 lacks and non delivery
turnover of Rs. 6.3 crore).
In second scheme fee is Rs.10,000 and provided a validity of one year in which investor is given a
limit of Rs. 20 crore (out of which he/she can do delivery turnover of Rs. 2 crore and non delivery
turnover of Rs. 18 crore).
20

These are the five cards offered by Reliance money to attract totally a large number of potentially
untapped investors. Apart from this the account opening charges are Rs. 750 one time and four
accounts namely Trading Demat Forex and Commodity are provided to the investor. Reliance
Money is offering a brokerage charge of 7.4 paisa on every Rs 100 worth of delivery-based trades,
and 2 paisa on non-delivery trades, which is the lowest in the industry so far.
Currently, the average brokerage charge for delivery-based trades is anywhere between 15 paisa
and 25 paisa for every trade worth Rs 100, while for non-delivery trades it is around 3-5 paisa.

Following are also the main features of this share trading account provided by
Reliance Money: 1. Flexibility to access Reliance money services in multiple ways through Internet,
Transaction kiosk, Call and transacts or seeks assistance through business partners.
21

2. This is a safeguarded account Reliance money provided an electronic token that

flashes a unique security number in every thirty two (32) seconds. This number works as a third
level password (including the login ID and password keeping the account safe from any
unauthorized access.
3. Flexibility to transact in Equity and commodity derivatives, offshore investments,
mutual funds, IPOs, Life insurance and General insurance either through online or through
channel partners.
4. With the help of this account investors can access to their banking, trading and
Demat accounts without the hassle of writing cheques. Reliance money has tied up with AXIS,
HDFC, ICICI, and IDBI bank to link this share trading account for the investors.
5. Annual maintenance charge of just Rs. 50/- per annum and free on mobile tips.

These were some of the features of Reliance money share trading account.
A. Customer can do the share trading through trading kiosks installed by
Reliance money, through internet, through Business associates of Reliance
money.
22

Working of Reliance money:-

At the Macro Level

At the micro level

At Reliance money MORADABAD the following hierarchy exists:1. Three Centre managers.
2. Ten to twelve business development executives under each centre manager.
23

3. Business associates under each centre manager their number depending upon the area
allotted to each centre manager.
4. Remisars under each centre manager.
5. Team leader and PFCs under him/her for life insurance.
6. One customer support Executive and one Senior Finance executive.

Centre Manager:
The centre manager is the heart of the office who acts as a connection between Head office
(MUMBAI) National head, Regional head. The clients, Remisars , Business associates and
the business development executives. The centre manager is responsible for the following
functions:
1. Organizing all the BDEs business associates and remisars under one banner.
2. Making sure that the BDEs, business associates and remisars are carrying out their
functions well i.e. expanding the business in form of selling the shares trading
accounts, mutual funds, selling general along with life insurance policies.
3. Planning strategies for increase the business (i.e. installation of canopies at the right
place, appropriate advertising in different business Expos and corporate meets, etc.)
4. Interviewing and selecting business development executive for the organization.
5. Identifying the potential agents in the market and making them the business associate or
remisar of Reliance Money for good business prospects.
24

6. Training and new BDEs and the remisars about the product and how to approach the
clients.

Business Development Executive (B.D.E):

A business development executive is the main working hand for the company. It is the
B.D.E who is responsible for expanding the business for Reliance money. A B.D.E is
expected to sell the share trading accounts, mutual fund, general and life insurance policies
and other financial products directly to the clients either through cold calling or through
installation of canopies or through references from other clients and many other ways
including the walk-ins.

Business Associates:
The business associates are like an authorized franchisee for company. At Reliance money
the business associates are given the freedom to maintain their own separate office and
appoint staff but not on the roll of the company. They are independent to carry out their
business in their own way under the regular watch of the centre manager. The franchisee
authorized to sell all the financial products of the Reliance money in return they are paid
their respective brokerages as committed by the company. Also they are given the authority
to transact in the stock market on the behalf of the clients i.e. they are responsible for
putting a trade in the stock market on the will of the help of power trade software for which
they are paid per transaction fee by the customer. A business associates is the major
business generating machine for Reliance money and they are major source for clients
base for the company. Reliance money keeps a special watch on its associates; it assists
25

them and provides them with the necessary help they require. Also Reliance money trains
the sales force of these associates and also guides them in carrying out the daily business
activities.

Remisars:
They are direct agents for Reliance money whose work is totally based on commission.
Their work is also like a business associates i.e. selling all the financial products but with
the only difference that they are not authorized to put a trade on the behalf of the customer.
After the B.D.Es and the business associates the remisars are one of the major business
generating sources for the company and are really very helpful in generating the business
and developing a major client base.

Team leader:
At Reliance money a separate team leader has been appointed for the Reliance life
insurance section that is responsible for developing and expanding the life insurance
business under the banner of Reliance money. The work of the team leader is to look after
the PFCs working under him/her and assisting them in dealing with the clients and
rectifying the various queries asked by the customers.

PFCs
A PFC is like a BDE but with the difference that they are appointed to sell the life
insurance policies only. A PFC is required to report on a daily basis to the team leader and

26

achieve the required target as specified. They are also expected to handle the client queries
and deal with them.

Customer Support Executive:

The work of a customer support executive is as important as that of a centre manager. A
customer support executive is responsible for registering the Accounts, Mutual fund, Life
insurance policies and all the other financial products brought by the BDEs, Business
associates, Remisars or PFCs on the MISS of Reliance Money so as to keep a daily record
of the business being generated by Reliance Money.

Senior Finance Executive:

The job of senior finance executive is to look after the payment of brokerage to different
remisars, business associates, and salaries of the B.D.Es and the other employees of
Reliance Money.

The following diagram gives a brief idea about the working at Reliance Money
Moradabad

27

28

SWOT ANALYSIS

SWOT ANALYSIS OF RELIANCE MONEY:-

STRENGTHS

o Cost-effective: Pay a flat fee of just Rs. 500/- valid for 2 months or specified transactional
value.
o Convenience: Go online, through your broker/agent, Call & Trade or Kiosk.
29

o 3 in 1 integrated access: Reliance Money offers integrated access to your banking, trading
and demat account. You can now transact without the hassle of writing cheques.
o Security: Dynamic password - keeps the account extra secure
o Widest product range: Equity, Commodities, Derivatives, Mutual Funds, IPOs,
Insurance, Offshore Investment & Credit card
o Other value-adds: Live news from Dow Jones, research, expert views, etc available free
and in real time

WEAKNESS

o Slow connectivity.
o Less number of branches in India
o Do not have access on Regional Exchanges.
o Competition from banks
o No interest on cash margin.
o Less margin on intraday transactions.

OPPORTUNITIES
Already having a good market access through different products.
Market share of company is increase rapidly.
30

Reliance Securities Ltd is not so longer in the financial securities area but at present it has a very
good response of investors. Since Reliance Money is coming with its own Bank and Stock
Exchange, and is also planning to tie up with other banks the prospects are very good.

THREATS:
New Competitors
A lot of new competitors are trying to enter the market in this bullish run to taste the flavor of this
cherry. This is creating a lot of competition for large players like Reliance Money and it is creating
little confusion in the minds of the customers about the services provided by the broker. Also many
banking firms are entering into the market with huge investment. Competitors like ICICI, kotak,
HDFC, 5-paisa etc. are posing a lot of threats to the company.
Other threats are:
Sub broker, Supplier, Dealer

Reliance Money currently deals in the following financial products:Single window for multiple products:

Equity

Equity & Commodity Derivatives

31

Mutual Funds
IPOs
Life & General Insurance

Offshore Investments
Money Transfer
Credit Card
Gold

ABOUT THE PRODUCT

DEMAT ACCOUNT
As in a bank, we keep our money in a savings account, similarly demat account is an account
where shares are kept in electronic form. Few years back shares were bought and sold in physical
form which used to lead to huge amount of bad deliveries. So in order to prevent such losses, SEBI
(Securities Exchange Board of India) made to dematerialize the shares.
Basically to buy or sell shares one requires 3 accounts:
32

Saving account: This account is basically required to transfer funds to buy shares.
Trading account: This account is where funds get transferred from saving account to buy shares.
Demat account: The account where bought shares are kept in electronic form to prevent physical
losses.

DOCUMENTATION REQUIRED TO OPEN A DEMAT ACCOUNT

1. The first and the foremost thing required is PAN CARD, that is the person who wants to open a
demat account should be registered under Income Tax department.
2. An address proof
3. An identity proof
4. Photographs

ANALYSIS OF DEMAT ACCOUNT OF RELIANCE MONEY

The features offered by the company in its demat are entirely based on innovative ideas. If
compare the features of Reliance Moneys demat account with that of other industry players we
will find it more customer friendly and beneficial.

33

FEATURES

RELIANCE MONEY

OTHERS

1.Brokerage

Flat Fees : 1 Paisa

% Brokerage ranging from 0.4 per

2.Security

Special

security

token

cent to 0.85 per cent

whose No such facility

password changes after every 32

3. Service tax

seconds
Nil due 1 paisa brokerage

12.36% of brokerage

(12.36% of 1 paisa = 0 approx)

4.Annual

Rs. 50

Ranging from Rs.200 to Rs.550

maintenance
charge
5.Account

Rs. 750(self employed) and Rs. 500 Rs. 900 to Rs. 1250

opening

(employed)

charges
6.
Recharge Coupons worth Rs. 500, Rs.1000, No such facility
coupon facility

Rs. 5000 Rs. 10000 and Rs.2500

So the above table clearly shows the units. Per hand of Reliance Money in its DMAT account as
compared to that of competitors. Value added services provided by Reliance Money are truly
great.

How Reliance Money deals with equity trading and the services provided to the
customers:Reliance Money Ltd provides best services to its customers for equity trading in comparison to
other Financial Securities Companies.
34

These services are as follows-

Online trading facilities with Instra Trade.

Instra Trade terminal is java based software. Client can easily download the terminal through
Reliance Money web site. No extra charges are taken for the use of this terminal. Through this
terminal/software you execute your order within 2 seconds. In this terminal we get both NSE &
BSE On-line at same time. And the clients can do trading in both NSE & BSE at the same time.

Individual Client:

Demat A/c opening charges: Rs 750/- (Annual maintenance Charges Rs 50/-)

Trading A/c, commodities A/c, Forex A/c free for life time

Trading through offline or website. (www.reliancemoney.com)

NSE & BSE both are online.

Live applet for watching prices & trading purposes.

Brokerage: Reliance Money works on the pre-paid cards system instead of any cash brokerage and service tax
as illustrated table shows:-

35

Other features-

For the fund transfer and withdraw, we have tie up with four banks HDFC Bank, IDBI
Bank, ICICI Bank and AXIS Bank. If you are having bank account in one of them, you can
transfer the funds and withdraw the funds online same day.

Settlement of trades follows T+2 transaction cycle.

Freedom from paperwork, trading facilities is completely online.

SMS alerts on your mobile phones.

36

Apart of that we have our dedicated team to look after your Portfolio, Mutual Funds, and
Commodities.

Document Photocopies Required:(A) Three coloured Photographs (self signed).

(B) For identification Proof- Voter ID Card/ Driving License/ Passport/
PAN Card (Compulsory) any one.
(C) For residential proof:- Bank statement/ Voter ID Card/ Ration Card/
Driving License/ Passport/ Telephone or Electricity Bill statement
(any one)
(D) One cancelled cheque leaf (For MICR No. record)
(E) Later Bank Statement/ Front page of passbook (Showing Name,
Address, A/c No.)
(F)You can also deposit the initial margin money at the time of opening of
account.

37

MUTUAL FUNDS

MUTUAL FUNDS
38

MUTUAL FUND INDUSTRY PREVIEW

The mutual fund industry is the perhaps the smallest segment of the finance business segment in
India. It is comparatively a very young industry when compared to the other segments. The mutual
fund is structured around a very simple concept, the mitigation of risk through the spreading of
investments across multiple entities, which is achieved by the pooling of a number of small
investments into a large bucket.

FEATURES OF MUTUAL FUNDS

The essential features of the mutual funds distinguishing from other routes of investments are: The mutual fund is a trust into which many relatively small investors invest their money to
form a large pool of cash which is then invested in securities by the manager of the trust.
The price at which units can be bought and sold is governed solely by the value of the
underlying securities held by the mutual fund and dealings in units are on the basis of the net
market value of the investment per unit.
The managers of the mutual funds are obliged to redeem any units in issue on demand or on
certain specified period.
All dividend income that the mutual fund receives on its investments is paid out to unit holders.

MUTUAL FUND CYCLE

39

While the Indian mutual fund industry has grown in size from March, 1993 (Rs 470 billion) to
December, 2005 (Rs 1992 billion) in terms of AUM, the AUM of the sector excluding AXIS has
grown over 8 times from Rs.152 billion in March 1999 to Rs.1738 billion as at December 2004.
Indian mutual funds (MFs) have rewarded their investors better than any other funds in world.
According to a report3, a leading market research agency, Indian funds have grabbed eight of the
top 10 ranks over a 10year period. If one takes the last five years, they account for seven of the top
10 and over a 3year period, six of the 10 best performing mutual funds are from India.
As of today the size of the asset under management (AUM) in India is $68 billion against the
country's GDP of $ 780 billion. In some developed economies AUM size is close to the GDP
figure. This clearly shows the further scope for growth. If you take the last four year period
(January 2004-2008) the AUM of the mutual fund industry has risen substantially about 277%4.

40

The MF sector has 32 active players and they have mopped up nearly $8 billion through equity
mutual fund schemes. And they are expected to further grow to $ 10-12 billion. Around 45 new
equity schemes were launched in 2008 and garnered around $7.5 billion. New categories of funds,
like capital protection oriented funds and equity derivative funds were launched.

GROWTH IN ASSETS UNDER MANAGEMENT

Advantages of mutual funds

41

If one does not have the time, the inclination or the expertise to make and manage investments in
the complex equity or the debt market directly, should consider investing in mutual funds and reap
the benefits of research and a wider range of low cost information services. A risk-averse investor
can expect above the market returns at a lower cost and lower risk. The major advantages of
investing in mutual funds are:

A. Professional ManagementMutual funds are managed by highly skilled managers with sound knowledge of the market
and wide experience in investment.

B. Affordability (low initial investment)Mutual fund investments are usually very low. For eg: In Franklin Templeton schemes you
can invest minimum Rs.5000 (one time investment) or the Systematic Investment Plan of
Rs.500 every month.

C. Portfolio Diversification and Reduction in RiskIndividual investors have to face company-related risks and market-related risks. These risks
can be reduced through diversification of portfolios. When an investor invests in mutual fund
his portfolio automatically gets diversified and the risk tolerance capacity of a mutual fund is
much higher.

D. Convenient Record-keeping-

42

Record keeping is simplified in mutual funds. Bookkeeping of the investments is handled by

the fund.

E. SwitchingMutual funds allow investors to switch from one fund to another based on their investment
objective at that particular moment.

F. LiquidityIn case of open ended schemes investors can sell their existing units, or buy new units at any
point of time at related NAV of the fund. This gives investors a high level of liquidity on their
investments.

G. Tax BenefitsMutual fund investors all over the world enjoy certain tax benefits which increases the net
yield of investments.

H. Minimize Operating CostsMutual funds having large investible funds at their disposal avail economies of scale. The
brokerage fee or trading commission may be reduced substantially. The reduced operating cost
obviously increases the income available for investors. Investing in securities through mutual
funds has many advantages like option to reinvest dividends, strong possibility of capital
appreciation, regular returns, etc. Mutual funds are also relevant in national interest. The test of
their economic efficiency as financial intermediary lies in the extent to which they are able to
mobilize additional savings and channelizing to more productive sectors of the economy.
43

Drawbacks Of Mutual Funds

A. No Guarantees:
No mutual funds guarantee you the exact returns. If the entire stock market declines in
value the value of mutual fund shares will go down as well, no matter how balanced the
portfolio. Investors encounter fewer risks when they invest in mutual funds than when they
buy and sell stocks on their own. However, anyone who invests through a mutual fund runs
the risk of losing money.

B. Fees and Commissions:

All funds charge administrative fees to cover their day-to-day expenses. Some funds also
charge entry or exit loads to compensate brokers, financial consultants etc.

C. Management Risk:
Investment in a mutual fund depend on the funds manager capability (except in Index
Funds) to make the right decisions regarding the funds portfolio. If the manager does not
perform as well as you had hoped, you might not make as much money on your investment
as you expected. Of course, if you invest in Index Funds, you forego management risk,
because these funds do not employ managers.

Key Constituents Of Mutual Fund Industry

44

Despite the differences, all Mutual Funds comprise of four constituents: Sponsors, Trustees, Asset
Management Companies (AMCs) and Custodians.

A. Sponsor:
The sponsor initiates the idea to set up a mutual fund. It could be a registered company,
scheduled bank or financial institution.
A sponsor has to satisfy certain conditions, such as on capital, track record (at least five
years' operation in financial services), default-free dealings and a general reputation of

45

fairness, has to be ascertained. The sponsor appoints the trustees, AMC and custodian.
Once the AMC is formed, the sponsor is just a stakeholder.

B. Trust/Board of Trustees:
Trustees hold a fiduciary responsibility towards unit holders by protecting their interests.
Sometimes, as with Canara Bank, the trustee and the sponsor are the same. For others, like
SBI Funds Management, State Bank of India is the sponsor and SBI Capital Markets the
trustee. Trustees float and market schemes; and also they secure necessary approvals. They
check whether the investments of the AMC are within defined limits, whether the fund's
assets are protected, and also whether the unit holders get their due returns.

C. Fund Managers/AMC:
They are the ones who manage the investors money. An AMC takes investment decisions,
compensates investors through dividends, maintains proper accounting and information for
pricing of units, calculates the NAV, and provides information on listed schemes and
secondary market unit transactions. It also exercises due diligence on investments, and
submits quarterly reports to the trustees.

D. Custodian:
It is often an independent organization, and it takes custody of securities and other assets of
a mutual fund. Among public sector mutual funds, the sponsor or trustee generally also acts
as the custodian.

46

Classification Of Mutual Funds

Any mutual fund has an objective of earning income for the investors and/ or getting increased
value of their investments. To achieve these objectives mutual funds adopt different strategies and
accordingly offer different schemes of investments. On these bases the simplest way to categorize
schemes would be to group these into two broad classifications:
Operational classification highlights the two main types of schemes, i.e., open-ended and closeended which are offered by the mutual funds.
Portfolio classification projects the combination of investment instruments and investment avenues
available to mutual funds to manage their funds. Any portfolio scheme can be either open ended or
close ended.

Operational Classification
A. Open Ended Schemes
As the name implies the size of the scheme (Fund) is open i.e., not specified or pre-determined.
Entry to the fund is always open to the investor who can subscribe at any time. Such fund stands
ready to buy or sell its securities at any time. It implies that the capitalization of the fund is
constantly changing as investors sell or buy their shares. Further, the shares or units are normally
not traded on the stock exchange but are repurchased by the fund at announced rates. Open-ended
47

schemes have comparatively better liquidity despite the fact that these are not listed. The reason is
that investor can any time approach mutual fund for sale of such units. No intermediaries are
required. Moreover, the realizable amount is certain since repurchase is at a price based on
declared net asset value (NAV).

B. Closed Ended Schemes

Such schemes have a definite period after which their shares/ units are redeemed. Unlike openended funds, these funds have fixed capitalization, i.e., their corpus normally does not change
throughout its life period. Close ended fund units trade among the investors in the secondary
market since these are to be quoted on the stock exchanges. Their price is determined on the basis
of demand and supply in the market. Their liquidity depends on the efficiency and understanding
of the engaged broker. Their price is free to deviate from NAV, i.e., there is every possibility that
the market price may be above or below its NAV.

Portfolio Classification
Following are the portfolio classification of funds, which may be offered. This classification may
be on the basis of (a) Return, (b) Investment Pattern, (c) Specialized sector of investment, (d)
Leverage and (e) Others.

A. Return Based Classification

48

To meet the diversified needs of the investors, the mutual fund schemes are made to enjoy
a good return. Returns expected are in form of regular dividends or capital appreciation or a
combination of these two.

B.

Income Funds
For investors who are more curious for returns, Income funds are floated. Their objective is
to maximize current income. Such funds distribute periodically the income earned by them.
These funds can further be split up into categories: those that stress constant income at
relatively low risk and those that attempt to achieve maximum income possible, even with
the use of leverage. Obviously, the higher the expected returns, the higher the potential risk
of the investment.

C. Growth funds
Such funds aim to achieve increase in the value of the underlying investments through
capital appreciation. Such funds invest in growth oriented securities which can appreciate
through the expansion production facilities in long run. An investor who selects such funds
should be able to assume a higher than normal degree of risk.

D.

Conservative Funds
The fund with a philosophy of all things to all issue offer document announcing
objectives as: (i) to provide a reasonable rate of return, (ii) To protect the value of
investment and, (iii) to achieve capital appreciation consistent with the fulfillment of the
first two objectives. Such funds which offer a blend of immediate average return and
49

reasonable capital appreciation are known as middle of the road funds. Such funds divide
their portfolio in common stocks and bonds in a way to achieve the desired objectives.
Such funds have been most popular and appeal to the investors who want both growth and
income.

Investment Based Classification

Mutual funds may also be classified on the basis of securities in which they invest. Basically, it
is renaming the subcategories of return based classification.

A. Equity Fund
Such funds, as the name implies, invest most of their investible shares in equity shares of
companies and undertake the risk associated with the investment in equity shares. Such
funds are clearly expected to outdo other funds in rising market, because these have almost
all their capital in equity. Equity funds again can be of different categories varying from
those that invest exclusively in high quality blue chip companies to those that invest
solely in the new, un-established companies. The strength of these funds is the expected
capital appreciation. Naturally, they have a higher degree of risk.

B. Debt Funds
Such funds have their portfolio consisted of bonds, debentures, etc. this type of fund is
expected to be very secure with a steady income and little or no chance of capital
appreciation. Obviously risk is low in such funds. In this category we may come across the
funds called Liquid Funds which specialize in investing short-term money market
50

instruments. The emphasis is on liquidity and is associated with lower risks and low
returns.

C. Balanced Fund
The funds, which have in their portfolio a reasonable mix of equity and bonds, are known
as balanced funds. Such funds will put more emphasis on equity share investments when
the outlook is bright and will tend to switch to debentures when the future is expected to be
poor for shares.

Sector Based Funds

There are number of funds that invest in a specified sector of economy. While such funds do have
the disadvantage of low diversification by putting all their all eggs in one basket, the policy of
specializing has the advantage of developing in the fund managers an intensive knowledge of the
specific sector in which they are investing. Sector based funds are aggressive growth funds which
make investments on the basis of assessed bright future for a particular sector. These funds are
characterized by high viability, hence more risky.

Systematic Investment Plan

51

Mutual funds are basically collective investment done by thousands of investors and this money is
handled by fund manager who invests it into 8 to 10 sectors. This leads to diversification of risk
that is minimization of risk and maximization of returns
.
There are two types of investments in mutual funds:

1. Lump sum investment: In such type of investment money is invested in one time only
and NAV (Net Asset Value) of that particular day is allotted.
2. Systematic Investment Plan: It is an investment in which money is invested in
installments that are either monthly or quarterly and NAV is allotted every month.

Reliance money offers mutual funds of around 10 to 12 companies such as

1. RELIANCE
2. ICICI
3. HDFC
4. FRANKLIN TEMPELTON
5. SBI
6. KOTAK
7. TATA
8. BIRLA SUNLIFE

BENEFITS AT RELIANCE MONEY

52

1. Huge choice to invest.

2. Can invest directly through www.reliancemoney.com
3. Free insurance cover with some of the funds.

53

INSURANCE

LIFE INSURANCE
What is Insurance?
The business of insurance is related to the protection of the economic values of
assets. The asset would have been created through the efforts of the owner. The
asset is valuable to the owner, because he expects to get some benefits from it. The
benefit may be an income or something else. It is a benefit because it meets some of
54

his needs. In the case of a factory the product generated by is sold and income is
generated. In the case of motorcar, it provides comfort and convenience in
transportation.
Every asset expected to last for a certain period of time during which it
perform. After that, the benefit may not be available. There is a lifetime for a
machine in a factory or a motorcar. None of them will last for affairs that the end of
the period or the lifetime makes a substitute made available. An accident or some
other unfortunate event may destroy it or make it non functional. In that case the
owner and those deriving benefits therefore, would be deprived of the benefit and
the planned substitute would not have been ready. There is an adverse on
unpleasant situation. Insurance is a mechanism that helps to reduce the effect of
such adverse situations.

Why Insurance?
Insurance is the protection of life and assets against unforeseen circumstance. Whether it is a
general accident policy, a mediclaim policy or a pension policy, an insurance policy helps you to
scope with uncertainty and insecurity.
Ever thought about why you should take an insurance policy. For one, it helps you to hedge risks
against unforeseen circumstances and save more. If that's not all, it is:

Superior to an ordinary savings plan as it provides full protection against risk of death.

Encourages and forces compulsory savings unlike other saving instruments, wherein the
saved money can be easily withdrawn.

Provides loan to tie over a temporary difficult phase and is also acceptable as security for a
commercial loan.
55

Offers tax relief to policyholders.

Hedges risk against uncertainty.

For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is
created for wife and children as beneficiaries.

Based on the concept of sharing of losses, the society will benefit as catastrophic losses are
spread globally.

Who can buy a life insurance policy?

Any person above 18 years of age, who is eligible to enter into a valid contract, can go for an
insurance policy. Subject to certain conditions, a policy can be taken on the life of a spouse or
children.

How is a life insurance policy useful?

Planning for the financial consequences of a premature death is an essential part of every financial
plan. Generally, the consequences are simply too large to ignore and cannot be totally covered with
your own resources.
Life insurance is nothing but a contract with an insurance company under which the insured
(purchaser) pays a premium in exchange for coverage of specified losses. Life insurance protects
your family against the risk of the premature death of you (or your spouse). Life insurance
planning should consider your family's short-term needs (for example, medical expenses) and
long-term

needs

(for

example,

replacing

your

income).

In the course of our life we are accosted by risk-that of failing health, financial losses, accidents
and so on. Insurance is a means by which life's uncertainties are addressed in financial terms. It
offers a monetary compensation against those losses. Insurance is considered more as a hedging
56

mechanism rather than a true investment avenue. Life insurance, in particular is essentially
acknowledged as a mechanism which eliminates risk substituting certainty for uncertainty
primarily by transferring risk from the insured to the insurer.

Is

life

insurance

saving

instrument

by

tax?

Life insurance is mainly considered as a saving instrument rather than an investment avenue as it
promotes compulsory savings besides reducing tax burden on the policyholder and protects the
family of the policyholder in the event of unforeseen happening. It is the only saving instrument,
which covers the life risk besides giving tax concession both at entry (premium paid) and at exit
points. The section 10 (D) of the income tax act totally exempts payment of tax on any amount
received as bonus against life insurance policies.

Classification of Life Insurance Products

We can classify insurance plan in two categories.

Traditional

ULIP

Traditional
Term Insurance :
Under term insurance plan, sum assured is payable only if death occurs during the specified predetermined term. If death does not take place during such term the amount of premium stands
57

forfeited. Thus it can be seen that the term insurance is nothing but the cost of pure protection. It is
a contract, which provides financial protection if death should occur within a specified period. No
survival benefits are provided under the contract.

Whole life insurance:

Whole life insurance provides for the payment of the face value upon the death of the insured,
regardless of when it may occur. This policy furnishes permanent protection to the insured at he
moderate cost. This is highly important for the average man or woman of moderate salary, who
require considerable family protection and whose limited income does not enable him or her both
to pay premiums and to accumulate a large savings fund. The whole life policy provides a capital
sum of money in the event of death of the assured whenever that may occur.

Endowment Policy:
Endowment is a product, which includes Risk cover and saving also. In the pure endowment policy
the sum assured is payable in the event of death or definitely on maturity. In an endowment sum
assured is for sure given to the policyholder on completion of the term. Endowment plans are very
popular in developing nations since they serve a dual purpose of life cover and savings. Many a
people in our country go for endowment products because of the compulsory saving aspect. An
endowment plan on the other hand is not a cheap plan since the insurer has a dual liability of
providing life cover and on maturity giving the entire sum assured.

Annuities:
Annuities refer to income or other financial provision usually for retirement or old age. An
Annuity may be defined as a periodic repayment made during a fixed period or for the duration of
a designated life or lives. In one sense the life annuity may be described as the opposite of
insurance protection against death in its pure form a life annuity may be defined as a contract
whereby for a premium consideration one party (the insurer) agrees to pay the other (the annuitant)

58

a stipulated sum (the annuity) periodically throughout life. The purpose of the annuity is to protect
again a riskthe outliving of ones income.

UNIT LINKED INSURANCE PLAN (ULIP)

Unit linked insurance plan (ULIP) is a life insurance solution that provides the client with the
benefits of protection and flexibility in investment. It is a solution which provides for life
insurance where the policy value at any time varies according to the value of the underlying assets
at the time .
The investment is denoted as unit and is represented by the value that it has attained called as Net
Asset Value (NAV).
UNIT
LINKED
INSURANCE
POLICIES

UNITS

UNDERLYING

IN

INVESTMENT

FUNDS

ULIP

came

into play in 1960s and became very popular in Western Europe and America. The reason that is
attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility
which it offers to the clients.

As time progressed the plans were also successfully mapped along with life insurance needs to
retirement planning.In todays times ULIP provides solution for all the needs of a client like
insurance planning, financial needs, financial planning for childrens future and retirement
planning.

Structure Of Ulip

59

PREMIUM

LESS CHARGE

LIFE
COVER

INVESTMENT
REPRESENTED AS
UNITS

Benefits of unit linked plan :

ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan is
a one stop solution providing
1. Life protection
2. Investment and Savings
a. Market linked fund based on risk profile
b. Switch option
c. Premium redirection
d. Automatic transfer plan(ATP)
3. Flexibility of cover continuance
4. Transparency
5. Extra protection with riders
a. Death due to accident
b. Disability
c. Critical illness
6. Liquidity
a. During the term partial withdrawals
b. At Maturity
60

7. Tax planning

THE FACE OF INSURANCE INDUSTRY IN INDIA:

From the Indian Life Insurance Company Act in 1912 to the IRDA Act in 1999, regulation of
insurance business has come a long way. Insurance is a subject of federal law and all insurance in
India has been nationalized. IRDA prohibits 100% foreign ownership of an Indian Insurance
company and thus a foreign insurer can own only maximum of 26% of the shares in a new venture.
The Indian promoter has to sell through public offering after ten years and can retain only 26% of
the shares thereafter.
In India, the two most popular insurance products are Endowment and Money Back policies
that together consist more than 80% of life insurance business. Also these days ULIP, (Unit linked
insurance plan) is gaining consumer acceptance and demand. The Different players in this field
include:
Birla Sun Life Insurance CO. Ltd.
AVIVA Life Insurance Co. Pvt. Ltd.
Bajaj Allianz Life Insurance Co. Ltd.
ICICI Prudential Life Insurance Co. Pvt. Ltd.
Metlife India Insurance Co. Pvt. Ltd.
ING Vysya Life Insurance Co. Pvt. Ltd.
Life Insurance Corporation of India
Max New York Life Insurance Co. Ltd.
Om Kotak Mahindra Life Insurance Co. Ltd.
SBI Life Insurance Co. Ltd.
HDFC Standard Life Insurance Co. Ltd.
Tata AIG Life Insurance Co. Ltd.
Reliance Life Insurance co. Ltd
Sahara Life co. Ltd
Shriram Life co .Ltd
Bharti AXA Insurance co. Ltd
61

Consistent growth has been observed in the private insurance markets. Though LIC has been
in the country for a long time, it didnt tap much of the rural market. It only concentrates on the
endowment and money back policies. Private insurers had taken advantage of this and had come
with innovative products like Unit Link Insurance Products (ULIPs).

DIFFERENT PLANS OFFERED BY RELIANCE LIFE INSURANCE

Reliance Special Endowment Plan
Reliance Cash Flow Plan
Reliance Child Plan
Reliance EDLI Scheme
Reliance Group Term Assurance Policy
Reliance Market Return Plan
Reliance Simple Term Plan
Reliance Special Credit Guardian Plan
Reliance whole life plan
Reliance golden year plan
Reliance term plan
Reliance special Term plan
Reliance credit guardian plan

PRODUCT DETAILS
Reliance life insurance launches maiden insurance product:
62

Mumbai, august 17: Anil Dhirubhai Ambani group company Reliance Life Insurance today
announced the life launch of Reliance connect 2 life plan, its first product since acquiring the life
insurance business of AMP Sanmar in October last.
Reliance connect 2 life is a 15-year insurance - cum savings
Plan for individuals in the age group of 18 to 45 years with a minimum sum assured of Rs.1 lakh.
The insurance cover can be upgraded in the second and third year up to a sum of Rs. 10 lakh.

Reliance life insurance has 30,000 insurance advisors spread over 158 branches across 143
locations & a call center to service its customer.

HDFC and AXIS bank would act as a collection network. The company is in the final stages of
negotiation with banks for selling its products through the banc assurance channel.

The company plans to add another 10,000 to 12,000 advisors, who are under training, said
Nandagopal.
Reliance capital has infused Rs.166crore in Reliance life insurance, which has a capital base of
Rs.383 crore and employee strength of 3,654 including 822 employee of AMP Sanmar.

RELIANCE ENDOWMENT PLAN:

It takes a lot for a dream to become a reality. And money is surely one of them.
Reliance endowment plan gives you just the financial independence to realize your dreams in the
future. It lets you decide how much you would like to set as your sum assured based on your
current financial position and your expected future expenses.
63

KEY FEATURE:
1. On maturity receive sum assured plus bonuses.
2. Wealth creation through bonus addition.
3. More value for your money by way of high sum Assured Rebate.
4. Increase, your insurance protection by adding term cover.
5. Choose to pay regular or single premium.

RELIANCE SPECIAL ENDOWMENT PLAN:

Reliance special endowment plan is key to all your financial needs; you get a desired lump sum
after a specified period, however your life insurance protection continues for an extended period. If
anything were to happen to you, your beneficiary will get another sum assured along with the
bonuses. The policy comes with an added feature of a limited premium term, which is always 5
years less than the policy term.

KEY FEATURES:

1. Twin benefit of protection & savings.

2. Sum Assured is paid on survival, at the end of the premium paying term life cover for
full sum assured continues beyond premium paying term.
3. Wealth creation through bonus additions.
64

4. More value for your money by way of high sum Assured Rebate.
5. Choose to add the benefit of two riders-critical illness riders and Accidental death
benefit & total & permanent disablement rider.
6. Choose to avail of a policy loan available after 3 full years of premium payment.
7. Policy participates in profits even after premium paying term.

RELIANCE CASH FLOW PLAN:

While most insurance plans block your money for a certain period of time, Reliance cash flow plan
gives you the double benefit of life insurance along with easy liquidity through lump sum cash. It
provides money periodically when you need it.
It lets you live life to the fullest today and at the same time, helps you stay protected for tomorrow
by giving you the flexibility of receiving a specified percentage of the sum Assured at specified
intervals.

KEY FEATURES:

1. Easy liquidity- gets periodic cash flows at the end of the fourth year and thereafter
at the end of every three years.
2. Wealth creation through bonus additions.
3. On maturity receive accumulated bonuses along with final lump sum payout.
4. More value for your money by way of high sum assured rebate.
5.

Full sum assured plus bonuses in case of your unfortunate death. This is over and
above the survival benefits already paid.

RELIANCE CHILD PLAN:

65

As a parent, it is only natural to dream of a smooth and blissful life for your child. Which is
exactly why you need to secure your child tomorrow, today?
Reliance child plan helps you save systematically so that you can give your child much- needed
financial security in the future. Simply put, Reliance child plan gives you the freedom to enjoy
every moment with your child today, without worrying about his/her tomorrow.

KEY FEATURES:
FEATURES
1. Risk protection for you during the term of the
Policy.
2. Accumulated bonus at the end of the policy term.
3. 25% of sum assured payable every year sum benefit during the last four policy
anniversaries.
4. All future premiums are waived in the event of unfortunate loss of life.
5. Guaranteed fixed benefits continue even after loss of life of the policyholder.
6. More value for your money by way of high sum Assured Rebate.

STRATEGIES
To get successful in any task one should always device certain strategies before starting. Following
these strategies and working in a systematic manner not only gives good results but also early task
finishing.

STRATEGIES AT PERSONAL LEVEL

66

To achieve my targets I also devised certain strategies which were really very helpful to me. They
are as follows:
1. Before my summer internship program started I had already gathered information pertaining to
demat account, Mutual funds and Life Insurance of Reliance Money. So I had pre hand knowledge
of the product and pitching the product in the market became easier.
2. I also took data base of residents of Moradabad (mainly CAs) from one of my seniors. That data
base gave me most of my leads.
4. The next thing I did was, I started standing near the ATMs and distributed brochures of Reliance
Money with my phone number.
5. Prepared a chart of one year and corresponding investment and the benefit and showed it to the
customer along with verbal explanation.
6. To sell systematic investment plan I did cross selling across same customer base.

STRATEGIES AT CORPORATE LEVEL

1. Opening of DMAT account with cancel cheque for one month.

2. Issuance of appreciation letter on opening 100 accounts as a team in one day.
3. Certificate of HALL OF FAME and a wall clock on doing 100 Systematic
Investment Plan in Reliance Mutual Fund as a team.
4. Reimbursement of movie tickets.

67

5. On selling 5 Systematic Investment Plan of Birla Sun life , certificate of appreciation would
be given by Birla Sun life.

MARKET SHARE OF VARIOUS PLAYERS OPERATING IN LIFE

INSURANCE INDUSTRY
Since the advent of the private players in the market the industry has seen new and
innovative steps taken by the players in this sector. The new players have improved the service
quality of the insurance. As a result LIC down the years have seen the declining phase in its career.
The life insurance industry has recorded a growth of 120.41% in premium collection for the period
of April 06 to February 07 over corresponding period in the previous year. The market share was
distributed among the private players.
NAME OF THE
COMPANY

TOTAL PREMIUM MARKET SHARE RANKING

COLLECTED

(IN %)

UPTO February
2007(In Crores)
2997.1

5.17

3rd

2.ING VYSYA

349.88

0.6038

12th

3 RELIANCE LIFE

604.55

1.043

9th

4 SBI LIFE

1711.99

2.95

4th

5 TATA AIG

546.51

0.9432

10th

6 HDFC

1298.1

2.240

5th

STANDARD
7 ICICI

4069.86

7.024

2nd

PRUDENTIAL
8 BIRLA SUNLIFE

651.36

1.1242

7th

1.BAJAJ ALLIANZ

68

9 AVIVA

582.89

1.0060

8th

10 KOTAK

443.66

0.7657

11th

MUTUAL
11 MAX

719.89

1.2424

6th

NEWYORK
12 MET LIFE

234.83

0.4053

13th

13 SAHARA LIFE

25.67

0.0443

15th

14 SHRIRAM LIFE

124.63

0.215

14th

4.48

0.0077

16th

15 LIC

43573.45

75.20

1St

TOTAL

57938.85

100

--------

MAHINDRA OLD

15 BHARTI AXA

69

Life Insurance in India

Pvt Players

LIC

Pvt Players

LIC

TOTAL MARKET SIZE: 57938.85 Crores

From the above pie chart and table we can conclude that still LIC is the market leader in
insurance industry as it has a market share of almost 77% in life insurance industry compared to
private players which have only 23% of the total market share (up to March 2007), LIC currently
has a premium collection of 43573.45 Crores compared to 14365.4 Crores of private players but
the point here which is to be noted here is that over a period of time the market share of LIC has
declined and market share of private players have increased it can further be cleared from the table
given below:

70

Financial year

2002-03

2003-04

2005-06

2006-2007 (Up

LIC
PRIVATE

92%*
8%*

82.33%
17.67%

71.652%
28.348%

to March)
75%
25%

PLAYERS

GROWTH TREND IN LIFE INSURANCE INDUSTRY

FINANCIAL

2003-04(IN Rs)

2004-05(IN Rs)

YEAR

2005-06(IN Rs)
(UPTO

TOTAL

FIRST

YEAR PREMIUM

1866939.69

2534287.67

FEBRUARY2006)
2628630.47

Lakhs

Lakhs

Lakhs

(in Lakhs)

From the above table we can see that there is a tremendous growth in insurance business
from year 2003-04 to 2005-06 in year 2003-04 the total premium collected is Rs 1866939.69 lakhs
whereas it is 2628630.47 in the year 2005-06 so there is an increase in premium collected by
761691.78 lakhs i.e. growth in premium collected is 40.79% which shows that insurance industry
in India has grown tremendously in India but still there lies opportunities and challenges in
insurance sector they are as follows

OPPORTUNITIES:
1. The major opportunity for insurance business is that still a large portion of population is
uninsured and those who are insured are under insured so there is an opportunity for
71

insurance companies to increase there revenues by insuring the untapped portion of the
population.
2. The savings of people can be diverted from banking sector to insurance sector by offering
customers higher interest rates through unit-linked plans.
3. There is an opportunity for private players to increase their market share by providing
better products and services than L.I.C.

CHALLENGES:
The five main challenges faced by insurance industry are as follows
1. Low awareness level: large portion of the population of India is still unaware of the
insurance as a whole, so it is a major challenge before all the players in insurance industry
to make the customers aware about insurance and what are their major products.
2. Product innovation: Companies still follow the same old traditional plans with which
the insurance industry started. There is a very little change in the products offered.
Consumers today seek product that offer flexible options, products with benefits
unbundled, products customized to suit their diverse needs. So it is a challenge for
insurance companies to provide such kind of insurance products.
3. Distribution: current distribution channels are not able to serve the rural areas of the
country, so insures need to explore alternative channels of distribution for both urban and
rural area.
4. Customer service: The present communication and promotions about various
insurance products in India are only informative. So what needs to be done is to win the
hearts of the customers by providing them the extra what the customers wants without
asking for i.e. high level of customer service. Trust and confidence: people tend to have
more faith in government

72

5. Sector dealing with insurance e.g. L.I.C, People feel more secure and confident in
investing in plans of L.I.C. rather than in private players.
Apart from the above challenges the major challenge faced by insurance sector is to
increase the penetration rate of insurance which is very low in India it is only 2% of GDP
and still 80% of the population is not insured and those who are insured are not fully
insured.

ACHIEVEMENTS
One has to give his 100% to achieve something worthy. Strong determination and belief in
oneself can make anything that is called impossible possible. As stock market was showing
daily fluctuations, in such a tough scenario it was really tough to sell demat accounts and SIP
in mutual funds. The continuously decreasing index of sensex and nifty made it tougher for me
to take even appointments as people didnt even want to listen the name of share market but
with my strong will power I continued making efforts and achieved my targets as follows.

TARGETS GIVEN
MUTUAL

TARGETS ACHIEVED

FUNDS(Systematic 1

Investment Plan)
Life Insurance Products

MUTUAL

FUNDS(Systematic

Investment Plan)
1 Life Insurance Products

73

RESEARCH
METHODOLOGY
Problem formulation
In this insurance scenario, there prevails a huge competition between the private players and public
sector players' .Among the private sector itself high degrees of competition exists. In this
perspective Reliance Life Insurance is giving stiff competition to LIC and ICICI prudential. The
people are not much aware of Reliance Life Insurance company as compare to LIC and ICICI
prudential. If the people are not aware of Reliance Life Insurance company then the company will
not able to make a business in this competitive world.

Research Objective

To compare the scheme and policies of Reliance Life Insurance with ICICI prudential and
LIC.
To find out the customer awareness of Reliance Life Insurance.

Research design
A Research design is a purely and simply the framework or blueprint that guide us to solve the
problem and completing the study. Descriptive research has been be used in this research because
a large number of respondents are to be studied based upon the various factors. This Descriptive
research is adopted to know that what is happening in the market with respect to products,
customers and their attitude.

Sources of data
Primary data
74

Secondary data

Primary Data
Primary data is a new and fresh data. It is collected for the first time.
Secondary Data
I am collecting the secondary data from the manuals of company, internet and projects reports.
Secondary data is already exists. I use Secondary data to finding new things that help me in my
research.

Data Collection Methods

Primary data has been collected through the Survey technique by conducting personal interview.
The instrument used for data collection is a structured questionnaire, which has closed ended
questions.

Sample techniques
Under non probability sampling. Convenience sampling was used because it is convenient to me
to choose my respondent as according to my convenience.

Sample Size

35 Respondents

Sample Area

MORADABAD

DATA ANALYSIS AND INTERPRETATION

Figure 1(a)
75

Awareness about Reliance Life Insurance co.

70%
60%
50%
40%
30%
20%
10%
0%

60%
40%

YES
NO

YES

NO

Reliance Life insurance co.

Out of 35 respondents it shows that 40% have said 'Yes' that they are aware about Reliance Life
insurance company, 60% people have said 'No' that they are not aware about Reliance Life
insurance company.

Figure 1(b)
Awareness about Mutual Funds

76

120%
100%
80%
60%
40%
20%
0%

100%
YES
NO
0%
YES

NO

Mutual Funds

Out of 35 respondents it shows that 100% people are aware of Mutual Funds

Figure 1(c)
Giving better services
60%

47%

50%
40%
30%

23%

Reliance

30%

LIC
ICICI Prudential

20%
10%
0%
Reliance

LIC

ICICI Prudential

Out of 35 respondents it shows that 47% people says that ICICI Prudential" is giving better
services, 30% people says that Life insurance coproration is giving better services and 23%
people says that Reliance Life insurance is giving better services.

Figure 1(d)
77

%age of investors

Period of Investment
40%
35%
30%
25%
20%
15%
10%
5%
0%

38%
31%
23%

8%

less than 1
yr

1-5 yr

5-10 yr

period

78

more than
10 yr

LEARNING AND EXPERIENCE

IN 54 DAYS training of Summer Internship Program is truly a learning and knowledgeable

experience. One faces many good and bad experiences in such a training program and learns a lot
through these experiences. Well I faced three kinds of experiences, first with company, second
with clients and third at the college in a period of 6 months.

79

Experiences and learnings at the company: At the company I was given full product
training which not only increased my product knowledge but also helped me to pitch the product in
a better way. Also in company I got chance to meet heads of other departments and got chance to
interact with them. This helped me know about the work culture, code of conduct and various
other working strategies the organization. Many times when I was unable to achieve my targets,
the company guide told us to work on our strategies. This helped me to know my loop and poles.

Experiences and learnings with the clients: Sometimes I got a chance to meet very
knowledgeable clients and learn new things pertaining to capital market and its fluctuations. Not
only this some clients asked me such questions for which I had to consult my head which seemed
very embarrassing. So such clients also helped me in learning more about the market. This training
also taught me that one should always be prepared pertaining to product knowledge before going
to the customer.

Experiences and learning in the college: In college every Saturday I was given classes of
aptitude, guest lecturers from various industry heads and interview and group discussions. So this
was a very good part of my training as the guest lecturers shared their corporate experience and
how do they handle problems in day to day life. Not only was this, every week top performer
award was given. This motivated me to work in a better way to achieve the awards. The aptitude
class helped in increasing reasoning and aptitude skills. Not only this was the best part the
interview and group discussion sessions done by Career Launcher where I learnt interview skills
and question handling skills.

80

FINDING AND ANALYSIS

81

After pitching 100-130 people in the market my research and findings are:

Figure 1

120%
100%

99%

80%
60%
40%
20%

1%
0%

yes

no

Figure 2
82

Investor's Preference
3% 5%

Bank FD

17%

Mutual Funds
4%

Insurance
46%

25%

PPF/Post office
schemes
Direct equity
others

Figure 3

83

Portion of income invest

46%

%age of investors

50%
40%
30%

31%
23%

20%
10%
0%

below 20%

20-40%

above 50%

%age of income invest

84

Figure 4

%age of investors

Investment Objective
70%
60%
50%
40%
30%
20%
10%
0%

60%

26%
10%

Growth

Saving

Tax saving

investment objective

85

4%

Financial
Security

Figure 5

Preferred Financial Advisor

16%

15%

R Money
India Bulls
ICICI Direct

10%

Karvy

4%
35%
20%

Religare
Other brokers

86

LIMITATIONS

Nothing in this world is available for free. There are always some or the other constraints which
dont let one achieve the goals. These constraints not only become obstacle in the way to success
but also decrease the confidence level.
87

As when my summer internship started, I was very excited about it, about the SIP Company, my
targets and my working as this was my entry to corporate world.

Volatile Share Market:

Our SIP started when the market was very down with high volatility, so it was the biggest
challenge for us to convince people to even talk to us. The share market was not at all responding
and same was the scenario with the people in the market.

Competition:
The next thing that hit my working was competition in the market. Around 32 competitors and
same market, it was really tough to convince the people who were holding a demat account. No
doubt Reliance Moneys product was the cheapest with many value additions but on the grounds of
services people were not ready as they were satisfied with their previous company and were not
sure if my company would give them the same service.

No conveyance charges given:

I was given no allowances for conveyance and other expenses which hampered my working to
some extent. If I had some allowance from the company, I could work in better way.

Time Constraint:
Time constraint was one of the major constraints as I was to perform just in 8 weeks.

Existing Franchisees:

88

As for franchisee I also had to give the good hot leads and there were already 1 franchisee in
Haldwani. So whomsoever I targeted, refused by saying that company is already having
franchisees and this will affect their customers as other franchisee will try to pursue them.

Trainee Perspective:
Another thing people were refusing me was on the ground that we were just trainees and would go
after 53 DAYS and then who would provide them service. So this was also a big challenge for me
to handle it by convincing them that I would link them with the companys franchisees and be in
contact with them even after my training.

Personal Commission:
Most of the clients were asking for commission we were getting and that we would give them. So
it was very hard to convince them that neither we were getting anything nor we can give them any
rebate.

Very Few PAN Card Holders:

One of the biggest limitations was that many people who were interested in buying DMAT
accounts but they did not have PAN cards. So firstly I had to or their PAN cards.

89

CONCLUSION

Working with Reliance Money has been a wonderful experience as in Reliance Money I have
realized a complete corporate world scenario, its culture, its aggression, its passion and everything
pertaining to working in a company.

Immediate changes in the target taught me how to change plans accordingly so that my
productivity is not hampered.
90

SIP is truly taught me how to manage things in practical way.

Terms like cross selling, NAV etc have come to their real picture in summer internship as
their time to time usage has shown me their importance.

This was a very good opportunity for me to hone our skills and knowledge about the fundamentals
of Finance, Sales & Marketing so that when I step into the corporate world I will be able to apply
these experiences to achieve better results thereby adding value to the organization.

91

RECOMMENDATIONS

Based on the market study, new clients and existing clients following recommendations can be
given for more satisfaction of customers as well as more sale of product.

Recommendation related to account opening

Time taken to account opening is too long i.e. 8-12 days in comparison with other DPs
providing the account opening in 5-8 days and sometimes even in 3 days, so the time limit
should be reduced so that users are interested in opening the account.
92

Documents required for account opening are too unique and confusing
Numbers of signatures, which are made by the clients, are too many, a user has to sign
about 37 signatures, and numbers of signs must therefore be reduced.

Customer care service should be more focus

Customer service should be more focus and organization should take care that customer
TAT (turn around time) in a least period of time.

Companies should improve their research and development department

Company should focus on extensive research and development to launch more preferred
and acceptable financial product in this volatile market.

BIBLIOGRAPHY
Websites
www.google.co.in
www.wikipedia.com
www.amfi.com
www.irda.com
93

www.moneycontrol.com
www.reliancemoney.com

Magazines and Newspaper

Economic Times
Times of India
4 Ps
Mutual funds Insights

94

ANNEXURES
Q.1- Did you do your financial planning?
o Yes
o No

( )
(

Q.2- What are your investing preferences?

o Bank FD

( )

o Mutual Funds

( )

o Insurance

( )

o Direct equity

( )

o PPF/Post office schemes

( )

Q.3- How much portion of income you invest?

o Below 20%

( )

o 20% to 40%

( )

o Above 50%

( )

Q4- For what objective do you invest?

o Growth

( )

o Saving

( )
95

o Tax saving

( )

o Financial Security

( )

Q5- Who are your preferred financial advisor?

o R money

( )

o India Bulls

( )

o ICICI

( )

o Karvy

( )

o Religare

( )

o Other brokers

( )

Q6- For how much period you prefer investing?

o Less than 1 yr

( )

o 1 to 5 yrs

( )

o 5 to 10 yrs

( )

o More than 10 yrs

( )

Name..
Contact No
Occupation
Date
96