Os Project 1

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CHAPTER 1



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1. INTRODUCTION

An organization is a planned, coordinated and purposeful action of human beings to achieve

certain specific goals through division of labour and hierarchy of authority.

Anorganisational study is the systematic study about how people - as individuals and as groups -

act withinorganizations.It involves the study of the structure and functioning of its departments.

Organizing one of the important functions of Management. Almost all the organizations

aredifferent but they have certain common features. All are collection of people, linked together by formal andinformal relationships. They have hierarchical orders that are engaged in co-

operative activities and they allhave identical boundaries. So the study of people in organization

is important for future managers.

Structure of an organisation is very important for its functioning and growth. It provides the

basic frame workfor its progress and expansion. For future managers, it is imperative to study the

organisational structure andfunctioning of successful organisations so that they as future

managers may guide organisations towardsuccessand profitable function



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Objectives of the study

1. Study the functions various departments

2. To study the organizational structure and its hierarchy.

3. Have an exposure to the working environment

4. To learn the way management tries to co-ordinate activities of different departments.

5. Practical applications happening in the organization

6. To analyse strength, weakness, opportunities and threats of the company.

Scope

The study has been conducted at Geojit BNP Paribas Financial Services Ltd, Kaduthuruthy

Kottayam during the period 05-05-2010 to 05-06-2010.The study focuses on acquiring

knowledge regarding the functioning of various departments in the organization

Methodology

The study is based on both primary and secondary data. Primary data collected from the

employees and staff through formal meetings. Secondary data collected from the annual reports or

unpublished source

LIMITATIONS OF THE STUDY

1. Due to lack of time respondents were not ready to give much information.

2. It was very difficult to collect detailed data on each department within the limited



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CHAPTER II



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INDUSTRY PROFILE

The securities market can be divided in to primary and secondary market, primary market

means the market that deals with first hand securities, which means that the shares which are

firstly issued, or which are not already issued. Secondary market means the market that deals

with second hand securities, which means the shares which are already issued. It is also called

stock exchange. When a company wishes to raise funds from the public it has to offer IPO in the

primary market, IPO means the shares when a company issues to the public at the first time, this

is called an initial public offering. Organized exchanges constitute the main secondary market. A

security is a negotiable instrument representing financial value. Securities are broadly classified

in to debt and equity securities such as bonds and common stocks respectively .Securities may be

represented in certificate or electronic form/ demat form. The process of converting physical

form securities in to electronic form is called dematerialization

Securities are traditionally divided in to debt securities and equities. Debt securities may be

called debentures, bonds, notes or commercial paper depending on the maturity or certain other

characteristics. Debt securities are generally issued for a fixed term and redeemable by the issuer

at the end of that term. Debt securities may be protected by collateral may be unsecured .An

equity security is a share in the capital stock of the company .The holder of a share is a share

holder .In the debt securities which require regular payments, equity share holders are not

entitled to any payment, In mostly equity share holders have the control of the company .Equity

also enjoys the right to profit and capital gain.

We can trade directly in the stock market with the help of stock brokers who keeps us well

informed about the market and may sometimes able to help us with our buy or sell decisions.

Stock brokers have major role in the securities market. Geojit BNP Paribas Financial Services

Ltd , is one of the industrial pioneers that you can approach any of your financial needs ranging

from MF,STOCK BROKING,



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LIFE INSURANCE,GENERALINSURANCE,BONDS,COMMODITY, etc« charging a

normal fee for the services rendered

COMPETITORS

a. JRG

b. INDIA INFOLINE

c. HEDGE

d. REIANCE MONEY

e. RELIGARE

f. UAE EXCHANGE

g. ICICI DIRECT

h. ALL OTER GOVT. AND PVT BANKS

i. KOTAK MAHINDRA



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COMPANY PROFILE

Geojit BNP Paribas Financial Services Ltd

Evolution of the company

It all started in the year 1987 when Mr. C.J. George and Mr. Ranajit Kanjilal founded Geojit as a

partnership firm. In 1993, Mr.Ranajit Kanjilal retired from the firm and Geojit became the

proprietary concern of Mr. C .J. George. In 1994, it became a Public Limited Company named

Geojit BNP Paribas Financial Services Ltd. The Kerala State IndustrialDevelopment

Corporation Ltd. (KSIDC), in 1995, became a co-promoter of Geojit by acquiring a 24 percent

stake in the company, the only instance in India of a government entity participating in the equity

of a stock broking company.

(BSE) in the year 2000. Company¶s wholly owned subsidiary, Geojit Commodities Limited,

launched Online Futures Trading in agri-commodities, precious metals and energy futures on

multiple commodity exchanges in 2003. This was also the year when the company was renamed

as Geojit BNP Paribas Financial Services Ltd. (GFSL). The Board consists of professional

directors; including a Kerala Government nominee. With effect from July 2005, the company is

also listed at The National Stock Exchange (NSE). Company is a charter member of the

Financial Planning Standards Board of India and is one of the largest Depository Participant

(DP) brokers in the country. On March 13, 2007 the formation of Geojit BNP Paribas Financial

Services Ltd

About BNP Paribas

BNP Paribas (www.bnpparibas.com) is one of the 6 strongest banks in the world according to

Standard & Poor's.* With a presence in 85 countries and more than 205,000 employees, 165,200

of which in Europe, BNP Paribas is a global-scale European leader in financial services. It holds

key positions in its three activities: Retail banking, Investment Solutions and Corporate &



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Investment Banking. The Group benefits from its four domestic markets: Belgium, France, Italy

and Luxembourg. BNP Paribas also has a significant presence in the United States and strong

positions in Asia and the emerging markets.

BNP Paribas has been operating in India since 1860 in a number of businesses such as Investment

Banking (CIB), Private banking (BNP Paribas Wealth Management), Life Insurance (SBI Life)

and Asset Management (Sundaram BNP Paribas), Infrastructure Funding (Srei BNP Paribas),

Retail Financing (Sundaram BNP Paribas Home Finance), Car Contract Hiring (Arval),

Institutional Broking (BNP Paribas Securities India) and Securities Services (Sundaram BNP

Paribas Securities Services and BNP Paribas Sundaram Global Securities Operations).

A leading retail financial services player

Geojit BNP Paribas today is a leading retail financial services company in India with a growing

presence in the Middle East. The company rides on its rich experience in the capital market to

offer its clients a wide portfolio of savings and investment solutions. The gamut of value-added products and services offered ranges from equities and derivatives to Mutual Funds, Life &

General Insurance and third party Fixed Deposits. The needs of over 495,000 clients are met via

multichannel services - a countrywide network of over 500 offices, phone service, dedicated

Customer Care centre and the Internet.

Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and

the Bombay Stock Exchange (BSE). In 2007, global banking major BNP Paribas joined the

company¶s other major shareholders - Mr. C.J.George, KSIDC (Kerala State Industrial

Development Corporation) and Mr.Rakesh Jhunjhunwala ± when it took a stake to become the

single largest shareholder.

Strategic joint ventures and business partnerships in the Middle East have provided the company



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access to the large Non-Resident Indian (NRI) population in the region. Now, as a part of the

BNP Paribas global network, Geojit BNP Paribas is well positioned to further expand its reach to

NRIs in 85 countries. Barjeel Geojit Securities is the joint venture with the Al Saud group in the

United Arab Emirates that is headquartered in Dubai with branches in Abu Dhabi, Ras Al

Khaimah, Sharjah and Muscat. Aloula Geojit Brokerage Company headquartered in Riyadh is

the other joint venture with the Al Johar group in Saudi Arabia. The company also has a business

partnership with the Bank of Bahrain and Kuwait, one of the largest retail banks in Bahrain and

Kuwait.

At the forefront of the many fruitful associations between Geojit BNP Paribas and BNP Paribas

is their joint venture, namely, BNP Paribas Securities India Private Limited. This JV was created

exclusively for domestic and foreign institutional clients. An industry first was achieved when

Geojit BNP Paribas became the first broker in India to offer full Direct Market Access (DMA)

on NSE to the JV¶s institutional clients.

A strong brand identity and extensive industry knowledge coupled with BNP Paribas¶

international expertise gives Geojit BNP Paribas a competitive advantage.

Expanding range of online products and services

Geojit BNP Paribas has proven expertise in providing online services. In the year 2000, the

company was the first stock broker in the country to offer Internet Trading. This was followed by

integrating the first Bank Payment Gateway in the country for Internet Trading, and many other

industry firsts. Riding on this experience, and harnessing BNP Paribas Personal Investors¶

expertise as the leading online broker in Europe, is helping the company to rapidly expand its

business in this segment. Presently, clients can trade online in equities, derivatives, currency

futures, mutual funds and IPOs, and select from multiple bank payment gateways for online

transfer of funds. Strategic B2B agreements with Axis Bank and Federal Bank enable the

respective bank¶s clients to open integrated 3-in-1 accounts to seamlessly trade via a



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sophisticated Online Trading platform.

Further, deployment of BNP Paribas¶ state-of-the-art globally accepted systems and processes is

already scaling up the sales of Mutual Funds and Insurance.

Wide range of products and services

Certified financial advisors help clients to arrive at the right financial solution to meet their

individual needs. The wide range of products and services on offer includes -

Equities | Derivatives | Currency Futures | Custody Accounts | Mutual Funds | Life Insurance &

General Insurance | IPOs | Portfolio Management Services | Property Services | Margin Funding |

Loans against Shares

A growing footprint

With a presence in almost all the major states of India, the network of over 500 offices across

300 cities and towns presently covers Andhra Pradesh, Bihar, Chattisgarh, Goa, Gujarat,

Haryana, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi,

Orissa, Punjab, Rajasthan, Tamil Nadu & Pondicherry, Uttar Pradesh, Uttaranchal and West

Bengal.

1 |22 years of history in Indian Capital Market

Geojit BNP Paribas has 22 years of in-depth broking experience in the Indian Capital Market.

More than 495,000 clients and over Rs 9,900 cores (as of 30th Sep.¶09) in Assets under

Management reflect the trust reposed in our expertise.



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2 Pioneer in Online Trading in Feb. 2000

In the year 2000, Geojit BNP Paribas pioneered the simple concept of providing

individuals with the facility to trade online. This revolution has given the company the

first mover advantage in online trading. As a creative innovator, Geojit BNP Paribas uses

advanced technology in online trading to meet client requirements such as customized

online trading platforms and many other services.

3. StrongShareholders

Geojit BNP Paribas is backed by strong shareholders.In 2007, global banking major

BNP Paribas joined the company¶s other major shareholders - Mr. C.J.George, KSIDC

(Kerala State Industrial Development Corporation) and Mr.Rakesh Jhunjhunwala ± when

it took a stake to become the single largest shareholder.

4. Wide range of products

Geojit BNP Paribas offers a wide range of trading and investment products and solutions.

Certified financial advisors help clients to arrive at the right financial solution to meet

their individual needs.

The wide range on offer includes - Equities | Derivatives | Currency Futures | Custody

Accounts | Mutual Funds | Life Insurance & General Insurance | IPOs | Portfolio

Management Services | Property Services | Margin Funding | Loans against Shares

5. Attractive brokerage slabs

We provide value for money! To start with, we offer low online brokerage charges which

further decrease automatically, as and when, your volumes increase.

0.03 to 0.01 for intra-day trades



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0.30 to 0.10 for delivery trades

Rs 75 to Rs 30 for F&O

6. Learn the craft

you too can develop your trading skills by availing of the effective guidance by our

research department. We offer-

o Daily mails delivered to our client¶s mailbox on market conditions and

recommendations

o Technical analysis of BSE 200 Index scrip¶s

o Free monthly investment magazine

o Services of professionally qualified executives at 500 offices across India.

o Our strong research ideas have been instrumental in converting our clients into

successful traders.

7. Multichannel service- Internet, Phone, Branch trading

Trade the way that you want to by selecting from multiple channel options- Internet,

Phone or Branch.

8. First mover advantage

Geojit BNP Paribas through its first mover advantage in different areas has been the first

to serve investors with its innovative offerings.

o 1st to launch internet trading in the year 2000.

o 1st to launch integrated internet trading system for cash and derivative segments in

the year 2002.



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o 1st Indian stock broking company to commence domestic retail broking operations

in any foreign country.

o 1st in the industry to have a global player offering its name thereby creating Geojit

BNP Paribas.

o 1st to launch exclusive branches for women in 2005.

9. Our deep reach

we have a pan-India network of over 500 offices with industry certified executives and a

dedicated Call Centre to provide you quality services.

10. Wide range of fund options

Geojit BNP Paribas gives you the option to choose from the 700 plus Mutual Fund

schemes offered by over 35 Asset Management companies such as SBI Mutual Fund,

Reliance Mutual Fund, Franklin Templeton India Mutual Fund, Tata Mutual Fund,

Sundaram BNP Paribas Mutual Fund, Fidelity Mutual Fund, and HDFC Mutual Fund.



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BOARD OF DIRECTORS

Name Designation

Mr.A.P Kurian Non-Executive and Independent

chairmen

Mr.C.J George Managing Director & Chief Promoter

Mr. Alkeshkumar Sharma Non-Executive and Independent

Director

Mr. Mahesh Vyas Non-Executive and Independent

Director

Mr. Rakesh Jhunjhunwala Non-Executive Director

Mr. Ramanathan Bupathy Non-Executive and Independent

Director

Mr.Punnoose George Non-Executive Director

Mr.Olivier Le Grand Non-Executive Director

Mr. Pierre Rousseau Non-Executive Director



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MANAGEMENT

Name Designation

Mr.C.J. George ManagingDirector

Mr. Satish Menon Director(Operations)

Mr. A. Balakrishnan Chief Technology Officer

Mr. Venkitesh National Head Distribution

Mr. Martin Zachmeier Director (Planning and Control)

Mr.Binoy .V.Samuel Chief Financial Officer

Mrs. Jaya Jacob Alexander Chief of Human Resources

As per Clause 49 of the listing agreement with the stock exchanges, it shall be obligatory for the

board of directors of all listed Companies to lay down a code of conduct all board members and

senior management of the company in order to ensure good corporate governance



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1 CORPORATE GOVERNANCE

Corporate governance is about commitment to values and about ethical business conduct. It is

about how an organization is managed. This includes its corporate and other structures, its

culture, its policies and the manner in which it deals with various stakeholders. Accordingly,

timely and accurate disclosure of information regarding the financial situation, performance,

ownership and governance of the company, is an important part of corporate governance. This

improves public understanding of the structure, activities and policies of the organization.

Consequently, the organization is able to attract investors, and to enhance the trust and

confidence of the stakeholders.

We believe that sound corporate governance is critical to enhance and retain investor trust.

Accordingly, we always seek to attain our performance rules with integrity. The Board extends

its fiduciary responsibilities in the widest sense of the term. Our disclosures always seek to attain

the best practices in international corporate governance. We are also responsible to enhance long

term shareholder value and respect minority rights in all our business decisions.

II. INTRODUCTION OF CODE (Preamble)

This Code of Ethics for Directors and Senior Executives (the ³Code´) helps to maintain the

standards of business conduct for Geojit BNP Paribas Financial Services Limited (the

³Company´) and ensures compliance with legal requirements particularly of Companies Act,

SEBI Regulations and the Listing Agreement with Stock Exchanges. The purpose of the Code is

to deter wrongdoing and promote ethical conduct. The matters covered in this Code are of utmost

importance to the Company, our shareholders and our business partners. Further, these are

essential so that we can conduct our business in accordance with our stated values.



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The Code is applicable to the following persons, referred to as ³Officers´:

y Directors of the Company

y Our Senior Management

y Members of the Board of Subsidiary Company

Ethical business conduct is critical to our business. Accordingly, Officers are expected to read

and understand this Code, uphold these standards in day-to-day activities, and comply with all

applicable laws, rules and regulations, the Geojit BNP

P

aribas Code of Conduct, Service rulesand all applicable policies and procedures adopted by the Company that govern the conduct of its

employees.

Because the principles described in this Code are general in nature, Officers should also review

the Company¶s other applicable policies and procedures.

Officers should sign the acknowledgment form at the end of this Code and return the form to the

HR department indicating that they have received, read and understood, and agree to comply

with the Code. The signed acknowledgement form should be available with officers concerned.

Each year, as part of their annual review, Officers will be asked to sign an acknowledgement

indicating their continued understanding and adherence of the code.

III. HONEST AND ETHICAL CONDUCT

We expect all Officers to act in accordance with highest standards of personal and professional

integrity, honesty and ethical conduct, while working on the Company¶s premises, at offsite

locations where the Company¶s business is being conducted, at Company sponsored business

and social events, or any other place where Officers are representing the Company.

We consider honest conduct to be conduct that is free from fraud or misrepresentation or



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deception. We consider ethical conduct to be conduct conforming to the accepted professional

standards of conduct. Ethical conduct includes ethical handling of actual or apparent conflicts of

interest between personal and professional relationships. This is discussed in more detail in

Section IV below.

IV. CONFLICTS OF INTEREST

An Officer¶s duty to the Company demands that he or she avoids and discloses actual and

apparent conflicts of interest. A conflict of interest exists where the interests or benefits of one

person or entity conflict with the interests or benefits of the Company. Examples include:

A. Employment/Outside employment: With regard to the employment with the Company,

Officers are expected to devote their full attention to the business interests of the

Company. Officers are prohibited from engaging in any activity that interferes with their

employment with the Company. Our policies prohibit Officers from accepting

simultaneous employment with suppliers, customers, developers or competitors of theCompany, or from taking part in any activity that enhances or supports a competitor¶s

position. Additionally, Officers must disclose to the Company¶s Audit Committee, any

interest that they have that may conflict with the business of the Company.

B. Outside directorships: It is a conflict of interest to serve as a director of any company that

competes with the Company. Officers must first obtain approval from the Company¶s

audit committee before accepting a directorship.



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C. Business Interests: If an Officer is considering investing in any customer, supplier,

developer or competitor of the Company, he or she must first take care to ensure that

these investments do not compromise on their responsibilities to the Company. Our

policy requires that Officers first obtain approval from the Company¶s Audit Committee

before making such an investment. Many factors should be considered in determining

whether a conflict exists, including the size and nature of the investments, the Officer¶s

ability to influence the Company¶s decisions, his or her access to confidential information

of the Company or of the other company, and nature of the relationship between the

Company and the other company. At the time of application for approval, full facts of the

proposed investment shall be placed before the Committee.

D. Related parties: As a general rule, Officers should avoid conducting Company¶s business

with a relative, or have business in which a relative is associated in any significant role. A

relative means and includes spouse, children, parents, grandparents, grandchildren, aunts,

uncles, nieces, nephews, cousins, step relationships, and in-laws. Subject to the rules and

regulation, the Company discourages the employment of relatives of Officers in key

positions or assignments within the same department. Further, the Company prohibits the

employment of such individuals in positions that have a financial dependence or

influence (e.g. an auditing or control relationship, or a supervisor/subordinate

relationship). Every employee drawing a monthly salary of Rs.10, 000/- or more shall

disclose whether he is a relative or not of any of our directors.

E. Payments or gifts from others: Under no circumstance the Officers shall accept any offer,

payment, promise to pay, or authorization to pay any money, gift, or anything of value

from customers, vendors, consultants, etc., that is perceived as intended, directly or

indirectly, to influence any business decision, any act or failure to act, any commitment

of fraud, or opportunity for the commitment of any fraud. Inexpensive gifts, infrequent



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business meals, celebratory events and entertainment, provided that they are not

excessive or create an appearance of impropriety, do not violate this policy. Questions

regarding whether a particular payment or gift violates this policy are to be directed to

Finance Department. Gifts given by the Company to suppliers or customers should be

appropriate to the circumstances and should never be of a kind that could create an

appearance of impropriety. The nature and cost must always be accurately recorded in the

Company¶s books and records.

F. Corporate opportunities: Officers may not exploit for their own personal gain,

opportunities that are discovered through the use of corporate property, information or

position, unless the opportunity is disclosed fully in writing to the Company¶s Board of

Directors and the Board declines to pursue such opportunity.

G. Interested Contracts: Except with the consent of the Board of Directors of the Company,

any of the Director or his relative or a firm in which a director or his relative is a partner,

any other partner in such a firm, or a private company of which the director is a member

or director shall enter into any contract with the Company for sale, purchase or supply of

goods, materials or services, or for underwriting the subscription of any shares in or

debentures of the Company except for purchase or sale of goods for market price or such

contracts which either party regularly trades or does business. For any clarification in this

regard, the officers are requested to contact to the Finance Department / Secretarial

Department / Legal Department.

H. Whistle Blower Policy: Employees who came across any unethical or improper practice

(not necessarily a violation of law) shall be free to approach the Audit Committee without



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necessarily informing their supervisors. All officers are requested to inform their

subordinates about their this right through an effective manner. For any clarification in

this regard please contact Finance Department / Secretarial Department / Legal

Department.

I. Other Situations: It would be impractical to attempt to list all possible situations. If a

proposed transaction or situation raises any questions or doubts, please contact Finance

Department.

V. COMPLIANCEWITH GOVERNMENTAL LAWS, RULES AND

REGULATIONS

Officers must comply with all applicable governmental laws, rules and regulations, Officers must

acquire appropriate knowledge of the legal requirements relating to their duties sufficient to

enable them to recognize potential dangers, and to know when to seek advice from the Finance

Department. Violations of applicable governmental laws, rules and regulations will lead to penal

action as specified in the respective statutes. In any doubt about the compliance with laws

rules/regulations /guidelines contact appropriate department of the Company.

VI. VIOLATIONS OF THE CODE

Part of an Officer¶s job, and of his or her ethical responsibility, is to help enforce this Code.

Officers should be alert against possible violations and report this to appropriate department.

Officers must co-operate in any internal or external investigations of possible violations.

Reprisal, threat, retribution or retaliation against any person who has, in good faith, reported a

violation or a suspected violation of law, this Code or other Company policies, or against any

person who is assisting in any investigation or process with respect to such a violation, is

prohibited.



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The Company will take appropriate action against any Officer whose actions are found to violate

the Code or any other policy of the Company. Disciplinary actions may include immediate

termination of employment at the Company¶s sole discretion. Where the Company has suffered a

loss, it may pursue its remedies against the individuals or entities responsible. Where laws have

been violated, the Company will cooperate fully with the appropriate authorities.

VII.WAIVERS AND AMENDMENTS OF THE CODE

We are committed to continuously reviewing and updating our policies and procedures.

Therefore, this Code is subject to modification. Any amendment or waiver of any provision of

this Code must be approved in writing by the Company¶s Board of Directors and promptly

disclosed on the Company¶s website and in applicable regulatory filings pursuant to applicable

laws and regulations, together with details about the nature of amendment or waiver.

Overseas Joint Ventures

Barjeel Geojit Securities, LLC, Dubai, is a joint venture of Geojit BNP Paribas with Al Saud

Group belonging to Sultan Bin Saud Al Qassemi having diversified interests in the area of equity

markets, real estates and trading. Barjeel Geojit is a financial intermediary and the first licensed

brokerage company in UAE. It has facilities for off-line and on-line trading in Indian capital

market and also in US, European and Far-Eastern capital markets. It also provides Depository

services and deals in Indian and International Funds. An associate company, Global Financial

Investments S.A.O.G provides similar services in Oman

Aloula Geojit Brokerage Company is Geojit BNP Paribas's joint venture in Saudi Arabia with

the Al Johar Group. Saudi is home to the world¶s single largest NRI population. The Saudi

national and the NRI would be able to invest in the Saudi capital market. The NRI would also be

able to invest in the Indian stock market and in Indian mutual funds. This joint venture makes

Geojit BNP Paribas the first Indian stock broking company to commence domestic retail

brokerage operations in any foreign country.



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Bank of Bahrain and Kuwait (BBK), one of the largest retail banks in Bahrain & Kuwait

through its NRI-Business, and Geojit entered into an exclusive agreement in September 2007.

This association will provide the bank¶s sophisticated client base, the opportunity to diversify

their holdings through investments in the Indian stock market. Services offered are- Investment

Advisory, Portfolio Management, Mutual Funds, Trading in Indian Equity Market, DEMAT and

Bank account, Offline Share Transactions and PAN Card

Other Subsidiary Ventures

Geojit Comtrade

Geojit Comtrade, a subsidiary of Geojit BNP Paribas Financial Services Limited is mainly

engaged in the business of Commodities Futures Trading. Geojit Comtrade is a member of:

National Multi- Commodity Exchange of India Limited

National Commodity & Derivative Exchange limited

Multi-Commodity Exchange

India Pepper and Spice Trade Association

Singapore Commodity Exchange

Dubai Gold commodity Exchange

Geojit Technologies (P) Ltd

Geojit Technologies a subsidiary of Geojit Comtrade is engaged in providing software solutions

using open computing and web standard where possible .Geojit Technologies has strong domain

expertise in financial services such as Broking, Depository, Derivatives, and Banking etc

Geojit Credits (P) Ltd

Geojit Credits a subsidiary of Geojit BNP Paribas Financial Services Ltd, is registered with

Reserve Bank of India as an NBFC .It is engaged in the business of margin funding for securities

trading, loan against shares etc



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Customer Relation Initiatives

Geojit also provides a call and trade facility to its customers where in they can place track their

orders through our dedicated Call Centre Desk by dialing the toll free number 1800-425-5501

The brokerage structure makes Geojits online trading all the more attractive

0.03% for day trading

0.30 %for delivery

Vision Values and Beliefs

Vision

The vision of Geojit is to be leading financial and commodities market intermediary for

individual and institutional clients from India and overseas

Values and Beliefs

The understand and respect customers needs to consistently to deliver total quality solutions

trough constant skill up gradation

They believe that the company culture helps to attract and retain the best talent

They are committed to achieve profitable constant consistently

They freely share their investment experience across their investment experience across all ages

and strata of society to encourage wise investment for a better future

Geojit BNP Paribas Financial Services Ltd is a growing ³Financial Super Market´, which gives

all modern financial capital market services under one roof. Geojit BNP Paribas Financial

Services Ltd is the ³First Online Broking firm´ in India. The company stands as the first member

of NSE, the first company to give depositary services in South India



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Geojit BNP Paribas Financial Services Ltd is India¶s first internet brokerage firm. It has been

active in the field of capital markets for 20 years .Geojit BNP Paribas Financial Services is a well

established corporate sector in the Indian capital market .Its rate of return is growing every year

and its role in the market is expanding every year. The company also has an institution named as

³Geojit Institute of Capital Market´ also to train Geojits staff to equip with modern technology

for trading and related services. The staff is also trained for qualifying in NCFM exam conducted

by NSE

HISTORIC FOOPRINTS

1986

y Membership in Cochin Stock Exchange (CSE).

1994

y Becomes a Public Limited Company named Geojit Securities Ltd.

1995

y Kerala State Industrial Development Corporation Ltd. (KSIDC) acquires 24 percent

equity stake.

y Membership in National Stock Exchange (NSE).

y Public Issue

1996

y Launch of Portfolio Management Services with SEBI registration.

1997



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y Depository Participant (DP) under National SecuritiesDepository Limited.

1999

y Membership in Bombay Stock Exchange (BSE).

2000

y BSE Listing.

y 1st broking firm in India to offer online trading facility.

y Commences Derivative Trading with NSE.

y Integrates the 1st Bank Payment Gateway in the country for Internet Trading.

2001

y Becomes India's first DP to launch depository transactions through Internet.

y Establishes Joint Venture in the UAE to serve NRI customers.

2002

y 1st in India to launch an integrated internet trading system for Cash & Derivatives

segments.

2003

y Geojit Commodities Limited, wholly owned subsidiary, launched Online Futures Trading

in agri-commodities, precious metals and in energy futures on multiple commodity

exchanges.

y National launch of online futures trading in Rubber, Pepper, Gold, Wheat and Rice.

y Company renamed as Geojit BNP Paribas Financial Services Ltd.

2004



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y National launch of online futures trading in Cardamom.

2005

y NSE Listing.

y Geojit Credits, a subsidiary, registers with RBI as a Non-Banking Financial Company

(NBFC).

y National launch of online futures trading in Coffee.

2006

y Charter member of the Financial Planning Standards Board of India.

2007

y BNP Paribas takes a stake in the company¶s equity, making it the single largest

shareholder.

y Establishes Joint Venture in Saudi Arabia to serve the Saudi national and the NRI.



28

2008

y BNP Paribas Securities India (P) Ltd. ± a Joint Venture with BNP Paribas S.A. for

Institutional Brokerage.

y 1st brokerage to offer full Direct Market Access execution in India for institutional

clients.

2009

y Launch of Property Services division.

y Launch of online trading in Currency Derivatives.

y Consequent to BNP Paribas becoming the largest stakeholder in Geojit BNP Paribas

Financial Services, company is renamed as Geojit BNP Paribas Financial Services Ltd.



29

COPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) is a necessity for today's companies. To maintain a

competitive advantage, companies must expand Community Relations and Foundation programs

all over the world. Corporate Social Responsibility is the continuing commitment by business to

behave ethically and contribute to economic development while improving the quality of life of

the workforce and their families as well as of the local community and society at large.

Corporate social responsibility (CSR ), also known as corporate responsibility, corporate

citizenship, responsible business, sustainable responsible business (SRB), or corporate

social performance,[1]

is a form of corporate self-regulation integrated into a business model.

Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business

would monitor and ensure its support to law, ethical standards, and international norms.

Consequently, business would embrace responsibility for the impact of its activities on the

environment, consumers, employees, communities, stakeholders and all other members of

the public sphere. Furthermore, CSR-focused businesses would proactively promote the public

interest by encouraging community growth and development, and voluntarily eliminating

practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate

inclusion of public interest into corporate decision-making, and the honoring of a triple bottom

line: People, Planet, and Profit.

Recent CSR activities o f the company

Geojit Company sponsored the construction of a tourist police station cum museum at

mattanchery Kerala. This is one of the recent CSR activities of the company. This police station

mainly for tourist (mainly for outside state).The complains of the tourist can be solved through

these police station. This is very helpful to the tourist

Tamil Nadu team ³Go Green day´ celebrations staff of various branches planted 253 saplings in

several schools, colleagues¶, parks and hospitals



30

Donated medicines worth rupees -10000 to Vriddha Asramam (old age home) at Khadavli

village

In May 2008, sponsored Mr. Gopal international grand master and coach Lev Psakhis is an

endeavor to create an opportunity for him to play with higher ranked grand master to improve his

ratings Gopal was the first grand master in chess

Associate sponsor of a film award star nit show organized in Chennai by the world malayalee

council and kairali TV The proceeds of the show will support a social cause to raise rupees 20

million for setting up an orphanage in one acre of land to accommodate 1000 destitute children

who are mainly HIV positive.



31

CARRIER

Geojit BNP Paribas takes pride in its employees and their exceptional qualities, which form the

core strength of the Company. We continuously strive to set higher standards in transparency and

integrity in financial services industry. Our motto is to deliver quality service at competitive

rates.

With a pan-India network of Offices, Geojit BNP Paribas is an equal opportunities employer

having a workforce reflecting the diversity of our nation, with unity and strength woven through.

The work environment andH

R policies of the Company aims at achieving quality work life balance of our employees

On joining Geojit BNP Paribas, one becomes an integral part of a dedicated team working

towards achieving our organizational goals, particularly in creating investment awareness across

all ages and strata of society. Along with remuneration, employees are given a fair share of

profits. We encourage employees to continue learning, acquire new skills and grow with the

Company in its operations in India and abroad.

Given below are the current job opportunities with Geojit BNP Paribas. We look forward to

candidates who would want to be a part of the Geojit BNP Paribas Team.

We welcome people with experience to submit their applications. If you have the experience but

have not found any present opening suitable to your skills you may click on the Experienced

option and submit your resume for consideration against future opportunities.

We also welcome Fresh Graduates to register their names for any future suitable openings. To

register you may click on the Fresher option under Current Openings and enter the details. We

shall contact you when we have an opening matching your profile.



32

Current Opening

Executives (HR)

Customer Care Executive ( Proficiency in French )

Customer Care Executive

Dealers

Financial Consultant

Chief Manager (Call Centre)

Chief Manager (Legal & Compliance)

Senior Manager (Corporate Communications)

Relationship Officer



33

CHAPTER III



34

Vertical Functioning of Geojit

Operations department

Company secretary

Internet trading

Risk & Settlement

Technology department

Distributions department

Finance department

Human resource department

Operations department

The operations department is headed by the Chief Operating Officer .The various functions of

the operations department are the following.

equity and commodities trading

Portfolio management services

Research functions



35

Depository functions

Equity and Commodities Trading

Trading in both cash and comTrade market is one of the main services provided by Geojit.

Separate accounts are needed for trading in commodity and cash. Trading in cash, futures and

options can be done with the help of one account .Geojit also provides a call & Trade facility to

its customers can place and track their orders through a dedicated Call Centre Desk by dialing

the toll free number.

Geojits retail spread caters to the need of individual investors .Trading in equities is made

simple, safe and interesting with smart advice from the research desk through daily SMS alerts,

market pointers, periodical research reports, stock recommendations and customer meets

organized frequently

Portfolio Management Services

The portfolio management service is another function which comes under the operations

department. The strategy of the portfolio management services is to identify growth stocks from

a select list through extensive research

The minimum investment required for portfolio management services is Rs.10 lakes for resident

Indians and Rs.25 lakes for Non-resident Indians. The investment objective of the portfolio

management service is to generate medium to long- term capital growth by identifying

undervalued stocks and those with growth opportunities from a select list of well researched

stocks

Research Functions

Sophisticated tools are used for technical analysis and research to offer recommendations,

technical analysis and research reports. The research team provides the following information



36

Daily Market View Technical Analysis

Market, a daily report on markets gives a clear picture on the expected market movements (NSE

and BSE). It also covers the key support and resistance levels .it also provides clues on market

direction and expected profit booking levels.

Daily Stock View

Technical analysis stocks, a daily report on the stock for the day. These are prepared ³ Departure

Oscillators ³ tool that have a high degree of accuracy on stock readings; which in turn helps

investors , day traders , high net worth individuals with stock ideas that may benefit them

F & Q Analysis

F & Q Analysis is a daily report that gives near 100% accurate reading on both Futures and

Options. It is helpful for day traders, long term holders and H NI clients

SMS

SMS alerts are sent to those who have registered for the service. These are prepared with utmost

care, ensuring that it is suitable for both the Bulls AND the Bears I It provides instantaneous

buy/sell/hold recommendations purely on technical¶s .It also provides option strategies with the

use of Implied/Historical volatility study . SMS is especially hand for Index Traders

Geo Data

Geo Data is a monthly research report covering most financial instruments .It is quite

comprehensive, and provides in depth information on stocks to watch out for, recommended



37

Mutual Funds, performance of schemes, Futures and Options update and a review of the

commodities markets.

Depositary Function

Geojit is a depositary participant of NSDL. Investors can open demat accounts with NSDL

through Geojit. Agreement charges along with annual maintenance charge are collected upfront

while opening an account .DP facilities offered by Geojit are the following.

De- materialization

A share holder can convert physical shares in to electronic form by surrendering the shares for

dematerialization at the Geojit branch

Re-materialization

Re- materialization enables a share holder to convert the dematerialized shares in to physical

form

Repurchase

This facility helps the investor to submit the units of open-ended mutual funds in case of re-

purchase.

Pledge

An investor can pledge securities to avail a loan.

Transfer

An investor can transfer securities from one demat account to another this function is called off

market functions.



38

IPO¶s

An investor who has applied for an IPO and receives an allotment then the securities are

transferred directly to his demat account. The same applies for bonus and right issues.

Commodity De-mat Account

An investor dealing in commodity may need to open a commodity de-mat account with Geojit.

Speed-e

If an investor has registered for Speed-e services, then transfer instruction can be placed online

over the internet to pre-notified Clearing Members Pool A/c. This does away with the need to

submit a physical delivery instruction slip.

Company Secretary

A Company Secretary is a senior position in a private company or public organization. The

company Secretary ensures that an organization complies with relevant legislation and

regulation, and keeps board members informed of their legal responsibilities. They are the

company¶s named representative on legal documents and in their responsibility to ensure that the

company and its directors operate within the law. It is also ensure that dividends are paid and to

maintain company records, such as list of directors and share holders, and annual accounts

Every company having a paid up capital of Rs.2 core and above should appoint a company

Secretary. The annual general meeting of Geojit is conducted under the guidance of company



39

secretary. The company secretary has to collect notes from all departments and present it to the

board of directors for the board meetings.

The functioning of a company secretary is

To conduct meetings like AGM, board Meeting etc

Make minutes of the meeting

Make reports on the meeting

Reports on corporate governance

Preparation of annual report

Registrar report

Report to board of directors

To conduct share transfer meeting twice in a month

Replay to the investors Grievances & Complaints

Internet Trading

Internet trading or on line trading has introduced a new phase in stock market and commodity

futures trading. Making the market literally at the fingertips of the trader. The onset of on line

trading changed the traditional value proposition of trading now investors and traders get rich,

interactive information in real time, including market data, investment research and robust

analytics. The present day environment helps any class of investors to save time, which isµmoney¶ and hence, the need arises for internet trading.

In the real world one do stock market trading or commodity futures trade with the respective

exchange through a broker.



40

In on line trading one will access the website through their internet ± enabled PC and place

orders through the internet based trading engine.

Understand this need; Geojit introduced a unique, exclusive portal for its customers to internet

trading in stock market and commodity future market. It is the ultimate on line trading platform

for shares and commodities future trading in NSE, BSE, NMCE, and NCDEX.

Risk & Settlement Department

Being a trading firm Geojit¶s risk and settlement department can be considered in the life blood

of the firm. For the existence in the competitive market this department plays a major role. In a

competitive market providing proper guidance in trading is not only the function of a major

player like Geojit. So risk & settlement dept plays its part to make the customers stick to the

firm.

Its actual functioning is monitoring the transactions happening in the various branches & in the

business associates. For trading in the market a client need to have certain amount of money in

the account .They can make trading only in proportion to these amounts.

But with help of risk dept they can make trading by getting a limit up to 10 times i.e. if a client is

only having 10000/- in his a/c, he can get a limit up to 100000/- but the risk dept provides this

only on the basis of various factors like past trading pattern of the client, recommendation from

the branch etc. Risk dept is having the full control of all its branches & business associates. They

can square off the position of the client. By providing these limits the risk dept is actually

motivating the clients who are interested but doesn¶t have enough money to trade.

Monitoring the clients accounts

Setting Margin Amount for the client

Squaring the positions of the clients if necessary



41

Forwarding the tips from the research department

The settlement departments mainly focus on the pay in and pay out of shares. It works in

coordination with the accounting department. All the matters related these pay ins and pay outs

are looked over by this department.

Technology Department

The system department is headed by the chief technology officer. All regional office will have

one systems department, which is responsible for all the system related activities of the branches

which come under that region. The system department will be monitoring the trading the

software that is used in the branches. The software used in Geojit is FLIP Software. A server is

there at the regional office to which all the system of the region is connected with. The server

and branch office systems are connected through ISD N. The regional offices are connected to the

head office through a leased line.

At the regional office there will be one systems manager and systems engineers who are

responsible for all the systems functions that come under that regional office. Maintenance of the

system is the responsibility of the system department.

Distribution Department

The distributions department is headed by the head, distributions. The sale of mutual funds,

insurance products, bonds, IPO¶s, fixed deposits etc come under the distributions department.

Geojit sells the mutual funds of all leading mutual fund companies in India like Reliance, SBI,

HDFC, ICICI, HSBC, Franklin etc

Geojit sells the insurance products of the Met life Insurance companies



42

Finance Department

The finance department is headed by the Chief Financial Officer. The finance department is

responsible for the maintenance of client accounts, risk and settlement and also for the NBFC

operations. It is responsible for the all fund and cash related matters. Collection of margin money

is also done by this department. This department also looks after the pay in and pays outs of

funds in the firm.

The credit worthiness of a client is determined by the finance department based on which debit

balance is allowed to him. The settlement function is another important function of the finance

department. The NBFC functions like loans against shares, loans for commodity trading etc

comes under the control of the finance department.

Human Resources

The human resource department of Geojit BNP Paribas Financial Services is headed by the Chief

of Human Resources. The human resources department is responsible for the training and

development of human resources at Geojit BNP Paribas Financial Services.

There will be human resources coordinator at each regional office, who undertakes all the HR

related functions of the branches which comes under that region. The recruitment, selection,

training and development of employees come under the functions of HR dept. The functions are:

Recruitment and Selection

The HR department will conduct interviews for new employees many of the interviews and the

selection procedure are conducted in the head office.



43

Training and Development

The department takes initiatives in conducting training and development program. Geojit usually

providing to the dealers in the branches and conducts some seminars for the clients.

Compensation

The salary package of Geojit staff is best in the industry and is mainly based on individual

performance in course. The HR department will conduct the performance appraisal by analyzing

each and every staff personally.

Products and Services

1. Equity

Geojit, a member of NSE and BSE, has a net work of over 300 branches in India and abroad,

rendering quality equity trading services. Geojit not only has a strong offline presence but also

automated on line trading service. Geojit also provides a Call & Trade facility to its customers

where in they can place and track their orders through our dedicated Call Centre Desk by dialing

the toll free number 1800-425-5501. Geojit retail spread caters to the need of individual

investors. Trading in equities is made simple, safe and interesting with smart advice from the

research desk through daily SMS alerts, market pointers, periodical research reports, stock recommendations and customer meets organized frequently.

The online trading system allows customers to track the market by setting up their own

market watch, receiving research tips, stock alerts etc. The brokerage structure makes Geojit

online trading more attractive



44

2. Futures and Options

The national stock exchange and Mumbai stock exchange have commenced trading in

Derivatives market with Index Futures being the first instrument. Now both the exchanges

provide trading in index futures and options

A derivative is a financial contract, between two or more parties, which is derived from the

future value of an underlying asset.

At any point of time there will always be available near three months contracts periods

There are three types of members in the futures and options segment. Trading members are only

eligible to trade; their trades are settled by the clearing members. Trading cum clearing members

are members who are eligible to trade also settle on behalf of other trading members. Profession

trading members who are only specialized in the clearing and settlement activities. They do not

trade on their own behalf or on behalf of other members. Self clearing members are those who

trade and settle only their own trades

3. Margin Trading Funding Scheme

Geojit BNP Paribas Financial Services Ltd offers Margin Trading Funding facility to all offline

customers under the scheme of Margin Funding approved by SEBI.

Highlights the schemes are as follows

1. All securities defined under group 1 of NSE are eligible for margin funding

2. No processing fees

3. Easy and prompt accounting opening formalities



45

4. Margin funding of up to 50% of the purchase value

5. Shares purchased are credited to customers Demat account maintained specifically for the

purpose of margin trading

6. Liquidation if margins are not topped up on a 20% falls in the margin funded portfolio

7. Margin calls are made if there is fall of 10% of the margin funded portfolio. Margins can be

replenished by cheque or by transferring fund from normal trading account

8. Bonus and Rights are also directly credited to the customers said Demat account. Similarly

dividend shall be credited to the bank account stated in the said Demat account

9. Interest rate is 18% pa

10. No limits on time up to on which he can keep the position open.

11. Purchase can be made only against clear funds.

12. Margin trading is only permitted in NSE only

Margin Ratios

Margin Ratio: 50:50

Maintenance margin/Call margin:40%

Liquidation margin : 30%



46

4. Loan against shares

Geojits credit Pvt Ltd, a registered Non-Banking Finance Company and an associate of Geojit

BNP Paribas Financial Services Ltd offers loan against security of shares. The facility is

available to all customers of Geojit BNP Paribas Financial Services Ltd.

Highlights of the Scheme

1. All securities defined under group 1 of NSE are eligible for loan against securities

2. Loan is provided against a minimum of two securities and minimum loan amount is Rs.

50000/-

3. Loan up o 50% of the security value

4. Upper ceiling on quantum of loan shall be as determined by Geojits Credits P Ltd on a case to

case to basis.

5. Speedy disbursal through RTGS / direct credit to customer¶s bank account / cheque

6. Hassle free processing and simple documentation

7. Securities are to be transferred to Geojits Credits Pvt Ltd.

8. 75% loan amount is charged upfront

9. Rate of interest is 13.5% pa annualized rate 16.5% pa.

10. Loan can be availed for a maximum period of 90 days



47

11. Easy roll over process, simply give a letter for the same, however, upfront charges as stated

above shall be levied.

12. Loan can also be redeemed by instructing Geojit Credits P ltd to sell the securities

13. Loans are re valued daily

14. Margin calls are made if the values of the securities fall by 10% which can be met with either

by redeeming the loan partially. And or placed additional securities.

15. Securities may be liquidated if the margins are not furnished in case of a fall of 20% value of

the securities.

5. Loans for ComTrading

Geojit Credits P Ltd offer loans against Pledge of warehouse receipts of delivery at Commodity

Exchange.

Highlights of the Scheme

1. Loans against pledge of physical and Demat warehouse receipts

2. Loans up to 80% of sale value price contracted for the future delivery

3. Loans are also considered against pledge of warehouse receipts without futures sell contract

on a case-to-case basis at higher margins ranging from 30% to 50% of the value

4. Loans available till sale proceeds are realized on settlement from the Commodity Exchange

else up to a maximum of three months

5. Provision to switch between different future contracts.

6. Simple documentation



48

7. Speedy disbursal of loans through RTGS

6. Depositary Services

A depositary can be compared to a bank, it holds securities such as shares, bonds, debentures,

and government securities etc. of investors in electronic form there are two depositories in India

.The National Securities Depository Limited and Central Depositary Securities Limited. An

individual who desires to avail the depositary services can approach a Depositary Participant,

banks, financial institutions, custodians, brokers or any other entity eligible as per SEBI

regulations, 1996 can apply to the depository to become a Depositary Participant. AS on 31st Dec

2005 there were 221 depositary participants in India. Geojit is a depositary participant of NSDL.

Investors can open demat account with NSDL through Geojit. One can approach the nearest

branch of Geojit for opening an account. Agreement charges along with Annual Maintenance

charge are collected upfront while opening an account. It takes two or three days to pen a demat

account. Upon activation of the demat account, a welcome letter is sent to the customer along

with the Delivery Instruction Slip book.

DP facilities offered by Geojit

De- materialization

A share holder can convert physical shares in to electronic form by surrendering the shares for

dematerialization at the Geojit branch

Re-materialization

Re- materialization enables a share holder to convert the dematerialized shares in to physical

form



49

Repurchase

This facility helps the investor to submit the units of open-ended mutual funds in case of re-

purchase.

Pledge

An investor can pledge securities to avail a loan.

Transfer

An investor can transfer securities from one demat account to another this function is called off

market functions.

IPO¶s

An investor who has applied for an IPO and receives an allotment then the securities are

transferred directly to his demat account. The same applies for bonus and right issues.

Commodity De-mat Account

AN investor dealing in commodity may need to open a commodity de-mat account with Geojit.

Speed-e

If an investor has registered for Speed-e services, then transfer instruction can be placed online

over the internet to pre-notified Clearing Members Pool A/c. This does away with the need to

submit a physical delivery instruction slip.



50

7. Portfolio Management Services

Geojit, a SEBI registered portfolio manager offers discretionary portfolio management services.

Geojit has a team of experts who carefully take investment decisions based on the client¶s

objectives.

The portfolio management team has a successful track record of more than 10 years in the capital

market. The team has access to Geojit strong equity research and fundamental & technical

analysis.

Investment Objective

To generate medium long term capital growth by identifying undervalued stocks and those with

growth opportunities from a select list of well researched stocks.

Strategy

Identifying growth from a select list through extensive research minimum investment

Rs.10 lakes for resident Indians and Rs.25 lakes for non ± resident Indians

Reports

Portfolio and NAV are communicated bi-weekly via e-mail

Risk factors as the stocks are normally held for medium to long term, the net asset value will be

affected by market volatility.

PMS fee

Option 1: 3% p.a.

Option 2: 1% p.a.



51

Performance fee

20% on gain in NAV over the above 12% p.a. based on the high watermark concept charged at

the end of the year or on withdrawal

8. Research

Sophisticated tools are used for technical analysis and research to offer recommendations,

technical analysis and research reports. The research team provides the following information

Daily Market View Technical Analysis

Market, a daily report on markets gives a clear picture on the expected market movements (NSE

and BSE). It also covers the key support and resistance levels .it also provides clues on market

direction and expected profit booking levels.

Daily Stock View

Technical analysis stocks, a daily report on the stock for the day. These are prepared ³D

epartureOscillators ³ tool that have a high degree of accuracy on stock readings; which in turn helps

investors , day traders , high net worth individuals with stock ideas that may benefit them

F & Q Analysis

F & Q Analysis is a daily report that gives near 100% accurate reading on both Futures and

Options. It is helpful for day traders, long term holders and H NI clients

SMS

SMS alerts are sent to those who have registered for the service. These are prepared with utmost

care, ensuring that it is suitable for both the Bulls AND the Bears I It provides instantaneous



52

Buy/sell/hold recommendations purely on technical¶s .It also provides option strategies with the

use of Implied/Historical volatility study. SMS is especially hand for Index Traders

Geo Data

Geo Data is a monthly research report covering most financial instruments .It is quite

comprehensive, and provides in depth information on stocks to watch out for, recommended

Mutual Funds, performance of schemes, Futures and Options update and a review of the

commodities markets.



53

Six Sigma in Financial Institutions

Managing Quality has been the primary agenda in every organization. Quantifying quality

becomes comparatively easier for manufacturing houses where products are tangible. In contrast,

when the question of quality arises in organizations that are providing service, it becomes all the

more difficult to represent the same in numbers. This particular aspect has given rise to various

measurable metrics that strive to provide a quantifiable measure that has been universally

accepted as a standard benchmark of quality management.

EVOLUTION

The term Sigma was [in the early 1980s coined by Motorola Corporation stood as a synonym for

quality program Later, in the mid 1990s, it was adopted by General Electric [GE] and Allied

Signal. Initially, the concept hovered around manufacturing improvements. The reason being, the

knowledge of statistical tools in manufacturing functions and the ease with which one was able

to quantify the benefits. In simple terms, it signifies that for any manufacturing company, out of

one million opportunities, only 3.4defects are to be found. This is actually the theoretically

permissible limit of attainable quality. It is to be noted here that the philosophy behind the

concept finds an added priority as compared to the statistical significance. Six Sigma primarily

means the improvement or the design of any business process that exactly meets the customer¶s

requirements that are almost completely customized to the needs of the customers and at a

minimal cost structure. Indian companies such as Wipro, Godrej-GE have also adopted the Six

Sigma strategy to improve businesses.

THE PHILOSOPHY

As stated earlier, Six Sigma is a highly disciplined approach that is used for reducing the process

variations to the extent that the levels of defects are reduced to less than 3.4per million processes,

products or service opportunities [DPMO].Sigma is a Greek letter that describes the variability of

any process. In terms of statistical quality control, signifies ³standard deviation´. Let us take an

example: Consider an assembly with 30parts and five steps. This implies that there are



54

150(30*50)opportunities for a defect to occur, if one is able to track 100defects in every

100assemblies.This further signifies one defect per assembly or a million defects in one million

assemblies. This can now be converted in to 1,000,000*(1/150) i.e., 6,666DPMO. This

corresponds to a sigma level of 3.97.

Key elements of Six Sigma

Some of the elements that need to be considered before starting a Six Sigma initiative are as

follows:

Opportunity: An opportunity is considered as an area within the product, process, services or

other system where there is a possibility of a defect or where one fails to achieve the ideal

product in the eyes of the customer. An opportunity can be described as anything that one can

inspect, Measure or test on a unit that provides a chance of allowing a defect.

Unit: A unit is defined as any item that is produced or processed that is liable for the purpose of

evaluation as against already set criteria or standards.

Defect per unit: This is defined as the average number of defects that is observed while

sampling any particular population. In other words, it is defined simply as the ratio of the number

of defects over the numbers of units tested

CTQ: This stands for Critical to Quality and is considered as the key measurable characteristic

of a product or process that has to meet the performance standards or specification limits so as

satisfy the customers. CTQ S basically represents the product or service characteristics that are

defined by the customers.



55

DPMO: Defects Per Million Opportunities are the average number of defects per unit that is

observed during an average production run divided by the number of opportunities to make a

defect on the product under the stated circumstances.

Yield: Yield is defined as the percentage of process that is free of defects. It can also be defined

as the percentage of the commitments that are met and calculated over the total number of

opportunities for which the defect could generally appear.

BEYOND THE REALM OF THE MANFACTURING

Traditional thoughts on Six Sigma primarily focused on the manufacturing process. Of late, theconcept has moved on to be associated with other fields as well, Today ,Six Sigma is used by

everyone from health service providers to the accountants making the process of receivables and

payables more efficient. This has clearly signified that Six Sigma is no longer confined to the

manufacturing houses. Companies are now applying the same in various allied activities, which

was once a distant dream. But it is to be remembered that every client is different. Some of the

client (customers) may reciprocate saying that standardizing products may lead to inferior

services. It is true to a great extent. Six Sigma cannot be applied for every service process then

one may need to adjust the same to suit even those processes for which it does not work.

THE CASE FOR FINANCIAL INSTITUTION

One of the grueling challenges that a financial institution faces is that of optimizing its staff

levels. In the process of doing so, they strive to improve their individual branch-customer

satisfactions with simultaneous reduction in the overall cost. Customers, today, demand timely

and accurate service and they don¶t hesitate to switch to the company¶s immediate competitor if

dissatisfied with the service s rendered by the company .Thus, it becomes very important for

service providers to focus on quality performance every time they interact with their clients. In

this regard, financial institutions find the applications of Six Sigma as an opportunity to take

corrective actions based on empirical evidences rather than on gut feeling. The recent trends in

financial institutions provide an indication of the increasing number of areas Six Sigma is being



56

adopted in by various companies across the globe. The adoptions are more focused in a couple of

areas namely service processes and automation. It goes beyond saying that service processes play

a crucial role in every financial institution. This can be in the form of loan processing in banking

institutions, accounts payable in accounting departments, and orientation of employees in the

human resource department o mention a few. Considerable portions of the company resources

are consumed in service process. Thus, when the task of aligning the business processes with the

expectations of the customer comes to the fore front, priority needs to be given to direct the Six

Sigma efforts towards these resources. An example of opening an account in a bank provides a

wonderful example; a customer opens an account for the purpose of transacting in diverse

products of the bank. Customers are highly sensitive towards the time that is involved in the

process. The problem of opening an account compounds when the institutions wants to cross-sell

additional products from its diverse business lines. In the traditional form of business, such an

activity might take several days to complete, cost considerably high also score pretty low in

customer satisfaction index. Six Sigma applications help in streamlining the various operations

involved and, thus, help in securing customer business resulting in quicker flow of transactions.

Automation is yet another area where Six Sigma has made a considerable dent. Moving the

information¶s in an electronic format provides a great opportunity for cost efficiencies and also

the levels of customer satisfaction for financial institutions. At the same time, it needs to be kept

in mind that paperless transactions also carry the increased risk of failures. In the case of a single

process failure, several thousand of customers can be at risk in a highly automated environment.

An example can be of check imaging that can be highly successful with proper application of Six

Sigma resulting in enhanced customer satisfaction and cost reduction.

MAKING SIX SIGMA SUCCESSFUI

Financial institutions along with healthcare and consumer product companies are rapidly moving

towards the application of Six Sigma in their service processes. Several key elements need to be

understood before one can reap the benefits of the entire program. Initially, it is important to

determine the parts of the service process that find the best candidate. It is essential to demarcate

among a highly customized, mass customized and stanandardized service that is provided. In a



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highly customized situation, the cost incurred in applying Six Sigma is much application. In case

of standardized services such as credit card operations, the use of Six Sigma can give substantial

profit. Within the company, accounts payable and payroll structure are the areas that are the

primary beneficiaries of Six Sigma application. While Six Sigma in any enterprise, one should

clearly define what is actually meant by service defect and how one intends to measure the same.

Defending a service defect in an environment where there is no product involvement, nothing

tangible to inspect and the process being highly variable, one of the daunting challenges is the

application of Six Sigma in the service delivery system. In 1996, when Citi bank launched its

Six sigma programs for its banking services, it defined a defect as many customers rating that

were below two highest responses on a satisfaction survey. Based on that particular definition,

the bank could identify seven service process defects in its account opening process, its customer

statement process and five other processes Measuring defects requires highly skilled researched

service representatives who can pose the correct question and gather meaningful information

from the customers. Another important aspect that needs to be carefully analyzed pertains to

probing the basic cause of the defects. Once, the aspect of identifying and measuring the service

defect is done, it is

Important probe further in to the question of why such a defect has occurred. There may not be

just one reason for the error; one may find many reasons for the defect, a company can build

system that can serve the customers in a better way. When an insurance company realizes that its

commission check that were given to its agents were mostly in accurate, it can probe in to

finding the primary causes for the same. Once the streamlining of the chief causes is carried out,

it becomes easier for the insurer to carry out better and smoother operations later on. It needs to

be kept in mind that Six Sigma program calls for a long term commitment.

ADVANTAGES OF SIX SIGMA IN FINANCIAL INSTITUTION

The application of six sigma helps in maintaining integrity of data within the system. This is turn

helps avoid repetitive work. It also aids in the standardization of calculation methods. Another

benefit arising out of six sigma application is the avoidance of recording incorrect benefit that





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y Reduced processing and approval times

y Highly satisfaction among cross channel customer experience

y Better customer retention

Improve business results

y Increased compliancy

y More efficient department

y Dramatically improves competency and knowledge among employees

y Develop new innovative ways to increase business and cross- sale services

y Fewer defects, transactional errors

Reduced costs/cost savings

y Better financials and higher annual savings

y Less work and waste

y Optimized supply chain management

y Achieve an understanding of operations and what drives them

Financial companies which have been successful by implementing Six

Sigma Programme:

y Citi Group

y Fidelity Investment

y Nation Wide

y Bank One

y Sovereign Bank

y Cross Country Home Services

y Bank of NY

y Credit Acceptance Corporation.

y Mi Florida Federal Credit Union

y Balboa Capital

y Bank of Montreal



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y African Bank Investment Ltd.

y JP Morgan Chase

CONCLUSION

It is to be kept in mind that Six Sigma is a powerful tool that facilities in achieving better and

improved performance not only in manufacturing companies but also in financial institutions.

The approach heavily relies on the advanced statistical tools that help in complementing the

process and product knowledge in order to reduce the variability of operations. It can said to be a

new way of doing business that promises to eliminate the existing defects in an efficient manner

and also prevents further errors from creeping in. Companies use various strategies to deploy Six

Sigma. Each of addressed first before adopting the same. Six Sigma offers any financial

institutions the ability to save millions of dollars a year through quality improvements that

enhance customer satisfaction, since it¶s all about Money, Honey



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CHAPTER IV



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SWOT Analysis

Strength:

o 22 years of experience in providing financial services

o The company has got wide range of products for its customers

o They tie up with BNP Paribas has helped the company to serve a large number of people

both from India and outside India

o Company has got a good client relationship

o The company is blessed with committed and talented work force

o Company has got a conducive working environment

o The company follows a strict work hour policy

Weakness:

o Advertisement is very limited.

o Lack of awareness programs

Opportunity:

o Geojit can get a gaining position if they enter in to the banking operations.

o The company can explore international market as they have a tie up with BNP Paribas

o The company can maximize the benefit from wide range of products

o The company should try to target the corporate clients



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Threats

o From the new competition o From the unpredictable market situation



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CHAPTER V



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FINDINGS

y The company has more than 22 years of experience in the brokerage business

y The company a follows a strict work hour policy.

y The company is more adapt to changes and using new methodologies and technologies.

y The attrition rate is low because the staff doesn¶t want to leave the organization due to the

work culture, brand name. Independence, wages, that the company provides is unique by

it.

y The company is giving more opportunities to young graduates

y The database managed by the company is high class.

y The company keeps very good client relation.

y The brokerage fee is less compared to other competitive firm.

y The company has fully computerized departments.

y Now the company began to face competition in the local and national markets

y Most of the branches are located in urban areas



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SUGGESTIONS

y The advertisement should be increased

y The company should always take up new measures to face the competition to

remain as the market leader

y The company should try to extend the market to other foreign countries also.

y The company would open branches in both rural as well as urban areas



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CONCLUSION

Gratitude

Here what I want to put forward is that through this organization study I have been able to

acquire an appropriate knowledge regarding the functioning of different departments.

Earlier, I had a rough idea regarding the functional processes involved in the Departments of

Finance, HR and Trading. Here I was able to gain as much as knowledge I can and whole

integration of the organization was unique.

The work or the study which I have done has helped me a lot in understanding the work culture

present in an organization. While interacting with my company guide I have been able to get

some valuable tips, useful for managing the people who are working under you and hoe to get

the work done from them. He also told me about the importance of each and every employee in

the organization and how a manager understand his employees, their talent and uses them in

achieving the organization objective which will in turn benefit the employee and the

organization.

As a whole it was a nice experience for me to get an opportunity to do an Organizational study at

Geojit. I would like to thank each and every employee of the organization for helping me and

answering to my queries. I would also like to thank the different departmental heads for giving

me advice regarding the managerial work which an MBA Graduate will face while been on work

and how to tackle different situations.Once again I would like to thank each and everyone who

has directly or indirectly helped me in completing this OS



Bibliography

Books

1. Arun Kumar and Meenakshi, (2006), - ³marketing management´, second

edition, Vikas publishing house Pvt ltd Newdelhi.

2. Aswathappa K- Human Resource & Personnel Management

Tata McGraw ± Hill publishing co. ltd., 1999.

3. Pandey.I.M -Financial Management

Vikas publishing house Pvt ltd, 2000.

1.Www. Geojitbnpparibas .Com

2.Www. Nseindia. Com

3.Www. Mutualfundindia. Com

4.Www.Wikipedia

Documents

Os Project 1