Verily my Lord understand best the mysteries of

all that He planneth to do. For verily He is full

of knowledge and wisdom.

 DEDICATION

This piece of work is humbly dedicated with all love

and devotion to the greatest of all Almighty. As it
would not have been possible to complete
successfully my project without hid love and grace he
has bestowed upon me. I thank him foe al that he has
given me during this golden period of learning and
learning it realistically.

And thou (standest) on an exalted standard of

character.
 ACKNOWLEDGEMENT

It is my pleasant duty to gratefully acknowledge

my deep debt of gratitude and to offer my sincerest
thanks to kind, and supportive Mr. Prakash Nayak
(Vice president-Corporate banking) Mr. Jayraj Bhatt
(Sr.Manager- Corporate banking) whose positive
attitude and faith in my abilities spurred me a lot to
perform well.
I am also very thankful to MS. Bhavana Shah
without whom my project work would not have been
possible. She has always been a great source of help
at every stage of the project through discussion and
criticism would also like to thank whole staff of Kotak
Mahindra Bank who have been directly or indirectly
being instrumental in the development of this project.
Lastly, but not least,I owe our special regards to our
parents, sisters and brothers, who always supported
us and prayed for my betterment and success
 EXECUTIVE SUMMARY

Finance as are source stands next in importance to the

awesome power of human potential and financial
intermediaries are the pillars that support the activity of
finance.

The Kotak Mahindra Group was born in 1985 as Kotak Capital

Management Finance Limited. This company was promoted
by Uday Kotak, Sidney A. A. Pinto and Kotak & Company.
Industrialists Harish Mahindra and Anand Mahindra took a
stake in 1986, and that's when the company changed its
name to Kotak Mahindra Finance Limited.
Since then it's been a steady and confident journey to
growth and success.

Entering of mahindras in to finance sector was not an

eventual event it was an well thought and very much
awaited movement which has led to an foundation of full
service banking and one of giants in to an automobile sector
to venture in to banking sector.
The report focuses on components of trade finance offered
by division of corporatebanking.Following are the range of
products and services offered by corporate banking
department.They offer corporate anf intituitions a complete
banking client centric solutionsand services.These include
working capital,trade services,transaction
banking,moneymarket and foreing exchange sevices and
cash management.All of there services are client focused
and tailored according to clients needs and delivered after
factoring in industry imperatives and individual contexts.

Specifically my project objective requirqd me to undertake

an study and find out the prospective market for corporate
banking product like L/C(LETTER OF CREDIT) CBD (CLEAN
BILL DISCOUNTING). Our study concentrated on two major
sector in the industries which are heavily dependent on
efficient functiong of supply chain in to there
organization.We segregated our study in to two sectors
Pharma sector and oil sector.The focus was on finding out
the current status of there financing of the transportation
and logistics expenses and simultaneously prospecting about
there wllingness nad awareness about different kind of na
financinf instruments available and provided by our bank.
Collection of an data mainly concentrated on collecting
information regarding there current financials, there critical
raw materials requirement nad an list of vendors to there
company. After collecting al this materials from the
companies next step was to analyze and segregate the
vendor of this company who may fit in to the criteria for
providing services .The method used for contacting and
having healthy discussion with them was questionnaire and
some amount of oral communication. After getting an
informationliated an interpretation and analysis was done in
order to drive out na business from this information.
Companies selected for collection of data were:
INTAS PHARMACIEUTICALS LIMITED
CADILA PHARMACIUETICALS LIMITED
TROEKA PHARMACIUETICALS LIMITED
PLOX PHARMACIEUTICALS LIMITED
ISHITA DRUGS PRIVATE LIMITED
INDIAN OIL AND PETROCHEMICALS LIMITED(RELIANCE
LIMITED)

INTRODUCTION TO BANKING IN INDIA

Banking in India has its origin as early as the vedic period. It
is believed that the transistion from money lending to
banking must have occurred even before Manu, the great
Hindu Jurist, who has devoted a section of his work to
deposits and advances and laid down rules relating to rates
of interest. During the Mogul period, the indegenous bankers
played a very important role in lending money and financing
foreign trade and commerce. During the days of the East
India Company, it was the turn of the agency houses to carry
on the banking business. The General Bank of India was the
first Joint Stock Bank to be established in the year 1786. The
others which followed were the Bank of Hindustan and the
Bengal Bank. The Bank of Hindustan is reported to have
continued till 1906 while the other two failed in the
meantime. In the first half of the 19th century the East India
Company established three banks; the Bank of Bengal in
1809, the Bank of Bombay in 1840 and the Bank of Madras
in 1843. These three banks also known as Presidency Banks,
were independent units and functioned well. These three
banks were amalgamated in 1920 and a new bank, the
Imperial Bank of India was established on 27th January 1921.
With the passing of the State Bank of India Act in 1955 the
undertaking of the Imperial Bank of India was taken over by
the newly constituted State Bank of India. The Reserve Bank
which is the Central Bank was created in 1935 by passing
Reserve Bank of India Act 1934. In the wake of the Swadeshi
Movement, a number of banks with Indian management
were established in the country namely, Punjab National
Bank Ltd, Bank of India Ltd, Canara Bank Ltd, Indian Bank
Ltd, the Bank of Baroda Ltd, the Central Bank of India Ltd. On
July 19, 1969, 14 major banks of the country were
nationalised and in 15th April 1980 six more commercial
private sector banks were also taken over by the
government. Today the commercial banking system in India
may be distinguished into :

Public Sector Banks

State Bank of India and its associate banks

called the State Bank group
20 nationalised banks
Regional Rural Banks mainly sponsored by Public Sector
Banks

Private Sector Banks

Old generation private banks

 New generation private banks
Foreign banks in India
Scheduled Co-operative Banks
Non-scheduled Banks

CO-OPERATIVE SECTOR

The co-operative banking sector has

been developed in the country to the
suppliment the village money lender.
The co-operatiev banking sector in
India is divided into 4 components

State Co-operative Banks

Central Co-operative Banks
Primary Agriculture Credit Societies
Land Development Banks
Urban Co-operative Banks
Primary Agricultural Development Banks
Primary Land Development Banks
State Land Development Banks
DEVELOPMENT BANKS

Industrial Finance Corporation of India (IFCI)

Industrial Development Bank of India (IDBI)
Industrial Credit and Investment Corporation of India
(ICICI)
Industrial Investment Bank of India (IIBI)
Small Industries Development Bank of India (SIDBI)
SCICI Ltd.
National Bank for Agriculture and Rural Development
(NABARD)
Export Import Bank of India
National Housing Bank

LET US LOOK AT THE BASIC REASONS AS TO WHY A

BUSINESS WORLD WOULD LIKE TO INVEST IN INDIA:
There are several good reasons for investing in India.

One of the largest economies in the world.

Strategic location - access to the vast domestic and South
Asian market.
A large and rapidly growing consumer market up to 300 million
people; constitute the market for branded consumer goods -
estimated to be growing at 8% per annum. Demand for several
consumer products is growing at over 12% per annum.
Foreign investment is welcome, approval is required but is
automatic in sixty categories of Industries.
Skilled man-power and professional managers are available at
competitive cost.
One of the largest manufacturing sectors in the world, spanning
almost all areas of manufacturing activities.
One of the largest pools of scientists, engineers, technicians
and managers in the world.
Rich base of mineral and agricultural resources.
Long history of market economy infrastructure
Sophisticated financial sector.
Vibrant capital market with over 9,000 listed companies and
market capitalisation of US$ 154 billion (March,1996)
Well developed R&D infrastructure and technical and marketing
services.
Policy environment that provides freedom of entry, investment,
location, choice of technology, production, import and export.
 Well balanced package of fiscal incentives.
A sophisticated legal and accounting system.
English is widely spoken and understood.
Rupee is convertible on Current Account at market determined
rate.
Free and full repatriation of capital, technical fee, royalty and
dividends.
Foreign brand names are freely used. No income tax on profits
derived from export of goods.
Complete exemption from Customs Duty on industrial inputs
and Corporate Tax Holiday for five years for 100 per cent
Export Oriented units and units in Export Processing Zones.
Corporate Tax applicable to the foreign companies of a country
with which agreement for avoidance of Double Taxation exists,
can be one which is lower between the rates prevailing in any
one of the two countries and the treaty rate.
A long history of stable parliamentary democracy.

Overview

KOTAK MAHINDRA GROUP

Kotak Mahindra is one of India's leading financial
institutions, offering complete financial solutions that
encompass every sphere of life. From commercial banking,
to stock broking, to mutual funds, to life insurance, to
investment banking, the group caters to the financial needs
of individuals and corporates.
The group has a net worth of over Rs.1,550 crore and
employs over 3,000 employees in its various businesses.
With a presence in 59 cities in India and offices in New York,
London, Dubai and Mauritius, it services a customer base of
over 5,00,000.

Kotak Mahindra has international partnerships with

Goldman Sachs (one of the world's largest investment
banks and brokerage firms), Ford Credit (one of the world's
largest dedicated automobile financiers) and Old Mutual (a
large insurance, banking and asset management
conglomerate).

THE JOURNEY SO FAR ...

KEY GROUP COMPANIES AND THEIR BUSINESSES

Kotak Mahindra Bank

The Kotak Mahindra Groups flagship company, Kotak Mahindra
Finance Ltd which was established in 1985, was converted into
a bank Kotak Mahindra Bank Ltd in March 2003 becoming the
first Indian company to convert into a Bank. Its banking
operations offers a central platform for customer relationships
across the groups various businesses. The bank has a
presence in the Commerial Vehicles, Retail Finance, Corporate
Banking and Treasury and has recently entered the Housing
Finance segment.

Kotak Mahindra Capital Company

Kotak Mahindra Capital Company Limited (KMCC), India's
premier Investment Bank and a Primary Dealer (PD)
approved by the RBI, is a strategic joint venture between
Kotak Mahindra Bank Limited and the Goldman Sachs
Group, LLP. KMCC's core business areas include Equity
Issuances, Mergers & Acquisitions, Structured Finance and
Advisory Services, Fixed Income Securities and Principal
Business.

Kotak Securities
Kotak Securities Ltd., a strategic joint venture between
Kotak Mahindra Bank Limited and the Goldman Sachs
Group, LLP., is one of India's largest brokerage and
securities distribution house in India. Over the years Kotak
Securities has been one of the leading investment broking
houses catering to the needs of both institutional and
retails investor categories with presence all over the
country through franchisees and co-ordinators. Kotak
Street - the retail arm of Kotak Securities Ltd., offers online
(through www.kotakstreet.com) and offline services well-
researched expertise and financial products to the retail
investors.

Kotak Mahindra Primus

Kotak Mahindra Primus Limited (KMP) is a joint venture
between Kotak Mahindra Bank Ltd and Ford Credit
International Inc., (USA) formed to finance all non-Ford
passenger vehicles. KMP is one of the countrys leading
players in car finance and is focused to financing and
supporting automotive and automotive related
manufacturers, dealers and retail customers.

Kotak Mahindra Asset Management Company

Kotak Mahindra Asset Management Company (KMAMC), a
subsidiary of Kotak Mahindra Bank, is the asset manager
for Kotak Mahindra Mutual Fund (KMMF). KMMF manages
funds in excess of Rs 4000 crores and offers schemes
catering to investors with varying risk- return profiles. It
was the first fund house in the country to launch a
dedicated gilt scheme investing only in government
securities.

Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra Old Mutual Life Insurance Limited, is a joint
venture between Kotak Mahindra Bank Ltd. and Old Mutual
plc. Kotak Life Insurance helps customers to take important
financial decisions at every stage in life by offering them a
wide range of innovative life insurance products, to make
them financially independent.
Kotak Mahindra Bank, which offers complete practical financial
solutions, today opened a new retail-banking branch in Ahmedabad
at Chandan house, Near Mithakali Six Roads, Navrangpura. The
branch was inaugurated by Uday Kotak, Executive Vice-Chairman
and Managing Director of the Bank.

Speaking on the occasion, Mr. Uday Kotak said, Gujarat has held a
very special place in my heart and the state is an important market in
our overall expansion plans. With the country moving from a savers
attitude to an investors outlook, we will see more and more people
going for trustworthy financial advice. We believe that our expertise of
twenty years in wealth management will work to our advantage.

The Bank offers its customers Personalised Investment Advice that

is aimed at helping them manage and grow their wealth. The essence
of this customer proposition is captured in the new campaign line of
the Bank Think Investments. Think Kotak. The Bank has a team of
Wealth Managers in place, who with the aid of proprietary techniques,
provide personalized investment advice to customers on products
ranging of Mutual Funds to Insurance to Equity. This advice is given
keeping in mind the individuals risk return appetite, liability profile
and long term financial goals and objectives.
On the occasion, Mr. Dipak Gupta, executive Director, Kotak
Mahindra Bank said, We are rapidly ramping up operations all
across India, the Ahmedabad branch is the third branch in Gujarat,
15th branch in India and the next few months will see us at Rajkot
and Surat. The Ahmedabad branch will help customers manage and
better their wealth by offering personalised investment advice and an
array of financial products under one central platform.

The Bank customers will get a free Visa affiliated Global Debit Card
with their account, which will allow a majority of the customers to
access their accounts free of cost.

Kotak Mahindra Bank also proposes to offer its customers the use of
Electronic Fund Transfer facility to transfer funds to third party
accounts in other banks. This facility, offered free, helps the
customers save on Demand Draft making & couriering charges, and
also aids in a faster funds transfer.

The Ahmedabad branch will also offer the recently launched At-par
Cheque facility for its bank account customers. This facility allows
Kotak Mahindra Banks At-par cheques to be treated as local
cheques across ten key locations, which include Mumbai,
Ahmedabad, Delhi/Noida, Gurgaon, Chennai, Kolkata, Pune,
Hyderabad, Bangalore and Vadodara. To be offered free to its
premium Savings/Current Account customers, At-par cheque facility
would help the issuer save on DD making charges and recipient save
on cheque collection charges at these locations.

The customers would also enjoy facilities like Net Banking

(www.kotak.com), Phone Banking, Home banking, etc. which the
Bank offers free of cost to all its account holders. It offers free Home
Banking - which allows the Bank customers to get cash and DDs
delivered at home without any charges to all its customers.

The Ahmedabad branch is spread over 2500 square feet and has
been designed in a manner consistent with its corporate identity the
infinite ka reflecting the Banks global Indian personality.
The branch has a unique design aimed at providing the most
satisfying banking experience to the customers while being
aesthetically appealing. It incorporates the ambience of a modern
high-tech bank with features that appeal to the Global Indian viz.
privacy when discussing finance, customer comfort zones that allow
personalized attention from Relationship Managers, etc.

The use of warm materials like wood, earthy colour tones, and subtle
design elements give the branch a warm, friendly look while the
layout and fixtures have been designed to be practical, friendly and
functional.

Kotak Mahindra Sells Stake In Fascel Limited (April 23, 2003)

Kotak Mahindra Bank Limited, along with its subsidiary, has sold its
11% holding in Fascel Limited, the cellular telecom provider in
Gujarat. The sale has been on the basis of an independent evaluation
done by Messrs Deloitte, Haskins & Sells, and the total consideration
realized on the sale is Rs. 92.44 crore. The shares have been sold to
Usha Martin Telematics Ltd., a joint venture with Hutchison.
Dividend History

Year Rate
2002 03 21% (Final)
2001 02 21% (Final)
2001 02 20% (Special Interim)
2000 01 18% (Final)
1999 00 18% (Interim)
1998 99 12% (Final)
1997 98 18% (Final)
1996 97 18% (Final)
1995 96 18% (Final)
1994 95 18% (Final)
1993 94 18% (Final)
1992 93 30% (Final)
1991 92 30% (Final)
Shareholding Pattern as on 30.06.2004
No. of Shares Percentage of
Category
Held shares
A Promoters Holding
1 Promoters
-Indian Promoters 36,284,988 60.95
-Foreign Promoters NIL NIL
2 Persons acting in concert NIL NIL
Sub Total 36,284,988 60.95

B Non-Promoters Holding
3 Institutional Investors
A Mutual Funds and UTI 2,348,966 3.95
Banks, Financial Institutions,
B
Insurance
Companies,(Central/State
Government
Institutions/Non-Government
14,926 0.03
Institutions)
C FIIs 9,469,771 15.90
Sub Total 11,833,663 19.88

4 Others
A Private Corporate Bodies 819,695 1.38
B Indian Public 9,608,673 16.14
C NRIs / OCBs 955,333 1.60
D NSDL Transit 30,398 0.05
Sub Total 11,414,099 19.17

Grand Total 59,532,750 100.00

Distribution schedule as on 30.06.2004

No. of Equity shares
Share Holders Shares
held
From To Number % Number %
1 5000 32383 95.45 52,00,738 8.74%
5001 10000 861 2.54 5,96,984 1.01%
1,00001 20000 261 0.77 3,82,915 0.60%
20001 30000 76 0.22 1,96,574 0.34%
30001 40000 63 0.19 2,29,105 0.43%
40001 50000 29 0.09 1,32,901 0.23%
50001 100000 80 0.24 5,72,081 0.96%
100001 and above 172 0.51 5,22,21,452 87.72%
Total 30,871 100.00 5,95,32,750 100.00%
List of Top 10 shareholders as on 30.06.2004

Name of the investor No of % Categories

shares holding
Mr. Uday Kotak 30,626,355 51.44 Indian Promoter
Kotak Trustee Company Pvt Indian
2,689,706 4.52
Ltd Promoter's Co.
Mrs. Anuradha Mahindra 1,781,410 2.99 Indian Promoter
J.P. Morgan Fleming Asset
1,178,352 1.98 FII
Management
T Rowe Price International
1,159,715 1.95 FII
New Asia Fund
Sloane Robinson Investment
814,008 1.37 FII
Management
Indian
Avion Aerosols Pvt Ltd 769,655 1.29
Promoter's Co.
India Liberalisation Fund
661,387 1.11 FII
( Mauritius ) Ltd.
JF India Fund 639,809 1.07 FII
T Rowe Price International
601,300 1.01 FII
Emerging Markets Equity Trust
Total 40,921,697 68.74
Capital Build up as on 30.06.2004

Issue
Price
Date of No. of Cumulative
(Rs. Mode
Allotment Shares No. of Shares
Per
share)
22.11.85 10 70 70 Subscription - Cash
30.09.86 10 3,08,700 308,770 Initial offer - Cash
22.06.89 10 3,41,230 650,000 Rights - Cash
Capitalisation of
27.09.89 Bonus 6,50,000 1,300,000
reserves
Capitalisation of
08.11.91 Bonus 13,00,000 2,600,000
reserves
Capitalisation of
25.02.92 Bonus 26,00,000 5,200,000
reserves
25.02.92 45 17,82,500 6,982,500 Public Issue -Cash
11.04.93 150 44,00,000 11,382,500 Public Issue - Cash
18.04.93 25 69,82,500 18,365,000 Rights - Cash
Capitalisation of
21.01.95 Bonus 1,83,65,000 36,730,000
reserves
31.03.00 100 91,82,500 45,912,500 Rights Cash
Net effect of merger
12.01.01 10 1,33,00,250 59,212,750 with Pannier Trading
Co. Pvt. Ltd.
07.11.03 50 272,000 59,484,750 ESOP Plan 2001
02.12.03 50 34,000 59,518,750 ESOP Plan 2001
15.12.03 50 4,000 59,522,750 ESOP Plan 2001
09.02.04 50 10,000 59,532,750 ESOP Plan 2001
Year Rate
2002 03 21% (Final)
2001 02 21% (Final)
2001 02 20% (Special Interim)
2000 01 18% (Final)
1999 00 18% (Interim)
1998 99 12% (Final)
1997 98 18% (Final)
1996 97 18% (Final)
1995 96 18% (Final)
1994 95 18% (Final)
1993 94 18% (Final)
1992 93 30% (Final)
1991 92 30% (Final)
 Shareholding Pattern as on 30.06.2004

No. of Shares Percentage of

Category
Held shares
A Promoters Holding
1 Promoters
-Indian Promoters 36,284,988 60.95
-Foreign Promoters NIL NIL
2 Persons acting in concert NIL NIL
Sub Total 36,284,988 60.95

B Non-Promoters Holding
3 Institutional Investors
A Mutual Funds and UTI 2,348,966 3.95
Banks, Financial Institutions,
B
Insurance
Companies,(Central/State
Government
Institutions/Non-Government
14,926 0.03
Institutions)
C FIIs 9,469,771 15.90
Sub Total 11,833,663 19.88

4 Others
A Private Corporate Bodies 819,695 1.38
B Indian Public 9,608,673 16.14
C NRIs / OCBs 955,333 1.60
D NSDL Transit 30,398 0.05
Sub Total 11,414,099 19.17

Grand Total 59,532,750 100.00

Distribution schedule as on 30.06.2004

No. of Equity shares

Share Holders Shares
held
From To Number % Number %
1 5000 32383 95.45 52,00,738 8.74%
5001 10000 861 2.54 5,96,984 1.01%
1,00001 20000 261 0.77 3,82,915 0.60%
20001 30000 76 0.22 1,96,574 0.34%
30001 40000 63 0.19 2,29,105 0.43%
40001 50000 29 0.09 1,32,901 0.23%
50001 100000 80 0.24 5,72,081 0.96%
100001 and above 172 0.51 5,22,21,452 87.72%
Total 30,871 100.00 5,95,32,750 100.00%
List of Top 10 shareholders as on 30.06.2004

Name of the investor No of % Categories

shares holding
Mr. Uday Kotak 30,626,355 51.44 Indian Promoter
Kotak Trustee Company Pvt Indian
2,689,706 4.52
Ltd Promoter's Co.
Mrs. Anuradha Mahindra 1,781,410 2.99 Indian Promoter
J.P. Morgan Fleming Asset
1,178,352 1.98 FII
Management
T Rowe Price International
1,159,715 1.95 FII
New Asia Fund
Sloane Robinson Investment
814,008 1.37 FII
Management
Indian
Avion Aerosols Pvt Ltd 769,655 1.29
Promoter's Co.
India Liberalisation Fund
661,387 1.11 FII
( Mauritius ) Ltd.
JF India Fund 639,809 1.07 FII
T Rowe Price International
Emerging Markets Equity 601,300 1.01 FII
Trust
Total 40,921,697 68.74
Capital Build up as on 30.06.2004

Issue
Price
Date of No. of Cumulative
(Rs. Mode
Allotment Shares No. of Shares
Per
share)
22.11.85 10 70 70 Subscription - Cash
30.09.86 10 3,08,700 308,770 Initial offer - Cash
22.06.89 10 3,41,230 650,000 Rights - Cash
Capitalisation of
27.09.89 Bonus 6,50,000 1,300,000
reserves
Capitalisation of
08.11.91 Bonus 13,00,000 2,600,000
reserves
Capitalisation of
25.02.92 Bonus 26,00,000 5,200,000
reserves
25.02.92 45 17,82,500 6,982,500 Public Issue -Cash
11.04.93 150 44,00,000 11,382,500 Public Issue - Cash
18.04.93 25 69,82,500 18,365,000 Rights - Cash
Capitalisation of
21.01.95 Bonus 1,83,65,000 36,730,000
reserves
31.03.00 100 91,82,500 45,912,500 Rights Cash
Net effect of
merger with
12.01.01 10 1,33,00,250 59,212,750
Pannier Trading
Co. Pvt. Ltd.
07.11.03 50 272,000 59,484,750 ESOP Plan 2001
02.12.03 50 34,000 59,518,750 ESOP Plan 2001
15.12.03 50 4,000 59,522,750 ESOP Plan 2001
09.02.04 50 10,000 59,532,750 ESOP Plan 2001

Note: Face Value of all shares is Rs 10.

ORGANISATION CHART
Mr. K.M. Gherda Chairman

Mr. Uday Kotak Executive Vice Chairman &

Managing Director

Mr. Anand Mahindra

Mr. Cyril Shroff

Mr. Pradeep Kotak

Dr. Shankar Acharya

Mr. Shivaji Dam

Mr. Ajay Sondhi

Mr. C. Jayaram Executive Director

Mr. Dipak Gupta Executive Director

Ms. Bina Chandarana Secretary & Senior Vice

President

PROJECT PROFILE

WHAT IS SUPPLY CHANI MANAGEMENT?

 Supply Chain Management is a unit with in process
management.
For example, the supply-chain process includes
phases from customer inquiries to ,purchase and
production,and
finally to delivery of the product to the customer.

Benefits of supply chain management services:

Focuses especially on
- improving customer service
- improving efficiency
- reducing inventory
- reducing cycle and lead times
- Reducing costs
In general it
- Reduces the complexity of the supply-chain
- Helps to manage dynamic supply-chain
Environment (internal and external)

STEPS IN SUPPLY CHAIN MANAGEMENT:

www.qprsof
tware.com
Modeling and Measuring: supply chain
management mainly consist of having an
appropiate model being prepared for each and
every basic item to be taken in to consideration for
inbound as well as outbound logistics.
Analyzing: Even under procurement and delivery of
materials we find that an analysis of each and
every parameter has to be taken in to
consideration.
Improving: Again an continuous improvement on
the part of supplier and improvement at each and
evry level are required to be done where and when
required at every nanno point of a time.
Controlling: When whole of the cycle of supply
chain have been developed an continuous amount
of evaluation and comtrol becomes inevitable at all
levels.
Need for developing alternatives

(1) Disrubution Decision

(2) Supplier Decision

Traditional sales E-commerce

EDI-Links Extranet system

Linking measures to the performance of the

processes
-Information links between ProcessGuide model
elements or measures and ScoreCard metrics
Four primary metric groups:
_Costs
_Assets
_Reliability
_Flexibility and Responsiveness
METHODS AVAILABEL FOR INPUT OF COMPLICATED
DATAT OF MATERIALS AND QUALITY MEASUREMENT
ETC:

Several analysis options

(1) Powerful analysis
(2) user defined measures
(3) critical path, assumed cost, and lead time
calculations etc.
(4) Visual presentation of the results For eg.
Graphs,charts.
 AREA OFACTIVITIES UNDERTAKEN BY BANK

TRADE FINANCE

International
Bank guarantee
Domestic

FUNCED PRODUCTS

Working capital
Structured products

TREASURY PRODUCTS
Foreigh exchange
Money market

INVESTMENT PRODUCTS
Term deposits
Mutual Funds
Bank assurance

HISTORY OF INDIAN TRADE FINANCE

Historically, the Indian government has pursued a
cautious policy with regard to financing budgets,
allowing only small amounts of deficit spending. Budget
deficits increased in the late 1980s, and the necessity
of financing these deficits from foreign borrowing
contributed to the 1990 balance of payments crisis. The
central government budget deficit reached 8.4 percent
of GDP in FY 1990, up from 2.6 percent in FY 1970, 5.9
percent in FY 1980, and 7.8 percent in FY 1989. The
deficit was cut to 5.9 percent in FY 1991 and 5.2
percent in FY 1992, but widened to 7.4 percent in FY
1993. It was expected to recede to 6.2 percent in FY
1995.

The central government's budget deficits during the

1980s increased the total public debt rapidly until in FY
1991 it stood at Rs3.9 trillion. The bulk of this debt was
owed to citizens and domestic institutions and firms,
particularly the central bank. Readers of Indian
monetary statistics should be alert to the use of the
terms lakh (see Glossary) and crore (see Glossary),
which are used to express higher numbers.
India Monetary Process
The basic elements of the financial system were
established during British rule (1757-1947). The
national currency, the rupee, had long been used
domestically before independence and even circulated
abroad, for example, in the Persian Gulf region. Foreign
banks, mainly British and including some from such
other parts of the empire as Hong Kong, provided
banking and other services. The Reserve Bank of India
was formed in 1935 as a private bank, but it also
carried out some central bank functions. This colonial
banking system, however, was geared to foreign trade
and short-term loans. Banking was concentrated in the
major port cities.

The Reserve Bank was nationalized on January 1, 1949,

and given broader powers. It was the bank of issue for
all rupee notes higher than the one-rupee
denomination; the agent of the Ministry of Finance in
controlling foreign exchange; and the banker to the
central and state governments, commercial banks,
state cooperative banks, and other financial
institutions. The Reserve Bank formulated and
administered monetary policy to promote stable prices
and higher production. It was given increasing
responsibilities for the development of banking and
credit and to coordinate banking and credit with the
five-year plans. The Reserve Bank had a number of
tools with which to affect commercial bank credit.

After independence the government sought to adapt

the banking system to promote development and
formed a number of specialized institutions to provide
credit to industry, agriculture, and small businesses.
Banking penetrated rural areas, and agricultural and
industrial credit cooperatives were promoted. Deposit
insurance and a system of postal savings banks and
offices fostered use by small savers. Subsidized credit
was provided to particular groups or activities
considered in need and which deserved such help. A
credit guarantee corporation covered loans by
commercial banks to small traders, transport operators,
self-employed persons, and other borrowers not
otherwise effectively covered by major institutions. The
system effectively reached all kinds of savers and
provided credit to many different customers.

The government nationalized fourteen major private

commercial banks in 1969 and six more in 1980.
Nationalization forced commercial banks increasingly to
meet the credit requirements of the weaker sections of
the nation and to eliminate monopolization by vested
interests of large industry, trade, and agriculture.

The banking system in India expanded rapidly after

nationalization. The number of bank branches, for
instance, increased from about 7,000 in 1969 to more
than 60,000 in 1994, two-thirds of which were in rural
areas. The deposit base rose from Rs50 billion in 1969
to around Rs3.5 trillion in 1994. Nevertheless, currency
accounted for well over 50 percent of all the money
supply circulating among the public. In 1992 the
nationalized banks held 93 percent of all deposits.

In FY 1990, twenty-three foreign banks operated in

India. The most important were ANZ Grindlays Bank,
Citibank, the Hongkong and Shanghai Banking
Corporation, and Standard Chartered Bank.

Public-sector banks in India are required to reserve their

lending based on 40 percent of their deposits for
priority sectors, especially agriculture, at favorable
rates. In addition, 35 percent of their deposits have to
be held in liquid form to satisfy statutory liquidity
requirements, and 15 percent are needed to meet the
cash reserve requirements of the Reserve Bank. Both
these percentages represent an easing of earlier
requirements, but only a small proportion of public-
sector banks' resources can be deployed freely. In late
1994, the rate of interest on bank loans was
deregulated, but deposit rates were still subject to
ceilings.

More than 50 percent of bank lending is to the

government sector. With the onset of economic reform,
India's banks were experiencing major financial losses
as the result of low productivity, bad loans, and poor
capitalization. Seeking to stabilize the banking industry,
the Reserve Bank of India developed new reporting
formats and has initiated takeovers and mergers of
smaller banks that were operating with financial losses.

India has a rapidly expanding stock market that in 1993

listed around 5,000 companies in fourteen stock
exchanges, although only the stocks of about 400 of
these companies were actively traded. Financial
institutions and government bodies controlled an
estimated 45 percent of all listed capital. In April 1992,
the Bombay stock market, the nation's largest with a
market capital of US$65.1 billion, collapsed, in part
because of revelations about financial malpractice
amounting to US$2 billion. Afterward, the Securities and
Exchange Board of India, the government's capital
market regulator, implemented reforms designed to
strengthen investor confidence in the stock market. In
the mid-1990s, foreign institutional investors took
greater interest than ever before in the Indian stock
markets, investing around US$2 billion in FY 1993
alone.

Despite increases in energy costs and other pressures

from the world economy, for most of the period since
independence India has not experienced severe
inflation. The underlying average rate of inflation,
however, has tended to rise. Consumer prices rose at
an annual average of 2.1 percent in the 1950s, 6.3
percent in the 1960s, 7.8 percent in the 1970s, and 8.5
percent in the 1980s.

Three factors lay behind India's relative price stability.

First, the government has intervened, either directly or
indirectly, to keep stable the price of certain staples,
including wheat, rice, cloth, and sugar. Second,
monetary regulation has restricted growth in the money
supply. Third, the overall influence of the labor unions
on wages has been small because of the weakness of
the unions in India's labor surplus economy.