Private Banking

Santosh Kumar
 Private Banking
• Banking, investment and other financial services
for rich and capital accumulating clients.
• Personalized services
• Money management, financial counselling,
investment services for HNIs
• Minimum ticket size varies from bank to bank
• Called as relationship managers, private bankers,
and wealth managers
• Delivered at the choice space and time with
desired facility
Indian wealth pyramid

Ultra HNI

HNI

Affluent
 Services Offered
• Financial goal setting
• Cash flow analysis and management
• Banking and credit management
• Investment strategy
• Insurance analysis
• Business succession planning
• Estate planning
• Tax planning
• Trust services
 Steps in Personal Finance
• Projected balance sheet
• Determination of goals
• Developing a plan
• Execution
• Monitoring and reassessment
 Key areas of financial planning
• Financial position
• Adequate protection
• Tax planning
• Investment and accumulation goals
• Retirement planning
• Estate planning
 Principles of Personal Finance
• Spend less than what you earn
• Make the money you have work for you
• Be prepared for the unexpected
 Bancassurance Concept
• Distribution of insurance products through the
bank’s distribution channels
• Synergy between banks and insurance
companies
• Add to non fund based income for banks
 Models of Bancassurance
Structural Classification
• Referral model....banks will give the data of prospective
clients (execution is done by insurance companies)
• Corporate strategy ( refer and execution by
bankers)...good for mid sized banks
• Insurance as integrated financial services ( large banks
will prefer that)
Product Based Classification
• Stand alone insurance products
• Blend of insurance and bank products ( home loans
with insurance)
 Benefits of Bancassurance
For Bank
• Source of income
• Product diversification
• Customer retention
For Insurance Companies
• Meeting competition
• Savings in high cost of agents
• An access to rural segment
 Cont.
For Customers
• Product innovation and distribution as per the
needs of the customers
• Less cost, diversified product, quality and timely
services and conveniences
• Comprehensive financial advisory services under
one roof
• Easy disposal of claims
• Reduced premium
 Financial planning and income tax
implications
• Tax savings avenue
• Reimbursements
• Loan disbursement
• Income from the last employer
• Tax deducted at source on income
• Pay advance tax by 15th March
• Capital gains tax
 Tax
• Tax evasion ( inflated expenses, conceal
income, manipulation of accounts)
• Tax avoidance ( doing wrong things but taking
advantage of loopholes in the legal provisions,
job to spouse)
• Tax planning ( ELSS, housing loan, tuition fee,
medical bills, insurance, donations)
 Estate planning
Benefits
• To provide care for others
• To manage and multiply money
• To ensure a continued lifestyle for survivors
• To minimize taxation