G.L.

BAJAJ
INSTITUTE OF TECHNOLOGY AND MANAGEMENT
(Approved by AICTE & Affiliated to Abdul Kalam Technical University Plot
No.2, Knowledge park 3,Greater Noida)

SUMMER INTERNSHIP PROJECT REPORT

ON

STUDY ON INDIVIDUAL FINANCIAL PLANNING

UNDER THE GUIDANCE OF- SUBMITTED BY-

Neha Gupta Vishnoi Vaibhav

Bhatt
(HR Manager at HBF NIDHI LTD) Batch 2017-
2019
1719270056
Abhishek Goel

1
(Certified Financial Planner)

G.L. Bajaj Institute of Management and Research

Greater Noida

CERTIFICATE

This is to certify that Mr. VAIBHAV BHATT is a bonafide student of this

institute (MBA Batch 2017-2019),has undertaken this project work entitled “ A
Study On Individual Financial Planning” as part of his summer training for
the partial fullfillment of the award of Master Of Business Administration
degree from Dr. APJ Abdul Kalam Technical University ,Lucknow ( U.P).

As per best of my knowledge this project work is an original piece of work and
has not been submitted or published elsewhere.

I wish him all the best for his bright future ahead.

(Dr. Deepa Gupta)

( Head - MBA)

2
3
 TABLE OF CONTENT

Sr. No Topic Page Number

1 CERTIFICATE 3-5
1 CHAPTER- 1 8-15
INTRODUCTION
2 LITERATURE REVIEW 16-22
3 CHAPTER- 2 23-29
ABOUT NIDHI COMPANY
4 CHAPTER -3 30-57
ABOUT HBF NIDHI LTD
(PRODUCTS & COMPETITORS)
5 CHAPTER – 4 58-59
OBJECTIVE OF THE STUDY
6 CHAPTER – 5 60-74
RESEARCH METHODOLOGY
7 CASE STUDY 75-76

8 CHAPTER -6 77-78
LIMITATIONS
6 CHAPTER- 7 79-80
BIBLIOGRAPHY
7 CONCLUSION 81
8 ANNEXURE 82-100

DECLARATION

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I declare that this project report entitled “A Study On Individual Financial
Planning” is original and bonafide work of my own in the partial fulfillment of
the requirements for the award of the Degree of Master Of Business
Administration and submitted to the Department of Management, G.L. Bajaj
Institute of Management and Research, Greater Noida.

The data that has been collected by me is truly authentic and contains true and
complete information.

Date:-

VAIBHAV BHATT

5
 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and
assistance from many people and I am extremely privileged to have got this all
along the completion of my project. All that I have done is only due to such
supervision and assistance and I would not forget to thank them.

I respect and thank Mr. Sachin K Sheoran, for providing me an opportunity to

do the project work on study on individual financial planning and giving us all
support and guidance which made me complete the project duly. I am extremely
thankful to him for providing such a nice support and guidance, although he had
busy schedule managing the corporate affairs.

I owe my deep gratitude to our project guide Mrs. Neha Gupta Vishnoi who
took keen interest on our project work and guided us all along, till the
completion of our project work by providing all the necessary information for
developing a good system.

I would not forget to remember Abhishek Goel & Anshika Singh Bhadauria,
of HBF NIDHI LTD for their encouragement and more over for their timely
support and guidance till the completion of our project work.

VAIBHAV BHATT

6
 ABSTRACT

Personal Financial Planning Profession has grown substantially in recent years

owing to a number of reasons, particularly in India. Being one of the most
promising developing countries, India has shown rapid growth in per capita
income and purchasing power of people. This has given rise to a need for
professionals to manage their personal financial planning. This study aims to
explore the prevalence and position of the personal financial planning
profession specifically in the state of Andhra Pradesh. The qualitative method of
data using interviews was used to understand the career prospects, features of
the job, challenges and the need for personal financial planning professionals
within Andhra Pradesh state. The need for personal financial planning
professionals in Andhra Pradesh was explored. The findings of this study
indicate that career in the personal financial planning profession in the state of
Andhra Pradesh and India is full of challenges of growing markets; however,
the career promises features of a high growth prospect job in the economy.

7
CHAPTER - 1

 INTRODUCTION

8
 What is Financial Planning ?

Financial Planning is the process of estimating the capital required and determining it’s
competition. It is the process of framing financial policies in relation to procurement,
investment and administration of funds of an enterprise.

Objectives of Financial Planning

Financial Planning has got many objectives to look forward to:

a. Determining capital requirements-

This will depend upon factors like cost of current and fixed assets, promotional
expenses and long- range planning. Capital requirements have to be looked with both
aspects: short- term and long- term requirements.
b. Determining capital structure-
The capital structure is the composition of capital, i.e., the relative kind and
proportion of capital required in the business. This includes decisions of debt- equity
ratio- both short-term and long- term.

c. Framing financial policies with regards to cash control, lending, borrowings,

etc.

d. A finance manager ensures that the scarce financial resources are maximally
utilized in the best possible manner at least cost in order to get maximum returns on
investment.

Importance of Financial Planning

Financial Planning is process of framing objectives, policies, procedures, programmes and

budgets regarding the financial activities of a concern. This ensures effective and adequate
financial and investment policies. The importance can be outlined as-

1. Adequate funds have to be ensured.

2. Financial Planning helps in ensuring a reasonable balance between outflow and
inflow of funds so that stability is maintained.

3. Financial Planning ensures that the suppliers of funds are easily investing in
companies which exercise financial planning.

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 4. Financial Planning helps in making growth and expansion programmes which helps in
long-run survival of the company.

5. Financial Planning reduces uncertainties with regards to changing market trends

which can be faced easily through enough funds.

6. Financial Planning helps in reducing the uncertainties which can be a hindrance to

growth of the company. This helps in ensuring stability an d profitability in concern.

Benefits of Using a Financial Planner

How do you know if you could benefit from the services of a financial planner? You may not
have the expertise, the time or the desire to actively plan and manage certain financial aspects
of your life. You may want help getting started. Some reasons for seeking professional
financial planning guidance might include:

 Making sure your money will last during retirement or rolling over a retirement plan
 Handling the inheritance of a large sum of money or other unexpected financial
windfall

 Preparing for a marriage or divorce

 Planning for the birth or adoption of a child

 Facing a financial crisis such as a serious illness, layoff or natural disaster

 Caring for aging parents or a disabled child

 Coping financially with the death of a spouse or close family member

 Funding education

 Buying, selling or passing on a family business

Procrastination is the greatest enemy of financial independence, and using a

financial planner will keep you on track.

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11
 Financial Planning

Safety

Future Need
Goals

Investments Accounting

Solutions
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 Why a CFP® Professional?
CFP® professionals are dedicated to using the financial planning process to serve the
financial needs of individuals, families and businesses. Most CFP professionals have earned a
four-year college degree in a finance-related field, and have completed a course of study in
financial planning approved by CFP Board.To earn the prestigious CFP® certification and
remain certified as a CFP professional, individuals must meet four main requirements.

Examination: Certified Financial Professionals must successfully complete CFP Board's

comprehensive certification examination, which tests an individual's knowledge on various
key aspects of financial planning.

Experience:

Certified Financial Planner Professionals must acquire three years of financial planning-
related experience before receiving the right to use the CFP certification marks.

Ethics:

Certified Financial Planner Professionals must voluntarily ascribe to CFP Board's Code of
Ethics and additional requirements as mandated. CFP practitioners who violate the code can
be disciplined, including permanent loss of the right to use the CFP certification marks.

Education:

Certified Financial Planner Professionals must complete 30 hours of continuing education

every two years to stay current in financial planning knowledge, including ethics.

CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame
logo) are certification marks owned by Certified Financial Planner Board of Standards. These
marks are awarded to individuals who successfully complete CFP Board's initial and ongoing
certification requirements.

A practical approach to financial planning

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Somerset West – Trust is one of the most important aspects of the relationship
between a financial planner and his client, according to Wouter Fourie, a
Certified Financial Planner (CFP).

“If there is no trust in the process between you and your client, then there is no
business, only costs and your business will go down," said Fourie at a
retirement and investment event hosted by the Financial Planning Institute (FPI)
at the Lord Charles Hotel in Somerset West.

“On top of that, if clients do not understand you, they will not trust you. So my
approach is to keep it simple. The financial services industry has sown
confusion with its vast number of products.”

According to Fourie, a financial adviser should listen to his clients and speak at a level they
understand. He also finds it is useful to present information to clients in visual form. This can
then be followed by a detailed document.

He emphasised the importance of having a process to follow with clients and prospective
clients in terms of financial planning.

He uses a 6-step method:

Step 1

Establish and define the professional relationship. Inform the prospective client of your
competency. Also describe the process of financial planning to the client and show the value
proposition you are making. Document the process, make it visual.

It is also important to inform the client about the risks involved and to determine the client’s
risk profile.

“Explain the different costs involved and what a client will actually be paying,” said Fourie.
“Construct a portfolio for the client.”

Step 2

Collect information about the client and his goals and dreams.

Step 3

Analyse and assess the client’s financial status.

“Only on approval of our quotation will we proceed. We provide a written quotation for
services to be rendered and have three different fee models,” said Fourie. “Clients must see
the value add.”

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Step 4

Develop the financial planning recommendations and present them to the client in writing
and if the client argrees, he signs off on it.

Step 5

Implement your financial planning recommendations.

Step 6

Review the client’s financial plan periodically.

Five golden rules of financial planning

15
LITERATURE REVIEW

Managing money in itself is a difficult task and when it comes to managing the finances for
others, the challenges get exponentially high. Considering the difficulties that people face and

16
the guidance they require on where to invest and how to grow their funds in the market paves
way for the personal financial planning profession. The profession involves providing
guidance to the people on investment, mortgage, insurance, college savings, property taxes,
and retirement.

Personal financial planning profession job roles require an individual to help the client in
maximizing their returns from various investments instrument while minimizing the risks
involved in such ventures. The need for personal financial consultations is high in India as the
country is going through a rapid expansion in terms of existing financial services firms as
well as there is the addition of new and diverse financial products coming into the market.

Advantages of personal financial planning as a profession:

Personal financial planning profession is increasingly becoming one of the most sought-after
careers, as the working population around the globe continues to increase, and so does their
ability to earn more. With the boom in working population, people increasingly need experts
to handle their finances, and thus the career prospects for personal financial planning
profession continue to brighten. Besides helping clients, the nature of profession also gives
the financial advisors an opportunity of unlimited earning.

The advisors can earn through three different ways, that is, via commissions, fees, or through
a combination of both(IBF, 2017). Henceforth, the rapid pace of development of personal
financial planning profession makes it a lucrative career. The personal financial planning
professional could either choose to work in a firm or be self-employed.

The professional can begin operations by setting up SME, which is associated with low-
startup costs and can be initiated after obtaining required degrees and creating the relevant
clientele. Other advantages include modest regulatory costs in the segment and ease of
obtaining the license and in a cost-effective manner.

The nature of work allows the advisor to be a part of lifetime learning process with the ever-
evolving product range and strategies, and a chance of interacting with the people regularly.
Regular interactions with the clients allow the professionals to stay in touch with the
changing needs of the clients, and propose solutions in accordance with the client needs.

Personal financial planning profession career also gives the option of flexible working hours
to the advisors along with the opportunity for high growth(AICPA, 2017).

Features of personal financial planning profession:

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Practicing personal financial planning profession requires more than the academic knowledge
of finance, economics, and taxation to provide necessary benefits to the consumers (Raskie,
2017). The efficientaddressal of the consumer’s needs could only be facilitated through the
incorporation of academic knowledge with service providing ability, intelligent counseling
services, and thorough research as a part of the advice.

As the per capita income of the Indian population continues to increase (GOI, 2015), the
working professionals are becoming increasingly busy in their day to day profession, and
hence the need for personal financial planning profession decision assistances is pressing.
Further, personal financial planning professionals are also required to advise the people
nearing retirement, the inclusion of women investors, and those from lower-income segment
(LaPonsie, 2017). Hence, it is seen that personal financial planning professionals are more
than marketers, they consult people in cases of large cash receipts, inheritances, retirement
planning, and creation of wealth for an individual's future generations.

The study conducted by Iannicola and Parker, (2010) pointed that development of trust is
essential for the conversion of the clients. If the professionals are able to generate trust and
understanding of the products in the client, it can enhance the conversion of prospects into
clients.

Need for personal financial planning profession as a profession in India,

especially AP state:
In a large and diverse country such as India, enhancing financial awareness amongst the
people of the country requires more than relevant action from the regulatory authorities,
financial institutions, and stock exchanges(Subha and Shanmugha, 2014). Several studies
indicate that the financial literacy in India is low, as highlighted by Naidu(2017) in his study
wherein he indicated that the literacy rate is further low among youngsters and women.

A briefing paper by the European Parliament highlighted that financial literacy is the
combination of knowledge, awareness, skill, behaviour, and attitude and thus essential for
taking intelligent financial decisions. These factors help an individual in making sound
financial decisions and reach the position of financial wellbeing (European Parliament,
2015). Therefore the country needs to be integrated with the network of financing options on
a more personal level.

Also, the changing earning pattern of the young Indian population, as revealed by changes in
the per capita percentage growth in the national income of the country, suggests that people
now have higher dispensable income. The per capita income growth rate increased from 5.4%
in 2013-14 to 5.9% during the period 2014- 15(GOI, 2015). With the increase in income
arises the need for better investments so that the investors can profit from the increased
income levels. Hence, personal financial planning profession as a profession in India is
essential to bridge the gap between financial literacy rate and earning (Agarwal, 2015).

Personal financial planning profession career assumes special importance with respect to the
state of AP, as per day income among the poor, medium, and rich households varies between

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$1.25 for the poor section to $2 per day for the rich household segment in the
economy(Reddy and Bantilan, 2013). Also, personal advisors can be influential in enrolling
all section of people in the financial system, especially when the regulatory authorities in
India are aiming to include the marginalized and the poor in the financial system, by
advocating the best products according to their needs (Subha and Shanmugha, 2014).

The state presents the need for personal financial planning profession as highlighted by a
study on the retail investors’ perspective on capital market by Kumar(2010), conducted in
Vishakhapatnam. The results showed that almost half of the retail investors do not consider
tax benefits to be influential in undertaking investment decisions. The study further
elaborated that 77.3% investors in the capital market considered it to be volatile, and 39.3%
believe that the market has too much of price manipulation. The study further reveals that
99.3% of the population considers equity investment as their first priority, and 73.3%
alternately follow it by investing in mutual funds, leaving out several profitable options such
as tax saving investments. Thus, personal financial planning professionals can help assure the
investors regarding the benefits of investment in the market and also suggest them with
products that suit the client specific needs.

Challenges of the personal financial planning profession:

The respondents in the interview highlighted that the career of personal financial planning
profession professionals is filled with challenges. To the questions on challenges faced in the
profession of personal financial planning, respondent Arevealed, “You are required to wear
several hats such as of asset manager, retirement advisor, and marketer to perform in the job
effectively.” Respondent B elaborated that personal financial planning professionals may
perform some roles better than others. The respondent B stated, “Personal financial planning
professional needs to understand client’s psychology to suggest the right products to suit the
client’s needs. In some cases, professionals may have to deal with unrealistic expectations
and help them see beyond short-term profits.” Respondent C stated that “In the market facing
bearish trends, interests on the investments decreases and during such periods providing
promising returns to the investors can be challenging.”

Strategies:
The respondents were asked to highlight the strategies that they employ to overcome the
challenges they encounter while working in the personal financial planning profession. The
Respondent A stated, “Professionals need to stay in close contact with all their clients and use
services such as instant messaging and Skype to stay in touch with clients. Respondent B
reported, “Professionals need to be technologically ahead at all times.” Respondent C
reported, “Managing large-scale information, maintaining reliability and authenticity of the
data, surviving competitions, and developing emotional engagement through the use of
modern communication technology and reliable internet resources proves to be useful.”

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Research in Financial Management:
The research . activity in financial management gained momentum in India only from I960.11
Since then, academicians, researchers and .practitioners have contributed many thought-
provoking studies, which come in the form of books and articles. The work done so far can
be broadly classified into the following important aspects in the area of financial
management:

 Corporate financial behaviour.

 Capital structure planning, including valuation of shares and dividend policies.

 Allocation of capital resources.

 Capital markets, including development banks andfinancial corporations.

 Management of working capital.

 Financial management of typical organizations like small enterprises, public

enterprises and transnational corporations, etc.

Financial Literacy and Personal Financial Management Personal

Financial management refers to the management of money in its various forms to ensure
short and long term financial security. Dowling et al (2009) defined that “financial practice as
a set of behavior which include cash management, credit management, financial planning,
investments, insurance, retirement planning, and estate planning.” which requires
understanding of basic concepts of finance and economics, such as interest and inflation, and
performing some computations, risk diversification, awareness of financial products and
ability to choose the one with ones best interest.

Researches on financial literacy hypothesized that financial literacy and savvy personal
financial management behavior are related. These studies according to Hilgert et al (2003)
instituted in classical economics ‘….and operate under the implicit assumption that increases
in information and knowledge will lead to changes in financial management practices and
behaviors.’(p.109) Similarly, Roa Garcia (2011) in the review of ‘Financial Education and
Behavioral Finance’ pointed out that increasing financial education programs across the
world and the related studies measuring financial literacy and the impact of financial
education assume that access to increased education and financial information produce better
informed individuals who then, based on life-cycle models and the assumption of rational
expectations, make optimal saving and investment decisions.’ Nevertheless, both Hilgert et al
(2003) & Roa Garcia (2011) stated that the empirical evidences on the impact of financial
literacy on financial behavior are not conclusive. Similarly Xu and Xia (2012) on their survey
noted mixed finding which are not conclusive, but suggesting that financial education
improves financial literacy and also results in improved financial behavior. Hilgert et al

20
(2003) & Roa Garcia (2011), in this regard, similarly cited behavioral finance and economics
literatures that posit the relevance of psychological factors on personal financial management
decision making.

The effect of behavioral factor and practical experience on financial management behavior
leads financial education to shift emphasis from financial literacy to financial capability.
According to Kumar & Mishra (2015),

“Financial capability is precisely the skills to manage financial resources in a way that one
can optimize the use of a single penny earned or spent.” Zakaria & Sabri (2013) based on
review of surveys conducted in 10 different countries tried to formulate indicators of financial
capability also identified four indicators, in use with slight variation in the contextual
application, focus on general four domains; managing money, staying informed, choosing
products and planning ahead.

Thus, in financial capability effort is beyond imparting knowledge to developing behavior of

practicing suggested personal financial management tools and techniques, such as budgeting
and financial planning, keeping personal finical records, seeking relevant information to use
in making saving, investment, borrowing and other financial decisions. Studies discussed
hereunder thus tried to examine how far financial literacy and behavioral traits factors are
related with one or more aspects of personal financial management capability.

A study by Kanpon, Lusardi and Panos (2012) also examined the effect of financial literacy
on financial behavior, and financial and real outcomes in Russia, which represented emerging
economies affected by financial crises. The study used an individual level survey data
collected from sample Russians in 2008 and 2009 to measured financial literacy in terms of
personal finance basics and financial service awareness, financial behavior, outcomes across
socio economic profiles. A polled data regression analysis revealed that ‘financial literacy
was positively related with usage of formal financial service, but negatively with usage of
informal credit’. With respect to outcomes of financial literacy, they found that high level of
financial literacy was related with high spending capacity and high amount of unspent
income during the financial crises. The result shades light on how financial literacy enables
individuals to cope up with macro-economic shocks through saving and wise of personal
finance.

Mahdzan &Tahiani (2013) also explored the impact of financial literacy on individual saving
in Malaysia. For the purpose a survey data from 200 respondents with diverse demographic
and economic characteristics were analyzed using a probit model of regression which showed
that financial literacy, both basic and advanced knowledge are related with high saving. The
study suggested, like studies from India (Sarr & et al, 2012, Kumar et al, 2012, and others),
that government should promote financial education in order to improve the saving in the
population. Suwanaphan (2013) also argued for the same based on the analysis of sample
survey of 400 sample academic support staffs of Change Mi University in Thailand which
showed an overall low financial literacy negatively affected saving behavior or leads to
overspending.

On Juen et al. (2013) money management skill, a dependent variable conceptualized to

include: financial planning, budgeting, saving and credit management abilities, and its

21
relationship with (1) financial knowledge, (2) financial practice, and (3) self-stem also
considered in the context of Malaysian. Based on the analysis of survey data from a sample
of 480 youth, they found significant moderate positive correlation of financial knowledge,
and self-esteem with money management skills.

The multivariate analysis implemented to determine the significant predictors for money
management skills also indicated 26.5 % explanatory power of the independent variable in
the study. Concerning the effect of each variable financial management practice found to
have the highest effect followed by financial knowledge and self-esteem.

Ali & et al (2013) conducted a pilot study on financial literacy and satisfactions based on a
sample 199 employed people in Malaysia. And A factor Analysis technique in the study
identified financial planning having higher significant relationship with financial literacy than
other pre identified antecedents such as “[…] basic money management, investment know-
how, attitude to money and financial activities.”

Navickas, Gudaitis & Krajnakova (2014) also examined how level of financial literacy
influenced personal finance management of Lithuanian population, aged between 18 and 30.
A descriptive analysis of data from an online survey of 437 sample respondents from
different parts of the country revealed low level of financial literacy, which is related to
unsatisfactory personal finance management that they argued leads to “……spends a lot of
money because of impulsive or unnecessary buying, which eventually leads to lower saving
rates and lower investment returns.’

The result in the above three studies show the relationship that financial literacy has with
different financial management behavior, such as usage of formal financial product, financial
management practices: financial planning, saving, credit management which enables
individual to maintain stable financial status even during the time of financial crises. In other
words the above studies show how low financial literacy attributed to undesired financial
behavior.

The studies examining psychological factors such as self-esteem and impulsive buying also
established relationship with financial management behavior underscoring the importance of
including behavioral factor in financial education frameworks.

Personal financial management behavior studies reviewed so far considered financial literacy,
both knowledge of personal finance basics and financial product and services awareness are
associated with financial inclusion. Majority of adults in developing countries, however,

22
neither has access to formal financial service nor used existing service partly because of
financial illiteracy. Thus, financial literacy and capability in developing and emerging
countries become an integral part of financial inclusion agenda.

And most financial education programs are delivered by financial institutions and their
regulatory agencies or by other stakeholders with a mission to improving usage of formal
financial services that can have a positive welfare effects. The following section of the
review; thus, presents synthesis of literatures surveyed on the relationship between financial
literacy and financial inclusion, next to a brief overview financial inclusion.

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 Chapter -2
 About Nidhi Company

What is NIDHI company?

Nidhi Company is one of the category of Non Banking Financial Company (NBFC) which
does not require any Reserve Bank of India (RBI) license. Nidhi Company works through its
members. It can accept deposits and lends loans to its members only.

Nidhi is the safest and the cheapest way of raising funds from the General
public (just by registering them as members).

24
The alternatives of Nidhi (like Non Banking Financial Companies (NBFC’s) will need a
capital of at least two crores) are very costly. Through, very business friendly, Nidhi is yet to
be common between the business communities. .

Basics of Nidhi Company

1. Nidhi Company is also called a Mutual Benefit company. It promotes the art of saving and
utilization of funds within its member community.

2. Anybody can register a Nidhi Company; there is no background check, nor there did any
prescribe qualification for its owners.

3. Nidhi Company cannot deal with anybody other than its members. You will have to
understand the process of making a making in a Nidhi.

4. The minimum capital requirement for Nidhi Company is five lacs with at least seven
members needed to incorporate a company.

General restrictions or prohibitions

Rule 6 list out general restrictions or prohibitions. No Nidhi shall.

 Carry on the business of chit fund, hire purchase finance, leasing finance, insurance or
acquisition of securities issued by any body corporate;
 Issue preference shares, debentures or any other debt instrument by any name or in
any form whatsoever;

 Open any current account with its members;

 Acquire another company by purchase of securities or control the composition of the

Board of Directors of any other company in any manner whatsoever or enter into any
arrangement for the change of its management, unless it has passed a special
resolution in its general meeting and also obtained the previous approval of the
Regional Director having jurisdiction over such Nidhi.

 Carry on any business other than the business of borrowing or lending in its own
name. Nidhis which have adhered to all the provisions of these rules may provide
locker facilities on rent to its members subject to the rental income from such
facilities not exceeding twenty per cent of the gross income of the Nidhi at any point
of time during a financial year.

 Accept deposits from or lend to any person, other than its members;

25
  Pledge any of the assets lodged by its members as security;

 Take deposits from or lend money to any body corporate;

 Enter into any partnership arrangement in its borrowing or lending activities;

 Issue or cause to be issued any advertisement in any form for soliciting deposit.
Private circulation of the details of fixed deposit Schemes among the members of the
Nidhi carrying the words ”for private circulation to members only” shall not be
considered to be an advertisement for soliciting deposits.

 Pay any brokerage or incentive for mobilising deposits from members or for
deployment of funds or for granting loans.

How does it come into existence?

A. Conditions during incorporation

 Minimum paid capital should be Rs.5,00,000.

 No preference shares can be issued.

B. Conditions after incorporation

Every company should ensure the following within 1 year.

 Minimum members must not be less than 200.

 Minimum net owned fund should be at least Rs.10,00,000.

 The ratio between net owned funds and deposits must not be more than 1:20.

 No body corporate or trust must be admitted to it as its member.

 A minor should be a part of it.

C. Directors

 The minimum number of directors should be 3.

 The director should be the member of the company.

 The director should be appointed for a minimum of 10 years.

D. Incorporation

1. Minimum requirements
26
The company should fulfil all the minimum requirements to register a Nidhi Company like:

a. Minimum 7 members

b. Document requirement

c. Minimum capital requirement

2. Choose directors

A minimum of 3 directors must be chosen by the company and it must be done wisely, for the
directors run the company.

3. Apply for DSC and DIN

Digital signature is encrypted signature made for every director. It is used in various
processes during incorporation.

Director Identification Number(DIN) – As per the law, every director must have a DIN. If the
newly appointed director doesn’t have one, he should apply for it. It is like a PAN card since
it has lifetime validity.

4. Name approval

A Nidhi company should get its name approved. It should either have the words Nidhi
Limited or Mutual Benefit Company at the end.

Share capital and allotment

According to Rule 7, every Nidhi shall issue equity shares of the nominal value of not less
than ten rupees each. This requirement shall not apply to a company referred to in sub-rules
(a) and (b) of rule 2of the Nidhi rules 2014. No service charge shall be levied for issue of
shares. Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares
or shares equivalent to one hundred rupees. A savings account holder and a recurring deposit
account holder shall hold at least one equity share of rupees ten.

27
 Concerns Related to Nidhi Company

 Highly dependent on the integrity, honesty and loyalty of workers and members.

 Lacklustre sales promotion.

 It caters to only the needs of small and medium-income groups.

 Nidhi Companies are usually managed by amateurs and professional managers cannot
be hired due to lack of funds.

 People may be afraid to deposit funds because Nidhi Companies don’t require a
licence from the RBI.

28
 Some Nidhi's In India

 Achiva Nidhi Limited

 Racmak Nidhi Limited

 Muthoottu Nidhi (Kerala) Limited

 Jayant India Nidhi Limited

 Kalayil Nancy Nidhi Limited

29
  Taxway Wealth Nidhi Limited

 Swasthirtha Nidhi Ltd.(Maharashtra)

 SaiAmrit India Nidhi Ltd.

 Navika India Nidhi Limited

 Royalbenefit mutual india nidhi limited.

Steps to Incorporate Nidhi Company Registration

Step1. Application of DSC & DPIN :

First of all, the partners have to apply for Digital signature and DPIN for Nidhi company.
Digital signature is an online signature used of filing and DPIN refer to Directors PIN
number issued by MCA. If the directors already have DSC and DPIN, then this step can be
skipped.

Step 2. Name approval :

You have to provide 3 different name options for Nidhi company to MCA of which one will
be selected. Names provided should ideally be unique and suggestive of company business.

30
Step 3. MOA & AOA submission :
Once the name is approved, one needs to draft Memorandum of association and Articles of
Associate. But the object of the Nidhi company must always be a charitable object. Both
MOA and AOA are filed with the MCA with the subscription statement.

Step 4. Get incorporation certificate :

It typically takes 15- 25 days to form a Nidhi company and get the incorporation certificate.
Incorporation certification is a proof that company has been creation. It also includes your
CIN number.

Step 5. Apply for PAN, TAN and Bank account :

Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days.
Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with bank to
open your bank account.

OR

Online Filing
The Ministry of Corporate Affairs (MCA) has issued an integrated incorporation form INC-
32. So now, an OPC can be incorporated online by filling the Simplified Proforma for
Incorporating Company Electronically (SPICe) form in Form INC-32 (using Digital
Signature Certificate of the Director)along with (eMoA) in Form INC-33 and (eAoA) in
Form INC-34.

31
 CHAPTER -3
 HBF NIDHI LTD.

HBF NIDHI LIMITED

Introduction:
HBF NIDHI LIMITED, a public limited company, was incorporated in 2017, recognizing the
prevalent gap in addressing the basic functionality of banking to inculcate the habits of
“Thrift Saving”. In line with the growing aspiration of a resurgent and developing economy
of India and with the focus of financial inclusivity of the population by the present economic
outlook, HBF Nidhi Limited aspires to address this opportunity with its innovative products
and services. Our businesss model stands on the principles of transacting within members of
the Nidhi company. We accept deposits from lend credit to our members and thus inculcte the
habbit of savings among the masses and also provide credit at lower costs than traditional
banks.

32
HBF Values:
People, Integrity, Leadership, Teamwork and Excellence Our values are the fundamentals
beliefs and guiding principles of our organization. Our values define who we are.

People
We value our people - be it our team members or customers. We treat our team members,
clients and others with whom we do business with equality, respect, dignity and politeness.
People are our biggest asset and we value their development and reward their performance.
We are committed towards maintaining a safe working environment that is free from any kind
of discrimination, harassment and retaliation.

Leadership
demands vision, courage and integrity. We believe in leading our clients towards taking apt
business decisions, leading our people towards achieving excellence and thought leadership.
Teamwork: Effective teamwork requires strong relationships built on the foundation of
mutual respect and sharing. We believe that the best business solutions come from working
together with our team members and clients.

Ethics
our business ethical standards are higher. Ethics is an integral part of everything that we do.
We believe that following an ethical behavior results in companies’ growth in both the short
and long term

Integrity:
We believe that Integrity should be at the heart and soul of a company’s culture. We have
clear commitment towards achieving professional goals and objectives through ethical
conduct of our business.

Excellence:
Drives us to deliver what we promise and add value beyond the customer expectations. We
strive to achieve excellence through keeping an open mind for learning, adopting futuristic
technologies and by being agile in our thoughts and actions.

33
Team work:We Believe in maintaining employer-employee relationships based on open
communication. Our team always works with transparency & maintain ethical behavior.

Future Vision:
Our Goal is to fulfill all public financial needs in order to raise our organization into small
bank Covering target with more than 100cr authorized capital within a period of 5years.

Provide Doorstep Services -

Get pick-up and delivery services for cash and instruments, right at your doorstep

There is an increasing expectation from customers for better service from their banks. The
availability of ATMs for 24-hour banking is also not seen as sufficient. More and more
customers look for getting banking transactions done sitting in their homes or offices. This
has led to the concept of Doorstep Banking getting more and more volumes.

While, the services to be offered are simple; the timeliness and urgency towards the customer
poses a big challenge specifically because the geographical reach are very important.

These services are already being handled well through phone calls and third-party service
providers. However, to handle higher volumes with reduced errors we have evolved the
Doorstep Banking solution.

As also defined in Regulatory guidelines, Banks now offer the following banking services to
all of their customers at their doorstep:

• Cash pick-up and delivery

• Instruments/Cheque pick up

• Instruments (DD/PO) delivery

In order to manage / track/ evaluate these services centrally, there is need of robust system
integrating central unit, hub branches, spoke branches & service provider agency. This system
should enable the faster mode of communication between central unit, hub branches, service
provider & customer thus reducing the turnaround time so that each customer is serviced
effectively.

HBF provide a doorstep services in India. where we start our first phase from Noida second
Lucknow Third Phase NCR and forth Allahbad. Entire four phases we will cover within three
years.

34
Our doorstep banking facility help to our members banking solution at their home . We will
provide deposit, withdrawal, statement and other services at their home.

In future, our organization will provide doorstep Micro ATM Services also.

Condition
 Services only for our members.

 Number of times cash collecting transactions from customer's home will vary for everyone
according to their Transaction volume.

BUSINESS MODEL OF HBF NIDHI LTD

GROWTH AND DEVELOPMENT OF THE ORGANISATION

This companies shares rises day by day because of his effective performance.

Now this company launches to more new companies which named are -

HBF Direct Ltd.

HBF Insurance & Mutual Fund.

35
 OUR COMPETITORS

1. Au Small Finance Bank Limited(AUBANK)(Jaipur, Rajasthan).

2. Capital Lab Small Finance Bank (India’s first small finance bank(Jalandar ,Punjab).

3. Equitas Small Finance Bank(Chennai, Tamilnadu).

4. Janalakshmi Small Finance Bank(Bengaluru , Karnataka).

5. North East Small Finance Bank(NESFB)-RGVN Micro Finance Ltd(Guwahati , Assam).

6. Ujjivan Small Finance Bank(Bengaluru, Karnataka).

7. Utkarsh Small Finance Bank(Varanasi , U.P).

Products Of HBF

 HBF Savings Account

 Fixed Deposit:
 Non- Breakable Scheme

36
  Breakable Scheme

 Sr. Citizens Fixed Deposit

 Bitiya Nidhi Dhan Yojana (Scheme)

 Monthly Income Plan (MIP)

 Recurring Deposit

HBF Savings Account

HBF NIDHI LTD offers an attractive savings account to our members with a interest rate of
6% . We offers this savings account facility to our tie-up housing society members where
banking service/solution are not easy for senior citizen, ladies & others.

Features of HBF Saving Account:

37
Minimum amount of deposit for opening a Savings Account with a minimum balance of Rs.
100 only which is to be maintained always.

The money can be withdrawn and deposited by using withdrawal/Deposit slip in the
concerned branch(es) or on demand at your doorstep free of charges*

To enable the depositor to earn high rate of Interest below are the slabs for Interest Rates
provided:

Fixed Deposit Non- Breakable Scheme

HBF Fixed deposits (FDs) are an attractive mode of parking one's money safely. It offers
security in terms of savings on one's income.

Non-breakable Fixed Deposit as the name suggests cannot be withdrawn prematurely. In

other words, Fixed Deposit cannot be broken before maturity date.

Features
 Guaranteed Returns

 Higher rate of Interest compounded Quarterly.

 Quick Loan against deposits

 Prompt Doorstep Assistance through our well experienced staff.

 Tax is deducted at source, from interest on Fixed Deposits as applicable, as per the
Income Tax Act, 1961.

 Nomination facility available.

Interest Rate (w.e.f. 1st June 2017)

38
 Fixed Deposit: Breakable Scheme
HBF Fixed deposits (FDs) are an attractive mode of parking one's money safely. It offers
security in terms of savings on one's income.

Breaking a fixed deposit means withdrawing the money before the maturity expires. It is also
called as premature withdrawal from Fixed Deposit. This may be necessary if you urgently
require the funds.

Sr. Citizens Fixed Deposit

Senior Citizen Fixed Deposits (FDs) are customized term deposit plans that allow those
above 60 to get maximum returns out of their investment.

HBF offer higher interest rates for this age group, making FDs a lucrative option. These types
of deposits are referred to as senior citizen fixed deposits.

Non-breakable Scheme as the name suggests cannot be withdrawn prematurely. In other

words, one cannot break their fixed deposit before the end of maturity period.

Features
 Guaranteed Returns

39
  Higher rate of Interest compounded Quarterly.

 Quick Loan against deposits

 Prompt Doorstep Assistance through our well experienced staff.

 Tax is deducted at source, from interest on Fixed Deposits as applicable, as per the
Income Tax Act, 1961.

 Nomination facility available.

Earn attractive interest for various tenures on your deposits as listed

Bitiya Nidhi Dhan Yojana

Bitiya Nidhi Dhan Yojana (Scheme) is a fixed deposit scheme meant exclusively to secure the
future of your girl child. The scheme is meant to meet the education and marriage expenses of
a girl child.

Features of HBF Bitiya Nidhi Dhan Yojana.

 Covers your girl child aging from 0 year – 25 Years 11 Months 29 days.

 Secure Your Daughter’s Future by saving for their Education, Marriage, & other
Financial Securities.

 Offers lucrative interest rates at 11% for a fixed tenure of 5 years.

 Allows you to Investment from INR 5000 to INR 10, 00,000 per girl child.

 No Loan Facility is available because it’s especially for girl child.

 Tax is deducted at source, from interest on Fixed Deposits as applicable, as per the
Income Tax Act, 1961.

40
MONTHLY INCOME PLAN (MIP)
HBF Nidhi , Monthly Income Plan assures guaranteed fixed monthly income for next 5 years.
The MIP offers both secure Fixed Deposits and regular monthly income with higher returns.

Earn attractive interest for various tenures on your deposits as listed

under:

41
 Recurring Deposit
HBF Nidhi Ltd. Recurring Deposit is designed to help you prepare for the future. It enables
you save regularly for a certain period of time with minimum amount starting Rs. 1,000/-
only and earn a higher interest rate. At the end of pre-defined period you are paid back the
lump sum including the principal and interest.

Features:
 Minimum amount can be deposit Rs.1,000/- at regular intervals.

 The Period of deposit is minimum 1 year and maximum 5 years.

 The most attractive rate of interest of 8% p.a. with an effect of 1st Mar 2017.

 Providing the loan facility. The loan can be given up to 90% of the amount standing
the credit of the account holder.

 Recurring Deposit provides an option Any Time Money after 12 months. Member can
opt this option.

AVIVA LIFE INSURANCE

Aviva New
Aviva
Family
LifeShield
Income
Advantage
42
Builder
 Aviva
Wealth
Builder

AVIVA PRODUCTS -

AVIVA NEW FAMILY INCOME BUILDER

A saving cum protection oriented plan that assists you financially by

guaranteeing returns in the form of regular payouts for 12 years.

Get double of the premiums paid.

Immediate guaranteed payout in case of death.

Tax benefit on all premiums paid &payouts.

43
 NOTE -

 Minimum Age - 6 years

 Maximum Age - 50 years

 Minimum Premium - Rs. 40000+GST

 Maximum Premium -Rs. 1 cr.+ GST

 Policy Term - 24 years

(12 years Premium paid & 12 year get double

amount of the premium paid) Also get Loyalty Bonus after premium paid.

GST of 18% is applicable on life insurance effective from the 1st of July, 2017

Specifications:

Parameter Criterion

Entry Age 6 to 50 years last birthday

Maturity age 18 to 62 years last birthday

Policy Term 12 years

Premium Payment Term 12 years

Payout Period 12 years after maturity i.e. 13th to 24th year

Annual Premium (Min) Rs. 40,000

Rs. 1 crore (per life)

Annual Premium (Max)

Sum Assured Sum Assured would be 24 times the Annual Premium

(exclusive of Goods & Services Tax and extra premium, if any)

44
Minimum Sum Assured

Maximum Sum Assured

Rs 9,60,000 (minimum annual premium of Rs.40,000 X 24)

Rs.24,00,00,000 per life (maximum annual premium of Rs.1,00,00,000 X

24)
Premium Payment
Frequency Annual only

Benefits That I Will Receive

Maturity Benefit:

In case the life insured survives till the end of the Policy Term and provided all due premiums
have been paid; the Maturity Sum Assured will be paid in the following manner:

o 12 annual instalments of “1.5 times the annual premium” (excluding taxes and extra
premium, if any) shall be paid at the end of each year during the Payout Period.
o A lumpsum amount of “6 times the annual premium” (excluding taxes and extra
premium, if any) shall be paid at the end of the Payout Period

An additional Guaranteed Terminal Benefit, depending upon age at entry, is paid at the end of
the Premium Payment Term.

In case of unfortunate death of the Life Insured while receiving the regular income, the
outstanding regular payouts shall be paid to the nominee/beneficiary.

Death Benefit:

In case of death of the life insured during the policy term provided all due premiums till date
of death have been paid, the Death Sum Assured payable shall be highest of the following
amounts:

a. 10 times of the annualized premium, or

b. 105% of all the premiums paid (excluding taxes and extra premiums, if any) as on
date of death, or

45
c. Maturity Sum Assured

d. Sum Assured of the Policy; the Sum Assured will be paid in the following manner:

 12 regular annual installments of “1.5 times the annual premium” (excluding taxes
and extra premium, if any) shall be paid. The first installment would be paid at the
time of claim settlement and the remaining 11 annual installments shall be paid on
each of the death anniversary of the life insured commencing from first death
anniversary date.

 A lump sum amount of “6 times the annual premium” (excluding taxes and extra
premium, if any) shall be paid along with the 12th annual installment on 11th death
anniversary of the life insured.

AVIVA WEALTH BUILDER PLAN

46
47
 Specifications:

Entry Age(last Minimum: 5 years

birthday) Maximum: 50 years

Maturity Age (last Minimum: 18 years

birthday) Maximum: 63 years (Single Premium); 67 years (Regular Premium)

Policy Term Premium Payment Term

Policy Term & 13 Single Premium

Premium Payment
Term (in years) 15 5

17 10

Regular Premium: Rs.50,000 p.a. + applicable taxes

Minimum Premium
Single Premium: Rs.1,50,000 + applicable taxes

Maximum Premium
Rs.1,00,00,000
(per Life)

Premium Payment Term Sum Assured

Single 2 times of the Single Premium*

Sum Assured 5 years 10 times of the Annual Premium*

10 years 20 times of the Annual Premium*

*Premium is exclusive of taxes or extra premium, if any

Premium Payment Minimum Sum Assured Maximum Sum Assured (Rs.)

Maximum/ Term (Rs.)
Minimum Sum
Single 3,00,000 2,00,00,000
Assured
5 years 5,00,000 10,00,00,000

10 years 10,00,000 20,00,00,000

Premium Paying Single or Annual

Please Note:

48
1.Taxes including but not limited to Goods & Services Tax, Cesses as applicable shall also be
levied as notified by the Government from time to time. Tax laws are subject to change.

2.The policy can be backdated within current financial year by paying interest @9% p.a.
compounding monthly, for the backdated period in addition to the applicable premium.

3.If the insured is minor at inception of the policy:

- the risk shall commence immediately

- the premiums will be payable by the policyholder who can either be a parent or grandparent
or guardian of the insured. In case of death of the policyholder before the policy term is over,
future premiums can be paid by the surviving parent/legal guardian of the insured. If the
insured is a minor and in case future premiums are not paid, lapse/paid-up provisions will
apply.

- In case of death of the policyholder when the life insured is a minor, the surviving
parent/legal guardian of the life insured shall deem to be the policyholder on admission of
claim and submission of documentary evidence.

-The policy shall vest in the insured on his/her completion of 18 years of age

Current Scenario Of Financial Planning In Indian Market

What are your views on the current state of awareness on financial planning in India? Do you
see a rise in awareness levels with a rise in the wealth quotient?

Awareness of financial planning in India is low, but this is pretty consistent with the state of
awareness in a lot of other countries where we have our programs. Consumers do not
understand what financial planning is and, due to which, they don't value it.

The key element to a financial planning certification is financial literacy, which makes it
important to improve overall literacy levels. As wealth increases it tends to change the
mindset. When consumers are in a state of subsistence, wherein they live on a day-to-day
basis, it is hard to plan your finances. As wealth increases you have something you need to
protect or multiply.

While awareness levels are currently low, we are seeing an improvement globally, including
in India. Consumers are living longer and in retirement than as part of the work force.
Regulators and governments are pulling away from guaranteed pensions and employers are
pulling away from offering lifetime employment. Consumers now need to take on the
responsibility (of creating wealth).

49
Do you think that the need for financial planning in India is different compared with
other countries, especially the developed world?

Culturally, in India, the structure of a family is usually strong and extended. This means it is
not uncommon for Indians to be involved in taking care of their parents, grandparents, their
children's education or marriage and so on.

To accomplish this, one needs to have an extended financial plan. This adds a measure of
complexity and needs to be factored in by a financial planner, unlike in western culture or
anywhere else where the planner only deals with a particular client's individual issues.

Typically, problems and approaches are common everywhere and markets tend to evolve.
Markets that were focused on transaction or product selling, where individuals went to
different people for different needs, are now seeing a shift to wanting a one-stop solution
provider, someone who can plan your whole life and give you a solution in its entirety.
Increased responsibility and complexity leads to this change.

Things are better when you have professional help. In 2008, people lost a lot of their wealth
and realised they did not want to undertake this journey (of planning their finances) on their
own. During this period, certified financial planners (CFPs) gave feedback that their clients
stayed the course that had planned for them.

Education and trust helps in developing this. Investors understand that volatility will come
and that risk exists but they still want to stay invested, now more than ever. India was known
to be a saving country.

Earlier investors wanted tangibility, to be able to invest into things they could see and so they
invested in gold, real estate etc. Now, there has been a shift in mindset to investing in stocks,
bonds, mutual funds and so on.

Do you feel there is a need to strengthen long-term financial security of in

India?

50
Yes, it is very important to create retirement funds. Because India does not have social
security in place yet, you are in a better position to understand financial planning (for
retirement).

Europe has a very solid social security system in place and yet, with governments going into
debt, what has been telegraphed to consumers is that they may not be able to fulfil all
obligations. The US has also indicated that while social security is there and the government
will pay a small part of retirement income, they might need something more for financial
security.

Even with such systems in place, these have not been designed to cover all your needs or
designed to protect you from impoverishment. People want to maintain a lifestyle during
retirement - commensurate or better than what they have had during their working life.
Whatever the social security structure, it is never enough; you must take care of yourself.

If we look at the Australian model they have superannuation, while in America it is called the
401K. Individuals, while they are earning steadily, contribute to their retirement with pre-tax
dollars and there is a matching investment made by their employers. The notion of letting
people save pre tax for retirement is what motivates them.

In the US and Australia, it is money that was never part of their salary that is being put into
the retirement fund and so they won't miss it (while they are working). Given the opportunity
to save pre tax and with access to financial advice, one can improve one's financial well
being.

Aviva LifeShield Advantage

51
 Specifications:
 Entry age: 18-55 years (Maximum age at the expiry of the policy is 65 years)
 Policy term: 10 years to 30 years

 Minimum Sum Assured: Rs 2 lacs

 Premium Payment Frequency: Single Premium (for Option A); Yearly, Half-Yearly,
Quarterly and Monthly (for both Options)

Easy steps to your plan:

Option A: Sum Assured on death during the Policy Term, provided that
all the due premiums are paid till death

Option B: Sum Assured plus Return of Premiums on death or on

Permanent Total Disability (PTD) due to an accident, whichever is earlier
during the Policy Term, provided that all the due premiums are paid till
death

Step 1 Maturity Benefit for all options is Return of Premiums paid excluding
Choose the nature of protection required extra premiums and taxes.

Minimum Sum Assured: Rs 2 lacs

Maximum Sum Assured:

Step 2 Option A - No limit

Choose the level of protection you want
Step 3
Arrive at the policy term by choosing the
period for which you want protection
Option B - Rs 50 lacs
10-30 years subject to:
 Entry Age: 18-55 years
 Maturity Age: 28-65 years
Single Premium (for Option A only)

Step 4  Regular (equal to policy term) for Option A/B via Yearly, Half-
Select the Premium frequency Yearly, Quarterly & Monthly modes (only ECS/ Direct Debit
allowed for Quarterly & Monthly modes)
Step 5
Work out the premium payable along
wiht our Financial Planning Adviser
 Enjoy rebate for high Sum Assured

52
What are the benefits I will receive?

Death / PTD Benefit:

 Option A: Life Protection

Death Benefit: In the unfortunate event of your death during the policy
term, provided that all the due premiums are paid till death, the Sum Assured is
paid to your nominee and the policy terminates

 Option B: Life-cum-disability protection along with Return of

premium

Death/PTD Benefit: In the unfortunate event of your death or suffering

from Permanent Total Disability (PTD) due to an accident, whichever is earlier
during the policy term, provided that all the due premiums are paid till death,
the Sum Assured along with the sum of all premiums paid till date of
notification of death, will be paid and the policy terminates.

A life insured shall be regarded as Permanently and Totally Disabled only if, as
a result of accidental bodily injury:

1. Life insured has suffered the loss by physical separation (or loss of use) of
two limbs or

2. The complete and irremediable loss of sight in both eyes or

3. The loss by physical separation (or loss of use) of one limb, accompanied by
the complete and irremediable loss of sight in one eye or

4. Life insured has been continuously disabled for a period of 1 year and has
been determined by the Company to be incapacitated to such an extent as to
render that person unable ever to resume own or similar employment.

Here limb means hand/foot at or above wrist/ankle.

The amount payable on death shall be highest of the following:

a) 10 times of the annualized premium (excluding taxes and extra premiums, if

any), or (Applicable for Regular Premium Policy)

53
b) in case of Single premium, 125% of the single premium paid (excluding
taxes and extra premiums, if any)

in case of Regular premium, 105% of all the premiums paid (excluding taxes
and extra premiums, if any) as on date of death. or

c) the amount payable on the maturity of the policy.

d) In case of Option A-Sum Assured

In case of Option B-Sum Assured plus sum of all premiums paid (excluding
extra premiums, if any and taxes)

54
 Important Points

In case of premature closure of fixed deposits i.e., before

maturity, instead of contracted rate Interest will be paid
on deposit at applicable rate prevailing on the date of
opening of deposit less 2% for the period for which
deposit actually remained with HBF Nidhi Limited.
For example, suppose you opened the FD for 3 years
originally, and the interest rate offered was 8% Now if
you closed the FD in 1 Year, and if the interest rate for
1 Year FD was 7.5%, then you will get only 5.5%
(7.5% minus 2%) interest for the period of your fixed
deposit.

In case of death of a depositor the amount will be paid by

the company to Nominee / Legal Heir / Surviving
depositor, without any premature closer penalty.

55
 HBF Strengths

Financial Doorstep
Planning Services

Strengths

Third Party Future Risk

Support Coverage

56
UTKARSH SMALL FINANCE BANK LIMITED
Aapki Umeed ka khata

Mission
To provide affordable & accessible banking services which are process centric, technology
enabled and people oriented resulting in reliable, scalable and sustainable institution
facilitating socioeconomic change.

ABOUT UTKARSH-
 Started in 2014- 2015as a micro finance by Mr. Govind Singh .

 Got licence for small Finance from Reserve Bank Of India on January 23,2017.

 Utkarsh was launched as Full – service Small Finance Bank on 22nd September 2017.

 Registered and Corporate Office – Varanasi , Uttar Pradesh.

 Established in 2009 with the mission to empower the low-income group financially.

 The objective of our bank is 'Umeed' - giving hope to customers for fulfilling their
dreams and needs.

 Utkarsh Micro Finance with Rs 700 crore net worth will be the holding company for
the new bank, which will cater to the poor in largely in the northern belt.

 CDC is its key equity investor along with International Finance Corporation and
Aavishkaar Goodwell. Utkarsh raised Rs 395 crore from local investors four months
back to bring down foreign holding to below 49%, a norm for small finance banks.

57
 Utkarsh becomes the third player in this space after Capital Small Finance Bank and
Equitas Small Finance Bank. Reserve Bank of India has offered in-principle license to
10 financial services companies including eight micro lenders.

 As the bank, it will remove 1% loan processing fee for new borrowers to start with,
while look to reduce lending rates in the future. At present it will lend at 15-25%
annual rate.

CIN NO U65992UP2016PLC082804

AUTHORISED CAPITAL 7500000000

PAID UP CAPITAL 7370500000

DATE OF INCORPORATION 30/04/2016

Types of Banks

t
Paymen
rcials Banks
Comme
banks
58
 RBI
NIDHI CO.

ope ratives
Co-
Banks
Credit

Small Fin
ance NBFC
Bank

59
 CHAPTER -4
 OBJECTIVES

OBJECTIVES OF STUDY

 To identify about the market position of the company.

 To know related the financial statement of the company.

 To analyse the business model of the company.

60
 To identifiy what percentage of the members of this company are satisfied.

 To evaluate the competition between this company with other small finance
companies.

61
CHAPTER - 5
 Research Methodology

62
 Research Methodology

Introduction

Research is process of systematic and in depth study or serach for any particular topic,
subject, or area of investigation, backed by collection, compilation, presentation and
interpretation of relevant details or data.

Research methodology is a way systematically solve the research problems. It may be

understood as a science of studying how research is done scientifically. Research may
developed hypothesis and test in it. In it we study the various step that are generally adopted
by the researcher in studying his problem along with the logic behind them.

Research must be based on fact observable data forms a sound basis for research inductive
investigation lead better support to research finding for a analyzing facts a scientific
methodology of analysis must be developed and result interpreted logically. It is necessary for
the researcher to know not only the research method or technique but also the methodology

Thus,when we talk of research methodology we not only talk of the research methods but
also consider the logic behind the method we use in the context of our research study and
explain why we are using a particular method or technique and why we are not using others
so that the research result are capable of being evaluated either by the research result are
capable of being evaluated either by researcher himself or by others.

63
RESEARCH DESIGN:

After formulating the problem the research design has to be prepared. Preparation of
research design involves selection of means of obtaining information, time available for
research and

selection of method of tabulation and presentation of data.

The research of my project is DESCRIPTIVE STUDY. I have obtained information by some

of the employees of the organization and also from monthly and annual reports of company.
Feedback form, magazine and website.

Descriptive research design:

Descriptive research includes surveys and fact-finding enquiries of different kinds. The major

purpose of descriptive research is description of the state of affairs as it exists at present. In

social science and business research we quite often use the term Ex post facto research for

descriptive research studies. The main characteristic of this method is that the researcher has
no control over the variables.

It provides description of something. It is undertaken in order to ascertain and describe the

characteristics of variables of interest in a particular situation. It is a preplanned and

structuring

design. A descriptive study is one in which information is collected without changing the the

environment (i.e. nothing is manipulated). Sometimes these are referred to as “ correlation”

or

“observational” studies. Descriptive research is used to describe chracteristics of a

population or

64
phenomenon being studied. It does not answer question about how/when/why the
characterstics occurred.

‘Descrptive research design is used in in this project.’

SAMPLING DESIGN

Sampling is the process of selecting a sufficient number of elements from the population, so

thata study of the sample and an understanding of its properties or characteristics would make

it possible for us to generalize such properties or characteristics to the population elements.

A sample design is a definite plan for obtaining a sample from a given population. It refers to

the technique or the procedure the researcher would adopt in selecting items for the sample.

Sampl design may as well lay down the numbers of item to be included in sample that the

size of the sample. Sample design is determined before data are collected. There are many

sampe designs from which a researcher can choose. Some design are relatively more precise

and easier to apply than others. Researcher must select/prepare a sample design which should

be reliable and appropriate for his research study. The way of selecting a sample is known as

the sample design.

Here the researcher used Non-Profitability sampling.

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SAMPLING TECHNIQUES

The sampling techniques used for carrying out this study is Non- profitability sampling.

NON-PROBABILITY SAMPLING

Non-probability sampling is a sampling technique where the sample are gathered in a process

that does not give all the individuals in the population equal chances of being selected.

Sampling is the use of a subset of the population to represent the whole population or to

informabout (social) processes that are meaningful beyond the particular cases, individuals or

sites studied. Probability sampling or random sampling is a simple technique in which the

probability of getting any particular sample may be calculated. Non-probability sampling

does not meet this criterion and as any methodological decision, should adjust to the research

question that one envisages to answer. Non-probability sampling techniques cannot be used

to infer from the sample to the general population in statistical term and thus answer “how

many”- related research questions.

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COLLECTION OF DATA

The task of data collection begins after a research problem has been defined and research

design plan chalked out. While deciding about the method of data collection to be used for

the study, the researcher should keep in mind two type of data VIZ., primary and secondary.

The primary data are those which are collected afresh and for the first time, and thus happen

to be in original in character. The secondary data on the other hand are those which have

already been collected by someone else and which have already been passed through

statistical process. The researcher would have to decide which sort of data he would be using

(thus collecting) for his study and accordingly he will have to select one or the other method

of data collection. The methods of collecting primary and secondary data differ since primary

data are to be originally collected, while in case of secondary data the nature of data

collection work is merely that of compiliation. We describe the different methods of data

collection, with the pros and cons of each method.

67
 RESEARCH METHODOLOGY

DATA
GATHERING

MARKET GRAPHS
SURVEY

OBSERVATION

68
 MARKET ANALYSIS

The study is conducted with 50 responses, when considered a new bank , the
respondents generally considered quality & brand according to data collection, 66%
respondents goes to quality ,while 38% goes to brand and 14% generally considered
innovation and 4% considered value and 4% respondents goes to price factor and 20%
respondents considered others factors.

69
Out of the 50 respondents 73.5% are think the bank cares to complete all banking
needs, it means 37 respondents are satisfied with the bank carement & while 26.5%, it
means 13 respondents are unsatisfied that bank does not care to complete all their
banking needs.

70
According to demographic profile, 52%,it means 25 respondents gives rate the quality
of banking services & 42% neither high or now low quality & 6% ,it means 5
respondents goes to low quality of banking services.

Out of the 50 responses, 18% bank provides personalise

services ,24% respondents says when we think bank the first thing which comes in our
mind , bank is a wide branch network and 56% respondents, it means 3 respondents
says bank provides customer services and other 22% respondents said bank means a
core banking facility provider.

71
After analysis the data, in the responses 64% ,28 respondents said that our bank offers
competitive interest rate and 36%, 22 respondents do not think our banks offers
competitive interest rate.

After analysis the data ,out of the 50 responses, 84% , it means 42 respondents do not
have any financial advisor / financial planner ,while other responses 16%, 8
respondents have a financial planner.

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 In the data analysis , out of 50 respondents , 64% ,32 respondents do not filling the
income tax return and 36% respondents , it means 18 respondents only filling ITR.

Out of the 50 responses, 36 respondents goes with the core banking facility for the
customers and while 14 respondents does not agree that their banks are gives core
banking facility for the customers.

73
 MEETING ANALYSIS

Customer name : Nischay

STEP 1
 Called his and conduct a meeting.
 Decide date,Time & place.

STEP 2
 Firstly present the Financial planning presentation.
 Know what is this? Why we do this? How we can do this?
 What are the Financial Goals?

STEP 3
 Pitch the Fixed deposits for normal citizen. (you can see annexure 3)
 Explain all the Interest rates of fixed deposits.
 Define All the necessary Calculations.
 Showed the value of principal amount after maturity period.

------------------------------------------------------------------

Customer name : Rishabh

STEP 1
 Called his and conduct a meeting.
 Decide date,Time & place.

74
STEP 2
 Firstly present the Financial planning presentation.
 Know what is this? Why we do this? How we can do this?
 What are the Financial Goals?

STEP 3
 Pitch the AVIVA insurance.
 Explain all the Interest rates.
 Define all the necessary Calculations.
 Showed the value of principal amount after maturity period.

----------------------------------------------------

Customer name : Rishabh Chauhan

STEP 1
 Called his and conduct a meeting.
 Decide date,Time & place.

STEP 2
 Firstly present the Financial planning presentation.
 Know what is this? Why we do this? How we can do this?
 What are the Financial Goals?

STEP 3
 Pitch the AVIVA insurance.
 Explain all the Interest rates.
 Define all the necessary Calculations.
 Showed the value of principal amount after maturity period.

Customer Name: Yatin

75
STEP 1
 Called his and conduct a meeting.
 Decide date,Time & place.

STEP 2
 Firstly present the Financial planning presentation.
 Know what is this? Why we do this? How we can do this?
 What are the Financial Goals?

STEP 3
 Pitch the Fixed Deposit.(You can see annexure 3)
 Explain all the Interest rates.
 Define all the necessary Calculations.
 Showed the value of principal amount after maturity period.

CASE STUDY

Customer Name : Lakshmi

76
Followed some steps For selling the Product in live field :

STEP 1
Appointment:

 I have called her for conduct the meeting but she do not have time so that meeting
has postponed.

 After two days I have again called her and finally meeting has conducted and decided
time and place of meeting

STEP 2
 We met then I Show the Financial planning Presentation.
 Define What is Financial planning? , Who are the CFP’s? , Why we do financial
planning?

STEP 3

 Showed All the Products of the HBF.

 Showed all the benefits of the products

STEP 4

 Pitch the Bitiya NIDHI dhan yojana Fixed Deposit.

 Showed all the benefits of bitiya NIDHI.
 Showed all the necessary calculations.

STEP 5

 Explian why Bitiya NIDHI is best?

 Calculations of Interest rate.

STEP 6

77
  Before selling the policy. Maked the member
 Through Open the savings Account filled some necessary forms.
(you can see in Annexure 1)

STEP 7

 Then filled the Bitiya NIDHI policy Form

(you can see in Annexure 2)
 Do all the necessary formalities of Policy.

STEP 8
 Then giving some another peoples references.

78
 CHAPTER 6
 LIMITATION

LIMITATIONS

 Can not Advertise.

 Can not open branches.

79
 Can not Promote.

 Can not provide Debit/credit cards.

 Sale policies only there members.

(so it is compulsory to make member)

 Not listed in NSE/BSE.

 Its difficult to create trust level of the customer for the company.

 Give loan not more than 15 lakh .

80
 CHAPTER 7
 BIBLIOGRAPHY

BIBLIOGRAPHY

 https://www.hubco.in/

 https://www.google.co.in

81
 https://www.quora.com/

 http://perry4law.org/

 https://aishmghrana/
 http://hbfnidhi.com/

Conclusion

Closing the sales in live field.

Raising The funds through investments option.

Create Strong relationship between client & Nidhi

company.

82
 Understanding the current scenario of the financial
planning in the indian market by the help of data analysis.

I found my study that trust factor is less in north region

,but in south region 80% peoples are invested their money
in nidhi bank apart from other institutions.

Annexure

HBF Savings Account

HBF NIDHI LTD offers an attractive savings account to our members with a
interest rate of 6% . We offers this savings account facility to our tie-up housing
society members where banking service/solution are not easy for senior citizen,
ladies & others.

83
Features of HBF Saving Account:
 Minimum amount of deposit for opening a Savings Account with a
minimum balance of Rs. 100 only which is to be maintained always.
 The money can be withdrawn and deposited by using withdrawal/Deposit
slip in the concerned branch(es) or on demand at your doorstep free of
charges*

 To enable the depositor to earn high rate of Interest below are the slabs
for Interest Rates provided:

Daily Minimum Balance Required Daily Minimum Balance Required

in your Account in your Account
Less than or Equal to Rs. 10,000/- @6% p.a.
For Rs. 10,001 and above @6% p.a.
 NEFT Transfers’ facility will also be provided for ease of transacting

 Loans will NOT be provided against the balance kept in HBF Savings
Account

Annexure
Fixed Deposit Non- Breakable Scheme
Earn attractive interest for various tenures on your deposits as listed under:
Interest Rate (Quarterly Interest Rate Citizen (Annual
Tenure
Compounding) Yield)
6 Months 7.297% 7.5%
12
7.40% 07.61%
Months
24
7.77% 08.00%
Months

84
 Interest Rate (Quarterly Interest Rate Citizen (Annual
Tenure
Compounding) Yield)
36 Months 8.14% 08.40%
48
8.59% 08.88%
Months
60
9.59% 09.95%
Months

Procedure for appointment of nominee:

 Individual, single or joint account holders can appoint nominee. Hindu
undivided family, trust, society etc. cannot appoint a nominee.
 The nominee must also be an individual.

 It is advisable to appoint a nominee as there will be less trouble in

transferring the money in an event of the account holder’s death.

 Only one person can be appointed as the nominee (in case of joint
accounts also).

Annexure
Fixed Deposit: Breakable Scheme
Earn attractive interest for various tenures on your deposits as listed under:

Interest Rate (Quarterly Interest Rate Citizen

Tenure
Compounding) (Annual Yield)
6 Months to 24
7.297% 7.5%
Months
Above 24 Months to
7.77% 8.00%
48 Months
Above 48 Months to 8.59% 08.88%
60 Months

85
 Interest Rate (Quarterly Interest Rate Citizen
Tenure
Compounding) (Annual Yield)

Procedure of Breaking Fixed Deposits at Branch

Level
 No foreclosure shall be allowed within 6 months of deposit.
 For foreclosure after 6 Months, request is to be submitted by
depositor at the branch mentioning that you want to break your
FD.

Earn attractive interest for various tenures on your deposits as listed under:
Interest Rate (Quarterly Interest Rate Citizen (Annual
Tenure
Compounding) Yield)
6 Months 7.297% 07.5%
12
7.65% 07.88%
Months
24
8.02% 08.27%
Months
36
8.49% 08.77%
Months
48
8.85% 09.15%
Months
60
9.94% 10.32%
Months

86
 Annexure

Bitiya Nidhi Dhan Yojana

Bitiya Nidhi Dhan Yojana (Scheme) is a fixed deposit scheme meant
exclusively to secure the future of your girl child. The scheme is meant to meet
the education and marriage expenses of a girl child.

Features of HBF Bitiya Nidhi Dhan Yojana

 Covers your girl child aging from 0 year – 25 Years 11 Months 29 days.
 Secure Your Daughter’s Future by saving for their Education, Marriage,
& other Financial Securities.

 Offers lucrative interest rates at 11% for a fixed tenure of 5 years.

 Allows you to Investment from INR 5000 to INR 10, 00,000 per girl
child.

87
  No Loan Facility is available because it’s especially for girl child.

 Tax is deducted at source, from interest on Fixed Deposits as applicable,

as per the Income Tax Act, 1961.

Annexure
MONTHLY INCOME PLAN (MIP)
HBF Nidhi , Monthly Income Plan assures guaranteed fixed monthly income for next 5 years.
The MIP offers both secure Fixed Deposits and regular monthly income with higher returns.

Normal Interest rate(Monthly Normal interest

Term
Compounding) rate(Annualized yield)
1 year 7.35% 7.6027%
2 year 7.46% 7.7204%
3 year 7.61% 7.88%
4 year 8.00% 8.30%
5 year 8.25% 8.5692%

88
  INTEREST SLAB FOR SR. CITIZENS
Senior citizen interest Senior citizen interest
Term
rate(Monthly Compounding) rate(Annualized yield)
1 year 7.61% 7.88%
2 year 7.72% 7.9991%
3 year 7.88% 8.17%
4 year 8.25% 8.5692%
5 year 8.50% 8.8391%
Normal interest
MONTHLY
INVESTMENT Term rate(Annualized
RECEIVED
yield)
1 cr 5 year 9% 75000
 The below illustration shows the amount received on monthly basis
against the investment made under Monthly Income Plan:

Te MONTHLY MATURIT
INVESTMENT
rm RECEIVED Y
5
1 cr 68750 1 cr
year
5
50 LAKH 34375 50 LAKH
year
5
15 LAKH 10312 15 LAKH
year
5
2.5 LAKH 1718 2.5 LAKH
year

89
 Te MONTHLY MATURIT
INVESTMENT
rm RECEIVED Y

Annexure

Recurring Deposit
HBF Nidhi Ltd. Recurring Deposit is designed to help you prepare for the
future. It enables you save regularly for a certain period of time with minimum
amount starting Rs. 1,000/- only and earn a higher interest rate. At the end of
pre-defined period you are paid back the lump sum including the principal and
interest.

Features:
 Minimum amount can be deposit Rs.1,000/- at regular intervals.
 The Period of deposit is minimum 1 year and maximum 5 years.

 The most attractive rate of interest of 8% p.a. with an effect of 1st Mar
2017.

 Providing the loan facility. The loan can be given up to 90% of the
amount standing the credit of the account holder.

 Recurring Deposit provides an option Any Time Money after 12 months.

Member can opt this option.

Interest rate
 Interest Rate @ 8% p.a.
 Interest Rate @ 8.25% p.a. in case of RD in name of Girl Child below
15yrs of age.

 Interest Rate @ 8.25% p.a. in case of RD of a Senior Citizen.

90
 Annexure
Survey Questionnaire

1. How would you rate the quality of banking services you currently use?
Very high quality High quality Neither high nor low
quality
Low quality Very low quality I don't use banking
services

2. When considering a new bank, what would be the top two things you
would generally consider? (Check two boxes.)
Price Brand Innovation Quality Value
Other (specify)

Do you think that your bank caters all your banking needs?
(a) Yes (b) No

Does your bank have core banking facility for the customers
(a) Yes (b) No

Do you think your bank offers competitive interest rate

(a) Yes (b) No

91
When do you think of your bank what comes first in your mind

a. Personalized service b. Wide branch network c. Customer service d.

Core banking

Do you currently have a financial adviser/financial planner?

(a) Yes (b) No

The six stages of a financial planning process are listed below. Please
rate at the scale of 1 to 5 how useful each of these stages are to you ( 1-
being the highest)

1 2
3 4 5

 Establish your short, medium and long term

 goals in life

 Work out what assets and liabilities you

 have

 Analyze & evaluate your financial status

 Develop your plan

 Implement your plan

 Monitor your plan and make necessary

92
 adjustments by reviews

How much would you be prepared to pay for the

preparation of a financial plan?

a. Nil b. Up to INR 500 c. Between INR 500 – 1000 d. Between

INR 1001- 2000
e. More than 2000

KYC Details

 Customer Name:
 Customer Contact Number:

What is your age?

20-25

26- 35

36-50

93
What is your marital status?

a. Single b. Married

Do you have children?

a. Yes b. No

Do you File ITR ?

a. Yes b. No

Thank-You!

94
Annexure

95
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100
101
THANK YOU

102