TAMIL NADU OPEN UNIVERSITY

M Phil PROGRAMME-DESSERTATION

FINANCE MANAGEMENT
- A study focusing the Savings Habits among Private Medical Practitioner and their
preferences towards Financial Institutions.

SYNOPSIS

A. RATIONALE FOR THE STUDY

With the movement towards globalization, market determined exchange rate

system and highly liberalized exchange rate regime by India, it has become imperative to
every management student, and managers working in the financial services, banking and
insurance sectors to have a working knowledge of the changed Financial Environment

B.OBJECTIVE

The study seeks to bring out the conceptual understanding in the field of Finance
Management.
The study brings out nature of Finance management and issues faced by marketers.
The study identifies key factors influencing the demand for Finance in a competitive
environment.
Several methods of Finance forecasting and models of demand analysis would be
identified and adopted for analyzing problems.

C. RESEARCH METHODOLOGY TO BE ADOPTED FOR CARRYING OUT THIS

PROJECT.

In carrying out this dissertation an exhaustive literature survey on finance

management, demand analysis would be carried out for this purpose Management Books,
Periodicals, Study Reports would be referred.

In addition access to internet would be made to obtain global perspectives in the

field of Finance Management would be consulted.
D. INTRODUCTION

An efficient allocation of capital is the most important finance function in the

modern times. It involves decisions to commit the firm’s funds to the long-term assets.
Such decisions are of considerable importance to the firm since they tend to determine its
value size by influencing its growth, profitability and risk.

NATURE OF INVESTMENT DECISIONS

The investment decisions of a firm are generally known as the capital budgeting,
or capital expenditure decisions. A capital budgeting decision may be defined as the
firm’s decision to invest its current funds most efficiently in the long-term assets in
anticipation of an expected flow of benefits over a series of years. The long-term assets
are those which affect the firm’s operations beyond the one-year period. The firm’s
investment decisions would generally include expansion, acquisition, modernization and
replacement of the long-term assets.

Importance of Investment Decisions

They influence the firm’s growth in the long run

They affect the risk of the firm
They involve commitment of large amount of funds
They are irreversible, or reversible at substantial loss
They are among the most difficult decisions to make.
 - A study focusing the Savings Habits among Private Medical Practitioner and their
preferences towards Financial Institutions.

Name of the Medical Professional :

Name of the Hospital/Clinic :

Specialization :

Address :

Year of Establishment :
Savings Interest : Yes / No

Type of savings : a) Short term savings □

b) Long term savings □

Institutions : a) Bank:
Nationalized Banks □
Private Banks □
Private Fund Office □
b) Insurance □
c) Postal □
d) Private Chit Company □
e) Financial services companies:
Shares □
Mutual funds □
Bonds □
f) Others □

Investment Plan : a) Small Savings:

Daily □
Monthly □
Quarterly □
Half-Yearly □
Yearly
b) Fixed Deposits □

Inspiration of the Institutions (Thru) : a) Advertisement □

b) Personal selling □
c) Seasonal/Discount Offers □
d) Income tax benefits □

Suggestions if Any :
INTRODUCTION

We normally tend to believe that the rational economic agent is aware of the
savings alternatives and is willing to substitute instruments in a manner such that returns
are maximized, which is what economic theory also assumes.

Therefore, whenever we talk of interest rates, we assume that when interest rates fall,
bank deposits would decline as savers would move away from fixed deposits with banks
to more remunerative instruments such as capital markets or small savings.

Economic intelligentsia also adds another dimension in talking about real returns where
adjustments are made for inflation, or going ahead one step further, expected inflation.

However, if you look at the trends in the savings pattern of Indian households, a different
pattern emerges. The Indian saver, in fact, typically does not seem to be quite as
perspicacious as our textbooks assume him to be.

The interest rate on a bank deposit with tenure of one to three years has dropped from 9
per cent in FY00 to 4.6 per cent in FY04. But the share of bank deposits in total savings
actually increased from 35.1 per cent to 42.8 per cent during this period.

Quite clearly, deposit holders are not really sensitive to interest rate changes. The reasons
are not difficult to guess. Tradition and lethargy combine to retain a shine on declining
deposit rates because households are not mobile when it comes to bank deposits.

A person banking with, say, a local bank does it out of convenience and tradition; and due
to this acquired familiarity is loathe to shift to other banks or other avenues of savings.

In fact, even the growth of private sector banks did not replace existing deposits in public
sector banks but only cornered a larger incremental