Private Banking India

8/3/2019 Private Banking India

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Porters five forces :-

Industrial rivalry :-

The degree of rivalry among various firms in private banking industry ranges from

moderate to high :-

y Brand identity: - The firms are usually connected with foreign entity which provides the

industry with huge global brand name for e.g. ING Vysya, HSBC, and ABN-Amro etc.

The investors relate to these brand names and hence have faith in them.

y High market growth:- With the industry growth booming in the last few years in Asia-

pacific countries the players are trying to capture the growing market share before the

industry becomes saturated which has added to competition.

y Undifferentiated services- Almost every bank provides similar services which increases

level of competition.

y High fixed cost

y High exit barriers- The banks have a name in international market and exiting a

business will hurt their profit and other business lines as well

Bargaining power suppliers in private banking :-

The suppliers for private banking include investment related service providers like

mutual fund providers, insurance, real estate funds, private equity providers, etc. Thebargaining power of supplier power is low in private banking due to:-

y Forward integration of suppliers is low because of the diversity in industry requirement.

y SEBI and other regulators: - The suppliers are governed by a different set of regulators.

These lay down various norms which are revised from time to time. As the suppliers

products are governed by the regulators their bargaining power is reduced.

y Few alternatives- the suppliers few alternatives to get big business from private banking

firms.

y High competition: - The suppliers industry is highly fragmented with a number of firms

offering same product in market. The narrow margin, low switching costs further

reduces their bargaining power.


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Bargaining power of buyers:-

The private banking landscape is now increasingly characterized by clients who have

built their wealth through entrepreneurship or senior positions in corporations. The buyers of private banking are clients that have huge amount of investable assets. The

bargaining power of customers is high in private banking due to:-

y Large no of alternatives: - Customers have large no of alternatives, there are so many

banks, which fight for same pie. There are many non financial institutions like ICICI,

HDFC, and IFCI, etc. which are also operating into these business. There are foreign

banks, private banks, co-operative banks and development banks together with

specialized financial companies that provide finance to customers. These all increase

preference for customers.

y Undifferentiated service:- Bank provide merely similar service there are no much

differentiation in service provides by different banks so, bargaining power of customers

increase. They can not be charged for differentiation.

y Full information about the market: - Customers have full information about the market

due to globalization and digitalization Consumers have become advanced and

sophisticated. They are aware of the current market condition and any event which may

change the market scenario. Hence banks have to be more competitive and customer

centric to serve them.y The clients are HNIS and UNHWIs and are the main buyers in this industry. Hence the

banks have to ensure they are the preferred one for these clients.

Threat of new entrants :-

The threat of new entrants is low :-

y The industry is highly regulated by RBI regulations making it less attractive for

industry players entering the market.

y With mergers and acquisition of banks underway the threat of new entrant is low

comparatively.

y Every bank tries to achieve economics of scale through use of technology and selecting

and training manpower.


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y BNP Paribas

y JP Morgan Chase

y Barclays wealth

y Credit Suisse

Products and services offered by these competitors : - The products and services

offered by these banks are more or less with few differentiation factors. The products

may range from the variety investment options available in the market for the clients. The

investment products cover mutual funds, equity, insurance, structured products,

derivatives, real estate funds and other financial instruments and alternative assets. While

the services are portfolio management services, non-discretionary investment advice,

advisory nature of investment and other special banking facilities to clients like credit

support. Some of the bank also provides trust and estate planning services and tax

guidance. The banks also tie in with third party service providers to provide some of the

above mentioned services.

Products and services offered by ING :-

Investment Advisory Services

Non-discretionary Portfolio Management Services (NDPMS)

O ur Portfolio Management Services are non-discretionary, actively advised investment

solutions made up of carefully selected combination of securities, funds and other

sophisticated financial instruments. The objective is to ensure an optimum level of

portfolio diversification to achieve your portfolio goals while managing the risk and

allowing you the control of your investment decision process.


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Investment advice encapsulates :

Direct Equity

Derivatives :- is a financial instrument whose value depends on other, more basic,

underlying variables. Such variables can be the price of another financial instrument (the

underlying asset), interest rates, volatilities, indices, etc, contract whose payoff depends

on the behavior of some benchmark, which is known as the "underlying". The assets that

can be used for derivatives are:-

a) equity

b) foreign exchange

c) interest rate

d) commoditye) credit

f) index

The derivatives are of two types mainly-

a. Over-the-counter

b. Exchange traded derivatives

The derivative markets in India are highly regulated by SEBI and RBI leaving few

options for the investors to venture in. In India equity derivatives form a huge portion

61% as compared to other like interest rate (14%), currency (11%), and commodity

derivatives (14%) Source: Karvy Private Wealth Report

Mutual Funds : - It has a very fluid capital stock. It is unique in that at any time it can

sell or redeem any of its outstanding shares at net asset value (i.e., the price of a share

equals total assets minus liabilities divided by the total number of shares). A mutual fund,

also called an open-end investment company, owns the securities of several corporationsand receives dividends on the shares that it holds. These do not have a fixed maturity.

Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices.

The key feature of open-end schemes is liquidity. A closed-end investment company

differs from an open-end company in that the number of shares is limited and the price of


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the shares may fluctuate above and below the net asset value. These schemes have a pre-

specified maturity period. There are two exit options available to an investor after

investors can transact (buy or sell) the units of the scheme on the stock exchanges where

they are listed. The market price at the stock exchanges could vary from the net asset

value (NAV) of the scheme on account of demand and supply situation. Alternatively

some close-ended schemes provide an additional option of selling the units directly to the

Mutual Fund through periodic repurchase at the schemes NAV; however one cannot buy

units and can only sell units during the liquidity window. The earnings of a mutual fund

are distributed to the holders of its shares. The mutual funds in India are regulated by

SEBI. Mutual funds are offered by ING in categories of equity, debt and gold.

Bonds/Fixed Income Securities : - Fixed income products that are offered by ING aregenerally in the form of FMP or FDs.

Structured Products :- also known as a market-linked product, is generally a pre-

packaged investment strategy based on derivatives, such as a single security, a basket of

securities, options, indices, commodities, debt issuances and/or foreign currencies, and to

a lesser extent, swaps. A feature of some structured products is a "principal guarantee"

function, which offers protection of principal if held to maturity. Structured products can

be used as an alternative to a direct investment, as part of the asset allocation process to

reduce risk exposure of a portfolio, or to utilize the current market trend. The products

offered by ING are in collaboration with various NBFCs and hence are in various

permutations and combinations.

y Private Investment Banking

Our Private Investment Banking initiative is focused on value creation as advisors on

business and related aspects. We facilitate execution of funding (Private Equity / Venture

Capital) and strategic objectives (M&A, JV) for our clients businesses. We also provide

investors with dynamic investment proposition that may be business related and suits risk

profile appropriately.


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y Structured Credit at ING - provides instant liquidity on your investments

without selling them. Loans against securities such as Mutual Funds ( Debt, Hybrid &

Equity), eligible RBI Bonds, Gold ETF, LIC Policies, NSC/KVPs, Deposits are provided

with competitive pricing and quick disposal.

y Estate Planning Advisory - Estate planning attempts to eliminate uncertainties

over the administration of a probate and maximize the value of the estate by reducing

taxes and other expenses. ING offers Estate Planning advisory through third party service

provider.

Along with the portfolio management and advisory services, we also bring to you our

Banking Services, which include remittances, deposits, loan against deposits/mutual

funds etc. At the same time, we work closely with established external providers to bring

to you value added services like Trust & Estate Planning to meet your wealth

protection/movement needs.

y NRI :- At ING Private Banking India, we work out the optimum solutions for your

investment needs keeping in mind your residential status, risk appetite, liquidity and

regulatory and taxation requirements. We also facilitate completion of relevant onshore

regulatory requirements such as RBI approvals, tax matters and issuance of PAN.Our services include : NRI Bank Account, India deposits, Demat Account, Loans and

overdrafts, online banking, Statement on E-mail, Utility Bill payment, Money transfer,

Home Loan.


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SWOT for ING :-

Strengths :-

Heritage of a strong parent company

Pioneers of private banking in India

Customer centricity

Products offered backed by a strong in-house research based team

Special catering of products to NRI

Weaknesses :-

Cautious approach to investment

Narrow product range in alternate assets

Non aggressive marketing strategiesLow brand visibility

Opportunity :-

Cross selling

Rising HNI wealth

Changes in investment pattern with respect to more risk high return

Rising need of providing family office services to HNI

Untapped market of about 80% HNI

Threat :-

Rising competition

Aggressive marketing by competitors

Security threat

Rising legal regulations

Shaky investor confidence post crisis


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STRENGTHS WEAKNESSES

O

P

P

O

R

T

U

N

I

T

I

E

S

S O Strategies

Strength: Strong support from parent

company.

Opportunity: Cross selling

Strategy: Expand customer base by

acquiring customers from other related

parent companies.

W O Strategies

Weakness: Narrow product range in alternate

asset class

Opportunity: Rising HNI wealth

Strategy: Develop products across diversified

asset class range.

T

HR

E

A

T

S

S T Strategies

Strength: Pioneer of private banking

Threat: Increased Competition

from foreign banks.

Strategy: Ensure retention & loyalty of

customers.

W T Strategies

Weakness: Low brand awareness.

Threat: Aggressive marketing strategy by

competitors.

Strategy: Scope for brand building.


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Target segments of ING :-Break down clients to following group: ultra high net worth (more than 50m), very

high net worth ($5m-50m), high net worth ($500000-5m) and core affluent ($100000-

500000). The private banking services are offered to only UNHWI and HNWI.Characteristics : - Net worth of over $3 million

Business owner, entrepreneur

Business executive

Doctor, lawyer or other business professional

Sports & entertainment professional

Large deposits, high status

Wealth comes from various categories- family inherited wealth,

corporate wealth, business wealth.

Have increased access to information

UHNWI : - They have, on average, eight cars and three or four homes. Three-

quarters own a jet aircraft and most have a yacht. They live global and want residences

around the world as one-of-kind experiences. Products and services offerings to an

Ultra high net worth individual are asset management, financial planning, estate

planning, trust planning, succession planning, and governance. Equities and real estate

products are the most favored destinations for their investment. Financial and tax

planning is the important need for setting up family office by Ultra high individual and

philanthropy is the next important service that is demanded by Ultra-high families.

They are also looking at banks that can cater to their family issues by establishing

family offices. In India, single family office owners are Azim Premji (Premji invest),

Ajit Khimji (Khimji family office), N.R. Narayana Murthy (Cataraman), and the

Ambani family. The overall market for UNHWI provides huge opportunity in terms of

low penetration (20%) of Ultra high net worth individuals and also the huge amount of

intergenerational transfers going to change hands in the coming decade. The amount is

estimated to be around 5.78 lakh crore ($128 billion).


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HNWI :-

Market in India :

HNWI in India consists of 8% of the total wealthy households but constitutes around

45% of the total wealth. As per 2011 Capgemini Merill Lynch World Wealth Report

Indias HNWI population entered the Top 12 for the first time to reach 153,000.

Around 69% of the Indian HNWI population is in the age group of 30-55, which has long

term investment plans and thus requires financial planning and advisory asset

management.

39% of the HNWI wealth has been accumulated on the basis of business income, leading

to demand of Tax planning solution which can help to protect wealth and mitigate risk.

However in spite of the lucrative market size among the total HNWIs in India, only 20%

consult financial advisors thus leaving a huge untapped market for financial advisers.

Needs and Demands of HNI :-

y The primary need of HNI is to have trust on the private banker and the organization

which lays the foundation of the strong relationship service.

y

The niche one-stop-shop service of a family office for HNW clients will become astronger proposition for financial advisers to consider in the future.

y The relationship manager must be able to source information and services leveraging

a team approach, assimilate the pieces, and communicate it in a collaborative,

transparent manner with the HNWI.

y The financial advisors must be able to employ a holistic and collaborative team

approach for a HNWI including (1) business, (2) tax, (3) estate, (4) legal, (5)

accounting, (6) intra-family governance, (7) philanthropy (8) compliance and (9)

lifestyle issues, and communicate operations and solutions to the HNWI and family

members.

y New breed HNWIs wants communication by email weekly from their wealth

manager. Sophisticated advisors will leverage secure, though inexpensive, video

conferences to establish more efficient and effective face time.


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y They seek soft skills such as client communication, and even more relevant in this

economic downturn, the ability to counsel through economic and personal stress, will

decide for HNWIs who is to become trusted advisors, and who are simply hawking

services.

y They desire efficient investment choices with high yields.

y They are looking for a combination of investment performance and high level of

service from private banking relationship managers.

y They seek portfolio optimization by extending their wealth holdings.

Investment preference of HNWI :

y Development of a financial plan which enables them to understand if their needs and

expectations can be adequately met

y A full balance sheet approach being taken by their chosen provider, which means in

reality that all aspects of their needs are covered, ranging from banking services,

deposits and insurance to investments

y Service offerings covering aspects like tax management a critical ingredient in

helping clients to meet their financial objectives and estate planning, meeting

their desires to pass on wealth

y The provider being able to establish the right mix of investments appropriate to their time horizons and risk tolerances

y The provider offering alternative investment solutions to facilitate diversification,

performance enhancement and risk reduction.

Challenges faced by HNI for investment :-

y HNI require talented RMs with good skills which at present is at shortage in Private

banking. The skills sets required are very different from that of retail banking hence;as the new entrants evolve the industry face a shortage of talented RMs.

y Regulatory measures some capital controls limit the kind of services available

in local markets that the wealthy would need to manage their wealth. Non-resident

Indians have access to global investment opportunities, limited only by their own


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investment objectives or preferences. For a resident Indian, the investment horizon is

restricted to rupee-denominated domestic opportunities.

y Regulators think that those who approach private banks for tax advisory services are

tax dodgers and hence they want access to the documentation provided by private

banks to these individuals. These issues have become more predominant in recent

timelines due to some of the scams that have evolved.

Investment allocation in different assets by HNI :

The total wealth in India held by individuals is estimated to be ` 73 lac crores. Indias

HNWIs wealth will grow by a CAGR of 12% and it will reach close to $949 billion by

2015. Table 1:

Asset-wise break-up of Individual Wealth in India

Amount Amount (in ` Crore) Percentage

Direct Equity 22,73,043 31.1%

Fixed Deposits & Bonds 22,16,307 30.3%

Insurance 10,46,145 14.3%

Savings Bank Deposits 6,75,134 9.2% Small Savings 5,19,162 7.1%

Provident Fund 2,81,559 3.9%

Mutual Funds 2,77,953 3.8%

Alternative Assets 18,575 0.3%

Total 73,07,878 100


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Asset holdings of HNI

30%

14%

9% 32%7% 4% 4%0.3%

Direct E quity

Fixed Deposits &

BondsIns urance

S avings B ank Depos its

S mall S avings

P rovident F und

Mutual F unds

Source: Karvy Private Wealth Report India 2010

Classification of Individual Wealth in India according to Key Asset Classes

Name of Asset Amount (in ` Crore) Percentage

Equities 24,76,626 33.9%

Debt 48,12,677 65.8%

Alternative Assets 18,575 0.3%

Total 73,07,878 100%

K ey As s et class ification o f HNI

0.3%

34%

66%

E quities

Debt

Alternative A s s ets



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Comparing this with how globally investors invest their wealth, it may be observed that

globally, approximately 58% of Individual Wealth is in Debt investments, 35% in Equity

and 7% in Alternative Assets.

In India, Debt instruments are popular with the investors due to our traditional saving and

risk-averse behavior. But over the last few years investors have started viewing Equities

as a good investment option, forming 33.9% of Individual Wealth. Investment in

Alternative Assets is still at a nascent stage; therefore it comprises only 0.3% of total

Individual Wealth but over the years it is expected to increase.

o Direct equity :-

The overall amount invested in Direct Equities as on 31st March, 2010 is ` 60 lac crores.

However, the portion of total Individual Wealth invested in Direct Equity comes to ` 22.7

lac crores which is 31.1% of the Overall Individual Wealth in India. It is the highest

contributor of all of the asset classes.

o Mutual funds :-

According to data available on the Association of Mutual Funds in India (AMFI) Web

site, the number of HNI folios has increased by 1.6 lakh folios since March 2009 this

means a 19% increase as compared to last year. This indicates that of the total AUM,

45% is held by individuals and the remaining amount by corporate and institutionalinvestors. However, it must be noted that the HNI segment consists of only 1.65 per cent

of the total folios in the industry. Retail investors still have the lion's share with 97.5

percent of the total folios in the industry.


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Break-up of Mutual

Funds

by Underlying

Investment

Asset Class Amount (in ` Crore)

Equity 1,85,817

Debt 91,144

Gold 992

Total 2,77,953

Mu tua l f u nds a sset bre ak up of HNI

0.3%

67%

33%Equity

DebtGold



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o Asset allocation in fixed income products :

1. Investments in Bank Fixed Deposits (FD) and bonds:

Asset Amount (in ` Crore)

Fixed Deposits 22,13,023

Bonds 3,284

Total 22,16,307

F ixed income distrib u tion of HNI

0.14%

99.8%

F ixed Deposits

Bonds


a. Fixed deposits :

The swinging stock index is making investors vary and hence as a prudent approach

investment in debt instruments is a safer option. Interest rates are already considerably

high and a probable increase in benchmark rates by the Reserve Bank of India (RBI)could help bank fixed deposits rates move further northward. The current fixed deposit

rates are in the range of 8.5-9.5%. However, the interest earned from fixed deposits is not

tax-free and is taxed as per the investor's tax slab. But, the interest rates are lower on

these schemes. Corporate FDs, on the other hand, offer 1-2% higher rates of interest than


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bank FDs. Fixed Deposits account for 30.28% of the overall Individual Wealth in India .

The investment in fixed deposits is proportionately high as it is the 2nd most preferred

investment avenue after Direct Equities. The total wealth in Fixed Deposits in India is `

41.45 lac crores. Of this, the amount with HNI is 53.39% of total wealth in Fixed

Deposits.

b. Bond prices are also likely to inch upwards following budget announcements of a

lower than expected fiscal deficit. The government usually funds fiscal deficits by issuing

bonds and a low fiscal deficit number means fewer bonds issued, which, in turn, would

keep bond prices firm. The government in its budget allowed four PSUs to issue tax-free

bonds of up to Rs 30,000 crore in 2011-12. These (taxable) bonds are best suited for

HNIs, who are in the highest tax slab (30%) and hence tax-adjusted return is higher. SBIrecently issued taxable bonds with the target of raising Rs 750 crore from individual

investors-retail as well as HNIs. For 10-year bonds, the bank offered 9.75% annual

interest and 9.95% for a 15-year bond.

Assets in Bonds

Bond Type Amount (in ` Crore) Percentage

PSU Bond 1,359 41%

Corporate Bond 1,925 59%

Total 3,284 100%

B ond a sset cl a ssific a tion

41 %59%

PSU Bond

Corporate


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2. Savings bank deposits : - It addresses the amount of surplus the individuals have

in this section. It is further divided into type of banks the deposits are with like scheduled

commercial banks and Scheduled co-operative banks. Savings Bank deposits with HNI

account for 9.24% of the overall HNI wealth in India.

3 . Small savings : - Small savings comprise savings made with the Post Office. It is

one of the most traditional forms of investment in India. The Assets in Small Savings

contributes 7.10% of the total estimated High net worth Individual Wealth in India.

4 . Investments in Insurance policies : - A major portion of this asset class

comprises Life Insurance. This can be divided into public sector insurers and private

sector insurers. The Assets in Insurance account for 14.32% of the total Individual

Wealth in India. This comes third only to Equity and Fixed deposits in terms of preferred

investment instruments. Of the total amount that high net worth individual investors have

put into Insurance, ` 1.77 lac crore (approx.) is invested in the Equity markets through

Unit Linked Insurance Plans (ULIPs).

Assets in Insurance

Types of Insurance Amount (in ` Crore)

Life Insurance 9,40,445

Employees Pension Fund 98,242

Employees Deposit

Linked Insurance Fund

7,458

Total 10,46,145


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Ins u r a nce we a lth distrib u tion of HNI

90%

9% 1 %

Life Insurance

Employees PensionFund

Employees DepositLinked InsuranceFund

5 . Investments in Public Provident Fund (PPF) :- One of the reasons for the difference

in the AUMs of EPF and PPF is that EPF is provided by all employers to their employees

and is compulsory in most organizations. Whereas PPF is an investment cum tax saving

option that an investor can opt for. It is not compulsory to have a PPF account. As only

individuals can have a Provident Fund account, the entire amount is considered as the

wealth with individuals.

When the Assets of PF are evaluated against the overall High net worth Individual

Wealth in India, they account for 3.85% of the overall wealth.

Type of PF Amount (in ` Crore)

Employee Provident Fund 2,11,677

PPF with Banks 47,124

PPF with Post Office 22,758

Total 2,81,559

6. Alternative Assets

Investments which are considered outside the traditional asset classes like Equity, Mutual

Funds, Saving and Fixed Deposits, Insurance and other instruments covered earlier are

known as alternative assets. These assets include private equity/venture capital, structured


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products, real estate funds, art funds, film funds etc. These alternative assets usually have

a larger initial investment.

A. Equity Linked Debentures

Equitylinked Debentures are instruments whose returns on investment are tied to the

equity markets. These are comparatively new in the Indian market and are of two types:

o Principal Protected, where the principal amount is fixed while the interest

component is variable and linked to stock market movements;

o Non-Principal Protected instruments are a riskier variant, where even the principal

is linked to the market.

The total assets in ELDs as on 18th November, 2009 are ` 15,000 crores.

B. Private Equity Funds/Venture Capital

Private Equity (PE) is a broad term that refers to any type of non-public ownership equity

securities that are not listed on a public exchange. Private Equity encompasses both early

stage (venture capital) and later stage (buy-out, expansion) investing.

C. Real Estate Funds

Like Mutual Funds, Real Estate funds are founded by a group of real estate

professionals/experts to 'manage' property/real estate for the investor. Investors get the

benefit of diversification across cities and across property Residential and Commercial.

The introduction of Real Estate Mutual Funds has further ensured large-scale investments

in the Indian real estate market.

As of now, the real estate window is open to high net worth individuals, institutional

investors and global investors.

D. Film Funds

Film Funds mobilize money to invest in movie productions/marketing. The fund sets up

Special Purpose Vehicles (SPVs) to fund each film project. The revenues from the film


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will flow directly into the SPV and will be re-distributed according to the ownership

pattern. The filmmaker too will have a stake in the SPV.

The assets in Film Funds, contributed by HNI are 482 crores.

E. Art Funds

An Art Fund works much like a Mutual Fund, the difference being that the former invests

in Art. The funds aim at investing in a diversified portfolio of select works by leading

artists and providing investors with the opportunity to profit from leveraging the fund's

pooled purchasing power. Art funds are a fairly recent phenomenon in India, and are

cumulatively estimated to command AUM of ` 239 crore under management.

This asset class is relatively new in India and as the initial investment is huge and

risk is fairly high, people are still reluctant to invest in it.

The summary of the overall funds lying with HNI under alternative assets are as follows:

Type of Asset AUM (in ` Crore)

Equity-linked Debentures 15,000

Private Equity/Venture Capital 1,503

Real Estate Funds 1,351

Film Funds 482Art Funds 239

Total 18,575


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Altern a te Asset cl a ss we a lthdistrib u tion

81%

1%3%7%8%

E quity-linkedDebentures

P rivate E quity/VentureC apital

R eal E s tate F unds

Film Funds

A rt F unds


Future of Indian wealth : - The robust and growing Indian economy backed by

consistent GDP growth is ensuring that the wealth in India held by individuals increases

at a rapid pace. This is on account of both the existing investments held by individuals

growing with the economy as well as additional wealth invested by individual from the

Financial Household Savings on account of higher Household Savings.

Table showing estimated projections of wealth:-

2010-2011 2011-2012 2012-2013

GDP Growth Rate 8.5% 9% 9%

Individual Wealth - Beginning of the Year 73,07,878 91,60,011 1,14,95,116

Financial Household Saving to be invested 10,49,101 12,98,448 16,05,490


As can be seen in table above, it can be estimated that the Individual Wealth in India to

almost double from the existing ` 73 lac crore to `114 lac crores by 2012-13 at a

compounded annual growth rate of 25%.

With such increase in the overall invest able wealth across various asset classes it is

important for the companies to target these HNIs and their investment.


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Conclusion:-

You can not solve a Problem at same Level that it was created. You have to rise above itto next level..

Albert Einstein

Private Banking in India is still at a very nascent stage. With western markets still

under the grip of recession the future growth prospects lie in Asian pacific markets.

Indian markets in general have shown to tide against recession hence there lays a faith

that would support the growth of Private Banking.

The Private Banks that offer Private banking services are facing increasing

competition with many players gaining entry into the market. There is a shift from the product based to value-added services. The focus would be on those who offer quality

services to the clients creating a differentiation from the usual.

Indian investors are rising at the rate of 6-8% per year. The HNI population is

expected to surpass North America in 2013. Their wealth on the other hand is rising in

double digit rise. The HNI in India are shifting from the usual savings scheme to a more

diversified portfolio with sustainable of risk element involved. Data has suggested that

recently HNIs are moving from the traditional investment options to equity based funds.

In a view to have a more diversified portfolio some of the HNI have more than

one Private Bank Accounts. This increases the competition amidst the firms as they try to

capture a larger market share. The limited channels of acquisition available are already on

the verge of exhaustion. Innovative products and creative ideas will drive the force of

acquisition and retention of HNI client. The rise of technology will lead to development

of new mass marketing channel which may become a way of acquisition in the future.


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Experiences & Learnings:-

The internship was taken by me in the marketing department of ING Private

Banking India. Private banking is a division of ING Vysya Bank which deals with HNI &UHNWI clients. The target audience being a niche market itself it is a tedious for the

bank and the marketing to stand out amidst the competition as first choice private bank.

The sales team is backed by a strong in-house research team that update clients portfolio

on a regular basis. The back office team ensures the daily transactions for clients is

carried out smoothly and in an efficient manner. This study has helped me understand the

processes of the organization.

The summer training gave me an opportunity to closely watch the working in

corporate sector. It taught me how all the departments of an organization must co-

ordinate and synchronizes their working in order to ensure the success of the

organization.

The experience of summer training at ING Private Banking India will act like a

stepping stone for me and would support me in my career as a professional. The

experience has helped me understand the various financial terms in the market.

At last but not the least there are lot many things which I have gone through in

those days, I was treated as a part of the organization and was allotted with the work of

the company due to which today I am aware of many practical concepts. I was able to

understand the working culture of an organization with the help and support of the

employees.


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Bibliography:-

In this project report, while finalizing and for analyzing quality problem in details the

following Books, Magazines/Journals and Web Sites have been referred. All the material

detailed below provides effective help and a guiding layout while designing this text

report.

Information has been sourced from namely, books, newspapers, journals, industry

portals, government agencies, industry news and developments and through access to

database.

ON-LINE WEBSITE:y http://www.investopedia.com/terms

y http://en.wikipedia.org/wiki/Private_banking

y http://www.investmentinternational.com/

y http://blogs.law.harvard.edu/sammy/2009/07/26/private-banking-trends-2010/

y http://www.financialexpress.com/news/mounting-hnis-make-india-hub-for-pvt-

banking

y http://www.assettreat.com/2010/05/alternative-investment-options-in-india.html

y http://www.business-standard.com/india/news/indias-hni-population-in-global-

top-12/440260/

y http://www.financialexpress.com/news/high-net-worth-individuals-in-india-up-

51-in-2009/637684/

y http://www.capgemini.com/m/en/img/Fig_08_01.jpg


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NEWSPAPERS:

y The Times of India

y The Economic Times

y Financial express

ARTICLES & MAGAZINES:

y Private banking horizon in India by Mr. Shailendra Tripathi HSBC Private

banking

y Karvy Private Wealths-INDIA WEALTH REPORT 2009-2010

y Private banking and wealth management Published by The Chartered Institute of

Bankers in Scotland

y Article on private banking trends and development 2010-2011 by ABN Amro

Hans diederen Chief Executive Officer Private Banking Asia

y Questions every Banker would like to ask about Private Banking and their

answers by Michael Atz Emerging Issues Series Supervision and Regulation

Department Federal Reserve Bank of Chicago

y Seven Benchmarks to identify the right Private Banker by Samir Bimal Country

Head ING Private Banking


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Private Banking India

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