A Project Report

On
“ASSET LIABILITY MANAGEMENT”
Submitted in partial fulfillment of the
requirement for t he award o the degree of
MASTERS OF BUSINESS ADMINISTRATION
In
Finance
Under
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

***
Submitted
By
M. SARITHA
(16D21E0026)
Under guidance of
Mrs. PADMAVATI
Asst Professor

DEPARTMENT OF MANAGEMENT STUDIES

SRIDEVI WOMEN’S ENGINEERING COLLEGE
(Affiliated to Jawaharlal Nehru Technological University Hyderabad)
(2016-2018)
 Date: 23.07.2017

Certificate of Project Completion

This is to certify that Ms. MUTHANGI. SARITHA, bearing Hall ticket No:
16D21E0026, MBA. SRIDEVI WOMEN’S ENGINEERING COLLEGE,
VATTINAGULAPALLY, Near Gandipet, Ranareddy (Dt, has successfully completed
her project on “ASSET LIABILITY MANAGEMENT” as part of the Academic
course circular in our organization.

She has done the project during the period 19/05/2014 to 19.08.2014, under the
guidance of Mr. UDAY KOTAK, Asst. Manager Finance, in Kotak Mahindra Bank
Ltd, Hyderabad.

She has completed the assigned project well within the time frame. She is
sincere, hard working and her conduct during the period is commendable.

We wish all the best in her future endeavours.

For KOTAK MAHINDRA BANK

Asst. Manager Finance,

KOTAK MAHINDRA BANK
 ACKNOWLEDGMENT

I would like to express my gratitude for all the people who extended unending
support at all the stages of the project.
I would also thank my project guide Uday Kotak (Asst Manger finance) for is
support and co-operation during the course of project.
I wish to express my sincere thanks to Dr. BL Malleshwari Principal Sridevi
Womens Engineering College, and B. Subbarao Head of the Department of
Mangement studies and I thank my faculty guide Mrs. Padmavati (Asst. Professor)
Department of Management studies, Sridevi Womens Engineering College for his
valuable inputs and guidance provided throughout my project.
Last but not the least, I would also thank to all the employees of “Kotak
Mahindra Bank” who have directly or indirectly contributed to the successful
completion of the project.

M. SARITHA
16D21E0026
 DECLARATION

I M. Saritha here by declares that the Project work entitled “Asset Liability
Management” is an authenticated work carriers out by me Kotak Mahindra Bank.
Under guidance of Mrs. Padmavathi for the partial fulfillment of the award of the
degree of “Masters of Business Administration” and this work has not been submitted
for similar purpose any were else expect to Department of Management Studies,
Sridevi Women’s Engineering College, Affiliated to Jawaharlal Nehru Technological
University, Hyderabad.

Place:
Date:
M. SARITHA
 INDEX

S.NO CONTENT PAGE NO.

1. Introduction 1
1.1 Need of the study 2
1.2 Scope of the study 2
1.3 Objective of the Study 3
1.4 Limitation of the Study 3
2. Organization Profile
2.1 Industry Profile 4
2.2 Company Profile 9
3. Research Methodology
3.1 Primary Data 17
3.2 Secondary Data 17
4. Literature Review 18
4.1 ALM Approach 21
4.2 ALM Process 26
4.3 Benefits of ALM 27
5. Data Analysis & Interpretation 46
Findings 62
Suggestions 63
Conclusion 64
Bibliography 65
INDUSTRY PROFILE:
Kotak Mahindra bank is an Indian is an Indian Private Sector Bank head quarter in
Mumbai, Maharastra, India.

In February 2003 Reserve Bank of India gave the Licence to Kotak Mahindra Finance
Ltd.,

The Groups flagship company to carry on banking business.

Head Quarters : Mumbai

Founder : Uday Kotak
Founded : 2003
Revenue : 279.7 Billion INR
(International Organization for standarsization 2016, US$4.2 Billion)
Number of Employees : 46,500
Subsidiaries : Kotak Securities,
Kotak Life Insurance
More
Dipak Gupta, Joint managing Director, Kotak Mahindra Bank has been with Kotak
Mahindra group since 1992 he was appointed as Executive director of Kotak mahindra
finance Limited (now Kotak Mahindra Bank Limited) on 1st October 1999.

Chairman : Shankar Acharya

Executive Vice : Uday Kotak
Chairman and MD
Non Executive Director : C. Jayaram
Join Managing Director : Dipak Gupta
Company Secretary : Bina Chandarana
 PROFIT AND LOSS A/C

Particulars March 2017 March 2016

Interest Earned 17,698.93 16,384.18
Other Income 3,477.16 2,612.23
Total Income 21,176.09 18,996.41
Employee Cost 9,572.78 9,483.81
Selling and Admin Expenses 0.00 0.00
Depreciation 290.66 287.38
Miscellaneous Expenses 5,132.62 4,318.48
Preparation Expenses Capitalized 0.00 0.00
Operating Expenses 5,618.50 5,471.52
Provisions and Contingencies 2,573.31 1,951.31
Total Expenses 17,764.59 16,906.64
Net Profit for the year 3,411.50 2,089.78
Extraordinary Items 0.00 0.00
Profit brought forward 8,214.12 6,769.97
Total 11,625.62 8,859.75
Preference Dividend 0.00 0.00
Equity Dividend 0.07 91.84
Corporate Dividend Tax - 0.68 18.70
Earning per share (Rs) 18.53 11.39
Equity Dividend (O/o) 12.00 10.00
Book Value (Rs) 150.01 130.61
Transfer to statutory reasons 869.94 535.10
Transfer to other Reserves 0.00 -0.01
Proposed dividend / Transfer to Govt. -0.61 110.54
Balance C/f to balance sheet 10,756.29 8,214.12
Total 11,625.62 8,859.75
 PROFIT AND LOSS A/C

Particulars March 2017 March 2016

Total share capital 920.45 917.19
Equity share capital 920.45 917.19
Share Application Money 1.87 3.41
Preference share capital 0.00 0.00
Reserves 26,695.62 23,041.87
Revaluation Reserves 0.00 0.00
Net Worth 27,617.94 23,962.47
Deposit 157,425.86 138,643.02
Borrowings 21,095.48 20,975.34
Total Debt 178,521.34 159,618.36
Other Liabilities & Provisions 8,450.68 8,678.96
Total Liabilities 214,589.96 192,259.79
Cash & balance with RBI 7,492.43 6,903.43
Balance with banks, money at call 15,079.58 3,976.28
Advances 136,082.13 118,665.30
Investment 45,074.19 51,260.22
Gross Block 1,537.63 1,551.59
Accumulated depreciation 0.00 0.00
Net Block 1,537.63 1,551.59
Capital work in Progress 0.00 0.00
Other Assets 9,324.00 9,902.97
Total Assets 214,589.96 192,259.79
Contingent Liabilities 213,385.80 257,574.33
Bills for collection 0.00 0.00
Book value (Rs) 150.01 130.61
 STRUCTURE OF ORGANIZATION

MD

Technical Director

Vice President &

Empanelled Experts Technical Manager

DGM
GE & Quality
Manager

Manager Manager Manager Manager Manager

Environment Social Environment Environment Environme

Assistant Manager Assistant Manager

Environment Public Relation

Executive Executive Accounts

Environment

Executive – IT

Executive
 NATURE OF BUSINESS
Business Loan Interest:
Rates:

Please find the detailed Kotak Mahindra Bank Business loan Interest rates.

Up to 10,00,000 10,00,000 above

Manufacturer 17.50% 17.00%
Service provide 18.00% 17.50%
Trades 18.00% 17.50%

Features of Kotak Mahindra bank Business Loan:

Please find the Detailed features of Kotak Mahindra Bank Business loan.
Type Features
Processing fee 3.0%
Pre closure charges 5.0%
Part payment charges Nil
Min Tenure 1 year
More Tenure 4 years.
Min Age 24 years
More age 60 years
Min loan Amount Rs. 5,00,000/-
More loan Amount Rs. 30,00,000/-

Kotak Mahindra Bank Business Loan Charges:

Type Charges
Emi Bounce Charges Rs.750.00/-
Part Pre Payment Charges Allowance
Penal Interest 3% pm on overdue amount
Insurance cover Upto loan amount
Cheque swapping charges Upto Rs.500/-
Issue Amortization schedule duplicate Rs.250/-
CIBIL report issuance charges Rs.50/-
NOC issuance charges Free
Duplicate NOC issuance charges Rs.500/-

PRODUCT MIX OF KOTAK MAHINDRA :

Product Name Year Month Sales Sales Value Product

 Quantity (Rs.) Crore Mix (%)
Interest and discount on 2017 12 13,402.10 75.72
advance and bills
Income from Investment 2017 12 3,681.04 20.79
Interest 2017 12 397.47 2.24
Interest on balances with 2017 12 218.32 1.23
RBI and other inter bank
funds
 INTRODUCTION

Kotak Mahindra Bank is the fourth largest Indian private sector bank by market
Capitalization, headquartered in Mumbai, Maharashtra.

Kotak Mahindra group, established in 1985 by Uday Kotak is one of India’s leading
financial services conglomerates in February 2003, kotak Mahindra finance ltd
(KMFL), the group’s flagship company received a banking license from the reserve
bank of India (RBI), with this KMFL become the first Non- Banking finance company
in India to be converted into a bank- Kotak Mahindra Bank limited (KMBL).

In 2014, Kotak Bank acquired ING Vysya Bank for a deal valued at Rs 15,000
crore (US $ 2.3 billion) with the merger, the total human resource count will jimp to
almost 40,000 heads and the branch was expected to rise over 1200 past the merger,
ING group which controlled ING Vysya Bank will own 7% share in kotak Mahindra
Bank.

ORGANIZATION DEVELOPMENT

Kahlil Gibran.

We believe that developing & festering a learning culture along with creating
professional entrepreneurs is one of our key value propositions.

A large training infrastructure with state of the art classrooms has been setup in
Mumbai & Similar infrastructure is planned in other regional hubs as well.

The organization inherent belief in investing in people our learning and development
initiatives continue to grow year and contribute significantly to the quality of our
talent.
Systematic role based learning maps have been defined on the basis off which various
programs related to product, process skill competency, behavioral & leadership are
designed and mapped to respective individuals.
Kotak Mahindra Bank.
Mr. Uday Kotak.
Vision:-
To be the most trusted global Indian financial services brand and the most
preferred financial services employees with focus on creating value.

Mission:-
Our customers must enjoy the benefits of dealing with a global Indian brand
that best understands their needs and delivers customized pragmatic solutions across
multiple platforms.

Commercial Banking:-
The commercial banking business has Registered a reasonable growth in FY
2015-16 despite subdued market sentiments and erratic Monsoon.
Commercial vechicles (CV) and construction equipment sectors. Which have been
witnessing stowdown since 2011, showed strong sings of recovery.

The CV situation has improved significantly over the previous year. Especially in the
case of medium commercial vehicle Heavy commercial vehicle sales across segments
which was driven by replacement demand.

Small commercial vehicles segment is also showing signs of recovery with marginal
growth in the last quarter.

Kotak Mahindra Bank Computative:

i. ICICI Bank (Industrial credit and Investment corporation of India)
ii. Andhra Bank
iii. Bank of Baroda
iv. Bank of India
v. UCO Bank
vi. Axis Bank
vii. Central Bank of India
viii. ING Vysya Bank
ix. State Bank of India
x. State Bank of Hyderabad
xi. Vijaya Bank
xii. IDBI Bank
xiii. Housing Development finance corporation (HDFC)

ICICI Bank
Industrial Credit & Investment Corporation of India (ICICI)India multinational
banking and financial services company head quarter in Mumbai Maharastra, India.
With its registered office in vadodara.

In 2014 it was the second largest bank in India.

Banking products and financial services for corporate and retail customers.
The Bank has a network of 4,850 branches and has a presence in 19 countries
including India.

HDFC Bank Limited

Housing Development Finance corporation limited (HDFC)

The HDFC was amongst the first to receive an in principle approval from the
reserve bank of India (RBI) to set up a bank in the Private sector as part of the RBI’s
liberalization of the Indian Banking. Industry in 1994 HDFC bank is headquartered in
Mumbai.

The promoter of the company HDFC was incepted in 1977 is India’s premier housing
finance company and enjoys an impeccable track record ion India as well as
international markets.

AXIS BANK

Axis bank established in 1993 was the first of the new private banks to have began
operations in 1994 after the Government of India allowed new Private banks to be
established Axis Bank Ltd.
Has been promoted by the larges bank.
Total Assets: Rs. 5.25468 trillion (US $ 82 Billion) (2016)
Total Equity: Rs. 4.7658 Billion (US $ 74 Million)
Number of Employees: 56,089 (March 2016)
Head Quarters: Mumbai, Maharastra, India.

ADMINISTRATION
Uday Kotak:
Executive Vice chairman and Managing Director Kotak Mahindra Bank. As a
young 26- years old entrepreneur in 1985, Uday Kotak Started Kotak Capital
management finance ltd.

The vision was to eventually become a banking company private Indian banks
were not even a speck on the horizon at the time on 22nd march 2003/ Kotak Mahindra
Bank became the first non-banking financial company in India’s corporate history to
be converted into a bank.

Mr. Dipak Gupta:

Joint managing director Kotak Mahindra a Bank Limited.
Dipak Gupta Joint managing Director, Kotak Mahindra Bank has been with Kotak
Mahindra Group since 1992.

He was appointed as Executive Director of Kotak Mahindra Finance limited

(now Kotak Mahindra bank Limited) on 1st October 1999. Effective may 2016, Dipak
heads the group treasury. Wealthy management and Asset reconstruction business of
the bank. An has oversight over the Alternative investment business of Kotak
Mahindra Group Dipak is part of the Bank’s Management committee and Bank’s
operating management committee that drives & oversees the Kotak Group’s.

Features of Newt Banking:

i) Bank 24x7 Any where anytime.
ii) Straight security for safe online banking.
 iii) View account details for saving Account current Account. Term Deposits
and demat accounts.
iv) Transfer funds online between your third party accounts with Kotak
Mahindra Bank or any other bank account via NEFT, RTGS or IMPS.
v) Book a term deposit and do premature withdrawal online.
vi) Online password regeneration and unlock user ID instantly.
vii) View and update your profile details such as mobile number, email id,
correspondence address. Aadhaar number etc.
viii) View Kotak life insurance policy switch funds, pay premium online.
ix) Apply online for new Kotak life insurance policy.
x) View account balance account activity and check cheque status.

Features:
i) Multi city Banking: Current accounts with Kotak Mahidra Bank will be
recognized in every other branch.
ii) Active Money: Term Deposit linked current A/c Kotak Active money
ensure that the money never stops working.
iii) Free Demand Drafts & Pay Orders: Enjoy the benefit of free demand
drafts payable at Kotak Mahindra Bank branch location in India.

Use of Online Banking :

i) Transfer funds between your accounts or third party accounts.
ii) Check your bank account details.
iii) Make payment of utility and credit card bills.
iv) Open a fixed deposit account.
v) Recharge prepaid mobile/DTH.

The Symbols of Kotak Mahindra Bank Means:

It symbolized that we have infinite no of way to meet the variety of needs.
These are the key individuals of the bank.
Executive vice chairman and managing director – Mr. Uday Kotak.
 SUGGESTION

Kotak Mahindra Bank must treat CRM as a business strategy to become more
customers centric customers strategy and business needs to be flexible to what
customers want.
Kotak Mahindra Bank needs to understand the benefits and importance of CRM.
Bank’s Environmental performance
Water Consumption:
1 34500
2 33500
3 32500
4 31500
5 30500
6 29500
7 28500
8 27500
9 26500
10 25500
 CONCLUSION

The efficiency and productivity of employee may influence the business and if
the funds are used efficiency with the help of higher productivity of personal then it
will lead to higher profitability.
In order to increase per employee business, Banks should train their personal
accordingly motivate them and make them customers oriented second option is to
reduce the size of man power by voluntary retirement scheme (VRS) and early
retirement scheme (ERS) and reset to out sourcing of some of the functions of the
bank.