project report on mutual fund

1. About J&K Bank………
J&K Bank one of the leading banks in the country is a brand with heritage,
widespread presence and a strong track record of solid performance and stability
under very difficult conditions. It is also unique in that it is a private sector Bank,
despite the government holding a major stake; it is the sole banker and lender of
last resort to the Government of J&K. It is the only private sector bank designated
as RBI’s agent for banking business, and it carries out the banking business of
the central government in the state.
J&K Bank is today one of the fast growing banks in India with a network of more
than 500 branches/offices spread across the country offering world-class banking
products/services to its customers. Today the bank has a status of value driven
organization and is always working towards building trust with its stakeholders,
for which it has adopted a strategy directing to developing a sound foundation of
relationship and trust aimed at achieving excellence, which of course, comes
from the womb of good corporate governance.
The J&K Bank one of the most vibrant banking institutions was founded on
October 1, 1938 and it commenced business from July 4, 1939. It has been the
first of its nature and composition as a State owned bank in the country. The
Bank was established as a semi State Bank with participation in capital by State
and the public under the control of State Government. Following the extension of
Central laws to the state of Jammu & Kashmir, the bank was defined as a
government company as per the provisions of Indian companies act 1956.
In its formative years the bank had to encounter several serious problems at the
time of independence when out of its total of ten branches two branches of
Muzaffarabad and Mirpur fell to the other side of the line of control (now Pak
Occupied Kashmir) along with cash and other assets in 1947, however the state
Government came to its rescue with the assistance of Rs. 6 Lakhs to meet its
claims.
The excellence achieved by bank in its operations stemming from the roots of
voluntary governance has not gone unrecognized and bank has recently bagged
three very prestigious awards for fair business practices and commitment to
social obligations.

2. Board of Directors of J&K Bank……..
J&K Bank’s diverse and rich culture is abundantly evident in
its Board Members, who provide direction to the Bank in order
to achieve its vision. A brief profile of our eminent Board
Members is as under:
MUSHTAQ AHMAD
MUSHTAQ AHMED (Chairman & CEO)
Having joined the Bank in 1972 as
Probationary Officer (PO), Mr. Mushtaq
Ahmad has a distinguishing career of 36
years as a prudent banker. His personal
progression has been a vital and
contributing element of the unfolding
success story of J&K Bank since more
than three decades.
Before his retirement as Executive Director of the Bank in
February 2008, he held some of the most significant positions
in the bank and discharged all his duties with honesty and
distinctive vision.
His person makes an ideal blend of specialized knowledge and
practical experience in almost all the critical fields of
contemporary banking, which include Credit/Risk
Management, Strategy and Business Development, Assets &
Liability Management, Human Resource Development,
Investments, Treasury, Forex operations, International
Banking, Insurance etc.
As a leading banker, he commands huge respect for his
prudence, esteem for his discipline and affection for his
leadership skills in the Bank as well as the industry.

3. As a top executive, Mushtaq Ahmad lays great emphasis on
talent search, human resources development, skill
enhancement, besides team building.
SUDHANSHU PANDEY, IAS
Mr. Sudhanshu Pandey, IAS, is
Commissioner Secretary to Government,
Finance Department, J&K, Govt. A post
graduate in Life Science (Botany) with
specialization in Environmental Management
and Ecology (Gold Medal), University of
Allahabad, MBA in Financial Management;
Business Management and Financial
Management, Institute of Management, Ahmadabad, Reforms
in Government, Indian Institute of Management, Bangalore
and Decentralized Industrial Development, Japan.
Mr. Sudhansh Pandey began his career with Indian Forest
Services in 1985 and thereafter, joined the Indian
Administrative Services in 1987. Mr. Sudhanshu Pandey has
served the IAS in various distinguished capacities, which
include Sub-Divisional Magistrate, Bhaderwah (J&K),
Additional Secretary Education(GOJK), Addl. Chief Executive,
Shri Mata Vaishno Devi Shrine Board, Katra (Udhampur),
District Development Commissioner and District Magistrate,
Doda, J&K, Special Secretary to Governor, J&K, Managing
Director, SIDCO, Director Information, Director Employment
and Special Secretary, Labor and Employment, J&K, Director
& PS to MoS , Ministry of Commerce and Industry, GOI,
Director & PS to Mos , Ministry of External Affairs, GoI,
Counselor and Director, Tagore Centre for Information,
Education, Commerce and Culture, Embassy of India, Berlin
and Divisional Commissioner, Jammu.
Mr. Sudhanshu Pandey has additionally also held the position
of Chairman of the Confederation of Indian Industries (J&K
Chapter) for two years, besides serving on the Board of

4. Directors of several reputed Public and Private Sector
Companies including RPG group and Modi group, as
Managing Director of SIDCO.
Mr. Sudhanshu Pandey is the recipient of Governor’s Medal
(1997), a highest recognition awarded in the state and also the
State Government Medal (2008), in honor of his exemplary
services for the state of J&K.
M. I. SHAHDAD
Mr. M. I. Shahdad is a holder of Master’s
Degree in Economics and LLB from Aligarh
Muslim University.
He has made significant contribution to
Commerce Industry by being associated with
Kashmir Chamber of Commerce & Industry in
the capacity of President and other prominent
positions. Mr. M. I. Shahdad has had a long
association with the Bank as Director, during which he has
made valuable contribution and provided tremendous value
addition to the organization.
VIKRANT KUTHIALA
Mr. Vikrant Kuthiala is B.com (Hons) from
Hindu College, Delhi University. He is a
prominent Businessman from Jammu with
interests in steel manufacturing and hydel
projects.
He is also representing on the committees of
various academic and professional
organizations, prominent being the Regional
Advisory Committee of Central Excise &
Customs, J&K, Chamber of Commerce & Industry, Jammu
and J&K State Committee of Federation of Industries of India,
New Delhi. He is also a Member of India Islamic Cultural
Centre, New Delhi and INTACH, J&K Chapter, Jammu.

5. PROF. NISAR ALI
Prof. Nisar Ali is a Ph.D in Economics from
Osmania University, Hyderabad. He is a
Professor from Post-Graduate Department of
Economics, University of Kashmir.Prof. Nisar
Ali is also Dean, Faculty of Social Sciences
University of Kashmir and Member, J&K
State Finance Commission. He has served in
various prominent positions with the
University and has many research papers and publications to
his credit.
RAKESH KUMAR GUPTA
Mr. R.K. Gupta, aged 47 years, is a
professional Chartered Accountant with 25
years standing possessing skill in Finance,
Taxation, Auditing and Corporate Legal
Affairs. He started his professional career
with M/s Gupta Gupta & Associates in
January 1986 and heads this renowned firm
of Chartered Accountants since then.
Mr. Gupta remained in Executive Committee
of the Jammu & Kashmir Branch of the Institute of Chartered
Accountants of India for three terms from 1991-1994; 1994-
1998 and 2006-2009. During these three terms he
represented the Branch as its Treasurer, Secretary, Vice-
Chairman and Chairman. Mr. Gupta has been member of Tax
Payers Committee of this Region. He has also been member of
Research Committee & Direct Tax Committee of The Institute
of Chartered Accountants of India. He is also empanelled as
Peer Reviewer with Peer Review Board of the ICAI. Having
authored various articles, Mr. Gupta has to his credit
published Articles in The Chartered Accountant Journal and
also in Current Tax.com on the issues of Taxation and
Accounting Standards. Mr. Gupta has been Guest Speaker on
many occasions for various Seminars and Study Circle meets
of Chartered Accountants & others. Mr. Gupta is Member of

6. Taxation Advisory Committee and other Committees of
Chamber of Commerce & Industry, Jammu. He is also a
Trustee in Charitable Institutions providing education to the
under privileged children and relief to the needy. In view of his
interest in social activities and sports, Mr. Gupta is also a
member of Sports and Health Committee of Prestigious Social
Club.
A. M. MATTO
Mr. A. M. Matto is a Graduate in Commerce
and World Explorer. He is a high silhouette
Businessman having his interests in the
manufacture and export of Kashmir
Handicrafts.
He has made significant contribution to
commerce industry by being associated with
it in the capacity of President and other
prominent positions. Mr. A. M. Matto has had a long
association with the Bank as Director, during which he has
made valuable contribution to the Institution with his rich and
varied experiences.
NIHAL GARWARE
Mr. Nihal Chandrakant Garware is a holder of
Bachelor of Arts Degree (U.S.A.) and the scion
of well known Industrialist family of India –

7. the Garwares.
Mr. Nihal Chandrakant Garware, is at present Head of the
Legal Department and Liaison Department in some of the
Garware Companies. He has been a Director in various
companies in the Garware Group, where his responsibilities
have ranged from Production, Sales, Legal, Liaison to Finance.
He is Advisor to outside Companies like Ama Pvt. Ltd., D. Y.
Patil Group and Sharad Pawar International School. He is also
the founder member of The Youth Wing of Indian Merchants
Chamber Of Commerce.
Origin of the word “BANK”…….
The name bank derives from the Italian word banco "desk/bench", used during
the Renaissance by Florentines bankers, who used to make their transactions
above a desk covered by a green tablecloth. However, there are traces of
banking activity even in ancient times. In fact, the word traces its origins back to
the Ancient Roman Empire, where moneylenders would set up their stalls in the
middle of enclosed courtyards called macella on a long bench called a bancu,
from which the words banco and bank are derived. As a moneychanger, the
merchant at the bancu did not so much invest money as merely convert the
foreign currency into the only legal tender in Rome- that of the Imperial Mint.
Concept of a Bank………
A banker or bank is a financial institution that acts as a payment agent for
customers, and borrows and lends money. The first modern bank was founded in
Italy at Genoa in 1406, its name was "Banco di San Giorgio" (Bank of St.
George).Banks act as payment agents by conducting checking or current
accounts for customers, paying cheques drawn by customers on the bank, and
collecting cheques deposited to customers' current accounts. Banks also enable
customer payments via other payment methods such as telegraphic transfer,
EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current account,
accepting term deposits and by issuing debt securities such as banknotes and
bonds. Banks lend money by making advances to customers on current account,

8. by making installment loans, and by investing in marketable debt securities and
other forms of lending.
Banks provide almost all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments. Non-banks that
provide payment services such as remittance companies are not normally
considered an adequate substitute for having a bank account.
Banks borrow most funds borrowed from households and non-financial
businesses, and lend most funds lent to households and non-financial
businesses, but non-bank lenders provide a significant and in many cases
adequate substitute for bank loans, and money market funds, cash management
trusts and other non-bank financial institutions in many cases provide an
adequate substitute to banks for lending savings to.
Economic Functions of a Bank……..
1. Issue of money: in the form of banknotes and current accounts subject to
cheques or payment at the customer's order. These claims on banks can
act as money because they are negotiable and/or repayable on demand,
and hence valued at par and effectively transferable by mere delivery in
the case of banknotes, or by drawing cheques, delivering it to the payee to
bank or cash.
2. Netting and settlement of payments: banks act both as collection
agent and paying agents for customers, and participate in inter-bank
clearing and settlement systems to collect, present, be presented with,
and pay payment instruments. This enables banks to economize on
reserves held for settlement of payments, since inward and outward
payments offset each other. It also enables payment flows between
geographical areas to offset, reducing the cost of settling payments
between geographical areas.
3. Credit intermediation: banks borrow and lend back-to-back on their
own account as middle men

9. 4. Credit quality improvement: banks lend money to ordinary commercial
and personal borrowers (ordinary credit quality), but are high quality
borrowers. The improvement comes from diversification of the bank's
assets and the bank's own capital which provides a buffer to absorb
losses without defaulting on its own obligations. However, since
banknotes and deposits are generally unsecured, if the bank gets into
difficulty and pledges assets as security to try to get the funding it needs to
continue to operate, this puts the note holders and depositors in an
economically subordinated position.
5. Maturity transformation: banks borrow more on demand debt and
short term debt, but provide more long term loans. Bank can do this
because they can aggregate issues (e.g. accepting deposits and issuing
banknotes) and redemptions (e.g. withdrawals and redemptions of
banknotes), maintain reserves of cash, invest in marketable securities that
can be readily converted to cash if needed, and raise replacement funding
as needed from various sources (e.g. wholesale cash markets and
securities markets) because they have a high and more well known credit
quality than most other borrowers.
Banks in India…….
Banks in India can be categorized into non-scheduled banks and scheduled
banks. Scheduled banks constitute of commercial banks and co-operative banks.
There are about 67,000 branches of Scheduled banks spread across India.
During the first phase of financial reforms, there was a nationalization of 14 major
banks in 1969. This crucial step led to a shift from Class banking to Mass
banking. Since then the growth of the banking industry in India has been a
continuous process.
As far as the present scenario is concerned the banking industry is in a transition
phase. The Public Sector Banks (PSBs), which are the foundation of the Indian
Banking system account for more than 78 per cent of total banking industry
assets. Unfortunately they are burdened with excessive Non Performing assets
(NPAs), massive manpower and lack of modern technology. On the other hand
the Private Sector Banks in India is witnessing immense progress. They are
leaders in Internet banking, mobile banking, phone banking, ATMs.

10. On the other hand the Public Sector Banks are still facing the problem of
unhappy employees. There has been a decrease of 20% in the employee
strength of the private sector in the wake of the Voluntary Retirement Schemes
(VRS). As far as foreign banks are concerned they are likely to succeed in India.
Indusland Bank was the first private bank to be set up in India. IDBI, ING Vyasa
Bank, SBI Commercial and International Bank Ltd, Dhanalakshmi Bank Ltd,
Karur Vysya Bank Ltd, Bank of Rajasthan Ltd etc are some Private Sector
Banks.
Banks from the Public Sector include Punjab National bank, Vijaya Bank, UCO
Bank, Oriental Bank, Allahabad Bank, Andhra Bank etc. ANZ Grind lays Bank,
ABN-AMRO Bank, American Express Bank Ltd; Citibank etc are some foreign
banks operating in India. Currently (2007), banking in India is generally fairly
mature in terms of supply, product range and reach-even though reach in rural
India still remains a challenge for the private sector and foreign banks. In terms
of quality of assets and capital adequacy, Indian banks are considered to have
clean, strong and transparent balance sheets relative to other banks in
comparable economies in its region.
The Reserve Bank of India is an autonomous body, with minimal pressure from
the government. The stated policy of the Bank on the Indian Rupee is to manage
volatility but without any fixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some
time-especially in its services sector-the demand for banking services, especially
retail banking, mortgages and investment services are expected to be strong.
One may also expect M&As, takeovers, and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first
time an investor has been allowed to hold more than 5% in a private sector bank
since the RBI announced norms in 2005 that any stake exceeding 5% in the
private sector banks would need to be vetted by them.
Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector
banks (that is with the Government of India holding a stake), 29 private banks
(these do not have government stake; they may be publicly listed and traded on

11. stock exchanges) and 31 foreign banks. They have a combined network of over
53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a
rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5%
respectively.
Banking in India
Central Bank Reserve Bank of India
State Bank of India · Allahabad Bank · Andhra Bank · Bank of Baroda ·
Bank of India · Bank of Maharashtra · Canara Bank · Central Bank of India ·
Corporation Bank · Dena Bank · Indian Bank · Indian Overseas Bank ·
Nationalized Banks
Oriental Bank of Commerce · Punjab & Sind Bank · Punjab National Bank ·
Syndicate Bank · Union Bank of India · United Bank of India · UCO Bank ·
Vijaya Bank · IDBI Bank
Axis Bank · Bank of Rajasthan · Bharat Overseas Bank · Catholic Syrian
Bank · Centurion Bank of Punjab · City Union Bank · Development Credit
Bank · Dhanalakshmi Bank · Federal Bank · Ganesh Bank of Kurundwad ·
HDFC Bank · ICICI Bank · IndusInd Bank · ING Vysya Bank · Jammu &
Private Banks
Kashmir Bank · Karnataka Bank Limited · Karur Vysya Bank · Kotak
Mahindra Bank · Lakshmi Vilas Bank · Nainital Bank · Ratnakar Bank · SBI
Commercial and International Bank · South Indian Bank · Tamilnad
Mercantile Bank Ltd. · YES Bank
Foreign Banks Citibank · HSBC · Standard Chartered
Regional Rural Banks South Malabar Gramin Bank
Corporate Governance of J&K Bank……..
J&K Bank has been committed to all the basic tenets of good Corporate
Governance well before the Securities and Exchange Board of India and the
Stock Exchanges pursuant to Clause 49 of the Listing Agreement mandated
these. Now, it is our Endeavour to go beyond the letter of the Corporate
Governance codes and apply it innovatively in a more meaningful manner
thereby making it relevant to the organization that is operating in a specific
environment, which is different from the generic Anglo-Saxon one. In line with the
vision, J&K Bank wants to use Corporate Governance innovatively in a
transitional economy like Jammu and Kashmir.

12. The Bank wants to use Corporate Governance as an instrument of economic and
social transformation. In due course, we would set our self-targets of social and
economic reporting as a part of annual disclosures. This will help us
conceptualize and contextualize the form and content of Corporate Governance
in a developing state. Given the fact that J&K Bank is and is seen as a great
success of” public-private partnership”, our Bank as a business is expected to
play a role in social transformation of the economy. This lends urgency to
implementation of good governance practices which go beyond the Corporate
Governance code. Operating in an environment that is emerging from a situation
of civil strife, the issue of Corporate Governance assumes a different and greater
relevance. We, as the prime corporation of Jammu and Kashmir, have a vested
interest in making the state a safe place for business. J&K Bank has a key role to
play in providing public and private services, financial infrastructure and
employment.
As such, the efficiency and accountability of the corporation is a matter of both
private and public interest, and governance, therefore, comes at the top of the
agenda. The fact that the bank is state owned but professionally managed,
having a large size of international investors, governance is critical. For us
Corporate Governance is concerned with the systems of laws, regulations, and
practices, which will promote enterprise, ensure accountability and trigger
performance. The J&K Bank, for one, stands for being more accountable,
practice self-policing and make financial transactions transparent and
constitutional, of our directors to make J&K Bank an engine of social
transformation. As an eminent corporate jurist (Chancellor William T. Allen) from
US says, “A corporate director has civic responsibility. The people, who accept
this responsibility, do it conscientiously and well deserve our respect as they are
serving a nation.
Vision of J&K Bank……….

13. The vision of J&K Bank is not to be like any other commercial bank operating in
Jammu and Kashmir but to be the developmental bank of the state intrinsically
involved in its overall socio-economic development.
In synchronization with this vision, J&K Bank adopted a new strategy of
substantially increasing the investment in the state, particularly in productive
sectors like horticulture, handicrafts etc and developmental sectors like primary
education.
Mission of J&K Bank……….
Our mission is two-fold: To provide the people of J&K international quality
financial service and solutions and to be a super-specialist bank in the rest of the
country. The two together will make us the most profitable bank in the country.
Quick Facts about J&K Bank………
 First meeting of BOD’s-7th Jan 1938.
 First manager: Mr. Sohan lal khotari.
 First Chairman: Major general Roy Bahadur Bishan Dass (CM).
 First safe deposit vault at Residency Road: 1940
 Appointment of staff on professional basis: 1945
 First outside branch: Amritsar.
 Loss of two braches –Mirpur and Muzafarabad on partition 1947.
 Sponsored first Regional rural bank: Jammu rural bank 1976.
 Responsibility of payment of pension to civil pensioners of state 1976.
 Bank declared as A class bank 1976
 Permission granted by RBI to deal in the foreign exchange business 1981
 Sponsored another regional rural bank Kamraz rural bank 1981.
 Customer service cell 1984.
 Introduction of MICR technology 1987.
 Historic period Golden Jubilee, creation of J&K bank golden jubilee 1989.

14. Brand Identity……….
The new identity for J&K Bank is a visual representation of the
Bank’s philosophy and business strategy. The three colored
squares represent the regions of Jammu, Kashmir and Ladakh.
The counter-form created by the interaction of the squares is a
falcon with outstretched wings – a symbol of power and
empowerment.
The synergy between the three regions propels the bank towards new horizons.
Green signifies growth and renewal, blue conveys stability and unity, and red
represents energy and power. All these attributes are integrated and assimilated
in the white counter-form.
View of the Organization……….

15. Corporate Eleven Divisions
Headquarters
Zonal Offices Ten Zonal Offices
Branch Network 555+Business units
ATM and other 200+centers
Channels
Corporate Social Responsibility………
 The Corporate Social Responsibility (CSR) of the J&K Bank seeks to
recognize obligations towards society and aims to integrate the CSR ideals
into its mission for optimizing both business and social performance. It
stresses on promoting work life balance, give attention to social and
environmental concerns and host of factors that facilitate business pursuits
and accomplishment of economic goals. The CSR is not just recognized as
promulgating the Bank's own values and principles of philanthropy but also
the values and principles of all those who have a stake in it or are affected by
its operations. By supporting social cause aligned to the mission the CSR
strategy differentiates the Bank's brand and enhances its reputation. The
Bank manages social issues in the same manner as any other strategic
business issues.

16.  The Bank besides playing its role in economic development of the State and
country contributes significantly towards the social cause. The Bank has
established its credentials for the poor and needy by donating generously for
various philanthropic activities aimed at ameliorating their sufferings. Be it
victims of natural calamity, like fire, flood, snowstorm or tsunami and disabled
or patients with serious ailment who lack reliable means of survival, the bank
has been all through supporting them. The one and a half decades long
turmoil in the State of J&K has added to the agonies of people with hundreds
of children losing their parents to fend for themselves in this harsh world. The
Bank realizing its responsibility of saving the life/ future of these blooming
children, adopt several of them by providing financial support either through
various orphanages where they are sheltered or directly to the orphans by
bearing their educational or other expenditure.
 The Bank would continue to provide study scholarships to the poor and needy
students including students from far-flung areas, who without such support
would have been school dropouts. The Bank shall continue donations for the
development of infrastructure (computers, books, TV's, prosthetic support etc)
to various NGOs, societies, trusts, institutions, etc. involved in socio-
economic development of the society. The physically challenged persons
belonging to socially and economically deprived classes especially children
shall be helped by acquiring prosthetic support by meeting partly or fully cost
of surgery with pre and post medication.
 In order to enable socially and economically weaker classes to live a healthy
life the bank shall endeavor to give financial support to the needy and poor
patients, afflicted with dreaded diseases like Cancer, cardiac failure, Kidney
failure etc. for their treatment / surgery.
 Heritage preservation is an important responsibility of every conscious
individual, institution or agency. The thrust areas to assist in this respect for
the Bank will be preservation of historical/religious monuments, development
of tourist sites, national properties, museums, libraries, protection of
environment/ecology etc. and sponsoring seminars and awareness camps,
art and literary works, 3rd cultural activities, social service camps, college or
university students clubs etc.
 The Bank has been playing a vital role in the promotion of tourism and it is in
this backdrop that the Bank has been shouldering the responsibility of
registering yatris for the Shri. Amarnathji Yatra through its extensive network
of branches spread across the country. The Yatra is an annual religious
function of Hindu community, wherein devotees travel by foot to pay

17. obeisance to Holy Shiv Lingam at Shri Amarnathji cave. The Bank puts in
place special registration counters at all branches of the Bank outside the
state and some selected branches in Jammu and Kashmir State. In addition
to this, accidental insurance cover facility of Bajaj Allianz General Insurance
Co. Ltd. to the pilgrims at a nominal premium is made available to the yatris.
During the Yatra, the bank establishes mobile branches even at the holy
cave. People in general and pilgrims in particular all over the country have
appreciated this effort and won lot of applause for the Bank.
 Apart from above activities the Bank has been constructing/developing the
public utility service like public parks, bus stands, drinking water posts,
lavatories, conveniences, rain shelters. In addition to this, the bank organizes
relief camps, service camps, night shelters, health resorts, health clinics,
disaster & calamity management centers, rehabilitation centers etc.
 With the objective of promoting the philanthropic activities, other social and
environmental issues, the bank has a CSR policy in place embodying the
broader principles for providing donations. The donations are made within the
prescribed limit of 1% of the published profit for the previous year. It focuses
on economic, social, cultural and geographical backwardness of the area.
 The bank provides financial assistance for the benefit of Handicapped
persons/ orphans/ poor patients suffering from serious ailments.
 Provides direct assistance or through Prime Minister's Relief Fund or Chief
Minister's Relief Fund or any other national level or state level calamity relief
fund to needy who have suffered due to natural disaster and calamities.
 Helps in rehabilitation of handicapped children/ persons belonging to
depressed classes of society.
 Provides for procurement of devices / apertures for kidney transplantation;
cardiac interventions; cancer patients; AIDS HIV and other dreaded diseases,
philanthropic support for people belonging to economically deprived sections
of the society.
 Provides financial support to orphanages.
 Provides scholarships to meritorious students of depressed sections of the
society at various levels with focus on the needy.
 Provides technical and financial support for the Heritage Preservation through
sponsorship of awareness seminars, organizing social service camps,
sponsoring Art & Literary works and preservation and development of
important Historical, religious, tourist sites, museums, libraries, archives,
scientific organizations and National properties.
 Provides financial assistance for protection of Environment/ecology.

18.  Constructs and develops the public utility services like bus stands,
development of parks, construction of drinking water posts, lavatories,
conveniences etc.
 The donations are directly made to depressed class of society including
physically challenged person or through a Non Governmental Organization
engaged in the ameliorating of the suffering of this class of society.
 The Bank's CSR is rooted in its Corporate Governance philosophy, which in
turn is woven around Bank's commitment to ethical practices in the conduct of
its business, while striving in the constant quest to grow with profits and
enhance shareholders value and align interests of the stakeholders and
society through adoption of best international practices and standards.
Managing CSR is not viewed as an extra cost or burden but is viewed not
only as making good business sense but also contributing to the long-term
prosperity of our Bank and ultimately its survival. Being a good neighbor and
showing that you care on the one hand and being a successful business on
the other, are flip sides of the same coin.
 The Bank donated Rs.1 lakh to Maharaja Ranjit Singh Trust, New Delhi, for
the upliftment of downtrodden sections of the society. The Bank gave
donation to the Foundation for inter-community Relations Delhi for upliftment
of society. A financial assistance to the tune of Rs.1.00 lakh for the welfare of
Gujjars was given to Gurjar Desh Charitable Trust, Jammu.
 The Bank donated sewing machines to destitute widows through Bhartiya
Dalit Sahitya Academy, Jammu. Showing its eagerness for the upliftment of
women, the Bank donated embroidery machines to Women's Welfare
Society, Kachhama, Kupwara. The Bank also gave donation to NGO Friends
Association for Ladies and Orphans Welfare (FAOW), Srinagar.
 Devastating fire in village Batpora (Wathora), Kashmir rendered hundreds of
people homeless and two persons lost their lives. The Bank organized a relief
camp and distributed 50 Kgs of rice and Rs. 5000 to each of the affected
family. Similarly, another relief camp was organized for the fire victims at
Seer, Anantnag (South Kashmir), where blankets, eatables and domestic
utensils were distributed among the sufferers. A camp was also organized by
the Bank at Lasipora, Pahalgam, where cash was distributed among the fire
victims.
 With a view to help Kargil war sufferers of Drass area in Ladakh region in
their rehabilitation, the Bank organized a relief camp. Blankets and eatables
were distributed among the people covering about 1500 families settled in 17
villages in and around Drass, who had migrated to Sankoo, Saliskote and

19. other far flung areas of Kargil. Stationery items were distributed among the
school going children.
Insurance Service through J&K Bank……..
 In life insurance segment, the bank joined hands with MetLife International
(USA) and it culminated into the launch of MetLife India Insurance Company
Private Limited, which was incorporated in India on April 11, 2001. MetLife
India is a joint venture between MetLife International Holdings Inc., the J&K
Bank, M. Pallonji and Co. Private Limited and other small private investors.
MetLife India is headquartered in Bangalore.
 It is remarkable that MetLife International, headquartered in New York, is
number one insurer in the United States based on over US$ 2 trillion of life
insurance in force and serves approximately 9 million individual households in
the U.S. as well as 87 of the Fortune 100 companies. It has its affiliates,
subsidiaries and representative offices in 15 countries.
 The bank is also Corporate Agent of MetLife and is marketing its products
through its strong branch network.
 The Bank has entered into an alliance with Bajaj Allianz to distribute their
non-life products.
 These products are available at all branches of the bank across India.
Remittance Services through J&K Bank……..
 The bank has a tie –up with Western Union Financial Services Inc., an
international leader in money transfer services through its primary agent
SITA, a division of Kuoni Travels India Pvt. (“Kuoni”) to provide inbound
money transfer services to customers across the country. As a result of this
association, people in general and J&K Bank customers in particular are
availing the facility of receiving money from their relatives and friends abroad
using the Western Union Money Transfer service.
 Our bank has also an arrangement with Reliance Capital –Travel mate to
provide inbound money transfer services to customers across the country. A
number of branches in J & K and all the branches outside state have been

20. added to the existing list to bring more customers to the bank’s fold for
availing this facility.
J&K Bank’s Tie up with foreign AMC’s for Mutual
Funds…….
J&K bank Ltd. has joined its hands with various foreign Asset Management
Companies for entering into a joint-venture for its proposed mutual fund venture.
The bank has been approached by many foreign AMC’s, who have shown a
keen interest in joining hands with it. The joint-venture becomes important for
J&K bank as it would provide the expertise required for running the Asset
Management Business. The bank already has a network of more than 500
branches, which could be leveraged to market the schemes. It is a great
opportunity to exploit the virgin market for mutual funds in Jammu & Kashmir
where J&K Bank is having around 280 branches,"
Role of J&K Bank in Mutual Funds……..
 J&K Bank has entered into tie-ups with reputed Asset Management
Companies for distribution of Mutual Fund products.
 Mutual Fund industry is one of the fastest growing segments in financial
services in India. Over the years, banks in India have emerged as the biggest
distributors of financial products. This has helped the banks to capture and
retain their huge client base and simultaneously adding a steady stream of
fee based income.
 Mutual Funds have become an attractive proposition for investors in the
current context and for J&K Bank it will be a good investment option to have
in our product portfolio. This shall be an important step towards converting the
bank branch into a financial supermarket addressing all the financial needs of
the customers thus helping the bank retain the customers within its fold.

21.  Moreover the branch can augment its fee based income the Bank aims to
match to industry standards.
 The AMC’s with which the Bank has entered into an arrangement are: UTI, Kotak
and Reliance Capital Asset Management. The Bank shall undertake distribution of
their current schemes as well as NFO (New Fund Offer) as and when the AMC comes
up with the same.
Moving forward challenges ahead………
 Barrier less entry of foreign banks from 2009 (GATS).
 Capital account convertibility
 Global market integration
 Sub prime crises
 Possible mergers and acquisitions
 Application of BASIL-II norms
Mutual Fund…….
A mutual fund is a common pool or fund of capital mobilized from a large
number of investors and invested on their behalf in several securities in the
market. All the returns from such investments, both in terms of dividends and
capital appreciation, net of various incidental expenses, accrue to the investors.
A mutual fund provides many financial and non-financial benefits to the investors.
Like shares, all mutual funds provide returns in the form of dividends and capital
appreciation and even bonus issues. But by far the most significant benefit is one
of risk reduction or risk diversification.

22. When one invests in the stock of anyone company, one is exposed to several
random risks. For instance, the company may go bankrupt, it may suffer huge
unexpected losses or the management may not be honest or efficient. Investing
in a mutual fund protects investors from such random or non- Systematic risks.
How does this protection work? It is well known from one's grandma that one
should not put all one’s in a single basket. Thus, any investment portfolio must be
well diversified. It is difficult for a small investor to diversify the investment over
30 or 50 different securities or more. Also, being laypersons, it maybe wiser to
leave the selection of securities to an expert agency. This is where the mutual
fund steps in by pooling together investments from a large number of small
investors and then investing the accumulated proceeds in a well diversified
basket of securities. Thus, investors get the benefit of diversification without
actually doing so themselves.
It is therefore usually better for small investors to invest in a mutual fund directly
rather than invest in 30 to 50 securities on their own. The capital required for
investing in several securities on one's own is considerably higher than that
needed for investing in a mutual fund. For example, if one wants to invest Rs.
10,000, it is not sufficient to build a diversified portfolio. However, this amount
can be easily invested in a, mutual fund, which typically invests in a large number
of companies. Thus, a mutual fund offers the benefit of diversification even at a
low level of investment. As a consequence of wide diversification, its expected
returns tend to be lower and less volatile than the returns from anyone security.
Furthermore, transaction costs for the investors tend to be lower while dealing
with a single mutual fund as against transacting in a large number of securities.
There is also no need to research or track a large number of different companies
or regularly keep a check on the dividend returns from dozens of' different
companies.
Thus, much of the value of mutual funds to small investor comes from risk
diversification or risk mitigation, professional management, switching among
schemes, affordability, liquidity, lower transaction costs, research, international
investment facilities, etc.
Mutual funds render a large range of services that are not available to an investor
who invests in securities directly.
A mutual fund is thus, as much a financial product as a financial service. Of
course, the services rendered by a mutual fund are not free. Nothing worthwhile
ever is. Unit holders have to pay for the recurring transactions, annual fees, entry
and exit loads and so forth, irrespective of whether the fund generate returns or
not.

23. All this should not create the impression that mutual fund investments are only
for small investors. Large entities, including banks, insurance companies and
financial institutions routinely invest in mutual funds.
Investors subscribe to units of a mutual fund just as shareholders subscribe to
shares of a company. Also, a mutual fund, like a company, does not guarantee
any dividend.
Mutual fund managers use their discretion to decide whether or not to declare
dividends, based on the profitability of the fund, market conditions, etc.
Even when they do so, the dividend per unit may vary from period to period and
these variations may be considerably higher than in the case of shares. This is
because companies normally like to smoothen out the equity dividends over a
period of time. This means that they strive hard to maintain dividends even in a
bad year to convey the impression to the market that all is well with the company.
But such considerations do not constrain mutual funds since their major
preoccupation is to provide well-diversified portfolio returns, whatever they may
be.
Mutual fund dividends can be paid only from the revenue income and realized
capital gains of the underlying portfolio and not from previous profits as in the
case of shares.
Each unit of a mutual fund represents a unit holder’s proportionate ownership of
the fund's portfolio holdings. The investors of mutual funds are known as unit
holders. The companies that operate the mutual funds are known as Asset
Management Companies (AMC’s) or Investment Managers. (Appendix 1 lists the
AMC’s operating in India). An AMC may float more than one fund (also called
schemes), each with an objective and investment mandate of its own. The terms
mutual fund, fund or scheme are often used interchangeably.
Benefits from investing in a Mutual Fund…….

24. Small investments: Mutual funds help you to reap the benefit of returns by a
portfolio spread across a wide spectrum of companies with small investments.
Such a spread would not have been possible without their assistance.
Professional Fund Management: Professionals having considerable
expertise, experience and resources manage the pool of money collected by a
mutual fund. They thoroughly analyze the markets and economy to pick good
investment opportunities.
Spreading Risk / Diversification: An investor with a limited amount of fund
might be able to invest in only one or two stocks / bonds, thus increasing his or
her risk. However, a mutual fund will spread its risk by investing a number of
sound stocks or bonds. A fund normally invests in companies across a wide
range of industries, so the risk is diversified at the same time taking advantage of
the position it holds. Also in cases of liquidity crisis where stocks are sold at a
distress, mutual funds have the advantage of the redemption option at the NAV’s.
Transparency and interactivity: Mutual Funds regularly provide investors
with information on the value of their investments. Mutual Funds also provide
complete portfolio disclosure of the investments made by various schemes and
also the proportion invested in each asset type. Mutual Funds clearly layout their
investment strategy to the investor.
Liquidity: Closed ended funds have their units listed at the stock exchange,
thus they can be bought and sold at their market value. Over and above this the
units can be directly redeemed to the Mutual Fund as and when they announce
the repurchase.
Choice: The large amount of Mutual Funds offer the investor a wide variety to
choose from. An investor can pick up a scheme depending upon his risk / return
profile.
Regulations: All the mutual funds are registered with SEBI and they function
within the provisions of strict regulation designed to protect the interests of the
investor.
Mutual Funds give returns in two ways - Capital Appreciation or Dividend
Distribution.
Capital Appreciation: An increase in the value of the units of the fund is
known as capital appreciation. As the value of individual securities in the fund

25. increases, the fund's unit price increases. An investor can book a profit by selling
the units at prices higher than the price at which he bought the units.
Dividend Distribution: The profit earned by the fund is distributed among unit
holders in the form of dividends. Dividend distribution again is of two types. It can
either be re-invested in the fund or can be on paid to the investor.
A Mutual Fund is not an alternative investment option to stocks and bond; rather
it pools the money of several investors and invests this in stocks, bonds, money
market instruments and other types of securities. A Mutual Fund is a trust that
pools the savings of a number of investors who share a common financial goal.
The money thus collected is then invested in capital market instruments such as
shares, debentures and other securities.
The income earned through these investments and the capital appreciation
realized is shared by its unit holders in proportion to the number of units owned
by them. Thus a Mutual Fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed
basket of securities at a relatively low cost. The flow chart below describes
broadly the working of a mutual fund:
Mutual Fund Operation Flow Chart

26. Types of Mutual Fund………
Mutual funds may be categorized in many ways. At the most fundamental
level, mutual funds may be close-ended or open-ended, which are the types
of mutual funds categorized by their structure.
Close-ended funds are redeemable funds having a pre-specified life, at
the end of which the capital is returned to the investors. These are listed in the
stock exchanges. After one has subscribed for the units at the time of the initial
public offer, these cannot be sold back to the AMC until the end of the fund's life.
Nor can one buy new units from the mutual fund. However, if one wishes to
redeem (sell) the holdings or buy into such a fund before the date of maturity of
the fund, one may do so in the stock exchange where the units are listed.
Morgan Stanley Growth Fund is an example of a well-known close-ended mutual
fund.
Open ended funds on the other hand have no finite life or maturity period,
having no finite life. They are also far more prevalent than close-ended funds.
They are open for investment and redemption throughout the year. But they are
not listed in a stock exchange. It is the AMC of the fund that offers to sell and buy
the units from the investors at what is called the Net Asset Value (NAV).
New investors can also buy units of a mutual fund directly from the AMC and not
from the secondary market. So in an open-ended scheme the number of
outstanding units varies on a daily basis, while in a close-ended scheme the
outstanding units at any point in time remain constant. Thus, in an open-ended
scheme, the fund size constantly increases or decreases on a daily basis
depending on whether redemption by existing unit holders is less than
subscriptions from new investors or vice versa.
The next level classification of mutual funds is based on their characteristics
with respect to the risk level of the asset invested nature of asset invested, the
fund's objective, industry to which the invested assets belong, trading and

27. investment strategies adopted, structure, frequency of dividend payments, and
so forth.
Mutual funds based on an asset class of investment may be equity funds,
debt funds, money market funds, Gilt fund, real estate funds and so forth. As the
names suggest, equity funds primarily invest in a portfolio of equity shares; debt
funds in fixed return instruments; money market funds in short-term money
market instruments like certificate of deposit, commercial paper. Inter bank call
money market etc; gilt funds in gilt or bullion or related securities; and real estate
funds invest in real estate.
Growth funds, balanced funds and Income funds describe the extent of the
combination of different asset classes in the investments. For instance, a growth
fund invests predominantly in equities and very little in debt (e.g. a ratio of 80:20).
Also, a growth fund concentrates more on growing the value of the fund by re-
investing rather than on paying out dividends.
An income fund on the other hand invests in the reverse ratio, e.g. around
20:80 in equities and debt securities respectively. The accent here is more on
paying out a steady dividend or income stream.
A balanced fund strikes the golden mean investing in a more or less equal
mix of equity and debt securities. In general however, all funds keep a small
fraction, perhaps around 5 to 10 per cent of the corpus, invested in money
market instruments for easy liquidity. This ensures that the mutual fund is able to
pay for the units as and when they come for redemption from unit holders.
Industry specific or sectoral funds focus upon specific industries or
sectors. For example, the sector of focus could be information technology,
biotechnology, pharmaceuticals, banking, emerging stocks, small and medium
enterprises, or even geographic sectors, such as emerging markets, Asia Pacific,
India, China and so forth., For example, a FMCG fund limits its investments to
securities issued by companies engaged in the business of fast moving
consumer goods and other similar businesses. An MNC fund invests in
multinational or transnational companies. Often the name of a sectoral fund fairly
describes the investment objective of the fund. For example, HSBC Floating Rate
Fund Short Term Plan invests mostly in floating rate short-term debt instruments.

28. A real estate fund basically invests in real estate properties. Like regular
mutual funds, real estate funds pool money from investors, but unlike other
funds, they predominantly invest in securities issued by real estate companies
and in the absence of these securities they invest in real estate properties. Again,
unlike other funds, calculation of the daily NAV’s for these funds is not as
straightforward as the valuation of the underlying investment units. This is
because real estate is typically much more illiquid than securities and real estate
prices are not available with as much frequency as securities on. a day-to-day
basis. Real estate funds are only just making an entry in the Indian capital
market. Recently SEBI spelt out the guidelines for these funds and some AMC’s
are in the process of launching these funds.
Then there are index funds that invest in companies belonging to specific
indices such as Sensex or Nifty.
Schemes or funds may also be characterized by their investment objective.
For example, a fund may be called a Children's Fund or Young Citizens' Fund,
etc. A children's fund may enable parents or relatives to invest with the specific
purpose of generating savings to meet the anticipated expenses of their children
in the future. Young Citizen's Fund may be directed at young professionals. A
dividend re-investment plan may not payout periodic dividends but may re-invest
the dividends into new units. Typically, these schemes are open-ended in nature
and often carry a lock-in provision, so that the unit holders have to wait till this
period is over before redeeming the units. Often AMCs suffix their funds with G/
Q/ MD/ WD/ DD along with the name to indicate a growth plan or quarterly/
monthly/weekly/daily payment of dividends (See Box 77.1).
Box 77.1
Name Option
Floating Rate Short Term Plan (G) Growth
Floating Rate Short Term Plan (MD) Monthly Dividend
Floating Rate Short Term Plan (WD) Weekly Dividend
Floating Rate Short Term Plan (DD) Daily Dividend
For example, HSBC Mutual Fund offers the above options for its HSBC
Floating Rate Fund Short Term Plan. Mostly the fund invests in floating rate debt
instruments.
Incidentally, even when a mutual fund offers a 'daily dividend option' in reality
they may not actually distribute cash on a daily basis. They may simply re-invest

29. the daily dividend back into the scheme so that additional units are allotted to unit
holders.
As stated earlier, a single AMC may offer many different mutual funds or
schemes. Appendix 2 provides a list of various mutual categories of mutual funds
being offered by the HDFC Mutual Fund.
Lewis Carroll on Types of Mutual Funds
(with apologies in Alice's Adventures in Wonderland)
'Never imagine mutual funds not to be otherwise than what
they might appear to others that what they are or might have
been was not otherwise than what they had been would have
appeared to them to be otherwise.'
Different kinds of mutual funds available in India……..
With the growth of the mutual fund industry in India, the AMCs offer
schemes with many innovative features to cater to different clients. Figure 78.1
lists a few of the schemes along with their objectives that are offered by various
AMC’s in India. Even though these schemes have many common features, the
AMC’s of each of these try to incorporate some unique features into each fund in
order to create a special appeal for some select group of investors. The offer
document of each scheme of the AMC’s, provide this information in greater detail
in their websites.
Structural arrangement of an average mutual fund…….

30. Mutual funds in India function under a 3-tier structure as indicated in Figure
79.1. The promoters or sponsors intending to float a mutual fund appoint trustees
and set up an AMC, which in turn appoints a custodian/depository, registrars,
transfer agents and auditors.
The mutual fund industry in India and all the participants involved in this
business are governed by SEBI. A sponsor or promoter first applies to SEBI to
get a registration in order to start mutual fund activities. SEBI grants a certificate
of registration if the sponsors fulfill the necessary criteria of experience,
profitability, positive net worth, etc.
Next, the sponsor forms a trust under the provisions of the Indian Trusts Act,
1882, appoints trustees and forms a board of trustees. The composition of the
board of trustees is governed by SEBI. For example, a certain number of trustees
have to be independent persons, not associated with the sponsors in any
manner whatsoever.
Entities in a Mutual Fund Business
The trustees play a critical role as they 'hold in trust' the investments of the
investors/ unit holders of the mutual fund. The trust deed contains clauses that

31. are necessary for protecting the interests of the unit holders. In general, the
trustees act as a self- regulating body and protectors of the unit holders' money.
The board of trustees does not manage the day-to-day activities of the
mutual fund directly. Instead, it appoints an Asset Management Company (AMC)
to perform that task. Normally an AMC is registered under the Companies Act,
1956.
It may be a private limited company or a wholly owned subsidiary of a public
limited company or even a joint venture. Table 79.1 lists three AMC’s under
different forms of ownership.
SEBI also requires that AMC’s have a certain minimum net worth
contributed by the sponsors. Thus, de facto an AMC manages a mutual fund
scheme while, de jure the trustees manage them. The trustees also monitor the
performance of the AMC and ensure that it complies with various regulations of
SEBI.

32. A custodian holds the securities of various schemes of the fund in their
custody. Before dematerialization of shares was introduced, share transfers were
done in physical form. As mutual funds regularly buy and sell huge volumes of
securities, the custodians used to receive, transfer and hold the physical
certificates on behalf of an AMC. However, following demat of securities; the
term custodian has given way to the depository. A depository maintains an on-
line record of ownership of securities bought and sold by a mutual fund in
dematerialized form, just as a bank records the balance in one's account.
The registrar is appointed in order to accept and process the unit holders'
applications, and inform the AMC regarding the amount received for subscription,
redemption and so forth.
Transfer agents are responsible for issuing and redeeming units of the
scheme and provide other related services such as preparation of transfer
documents and updating investor records. They are the conduit through which
fresh units are issued to new buyers or units sent back to the AMC for
redemption.
The trustees appoint the top management of the AMC, such as Chief
Investment Officer or Chief Executive Officer as well as fund manager(s) for the
various schemes. The trust company also appoints an auditor to audit the books
of accounts of all the schemes. Auditing the financial details for a specific
scheme, is an important aspect as in the past there have been several instances
where AMC’s have resorted to inter-scheme transfer of securities to make a
specific scheme more attractive. Such manipulations acquire ominous
proportions particularly when the transfer of securities from one scheme to
another is done at a price different from the market price. In such cases, unit
holders of one scheme benefit at the cost of another.
Having organized its structure comprehensively, an AMC is ready to float
various schemes, each one tailored to the requirements of different sections of
the public. An AMC may appoint separate fund managers for each scheme under
its umbrella or may assign two or three schemes to a specific fund manager.
One of the important aspects of this multi-tiered organization structure in the
mutual fund business is to clearly segregate the involvement of sponsors. The
trust company and the board of trustees form the proverbial Chinese wall
between the promoters of the mutual fund business and the money invested by
millions of unit holders. Apart from their other supervisory roles, the trustees also
ensure that aggregate investment by the sponsor promoted AMC into the listed
securities of group companies of the sponsors, does not exceed a certain limit. In

33. short, the trustees ensure that sponsors do not use the AMC as a vehicle to
channel the unit holders' money to their own group companies.
Example of the above structural arrangement……..
Let us consider the mutual funds floated by Kotak Mahindra. Kotak Mahindra
Bank Limited (KMBL), as the sponsor, established Kotak Mahindra Trustee
Company Limited (KMTCL) as the trustee company. KMBL also floated Kotak
Mahindra Asset Management Company Limited (KMAMC) as the
AMC/Investment Manager. KMAMC offers many different kinds of schemes such
as, Kotak Global India, Kotak Savings Plan, Kotak MNC, Kotak Tech, etc.
Computer Age Management Services Private Limited is the registrars, Deutsche
Bank and ABN AMRO are the custodians and Price Waterhouse is the auditors
for the fund.
Difference between IPO of a mutual fund and IPO of a
company
Depending upon the type of mutual fund an AMC expects its potential
investors to be interested in; it makes an initial public offer (IPO) for a suitably
designed scheme. Until the middle of 2005, AMC’s announced an IPO every time
they launched a new scheme. But this confused the investors somewhat, as
normally only the first public issue of a company is called an IPO (all subsequent
issues to public merely being public issues). Hence the AMFI (Association of
Mutual Funds in India) and SEBI instructed the AMC’s to use the term NFO (New
Fund Offer) rather than IPO for launching their new schemes. AMFI is the
association of all AMC’s registered with SEBI, which promotes professional and
ethical standards in the mutual fund industry in India. But this is not the only point
of difference between the IPO of a company and the NFO of a mutual fund.
One other difference pertains to the issue of pricing. In an IPO, a company
may issue shares at a premium over the par value. For example, an IPO may be

34. priced at Rs. 60 per share, representing Rs. 50 premium over the face value of
Rs. 10 per share. But the concept of a 'premium' is not applicable in case of
mutual fund units, which carry only their face value.
Another difference pertains to the matter of oversubscription. In an IPO, a
company is normally required to return the over-subscribed amount to the
investors (though companies can exercise greenshoe option). However, in an
NFO, the AMC retains the entire -amount that it mobilizes. Incidentally, it may be
noted that this also impacts the pricing of shares vis-à-vis units following the
public offer. This is because, when an IPO of a company is over-subscribed by a
large margin, there is a huge unfulfilled demand and that pushes up the price of
shares following the public offer. However nothing like that happens in case of
NFO’s of mutual funds. The fund starts trading at the Net Asset Value (NAV),
(Question 85 has more on calculation of NAV) which in turn depends upon the
value of the underlying portfolio of the relevant scheme.
Lastly, the price of a share may be influenced by speculation, rumors,
corporate performance, forces of demand and supply, etc. so that there could be
significant swings in share prices. However the NAV of a mutual fund scheme is
largely governed by the value of the underlying securities (which could add up to
30, 50 or even more securities) into which the fund stays invested and is hence
far less volatile. For example, it is not unknown for the market price of a share to
double over a relatively short period of time. But for the NAV of a particular
scheme to double in the same time, each and every one of the underlying
securities will have to double in their market price, which is highly unlikely.
Offer Document of Mutual Fund…….
When launching any new scheme, the AMC prepares an offer document. This
provides the name of the scheme, its specific investment objectives, entry/exit
load structure and other attributes such as, minimum investment requirement,
face value, periodicity of dividend payments and so forth. The document often
contains so much information that it runs into 60-70 pages, although in
newspapers there is usually only a quarter-page highlights in the form of an
advertisement. Almost all mutual funds put their offer document on their
websites.

35. Once the offer closes, the AMC issues the units of the scheme to the
investors and the funds mobilized are invested according to the broad investment
objectives indicated in the offer document. For example, the investment objective
or investments mandate of a certain scheme may be to invest at least 70 per
cent in equity and equity-related securities issued by service sector companies
and the balance in debt and money market instruments. Thus, such a scheme
targets itself at those investors who feel that investing a sizeable amount in the
services sector affords a good opportunity of investment. This mandate indicates
that if one is an investor looking for a regular income from the investment and/ or
if one has a very short-term investment horizon, then this scheme may not be
suitable.
The offer document also indicates whether a unit holder will receive a -
return through regular dividend or only the capital appreciation on the investment,
or a combination of both. It may also require the unit holder to specify whether
dividends should be paid daily, weekly, monthly or quarterly and so forth. The
document also specifies the face value of a unit (which may vary depending on
the scheme) and the minimum application amount for a single unit holder, etc.
Costs associated with investing in mutual funds……
The offer document provides details of the various costs associated with
investing in the funds. Needless to say, an AMC incurs several expenses in
managing the fund on behalf of the investors. Some of these are recurring
expenses while others are one-time.
The annual recurring expenses recovered as fund management fees from
the investors include trustee fees, custodian fees, registrar fees, investment
management and advisory fees and other recurring operating expenses. This
includes ongoing marketing and selling expenses, brokerage and transaction
costs, audit fees, costs related to providing accounting statement, dividend
redemption cheques and warrants, insurance premium paid by the fund, salaries
to staff, etc. In general, mutual funds cannot exceed the fund management fees
indicated in the offer document.
The AMC passes on these annual recurring expenses or fund management
fees to the investors as entry or exit loads.
The annual recurring expense is normally expressed as a percentage of the net
assets and is referred to as expense ratio. SEBI has given directives on the

36. expense ratio to be charged by AMC’s. This ratio is a graded ratio. For example,
equity funds may charge up to 2.5 per cent of the average weekly net asset of
the fund for the first Rs. 1,000 million, 2.25 per cent on the next Rs. 3,000 million,
2 per cent on the following Rs. 3,000 million and 1.75 per cent on any amount
above this. Debt funds, balanced funds, and liquid funds may charge different
amounts as prescribed by SEBI. These expense ratios form an upper limit. Given
the structure of expenses, the bigger funds will obviously have lower expense
ratios.
Entry load or the front-end charge is applied when investors buy units of a
scheme. Thus, if the entry load is 2 per cent, then the AMC deducts 2 per cent of
the total fund mobilized straight away and invests the balance 98 per cent of the
corpus to create the investors' portfolio. Hence, if the face value of a scheme is
Rs. 10, the opening NAV will be only Rs. 9.80 and not Rs. 10, since 2 per cent is
deducted towards expenses.
Exit Load, or the back-end load, is levied when an investor exits the scheme
(i.e. sells his units). For example, if a fund charges an exit load of 2 per cent and
the NAV of the scheme is Rs. 20 only Rs. 19.60 will be received when the units
are redeemed or sold.
Normally AMC’s do not charge both entry and exit loads for a given scheme. A
scheme may also be a no-load scheme, if the AMC chooses not to levy any load
whatsoever on a scheme.
There are some variations to these loads. One of them goes by a rather
pompous terminology as contingent deferred sales charges (or CDSC). CDSC is
a back-end load with a difference. It varies depending upon the duration for
which an investor remains invested in .the scheme. Typically, it rewards an
investor for loyalty that is, for remaining with the scheme longer. For example, a
fund may levy a CDSC of 2 per cent if the investment is for less than one year
from the time of investing; 1.5 per cent if it is between one and two years; 1 per
cent for between two and three years; 0.5 per cent if it is between three and four
years; and there is no charge if the investment is for more than four years. CDSC
is normally computed on the face value of the unit or the NAV whichever is lower.
More often than not, CDSC is levied by debt funds more than equity funds.
Exit loads are generally structured so as to discourage large redemptions
and in a certain period they carry higher exit loads while smaller redemptions
during the same period may carry smaller exit loads. Similarly, large investors
are rewarded with lower or no entry load in order to attract a bigger corpus while
small investors are levied a higher load. Surprisingly, there have been occasions

37. when some AMC’s have inexplicably done the opposite, i.e. levied lower exit load
(in percentage terms) to be compared etc. NAV’s and performance of other
schemes of the fund, both past and present and other relevant information,
including financial information about the sponsors and information about the
board members of the mutual fund trust company etc. are also mentioned in this.
The offer document also lists out details of the growth or dividend options.
For example, under dividend option it may mention the periodicity of dividends
and reinvestment plans, etc. It also clearly mentions the day of the week on
which the AMC will declare the dividend. For example, in the case of HSBC
Floating Rate Short Term Plan-Monthly Dividend Option, the dividend is declared
on the last Friday of each month. Similarly, the exact date for quarterly and
weekly dividend is also mentioned.
While the offer document with its 60-70 pages of information might appear
intimidating to the newly initiated, in reality these documents are fairly
standardized and one soon learns which information is more relevant. It is
however, very important to read the fine prints more than anything else. A simple
and trivial sounding term like automatic renewal could create a great problem as
it may give the AMC the right to shift the investment from a close-ended fund
upon its maturity to some other fund, unless redemption instructions are
communicated to them on time.
To sum up then, one should not only look for important factors that could
affect the risk and return of the investment in a scheme, but also develop the skill
to read the fine prints. The devil, as they say, often lurks in the details.
Net asset value (NAV) and its calculation…….
It is important here to first distinguish between the NA V of fund and the
NAV of a unit. The NAV of a fund at any point in time is the sum total of the
market value of the assets (securities) that comprise its portfolio, net of any
liabilities at that time. In other words, the NAV of a fund is the amount that all the
unit holders will receive after paying all its liabilities. The NAV of a unit or NAV
per unit on any given day simply the NAV of the fund divided by the number of
outstanding units of the scheme on that day. For example, if the market value of
securities of a mutual fund scheme is Rs. 20 million, net of all its liabilities on a
given day and the mutual fund has 1 million units outstanding on that day, the
NAV per unit will be Rs. 20.

38. The most common use of the term NAV represents the NAV per unit. This is
the price at which all the buying and selling of units with the AMC takes place.
Simply put, NAV is the market value of the securities held by the scheme. As the
market price of the underlying securities change daily, so also does the NAV of a
scheme, although the change is much less than that of a single security.
AMC’s are required to calculate the NAV of all open-ended schemes on a
daily basis and at the least on a weekly basis for close-ended ones, and publish
these in a minimum of two national newspapers. The NAV’s are also available on
the websites of the respective AMC’s as well as on the website of AMFI.
The specific formula for computing the NAV is as follows:
A. (Market Value of Investments + Receivables + Other Accrued Income + Other
Assets)
Less
B. (Accrued Expenses + Other Payables + Other Liabilities)
Divided by
C. Number of units outstanding on the NAV computation date
Clearly all the items against A above are the various assets of the mutual
fund, while all the items against B are the liabilities. The market value of
investments of the fund is impacted by the individual market prices of the
invested securities. Receivables come about in the process of transacting the
units where certain sale proceeds of the scheme are yet to be received. Other
accrued income and assets may typically be the various dividends or interest
accrued from the fund's investments, but not yet received.
Similarly, accrued expenses may represent various loads, issuing expenses
or other accrued expenses payable to the AMC from the scheme. The payables
and other liabilities may be occasioned in the course of units being transacted,
where the scheme has yet to pay the unit holders for their redemptions. They
could also be the dividends of the units themselves that are payable to the unit
holders.
The net amount of the two sets of items (A and B) represents the net asset
value (or net market value or net realizable value) of the fund for the unit holders
as a whole. When divided by item C, namely the number of units outstanding on
the NAV computation date, it yields the NAV per unit.

39. It can thus be seen that the NAV is impacted every time an investor buys
into or exits from the scheme. Clearly, large-scale redemptions have an effect of
lowering the NAV. Even though all funds maintain some liquidity for meeting the
needs of normal redemptions, large-scale redemptions may force a fund
manager to sell large volumes of securities in a hurry. This may put a downward
pressure on the market value of the securities being redeemed, which in turn
may result in a lower NAV. Also, if such a large-scale redemption has to be
undertaken when the market conditions are unfavorable, the NAV again takes a
dip. If the fund holds stocks whose values were expected to go up in the future,
the interest of the non-redeeming unit holders is compromised as their NAV’s
become much lower, as they are deprived of future appreciation of market value
of those stocks.
Incidentally, the NAV of a close-ended fund is different, and is generally less
than its market price. There are several reasons for this phenomenon. Perhaps
the most significant of them is the fact that while the NAV is computed at the end
of the day, it is effectively reported only the next day, by which time the market
value of the underlying securities may have risen (though of course this need not
always be the case). When the market price of a fund is greater than the NAV, it
is said to trade at a premium; and when it is lower than the NAV, it is said to
trade at a discount. It is noteworthy that this does not apply to open-ended funds,
as they are not quoted in the stock exchanges and hence have no market value;
they have only NAV’s.
Does NAV reflect the best estimate of the net market value of a scheme's
investments?
This depends on what one means by the term 'best estimate'. It is a fact that
computation of NAV is not without some problems. For example NAV depends a
lot on the market prices of all the underlying securities of the scheme.
However, market prices are not always available for every invested security. For
example, shares of many companies in India are traded very infrequently. Again,
trading in most corporate debt securities is negligible. Often, securities like
convertible debentures or warrants do not trade at all or the trading may be too
thin for the prices to be representative.
Thus, the calculation of the NAV is hindered by the problem of non-availability of
daily market prices for all the underlying securities. It is for these reasons that the
market price and the NAV of a fund are rarely the same. What is worse is that
such situations often present an attractive incentive for the mutual funds to
manipulate the computation of the NAV’s. The intensity of the problem is mild or

40. strong depending on the proportion of the scheme invested in illiquid stocks. To
help minimize this problem, SEBI has prescribed detailed guidelines on how no
traded or thinly traded securities and other types of illiquid securities such as
convertible debentures, call money papers, short term-deposits with banks and
securities with put and call options, etc. are to be valued for the purposes of
computing NAV.
Difference between index funds and mutual funds………
An index fund is also a mutual fund, except that it only invests in securities of
companies underlying a major market index. For example, a mutual fund that
invests only in the 50 securities underlying the Nifty will track only the Nifty. Index
funds characteristically mimic popular indices like Sensex, Nifty, BSE-I00 or other
major market indices such as Crisil Composite Bond Index, etc. Index funds may
also mimic specific industry indices.
An index fund that tracks a specific index not only invests in the securities
that comprise the index, but does this in the same proportion as they are
represented in the index. For example, a mutual fund tracking the Sensex will
invest in the stocks of 30 companies that make up the Sensex index, in the same
proportion as the weights assigned to these companies in the index. Fund based
on the Sense x would thus invest 8.28 per cent of the total portfolio in Infosys,
12.33 per cent in Reliance Industries, 6.65 per cent in ICICI Bank and so forth,
on that day. Depending upon the changes in underlying share prices on the next
day, the weights of the shares in SENSEX would change again, and the fund
manager would alter the portfolio accordingly so that the weight age of shares
both in the portfolio and the Sensex are the same.
At times, fund managers may depart from this norm by changing the
weights of some or, all of the securities in the index depending upon their
perception of the specific stocks securities comprising the index. However, such
funds cannot strictly be called pure index funds. For example, ING Vysya Nifty
Plus Fund invests 70 per cent of the total corpus in the same proportion to that of
the Nifty, while the balance 25 per cent of the fund is invested in a few other
stocks from the Nifty itself, in order to create an overweight position in these
stocks.
Typically, a fund's offer document details the actual portfolio composition within
the larger investment objective of tracking a specific index.
Index funds provide certain features that other mutual funds do not and vice
versa. To begin with index funds are more diversified than other types of mutual

41. funds. In other types of funds, a fund manager selects the securities for
investment while in an index fund, security selection is not an issue. Of course,
that can swing returns either way, but risk is precisely about volatility or swing of
returns. An index fund on the other hand, takes away the selection of securities
from the fund manager and reduces his job to simply mimicking an index.
Thus, an index fund keeps the volatility of returns close to the market
volatility, because by definition an index is merely a representation of the market
as a whole. For these reasons, the indexed management strategy is called a
passive management strategy. This is also why entry/ exit loads on index funds
tend to be lower compared to other kinds of equity funds that require active
management strategies for stock selection.
However in times of market upswings, AMC’s have been known to charge
or increase the entry load on index funds in order to capitalize on the good
performance of the market. One must therefore closely examine the entry/ exit
load structure in any index fund particularly when they try to buy or sell units
during a market upswing.
Index funds are not suitable for investors wanting to beat the- market, as
beating the market with index funds is an oxymoron, simply because the return
on an index fund moves in line with the market. Nor are they suitable for an
investor with a very short-term investment horizon, as swinging with the market is
a fairly long affair. (Appendix-3 lists some of the index funds.)
On the whole, however, index funds provide a safer (less risky) investment
opportunity, unlike actively managed funds, which entail higher risk. Normally
there is very little variation in the returns of index funds, as all stock indices are
usually highly correlated.
Shareholder’s Rights……..
Owners of shares in mutual funds receive investment income dividends derived
from dividends and interest earned on securities in the portfolio. Capital gains
distributions are made when and if long-term gains are realized on the sale of
securities in the portfolio. Income dividends are paid quarterly or semiannually;
capital gains distributions are usually made annually, toward the end of the fiscal
year of the fund. A variety of services are offered to shareholders by mutual
funds. Most funds provide accumulation plans, in which investors may buy
shares at regular intervals, have dividends reinvested automatically, and accept
capital gains distributions in additional shares. A few mutual funds offer
contractual plans wherein the shareholder agrees to invest a certain amount
each month. Many financial institutions offer a so-called family of open-end
mutual funds, allowing investors to divide their savings among funds with varying

42. objectives but managed by the same sponsor and to switch from one fund to
another at little or no cost. A number of funds also offer withdrawal plans, under
which shareholders may receive payments from their investment at regular
intervals while income dividends and capital gains are routinely reinvested.
Mutual Funds in Indian Capital Market…….
Retail investors usually want to participate in the Capital market but due to
paucity of funds, lack of expertise knowledge and limited risk - bearing capacity
they have limited access to capital market. Mutual funds provide a mechanism
that helps the retail investors enter the capital market. The mutual funds manage
their funds for maximum gain at minimum risk and in the most professional way
and work as agent for growth and stability of capital market. Till 1964, there was
no mutual fund in India. In 1963, UTI Act, 1963 was enacted for the
establishment of first mutual fund. The UTI launched its first scheme, US-64, in
1964 which later became the most popular unit scheme in India. In 1987, the RBI
issued bank-sponsored mutual funds. Government of India also issued
Guidelines in 1991 for setting up of mutual funds. In the first phase, i.e., from
1964 to 1987, there was single mutual fund (UTI) structure. After 1987, some of
the commercial
banks started mutual fund schemes, and this second phase continued till 1992.
The third phase started after the set up of SEBI in 1992 when the private sector
mutual funds were also encouraged. Since then, there h as been a growth in
number of mutual funds as well as the numbers and types of schemes. During
last 10 years, mutual funds have become very popular among retail investors.
The increase in number of mutual funds and their schemes speak of the
underlying strength of the investors' confidence in them. Some of the mutual
funds operating in India are as follows (in alphabetical order):
ABN Amro DSP Merril Lynch JM SBI
Alliance Capital Escorts Kotak Mahindra Standard
Bank of Baroda Fidelity LIC Chartered
Benchmark Franklin Tempelton Morgan Sun F&C
Birla Sunlife GIC Principal Sundarum
Canbank HDFC Reliance Tata
Cholamandola ING Vysya Sahara Tauras
m UTI
Deutsche

43. The multiplicity of mutual funds has intensified competition and led to product
innovation. Each of these mutual funds has a number of scheme operating with
different features and characteristics. There are more than 400 schemes in
operation at present.
Immediately after its constitution, SEBI issued the Mutual Fund Regulations in
1993. However, with the growth of mutual funds, it was imperative that they
should follow uniform policies in respect of NA~ valuation of investment,
accounting practices, etc. SEBI prepared a Mutual Fund 2000 Report and on the
basis of this report, it prepared more stringent and comprehensive regulations in
1996 known as SEBI (Mutual Fund) Regulations, 1996. Since then, there have
been number of amendments in Regulations, 1996. Besides, SEBI has also
issued several Guidelines in respect of working of mutual funds.
Some of the provisions of the Regulations, 2000 and Guidelines are as
follows:
1. The sponsor, who wants to establish a mutual fund, should have a sound
track record and a general reputation of fairness and integrity i.e., must be
in business of financial services for 5 years, etc.
2. A mutual fund is constituted in form of trust. The trust shall incorporate an
Asset Management Company (AMC). The trustees shall ensure that the
AMC has been managing the schemes independently of other activities.
3. The trust shall periodically review the investor complaints received and
shall be redressed by the AMC.

44. 4. The mutual fund shall appoint a custodian to carry out the custodial
services for the schemes. The sponsor or its associates shall not have
50% or more of the share capital of the custodians.
5. No scheme shall be launched by the AMC unless the offer document
contains disclosures which are adequate in order to enable the investors
to make informed investment decisions.
6. Advertisement in respect of every scheme shall be in conformity with the
Advertisement Code.
7. Every close-ended scheme shall be listed at a recognized stock
exchange, or there will be a repurchase facility.
8. The close-ended schemes may be converted into open-ended schemes
under certain conditions. A close-ended scheme may be allowed to be
rolled over if necessary disclosures about NAV, etc., are made to the unit
holders.
9. In case of over-subscription for a new scheme, the applicants applying for
upto 5,000 units shall be allotted full. The refund to applicants, if any, shall
be made within 6 weeks from the date of closure of the list.
10. No guaranteed return shall be provided in a scheme, unless such return is
fully guaranteed by the sponsor or the AMC.
11. An open-ended scheme shall be wound up after the expiration of the fixed
period, or 75% of the unit holders decide so, after repaying the amount
due to the unit-holders.
12. The money collected under any scheme shall be invested only in
transferable securities in money market or capital market or private placed
debts or securitized debts.
13. The mutual fund shall not borrow any money except to meet temporary
liquidity needs and borrowing, if any, need not be more than 20% of NAV
of the scheme, and for period of less than 6 months.
14. The funds of a scheme shall not be used in option trading or a carry
forward transaction. However, derivatives can be traded by a mutual fund
at a recognized stock exchange.
15. A mutual fund can enter into underwriting agreement.
16. NAV for each scheme shall be calculated by dividing the total assets of
the scheme by the number of outstanding units. The NAV of the scheme
shall be published in two daily newspapers at interval of not exceeding
one week.
17. In case of open-ended schemes, the repurchase and sale price shall be
published at least once a week.
18. The mutual fund shall ensure that the repurchase price of a unit is not less
than 93% of NAV and the sale price is not more than 107% of NAV. In

45. case of close-ended schemes, the repurchase price shall not be less than
95% of the NAV.
19. The AMC may charge the mutual fund with investment and advisory fees
as per rates prescribed in the Regulations. The issue expenses and
redemption expenses of a scheme shall not exceed the limits given in the
Regulations.
20. The mutual funds are required to raise at least Rs. 20 crores or Rs. 50
crores (for close-ended and open-ended schemes respectively) or 60% of
the target amount, otherwise the entire subscription be refunded.
21. The unquoted debt instruments shall not exceed 10% in case of growth
funds and 40% in case of income funds.
22. Investment in one company under any scheme should be restricted to 5%
of the corpus of the scheme. Under all schemes, the investment in one
company should be restricted to 5% of the paid-up capital of the company.
Total investment in all securities (Debts and shares) in one company shall
be restricted to 10% of the corpus of the mutual fund.
23. Funds under the same AMC should not be lent or invested from one
scheme to another, unless the funds are transferred at the prevailing
market price.
24. All mutual funds must distribute a minimum of 90% of their profits in any
given year. The earnings must be segregated as current income, short-
term capital gain and long-term capital gain.
25. Trading by mutual funds shall be restricted to hedging and portfolio
balancing purposes only. The securities held shall be marked to market by
the AMC to ensure full coverage of the investments made in derivative
products.
26. Mutual funds are permitted to participate in the Securities Lending
Scheme of SEBI under certain guidelines.
27. Mutual funds are allowed to invest in ADRs/GDRs issued by Indian
companies. They can also invest in foreign securities under certain
conditions and within limits.
28. Mutual funds can also invest up to 10% their funds in equity or listed
overseas companies which have a shareholding of at least 10% in an
Indian company listed on a recognized stock exchange.
29. The AMC and the trustees are required to review and disclose the
performance of their schemes. They are also required to disclose the
performance of the benchmark indices. Any of the following indices may
be selected for this purpose: BSE Sensex, S&P CNX Nifty, BSE 100, BSE
200 or S&P CNX Nifty 500.

46. 30. Several Guidelines have been prescribed in respect of advertisement to
be issued by mutual funds. Any advertisement, communication, sales
literature, or presentation, etc., should not be misleading.
31. Detailed guidelines are prescribed for valuation of investments. For this
purpose, the investments are classified into traded, thinly traded and non-
traded investments.
32. Guidelines for identification and provisioning for NPA are also provided.
For this purpose, an asset is NPA if the principal/interest is not received
for one quarter. On NPA, no interest shall be accrued. If any interest is
already accrued, it shall be provided. A provision @ 10%, 20% or 25% of
the book value of NPA is required depending upon the period for which it
is NPA.
33. A mutual fund and the AMC, before the expiry of 1 month from the close of
half year, shall publish its financial results in respect of that half year.

47. Mutual Fund Companies in India……….
Overview
ABN AMRO Mutual Fund
ABN AMRO Mutual Funds are promoted by ABN AMRO
Bank, one of the leading banks of the world. In India, the
investment management business of the bank is handled
by ABN AMRO Asset Management (India) Limited, which is a part of the global
network of ABN AMRO Asset Management.
ABN AMRO Asset Management is one of the world's leading asset management
companies with more than 70 years of experience in managing funds for
individual customers and institutional clients including central banks, pension
funds, insurance companies and other institutions.
Benchmark Mutual Fund
Benchmark Mutual Fund is one of the leading asset management
companies of India. Benchmark Mutual Fund specializes in
managing Exchange Traded Funds (ETFs). The objective of Benchmark Mutual
Fund is to provide low cost innovative products that enhance returns at
acceptable levels of risk.
Benchmark Mutual Fund employs quantitative techniques of investing. These
techniques involve gathering massive amounts of financial information, analyzing
and transforming it to develop disciplined and rigorous models of investing.
Birla Sun Life Mutual Fund

48. Birla Sun Life Mutual Fund is a joint venture between Aditya Birla
Group and Sun Life Financial. The Aditya Birla Group is India's first
truly multinational corporation. It is a dominant player in viscose
staple fiber, non-ferrous metals, cement, viscose filament yarn, branded apparel,
carbon black, chemicals, fertilizers, sponge iron, insulators, financial services,
telecom, BPO and IT services. Sun Life Financial is a leading international
financial services organization providing a diverse range of protection and wealth
accumulation products. The company has operations in key markets worldwide,
including Canada, the United States, the United Kingdom, Ireland, Hong Kong,
the Philippines, Japan, Indonesia, India, China and Bermuda.
BOB Mutual Fund
BOB Mutual Fund is sponsored by Bank of Baroda.
Bank of Baroda was established in July 1908 by
Maharaja of Baroda Sir Sayajirao Gaikwad III. The
bank has a 2,704 strong branch network all over the
country. Bank of Baroda is one of the few Indian Banks with a formidable
presence overseas with 39 branches.
BOB Mutual Fund has been established and set up as a Trust under the Indian
Trusts Act, 1882 by Bank of Baroda and registered with SEBI. BOB Asset
Management Company Ltd. is a wholly owned subsidiary of Bank of Baroda
incorporated on November 05, 1992 acts as an Investment Manager to the BOB
Mutual Fund.
Canbank Mutual Fund
Canbank Mutual Funds are sponsored by Canara Bank. The bank
was established in 1906 and is a leading nationalized Bank
operating in India and abroad, through its network of branches in
India and offices in London, Moscow, UAE (Exchange Companies)
and Hong Kong.

49. The investments of Canbank Mutual Funds are managed by Canbank
Investment Management Services Ltd, the Asset Management Company of
Canara Bank.
DBS Chola Mutual Fund
DBS Chola Mutual Funds are managed by Cholamandalam
AMC Limited (CAMC). The company was set up in 1996, as a
joint venture with Cazenove Investment Management of the UK.
Cholamandalam is part of the Murugappa Group, Rs. 6250 crores conglomerate.
Cholamandalam Financial Services Group (Cholamandalam FSG) is a pan-
Indian, composite financial services provider. In 2001, the Murugappa Group
acquired Cazenove’s stake in the company. CAMC presently manages over
Rs.1000 crores of assets.
Deutsche Mutual Fund
Deutsche Mutual Funds are managed by Deutsche Asset
Management, which is a member of the Deutsche Bank
Group. Deutsche Asset Management is one of the leaders in
global asset management. It has offices in 42 countries and manages over
US$633.23 billion in assets (As on 31 March 2006). Deutsche Asset
Management entered India in 2002, when its subsidiary Deutsche Asset
Management, India was established. As on April 2006, the company manages
assets worth Rs 3500 crores.
DSP Merrill Lynch Mutual Fund
DSP Merrill Lynch Mutual Funds are managed by DSP Merrill
Lynch Fund Managers. DSP Merrill Lynch Ltd. (DSPML) is a
premier financial services provider and Merrill Lynch (ML)
holds 90% stake in DSPML. DSPML was originally called
DSP Financial Consultants Ltd. The firm traces its origins to D. S. Purbhoodas &
Co., a securities and brokerage firm with over 140 years of experience in the