The document provides an overview and introduction to the Foreign Contribution (Regulation) Act 1976 in India. Some key points: - The Act regulates the acceptance and use of foreign contributions by certain individuals and organizations to ensure it does not compromise national security or elections. - Organizations need prior permission or registration to receive foreign funds. Registered organizations must maintain separate accounts and submit annual audited reports. - Over 34,000 organizations are registered under the Act across religious, cultural, economic, educational and social categories. The top recipient states are Tamil Nadu, Delhi, and Andhra Pradesh. - The Act also regulates foreign hospitality received by certain public officials and politicians to/from foreign countries.

1. INTRODUCTION TO THE REPORT
The present Report has been prepared with the objective of searching for the
business opportunities for the bank by collecting and analyzing information from
various sources and making strategies for the same.
Report has valuable information which has been carefully
collected and analysis on the same has been made to reach at the appropriate
conclusion.
Survey has been done of the various charitable institutes with appropriate
questionnaire framed with the objective kept in mind. Questions were asked to the
officials to the various organizations and necessary information was collected as a
primary source to the subject. Detail study of Foreign Contribution Regulation Act
1976 is done to have the deep theoretical and practical knowledge of the project.
Project is to study the requirements of the charitable institutions in the banking
product which is done by meeting different charitable institutions and asking them
about their present banker and their needs. A comparison of the banking product
offered by the Standard Chartered Bank and HDFC Bank is also done by meeting
the two Banks officials in Delhi region.
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2. 1.1 COMPANY PROFILE
Country India
Industry Banking
NSE/BSE Listing NSE Code -532648
Regd.& corporate office Nehru centre,9th floor, Discovery of India,
Dr.A.B.Road, worli, Mumbai 400018 Tel:-
+91(22) 6669 9000
Northern Regional Corporate Office 48,Nyaya Marg, Chanakyapuri, New Delhi
110021 Tel:-+91(11) 6656 9000
Website www.yesbank.in
Table 1.1
Company Detail
Yes Bank, India’s new age private sector Bank is the outcome of the professional
commitment of its founder Mr. Rana Kapoor supported by his highly competent top
management team to establish a high quality, customer centric, service driven,
private Indian Bank catering to the “Future Industries of India”.
Yes Bank has adopted international best practices, the highest standards of service
quality and operational excellence, and offers comprehensive banking and financial
solutions to all its valued customers. A key strength and differentiating feature of
Yes Bank is its knowledge driven approach to banking and an unprecedented
customer experience for its retail and wealth management clients.
Yes Bank is steadily building corporate and institutional banking, financial markets,
investment banking, corporate finance, business (Small &Medium Enterprises) and
2

3. transaction banking, international banking, retail banking and wealth management
business lines across the country. The Bank’s constant endeavour is to provide a
delightful banking experience expressed with simplicity, empathy, and totality.
Yes Bank understands the financial needs of the Government of India, in its
progress and development role of a ‘Growing India’ through Yes Bank’s
Knowledge Banking approach and the objective of being the “Bank for an Emerging
India”. Yes Bank remains committed to serving this specialized segment. Yes
Bank’s knowledge Banker’s deliver innovative, structured and comprehensive
solutions through a “Money Doctor” approach focusing on diagnostic and
prescriptive attention to detail. This is facilitated through Yes Bank’s Technology
leadership –delivering proven, easy-to-use solutions for Government Undertakings
and agencies. Yes Bank has provided financial and advisory services to Ministries
of the Union Government, State Governments, Central and State Public Sector
Undertakings (PSU’s) and Agencies.
In a short span of over three and a half years the Government Relationship
Management (GRM) team has developed robust relationships with over 100 entities.
The GRM team is committed to the core values of client orientation, innovation and
superior service experience that exemplify all Businesses at Yes Bank. GRM team is
providing the Knowledge Advisory, Liquidity Management and Investment
Products, Transaction Banking, trade finances, cash management services, Treasury
services, Forex Remittances, debt capital markets, investment managements,
corporate salary accounts, Advisory structured transactions, term loans, and cash
credit limits to various government operations like IFFCO, SAIL, Airport Authority
of India, IOCL, NDPL, HPCL, Bridge & Roof co.(India) ltd and many more.
3

4. 1.1.1Business Strategy
Knowledge Banking: -
One of the strengths and differentiating features of Yes Bank is its knowledge
banking approach that is the essence of all offerings to its customers. Knowledge
has been institutionalized as a key ingredient in all internal and external processes
and utilized to create customized solutions for the clients’ specific requirements.
Technology and Operations: -
As a new generation Bank, Yes Bank has the advantage of accessing the latest
available technology. The Bank has taken a calibrated decision to invest in the best
IT system and practices in order to make its technology platform a strategic business
tool for building a competitive advantage.
Responsible Banking: -
Yes Bank has a vision to champion ‘Responsible Banking’ in India, where the
concepts of Corporate Social Responsibility (‘CSR’) and sustainability are
integrated in its Business focus.
Business Lines: -
Yes Bank has four distinct business segments to effectively service the
differentiated needs of its targeted customers.
Corporate and Institutional Banking (C&IB): -
4

5. To cater to the needs of large corporate & institutional clients, MNC’s, government
companies and PSU’s. Bank targets C&IB customers through its multifunctional
branches in the key metropolitican cities.
Emerging Corporate Banking (ECB) : -
It is dedicated to partner with growth-focused, fast-paced enterprises, which are
emerging as a leader in their respective business areas.
Business Banking : -
To cater to the needs of the small and medium enterprises (SME), Yes Bank has set
up a dedicated business unit to focus on delivering superior banking solutions
specially designed to meet the varying and dynamic needs of its SME clients.
5

6. Retail Banking and Wealth Management : -
The Bank intends to develop Retail Banking into a key value driver. Yes Bank
offers its customers choice & convenience, reflected in its branch layout & design,
product feature /design, options of distribution channels and superior technology
enabled service quality. Yes Bank predominantly offers value added retail liability
and third party wealth management products as well as retail asset offerings through
its sales and service network linked to its branches.
6

7. Private Banking : -
Yes Bank is focusing on personalized relationship banking for its top end High Net
worth customers, supported by structured financial solutions tailor-made to suit the
needs of such customers.
Product lines: -
Yes Bank offers a wide range of fee-based products to corporate and business
banking customers to ensure a high degree of cross-sell to clients.
Financial Markets : -
Yes Bank financial markets was ranked second in the ‘Best for currency strategy’
and ‘best for technical analysis’ categories at the Asia Money 2005 foreign
exchange poll for India.
Transaction Banking : -
Yes Bank Transaction banking group has adopted a consultative approach and focus
on knowledge and relationship banking to enable customers to address strategic
financial and operating needs in the domain of:
7

8. · Working capital and liquidity management
· Asset management
· Treasury integration
· Exposure and risk management
Yes Bank proposes to apply industry knowledge and superior technology for
offering innovative structured solutions integral to a company’s financial supply
chain.
8

9. Yes International Banking : -
It offers a complete suite of international banking products and services, driven by
state-of-the art technology, which includes Debt, Trade finance, corporate finance,
Investment banking and business advisory services, treasury and global Indian
banking. The Bank also plans to leverage its international presence, for its capital
raising activities. These services will initially be through partnerships with
international banks and financial institutions followed by the establishments of
branches and representative offices, as per regulatory approvals.
Brand Creation : -
9

10. The Bank believes that its differentiation begins with its service and trust mark
’YES’. ‘YES’ represents the bank true spirit of being service-oriented. The ‘YES’
brand creation effort is supported by ‘Triton Communications’, the principal
advertising agency and ‘Ad factors PR’, the Bank’s public relation consultant.
1.1.2 Key Members of Yes Bank Management Team
NAME DESIGNATION
Mr. Rana Kapoor Managing Director & CEO
Mr. Sunil Gulati Group President - C&IB, Transaction
Banking
Mr. Deepak Gaddhyan Group President GRM Team.
10

11. Mr. Sumit Gupta Country Head – Emerging Corporate
Banking
Mr. Alok Gupta Country Head – life sciences &
technology
Mr. Rajnish Datta Country Head –Small business banking
group
Mr. Subir Bisht Chief Risk Officer
Mr. Sanjay Aggarwal Country Head –Credit Risk, Business
Banking
Mr. Varun Tuli President Business Banking
Table (1.2)
Management Team
1.1.3 Key Highlights & Milestones of Yes Bank.
Nov 2003 Incorporation of YES BANK Limited
May 2004 RBI License to commence banking
business
11

12. Dec 2006 Ranked No.3 in the Business World
Survey of India’s Best listed Banks
Mar 2007 Ranked No.2 among New Private Sector
Banks in the Financial Express survey
Dec 2007 Won ‘Best CSR practice award 2007’
Dec 2007 Won ‘IT people award 2007’
Jan 2008 60 operational branches across India
Mar 2008 Ranked No.3 among New Private Sector
Banks in the Financial Express-E&Y
survey & overall #1 on credit quality &
#2 on Growth
Apr 2008 67 operational branches across India
Table (1.3)
Milestones
1.2 INTRODUCTION TO THE TOPIC
An Overview to the Foreign Contribution (Regulation) Act
FCRA 1976.
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13. Foreign Contribution (Regulation) Act was given by the Parliament in the Twenty-seventh
year of the republic India. It is to regulate the acceptance and utilization of
foreign contribution or foreign hospitality by certain persons or associations, with a
view to ensuring that parliamentary institutions, political associations and academic
and other voluntary organizations as well as individuals working in the important
areas of national life may function in a manner consistent with the values of a
sovereign democratic republic, and for matters connected therewith. FCRA
department is situated in New Delhi, Ministry of Home Affairs, Foreigners division,
jaisalmer house, 26, Man Singh Road every permission for registration is sent here.
Application Forms can be downloaded from website, www.mha.nic.in. Need for the
Foreign Contribution Regulation Act,1976 was felt due to the security
considerations and to ensure that foreign contribution is utilized for genuine
activities without compromising on concerns for national security.
The central government has the power to prohibit any person or organizations from
accepting foreign contribution or hospitality if it is determined that such acceptance
would likely ‘affect prejudicially’
a) the sovereignty and integrity of India,
b) public interest,
c) freedom of fairness of election to any legislature,
d) friendly relations with any foreign state, or
e) harmony between religious, racial, social, linguistic or regional groups, castes or
communities.
The Act envisages following four broad categories of restrictions on the receipt of
foreign contribution:
Section 4 of the Act precludes the following categories of persons
from receiving foreign contribution:
13

14. (a) candidates for election,
(b) correspondents, columnists, cartoonists, editors, owners, printers or
publishers of the registered newspapers,
(c) Judges, Government servants or employees of any
Corporation,
(d) members of any legislature,
(e) political parties or office-bearers thereof.
Section 5 of the Act provides that no organization of political nature shall
accept any foreign contribution without the prior permission of the
Central Government. Such organizations are not permitted to receive
any foreign fund since they are essentially involved in political
activities. However, these organizations, which are notified in the
official Gazette, can receive foreign contribution with the prior
approval of the Central Government.
Registration and permission
An association having a definite cultural, economic, educational, religious or social
programme can receive foreign contribution after it obtains either
· The prior permission of the central Government, or
· Gets it self registered with the central Government.
Prior permission
Prior permission is required
· Where the association does not have a FCRA registration ,
· Where the association is kept under prior permission category,
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15. · Where registration is frozen
· Association of political nature not being political party.
Accounts
In the Act it is mentioned that registered associations may only receive foreign
contribution in a single account of a specified Bank branch.
Every association so registered shall give within such time & in such manner as may
be prescribed, intimation to the central government as to the amount of each foreign
contribution received by it.
A separate set of accounts and records shall be maintained, exclusively for foreign
contribution received and utilized. Every account shall be maintained on a yearly
basis duly certified by a chartered accountant along with a balance sheet &
statement of receipt& payment account to MHA.
Foreign Hospitality
The Act regulates receipt and utilization of foreign hospitality by certain individuals
which includes members of legislature, office-bearers of political party, judges,
government servants, employees of Corporation, while visiting any foreign country
or territory outside India. Such individuals can receive foreign hospitality only with
the prior permission of the Central Government. Prior permission is not required
when such individuals are required to receive any emergent medical aid needed on
account of sudden illness contracted during foreign visit, but, they are mandated to
intimate the Central Government within one month from the date of such foreign
visit/receipt of foreign hospitality. The intimation shall include the source from
which and the manner in
which such hospitality was availed by the recipient. Foreign hospitality includes
cost of travel, boarding, lodging, free transportation, free medical treatment, etc.
15

16. Over 34,035 associations have been registered under FCRA as on 28th February,
2007 to receive and utilize foreign contribution. These associations are broadly
divided into 5 categories viz. Religious, Cultural, Economic, Educational & Social.
Many of these associations are simultaneously engaged in activities falling within
two or more categories.
No bank should credit any foreign contribution to the account of an
association/NGO unless it produces documentary evidence of having obtained
registration/prior permission from the Central Government for the same. In case any
foreign contribution is credited to the account of an NGO/Association/Trust directly,
the bank should not allow utilization of such fund and inform the
NGO/Association/Trust concerned to obtain necessary permission/registration from
the Central Government for the same. Simultaneously, the bank should inform the
Deputy Secretary (FCRA), Ministry of Home Affairs, Govt. of India, New Delhi
about such receipt. Non-compliance of the above by the bank will constitute a
violation and will render the defaulting bank liable for appropriate action by the
Reserve Bank of India.
Monitoring of utilization of foreign contribution
The primary purpose of Foreign Contribution (Regulation) Act, 1976 is to ensure
that the foreign contribution that is received for specific tasks is not misused for
activities detrimental to national interest. The associations registered under FCRA
and those granted prior permission, are required to submit audited FC-3 returns to
MHA within 4 months of close of the financial year. The information pertains to
details of receipt and utilization of foreign funds along with corresponding
Balance Sheets, Income & Expenditure Account, Receipts & Payments Account,
Schedule of Assets created out of foreign contribution etc. A certificate from a
Chartered Accountant that the accounts of the association have been maintained as
prescribed by the Foreign Contribution (Regulation) Act, 1976, is mandatory. The
16

17. accounts are required to be authenticated by the Chartered Accountant.
Salient Features
Data pertaining to receipt of foreign contribution for 2005-06 has been compiled. Its
salient features are as below:
I. As on 31-03-2006, 32,144 associations were registered and 513 were granted
prior permission during the year 2005-06.
II. For the year 2005-06, 18,570 associations reported receipt of foreign
contribution (including those which received NIL amount) amounting to Rs7,877.57
crores.
III. Among the States and Union Territories, Tamil Nadu Rs. 1,609.64 crores
reported the highest receipt of foreign contribution followed by Delhi Rs.1556.46
crores
and Andhra Pradesh Rs 1,011.57 crores.
IV. Among the reporting associations, World Vision of India, Tamil Nadu (Rs.
256.41 crores) received the highest amount of foreign contribution followed
by Caritas India, Delhi (Rs. 193.36 crores) and Rural Development Trust,
Andhra Pradesh (Rs. 126.64 crores).
Analysis of the Last Three Years’ Data
An analysis of the data for the last three years i.e. from 2003-04 to 2005-06 shows
that;
a) United States of America is the top donor country.
b) Foundation Vincent E Ferrer, Spain contributed the highest amount of foreign
17

18. contribution.
c) Tamilnadu received the highest amount of foreign contribution.
d) Chennai district received the highest amount of foreign contribution.
e) World Vision of India, Tamil Nadu received the highest amount of foreign
contribution.
f) Among the purposes, the highest amount was received for Establishment
purposes.
RECEIPT OF FOREIGN CONTRIBUTION IN INDIA
Year Amount
( Rs. in Crores )
% Increase over
previous year
2001-02 4871.90 7.42
2002-03 5046.50 3.58
2003-04 5105.50 1.17
2004-05 6256.68 22.55
2005-06 7877.57 25.91
Table (1.4)
18

19. Foreign Contribution in India
TOP RECEIPTENT ASSOCIATIONS IN DELHI
Foreign Contribution Rs/Crores
NAME OF ASSOCIATION 2005-06 2004-05 2003-04
Caritas India, Delhi 193.36 65.30 37.54
Plan International Inc., Delhi 92.09 64.91 56.80
Oxfam India Trust, Delhi 71.90 52.30 33.93
SOS Children’s Village of India, Delhi 55.91 26.01 38.66
Society for Development Alternatives, Delhi 53.79 28.46 19.32
Table (1.5)
Top Receipt in Delhi
19

20. NUMBER OF ASSOCIATIONS REPORTING TO FCRA
DEPARTMENT
YEAR ASSOCIATIONS
2003-04 17145
2004-05 18540
2005-06 18570
Table (1.6)
Number of Association
20

21. FOREIGN FUNDS COMING TO DELHI
Foreign Contribution Rs/crores
2003-04 857.12
2004-05 1075.23
2005-06 1556.46
Table (1.7)
Foreign funds to Delhi
21

22. 2.1 INDUSTRY PROFILE
The oldest bank in Indian Banking industry is the “State Bank of India” being
established as the “Bank of Bengal” in Calcutta in June 1806. The first fully Indian
owned Bank was the “Allahbad Bank”, which was established in 1865. By the
1900s, the market expanded with the establishment of Banks such as “Punjab
National Bank”, in 1895 in Lahore and Bank of India, in 1906, in Mumbai. The
“Reserve Bank of India” formally took on the responsibility of regulating the Indian
banking sector from 1935. After India’s independence in 1947, the Reserve Bank
was nationalized and given broader powers. In the early 1990’s the then Narsimha
Rao government embarked on a policy of liberalization and gave licenses to a small
number of private Banks, which came to be known as New Generation tech-savvy
banks, which included banks such as Global Trust Bank (the first of such generation
banks to be set up) which later amalgamated with Oriental Bank of Commerce, UTI
Bank (Now re named as Axis Bank), ICICI Bank and HDFC Bank. This move,
along with the rapid growth in the economy of India, kick started the Banking sector
22

23. in India, which has seen rapid growth with strong contribution from all the three
sectors of Banks, namely:
· Government Banks,
· Private Banks, and
· Foreign Banks
The next stage for the Indian Banking has been set up with the proposed relaxation
in the norms for Foreign Direct Investment (F.D.I.), where all foreign investors in
banks may be given voting rights which could exceed the present cap of 10%, at
present it has gone up to 49% with some restrictions. The new policy shocks the
banking sector in India completely. Bankers, till this time, were used to the 4-6-4
method (borrowing at 4%; lend at 6%; go home at 4) of functioning. The new wave
ushered in a modern outlook and tech-savvy methods of working for traditional
Banks. All this led to boom in India. People just not demanded more from their
Banks but also received more.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time
an investor has been allowed to hold more than 5% in the private sector Bank since
the RBI announced norms in 2005 that any stake exceeding 5% in the private sector
banks would need to be vetted by them. In (2007), banking in India is generally
fairly mature in terms of supply, product range and reach-even, though reach in rural
India still remains a challenge for the private sector and foreign Banks. In terms of
quality of assets and capital adequacy, Indian Banks are considered to have clean,
strong and transparent balance sheets relative to other Banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body, with
minimal pressure from the government. The stated policy of the Bank on the Indian
Rupee is to manage volatility but without any fixed exchange rate and this has
23

24. mostly been true. With the growth in the
Indian economy expected to be strong for quite some time especially in its service
sector-the demand for Banking services, especially retail banking, mortgages and
investment services are expected to be strong. One may also expect M&A’s,
takeovers, and asset sales.
Currently, India has 88 scheduled commercial banks (SCBs)
- 28 public sector banks (that is with the government of India holding a stake),
- 29 private banks (these do not have government stake; they may be publicly
listed and traded on stock exchanges)
- And 31 foreign banks.
They have a combined network of over 53,000 branches and 17,000 ATM’s.
According to a report by ICRA limited, a rating agency, the public sector banks hold
75% of total assets of the banking industry, with the private and foreign banks
holding 18.2% and 6.5% respectively. The annual growth in bank credit to the
commercial sector is at 25.4% as on March 31, 2007 and was lower than 27.2%
against previous year. Till 2010, retail banking is expected to grow at a CAGR
(compounded average growth rate) of 28%
to touch a figure of INR 9,700 billion. This requires expansion and diversification of
retail product portfolio, better penetration and faster service mechanism.
The report on Retail Banking industry in India covers industry segments like
housing loan, auto loan, personal loan, education loan, consumer durable loan,
credit card and regulatory frame work for retail Banks is also discussed. The report
gives retail banking industry’s current performance and future outlook. Total 22
major retail Banks in India are covered in terms of their performance, strategy and
outlook. In absolute terms, India’s banking sector enjoyed reasonable growth
24

25. through the year to December 31 2007. In local currency terms, total assets, total
loans and total deposits increased by 23%, 21%, and 26%, respectively. The
loan/deposit, loan/asset ratio fell while the loan/GDP ratio rose.
2.1.1 State Bank of India (SBI)
 State Bank of India is the India’s largest Bank. It has largest branch network all over
the country with its special products like
· Personal Banking
25

26. Deposit Schemes
Personal Finance
· Agricultural/Rural Banking
Micro Credit
Regional Rural Bank
· NRI Services
· International Banking
Trade Finance
Merchant Banking
Correspondent Banking
· Corporate Banking
Mid Corporate Group
Project Finance
Small & Medium Enterprises (SME’s)
· Government Business
Public Provident Fund
SBI e-Tax
· Services
Internet Banking
Mobile Banking
The SBI’s powerful corporate banking formation deploys multiple channels to
deliver integrated solutions for all financial challenges faced by the corporate
universe. The Corporate Banking group and the National Banking group are the
primary delivery channels for corporate banking products. The Corporate Banking
Group consists of dedicated Strategic Business Units that cater exclusively to
specific client groups or specialize in particular product clusters. Foremost among
26

27. these specialized groups is the Corporate Accounts Group (CAG), focusing on the
prime corporate and institutional clients of the country’s biggest business centers.
The others are the Project Finance unit and the Leasing Unit. The National Banking
Group also delivers the entire spectrum of corporate banking products to other
corporate clients, on a nationwide platform.
Complete Range of Products and Services
The SBI offers an exhaustive range of financial products and services that answers
any business or market circumstance, backed by an assublack expertise in
customizing the product to meet the most sensitive specificities of each client and
each business context.
Its team of highly skilled and experienced product specialists can help its customers
in forecast structure complex transaction requirements.
The SBI Edge
Commanding unsurpassed respect and legacy in the Indian financial expanse, the
SBI is committed to provide the financial solutions that extract maximum value
from business and market situations.
While the Bank is strongly positioned to structure financial packages that anticipate
the changing business environment, its vast network-the world’s largest-ensures
delivery channels of unmatched reach, both in India and abroad.
Working Capital Finance
SBI offers working capital finance to meet the entire range of short term fund
requirements that arise within a corporate day to day operational cycle. The SBI
27

28. working capital loans help the companies in financing inventories, managing
internal cash flows, supporting supply chains, funding production, and marketing
operations, providing cash support to business expansion and carrying current
assets.
SBI’s working finance products comprise a spectrum of funded and non-funded
facilities ranging from cash credit to structured loans, to meet the different demands
from all segments of industry, trade and the services sector. Funded facilities
include cash credit, demand loan and bill discounting. Demand loans are considered
also under the FCNR (B) (Foreign currency from Non Resident) scheme. Non-funded
instruments comprise letters of credit (inland and overseas) as well as bank
guarantees (performance and financial) to cover advance payments, bid bonds etc.
Project Finance
The SBI has formed a dedicated Project Finance Strategic Business Unit to assess
credit proposals from and extend term loans for large industrial and infrastructure
projects. Apart from this, project term loans for medium sized projects and similar
clients are delivered through the CAG (Corporate Accounts Group) and NBG
(National Banking group).
In general, project finance covers Greenfield industrial projects, capacity expansion
at existing manufacturing units, construction ventures or other infrastructure
projects. Capital intensive business expansion and diversification as well as
replacement of equipment may be financed through the project term loans.
28

29. Project finance is quite often channeled through special purpose vehicles and
arranged against the future cash streams to emerge from the project. The loans are
approved on the basis of strong in house appraisal of the cost and viability of the
ventures as well as the credit standing of promoters.
Deferred Payment Guarantee (DPG)
SBI can extend deferred payment guarantees to industrial projects for obtaining
imported equipment. The DPG is a standby credit guaranteeing deferred payments,
usually for payments for capital goods, turnkey contracts etc.
Corporate Term Loan
The SBI corporate term loans can support company in funding ongoing business
expansion, repaying high cost debt, technology up gradation, R&D expenditure,
leveraging specific cash streams that accrue into the company, implementing early
retirement schemes and supplementing working capital. Corporate term loans can be
structured under the FCNR (B) scheme as well, with the option of switching the
currency denomination at the end of the interest periods. This will help you take
advantage of global interest rate trends vis-à-vis domestic rates to minimize your
debt cost. The Bank’s corporate term loans are generally available for tenures from
three to five years, synchronized with your specific needs. SBI corporate term loans
can have a bullet or periodic repayment schedule as required by the client. The
repayment mode may be linked to the cash accruals of the company. The Bank’s
expert credit crew gauges the applicant’s particular fund requirements and evaluates
the company’s credit worthiness, factoring in the cash flows generated by it.
Structured Finance
SBI structured finance involves assembling unique credit configurations to meet the
complex fund requirements of large industrial and infrastructure projects. Structured
finance can be a combination of funded and non-funded facilities as well as other
29

30. credit enhancement tools, lease contracts for instance, to fit the multi layer financial
requirements of large and long-gestation projects.
Being India’s largest bank and with the rich experience that it brings with it, SBI
commands formidable expertise in engineering financial packages that address
complex requirements with minimum risk. Further, SBI has firm relationships
across the financial map of the world, which can be leveraged to structure solutions
that may necessitate the participation of several credit agencies.
Dealer Financing
SBI extends financial support to the corporate distribution network, by providing
both working capital finance and term loans to select dealers of identified
companies. This gives dealers to leverage their business relationship with major
corporate to avail low cost credit. Also, this type of financial solutions allows the
corporate negotiate a better price with dealers. Dealer financing may be extended in
the bill discounting form or simply as cash credit.
Channel Financing
Channel financing is an innovative finance mechanism by which the bank meets the
various fund necessities along customer supply chain at the supplier’s end itself,
thus helping them sustain a seamless business flow along the arteries of the
enterprise. Channel finance ensures the immediate realization of sales proceeds for
the SBI client’s supplier, making it practically a cash sale. On the other hand, the
corporate gets credit for a duration equaling the tenure of the loan, enabling
smoother liquidity management. SBI has the world’s largest banking network of
over 9,000 branches and this enables it to deliver the financial solution at suppliers
doorstep, across the span of the country.
Equipment Leasing
The SBI’s has deployed a dedicated strategic business unit for lease financing that is
richly experienced in arranging lease contracts for procuring expensive equipment
30

31. for clients project or plant. At SBI, lease agreements as stand alone contracts or as
part of a structured package are arranged.
Loan Syndication
The SBI leverages its vast network of relationships to arrange syndicated credit
products for corporate clients and industrial projects. With its rich experience and
strong reputation, SBI’s syndication desk can assemble large loan packages
involving a ring of reputed financial entities, domestic and international, that match
the large credit requirements of infrastructure projects.
31

32. 32

33. 2.1.2 Industrial Credit& Investment Corporation of India
ICICI Bank
ICICI Bank is India’s second largest bank with total assets of Rs.3, 997.95 Billion
(US$100 billion) at March 31, 2008 and profit after tax of Rs.41.58 billion for the
year ended March 31, 2008. ICICI Bank is second amongst all the companies listed
on the Indian stock exchanges in terms of free float market capitalization. The Bank
has a network of about 1308 branches and 3950 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and
through its specialized subsidiaries and affiliates in the areas of Investment banking,
life and non life insurance, venture capital and asset management. The Bank
currently has subsidiaries in the United Kingdom, Russia, and Canada, branches in
United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai
International finance centre and representative offices in United Arab Emirates,
China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. UK subsidiary
has established branches in Belgium and Germany.
ICICI Bank’s equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts
(ADR’s) are listed on the New York Stock Exchange (NYSE).
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI’s shareholding in ICICI
Bank was reduced to 46% through a public offering of shares in India in fiscal 1998,
33

34. an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI
Bank’s acquisition of Bank of Madura Limited in all stock amalgamation in fiscal
2001, and secondary market sales by ICICI to institutional investor in fiscal 2001
and fiscal 2002. ICICI was
formed to in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian Industry. The principal objective was to create a
development financial institution for providing medium term and long term project
financing to Indian
businesses.
In the 1990s, ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial services group
offering a wide range of products and services, both directly and through a number
of subsidiaries and affiliates like ICICI Bank in 1999, ICICI become the first Indian
company and the first bank or financial institution from non-Japan Asia to be listed
on the NYSE.
After consideration of various corporate structuring alternatives in the context of the
emerging competitive scenario in the Indian Banking industry, and the move
towards universal banking, the managements of ICICI and ICICI Bank formed the
view that the merger of ICICI with ICICI Bank would be the optimal legal structure
for the ICICI group’s universal banking strategy. The merger would enhance value
for ICICI shareholders through the merged entity’s access to low cost deposits,
greater opportunities for earning fee based income and the ability to participate in
the payment system and provide transaction banking services. The merger would
enhance value for ICICI Bank shareholders through a large capital base and scale of
operations, seamless access to ICICI’s strong corporate relationships built up over
five decades, entry into new business segments, higher market share in various
business segments, particularly fee-based services, and access to the vast talent pool
34

35. of ICICI and its subsidiaries. In October 2001, the boards of directors of ICICI and
ICICI bank approved the merger of ICICI and two of its wholly-owned retail
finance subsidiaries, ICICI personal financial services limited and ICICI capital
services limited with ICICI bank. The merger was approved by shareholders of
ICICI and ICICI bank in January 2002, by the high court of Gujarat at Ahmedabad
in March 2002, and by the high court of judicature at Mumbai and the Reserve Bank
of India in April 2002. Consequent to the merger, the ICICI group’s financing and
banking operations, both wholesale and retail, have been integrated in a single
entity.
35

36. RESEARCH METHODOLOGY
Research in general refers to the search of knowledge. One can also define research
as a scientific & systematic collection of information.
In simple words research is the careful investigation or enquiry of markets
especially through search for new facts in any branch of knowledge.
Analytical Tools
Microsoft Excel (PivotChart Reports). A PivotChart Report is an
interactive chart that quickly combines and compares large amounts of
data from tables in excel. PivotChart report was used here to analyze
related totals, because there was a long list of figures to sum and there
was a need to compare several facts about each figure. Because a
PivotChart report is interactive, it has flexibility to change the
view of the data to see more details or calculate different
summaries, such as counts or averages. Drop fields feature was
extensively used for the report creation. Essentially it is an area in a
PivotChart report where we can drop fields from the Field List dialog
box to display the data in the field.
36

37. 37

38. 3.1 Justification of the Study
Topic allotted to me for the summer training project completed at YES BANK LTD.
is related to the knowledge of FCRA act i.e. Foreign Contribution Regulation Act
1976, as the bank is interested to enter into the segment of FCRA I completed my
project by three different surveys i.e. FCRA department at Ministry of Home
Affairs, three different banks, and different charitable institutions. As it was
interesting topic to be worked upon, I learned a lot of new things during this period
which will help me in my career.
38

39. 3.2 OBJECTIVES OF THE STUDY
Main objective:
Objective of the study is to look for the banking opportunities in FCRA accounts of
charitable institutions for the Yes Bank.
With the increasing number of organizations taking the FCRA registration, Bank is
interested in having the business with the NGO’s in Delhi and NCR.
Sub objectives:
1. Objective of the study aims at the 360 degree knowledge to the target business. It
includes the MHA (Ministry of Home Affairs), NGO’s and various banks giving
such type of services to take detail know how and should reach at a decision to be
taken by the bank after concluding the study.
2. To operate the FCRA accounts in accordance with the rules and guidelines
mentioned in the FCRA 1976.
39

40. 3.3 DATA COLLECTION
Data can be collected by using two well known methods: Primary & Secondary. In
primary data collection, you collect the data yourself using methods such as
interviews and questionnaires. The key point here is that the data you collect is
unique to you and your research and, until you publish, no one else has access to it.
There are many methods of collecting primary data and the main methods include:
· Questionnaires
· One-to-one interviews
· Group interviews
· Observation
· Case-studies
· Diaries
· Critical incidents
· Portfolios
Secondary data is data that has already been collected by someone else for a
different purpose to yours. For example, this could mean using:
· Data collected by a hotel on its customers through its guest history system
· Data supplied by a marketing organization
· Annual company reports
· Government statistics.
40

41. Primary data collection method used for this project.
I used questionnaire method which is also known as scheduling method for primary
data collection in the research process. To know the exact details regarding FCRA
accounts in Banks 360 degree approach is being used as the FCRA department,
Banks, and NGO’s are surveyed to take the required
Secondary Data is also used for the purpose of completion of project which includes
Internet, Centre for policy Research, and FCRA department.
41

42. 3.4 SAMPLING AND SAMPLING DESIGN
The procedure by which a few fields are chosen from the data to be studied in such
as way that the sample can be used to estimate the same characteristics in the total is
referred to as sampling.
The advantages of using samples are that it is much less costly, quicker and, if
selected properly, gives results with known accuracy that can be calculated
mathematically. Even for relatively small samples, accuracy does not suffer even
though precision or the amount of detailed information obtained, might. These are
important considerations, since most research projects have both budget and time
constraints.
Sampling process is taking a sample out of the universe population to take a
decision regarding the population. Instead of surveying the whole population we
take only a few persons for our topic to have a general idea of the subject related.
In the project I took a sample of three Banks for a general idea of the FCRA
accounts and made our study reach a conclusion.
These three banks are
1. HDFC BANK
2. STANDARD CHARTERED
3. CORPORATION BANK
42

43. For the charitable institutions and NGO’s who are reporting to the FCRA
Department to be studied I took a sample of 11 organizations from the NCR.
3.5 TIME PERIOD OF STUDY
June, 9-19, 2008
Gathering information regarding the Act, Rules, Bill, with help of the secondary
mediums.
June, 20-30, 2008
Meeting FCRA, Ministry of Home Affairs official
collecting the necessary &current information regarding the Act.
July, 1-11, 2008
Visiting various banks like Standard Charted Bank, HDFC Bank, Corporation Bank
and other banks which offer special services to the charitable institutions in regards
to FCRA & collecting the necessary details.
July, 14-29, 2008
Meeting the officials of various charitable trusts and such institutions who are
registered with FCRA and having the present banking arrangements.
43

44. 3.6 AREAS OF STUDY
Study of the project started from the Regional office of the Bank at 48, Nayaya
Marg Chanakyapuri New Delhi. Main centre of the study was around the office like
visiting the FCRA office from the Bank and then meeting the different charitable
institutions and also the different Banks providing the same services in the area of
Delhi and NCR.
Area includes the different parts of New Delhi few of them are
· Connaught Circus
· Safdarjung Enclave
· Janakpuri
· Ashok palace
· Bhai Veer Singh Marg
· Lodhi Road
44

45. 3.7 LIMITATIONS OF THE STUDY
1. General survey is more biased: General Survey is more biased because few
charitable institutions were not ready to give the exact financial details.
2. Less responsive communication: General Survey was found to be less
responsive because of the reason that institutions &organizations did not want to
respond to the questionnaire due to lack of time & non willingness.
3. Time consuming: The General Survey was time consuming because it take
time to reach to different charitable institutions & ask them certain related questions
in there different areas.
45

46. 1. Foreign receipt in the present year.
Figure (4.1)
Percentage of foreign receipt in present
46

47. No Foreign Receipt in Present 27%
Foreign Receipt in Present 73%
Never received foreign funds 0%
Table (4.1)
Percentage of foreign receipt in present
Interpretation: This pie chart shows that only 27% of the organizations have not
received any foreign funds in the current year and 73% organizations are receiving
funds continuously and there is no organization (0%) which has never received any
foreign fund so far.
2. Donor from which country.
Figure (4.2)
Percentage of donor from which country
47

48. Donor from all over the world. 55%
Donor only from USA. 27%
Donor from USA & others. 18%
Table (4.2)
Percentage of donor from which country
Interpretation: The figure gives an idea of the sample that 55% of the
organizations surveyed are receiving funds from all over the world where as the
27% organizations are having foreign receipts or donations or members sending
funds to India are only from USA. 18% of the organizations are as such they
receiving funds from USA & others like UK, Netherlands etc.
3. Dealing with which Bank for FCRA accounts.
Figure (4.3)
Percentage of dealing with which Bank
Account in Public Bank. 55%
Account in Private Bank. 27%
Account in Foreign Bank. 18%
48

49. Table: (4.3)
Percentage of dealing with which Bank
Interpretation: From the study of various organizations it has been concluded that
the 55% organizations are dealing with the public sector Banks which include
Indian overseas Bank, State Bank of Hyderabad, PNB, P&S Bank and 27%
organizations reported to have their Bank account with the private sector Banks it
has ICICI Bank, Federal Bank, Catholic Syrian Bank Ltd. Only 18% of the
organizations are having Bank Account in Foreign Banks which has ABN AMRO,
American express Bank.
4. Satisfaction level with present Banker.
Table (4.4)
Percentage of satisfaction level
Poor 9%
49

50. Average 9%
Good 73%
Excellent 9%
Table (4.4)
Percentage of satisfaction level
Interpretation: From the figure shown above it is clear that most of the
organizations visited are satisfied with the services of present Banker as the 73% of
the institutions have marked their Banker as good service provider and 9% each has
been given to the Poor service, average,& excellent respectively.
5. Foreign Exchange conversion charges taken by Bank.
Figure (4.5)
Percentage of For-Ex Conversion Charges
No extra charges. 27%
Charge, but Nominal. 55%
50

51. Charge Heavily. 18%
Table (4.5)
Percentage of For-Ex Conversion Charges
Interpretation: Analysis for the foreign exchange charges is shown in the figure
that 27% of the organizations are not paying any extra charges for the foreign
receipts in their FCRA accounts, 55% of the organizations are paying the charges
but they take them as a nominal charge for the transaction, only 18% of the
organizations are paying heavily on the foreign exchange conversion to the Banks.
6. More Services desired from the Banking sector.
Figure (4.6)
Percentage of services Desired
Just Satisfied need more. 46%
Well satisfied. 27%
51

52. Desire more benefits. 27%
Table (4.6)
Percentage of services Desired
Interpretation: Most of the Organizations visited report to be just satisfied with the
services provided by their present banker as the figure reaches up to 46% and also
they need more from the banking industry. 27% of the institutions reported to be
well satisfied with their banker, same is the percentage (27%) in the category which
desires more from the banking sector in their product.
7. Investment advisory an important value added.
Figure (4.7)
Investment advisory a value added
Investment advisory required. 55%
Own separate advisory body. 27%
Already getting. 18%
Table (4.7)
Investment advisory a value added
52

53. Interpretation: Figure above shows about the 55% of the organizations are
interested in the investment advisory and 27% of the organizations are having their
own separate body for the purpose of investments, 18% of the organizations are
already receiving such types of advices.
8. Reaction to proposed FCR bill 2006.
Figure (4.8)
Percentage of reaction to proposed FCR bill
In favor of Bill 2006. 18%
Against the Bill 2006. 36%
Partially favor partially against. 46%
Table (4.8)
Percentage of reaction to proposed FCR bill
53

54. Interpretation: A major proportion of the organizations have two sided opinion on
the FCR Bill 2006 as few of the proposals like multiple bank accounts instead of
single bank account at present, are good for the organizations but few proposals are
not favorable for the working of the organizations so it is 46% who are partially
favoring it and partially opposing it. But 36% of the organizations are totally against
the Bill, & 18% are in the favor of the Bill they say what government do is fine.
9. Requirement in rules of working with Fcra.
Figure (4.9)
Percentage of requirement in rules with Fcra
No Requirement to change in Rules. 82%
Required to be amended. 18%
Table (4.9)
Percentage of requirement in rules with Fcra
54

55. Interpretation: Most of the organizations are well satisfied with the current rules of
the department as 82% of the organizations do not need any change in rules of
FCRA only a small proportion i.e. 18% wants to have some amendments in the rules
of FCRA.
10. Auditing done by FCRA Department for the organization.
Figure (4.10)
55

56. Percentage of auditing done by FCRA Department for organization
No auditing by FCRA. 82%
Auditing in Past. 18%
Table (4.10)
Percentage of auditing done by FCRA Department for organization
Interpretation: According to the 82% organizations in the NCR area no auditing is
done by the FCRA department separately for their organizations, the only thing is
they file the FC-3 return at the end of each year audited by the certified chartered
accountant and for the 18% organizations FCRA department has done auditing some
time in past.
11. Problem faced in working with FCRA.
56

57. Figure (4.11)
Percentage of problems faced in working with FCRA
No Problem faced 100%
Problem Faced 0%
Table (4.11)
Percentage of problems faced in working with FCRA
Interpretation: Survey tells there is no problem in working for the organizations
with the FCRA department as 100% of the organizations told that there is no
problem in working as per rules of MHA.
12. Response level of FCRA department.
57

58. Figure (4.12)
Percentage of response level of FCRA department
Poor 0%
Average 18%
Good 82%
Excellent 0%
Table (4.12)
Percentage of response level of FCRA department
Interpretation: Survey shows that FCRA department is very good at response level
to the organizations as 82% of the respondents have marked as good for the FCRA
department & only 18% of the organizations mark them as average as they said
officers sitting in the FCRA office are not fully trained they should be perfect in
that.
13. Use of online services for the filling of returns by the NGO’s.
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59. Figure (4.13)
Use of online services by NGO’s
Using Online Services 45%
Not Using Online Services 55%
Table (4.13)
Use of online services by NGO’s
Interpretation: Figure tells about the use of online services for contacting the
FCRA department for filling the FC-3 returns or other returns is about 45% by the
NGO’s and 55% of the NGO’s are just using the traditional way of filling the return
to the FCRA department.
14. Reaction on the Proposed Renewal Fees on the FCRA
registration in Bill 2006.
59

60. Figure (4.14)
Reaction on the Proposed Renewal Fees
Against the Bill. 64%
Favor the Bill. 9%
Neutral for Bill. 27%
Table (4.14)
Reaction on the Proposed Renewal Fees
Interpretation: Figure tells about the view point of the organizations towards the
proposal of renewal fees on the certificate of the FCRA after every five years in
order to eliminate the organizations from the certification those who are not
responding to the department regularly, 64% of the organizations are against the
renewal proposal as they are regularly reporting to the department, 9% are in favor
as they say whatever government do is alright, 27% of the sample respond that they
are neutral towards Bill2006.
5.1 CONCLUSION
60

61. On the basis of study it is concluded that going towards the FCRA product will be a
good move by the bank as there is large number of NGO’s in NCR region which are
actively performing their projects, as they are receiving foreign funds through
FCRA accounts in banks then it can be a source of foreign funds for the bank. There
can be large income source from the float income. All charitable institutions and
associations in NCR can be targeted with the help of special team to gain more
business. There is also a benefit of foreign exchange income and conversion charges
in FCRA accounts.
VANI (Voluntary Action Network India) is the active NGO forum in NCR, It
is better to introduce our new product through Forum and target our potential
customers through this platform. In this forum most of the NGO’s and charitable
institution are members, in this way Yes Bank can have business with them.
61

62. FCRA
62
DIFFERENT BANKS
CHARITABLE
INSTITUTIONS.

63. 5.3 Comparison of the FCRA accounts offered by different
Banks.
Standard Chartered
Bank
· Savings Account
· Cash withdrawal
allowed
· Special team targeting
NGO’s for FCRA
accounts.
· Compliance team at
Bombay is reporting
RBI and central
government for MIS of
the accounts.
· Special care in case of
Prior permission
obtained by
organization from
central government.
HDFC Bank
· Savings Account
· Cash withdrawal not
allowed
· Consultancy services as
extra benefits to the
account.
· Special team for FCRA
accounts.
· Reporting regularly to
central government and
RBI.
· Special care in case of
Prior permission
obtained by
organization from
central government.
Corporation Bank
· Savings Account
· Cash withdrawal
allowed
· No special team.
· International Banking
Division (IBD) is
contacting central
government for FCRA
accounts MIS.
· Special care in case of
Prior permission
obtained by organization
from central
government.
63

64. 64