Rudra Raju Srikanth Verma did his MBA from a regular MBA College in Khammam, Telangana state, and worked for a while in a Private Bank. Then he was transferred to a bank in a small town in West Godavari, Andhra Pradesh. To his amazement, he realized that most of the people in the town and surrounding villages are his relatives. When the manager of the bank branch came to know about this, he called Srikanth and gave him a strange task. The town does not have any major industry but is full of cash pumped from the villages around that were rich with fish and prawn tanks. The town has an IMAX theatre and 4 or 5 clubs and other than that, there is not much there to spend or get entertained. Therefore, the rich people there either go to Hyderabad every month for shopping and many of them even go to Thailand regularly for vacations.The bank manager realized that most of the rich, who are not well guided, spend their money in betting on cockfights during the Sankranthi season and on cricket matches during the rest of the year. This is both illegal and unproductive. Therefore, the manager wants Srikanth to visit the villages, one by one, meet the opinion leaders and channel their money into the stock markets. This would be productive for the country and also legal. Speculation would satisfy those with high gambling instincts and investments would earn returns for those who get organized. The bank can help them in getting them to get familiar with stock markets. Being a socially responsible and community-conscious individual, Srikanth Verma readily accepted the task. Assume that you are to accompany him in his visits to those villages and assist him, as Srikanth is not much familiar with the capital markets. In the first meeting, Srikanth faced a tough situation. Rama Krishnam Raju did his B.Sc., in the nearby town and is now assisting his dad in pisciculture. He once saw that one of his lecturer’s share certificates were missing and he was very upset on that day. He also said that his lecturer once bought the shares of a particular company and the person who was to sell the certificates, took his money and fled away. His lecturer lost his hard-earned well-invested money. Now Rama Krishnam Raju is worried that if his dad invests in too many shares, sorting those certificates, keeping them safe, would be taxing on him. Frequent selling and buying would also attract lots of stamp duties. He is also worried that the collection of dividends, exercising rights, etc., would be a cumbersome process for his dad. Srikanth wants to know if the concerns of Rama Krishnam Raju are genuine and there is a solution for the problems stated by him. Provide with suitable explanation.
Rudra Raju Srikanth Verma did his MBA from a regular MBA College in Khammam, Telangana state, and worked for a while in a Private Bank. Then he was transferred to a bank in a small town in West Godavari, Andhra Pradesh. To his amazement, he realized that most of the people in the town and surrounding villages are his relatives. When the manager of the bank branch came to know about this, he called Srikanth and gave him a strange task.
The town does not have any major industry but is full of cash pumped from the villages around that were rich with fish and prawn tanks. The town has an IMAX theatre and 4 or 5 clubs and other than that, there is not much there to spend or get entertained. Therefore, the rich people there either go to Hyderabad every month for shopping and many of them even go to Thailand regularly for vacations.The bank manager realized that most of the rich, who are not well guided, spend their money in betting on cockfights during the Sankranthi season and on cricket matches during the rest of the year. This is both illegal and unproductive. Therefore, the manager wants Srikanth to visit the villages, one by one, meet the opinion leaders and channel their money into the stock markets. This would be productive for the country and also legal. Speculation would satisfy those with high gambling instincts and investments would earn returns for those who get organized. The bank can help them in getting them to get familiar with stock markets.
Being a socially responsible and community-conscious individual, Srikanth Verma readily accepted the task. Assume that you are to accompany him in his visits to those villages and assist him, as Srikanth is not much familiar with the capital markets. In the first meeting, Srikanth faced a tough situation.
Rama Krishnam Raju did his B.Sc., in the nearby town and is now assisting his dad in pisciculture. He once saw that one of his lecturer’s share certificates were missing and he was very upset on that day. He also said that his lecturer once bought the shares of a particular company and the person who was to sell the certificates, took his money and fled away. His lecturer lost his hard-earned well-invested money. Now Rama Krishnam Raju is worried that if his dad invests in too many shares, sorting those certificates, keeping them safe, would be taxing on him. Frequent selling and buying would also attract lots of stamp duties. He is also worried that the collection of dividends, exercising rights, etc., would be a cumbersome process for his dad.
Srikanth wants to know if the concerns of Rama Krishnam Raju are genuine and there is a solution for the problems stated by him. Provide with suitable explanation.
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