Project File New.docx

SUMMER INTERNSHIP PROJECT REPORT ON

“Product & services offered by stock Holding Corporation of India limited” SUBMITTED IN PARTIAL FULFILLMENT TOWARDS THE AWARD OF MASTER OF BUSINESS ADMINISTRATION (2017 – 19)

SUBMITTED TO: YOGESH KUMAR SIR

SUBMITTED BY: GOPAL University Roll no.: 178410111 MBA II YEAR (IV TRIMESTER)

INSTITUTE OF BUSINESS MANAGEMENT

PREFACE In a professional course like MBA the significance of practical knowledge through summer is imperative as one gets an opportunity to learn about a wide range of corporate activities.

training

Depositories in India till now have made a way for the elimination of market risk associated with physical holding in the settlement of securities by providing a highly efficient clearing and settlement system. Having pioneered dematerialization, Stock Holding Corporation of India ltd. is the first Depository Participant (DP) which is registered with the National Securities Depositories Ltd. It has been my best and sincere effort to collect information from various sources to make this project effective. Due to shortage of time I am unable to give a detailed report but I have tried my level best to do justice.

ACKNOWLEDGEMENT

Working in an organization as a trainee provides a medium to look into and experience the practices and procedures of the corporate sector. The Stock Holding Corporation of India Ltd. gave me a lot of exposure of the capital market. During my training period I received unconditional help by every member of the Stock Holding Corporation.

Firstly, I would like to express my gratitude to Chairmen Shri RAMESH NGS and to our Co-coordinator, RANVEER SINGH for their efforts to place me at SHCIL, Agra. I am equally obliged to my entire faculty teacher for their support.

I am also thankful to Ms. Shachi Mishra (Branch Manager, SHCIL, Agra) for permitting me to work as a trainee in SHCIL. My sincere thanks to Mr. SARTHAK SIR, AMIT SIR, LOKESH SIR, and Ms. POOJA ( officer trainee ) for giving his whole hearted support during my training period and providing me with valuable information.

Finally, I would like to thank my friends, customers of SHCIL and all the people who helped me in the successful completion of my Project.

DECLARTION

I, the undersigned, hereby declare that the Project Report entitled “product and services offered by stock holding” writer and submitted by me to the G.L.A. university, Mathura, in partial fulfillment of requirement for the award of degree of Master of Business Administration under the guidance of (Mr. Yogesh Kumar) is my Origin word and the Conclusion Drawn there in based on the Material collected by my Self.

Place: Date:

Signature of Student

CONTENTS

S.NO

Particulars

1

Introduction To Stock Holding Corporation Of India Limited.

2

SHCIL- As A Depository

3

Products Offered By SHCIL

4

Services Offered By SHCIL

5

E-Stamping-Monopoly of SHCIL

6

Customers’ view regarding stock holding

7

Swot analysis of Shcil

8

Lessons learnt from my Internship

9

Conclusion

10

Suggestions

11

Bibliography

12

Annexure

PAGE NO.

CHAPTER -1

INTRODUCTION TO TOPIC

PRODUCT AND SERVICES OFFERED BY SHCIL

DEPOSITORY SYSTEM A depository is a facility for holding securities which enables securities transactions to be processed by book entry . To achieve this purpose the depository may immobilize the securities or de-materialize them(so that they exist only as electronic records). India has chosen the dematerialization route. In India, a depository is an organization which olds the beneficial owners’ securities in electronic form through a registered depository participant (DP). A depository functions some what similar to a commercial bank. To avail of the services offered by a depository the investor has to open an account with a registered DP.

ADVANTAGES OF DEPOSITORY SYSTEM        

Elimination of bad deliveries and all risks associated with physical certificates such as loss, theft, mutilation, etc. No stamp duty. Immediate transfer and registration of securities. Faster settlement cycle. No risk of buying fraudulent certificates. No courier/postal charges. Reduced record keeping. One investor account for all shares.

DEPOSITORY PARTICIPANT In India, a depository participant (DP) is described as an agent of the depository. They are the Intermediaries between the depository and the investors. The relationship between the DPs and the depository is governed by an agreement made between the two under the depositories act. In a strictly legal sense, a DP is an entity who is registered as such with SEBI under the provisions of the SEBI act. As per the provisions of this act, a DP can offer depository-related services only after obtaining a certificate of registration from SEBI.SEBI (D&P) regulations, 1996 prescribe a minimum net worth of Rs. 50 lakhs for stockbrokers, R&T agents and non – banking finance companies (NBFC), for granting them a certificate of registration to act as DPs. If a stockbroker seeks to act as a DP in more than one depository he should comply with the net worth criterion separately for each such depository. No minimum net worth criterion has been prescribed for other categories of DPs. NSDL requires a minimum net worth of Rs. 100 lakhs to be eligible to become a DP as against Rs. 50 lakh prescribed by SEBI (D&P)regulations.

DEPOSITORIES IN INDIA Currently there are two depositories operational in the country: (1)National Securities Depository Limited. (2)Central Depository Services Limited

NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL) Although India had a vibrant capital market which is more than a century old, the paper based settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of depositories act in Augus1996 paved the way for establishment of NSDL, the firstdepository in India. This depository promoted by institutions of national stature responsible for economic development of thecountry has since established a national infrastructure of international standards that handles most of the securities held and settled in dematerialized form in the Indian capital market. Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions thatincrease efficiency minimize risk and reduce costs. At NSDL we play a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry. In the depository system securities are held in depositoryaccounts which are more or less similar to holding funds in bankaccounts. Transfer of ownership of securities is done throughsimple account transfers. This method does away with all the risks and hassles normally associated with paperwork.Consequentlythe cost of transacting in a depository environment Isconsiderably lower as compared to transacting in Certificates.

CENTRAL DEPOSITRY SERVICES LIMITED (CDSL) A depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a depository participant (DP) who as an agent of the depository offers depository services to investors. According to SEBI guidelines financial institutions, banks, custodians, stock brokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a DEMAT accountthrough any DP for dematerialization of his holdings and transferring securities. The balances in the investors account recorded and maintainedwith CDSL can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and transactions. The depository system has effectively eliminated paperbasedcertificates which were prone to be fake, forged, counterfeitresulting in bad deliveries. CDSLoffers an efficient and instantaneous transfer of securities. CDSL was promoted by Bombay stock exchange limited (BSE) jointly with leading banks such as Bank Of India, Bank Of Baroda, HDFC BANK, Standard Chartered Bank,Union Centurion

State Bank Of India, Bank Of India and Bank.

CDSL was set up with the objective of providing convenient-t, dependable and secure depository services at affordable cost to all market participants. Some of the important milestones of CDSL system are: •CDSL received the certificate of commencement of business from SEBI in February, 1999.

•Honourable union finance minister, Shri Yashwant Sinha flagged of the operations of CDSL on July 15, 1999. •Settlement of trades in the DEMAT mode through BOI share holding limited, the clearing house of BSE, started in July, 1999. •All leading stock exchanges like the national stock Delhi stock exchange, Ahmadabad stock exchange, all have established connectivity with CDSL.

exchange,

Calcutta stock

exchange,

•At the end of December, 2007, over 5000 issuers haveadmitted their securities (equities, bonds, debentures,commercial papers), units of mutual funds, certificate of deposits, etc. into the CDSL system.

BANK DEPOSITORY – AN ANALOGY BANK

DEPOSITORY

Holds funds in an account.

Hold securities in an account.

Transfers funds between Account on the instruction of the account holder.

Transfers securities between accounts instruction the account holder.

Facilitates transfer without having to handle money.

Facilitates transfer of without having to handle securities. Facilitates safe-keeping of securities.

Facilitates safe-keeping of money.

on

the

ownership

SERVICES PROVIDED BY DEPOSITORY      

Dematerialization (known as DEMAT) – converting physical shares into electronic form. Transfer of securities – change of beneficial owner. Settlement of trades done on exchange connected to the depository. Pledge/hypothecation of DEMAT shares, viz., loan against shares. Electronic credit in public offerings of the companies. Non-cash corporate benefits, viz. bonus/rights – direct credit into electronic form.

 Depository restricts the risk of fraud. Financial Market Stockholding Corporation of India Ltd. (SHCIL) the premier custodian of Indian Capital Market providing services of international standards is geared up to reposition itself in the changed scenario. The corporation has restructured and geared itself to serve the growing needs of individual investors in the paperless

environment. The organization in its willingness to provide its state of art of financial services in securities industries to the various segments of the investors has expanded itself to more than 100 cities across the country. SHC desires to give investors the time and attention in monitoring the performance of their securities consistently. All aimed at providing the investors with optimum financial gain. India has well established capital market mechanism where in effective and efficient transfer of money capital or financial resources from the investing class to the entrepreneur class in the private and the public sector of the economy occur. Indian capital market has a long history of organized trading which started with the transaction in the loan stocks of the East India Company, from that time it has undergone drastic changes to meet the requirements of the globalization. There has been a shift of house hold savings from physical assets to financial assets, particularly the risk bearing securities such as shares and debentures. Capital market structure has also undergone sea changes with number of financial service and banking companies, private limited companies coming into the scene which made the competition in the market stiffer.

Capital Market The capital market consists of primary market and secondary market segments. The primary market deals with the issue of new instruments by the corporate sector such as equity shares, preference shares and debentures. The public sector consisting of central and state governments, various public sectors industrial units (PSU’s) statutory and other authorities such as state electricity boards and port trust also issue bonds. The secondary market or stock exchange where existing securities are traded in an auction arena. Since 1995, trading in securities is screen based. Screen based trading has also made an appearance in India. The secondary market consists of 23 stock exchanges including the NSE and BSE and interconnected stock exchanges of India ltd. The secondary market provides a trading place for the securities already issued to be bought and sold. It also provides liquidity to the initial buyers in the primary market and to re-offer the securities to any interested buyer at a price, if mutually accepted .An active secondary market actually promoters the growth of the primary market and capital formation because the investors in the primary market are assured of a continuous market and they can liquidate their investments in the stock exchange.

Investment Avenues Investment Avenues we mean a particular organization or system in which an investor can place his surplus funds with the objective of having certain gains in the future. This organization may be well organized like a bank, financial institution, mutual funds, and company or in an unorganized manner like chit fund organization, Midis ( a type of non banking finance company) or curry ( a type of non –banking finance company in southern India). Different investment avenues have different features; few offer a mix of these two. Few of these have an element of safety and yet others do not have any kind of safety. In certain cases these are in negotiable form and in other cases these are non- negotiable. Investment avenues of a country are subject to different rules and regulations of either the government or some apex body like Reserve Bank of India, NABARD, SEBI or Companies Act.

Following are the features of investment avenues.      

A place where one can invest his surplus. Fixed or floating return. Security Vs. Non –security form. Investment accepting organization might have an obligation or not. Negotiable Vs. Non- negotiable. Risk is the inherent part of every avenue.



It may be organized or may be unorganized form.

Investment avenues can be broadly divided into following types-:    

Security form. Non-security form. Traditional form. Other emerging avenues.

Security Forms-: These are the instruments or securities through which a company or issuing authority like government raises finance. Majority of these are in negotiable form, i.e. these are sellable in the market by the holder of the securities. Companies/ Government issue these in capital market or money market to raise funds directly from the providers of the funds. Some of these have maturity for a very long period and others have for either medium term or short term. Security form can further be divided into money market securities and capital market securities.

Money Market Securities-: It is the market in which liquid funds as well highly liquid securities are traded in for a very shorter duration. The main participants in this market are banks and financial institutions. The banks deal in this market to fulfil their CRR (Cash Reserve Ratio) and SLR (Statutory Liquid Ratio) requirements. However, few corporate houses, insurance companies, mutual funds, provident funds trusts and non-banking finance companies also pay an active role in market. This market provides liquidity support to banking system. At the same time, the central bank of the country – Reserve Bank of India uses this market to exercise monetary control in the economy and credit control in the country. Money market can be divided into two parts, call money market and government securities/ gilt-edged securities market. Call money market in which surplus cash of banks and corporate houses is traded in for a very short maturity period, generally not exceeding one fortnight. The main transactions are carried on by banks to fulfils their liquidity, as well as CRR requirements. The main participants in market are banks, financial institution, mutual funds, corporate houses and other organizations as allowed by Reserve Banks of India from time to time. Banks are allowed to play the role both the seller and buyer of funds. A seller of funds is the one who provides it to another party and the party receiving it is identified as the buyer of the funds. For making funds available, the seller charges interest, this is decided mutually.

Treasury Bills Treasury Bills are very useful instruments to deploy short term surplus depending upon the availability and requirement. Even funds which are kept in current accounts can be deployed in treasury bills to maximise returns. These treasury bills have a maturity period not exceeding 364 days. These bills do not carry any interest rate; instead these are issued at a discount to face value and redeemed at par on the maturity. Treasury bills have a unique maturity period of 91 days, 182 days, and 364 days. Recently RBI issued treasure bills for a maturity of 14 days and 28 days too. Banks do not pay any interest on fixed deposits of less than 15 days, or balances maintained in current accounts, whereas treasury bills can be purchased for any number of days depending on the requirements. This helps in deployment of idle funds for very short periods as well.

Certificate of Deposits Certificate of Deposits are offered to investors by banks just like normal deposits. But the difference is certificate of deposits are short term wholesale deposits and they are tradable. An investor holding the certificate of deposit can sell it to another investor, Because of liquidity interest rates on certificates of deposits are normally less than that on ‘sight’ deposits, investors can compare certificate of deposit with treasury bills as they are short term, tradable, discounted bonds. But the difference is treasure bills are issued by government and certificates of deposits are issued by banks, financial institutions, etc. The lender of a certificate of deposits are rated by approved rating agencies. The term of certificate of deposit is fixed and is usually 3 months, 6 months, 1 year or 5 year. In India certificate of deposits are introduced in July 1989. Maturity period is minimum 7 days and maximum 12 months for certificate of deposits issued by banks. For certificate of deposits issued by financial institutions, maturity is minimum 1 year and maximum 3 years. Minimum amount to invest in a certificate of deposits is Rs.100000 and in multiples of Rs. 100000 thereafter. Loan against collateral of certificate of deposits is not permitted but it is possible in ‘sight’ fixed deposits. Premature withdrawal is not allowed but can be sold to other investors. Interest rate can be fixed or floating and they are issued at a discount at face value like zero coupon bonds.

Commercial Papers Commercial paper is short-term loan that is issued by a corporation for financing accounts receivable and inventories. Commercial papers have higher denominations as compared to the treasury bills and the certificate deposits. The maturity period of commercial papers is minimum 15 days to maximum 1 year. Commercial papers do not carry any interest rate, instead these are issued at a discount to face value and redeemed at par on maturity. The difference between issue price and maturity value is the interest compensation for the buyer of commercial papers. These are negotiable in nature- these are easily and freely be transferred from one party to another party. They can very safe since the financial situation of the corporation can be anticipated over a few months. Commercial paper is a money market security sold by banks and corporations .Commercial papers is a low cost alternative to bank loans. It is a very safe investment and can be used for inventory purchases or working capital. Use of commercial papers can effectively raise large amounts of funds quickly and without expensive registration by selling papers, either directly or through independent dealers, to a large and varied pool of institutional buyers. Competitive market-determined yields in notes, whose maturity and amounts can be tailored to specific needs, can be earned by investing in commercial papers. The essential quality of this type of investment is short term maturity typically three to six months, an automatic or self –liquidating nature, and non -speculativeness in origin and purpose of use. The two main methods of issuing commercial papers are selling them directly to an investor, or selling them to a dealer who then sells them in the market. Commercial papers is issued by large creditworthy borrowers, which means it’s typically less risky than some other investments. Also, the raising provided by credit rating agencies gives an indication to investors about how risky the investment is, which helps them better gauge the investment. As a tradeoff for the relative safety of this investment, it yields a lower rate than riskier investments, such as stocks. Another advantage is that commercial papers issuers usually can’t buy back the paper before its due date without a penalty. This means they can’t buy back the paper before its maturity without compensating the investor for the early purchase. Investors can thus count on a steady yield from commercial papers, unlike in the case of certain bonds that investors can retire before their maturity.

Dated Securities of Government Government securities are issued by the government for raising a public loan or as notified in the official gazette. They consists of government promissory notes, bearer bonds, stocks or bonds held in bond ledger account etc. They may be in the form of treasury bills or dated government securities. Government securities are mostly interest bearing dated securities issued by RBI on behalf of the government of India. Government

of India uses these funds to meet its expenditure commitments. These securities are generally fixed maturity and fixed coupon securities carrying semi-annual coupon. Since the date of maturity is specified in the securities, these are known as dated government securities. The dated government securities market in India has two segments; primary and secondary markets and after that we talk about the primary market consists of the issuers of the securities, viz.., central and state governments and buyers include commercial banks, primary dealers, financial institutions, insurance companies and co-operative banks. RBI also has a scheme of non-competitive bidding for small investors. Secondary market includes commercial banks, financial institutions, insurance companies, provident funds, trusts, mutual funds, primary dealers and reserve bank of India. Even corporate and individuals can invest in government securities. The eligibility criteria are specified in the relative government notification. Following are the main features of government securities.         

Issued at face value. No default risk as the securities carry sovereign guarantee. Ample liquidity as the investor can sell the security in the secondary market. Interest payment on a half yearly basis on face value. No tax deducted at source. Can be held in dematerialized form. Rate of interest and tenure of the security is fixed at the time of issuance and is not subject to change. Redeemed at face value on maturity. Maturity ranges from of 2-30 years.

Auctions for government securities are normally multiple –price auctions either yield based or price based. In yield based type of auction RBI announces the issue size or notified amount and the tenure of the paper to be auctioned. The bidders submit bids in term of the yield at which they are ready to buy the security. If the bid is more than the cut-off yield then its rejected otherwise it is accepted where in price based type of auction RBI announces the issue size or notified amount and the tenure of the paper to be auctioned, as well as the coupon rate. The bidders submit bids in terms of the price. This method of auction is normally used in case of reissue of existing government securities. Bids at price lower than the cut off price are rejected and bids higher than the cut off price are accepted. Price based auction leads to a better price discovery then the yield based auction. Government securities, state development loans and treasury bills are regularly sold by RBI through periodic public auctions. It gives investors an opportunity to buy government securities/treasury bills at primary market auctions of RBI through its invest scheme. Investors may also invest in high in high yielding government securities through buy and sell facility for selected liquid scripts in the secondary markets.

PRODUCTS IN SHCIL

Following are the various categories -:         

Insurance Investments. National Pension System ( NPS) E-Stamping Share Trading ( Demate and Trading Account) Systematic Investment Plan ( SIP’s) Fixed Deposits ( FD’s) Custodian of Gold and Silver coins Mutual Funds. Debentures and Bonds  Commodity Investments.

Insurance Investments Our Corporation linked up with ICICI Prudential Life Insurance and some Health Insurance are Apollo Munich Health Insurance, Star Health Insurance and Religare Health Insurance.

National Pension System National pension Scheme also known as NPS is a quasi –EET instrument in India where 40% of the corpus escapes tax at maturity, while 60% of the corpus is taxable. Of the 60% taxable corpus 40% is tax exempt as it has to be compulsorily used to purchase an annuity. The annuity income will be taxed, though. The remaining 20% alone will now be taxed at slab rates on withdrawal .It is introduced by government of India and regulated by Pension Regulatory and Development Authority (PFRDA) under PFRDA Act 2013 to all citizens of India. With the objective of promoting old age income security. NPS empowers subscribers to plan their own pension under the Defined Contribution Concept. It is not only helps to save for post retirement spending but is also a good investment and tax planning tool. PFRDA appoints Point of Presence ( POP) which act as the link between subscribers and PFRDA to promote the NPS. Stockholding has been appointed as Point of Presence (POP) by PFRDA for the National Pension System. All the branches of Stockholding offer the full spectrum of NPS subscriber who have opened their NPS account through other POP’s and eNPS can also contribute using Pay Online Service of Stockholding. Stockholding is the only custodian appointed by PFRDA apart from one of the POP’s. Stockholding is proud to receive three awards from PFRDA as best POP. Salient Features of NPS-:   

Open to all citizens aged between 18-60 years. Pension available from the age of 60 years. Attractive investments schemes to choose from

  

Professional record-keeping and fund management Withdrawal facility as and when you wish, under Tier-2 No Entry and Exit Loads.

E-Stamping E-Stamping is a computer based application and a secured way of paying non-judicial stamp duty to the government. E-Stamping is currently operational; in the states of Ohisha, Gujarat, Karnataka, NCR Delhi, Maharashtra, Assam, Tamil-Nadu, Rajasthan, Himachal Pradesh, Andhra Pradesh, Uttarakhand, and the union territories of Dadra and Nagar Haveli, Daman and Diu Pondicherry, Jharkhand, and Uttar Pradesh. The prevailing system of physical stamp paper/franking is being replaced by E-Stamping system. Stock Holding Corporation of India Limited (SHCIL) has been promoted by all India public financial institutions and insurance majors. SHCIL is known for its security, integrity, and wide, network and focus on technology. SHCIL is the only Central Record Keeping Agency (CRA) appointed by the government of India. The CRA is responsible for user registration, Impress Balance Administration and overall E- Stamping application operations and maintenance. CRA will appoint ACC’s who will issue certificate to their clients at their counters.

Share Trading Share Trading means buying and selling of shares at specifically period of time. Share trading can be done at specified time period only from 09:00am to 03:30pm in the afternoon. After 03:30 the market was closed , so in that case there should be no share trading can be done. There are specifically 5 days for share trading ie from Monday to Friday at a given specified period of time. For doing share trading it is necessary to open an demat account and the trading account for doing it specifically.

Systematic Investment Plan (SIP) Systematic Investment Plan is a type of a investment in which a customer can invest their money in stock market through mutual funds. It is an investment vehicle offered by mutual funds to investors, allowing them to invest small amounts periodically instead of lump sums. The frequency of investment is usually weekly, monthly, or quarterly. In SIP a fixed amount of money is debited by the investors in bank account periodically and invested in a specified mutual fund, The Investor is allocated a number of units according to the current Net Asset Value. Every time a sum is invested, more units are added to the investors account. The strategy claims to free the investors from speculating in volatile markets by Dollar cost averaging. As the investor is getting more units when the price is low and less units when the price is high, in the long run, the average cost per unit is supposed to be lower. SIP’s claims to encourage disciplined investment. SIP’s are flexible, the investors may stop investing a plan anytime or may choose to increase or decrease the investment amount. SIP is usually recommended to retail investors who do not have the resources to pursue active investment. SIP Investment is a good choice for those investors who do not possess enough understanding of financial markets. The benefits of SIP is it reduces the average cost of units purchased, as well as consistent investment, ensures that no opportunity is missed arising out of the market. For Example – SBI Mutual Fund, ICICI Mutual Fund, IDFC Mutual Fund, Reliance Mutual Fund, Birla Sun Life Mutual Fund, Kotak Mahindra Mutual Fund etc as in all kinds of mutual funds offered by Stockholding Corporation of India

Fixed Deposit A Fixed deposit is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account. It is known as a term deposit or time deposit in Canada, Australia, New Zealand, and the US, and as a bond in the United Kingdom and India. They are considered to be very investments. Term deposits in India and Pakistan is used to denote a larger class of investments with varying levels of liquidity. The defining criteria for a fixed deposit are that the money cannot be withdrawn from the FD as compared to a recurring deposit or a demand deposit before maturity. Some banks may offer additional services to FD holders such as loans against FD certificates at competitive interest rates. It important to note that banks may offer lesser interest rates under uncertain economic conditions. The interest rates varies between 4 and 11 percent. The tenure of an FD can vary from 7, 15 or 45 days to 1.5 years and can be as high as 10 years. These investments are safer than post office Scheme as they are covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC). However DICGC guarantees amount up to 1,00,000 per depositor per bank. They also offer income tax and wealth tax benefits.

Mutual Funds A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. Mutual funds have advantages and disadvantages compared to direct investing in individual securities. The primary advantage of mutual fund is that they provide a higher level of diversification, they provide liquidity and they are managed by professional investors. On the negative scale, investors in a mutual fund must pay various fees and expenses. Primary structures of mutual funds include open ended funds, Exchange traded funds (ETF’s) are open ended funds or unit investments trusts that trade on an exchange. Mutual funds are also classified by their principal investments as money market funds, bonds or fixed income funds, stock or equity funds, hybrid funds, or other. Funds may also be categorized as index funds, which are passively managed funds that match the performance of an index, or actively managed funds. Hedge funds are not mutual funds; hedge funds cannot be sold to the general public and are subject to different government regulations.

SERVICES OFFERED BY SHCIL

(1) CUSTODIAL SERVICES SHCIL provides firstrate custodial services to India’s leadingFinancial Institutions, Insurance Companies, M utual Funds, Foreign Institutional Investors (FII’s), Banks, Indian and Foreign Venture Capital Companies, Funds, PF Trusts & Corporate. SHCIL’s core competence in custodial business spans 18 years, with a dedicated pool of trained and experienced professionals working literally round the clock using state-of-the-art computer systems and world class technology. SHCIL maintains dedicated communication channels, well connected to client institutions,stock exchanges, clearing houses and depositories, thus maintaining process and quality leadership. As a custodian entrusted with sizable assets, SHCIL is continuously leveraging its scale and capabilities to help its clients mitigate risk and optimize efficiencies with greater control.

SETTLEMENT SERVICES Most of the institutional trades are settled through the clearinghouse of the stock exchanges.As a custodian, SHCIL facilitate estimably settlement of funds and securities. Funds are collecteddeposited from/to client and settled with the clearing houses. Most of the institutional trades are settled in the depository mode. For the institutional segment alone, SHCIL has a unique clearing code on the two principal stock exchanges and separate DPM units on both NSDL and CDSL. This ensures smooth settlement of transactions on both exchanges/depositories, based on thedeliverables and receivables received by them fo r eachsettlement. Daily verification of settlements (auction/normal)facilitates smooth reconciliation of settlements of client’s trades and mitigates systemic risk. For debt market deals SHCIL ensures timely movement of securities and funds. For the occasional delivery and receipt of securities in the physical mode, SHCIL ensures prompt scrutiny, processing and lodgement of securities with the respective company/ registrar and transfer agent, with the objective of final transfer to the purchaser, with objections handling if needed. SHCIL also ensures that delivery of A physical security to exchanges is handled strictly as per exchange regulations.

PHYSICAL CUSTODY (VAULT) SERVICES SHCIL has extensive vault capacity with stateofthearttechnology. This includes tracking with barcoding techniques.Certificates are held in customized, fire resistant ‘modular

slidingstorage units’, with automated location tracking and logs withtight security. There are comprehensive document tracking and storage systemsin place to hold investments in physical and electronic form. SHCIL tracks each and every security in the custody with absolute ease and tracks the status of investments at any point of time. Other security features include circuit TV, smoke detectors and fire extinguishers which are installedinthepremises.SHCILrelieson audit trials and physical reconciliation continuously to reconfirm validity of systemic data. SHCIL also periodically seeksreconfirmations from internal and statutory audit firms foradherence to the established best practices.

INSTITUTIONAL DP SERVICES SHCIL has installed dedicated DPMs (depository participant modules) on both the depositories, viz. NSDL and CDSL.A dedicated institutional DP team at SHCIL addresses your need for all core DP services like account opening and maintenance, conversion of physical holdings into electronic form, settlement of trade instructions, re-materialization, repurchase and pledgeinstructions, providing of holding and transaction statements and daily reconciliation of clients holdings. SHCIL also provides special services like electronic credit andcorporate action follow up, reporting of saleable holding positions required by many fund managers, monitoring of CP redemptions, prepayments and providing customizer reports like put/call forecasts, logical holdings and non equity holding reports.

ASSET SERVICING SHCIL has dedicated teams to handle the various aspects of asset servicing. The corporate actions team ensures forecast of allcorporate actions and benefits accruing on a clie nt’s holding, timely collection of monetary and none Monetary benefits and cover all activities relating to a corporate event like calculation of entitlements, reconciling with companies/registrars prior to due date, collection of monetary corporate actions from the premises of company/registrar and transfer of same to clients.

CLIENT RELATIONSHIP MANAGEMENT Every institutional client is assigned to an experienced clientrelationship manager who assistsin resolving sp ecial issues relating to the client. Over and above the services offered we have a premium offering called ADVAIT, an integrated, web based, online reporting system which provides a single window access to institutional reports with enhanced security features.

(2)DEPOSITORY PARTICIPANT SERVICES Our depository participant services address your individualinvestment needs. With a parentage of leading fin ancialinstitutions and insurance majors and a proven track record in thecustodian business, we have reiterated our past success byestablishing ourselves as the first ever and large st depository participant in India. Form a tentative foray in 1998 into the individual investor arena to servicing around seven lakhs accounts, we have endeavoured to constantly add and innovate to make business a pleasure for you. Our networked branches ensure we are available where you lookout for us.

Fourteen depository participant machines (DPMs) connected to NSDL and seven connected to CDSL ensure fast and direct processing of your instructions. Our customer-centric account schemes have been designed keeping in mind the investment psyche of our clients. Your DPaccount with us takes care of your depository needs likedematerialization, re-materialization and pledging of shares. Matching of your scanned signature on every debit instruction with a digitally scanned original in our system makes all your trading transactions absolutely secure. A proactive backup of tour instructions prior to execution in the depository makes us oblivious to system crashes.

(3) DEMAT Dematerialization is the process of conversion of shares fromphysical form to the electronic mode. Our dedicated DEMAT team enable you to convert your physical holdings/debentures/bonds/G-SECS into electronic mode in a quick and hassle free manner.

Transposition cum dematerialization The clients can get the securities dematerialized in the sameaccount if the names appearing on the certificates match with the names in the DEMAT account but are in different order. This can be done by submitting the certificates along with the transposition form and the dematerialization request form (DRF).

Transmission and dematerialization In case of death of one or more of the joint folders, the surviving holder(s) can get the name(s) of the deceased deleted from the security certificate and get the same dematerialized. Notarized copy of the death certificate, transmission form as per annexureOB and the dematerialization request form (DRF) have to besubmitted by the surviving joint holder(s) along with the security certificates. As per SEBI, scraps can be divided as:   

Scrips Eligible for DEMAT these scraps can be traded either in physical or electronic form. Scrips falling under compulsory DEMAT these scraps can be traded only in electronic form. Submit DEMAT Request Form. Once your demat account is opened with us and you havereceived your client identity number, you can start dematerializing your shares. You can submit the shares over the counter at any of our branches. Do go through the tips given on filling up the DRF to avoid rejection.

E-STAMPING-THE MONOPOLY OF SHCIL

E- stamping is a secured web based system which enables the citizens to pay non-judicial stamp duty to the Government in electronic mode. The system is reliable and ensures that the stamp duty paid by you reaches the Government safely. India is the third country in the world after Singapore and Hong Kong to adopt e-Stamping.

The Government of India embarked upon e-Stamping to check the uncontrolled circulation of fake stamp papers and ensure a reliable transparent system of collecting and remitting stamp duty to the government. Stock Holding had participated in the technical and commercial bid process. Stock Holding was selected and was authorized to act as Central Record Keeping Agency (CRA). The Govt. of India, Ministry of Finance, and Dept. of Economic Affairs issued a mandate in favor of Stock Holding for the same in December, 2005.

The e-Stamp certificate is tamper-proof and generated by the system through encryption of important identification content of the e-Stamp certificate. The authenticity of the e-Stamp certificate can be checked through the enquiry module on the e-Stamping website 'www.shcilestamp.com'. In other modes of payment of stamp duty, it is almost impossible for an individual to check the authenticity of the stamp duty payment. The website created for e-Stamping is a source of information for first time user as well as a gateway for other authorized users. The website features information on States in India as well as information on the articles of the Stamp acts of various states. It provides the first time users of eStamping with frequently asked questions and their answers as well as information on the officers of the States IGR offices. Constituents of e-Stamping System : 

Central Record-keeping Agency(CRA)



Authorized Collection Centers(ACC)



Sub-Registrar Interface



Government Revenue Dept.Interface

The access to the ESI system is governed by the Unique User name and Password. Each user, irrespective of his/her role in the ESI system, is provided with a user name and password to gain access into the system. The roles/privileges/rights are decided and setup as per the request received. The rights are granted only after authorization by the CRA.

Work flow of e-Stamp generation process for the SHCIL branches:

Client fills-up requisition form

Submits the form and payment at the eStamping counter

e-Stamping User does the data entry after verifying the form details & paymentswith clients

Verification of Data and Funds by e-Stamping Supervisor

Preview of the e-Stamp shown to the clients

If incorrect, data can be modified

Clients verifies the details & signs on the preview

e-Stamping Supervisor generates the e-Stamp

e-Stamp printed

Data cannot be edited after e-Stamp generation

ONLINE E – STAMPING SYSTEAM

SHCIL has introduced a new system whereby clients can register themselves and make Stamp Duty payment Online through 

Net Banking Debit Card via payment gateway services



Net Banking or Debit Card via payment gateway services



Cash payment at the SHCIL branch

Client can create the submission and make the payment but is required to visit the nearest SHCIL branch to collect the e-Stamp Certificate. Single e-Stamp certificate can be generated against single payment. Work flow of online e-Stamping system is given as follows.

Account activation Client Registration

Once logged in, three options are

done through the

visible.

link provided on

(1) Create

registered email ID

(2) View

Submission

Transaction

(3) View branch

details

After the data entry, on selection of payment mode, system will direct to respective pages

Once logged in, Client has to Make Submission entry through Create submission option.

NEFT / RTGS

Net Banking/ Debit Card/Master & Repay debit card

Cash

E-Stamping: -

  

E-stamping is a secured way of paying non judicial stamp duty to the state government. E -stamp which replaces the stamp paper is highly secured and temper proof. The government of India appointed SHICIL as the sole- central record keeping agency for E - Stamping



Why E-Stamping?  To prevent paper and process related fraudulent practices  To provide secure and reliable collection mechanism  To stop the leakage of government revenues  To store information in electronic form  To build a central data repository to facilitate easy verification and generation of MIS reports.



Features of E-Stamping:  Security features one-Stamp  Checks and balances  Redundancy, firewall protection, Intrusion prevention  Audit trail, MIS reports and online Verification of e-Stamp  Locking of registrable e-Stamp by Sub-Registrar  Minimum hardware



Constituents: I. II.

Central Record-keeping Agency(CRA) Authorized Collection Centers(ACC)

III.

Sub-Registrar

IV.

Revenue Department

I.

II.

III.

IV.

Role of CRA 

Appointment of ACCs in consultation with State Governments



Impress balance Management



Training of Users



Issuance of User ids and passwords



Technical support &troubleshooting



MIS reports to the State Government



Remittance of stamp duty payment to the State Government

Role of an ACC 

Pay Interest to the CRA



Collection of money and generation of e-stamps



Verification of e-stamp (if required by client)



Additional stamp duty generation (if required by client)

Role of a Sub-registrar 

Verification of e-stamp for registrable articles



Locking of e-stamp for registrable articles

Role of Revenue Department 

MIS reports download



Reconciliation of stamp duty collection



Cancellation and refund of e-stamps

CUSTOMERS’ VIEW REGARDING STOCK HOLDING FEATURES

CUSTOMER,S VIEW

Charges

Very High

Service

Good

Promotion Personal Touch

Need to invest in promotional activities Satisfactory

Reliability

Very Reliable

Speed

Good

Time Management

Satisfactory

Awareness about SHCIL

High Awareness

Knowledge of its Product & Services Visit to SHCIL’s Website

Known to customers who often visit to stock holding; others have little knowledge. Quite Regular

Depository Services

Good

Billing Services

Unsatisfactory

Other Services

Good

Working Environment

Need more improvement

Dealing of Employees with the Customer

Good

Relationship between client & SHCIL

Good

SWOT ANALYSIS OF SHCIL

STRENGTHS

WEAKNESS

1. Wide coverage throughout the country.

1. Lack of aggressive marketing.

2. Promoted by 7 financial institutions.

2. Improper billings.

3. Largest account holders.

3. Expensive.(Because separate account has to be opened according to holdings).

4. Largest custodian. 4.Less investment in advertising. 5. Catering to Indians as wells NRIs and FIIs. 6.One stop shop for all Financial solutions. 7. Advanced system network. OPPORTUNITIES

THREAT

1. E – Broking.

1. Promoters have become competitors with strong brand equity.

2. Acquisition of smaller DPs. 2. Increased cost as perceived by customers. 3. Collaboration with banks. 4. New products.

3. Fluctuating market conditions affect the business.

CHAPTER- 2 INTRODUCTION TO ORGANISATION

COMPANY PROFILE Stockholding Corporation of India Ltd. (SHCIL) was incorporated under the Companies Act, 1956 on July. 28, 1986 at the initiative of the Government of India, with an authorized capital of Rs. 25 cores and a paid up capital of Rs. 10.5 cores, subscribed by seven. All India financial investment institution and insurance companies, viz. Industrial Development Bank of India (IDBI) Unit Trust of India (UTI)Life Insurance Corporation of India (LIC)ICICI Ltd. Industrial Finance Corporation of India Ltd (IFCI) Industrial Investment Bank of India (IIBI). SHCIL was incorporated as a public limited company on July 28, 1986 and provide custodial services to its investors and depository services to retail investors. SHCIL commenced operations in August 1988 and has been providing custodial and related services of international standards for nearly a decade to the promoter and other institutions, foreign institutional investors (FII’s), commercial banks and mutual funds. It is headed by luminaries from its promoter institutions who constitute its Board of Directors and take policy decisions pertinent to the affairs of the Corporation. A senior management team that reports to the managing director and the CEO aids, assists and strategies business lines for the Corporation. The primary focus of the Corporation was specific – to set up custodial services of international standards in India and in the process to manage the entire array of post trade activities of Financial Institutions and Foreign Institutional Investors with dedicated client relationship teams and state –of-the-art reporting systems. The corporation quickly generated nearly 70% market share of the domestic custodial business and the financial figures shot up impressively for the first decade of its existence. SHCIL began by offering custodial and post trading services adding depository services and other services to its portfolio over a period of time. SHCIL began by offering custodial and post trading services adding depository services and other services to its portfolio over a period of time. SHCIL has established itself in India as a ones-top solution provider in the financial services domain. Stockholding acts as a Central Record Keeping Agency (CRA) for collection of stamp duty in 19 States and Union Territories on pan India basis. Stockholding is one of the largest Professional Clearing Member of the country. Stockholding distributes GOI Bonds, Sovereign Gold Bonds Fixed Deposits, Corporate Bonds & NCDS of reputed Institutes & Corporate, Mutual Fund Schemes, Initial Public Offers (IPO’s) and National Pension System (NPS) etc. Stockholding has its registered office at Parel, Mumbai, a world class main operations office at Mahape, Navi Mumbai and operates through its 186 retail branches all over India. Stockholding has been profit making and dividend paying company right from its inception. As on date, IFCI holds 52.86% equity shareholding in stockholding, making it a subsidiary Company of IFCI.

SHCIL Subsidiaries    

SHCIL Projects Ltd. SHCIL Services Ltd. SHCIL Ltd. SHCIL Commodities and Derivatives Trading Company Ltd.

Key Executives for Stockholding Corporation of India     

Mr. N. G. S. Ramesh CEO, MD and Executive Director) Mr. L. Viswanathan (Chief Operating Officer and Executive Vice President) Mr. Rohinton Hirji Mewawala( Chief Operating Officer and Executive Vice President) Mr. Sanjeev Vivrekar (CEO, MD and Director of Stockholding Document Management Services Limited. Mr. Nitin Jog (CEO of SHCIL Services Ltd, MD of Director of SHCIL Services Ltd and Director of SHCIL Services Ltd.)

Address of the Head Office: Main Centre Point Unit No. 301, 3rd Floor Dr. Babasaheb Ambedkar Road Parel Mahape Mumbai,400012 .

Vision of the Company “To become one step shop for all financial services.”

This vision of the company is slowly being achieved with the foray of the company into new financial services and products into its portfolio the latest to be Insurance product, which would be soon distributed.

Mission Statement “To be a world class technology driven and client focused market leader in financial and technical services”

Objectives of the Company  To retain the No, 1 position in the DP industry by being ahead of all other DP service providers with the innovative use of technology would be soon distributed.  To provide justified service to every rupee the client pays.  To ensure security and convenience of transaction to its client at reasonable price.  Channel technology to make convenient products for financial market that give quantum benefits to investors, corporate houses and brokers.  To reach 37 million Internet users in the years to come scaling USD 1.7 billion.  To move with speed and ease , diversifying into new areas sharpening its focus and paradigms.

with

e-Commerce

projection

considerably on others and

 To increase its customers base.  To evolve a new strategy to emerge as a broad based financial powerhouse in the years to come.  To find ways to make information and reporting system more effective for the institutional clients.  To expand to the South-East Asia , with the aim of becoming the leader.

Basic Facts about SHCIL   

SHCIL is India’s largest depository system. SHCIL has around 20% market share i.e. over 8 lakhs demat accounts. SHCIL has approx 50% market share of delivery-based transaction which amount to 1.33 crore transaction.

SHCIL Values     

Safety and Efficiency of operations is a hallmark of SHCIL. Professionalism and Integrity. Customer First. Relationship Building Commitment to Quality irrespective of asset size.

SHCIL’S HEIRARCHY AT AGRA

Branch Manager Executive Officer Officer Trainee

Officer Trainee

Executive Officer Feet On Street

Opportunity to acquire stake in SHCIL, India’s largest custodian & depository participant 

Largest custodian and depository participant in the country with assets under custody of over Rs. 30 lac crore



Dominant player in the domestic institutions custodian segment, enjoying a market share of ~36%



One of the largest retail depository participants in the country, with a client base of ~ 6.1 lacs



Aggregate value of transactions settled daily of over Rs. 5,000 crore



Participated in promotion of various financial institutions in India, including NSE, where it holds 5% stake



Only agency appointed by the Govt. of India for providing e-stamping services across India; currently serving 17 states



Fast-growing Document Management business with banks, FIs, courts and regulators as clients and an order book of Rs. 250 crore.

SHCIL’s product range comprises of the following:        

DP Services for corporate and individual entities. Custodial Services. Money Transfer. Broking Services. Document management services and physical custody and digitization. E-Stamping Loans- Home Loans, Auto Loan, Education Loan, Business Loan, Personal Loan, Loan against shares, Loan against property. Investment advisory services- Mutual funds, GOI Bonds, capital gain bonds, debentures, fixed deposits, and IPO’s of reputed companies.

CHAPTER – 3

OBJECTIVE AND METHODOLOGY

Objectives



To know about the customer expectation about the product and services offered by SHCIL



To know about the product and services offered by SHCIL



Critically examine the depository services provided by SHCIL.



To analyze the management and working of SHCIL in Agra.

RESEARCH METHODOLOGY Types of research

-

Descriptive and conclusive.

Data collected

-

Primary and secondary data.

Data collection method

-

Questionnaires Personal

Observation

-

personal interview

Observation

-

personal interview

Data collection, mode

closed and open ended

Undisguised

Questionnaire

Sample size

55

Data collection technique

Area sampling

Data analysis techniques

Quantitative and Qualitative

Data presentation

Bar diagram, pie chart, line diagram

CHAPTER: 4 DATA ANALYSIS

DATA

ANALYSIS

The data is collected through questionnaire is now analyzed. The respondents were asked to provide some information regarding this research will provide important information about customer's investment in shares and customer's satisfaction level. The data should be analyzed with the help of table graph and charts. The percentage was computed for interpretation of different variables.

1.

Do you have knowledge about the stock Market

OPTION

RESPONSE

PERCENTAGE

YES

40

72.73 %

NO

15

27.27 %

TOTAL

55

100 %

27.27% YES 72.23% 72.23%

2.

NO 27.27%

You are a share holder. yes/no OPTION

RESPONSE

PERCENTAGE

YES

44

80%

NO

11

20%

TOTAL

55

100%

20% YES NO 80%

3.

Are you aware of depository system?

Particular

Response

percentage

YES

45

85%

NO

10

15%

TOTAL

55

100%

15%

YES NO

85%

4.

How to open a demat account? are you aware

PARTICULAR

RESPONSE

PERCENTAGE

YES

44

80%

NO

11

20%

TOTAL

55

100%

20%

YES NO 80%

5.

The area which is most preferred by you? PARTICULAR

FREQUENCY

PERCENTAGE

EQUITY SHARE

22

40%

MUTUAL FUND

17

30%

BONDS

10

20%

OTHERS

06

10%

TOTAL

55

100%

160 140 120 100 FREQUENCY

80

PERCENTAGE

60 40 20 0 EQUITY SHARE

MUTUAL FUND

BONDS

OTHERS

6.

How many year you have been operating your demat account.

Sr. no.

PARTICULAR

RESPONDANT

PERCENTAGE

1

6 month

5

10%

2

1 year

5

10%

3

2 year

15

30%

4

More than 2 year

30

50%

5

total

55

100%

percentage 10% 10% 6 month

50%

1 year 30%

2 year more than 2 year

7.

Are you know about your every transaction of demat account OPTION

RESPONCE

PERCENTAGE

YES

40

70%

NO

15

30%

TOTAL

55

100%

30%

YES 70% NO 30%

70%

8.

Are you known about E-STAMPING? PARTICULER

RESPONCE

PERCENTAGE

YES

44

80%

NO

11

20%

TOTAL

55

100%

20%

YES 80% NO 20%

80%

CHAPTER – 5

CONCLUSION

1. . SHCIL has been able to maintain a lead position in a highly competitive environment which is no small achievement by any standards.

2.

Being an important constituent of the capital market the future of SHCIL is extricable intertwined with the fortunes of the capital market in general and the stock market in particular.

LEARNING While, I was working at SHICL then I learnt: 1. E-stamping certificate can be generated within minutes. 2.

E-stamp certificate can be check through the enquiry module.

3. The investors expect better service from depository participant

FINDING 1. They feel secure with e-stamping and other product and services 2. With the help E-stamping customer reduce the notary paper E-stamp work with single paper. 3. Product and services not stolen by other. 4. SHICL provided genuine E-stamping.

Limitations • The time was one of the major problems. • The study is limited to the different schemes available under the mutual funds selected. • More than studies were about the mutual fund schemes.

SUGGESTIONS

1. At the number of e stamping has increased in recent years efforts should be made to provide best services to their existing as well as potential clients.

2. SHCIL should adopt an intensive marketing campaign to promote newe stamping technique.

3. The cost structure needs to be revised so as to attract potential customers and compete in the market.

4. SHCIL should create awareness among the public of the products that it currently deals with in order to provide various investment opportunities for the e stamping community. 5. SHCIL should create more employment opportunities so as to the best work force available in the market.

REFERENCES

Journals and Reports:

SHCIL Journal Report VariousFormsUsedintheDepositoryWorkofSHCIL

Websites:

www.onlinestockholding.com www.sebiindia.com www.nsdl.com www.moneycontrol.com www.sharekhan.com www.investopedia.com

Books: Security Analysis and Portfolio Management – Fischer and Jordan. Financial Management – R.P.Rustagi. Business on the Net: What’s and How’s of E-Commerce Deeksha Ararwala.

Agarwala, K.N. and