A RESEARCH REPORT

ON

“ANALYSIS OF MUTUAL FUND IN KASHI GOMTI SAYUKT GRAMIN

BANK”

Submitted in partial fulfillment for Award of Degree of

MASTER OF BUSINESS
ADMIMISTRATION

Session 2017-2018

Submitted to :- Submitted by :-
MR. RAMESH SINGH RAJ SONKAR

HOD, SHEAT MBA IV SEM

Varanasi Roll No- 1638470030

1
SHEAT COLLEGE OF ENGINEERING &
MANAGEMENT BABATPUR VARANASI

Affiliated to APJ Abdul Kalam University

Lucknow UP.

PREFACE

“Experience   is   the   best   teacher”.   The   saying   plays   a   very   pivotal   role   in   our

curriculum where in we try and understand the nuances of the theoretical world

with a blend of   practical experience. It’s very important to understand how and

where to implement what we have studied. Knowledge in itself is a continuous

process. Getting practiced knowledge is an important thing for existence for any

business concern in the competition prevailing in an industry a total awareness is

the first and foremost thing necessary from all aspects, working smarter seems to be

as important as working harder and longer.

I completed this project on “Analysis of Mutual Fund In Kashi Gomti Sayukt

Gramin   Bank  ” in part fulfillment of my MBA curriculum. The knowledge I

garnered through this exposure with the outside world will help me in taking a giant

leap towards understanding employee’s behavior and preferences.

2
 RAJ SONKAR

ACKNOWLEDGEMENT

With regard to my Research Report with ANALYSIS OF MUTUAL FUND on

KASHI GRAMIN BANK I would like to thank each and every one who offered help,

guideline and support whenever required.

I am extremely grateful to my guide, Mr. Ramesh Singh and Mr.

Deepak Dhavan for their valuable guidance and timely suggestions. I would like

to thank all faculty members of SHEAT College for the valuable guidance&

support.

I would also like to extend my thanks to my members and friends for their

support.

3
Raj Sonkar

4
 DECLERATION

I hereby declare that this Project Report entitled “ANALYSIS OF MUTUAL FUND

on KASHI GRAMIN BANK ” in the partial fulfillment of the requirement of Master

of Business Administration (MBA) of Sheat college of Engineering and

Management Babatpur Varanasi is based on primary & secondary data found by

me in various departments, books, magazines and websites & Collected by me in

under guidance of s Mr. Ramesh Singh AND Mr. Deepak Dhavan .

DATE: RAJ SONKAR

Place Varanasi Roll No.1638470030

5
 TABLE OF CONTENTS

SR. NO CONTENT PAGE NO

1 INTRODUCTION 7-10

2 EXECUTIVE SUMMARY 11-12

INTRODUCTION TO MUTUAL FUND

3 13-16
AND ITS VARIOUS ASPECTS.
HISTORY OF THE INDIAN MUTUAL
4 17-35
FUND INDUSTRY

5 COMPANY PROFILE 36-40

6 OBJECTIVES AND SCOPE 41-43-

7 RESEARCH METHODOLOGY 44-49

DATA ANALYSIS AND

8 50-59
INTERPRETATION

9 FINDINGS AND CONCLUSIONS 60-63

SUGGESTIONS &
64-66
10 RECOMMENDATIONS

6
11 BIBLIOGRAPHY 67

12 QUESTIONNIORE 68-70

7
Introduction

8
Definition

SEBI (Mutual Fund) Regulations 1993 defines Mutual Fund as “a fund established in

the form of a trust by a sponsor to raise money by the trustees through the

sale of units to the public under one or more schemes for investing

securities in accordance with these regulations” The rationale behind a

mutual fund is that there a large number of investors who lack the time and

or the skills to manage their money.

Hence, professional fund managers, acting on behalf of the Mutual Fund,

manage the investments (investor’s money) for their benefit in return for a

management fee. The organization that manages the investment is called

the Asset Management Company (AMC). Thus, a Mutual Fund is the most

suitable investment for the common person as it offers an opportunity to

invest in a diversified, professionally managed basket of securities at a

relatively low cost. Anybody with an investible surplus of as little as a few

thousand rupees can invest in mutual fund .Each mutual fund scheme has

defined investment objective and strategy.

A Draft offer documents is to be prepared for launching a fund. Typically, it

specifies the investment objectives of the fund, the risk associated, the

cost involved in the process and the broad rules for entry into and exit from

funds and others areas of operation. As you probably know, mutual funds
9
have become extremely popular over the last couple of decades what was

once just another obscure instrument is now part of daily lives. More than

80 million people or one half of the household in America invest in mutual

funds. That means that, in the United States alone, trillions of dollars alone

are invested in mutual fund. In fact, too many people, investing means

buying mutual funds After all, its common knowledge that investing in

mutual fund is (or at least should be) better than simply letting cash waste

away in a saving account but for most people, that’s where the

understanding of fund ends.

Mutual fund is a mechanism for pooling the resources by issuing unit to

the investors and investing funds in securities in accordance with the

objective as disclosed in offer document. Investment in securities is spread

across a wide section of industry and sector and the risk is reduced.

Diversification reduces the risk because all stock may or may not move in

the same direction in the same proportion to their proportion at the same

time. Mutual fund issues units to the investors in accordance with quantum

of money invested by them. Investor of mutual are called unit holders.The

profit or losses are shared by the investors in proportion to their

investment. The mutual fund usually comes out with a number of schemes

with different investment objectives which are launched from time to time.

10
A mutual fund is required to be registered with the SEBI, which regulates

securities markets before it can collect fund from the public.

A mutual fund is nothing more than a collective stock and /or bonds. You

can think of a mutual fund as a company that brings together a group of

people and invests their money in stock, bonds and other securities Each

investors owns shares which represent a portion of holding of the fund.

In India, SEBI (Mutual Fund) Regulations, 1996 regulates the structure of

mutual funds. Mutual funds in India are constituted in the form of a Public

Trust created under The Indian Trusts Act, 1882.

11
 EXECUTIVE SUMMARY

In few years Mutual Fund has emerged as a tool for ensuring one’s

financial well being. Mutual Funds have not only contributed to the India

growth story but have also helped families tap into the success of Indian

Industry. As information and awareness is rising more and more people

are enjoying the benefits of investing in mutual funds. The main reason the

number of retail mutual fund investors remains small is that nine in ten

people with incomes in India do not know that mutual funds exist. But once

people are aware of mutual fund investment opportunities, the number

who decide to invest in mutual funds increases to as many as one in five

people. The trick for converting a person with no knowledge of mutual

funds to a new Mutual Fund customer is to understand which of the

potential investors are more likely to buy mutual funds and to use the right

arguments in the sales process that customers will accept as important

and relevant to their decision.

This Project gave me a great learning experience and at the same time it

gave me enough scope to implement my analytical ability. The analysis

and advice presented in this Project Report is based on market research

on the saving and investment practices of the investors and preferences of

the investors for investment in Mutual Funds. This Report will help to know

12
about the investors’ Preferences in Mutual Fund means Are they prefer

any particular Asset Management Company (AMC), Which type of Product

they prefer, Which Option (Growth or Dividend) they prefer or Which

Investment Strategy they follow (Systematic Investment Plan or One time

Plan). This Project as a whole can be divided into two parts.

The first part gives an insight about Mutual Fund and its various aspects,

the Company Profile, Objectives of the study, Research Methodology. One

can have a brief knowledge about Mutual Fund and its basics through the

Project.

The second part of the Project consists of data and its analysis collected

through survey. For the collection of Primary data I made a questionnaire

and survey. This Project covers the topic “ANALYSIS OF MUTUAL

FUND on KASHI GRAMIN BANK.” The data collected has been well

organized and presented. I hope the research findings and conclusion will

be of use.

13
INTRODUCTION TO MUTUAL FUND AND ITS VARIOUS ASPECTS.

Mutual fund is a trust that pools the savings of a number of investors who

share a common financial goal. This pool of money is invested in

accordance with a stated objective. The joint ownership of the fund is thus

“Mutual”, i.e. the fund belongs to all investors. The money thus collected is

then invested in capital market instruments such as shares, debentures

and other securities. The income earned through these investments and

the capital appreciations realized are shared by its unit holders in

proportion the number of units owned by them. Thus a Mutual Fund is the

most suitable investment for the common man as it offers an opportunity to

invest in a diversified, professionally managed basket of securities at a

relatively low cost. A Mutual Fund is an investment tool that allows small

investors access to a well-diversified portfolio of equities, bonds and other

securities. Each shareholder participates in the gain or loss of the fund.

Units are issued and can be redeemed as needed. The funds Net Asset

value (NAV) is determined each day.

Investments in securities are spread across a wide cross-section of

industries and sectors and thus the risk is reduced. Diversification reduces

the risk because all stocks may not move in the same direction in the

same proportion at the same time. Mutual fund issues units to the

14
investors in accordance with quantum of money invested by them.

Investors of mutual funds are known as unit holders.

When an investor subscribes for the units of a mutual fund, he becomes

part owner of the assets of the fund in the same proportion as his

contribution amount put up with the (the total amount of the fund). Mutual

Fund investor is also known as a mutual fund shareholder or a unit holder.

Any change in the value of the investments made into capital market

instruments (such as shares, debentures etc) is reflected in the Net Asset

Value (NAV) of the scheme. NAV is defined as the market value of the

Mutual Fund scheme's assets net of its liabilities. NAV of a scheme is

calculated by dividing the market value of scheme's assets by the total

number of units issued to the investors.

15
ADVANTAGES OF MUTUAL FUND

 Portfolio Diversification

 Professional management

 Reduction / Diversification of Risk

 Liquidity

 Flexibility & Convenience

 Reduction in Transaction cost

 Safety of regulated environment

 Choice of schemes

 Transparency.

16
DISADVANTAGE OF MUTUAL FUND

 No control over Cost in the Hands of an Investor

 No tailor-made Portfolios

 Managing a Portfolio Funds

 Difficulty in selecting a Suitable Fund Scheme

17
HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit

Trust of India, at the initiative of the Government of India and Reserve

Bank. Though the growth was slow, but it accelerated from the year 1987

when non-UTI players entered the Industry.

In the past decade, Indian mutual fund industry had seen a dramatic

improvement, both qualities wise as well as quantity wise. Before, the

monopoly of the market had seen an ending phase; the Assets Under

Management (AUM) was Rs67 billion. The private sector entry to the fund

family raised the Aum to Rs. 470 billion in March 1993 and till April 2004; it

reached the height if Rs. 1540 billion.

The Mutual Fund Industry is obviously growing at a tremendous space

with the mutual fund industry can be broadly put into four phases

according to the development of the sector. Each phase is briefly

described as under.

First Phase – 1964-87

18
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament

by the Reserve Bank of India and functioned under the Regulatory and

administrative control of the Reserve Bank of India. In 1978 UTI was de-

linked from the RBI and the Industrial Development Bank of India (IDBI)

took over the regulatory and administrative control in place of RBI. The first

scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI

had Rs.6,700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by

public sector banks and Life Insurance Corporation of India (LIC) and

General Insurance Corporation of India (GIC). SBI Mutual Fund was the

first non- UTI Mutual Fund established in June 1987 followed by Canbank

Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian

Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda

Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while

GIC had set up its mutual fund in December 1990.At the end of 1993, the

mutual fund industry had assets under management of Rs.47,004 crores.

19
Third Phase – 1993-2003 (Entry of Private Sector Funds)

1993 was the year in which the first Mutual Fund Regulations came into

being, under which all mutual funds, except UTI were to be registered and

governed. The erstwhile Kothari Pioneer (now merged with Franklin

Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more

comprehensive and revised Mutual Fund Regulations in 1996. The

industry now functions under the SEBI (Mutual Fund) Regulations 1996.

As at the end of January 2003, there were 33 mutual funds with total

assets of Rs. 1,21,805 crores.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963

UTI was bifurcated into two separate entities. One is the Specified

Undertaking of the Unit Trust of India with assets under management of

Rs.29,835 crores as at the end of January 2003, representing broadly, the

assets of US 64 scheme, assured return and certain other schemes

20
The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and

LIC. It is registered with SEBI and functions under the Mutual Fund

Regulations. consolidation and growth. As at the end of September, 2004,

there were 29 funds, which manage assets of Rs.153108 crores under 421

schemes.

Structure of the Indian mutual fund industry:

The Indian mutual fund industry is dominated by the Unit Trust of India and

which has a total corpus of Rs 700bn collected from more than 20 million

investors .The UTI has many fund /schemes in all categories i.e. equity,

balanced, income etc with some being open ended and some being closed

ended. The United Scheme 1964 commonly referred to as US64, which is

a balanced fund, is the biggest scheme with a corpus of about Rs 200bn

URI was floated by financial institution and is governed by a special act of

the parliament. Most of its investors believe that the UTI is government

owned and controlled, which, while legally incorrect, is true for all practical

purposes.

The second largest categories of mutual funds are the ones floated by

nationalized banks. Can bank Asset management floated by Canara Bank

and SBI Funds Management floated by the State Bank of India are the

largest of these. GIC AMC floated by General Insurance Corporation and

21
Jeevan Bima Sahayog AMC floated by the LIC are some of the prominent

ones. The aggregate corpus of funds managed by this category of AMC’s

is about Rs 150 billion

The third largest categories of the mutual funds are the once floated by the

private sector and by the foreign asset management companies. The

largest of these are Prudential ICICI AMC and Birla SUN LIFE AMC. The

aggregate corpus of the asset managed by this category of AMC s is in

excess of Rs 250bn.

Recent trends in the mutual fund industry:

The most important in the mutual fund industry is the aggressive

expansion of the foreign owned mutual fund companies and the decline of

the companies floated by the nationalized bank and smaller private sector

players. Many nationalized banks got into the mutual fund business in the

early nineties and go off to a good start due to the stock market boom

prevailing then. These banks did not really understand the mutual fund

business and they just viewed it as another kind of banking activity. Few

hired specialized staff and generally choose to transfer staff from the

parent organization. Some schemes had offered guaranteed returns and

their patent organization had to bail out these AMCs by paying large

amount of money the difference between the guaranteed and actual

22
returns. The service level was also bad. Most of these AMCs have not

been able to retain staffs, float, and new schemes etc. and it is doubtful

whether barring a few expectations, they have serious plans of continuing

the activity in a major way.

The experience of some of the AMCs floated by private sector Indian

companies was also very similar. They quickly realized that the AMCs

business is a business, which makes money in the long term and requires

deep pocketed support in the intermediate years. Some have sold out to

foreign owned companies, some have merged with the others and there is

general restructuring going on.

The foreign owned companies have deep pockets and have come in here

with the expectation of a long haul. They can be credited with introducing

many new practices such as new product innovation, sharp improvement

in the service standards and disclosure, usage of technology, broker

education etc. In fact, they have forced the industry to upgrade itself and

service levels of the organization like UTI have improved dramatically in

the last few years in response to the competition provided by these.

23
Future scenario:

The asset base will continue to grow at an annual rate of about 30 to 35%

over the next few years as investor’s shift their asset from banks and other

traditional avenues. Some of the older public and private sector players

will either close or be taken over.Out of ten public sectors players five will

sell out, close down or merge with strong players in three to four years. In

the private sector this trend has already started with two mergers and one

takeover. Here too some of them will down their shutter in the near future

to come. But this does not mean there is no room for other players. The

market will witness a flurry of new players entering the area. There will be

a large number of offers from various asset management companies in

times to come. Some big names like Fidelity, Principal and Old Mutual etc.

are looking at Indian market seriously.The mutual fund industry is awaiting

the derivation in India as this would enable it to hedge its risk and this in

turn would be reflected in its Net Asset Value (NAV).

SEBI is working out the norms for enabling the existing mutual fund

scheme to trade in derivatives. Importantly, many market players have

called on the Regulator to initiate the process immediately, so that the

mutual funds can implement the changes that are required to trade in

derivates.

24
Role of SEBI in mutual fund:

In the year 1992 SEBI act was passed. The objectives of SEBI are – to

protect the interest of investors in securities, to promote the development

of, and to regulate the securities market. As far as mutual are concerned,

SEBI formulates policies and regulation the mutual fund to protect the

interest of the investors. SEBI notified regulation for mutual funds in 1993.

Thereafter mutual fund sponsored by private sector entities were allowed

to enter the capital market. The regulations were fully revised in 1996 and

been amended. Therefore, from time to time SEBI has also issued

guidelines to the mutual fund from time to time to protect the interest of the

investors.

All mutual funds whether promoted by public sector or private sector

entities including those promoted by foreign entities are governed by the

same set of regulation. There is no distinction in regulatory requirement of

the mutual fund and all are subject to monitoring and inspecting by SEBI.

The risks associated with the scheme launched by mutual funds

sponsored by these entities are of similar type.

25
CATEGORIES OF MUTUAL FUND:

26
Mutual funds can be classified as follow :

 Based on their structure:

27
 Open-ended funds: Investors can buy and sell the units from the

fund, at any point of time.

 Close-ended funds: These funds raise money from investors only

once. Therefore, after the offer period, fresh investments can not be made

into the fund. If the fund is listed on a stocks exchange the units can be

traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of

the New Fund Offers of close-ended funds provided liquidity window on a

periodic basis such as monthly or weekly. Redemption of units can be

made during specified intervals. Therefore, such funds have relatively low

liquidity.

 Based on their investment objective:

Equity funds: These funds invest in equities and equity related

instruments. With fluctuating share prices, such funds show volatile

performance, even losses. However, short term fluctuations in the market,

generally smoothens out in the long term, thereby offering higher returns

at relatively lower volatility. At the same time, such funds can yield great

capital appreciation as, historically, equities have outperformed all asset

classes in the long term. Hence, investment in equity funds should be

considered for a period of at least 3-5 years. It can be further classified as:

28
 i) Index funds- In this case a key stock market index, like BSE Sensex

or Nifty is tracked. Their portfolio mirrors the benchmark index both in

terms of composition and individual stock weightages.

ii) Equity diversified funds- 100% of the capital is invested in equities

spreading across different sectors and stocks.

iii|) Dividend yield funds- it is similar to the equity diversified funds

except that they invest in companies offering high dividend yields.

iv) Thematic funds- Invest 100% of the assets in sectors which are

related through some theme.

e.g. -An infrastructure fund invests in power, construction, cements sectors

etc.

v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A

banking sector fund will invest in banking stocks.

vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the

investors.

Balanced fund:

Their investment portfolio includes both debt and equity. As a result, on

the risk-return ladder, they fall between equity and debt funds. Balanced
29
funds are the ideal mutual funds vehicle for investors who prefer spreading

their risk across various instruments. Following are balanced funds

classes:

i) Debt-oriented funds -Investment below 65% in equities.

ii) Equity-oriented funds -Invest at least 65% in equities, remaining in

debt.

Debt fund: They invest only in debt instruments, and are a good option for

investors averse to idea of taking risk associated with equities. Therefore,

they invest exclusively in fixed-income instruments like bonds, debentures,

Government of India securities; and money market instruments such as

certificates of deposit (CD), commercial paper (CP) and call money. Put

your money into any of these debt funds depending on your investment

horizon and needs.

i) Liquid funds- These funds invest 100% in money market instruments, a

large portion being invested in call money market.

ii) Gilt funds ST- They invest 100% of their portfolio in government

securities of and T-bills.

30
iii) Floating rate funds - Invest in short-term debt papers. Floaters invest

in debt instruments which have variable coupon rate.

iv) Arbitrage fund- They generate income through arbitrage opportunities

due to mis-pricing between cash market and derivatives market. Funds are

allocated to equities, derivatives and money markets. Higher proportion

(around 75%) is put in money markets, in the absence of arbitrage

opportunities.

v) Gilt funds LT- They invest 100% of their portfolio in long-term

government securities.

vi) Income funds LT- Typically, such funds invest a major portion of the

portfolio in long-term debt papers.

vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt

and an exposure of 10%-30% to equities.

viii) FMPs- fixed monthly plans invest in debt papers whose maturity is in

line with that of the fund.

INVESTMENT STRATEGIES:

31
1. Systematic Investment Plan: under this a fixed sum is invested each

month on a fixed date of a month. Payment is made through post dated

cheques or direct debit facilities. The investor gets fewer units when the

NAV is high and more units when the NAV is low. This is called as the

benefit of Rupee Cost Averaging (RCA)

2. Systematic Transfer Plan: under this an investor invest in debt

oriented fund and give instructions to transfer a fixed sum, at a fixed

interval, to an equity scheme of the same mutual fund.

3. Systematic Withdrawal Plan: if someone wishes to withdraw from a

mutual fund then he can withdraw a fixed amount each month.

RISK V/S. RETURN:

32
 MAJOR PLAYERS

1. Bank Sponsored

1. Joint Ventures - Predominantly Indian

1. SBI Funds Management Private Ltd.

2. Others

1. BOB Asset Management Co. Ltd.

2. Canbank Investment Management Services Ltd.

33
 3. UTI Asset Management Co. Private Ltd.

2. Institutions

1. Jeevan Bima Sahayog Asset Management Co. Ltd.

3. Private Sector

1. Indian

1. Benchmark Asset Management Co. Private Ltd.

2. Cholamandalam Asset Management Co. Ltd.

3. Credit Capital Asset Management Co. Ltd.

4. Escorts Asset Management Ltd.

5. J. M. Financial Asset Management Private Ltd.

6. Kotak Mahindra Asset Management Co. Ltd.

7. Reliance Capital Asset Management Ltd.

8. Sahara Asset Management Co. Private Ltd

9. Sundaram Asset Management Co. Ltd.

10. Tata Asset Management Ltd.

2. Joint Ventures - Predominantly Indian

1. Birla Sun Life Asset Management Co. Ltd.

2. DSP Merrill Lynch Fund Managers Ltd.

34
 3. HDFC Asset Management Co. Ltd.

4. Prudential ICICI Asset Management Co. Ltd.

3. Joint Ventures - Predominantly Foreign

1. ABN AMRO Asset Management (India) Ltd.

2. Deutsche Asset Management (India) Private Ltd.

3. Fidelity Fund Management Private Ltd.

4. Franklin Templeton Asset Management (India) Private Ltd.

5. HSBC Asset Management (India) Private Ltd.

6. ING Investment Management (India) Private Ltd.

7. Morgan Stanley Investment Management Private Ltd.

8. Principal Pnb Asset Management Co. Private Ltd.

9. Standard Chartered Asset Management Co. Private Ltd

Who can invest?

Who can invest in Mutual Funds in India:

First of all, distributors need to be aware of who mutual fund units.

Mutual funds in India are open to investment by

1) Residents including:

a) Resident Indian Individuals.

35
b) Indian Companies/Partnership Firms.

c) Indian Trust/Charitable Institutions.

d) Banks/Financial Institutions.

e) Non-Banking Finance Companies.

f) Insurance Companies.

g) Provident funds.

h) Mutual funds.

2) Non-Residents including:

 Non-Resident Indians, and Persons of Indian Origin.

 Overseas Corporate Bodies (OCBs) and

3) Foreign entities, viz.

 Foreign Institutional Investors(FII) registered with SEBI.

 Foreign citizens/ entities are not allowed to invest in mutual
funds in India.

36
 COMPANY PROFILE

Kashi Gomti Sayukt Gramin bank

Mahatma Gandhi once said "Eighty percent of the Indian population lives in
villages and most of them live below poverty line. We should therefore formulate
such plans and schemes which are beneficial to weakest person of the society also.
If the poor people are not brought into mainstream of development, the total
development of India will not be possible." Our Prime Minister Late Mrs. Indira
Gandhi initially nationalized 14 commercial banks with the intention that these
institutions would float credit in social activities and rural development. But after
06 years of nationalization she realized that nothing concrete could be achieved.
She then brought in an ordinance on 2nd October,1975 (Date of Birth of our
beloved Bapu and Lal Bahadur Shastri ji) to set up the Regional Rural Banks with
the object to accelerate the development of rural economy. The aim was to attain
upliftment of the poor, the neglected and the down trodden people by channelizing
the flow of credit to the rural areas. The Regional Rural Banks were local in
structure and were based at the District level. The Lead Banks were given the
responsibility of sponsoring these RRBs. The paid up capital was subscribed by the
central government, sponsoring bank and state government in the ratio of
50:35:15.In a slow but steady process 196 RRBs were established in 615 districts
across the country. The ordinance of 2nd October,1975 came to be recognized as
Regional Rural Banks Act,1976.Union Bank of India was sponsoring 3 RRBs in the
state of Uttar Pradesh. These three Banks were Kashi Gramin Bank, Gomti Gramin
Bank and Samyut Kshetriya Gramin Bank.

37
Samyut Kshetriya Gramin Bank, with its headquarter at Azamgarh was established
on January 06, 1976. It covered 4 districts (Azamgarh, Ghazipur, Mau and
Ambedkar Nagar) with a network of 168 branches and 5 extension counters. Gomti
Gramin Bank was established on 30th March, 1981 with its Head Office at
Jaunpur. It had 84 branches covering 6 tehsils and 21 blocks.
Kashi Gramin Bank headquartered in Varanasi was established on 28th July 1981.
In 2004 the Kashi Gramin Bank was rated as one of the top SIX RRBs in the
country. With the onset of Globalization and financial reforms all over the world,
self dependency became the keyword in banking industry. This scenario put
pressure on RRBs also which were hitherto concentrated on social banking.
Banking industry was very intensively growing and RRBs had to face extreme
competitive environment as soon as they tried to capture the non target group
customers. India was rapidly sailing on the tides of financial reforms. The banking
industry was trying to make big bases by way of consolidation. There were no
choices left to Government of India than to consolidate the RRBs. In this process
the government of India embarked upon a process of amalgamation of RRBs which
were adjacently situated and sponsored by the same sponsoring bank and In this
process Kashi Gramin Bank, Gomti Gramin Bank and Samyut Kshetriya Gramin
Bank sponsored by Union Bank of India in U.P. were amalgamated by GOI vide its
notification No.SO-1264(E) on 12th September 2005. Thus came into existence the
"Kashi Gomti Samyut Gramin Bank"

On 12th September 2005, the bank owned a fund of Rs.232.50 Crore with deposits
to the tune of Rs.2137.87 Crore. Advances of Rs.648.27 Crore and a CD ratio of
30% as on 12th Sep'05.The bank also achieved the landmark of converting its 100
percent branches on Core Banking Platform. This was a historical event in banking
industry that a RRB had achieved such a technical up gradation of its services and
that too in a record time.

38
39
 Vision

“To become the most preferred bank with commitment towards social
responsibility and enhancement of value of all stake holders through
customer centric approach by adopting noble ways of banking,
modern technology And good corporate governance.”

40
Board of directors

41
 OBJECTIVES AND SCOPE

OBJECTIVES OF THE STUDY

42
1. To find out the Preferences of the investors for Asset Management

Company.

2. To know the Preferences for the portfolios.

3. To know why one has invested or not invested in Mutual fund

4. To find out the most preferred channel.

5. To find out what should do to boost Mutual Fund Industry.

Scope of the study

A big boom has been witnessed in Mutual Fund Industry in recent times. A

large number of new players have entered the market and trying to gain

market share in this rapidly improving market.

The research was carried on in Varanasi. I had been sent at one of the

branch of ANGEL BROKING (SMART MONEY) where I completed my

Project work. I surveyed on my Project Topic “ANALYSIS OF MUTUAL

FUND on KASHI GRAMIN BANK ” on the visiting to individual &

government offices employee.

The study will help to know the interest & preferences of the customers,

which company, portfolio, mode of investment, option for getting return and

43
so on they prefer. This project report may help the company to make

further planning and strategy.

44
 Research Methodology

RESEARCH METHODOLOGY

45
This report is based on primary as well secondary data, however primary

data collection was given more importance since it is overhearing factor in

attitude studies. One of the most important users of research methodology

is that it helps in identifying the problem, collecting, analyzing the required

information data and providing an alternative solution to the problem .It

also helps in collecting the vital information that is required by the top

management to assist them for the better decision making both day to day

decision and critical ones.

Data sources:

Research is totally based on primary data. Secondary data can be used

only for the reference. Research has been done by primary data collection,

and primary data has been collected by interacting with various people.

The secondary data has been collected through various journals and

websites.

Duration of Study:

The study was carried out for a period of two months, from December

2017 to march 2018 in Varanasi .

46
Sampling:

 Sampling procedure:

The sample was selected of them who are the Businessman/govt.

employee, irrespective of them being investors or not or availing the

services or not. It was also collected through personal visits to persons, by

formal and informal talks and through filling up the questionnaire prepared.

The data has been analyzed by using mathematical/Statistical tool.

 Sample size:

The sample size of my project is limited to 100 people only. Out of which

only 10 people had invested in Mutual Fund. Other 90 people did not have

invested in Mutual Fund.

 Sample design:

Data has been presented with the help of bar graph, line graphs etc.

47
SWOT Analysis of the organization:-

SWOT analysis of organizations to provide recommendations on their

performance and growth potential. It is a powerful tool for analyzing both

complex qualitative and quantitative facets of an investment decision.

The results of this analysis have been fed into marketing and

organizational strategic plans and have been highly successful in strategy

formulation.

Through our SWOT analysis, our clients have been able to take advantage

of niche markets and focus on product innovation which allows them to

capture greater margins.

Our SWOT analysis identifies strengths and weaknesses and relates them

with forward looking opportunities and threats. This helps to identify

company and industry specific critical drivers and catalysts.

SWOT Analysis identifies your company’s:

Strengths - to build on

Weaknesses - to cover

Opportunities - to capture

Threats - to defend against.

SWOT Analysis
48
Strengths:

* Rich experience of the management.

* Good brand equity

* Giving the very good return from inception

* Stabilized and loyal clients.

* Well combination of new energetic and experienced employees.

* Wide variety of investment product to match with every level of customer

* Giving the mutual fund exposure

Weakness:

* People is not interested to invest in mutual fund & equity because risk &

trust.

* People not detail knowledge about mutual funds.

* Not very popular in rural area.

Opportunities:

* Stability through increased brand awareness, market penetration and

Service offerings.

* Across all categories of financial services.

* Increase in customer’s wallet share.

* 6 pay commission.

Threats;

* Increasing interest rate scenario.

49
* Execution risk.

* Competition from local players.

* Rising inflation could reduce savings and investments

Limitation:

 Some of the persons were not so responsive.

 Possibility of error in data collection because many of investors may

have not given actual answers of my questionnaire.

 The sample size may not adequately represent the whole market.

 Some respondents were reluctant to divulge personal information

which can affect the validity of all responses.

 The research is confined to a certain Govt. Dept. & part of

Varanasi.

50
Data Analysis

&

Interpretation

51
ANALYSIS & INTERPRETATION OF THE DATA

1. On the basis of Age of the Investors:

Age <= 31-35 36-40 41-45 46-50 >50

Group 30

No. of 0 4 3 2 1 0

Investors

Interpretation:

According to this chart out of 10 Mutual Fund investors of Auranagabad the most are

in the age group of 31-35 yrs. i.e. 40%, the second most investors are in the age group

of 36-40yrs i.e. 30% and the least investors are in the age group of below 46-50 yrs.

52
2. Occupation of the investors of Varanasi.

Occupation No. of Investors

Govt. Service 3
Pvt. Service 4
.
Business 2
Agriculture 0
Others 1

Interpretation:

In Occupation group out of 10 investors, 40% are Pvt. Employees, 20% are

Businessman, 30% are Govt. Employees, 0% are in Agriculture and 10% are in others.

(3) Investors invested in different kind of investments of Varanasi.

53
 Priority of Investments No. of Respondents %
Saving A/C 98
Fixed deposits 50
Insurance 99
Mutual Fund 10
RD 45
Real Estate 35

Interpretation: From the above graph it can be inferred that out of 200 people, 98 %

people have invested in Saving A/c, 91.6% in Insurance, 51.6% in Fixed Deposits, 11%

in Mutual Fund, 43% in RD and 21.6% in Real Estate.

4. Educational Qualification of investors of Varanasi.

Educational Qualification Number of Investors

Graduate/ Post Graduate 5

54
Under Graduate 2

Others 3

Total 120

55
 Interpretation:

Out of 120 Mutual Fund investors 50% of the investors in Varanasi are

Graduate/Post Graduate, 20% are Under Graduate and 30% are others (under

HSC).

4. Preference of factors while investing

Factors (a) Liquidity (b) Low Risk (c) High Return (d) Trust

No. of 10 31 40 19

Respondents

56
Interpretation:

57
 Out of 100 People, 40% People prefer to invest where there is High Return, 31%

prefer to invest where there is Low Risk, 10% prefer easy Liquidity and 19% prefer

Trust

5. Awareness about Mutual Fund and its Operations

Response Yes No
No. of Respondents 35 55

Interpretation:

58
 From the above chart it is inferred that 39% People are aware of Mutual Fund and

its operations and 61% are not aware of Mutual Fund and its operations.

6. Channel Preferred by the Investors for Mutual Fund Investment

Channel Financial Advisor Bank AMC

No. of Respondents 6 1 3

Interpretation:

Out of 10 Investors 60% preferred to invest through Financial Advisors, 30%

through AMC and 10% through Bank.

59
7. Preference of Investors for future investment in Mutual Fund

Name of AMC No. of Investors

SBIMF 30
Kashi Gramin Bank 14
HDFC 10
Reliance 20
ICICI Prudential 16
Kotak 6
Others 4

Interpretation:

60
 Out of 100 investors, 20% prefer to invest in Reliance, 16% in ICICI Prudential,

30% in SBIMF, 4% in Others, 6% in Kotak, 14% in Kashi Gramin Bank and 10%

in HDFC Mutual Fund.

8. Source of information for customers about Mutual Fund

Source of information No. of Respondents

Advertisement 13
Peer Group 25
Bank 30
Financial Advisors 42

Interpretation:

From the above chart it can be inferred that the Financial Advisor is the most

important source of information about Mutual Fund. Out of 100 Respondents,

42% know about Mutual fund Through Financial Advisor, 30 % through Bank,

25% through Peer Group and 13% through Advertisement.

61
Findings and

Conclusion

62
 Findings

 In Varanasi in the Age Group of 36-40 years were more in numbers.

 The second most Investors were in the age group of 41-45 years and the

least were in the age group of below 45-50 years.

 In Occupation group most of the Investors were Private employees., the

second most Investors were Govt. employees

 About all the Respondents had a Saving A/c in Bank, 98% Invested in

Fixed Deposits,50% Invested in insurance, Only 99% Respondents

invested in Mutual fund 10%.

 Among 100 Respondents only 10% had invested in Mutual Fund.

 Out of 90 Respondents 61% were not aware of Mutual Fund, 39% told

there is not any specific reason for not invested in Mutual Fund.

 For Future investment the maximum Respondents preferred SBI Mutual

Fund, the second most preferred Reliance, ICICI Prudential has been

preferred after them.

 Mostly Respondents preferred High Return while investment, the

second most preferred Low Risk then trust and the least preferred

Liquidity.

63
 Only 61% Respondents were aware about Mutual fund and its

operations and 39% were not.

 Among 100 Respondents only 10% had invested in Mutual Fund and

40% did not have invested in Mutual fund.

 Most of the Investors had invested in SBI or Reliance Mutual Fund,

ICICI Prudential has also good Brand Position among investors.

 60% Investors preferred to Invest through Financial Advisors, 30%

through AMC (means Direct Investment) and 10% through Bank.

64
 Conclusion

Running successful Mutual Funds requires complete understanding of the peculiarities

of the Indian Stock Market and also the psyche of the small investors. This study has

made an attempt to understand the financial behavior of Mutual Fund investors in

connection with the preferences of Brand (AMC), Products, Channels etc. I observed

that many of people have fear of Mutual Fund. They think their money will not be

secure in Mutual Fund. They need the knowledge of Mutual Fund and its related terms.

Many of people do not have invested in mutual fund due to lack of awareness although

they have money to invest. As the awareness and income is growing the number of

mutual fund investors are also growing.

“Brand” plays important role for the investment. People invest in those Companies

where they have faith or they are well known with them. There are many AMCs in

Varanasi but only some are performing well due to Brand awareness. Some AMCs are

not performing well although some of the schemes of them are giving good return

because of not awareness about Brand. Reliance, UTI, SBIMF, ICICI Prudential etc.

they are well known Brand, they are performing well and their Assets Under

Management is larger than others whose Brand name are not well known like Principle,

65
Sunderam, etc.Distribution channels are also important for the investment in mutual

fund. Financial Advisors are the most preferred channel for the investment in mutual

fund. They can change investors’ mind from one investment option to others. Many of

investors directly invest their money through AMC because they do not have to pay

entry load. Only those people invest directly who know well about mutual fund and its

operations and those have time.

Suggestions and

Recommendations

66
Suggestions and Recommendations

 The most vital problem spotted is of ignorance. Investors should be made

aware of the benefits. Nobody will invest until and unless he is fully convinced.

Investors should be made to realize that ignorance is no longer bliss and what they are

losing by not investing.

 Mutual funds offer a lot of benefit which no other single option could offer. But

most of the people are not even aware of what actually a mutual fund is? They only see

it as just another investment option. So the advisors should try to change their

mindsets. The advisors should target for more and more young investors. Young

investors as well as persons at the height of their career would like to go for advisors

due to lack of expertise and time.

67
 Mutual Fund Company needs to give the training of the Individual Financial

Advisors about the Fund/Scheme and its objective, because they are the main source

to influence the investors.

 Before making any investment Financial Advisors should first enquire

about the risk tolerance of the investors/customers, their need and time (how long they

want to invest). By considering these three things they can take the customers into

consideration.

 Younger people aged under 35 will be a key new customer group into the

future, so making greater efforts with younger customers who show some interest in

investing should pay off..

 Systematic Investment Plan (SIP) is one the innovative products launched by

Assets Management companies very recently in the industry. SIP is easy for monthly

salaried person as it provides the facility of do the investment in EMI. Though most of

the prospects and potential investors are not aware about the SIP. There is a large

scope for the companies to tap the salaried persons.

68
69
 BIBLIOGRAPHY

 NEWS PAPERS

 TELEVISION CHANNEL

 MUTUAL FUND HAND BOOK

 FACT SHEET AND STATEMENT

 WWW.SBIMF.COM

 WWW.MONEYCONTROL.COM

 WWW.AMFIINDIA.COM

 WWW.ONLINERESEARCHONLINE.COM

 WWW. MUTUALFUNDSINDIA.COM

”MUTUAL FUND INVESTMENT IS SUBJECT TO MARKET

RISKS. PLEASE READ THE OFFER DOCUMENT CAREFULLY

BEFORE INVESTING

70
 QUESTIONNAIRE

Analysis of mutual funds In Kashi Gomti Sayukt Gramin Bank .

Name :………………………………………………

Education ………………………………………………………………..

Address :………………………………………………

Telephone No. :………………………………………………

Date of Birth :………………………………………………

Occupation :……………………………………………...

Company/Business Name :……………………………………………..

Designation :……………………………………………..

Income per month (<10,000) (10-15) (15-20) (20-30)

Vehicle Owned :……………………………………………..

Interested in : Personal Financial Planning.

Equity
Mutual Funds
Retirement Plans
Child Education plans
Term Insurance Plans
Med claim/Health insurance plans
Vehicle/Property insurance
Personal/ Business loans
Homes loans

Period of call back :……………………………………………

71
1. What is the Age of Investors? Mention Yours.

a. 20-30 ______ b. 30-40 ______

c. 40-50 ______ d. 50-Above _____

2. Had you ever invested in different kind of Investment?

a. Saving A/C ______ b. FD ______

c. Insurance ______ d. Mutual Funds _____

3. What is your educational qualification?

a. Post Graduate ______ b. Graduate ______

c. Under Graduate ______ d. Others _____

4. In Which Preference do you like to Invest ?

a. Liquidity ______ b. Low risk ______

c. High return ______ d. Trust _____

5. Which mutual fund you will like to Invest ?

_____________________________________________
72
Specify Your Answer:

6. What is Your Source of Information to know about the Mutual fund?

a. Advertisement ______ b. TV ______

c. Friends ______ d. Others _____

7. How did you Aware about the Mutual fund?

______________________________________

Specify In words:

8. Which channel do you prefer about the Mutual fund?

a. Bank ______ b. AMC ______

c. Financial advisor ______ d. Others _____

*************

73