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  1. 1. INTRODUCTION The HSBC group is one of the largest banking and financial services organisation in the world. The group has around 10,000 offices in 82 countries and territories in Europe, Asia pacific region, Americas the middle east and Africa, serves over 125 million customers has assets of US $ 1.861 billion. HSBC Rank’s fifth largest as a company in Forbes Global 2000; it also has the distinction of being one of the leading companies in banking. HSBC headquarters is located in the London's Canary Wharf on the HSBC tower. The founding member of HSBC is The Hongkong and Shanghai Banking Corporation, which was established by Thomas Sutherland, a Scot, in 1865. HSBC origins in India date back to 1853, when the mercantile bank of India was established in Mumbai. The bank has since steadily grown in reach and services offerings, keeping pace with the evolving banking and financial needs of its customers. In India the bank offers a comprehensive suite of world class product and services to its corporate and commercial banking clients as also to a fast growing personal banking customer base. HSBC has a history of helping millions of customers globally to meet their financial goals. They have understood the importance and functioning of different markets through their experience in international trade. As a result, HSBC has grown into a company or banking institution that has the deepest respect for different cultures and people connected to these cultures. Their motto is to look at their customers as individuals and strive towards providing them with a personalized service that will fit each of their specific needs. 1
  2. 2. COMPANY HISTORY A GLOBAL PEDIGREE HSBC Investments draws upon a long history of serving clients of the HSBC Group, tracing its roots back to the foundation of the Hongkong and Shanghai Banking Corporation in 1865. The HSBC Group has identified asset management as a key constituent of the HSBC Group’s wealth management strategy and at HSBC Investments; we have been dedicated to managing assets on behalf of our clients for more than 30 years. In 1994 the HSBC Group recognised the increasingly global nature of financial markets, would create the need for a credible global asset management organisation to ensure delivery of the best possible solutions for clients. In response, the separate regional asset management businesses of HSBC were unified to create a single powerful investment manager aimed at delivering global investment capabilities combined with significant local expertise. In 2001, following the integration of CCF and its investment businesses into HSBC, a new global strategy was launched for asset management. The strategy aimed to create a core proprietary global investment management business – HSBC Asset Management, operating alongside a series of Specialist investment businesses, namely: Sinopia for quantitative and structured products, HSBC Specialist Investments for property and infrastructure investments, and HSBC Multimanager for best- in-class ‘open architecture’ investments and HSBC Alternative Investments 2
  3. 3. for single-manager hedge fund strategies. More recently, in 2004, following a strong period of growth in HSBC’s investment businesses, a new strategy was announced for the investment businesses of HSBC. The strategy is intended to position HSBC for market leadership in the provision of investment solutions that meet client needs and involved a reorganisation of HSBC’s investment businesses including HSBC Asset Management and HSBC Investment Management, leading to the creation of: HSBC Investments. A CONCISE HISTORY 1973 HSBC forms Hong Kong based Wardley as a wholly owned merchant banking subsidiary. 1986 The European arm of HSBC Asset Management is conceived with the purchase of James Capel, a leading and well established international securities company. The addition of New York based Marinvest establishes the US arm of HSBC Asset Management. 1992 Consolidation in Europe with the acquisition of the Midland Bank Group. 1994 Regional companies are brought together under the name HSBC Asset Management, a single investment manager offering global investment capability combined with significant local expertise. 2000 HSBC Group purchases CCF Bank, France Capital Management in Paris joins HSBC Asset Management. 3
  4. 4. 2001 The market for asset management solutions has grown rapidly and investors’ requirements have become ever more sophisticated. In response to this, the asset management business of HSBC was re- organised at the end of 2001 to provide a full range of sophisticated services under the name Asset Management Services, comprising the core business, HSBC Asset Management and several specialist companies offering complementary investment management services.HSBC Asset Management completed its acquisition of China Securities Investment Trust Corporation, Taiwan's premier asset management company, in August.HSBC Asset Management (India) Private Limited is incorporated in December 2001. 2002 New investment and marketing office established in India. Co- operation with HSBC Trinkaus Capital Management and its parent HSBC Trinkaus & Burkhardt.HSBC Asset Management (India) Private Limited, the Investment Manager to HSBC Mutual Fund launches its first four schemes in December 2002. 2003 Integration of Bital's fund management business in Mexico following its purchase by HSBC. 2004 Integration and development of investment management activity in Bermuda following the acquisition of Bank of Bermuda. On 1st December HSBC announces a reorganisation of its investment management businesses as part of a new strategy designed to drive further growth. 2005 HSBC Asset Management is replaced by HSBC Investments and HSBC Halbis Partners during 2005 BOARD OF DIRECTORS 4
  5. 5. S K Green, Group Chairman Age 58. An executive Director since 1998; Group Chief Executive from 2003 to May 2006. Joined HSBC in 1982. Chairman of HSBC Bank plc, HSBC North America Holdings Inc. and HSBC Private Banking Holdings (Suisse) SA. A Director of HSBC France and the Hongkong and Shanghai Banking Corporation Limited. Group Treasurer from 1992 to 1998. Executive Director, Corporate, Investment Banking and Markets from 1998 to 2003. Chairman of the British Bankers' Association. D J Flint, CBE Group Finance Director Age 52. Joined HSBC as an executive Director in 1995. Non-executive Chairman of HSBC Finance Corporation. A non-executive Director of BP p.l.c. and a member of the Consultative Committee of the Large Business Advisory Board of HM Revenue & Customs. Chaired the Financial Reporting Council's review of the Turnbull Guidance on Internal Control. Served on the Accounting Standards Board and the Standards Advisory 5
  6. 6. Council of the International Accounting Standards Board from 2001 to 2004. A former partner in KPMG. KG Morgan Age 61. A non-executive Director since October 2006. A member of the Remuneration Committee. Non-executive Chairman of SNC-Lavalin Group Inc. A member of the Board of Trustees of the Fraser Institute and the Energy Advisory Board of Accenture Limited. A non-executive Director of HSBC Bank Canada from 1996 to April 2006. Founding President and Chief Executive Officer of EnCana Corporation until December 2005 and Vice Chairman from December 2005 to October 2006. D J Shaw, Adviser to the Board Age 61. An Adviser to the Board since 1998. . A Director of the Bank of Bermuda Limited and HSBC Private Banking Holdings (Suisse) SA. A non- executive Director of Kowloon development Company Limited and Shui On Land Limited. IMPORTANCE AND SIGNIFICANCE OF HSBC PRODUCTS AND SERVICES 6
  7. 7. The banking industry has changed from a conventional banking to a new age modern banking. Now a customer doesn’t walk into a bank just for depositing the cash or withdrawal. They go to a bank to avail entire financial planning services ranging from investing into a equity fund to reducing there tax liability. HSBC was one of the first bank to understand the ever enhancing need of its customers, hence HSBC came of with its various products and services which are focused on providing solutions to there valuable customers. Products and Services offered by HSBC 7
  8. 8. Bank Accounts Bank accounts can be majorly classified into four categories: a) SAVINGS ACCOUNT: This account is suited to those who want to deposit their small savings in bank, which they need to withdraw only occasionally. The interest rate on savings account is lower than that allowed on fixed deposits, but higher than that allowed in current accounts. It is calculated on the lowest balance kept during a month. The rate of interest to be paid by banks to depositors on saving account is prescribed by the Reserve Bank of India. At present the rate of interest on savings account is 3.5 %. HSBC saving accounts make planning for your regular expenses convenient, accommodating your financial needs when making big purchases or meeting unexpected expenses. Savings accounts with HSBC can further be classified into 3 categories: i) Premier Accounts – Any relationship (one or more customers usually of the same family) where the cumulative relationship value is Rs. 2.5 million or more is eligible for ‘Premier’. Premier is a relationship-managed proposition. All wealth management needs of Premier customers are serviced by dedicated Premier Relationship Managers, who typically manage 150-200 such relationships. High-end Premier relationships where the cumulative relationship value is Rs. 25 million or more are also referred 8
  9. 9. to as ‘Private clients’. Private clients are serviced by Senior PRMs, who typically manage 60-70 such relationships. ii) Power Vantage Accounts – Any customer whose cumulative deposit value is Rs. 0.1 million or more is eligible for ‘PowerVantage’. PowerVantage customers are serviced by PowerVantage Officers for their banking needs. iii) Mass-market Accounts – Any customer who is not Premier or PowerVantage is referred to as ‘Mass-market’. Mass-market customers are serviced by Customer Services Officers for their banking needs. The minimum balance required for this account is Rs 25,000. Key Feature: 1) You can automatically transfer extra savings from your savings account to a fixed deposit, through a standing instruction, to enable you to earn higher interest. 2) You are also eligible for a fee waiver on HSBC credit card. 3) Introducing card-to-card transfer facility – a funds transfers service that enables you to transfer money in an easy, fast convenient and safe manner using the visa Money Transfer service from visa. 4) HSBC Demat Account services with wavier on account opening charges. 5) Keep track of your account with free quarterly account statements. 6) Free personalized cheques book. 7) Buy mutual fund products offered by select mutual fund houses. 8) Choose from a range of Insurance products offered by TATA AIG. 9
  10. 10. 9) Manage your account, make transactions, and pay your bills and much more by taking advantage of HSBC free internet banking facility. Service Charges Minimum Average Quarterly Balance (AQB) Resident Savings Account Rs. 25,000 NRO Savings Account Rs. 10,000 Non-Resident Savings (NRE) Rs. 25,000 Non maintenance of AQB Rs. 750 per quarter Account not operated for more than 2 years Rs. 150 per quarter Statement of Accounts each quarter (mailed to account holders) Free Duplicate Statements Rs.150 per statement Standing Instructions (out of pocket expenses will apply) Setting up Free Amendments Free Transactions charges (Charges for drafts/couriers, etc. will be as applicable.) Free All transactions Free Account closure in less than 6 months Rs. 500 b) CURRENT ACCOUNT It is usually opened for customers who are into business and requires lot of transaction to be done. In the case of current accounts the bank incurs the obligation of paying all cheques drawn against him as long as there is enough money to the credit of his customer. 10
  11. 11. The customer is allowed to deposit or withdraw money as and when he likes no interest is payed on current accounts. c) FIXED DEPOSITS ACCOUNT The term fixed deposits means deposits repayable after the expiry of a certain period. They are also known as time deposits. When it comes to assured returns choosing the right type of savings scheme makes all the difference. HSBC fixed deposits lets you make the most of value added benefits as you create wealth at low risk. Key Features 1) You can now open a fixed deposit with Rs 10,000 only. 2) Enjoy high rate of returns on your HSBC fixed deposits. 3) Choose from a wide range of tenure as per your convenience. 4) Avail of our special rates for select tenures. d) DEMAT ACCOUNTS Manages your securities portfolio at your own convenience. As someone who is interested in regular trading you need a well resourced account to match your needs in a dynamic market scenario. As a leading depository participant, we offer you HSBC Demat accounts, armed with an entire range of convenience specially designed to make your money work harder. Key Features: 1) You can purchase, hold and sell shares in electronic form. 2) Get your holding statement every three months, showing current portfolio of shares. 11
  12. 12. 3) Avail of a overdraft up to Rs 20, 00,000 available against demat shares through asset link. 4) As an NRI, you can easily dematerialize your portfolio of shares in India with HSBC. 5) If you already hold an HSBC current or saving accounts there will be no account opening charges and no minimum balance requirement for your demat account. 6) You can save on transaction cost with quick transfers. 7) Say good bye to risk of loss, theft and mutilation of shares. 8) Now, stop worrying about bad deliveries, forgeries and duplicate shares certificate. Service Charges SERVICE CHARGES 12
  13. 13. Annual Charges Rs. 750 per annum for Customer who maintain a Market Trade/Off Market Trade/ Inter Depository Transaction Purchase Nil Sale Upto 10 ISIN sale transactions per month per transaction thereafter Nil; Rs. 100 per ISIN Custody Fee Nil Pledge (a) HSBC Creation Nil Closure Nil Invocation Nil (b) Third Party Creation Rs. 50 per instruction Closure Rs. 50 per instruction Invocation Rs. 50 per instruction Dematerialization Nil Rematerialisation Rs. 100 per certificate Ad hoc Statements Mailed Abroad Rs. 50 per statement Ad hoc Statements Rs. 25 per statement Personalised Delivery Instruction book Nil HOME LOAN Buying a home for the first time can be daunting to any person but in today’s time bank like HSBC is lending a helping hand to the people to purchase their dream house. Thus people look forward towards choosing a home loan. The primary concern of bank is to determine the loan amount that the borrower is comfortably able to repay. The most popular method of financing a home purchase is with a mortgage. This is a loan that is secured 13
  14. 14. over the home. As it easier for you to move in as soon as possible without putting a strain on your wallet. Feature and Benefits of Home Loan 1) Loan Requirement –We offer loan ranging from Rs 5 lakhs up to Rs 3 crore. 2) Property types –We offer loans to Resident Indians and NRI’s for ready property, under construction property, self-construction and home improvement. 3) Loan tenure –Loans are available for tenure up to 25 years. 4) Repayment options – Choose fixed and floating rate home loans. You also have the option of switching from a floating rate home loan to a fixed rate home loan once a year at no extra cost. 5) No penalty option – You can opt to pre-pay up to 25% of your loan every year. Pre- payment is permitted after a minimum of 6 months following loan disbursal. 6) Free Gold credit card – On approval of your Home Loan. You get a Gold credit card, Free for the first year with annual charges being waived. PERSONAL LOANS Never stop chasing your dreams whether it is renovating your home or your shop, buying a computer for your child, or celebrating a wedding in family. You can now get a loan for any need. Feature and Benefits: 14
  15. 15. 1) Personal loans from Rs 10,000 to Rs 50,000. 2) Flexible repayment period between 12 months to 48 months. 3) No guarantor required. 4) Easy documentations and quick disbursal. 5) Easy monthly repayment through equated monthly installments. Personal Loan can be used for: 1) Home renovation or other home related expenses. 2) Marriage expenses in the family. 3) Education expenses. 4) Medical expenses. 5) Purchasing consumer durables or equipments. 6) Retiring other debts. 7) Any other personal need or contingencies. CREDIT CARD 15
  16. 16. Different people look at our credit cards differently with special money saving features and time saving services, it could mean the perfect way to save money for all the precious things you all ways desired or a convenient way to make time to do more. Get ready to enjoy more. Two major credit cards that HSBC offers are Gold Card and Classic Card. Features and Benefits: 1) Cash advance: Get instant access to cash, round the clock, at close to one million ATM’S world wide. 2) Additional credit cards: Gift your loved ones the freedom of spending by availing of two or three additional cards. 3) Zero Loss Credit Card Liability Benefit: Credit card holders have zero lost credit card liability after the loss of the credit card has been reported to the bank in writing or to the visa / master. Card global emergency assistance helps lines. However, you will liable for all the charges incurred on your credit card before you report the loss of credit card. 4) Credit Shield extensions: This feature provides a life insurance cover for an amount of Rs 40,000 for gold credit card holders with Tata Aig Life Insurance Co. Ltd in the event of death due to non accidental causes. 5) Global access: a) Get a cash advance at close to one million ATM’S in India and overseas b) Withdraw cash from your HSBC account from any visa plus or Master card in India or overseas. You can also enquire about your balance, transfer funds from any HSBC ATM’S in India or overseas. c) The HSBC visa credit card is accepted at over 18 Million establishments over 100,000 establishments in India 16
  17. 17. DEBIT CARDS HSBC debit card makes shopping a whole lot more convenient, by enabling you to do much more than your ATM card. Get electronic access to up to three HSBC savings /current accounts, wherever and whenever you need the 17
  18. 18. money. Your card is internationally valid and combines the benefit of domestic and overseas usage in one card. Features and benefits : 1) Banking cum Shopping Card: Your HSBC debit card can be used as an ATM card at any HSBC or visa/plus ATM across the world, as well as for making purchases at merchant locations. This card is accepted over 3, 20,000 merchants in India. You can also withdraw cash from any of the 20,000 HSBC /visa/plus ATM’S in India. 2) More safety more convenience: Your HSBC card is extremely versatile and easy to use it. It allows you the convenience of paying for your purchases directly from your bank account, without having to carry any cash beside there is no worry of tracking and making payments for bills every month. 3) Internationally valid and very handy when you are traveling abroad. Get access to over 1 million ATM’s 14 million merchant establishments, worldwide. 4) Widely accepted: Your HSBC debit card is accepted widely in India and around the world. Just look out for the Visa/Visa electron logo at ATM’s and merchant establishments. 5) Itemized Billing; Your HSBC debit card allows you to track your purchases on a regular basis. The details of the purchases made on your card, long with the date, merchant name and amount are mentioned in your bank statement. 6) Lost Card Insurance: If your HSBC debit card gets lost or stolen, you are protected against fraudulent purchase transaction from the moment you 18
  19. 19. report the loss to HSBC in India or the visa global assistance help lines, if overseas. 7) Unlimited free ATM transactions at non HSBC Visa ATM’s in India (Power Vantage and Premier Customers only) 8) Two free ATM transactions at other bank Visa ATM’s in India (debit card plus customers only) INTERNET BANKING In today’s demanding world you need instant solution for a better life style. HSBC presenting online@hsbc, HSBC‘s internet banking service that gives you complete control over your accounts. Now bank from the comfort of your home or office anywhere, anytime. Features and Benefits: 19
  20. 20. 1) View your bank account/credit card balances and transaction at your convenience. 2) Transfer funds online to account with HSBC and other banks in India. 3) Create and manage fixed deposits. 4) Say good bye to queues and miss dates. Pay your credit card and utility bills and insurance premiums online. 5) Get cashiers orders and demand drafts free. 6) Request for E- Statements for your bank account and credit card. 7) Manage your investments buy, redeem and switch between mutual funds online. 8) You can also stop cheques, order new cheques books, redeem bonus rewards points and more. I) Security Device: The security device, one of the latest technological innovations from HSBC, takes online security two even higher levels. To log on to your account on internet banking, you need to enter your existing user name and password or as usual, followed by the unique security code generated by the security device. The security device provides you an enhanced level of security. Since the security device is in your possession and the user name and password is known only to you, only you can access your account online. Simple to use and easy to carry, the security device ensure you can access your financial information online in a completely secure environment. II) Bill Payments: No more bill queues, no more missed due dates, you can now use HSBC’s convenient and flexible bill payment service to pay your 20
  21. 21. bills. You can pay your mobile, telephone, gas, electricity bills and insurance premiums. III) Mobile Alerts: HSBC introduces mobile alerts a service that allows you to stay updated on your banking transactions. Just register for your free mobile alert service to receive SMS alerts for select banking transactions, SMS reminders for your payment dues dates and term deposits maturity dates, and even your mini statement. Features and Benefits: 1) Keep track of your accounts, loans and investments with HSBC even while you are on the move. 2) Fast, easy and convenient - no need to visit your branch or call customer service. 3) No more forgetting due dates. Reminder alerts can be scheduled for payments due dates on your HSBC loans and business overdrafts. 4) You never need to send us an SMS. On your register, mobile alerts will be sent to you automatically as per your preferences. 5) What’s more, all this comes to you absolutely free. VI) PHONE BANKING: Phone Banking is yet another banking service offered by HSBC under this system, like in ATM card, a secret code number is provided to each account holder. A customer wanting to know his bank balance or any other information relating to his account should dial up a particular phone number indicated by the bank. When the number is dialed, 21
  22. 22. a recorded voice will ask you to identify yourself with your account number and code number. If the numbers are tallied, you will get all the information you want to know about your account. Presently many foreign banks provide this service. You cannot draw cash or deposit cash through phone banking. It is basically an information service. FOREIGN EXCHANGE The term foreign exchange may be defined as a means of payment of an instrument of short – term credits for various countries with different monetary units, when looked at from the point of view of their purchase or sale against the national money, or that of their holdings or reserves. It refers to foreign money which includes notes, cheques, bills of exchange, bank 22
  23. 23. balances and deposit in foreign currencies. It is often used to denote the process or system by which the currency of country is converted into that of another country. Foreign exchange transaction arises mainly from trade transactions among residents of different countries. The foreign exchange is the clearing house through which the purchase and sale of foreign exchange are offset against each other. The main link between the buyers and sellers of foreign exchange in the foreign exchange market is the bank Foreign Facilities for Resident: 1) Foreign exchange up to U$$ 10,000 in any calendar year for tourism or private travel to any country other than Nepal and Bhutan on the basis of self –certification. For travel to Nepal and Bhutan Indian currency can be taken without limit except Indian currency notes of denominations of Rs 500 and above. 2) Foreign exchange up to U $ $ 100,000 on the basis of self certification. For students the limit of $ 100,000 is applicable for each academic year. For medical treatment in addition to U$$ 25,000 can be taken for meeting boarding/lodging/travel expenses of the patient and also the accompanying attendant on self – certification. Amounts in excess of the limits can be released on basis of documentary evidence of requirement. INTERNATIONAL CREDIT CARDS 1) Meeting expenses/making purchases while abroad without any limit. 2) Making payment in foreign exchange for purchase of books and other items through internet. 23
  24. 24. Resident holding a foreign currency account in India or with a bank overseas is also free to obtain ICC’s issued by overseas banks and other reputed agencies. REMITTANCE FOR MISCELLANEOUS PURPOSES UPTO US$ 5000 Remittance can be made upto US$5000 for any miscellaneous purpose with out that production of any document. GIFTS AND DONATIONS Gifts/ Donation can be made to any body upto US$5000 every year per remitter on self certification. OTHER CURRENT ACCOUNTS TRANSACTION Foreign can be freely drawn for all other bonafied current account transaction (other than those which are restricted or are subject to specified limits) on production of documentary evidence to the satisfaction of the authorized dealer. SURRENDER OF FOREIGN EXCHANGE ON RETURN Foreign exchange up to US$2000 in the form of foreign currency notes or traveller’s cheques (TC’S) can be retained indefinitely for future use. Amounts in excess of US$ 2000 have to be surrendered to a bank with in 90 days and TC’s with in 80 days of return or credited to RFC [D] account. Foreign coins can be retained indefinitely without any limit. RESIDENT FOREIGN CURRENCY ACCOUNT 24
  25. 25. Resident can open Resident Foreign Currency Account with bank in India for crediting: 1) Unspent balances after travel abroad. 2) Currency, TC s, bank drafts received as gifts from or for services rendered to non resident while in India. 3) Foreign exchange earnings received, through banking channel, royalty, for any service or towards exports of goods. RFC [D] accounts are NOT interest bearing and there is no ceiling on the balances that can be built up in these accounts. The balances held in these accounts can be used for any purpose for which foreign exchange can be bought from a bank in India. THE USERS OF HSBC SERVICES We find two types of customers using the services of banks, such as general customers and the industrial customers as given below: General users: persons having an account in the bank and using the banking facilities at the term and conditions fixed by a bank are known as general 25
  26. 26. users of the banking services. Generally they are found to be small sized customers. Industrial users: the industrialists, entrepreneurs having an account in the bank and using the credit facilities and other services for the establishment and expansion of their business are known as industrial users. Generally they are found to be large sized. Prospects: it is also essential to clarify the term, prospects. The general or industrial prospects do not use the banking services at the present but they have the potentials to become a customer if induced or motivated in a right fashion. Wealth Management Services 26
  27. 27. HSBC Investments develops appropriate investment solutions using investment management expertise from within and outside of the HSBC Group. Our approach is to present the appropriate combination of investment capabilities, dependent on the requirements of the client. HSBC is able to do this by working in partnership with clients and their advisers, tailoring solutions to their specific requirements without a bias to in-house active investment capabilities, drawing on our own investment capabilities when appropriate and external managers when required:  A full range of investment solutions to meet the needs of clients around the world  A focus on what is right for the client rather than what we manage in- house 27
  28. 28.  Multimanagement from our Multimanager team is a core option for active investments Investment & Insurance (I&I) Services is a part of the Wealth Management thrust of the Bank. The various Investment & Insurance products made available to customers include mutual funds, fixed income securities (bonds), direct equities and insurance products – the former three are made available both under advisory as well as non-advisory basis while insurance products are available only on a non-advisory basis. Wealth Management Services is spearheaded by the Wealth Management Unit headed by the Head of Wealth Management who in turn reports into the Senior Manager Personal Financial Services (SMPFS). The Head of Wealth Management is assisted by a central team that supports the sales of I&I products to various customer segments. The various units in the central team are: 1. INVESTMENT ADVISORY UNIT The centralized Investment Advisory Unit (IAU) is responsible for: a) Maintaining research on investment products. Their views are expected to be uniformly disseminated to customers by the front office teams. 28
  29. 29. b) Providing customized investment proposals and advice to advisory customers. The advice broadly covers equities, mutual funds, debt products and tax-planning investment alternatives. c) Maintaining proposal templates for standardized client profiles ascertained through client responses through the KYC. The IAU updates these templates for the front offices on a monthly basis – these updates incorporate relevant changes pertaining to markets, product developments and product ideas. d) Maintaining the list of approved and recommended investment products. The approved funds are reflected in the monthly newsletter Fundamental that is prepared by IAU. e) Supporting the wealth management salespeople with sales material and periodic updates on investment products. Investment Research and Advisory The unit significantly draws upon the knowledge and research that resides within other arms of the Group - mainly HSBC Securities and HSBC Treasury. APPROVED AND RECOMMENDED INVESTMENT PRODUCTS HSBC does not distribute all mutual fund schemes available in the market. The Investment Advisory Unit (IAU) tracks suitable schemes and selects them for distribution after a fairly rigorous due diligence process. These schemes are then placed on what is commonly referred to as the “white list” and are open for distribution by Front Office Staff, subject to sales franchise limits. “White-listed” schemes are also referred to as approved schemes (or 29
  30. 30. as schemes distributed on an approved basis). Updates on “white list” are communicated to sales staff and customers through the monthly newsletter Fundamental Products classified as ‘recommended funds’ may be recommended to customers by advisory salespersons (only). The recommended mutual funds are a subset of the white-listed funds and are identified on the basis of the scheme level due diligence process on the past performance. In case post discussions, the customer chooses to invest in non white-listed mutual funds; the transactions must be categorized as customer-directed transaction. The recommended equity shares are a part of model portfolio that is maintained by IAU. The model portfolio also gives an indication of the recommended relative allocations. SALES SUPPORT IAU is also responsible for the production of sales support products like market commentaries, event impact notes, equity recommendation notes and updates, newsletters and model equity portfolios and themes. Extensive use is also made of information from electronic databases like Capitaline and Bloomberg in the equity research maintenance effort. 30
  31. 31. Direction, updates and queries pertaining to markets, products and client portfolios are provided to front office staff though product notes, updates, conference calls and telephonic discussions. Some of the regular updates provided to the frontline are: • Market Morning – Collection of newspaper articles (business dailies), synopsis of overseas markets, ADRs etc. Frequency: Daily • Market Evening – Summary of what happened in equity, debt and forex markets during the day. Frequency: Daily • MF Trac – Worksheet providing returns of all open-ended schemes over various time frames. Frequency: Daily • Weekly Report on equity and debt markets over the week. • Fundamental – A monthly newsletter containing the entire white list, market commentary for the month and usually an interview with a known face from the industry. Fundamental is mailed to the front offices and select Premier customers. • Fact sheets – Summary of actions / activities done by the fund managers in schemes in the white list during the month. 2. INSURANCE PRODUCTS UNIT The Insurance Products unit is the main driver of the insurance business of the Bank. It is responsible for liaison with the underwriters, development of suitable products for Bank customers and follow-up on operational issues with the underwriters. HSBC is the corporate agent for Tata AIG Life Insurance Limited (TAIG). However, we do not distribute all life insurance products from TAIG. The 31
  32. 32. Insurance product team, as part of its mandate, designs, studies and selects suitable insurance products for distribution. 3. CUSTOMER SEGMENTS PFS customers The PFS customer base primarily comprises of individuals (including minors) and HUFs holding bank accounts and is segmented as below: • Premier – Any relationship (one or more customers usually of the same family) where the cumulative relationship value is Rs. 2.5 million or more is eligible for ‘Premier’. All wealth management needs of Premier customers are serviced by dedicated Premier Relationship Managers (PRMs), High-end Premier relationships where the cumulative relationship value is Rs. 25 million or more are also referred to as ‘Private clients’. Private clients are serviced by Senior PRMs (SPRMs). • Power Vantage – Any customer whose cumulative deposit value is Rs. 0.1 million or more is eligible for ‘PowerVantage’ .PowerVantage customers are serviced by PowerVantage Officers (PVRM) for their banking needs. • Mass-market – Any PFS customer who is not Premier or PowerVantage is referred to as ‘Mass-market’. Mass-market customer is serviced by Customer Services Officers (CSOs) for their banking needs. 32
  33. 33. Non-PFS customers Non-PFS bank customers such as Proprietorships, Partnerships, Companies, Trusts, Clubs, Associations, Societies etc. may also require I&I services. These entities are classified as below: • Substantial – Entities with turnover (or total revenue) of INR 5,000 M or more. • Large – Entities with turnover of INR 1,000 M or more • Small – Entities with turnover (or total revenue) of less than INR 1,000 M • These entities may include existing SME, CMB or CIB relationships. Regulation and Guidelines & I salespersons must act in accordance with the laws of India. The finance Ministry through the RBI, SEBI, IRDA, AMFI, Company Law Board, Department of Company Affairs, Registrar of Companies oversees I 33
  34. 34. the various segments of the financial services industry. In addition there are other entities, as well as various legislations, which may affect the sales of I&I products. I&I salespersons should ensure that they have the necessary knowledge and skills to render such services and are properly licensed to conduct sales of various financial products. This section is designed to provide me&me salespersons with an overview of certain legal terms and regulations that impact their business. The section covers the following guiding principles • Contracts • Law of Torts • Regulatory requirements for Mutual Fund distributors • Regulatory requirements for sale of insurance policies by corporate agents • SEBI Insider dealing regulations and Staff dealing rules • AFP Professional Standards • Group Guidelines including Cross-border marketing guidelines, vulnerable customers, inherently-risky sales and blank or partially filled documents. Contracts The law of contracts in India is governed by the Indian Contract Act 1872. A contract entails an agreement between the parties – i.e. one party makes a proposal or an offer – and the other accepts the same. The ‘agreement’ may be to do or to refrain from doing a particular act or thing. This ‘agreement’ may be verbal or in writing and may even be inferred from conduct. So far 34
  35. 35. as a legally binding contract exists – a court may find either party guilty in the event of a breach of terms of the contract. This may result in financial damages or other punishment for the guilty party. The provision of I&I services to customers is a contractual arrangement. This being the case, it is vital to set out the bank’s responsibilities and liabilities so that the customer is clear about the same and consequently disputes are minimized. The sales process prescribes standard documentation such as Services Guide, Mutual Fund disclaimer, Investment Services Agreement etc. which communicate the terms and conditions of the business and the bank’s responsibilities and liabilities. It is vital that such documentation is completed as prescribed in the sales process. As the terms of a contract can also be inferred from verbal communication or from conduct, salespersons should ensure that all interactions with customers are in line with the terms of business that have been communicated. Any default in doing so will result in the bank being liable for breach of contract. Applicability to HSBC The banker-customer relationship is a fiduciary one and the banker significantly influences the customers’ decisions relating to his finances. With increasing consumer awareness, financial industry representatives will also become liable for negligence and malfeasance. Care should be exercised in the following aspects: 35
  36. 36. • Bankers should ensure that they in fact possess the skill and knowledge that they purport to possess – salespersons should ensure that they have undergone all training prescribed for their channel and are appropriately certified or licensed. • Where a banker provides advice (under a advisory proposition) as to specific investments, it is his duty to ensure that due diligence has been carried out before arriving at the recommendation – it is vital that salespersons rely on the central FPS team for any recommendation that is provided to the customer. At the same time, where ‘information’ is given during a brief impromptu meeting with regard to a company that a client was contemplating investing in, it was held that the banker’s duty was limited. • Bankers should not indulge in mis-selling i.e., promoting or suggesting financial products, which are either unsuitable for the customer or which the does not fully comprehend, merely for their own selfish reward. Duties and Responsibilities Every salesperson has a responsibility to Customers to act within the scope of their authority from the Group and ensure that the customer relationship is managed in accordance with appropriate regulatory requirements, professional standards and acceptable industry practices set out above. Every salesperson should be mindful of the Group’s Key Business Values of the highest personal standards of integrity at all levels and commitment to truth 36
  37. 37. and fair dealing. The following, although not exhaustive, outlines such responsibilities: Honest and Fair Dealings Salespersons should be honest and fair in all dealing with customers, staff members, intermediaries and third parties. This includes all interactions with potential, existing and previous customers, as well as those customers who have contractual arrangements, transactions and other forms of trade via other branches of HSBC and/or other Distributors. Client Confidentiality All information gathered in the course of a salesperson’s duty and functions is confidential and salespersons are responsible for protecting the confidentiality of their Customers. This includes the collection, use, storage and distribution of the following: • Identity of the Customers, including documents pertaining to the same; • Details regarding their personal, family, financial, health and other information; • Details regarding the recommendations made to them; • Computer records regarding the Customer; • All information held on the Customer files; All customer files must be maintained in a secure location at the HSBC branch where their accounts are held or where the salesperson is predominantly located. Access to customer files and confidential records must be limited to those staff directly involved in the provision of these services. All staff must be aware of the Privacy requirements. 37
  38. 38. As per Group and RBI guidelines, confidential customer information should be transmitted over the Internet strictly using secure encrypted mode of communication. It should be noted that the Lotus Notes system cannot be used for secure encrypted transmission to external email Ids. Salespersons should ensure that if any confidential customer information is required to be transmitted (inward or outward) over the internet, the secure email facility of Internet Banking should be used (with help from the email management team at CAS). Acting on Behalf of the Company Please note that no salesperson can sign contracts, agreements or arrangements for services on behalf of the bank unless authorized by the bank by way of a Power of Attorney in favour of the salesperson. In the absence of such a power of attorney, PRMs and SPRMs can only sign correspondence to clients or service providers. Copies of all correspondence to Clients, whether for the purpose of prospecting, marketing, financial planning or the provision of services, must be maintained on file. FPMs are not authorized to sign correspondence. Stationery, business cards, leaflets, brochures and all other documents displaying the Group logo must be approved by the Manager Public Affairs and be presented in line with the Group’s directives. In the first instance, documents requiring approval should be forwarded to INM FPS for seeking approval from GPA. Non-approved forms, stationary and other documentation must not be used under any circumstances. Integrity 38
  39. 39. Salespersons have a personal and professional responsibility for maintaining the integrity of the Group. Whenever a salesperson becomes aware or suspects that any of the following breaches have taken place, they must immediately report the details to their superior. The superiors would in turn follow the laid down procedures (stated in Local Compliance Officers Handbook of the Bank) for reporting such breaches. • Instances where the applicable codes of conduct have not been followed; • Sales which are not in the best interest of the Client; • Knowledge of a Client being disadvantaged, misinformed, tricked or manipulated; • Conduct that has been driven purely to generate or increase any bonus or incentive; • Sales that shows any unfair and unwarranted bias; • Sales which have been done without following the due sales process; Appearance and Behavior To our clients, the salespersons are representatives of the Group. They are thus required to project a professional, well-groomed image and conduct themselves appropriately at all times. This includes dress, punctuality and honoring of commitments and promises made to customers. 39
  40. 40. Ongoing Professional Development As part of continued professional development, salespersons and their superior’s salespersons are required to ensure that their knowledge of I&I Services is relevant, current and accurate. All I&I salespersons should undergo refresher training once every six months. Selling to family, friends and staff members When selling to family, friends and staff members we should afford the same professionalism and courtesy we do to all other customers. It is not acceptable to short circuit the established sales processes in these circumstances. Annexure I: Financial Planning Services The Hongkong and Shanghai Banking Corporation Limited (the Bank) shall offer financial planning services – details of which are mentioned below: 40
  41. 41. 1) Financial planning services entail the preparation of a Financial Plan based upon the mapping of financial goals and resources available and expected as specified by the customer. 2) The Customer shall complete the Personal Financial Review – which shall provide HSBC with the requisite information on the Customer’s financial goals, available / expected resources and risk profile. The Customer certifies that the information provided in the Personal Financial Review shall be complete and accurate in all respects. 3) The Bank may use a financial planning calculator that will arrive at the rate of return required to achieve the Customer’s financial goals. The assumptions made regarding various economic parameters and the expected returns on various asset classes are indicative in nature and may change based on market conditions. 4) The Bank may suggest an asset allocation for the Customer – using the risk profiling software that has been internally developed for the purpose. Based on the asset allocation, the Bank may make available to the Customer model portfolios that have been constructed based on a ranking of mutual funds (derived from a quantitative analysis of the funds’ performance) and the Bank may also suggest other securities. 5) The Bank may also make available to the Customer insurance products for the Financial Plan. 41
  42. 42. 6) The Financial Plan is not an agreement but a summary of the details provided by the Customer in the Personal Financial Review and the asset allocation derived from the risk profile of the Customer. The Bank cannot be held liable for the achievement/non achievement of the financial goals identified by the Customer and the Financial Plan cannot be construed as security for ensuring the achievement of the Customer’s financial goals. 7) The Bank will review the details provided by the Customer in the Personal Financial Review, including information on the Customer’s financial goals, available / expected resources and risk profile, once a year. 8) The Bank will not provide tax advice and the Customer should consult the Customer’s own tax advisor as appropriate. 42
  43. 43. Survey Report 1) How would you rate the value received for our banking services? Very Good – 50% Good – 30% Fair – 10% Poor – 7% Very Poor – 3% 43
  44. 44. 2) Would you recommend our banking services to your relatives and friends? Yes – 65% May be – 27% No -7% Yes May be No 44
  45. 45. 3) How would you rate the following services? Bank Account Personal Loan Home Loan Credit Card Debit Card Internet Banking Foreign Exchange Wealth Management Service Very good Good Fair Poor Very poor 45
  46. 46. Questioners Q1) What is a debit card? Ans- A debit card makes shopping for goods and services a whole lot easier by providing an on-line electronic payment facility from your HSBC Savings / Current Accounts, for purchases of goods and services at merchant establishments in India and overseas. It provides access to ATMs for cash withdrawals and enquiries. Q2) How does the HSBC debit card work? Ans- Your debit card functions like a regular ATM card at ATMs, whilst at merchant establishments it works in the same way as a credit card, except that the transacted amount is directly debited from your savings/current deposit account. Look for a VISA / VISA Electron sign at the point-of-sale merchant establishment The merchant must have an electronic point-of-sale card-swiping terminal Present your debit card after making your purchase Present your debit card after making your purchase After a successful authorization, a hold for the transacted amount will first be placed on your account. Subsequently, your account will be debited for the transacted amount Check and sign the charge slip. Your signature must match with that on the reverse of the card Ensure your card is returned to you 46
  47. 47. In case of purchase transactions, the debit card can only be used at merchant outlets with electronic terminals. Please do not try and use your card at Merchants with "paper imprinters". Also, since signature verification is essential for debit card transactions, you need to be physically present along with your card at the time of purchase i.e. the debit card cannot be used for Mail order, Telephone order or Internet transactions. Q3) How does HSBC’s secure online payment service work? Ans- Register the secure online payment services with HSBC's personal credit cards by creating your password and personal message. Shop online at participating merchants and pay with your HSBC's personal credit cards which you have registered* for the secure online payment services. Verify that the authentication screen is genuine by checking that the personal message is the one you created at the time of registration. Enter your password to authenticate the transaction and complete your online purchase. Q4) What type of loan should I choose? Ans- The type of loan you choose is generally based on two factors: 1. The reason for the loan. 2. Your financial circumstances. Most people who borrow money have a good reason for doing so, and most banks are sympathetic to their customers' needs. Here is a list of common reasons for borrowing: 47
  48. 48. • Furnishing a new home • Buying a car • Paying tax • Getting married • Going on a holiday • Taking advantage of a sale • Emergencies • Shortage of cash • Education • Making a timely investment • Buying appliances/durables Q5) How much should I borrow? Ans- The amount of your loan depends largely on: 1. How much you need. 2. Whether you can afford to repay it without leaving yourself short of money each month. Normally, we advise that you borrow only what you actually need. It is unwise to spend more than 30% of your gross monthly income on loan repayments (in the case of a home mortgage, it can be up to 50%). But you must also calculate your other commitments. Q6) What should I do before I start investing? Ans- Know your current financial situation. Before you begin to think about investing your money, you should know how much you can spare each 48
  49. 49. month. Naturally, the more you can put aside now, the better it will be for your future. It's up to you to achieve a balance between your current lifestyle and your expectations. Use our handy planning tool to find out how much you can invest. Or take a look at the example below. Calculate your income and expenses taking into account the following: • Mortgage repayments • Personal tax • Loans and overdrafts • Living expenses • Emergency funds • Car expenses • Entertainment • Holidays • School fees • Family commitments • Service Features • Insurance Protection for your family and your property. People have saved $100s of dollars per year on their insurance. Want to know how? By shopping around. Compare plans, get side-by-side quotes and apply - in minutes! Investing HSBC Securities (USA) Inc. offers a range of investment products and services to help you meet your long-term objectives. Retirement at HSBC we offer a wide array of products and services to help you save on taxes today and plan for a comfortable future. 49
  50. 50. Q7) How safe is Internet Banking? Ans- HSBC takes every precaution to keep your online experience safe. In a continued effort to safeguard online banking transactions, HSBC requires full 128-bit encryption for Personal Internet Banking use. Encryption is a process that transforms sensitive information into a string of unrecognizable characters before they are sent over the Internet and helps keep your information private between the bank's computer system and your Internet browser. The following are HSBC-supported browsers that offer this highest level of encryption: • Internet Explorer - versions 5.5 and 6.0 • Netscape - versions 7.1 and 7.2 • Safari version 1.2 • Mozilla/FireFox version 1.0 If you use an older browser that supports 128-bit encryption, it’s recommended that you upgrade to one of the HSBC-supported browsers listed above. Click on our Browser Check to verify that your browser supports 128-bit encryption. If your browser does not support 128-bit encryption, you will need to download the latest version in order for you to use Personal Internet Banking. In addition to encryption, your unique Customer ID and password will authenticate your access each time you use the service. And, all Personal Internet Banking customers are covered by HSBC's $0 Liability, Online Guarantee to help keep your online experience safe. Learn more through HSBC's Security Site. 50
  51. 51. Q8) Banks do not have a good reputation when it comes to customer service. What are you doing about that? Ans -There is a tendency to see all banks as the same in terms of performance and customer service. Nevertheless, there is good evidence from the product and service awards that we win in many parts of the world, and from customer surveys, that HSBC is trying to be different and is succeeding. However, we are not complacent and continue to focus strongly on defining HSBC through the quality of service we give to our customers. We remain strongly committed to putting our customers at the heart of everything we do and, in so doing, create long-term mutual value. 51
  52. 52. Conclusion I hope that this project has stimulated the reader’s interest in the term “Products and Services” as a Bank. I have certainly found the task of organizing my own knowledge of the subject and more of the information from the secondeary sources to make this Project report, a rewarding one. New instruments are being developed at an exciting pace ‘there can be little double that important. New ideas and new result will continue to emerge from this Project. I had come to know about Bank Products and Services such as various Bank Account and different types of loans and cards. Banks are providing services to attract Customers and to stay in the Competition. 52
  53. 53. Bibliography Websites Books Banking Theory & Practices (Dr.P.K, SRIVASTAVA) 53