Summer training project report r

SUMMER TRAINING PROJECT REPORT

On

Financial pattern of retail trader with SBI viz viz other banks in a

Lucknow

For

STATE BANK OF INDIA

Towards partial fulfillment of

Master of Business Administration (MBA)

(Affiliated to U.P. Technical University, Lucknow)

Guided by Submitted by

S.N.TRIVEDI Prateek Chandra

(B.M. Nishatganj) MBA IIIrd Semester

(STATE BANK OF INDIA) ROLL NO. 1205470073

Session 2013-2014

Department Of Management

BABU BANARASI DAS

NATIONAL INSTITUTE OF TECHNOLOGY & MANAGE MENT

Sector I, Dr, Akhilesh Das Nagar, faizabad Road, Lucknow, (u.p.) India

4

ACKNOWLEDGEMENT

I would like to thank S.N.TRIVEDI, SBI BRANCH MANAGER,

NISHATGANJ, for the guidance he has given to me in the conduction

of my project work.

I would also like to extend my gratitude to my parents, friends for their

consistent encouragement, suggestions and moral support.

Prateek Chandra

MBA IIIrd Semester

5

DECLARATION

I, PRATEEK CHANDRA , hereby declare that the research project

entitled “ Financial pattern of retail trader with SBI viz viz other banks in

a Lucknow” which is also known as STATE BANK OF INDIA IN LUCKNOW is my original work

.Now it is an asset of “BABU BANARASI DAS NATIONAL INSTITUTE

OF TECHNOLOGY AND MANAGEMENT” . All the rights of using this

project report lies with the institute. Unauthorized copying, hiring,

broadcasting or rental of this project without permission from the

institute will be considered illegal.

DATE: PRATEEK CHANDRA

MBA IIIrd Semester

6

EXECUTIVE SUMMARY

I Prateek Chandra have gone for project report on the topic of “Financial pattern of

retail trader with SBI viz viz other banks in a Lucknow” . Loan is a Secured loan

offered against the security of a property which is funded by the bank’s loan, the property

could be a personal property or a commercial one. The Loan is a loan taken by a borrower

from the bank issued against the security intended to be bought on the part by the borrower

giving the banker a conditional ownership over the property i.e. if the borrower is failed to

pay back the loan, the banker can retrieve the lent money by selling the property.

This study is to know the outcome of loaning scheme provided by SBI, during my survey,

I took 100 people for data collection of my report and from them I got information about

possibilities of takeover of loan scheme provided by SBI. The sample methodologies that

are used by me are judgmental. In primary source questionnaire and observation method

are used by me.

Private bank mostly prefer to finance business loan by the respondents and its strong

competitor for SBI.

7

TABLE OF CONTENTS

PARTICULAR PAGE NO.

1. INTRODUCTION

8

2. COMPANY PROFILE

3. ORGANIZATION CHART

4. AIM AND OBJECTIVE

5. OBJECTIVE OF THE STUDY

6. RESEARCH METHODOLAGY

7. ANALYSIS & INTERPRETATIONS

8. FINDINGS

9. SWOT/ETOP ANALYSIS

10. SUGGESTIONS/RECOMMENDATIONS

11. PROBLEMS AND LIMITATIONS

12. CONCLUSION

13. APPENDIX

14. BIBLIOGRAPHY

9

INDUSTRY PROFILE

INDUSTRIAL PROFILE

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a

healthy economy. The banking system of India should not only be hassle free

but it should be able to meet new challenges posed by the technology and

10

any other external and internal factors. For the past three decades India’s

banking system has several outstanding achievements to its credit. The most

striking is its extensive reach. It is no longer confined to only metropolitans or

cosmopolitans in India. In fact, Indian banking system has reached even to

the remote corners of the country. This is one of the main reasons for India’s

growth. The government’s regular policy for Indian bank since 1969 has paid

rich dividends with the nationalization of 14 major private banks of India.

The first bank in India, though conservative, was established in 1786. From

1786 till today, the journey of Indian Banking System can be segregated into

three distinct phases. They are as mentioned below

Early phase from 1786 to 1969 of Indian Banks.

Nationalization of Indian Banks and up to 1991 prior to Indian.

Banking sector Reforms.

New phase of Indian Banking System with the advent of Indian.

Financial & Banking Sector Reforms after 1991.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of

Hindustan and Bengal Bank. The East India Company established Bank of

11

Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as

independent units and called it Presidency Banks. These three banks were

Amalgamated in 1920 and Imperial Bank of India was established which

started as private shareholders banks, mostly European shareholders. In

1865 Allahabad Bank was established and first time exclusively by Indians,

Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.

Between 1906 and 1913, Bank of India, Central Bank of India, Bank of

Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up.

Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced

periodic failures between 1913 and 1948. There were approximately 1100

banks, mostly small. To streamline the functioning and activities of banks,

mostly small. To streamline the functioning and activities of commercial

banks, the Government of India came up with The Banking Companies Act,

1949 which was later changed to Banking Regulation Act

1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of

India was vested with extensive powers for the supervision of banking in India

as the Central Banking System.

During those day’s public has lesser confidence in the banks. As an

aftermath deposit mobilization was slow. Abreast of it the savings bank facility

12

provided by the Postal department was comparatively safer. Moreover, funds

were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after

independence. In 1955, it nationalized Imperial Bank of India with extensive

banking facilities on a large scale especially in rural and semi-urban areas. It

formed State Bank of India to act as

The principal agent of RBI and to handle banking transactions of the Union

and state government all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in

1960 on 19th July 1969, major process of nationalization was carried out. It

was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major

commercial banks in the country were nationalized. Second phase of

nationalization Indian Banking Sector Reform was carried out in 1980 with

seven more banks. This step brought 80% of the banking segment in India

under Government ownership.

The following are the steps taken by the Government of India to Regulate

Banking Institutions in the Country:

13

1. 1949: Enactment of Banking Regulation Act.

2. 1955: Nationalization of State Bank of India.

3. 1959: Nationalization of SBI subsidiaries.

4. 1961: Insurance cover extended to deposits.

5. 1969: Nationalization of 14 major banks.

6. 1971: Creation of credit guarantee corporation.

7. 1975: Creation of regional rural banks.

8. 1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks, the branches of the public sector bank India

raised to approximately 800% in deposits and advances took a huge jump by

11000%. Banking in the sunshine of Government ownership gave the public

implicit faith and immense confidence about the sustainability of these

institutions.

Phase III

This phase has introduced many more products and facilities in the banking

sector in its reforms measure. In 1991, under the chairmanship of M

Narasimha, a committee was set up by his name, which worked for the

Liberalization of Banking Practices.

14

The country is flooded with foreign banks and their ATM stations. Efforts are

being put to give a satisfactory service to customers. Phone banking and net

banking is introduced. The entire system became more convenient and swift.

Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is

sheltered from any crisis triggered by any external macroeconomics shock as

other East Asian Countries suffered. This is all due to a flexible exchange rate

regime, the foreign

Reserves are high, the capital account is not yet fully convertible, and banks

and their customers have limited foreign exchange exposure.

Banking in India originated in the first decade of 18th century with The General

Bank of India coming into existence in 1786. This was followed by Bank of

Hindustan. Both these banks are now defunct. The oldest bank in existence in

India is the State Bank of India being established as “The Bank of Calcutta” in

Calcutta in June 1806. Couple of Decades later, foreign Banks like HSBC and

Credit Lyonnais Started their Calcutta operations in 1850s. At that point of

time, Calcutta was the most active trading port, mainly due to the trade of

British Empire and due to which banking actively took roots there and

prospered. The first fully Indian owned bank was the Allahabad Bank set up in

1865.

By 1900, the market expanded with the establishment of banks like Punjab

National Bank in 1895 in Lahore; Bank of India in 1906 in Mumbai-both of

15

which were founded under private ownership. Indian Banking Sector was

formally regulated by Reserve Bank of India from 1935. After India’s

independence in 1947, the Reserve Bank was nationalized and given broader

powers.

SBI Group

The Bank of Bengal, which later became the State Bank of India. State Bank

of India with its seven associate banks commands the largest banking

resources in India.

16

Nationalization

The next significant milestone in Indian Banking happened in late 1960s when

the then Indira Gandhi government nationalized on 19th July 1949, 14 major

commercial Indian banks followed by nationalization of 6 more commercial

Indian banks in 1980.

The stated reason for the nationalization was more control of credit delivery.

After this, until 1990s, the nationalized banks grew at a leisurely pace of

around 4% also called as the Hindu growth of the Indian economy.

After the amalgamation of New Bank of India with Punjab National Bank,

currently there are 19 nationalized banks in India.

Liberalization-

In the early 1990’s the then Narasimha rao government embarked a policy of

liberalization and gave licenses to a small number of private banks, which

came to be known as New generation tech-savvy banks, which included

banks like ICICI and HDFC. This move along with the rapid growth of the

economy of India, kick started the banking sector in India, which has seen

rapid growth with strong contribution from all the sectors of banks, namely

Government banks, Private Banks and Foreign banks. However there had

been a few hiccups for these new banks with many either being taken over

17

like Global Trust Bank while others like Centurion Bank have found the going

tough.

The next stage for the Indian Banking has been set up with the

proposed relaxation in the norms for Foreign Direct Investment, where all

Foreign Investors in Banks may be given voting rights which could exceed the

present cap of 10%, at present it has gone up to 49% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till

this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go

home at 4) of functioning. The new wave ushered in a modern outlook and

tech-savvy methods of working for traditional banks. All this led to the retail

boom in India. People not just demanded more from their banks but also

received more.

CURRENT SCENARIO

Currently (2007), overall, banking in India is considered as fairly mature

in terms of supply, product range and reach-even though reach in rural India

still remains a challenge for the private sector and foreign banks. Even in

terms of quality of assets and capital adequacy, Indian banks are considered

to have clean, strong and transparent balance sheets-as compared to other

banks in comparable economies in its region. The Reserve Bank of India is an

autonomous body, with minimal pressure from the government. The stated

18

policy of the Bank on the Indian Rupee is to manage volatility-without any

stated exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some

time-especially in its services sector, the demand for banking services-

especially retail banking, mortgages and investment services are expected to

be strong. M&as, takeovers, asset sales and much more action (as it is

unraveling in China) will happen on this front in India.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to

increase its stake in Kodak Mahindra Bank (a private sector bank) to 10%.

This is the first time an investor has been allowed to hold more than 5% in a

private sector bank since the RBI announced norms in 2005 that any stake

exceeding 5% in the private sector banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public

sector banks (that is with the Government of India holding a stake), 29 private

banks (these do not have government stake; they may be publicly listed and

traded on stock exchanges) and 31 foreign banks. They have a combined

network of over 53,000 branches and 17,000 ATMs. According to a report by

ICRA Limited, a rating agency, the public sector

Banks hold over 75 percent of total assets of the banking industry, with the

private and foreign banks holding 18.2% and 6.5% respectively.

19

Banking in India

1 Central Bank Reserve Bank of India

2

Nationalised

Banks

State Bank of India, Allahabad Bank, Andhra

Bank, Bank of Baroda, Bank of India, Bank of

Maharastra,Canara Bank, Central Bank of India,

Corporation Bank, Dena Bank, Indian Bank, Indian

overseas Bank,Oriental Bank of Commerce,

Punjab and Sind Bank, Punjab National Bank,

Syndicate Bank, Union Bank of India, United Bank

of India, UCO Bank,and Vijaya Bank.

3

Private Banks

Bank of Rajastan, Bharath overseas Bank, Catholic

Syrian Bank, Centurion Bank of Punjab, City Union

Bank, Development Credit Bank, Dhanalaxmi

Bank, Federal Bank, Ganesh Bank of Kurundwad,

HDFC Bank, ICICI Bank, IDBI, IndusInd Bank, ING

Bank, Jammu and Kashmir Bank, Vysya

Karnataka Bank Limited, Karur Vysya Bank, Kotek

20

Mahindra Bank, Lakshmivilas Bank, Lord Krishna

Bank, Nainitak Bank, Ratnakar Bank,Sangli Bank,

SBI Commercial and International Bank, South

Indian Bank, Tamil Nadu Merchantile Bank Ltd.,

United Western Bank, UTI Bank, YES Bank.

21

Structure of Indian Banking

Reserve Bank of India is the regulating body for the Indian Banking Industry. It

is a mixture of Public sector, Private sector, Co-operative banks and foreign

banks. The private sector banks are further spilt into old banks and new

banks.

22

COMPANY PROFILE

23

HISTORY OF SBI BANK:-

The evolution of State Bank of India can be traced back to the first decade of

the19th century. It began with the establishment of the Bank of Calcutta in

Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal,

three years later, on 2 January 1809. It was the first ever joint-stock bank of

the British India, established under the sponsorship of the Government of

Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840)

and the Bank of Madras (established on 1 July 1843) followed the Bank of

Bengal. An important turning point in the history of State Bank of India is the

launch of the first Five Year Plan of independent India, in 1951. The Plan

24

aimed at serving the Indian economy in general and the rural sector of the

country, in particular. Until the Plan, the

commercial banks of the country, including the Imperial Bank of India,

confined their services to the urban sector. Moreover, they were not equipped

to respond to the growing needs of the economic revival taking shape in the

rural areas of the country. Therefore, in order to serve the economy as a

whole and rural sector in particular.

The All India Rural Credit Survey Committee proposed the take over of theIm

perial Bank of India, and integrating with it, the former state-owned or state-

associate banks. Subsequently, an Act was passed in the Parliament of India

in May 1955. As a result, the State

Bank of India (SBI) was established on 1 July1955. This resulted in making

the State Bank of India more powerful, because as much as a quarter of the

resources of the Indian banking system were controlled directly by the State.

Later on, the State Bank of India (Subsidiary Banks) Act was passed in

1959.The State Bank of India emerged as a

pacesetter, with its operations carried out byte 480 offices comprising

branches, sub offices and three Local Head Offices, inherited from the

Imperial Bank. Instead of serving as mere repositories of the community’s

savings and lending to creditworthy parties, the State Bank of India catered to

the needs of the customers, by banking purposefully.

25

State Bank of India

(SBI) (LSE:SBID) is the largest bank in India. The bank traces its ancestry

back through the Imperial to the founding in1806of the Bank, making it the

oldest commercial bank in the Indian Subcontinent. The Government

nationalized the Imperial Bank of India in1955, with the Reserve taking a 60%

stake, and renamed it the State Bank of India. In 2008, the Government took

over the stake held by the Reserve Bank of India.SBI provides a range of

banking products through its vast network in India and overseas, including

products aimed antis. With an asset base of $126 billion and its reach, it is a

regional banking behemoth. SBI has laid emphasis on reducing the huge

manpower through Golden schemes, which led to a flight of its best and

brightest managers which took to retirement allowances and then wanton the

become senior managers at new private sector banks, and computerizing its

operations. The roots of the State Bank of India rest in the first decade of 19th

century, when the Bank, later renamed the Bank, was established

on2 June 1806. The Bank of Bengal and two other Presidency banks, namely,

the Bank (incorporated on15 April 1840) and the Bank (incorporated on1

July 1843)... These three banks received the exclusive right tissue paper

currency in 1861 with the Paper Currency Act, a right they

retaineduntil the formation of theReserve Bank of India. The Presidency bank

samalgamated on27 January 1921, and the reorganized banking entity took

as its name Imperial Bank of India. The Imperial Bank of India continued to

remain a joint stock company. Pursuant to the provisions of the State Bank of

26

India Act (1955), the Reserve of India, which is India’s, acquired a controlling

interest in the Imperial Bank of India. On30 April 1955the Imperial Bank of

India became the State Bank of India.

In 1959 the Government passed the State Bank of India (SubsidiaryBanks)

Act, enabling the State Bank of India to take over eight former State-

associated banks as its subsidiaries. Onset, 2008, State Bank of Saurashtra,

one of its Associate Banks, merged with State Bank of India.

Associate banks

There are six associate banks that fall under SBI, and together these six

banks constitute the State Bank Group. All use the same logo of a blue

keyhole and banks constitutes use the "State Bank of" name followed

by the regionalheadquarters' name. Originally, the then seven banks that

became the associate banks belonged to princely until the government

nationalized them in 1959.In tune with the first Five Year Plan, emphasizing

the development of rural India, the government integrated these banks into

State Bank of India to expand its rural outreach. There has been a proposal to

merge all the associate banks into SBI to create a "mega bank" and

streamline operations. The first step along these lines occurred in September

2008 when State merged with State Bank of India, which reduced the number

of state banks from seven to six.

27

*State Bank of Indore

*State Bank of Bikaner & Raipur

*State Bank of Hyderabad

*State Bank of Mysore

*State Bank of Patiala

*State Bank of Travancore

Growth:-

State Bank of India has often acted as guarantor to the Indian, most notably

during Chandra's tenure as Prime. With more than 11,111 branches and a

further 6500+ associate bank branches, the SBI has extensive coverage.

State Bank of India has electronically networked all of its branches under

Core Banking System(CBS). The bank has one of the largest TM networks in

the region. More than 8500 ATMs across India. The State Bank of India has

had steady growth over its history, though it was marred by the Harsh

ad Mehta scam in 1992. In recent years, the bank has sought to expand its

overseas operations by buying foreign banks. It is the only Indian bank to

feature in the top India. The rest were government nominees, invariably civil

servants, one of whom was elected as the president of the board.

28

EVOLUTION OF SBI

The origin of the State Bank of India goes back to the first decade of the

nineteenth century with the establishment of the Bank of Calcutta in Calcutta

on 2 June 1806. Three years later the bank received its charter and was re-

designed as the Bank of Bengal (2 January 1809). A unique institution, it was

the first joint-stock bank of British India sponsored by the Government of

Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July

1843) followed the Bank of Bengal. These three banks remained at the apex

of modern banking in India till their amalgamation as the Imperial Bank of

India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into

existence either as a result of the compulsions of imperial finance or by the

felt needs of local European commerce and were not imposed from outside in

an arbitrary manner to modernize India's economy. Their evolution was,

however, shaped by ideas culled from similar developments in Europe and

England, and was influenced by changes occurring in the structure of both the

local trading environment and those in the relations of the Indian economy to

the economy of Europe and the global economic framework.

29

Bank of Bengal H.O.

Madras. It meant an accretion to the capital of the banks, a capital on which

the proprietors did not have to pay any interest. The concept of deposit

banking was also an innovation because the practice of accepting money for

safekeeping (and in some cases, even investment on behalf of the clients) by

the indigenous bankers had not spread as a general habit in most parts of

India. But, for a long time, and especially up to the time that the three

presidency banks had a right of note issue, bank notes and government

balances made up the bulk of the investible resources of the banks.

The three banks were governed by royal charters, which were revised from

time to time. Each charter provided for a share capital, four-fifth of which were

30

privately subscribed and the rest owned by the provincial government. The

members of the board of directors, which managed the affairs of each bank,

were mostly proprietary directors representing the large European managing

agency houses in India. The rest were government nominees, invariably civil

servants, one of whom was elected as the president of the board.

Group Photograph of Central Board (1921)

31

Business

The business of the banks was initially confined to discounting of bills of

exchange or other negotiable private securities, keeping cash accounts and

receiving deposits and issuing and circulating cash notes. Loans were

restricted to Scone laky and the period of accommodation confined to three

months only. The security for such loans was public securities, commonly

called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a

perishable nature' and no interest could be charged beyond a rate of twelve

per cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton

piece goods, mule twist and silk goods were also granted but such finance by

way of cash credits gained momentum only from the third decade of the

nineteenth century. All commodities, including tea, sugar and jute, which

began to be financed later, were either pledged or hypothecated to the bank.

Demand promissory notes were signed by the borrower in favor of the

guarantor, which was in turn endorsed to the bank. Lending against shares of

the banks or on the mortgage of houses, land or other real property was,

however, forbidden. Indians were the principal borrowers against deposit of

Company's paper, while the business of discounts on private as well as salary

bills was almost the exclusive monopoly of individuals Europeans and their

partnership firms. But the main function of the three banks, as far as the

government was concerned, was to help the latter raise loans from time to

time and also provide a degree of stability to the prices of government

securities

32

Old Bank of Bengal

Major change in the conditions

A major change in the conditions of operation of the Banks of Bengal,

Bombay and Madras occurred after 1860. With the passing of the Paper

Currency Act of 1861, the right of note issue of the presidency banks was

abolished and the Government of India assumed from 1 March 1862 the sole

power of issuing paper currency within British India. The task of management

and circulation of the new currency notes was conferred on the presidency

banks and the Government undertook to transfer the Treasury balances to the

banks at places where the banks would open branches. None of the three

banks had till then any branches (except the sole attempt and that too a short-

lived one by the Bank of Bengal at Mirzapore in 1839) although the charters

33

had given them such authority. But as soon as the three presidency bands

were assured of the free use of government Treasury balances at places

where they would open branches, they embarked on branch expansion at a

rapid pace. By 1876, the branches, agencies and sub agencies of the three

presidency banks covered most of the major parts and many of the inland

trade centers in India. While the Bank of Bengal had eighteen branches

including its head office, seasonal branches and sub agencies, the Banks of

Bombay and Madras had fifteen each.

Bank of Madras N ote Dated 1861 for Rs.10

34

Presidency Banks Act

The presidency Banks Act, which came into operation on 1 May 1876,

brought the three presidency banks under a common statute with similar

restrictions on business. The proprietary connection of the Government was,

however, terminated, though the banks continued to hold charge of the public

debt offices in the three presidency towns, and the custody of a part of the

government balances. The Act also stipulated the creation of Reserve

Treasuries at Calcutta, Bombay and Madras into which sums above the

specified minimum balances promised to the presidency banks at only their

head offices were to be lodged. The Government could lend to the presidency

banks from such Reserve Treasuries but the latter could look upon them more

as a favor than as a right

35

Bank of Madras

The decision of the Government to keep the surplus balances in Reserve

Treasuries outside the normal control of the presidency banks and the

connected decision not to guarantee minimum government balances at new

places where branches were to be opened effectively checked the growth of

new branches after 1876. The pace of expansion witnessed in the previous

decade fell sharply although, in the case of the Bank of Madras, it continued

on a modest scale as the profits of that bank were mainly derived from trade

dispersed among a number of port towns and inland centers of the

presidency.

36

Bank of Bombay

37

Stamp of Imperial Bank of India Subsidiaries

The State Bank Group includes a network of eight banking subsidiaries and

several non-banking subsidiaries. Through the establishments, it offers

variousservices including merchant banking services, fund management, fact

oringservices, primary dealership in government securities, credit cards.

The eight banking subsidiaries are:

11.State Bank of Bikaner and Raipur (SBBJ)

12.State Bank of Hyderabad (SBH)

13.State Bank of India (SBI)

14.State Bank of Indore (SBIR)

38

15.State Bank of Mysore (SBM)

16.State Bank of Patiala (SBP)

17.State Bank of Saurashtra (SBS)

18.State Bank of Travancore (SBT)

Products Personal Banking:-

*SBI Term Deposits SBI Loan For Pensioners

*SBI Recurring Deposits Loan Against Mortgage Of Property

*SBI Housing Loan Loan Against Shares & Debentures

*SBI Car Loan Rent Plus Scheme

*SBI Educational Loan Midi-Plus Scheme

Other Services:-

*Agriculture/Rural Banking

*NRI Services

*ATM Services

*Demit Services

39

*Corporate Banking

*Internet Banking

*Mobile Banking

*International Banking

*Safe Deposit Locker

RBIEFT

*E-Pay

*E-Rail

*SBI Vishay Yare Foreign Travel Card

*Broking Services

*Gift Cherubs

40

NETWORK OF SBI BANK:-

SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves

theinternational needs of its foreign customers, in addition to conducting retail

operations. The focus of the offices of SBI is India-related business. Few of

the countries where SBI Bank has branches are as under:

*Australia

*Bahamas

*Bahrain

*Bangladesh

*Belgium

*Bhutan

*Canada

*France

*Germany

*Hong Kong

*Japan

41

*Maldives

*Mauritius

*Muscat

*Nepal

*Nigeria

*Oman

*Russia

*Singapore

*Sri Lanka

*South Africa

*UK

*USA

42

List of Directors on the Central Board of

State Bank of India

(As on 06 th February, 2013)

Sr.

No. Name Designation

Under Section of

SBI Act 1955

1 Sheri Prate Chaudhuri Chairman 19 (a)

2 Sheri Hemans G.

Contractor

Managing Director

19 (b)

3 Sheri Diwakar Gupta Managing Director 19 (b)

4 Sheri A. Krishna

Kumar Managing Director 19 (b)

5 Sheri S.Vishvanathan Managing Director 19 (b)

6 Sheri S.

Venkatachalam Director 19 (c)

43

7 Sheri D. Sandarac Director 19 (c)

8 Sheri Parthasarathy

Iyengar Director 19 (c)

9 Sheri Thomas Mathew Director 19 (c)

10 Sheri Jota Bhushan

Mohapatra

Workmen Employee

Director 19 (ca)

11 Sheri S.K. Mukherjee Officer Employee

Director 19 (cb)

12 Dr. Rajiv Kumar Director 19 (d)

13 Sheri Deepak Amin Director 19 (d)

14 Sheri Harichandra

Bahadur Singh Director 19 (d)

15 Sheri Rajiv Takru Director 19 (e)

Capital Structure (State Bank of India)

44

Period Instrument Authorized

Capital

Issued

Capital

- P A I D U P -

From To (Rs. cr) (Rs. cr) Shares

(nos)

Face

Value

Capital

2011 2012 Equity

Share 5000 671.13 671044838 10 671.04

2010 2011 Equity

Share 5000 635.08 634998991 10 635

2009 2010 Equity

Share 1000 634.97 634882644 10 634.88

2008 2009 Equity

Share 1000 634.97 634880222 10 634.88

2007 2008 Equity

Share 1000 631.56 631470376 10 631.47

2006 2007 Equity

Share 1000 526.3 526298878 10 526.3

45

2005 2006 Equity

Share 1000 526.3 526298878 10 526.3

2004 2005 Equity

Share 1000 526.3 526298878 10 526.3

2003 2004 Equity

Share 1000 526.3 526298878 10 526.3

2002 2003 Equity

Share 1000 526.3 526298878 10 526.3

2001 2002 Equity

Share 1000 526.3 526298878 10 526.3

2000 2001 Equity

Share 1000 526.3 526298878 10 526.3

1999 2000 Equity

Share 1000 526.3 526298878 10 526.3

1996 2000 Equity

Share 1000 526.3 526298878 10 526.3

1995 1996 Equity

Share

1994 1995 Equity

Share

1993 1994 Equity

Share

1991

1993 Equity

Share

46

1000 474.01 474009872

1000 474.01 474009189

1000 473.83 473828726

1000 200 20000000

10 474.01

10 474.01

10 473.83

100 200

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Bank Overview

STATE BANK OF INDIA

Not only many financial institution in the world today can claim the antiquity

and majesty of the State Bank Of India founded nearly two centuries ago with

primarily intent of imparting stability to the money market, the bank from its

inception mobilized funds for supporting both the public credit of the

companies governments in the three presidencies of British India and the

private credit of the European and India merchants from about 1860s when

the Indian economy book a significant leap forward under the impulse of

quickened world communications and ingenious method of industrial and

agricultural production the Bank became intimately in valued in the financing

of practically and mining activity of the Sub- Continent Although large

European and Indian merchants and manufacturers were undoubtedly thee

principal beneficiaries, the small man never ignored loans as low as Rs.100

were disbursed in agricultural districts against glad Ornaments. Added to

these the bank till the creation of the Reserve Bank in 1935 carried out

numerous Central – Banking functions.

Adaptation world and the needs of the hour has been one of the strengths of

the Bank, In the post depression exe. For instance – when business

opportunities become extremely restricted, rules laid down in the book of

instructions were relined to ensure that good business did not go post. Yet

seldom did the bank contravenes its value as depart from sound banking

48

principles to retain as expand its business. An innovative array of office,

unknown to the world then, was devised in the form of branches, sub

branches, treasury pay office, pay office, sub pay office and out students to

exploit the opportunities of an expanding economy. New business strategy

was also evaded way back in 1937 to render the best banking service through

prompt and courteous attention to customers.

A highly efficient and experienced management functioning in a well defined

organizational structure did not take long to place the bank an executed

pedestal in the areas of business, profitability, internal discipline

and above all credibility A impeccable financial status consistent maintenance

of the lofty traditions if banking an observation of a high standard of integrity in

its operations helped the bank gain a pre- eminent status. No wonders the

administration for the bank was universal as key functionaries of India

successive finance minister of independent India Resource Bank of governors

and representatives of chamber of commercial showered economics on it.

Modern day management techniques were also very much evident in the

good old days years before corporate governance had become a puzzled the

banks bound functioned with a high degree of responsibility and concerns for

the shareholders. An unbroken records of profits and a fairly high rate of profit

and fairly high rate of dividend all through

49

ensured satisfaction, prudential management and asset liability management

not only protected the interests of the Bank but also ensured that the

obligations to customers were not met.

The traditions of the past continued to be upheld even to this day as the State

Bank years itself to meet the emerging challenges of the millennium.

THE PLACE TO SHARE THE NEWS ...……

50

ABOUT LOGO

THE PLACE TO SHARE THE NEWS ...……

SHARE THE VIEWS …

51

Togetherness is the theme of this corporate loge of SBI where the world of

banking services meet the ever changing customers needs and establishes a

link that is like a circle, it indicates complete services towards customers. The

logo also denotes a bank that it has prepared to do anything to go to any

lengths, for customers.

The blue pointer represent the philosophy of the bank that is always looking

for the growth and newer, more challenging, more promising direction. The

key hole indicates safety and security.

MISSION STATEMENT:

To retain the Bank’s position as premiere Indian Financial Service Group, with

world class standards and significant global committed to excellence in

customer, shareholder and employee satisfaction and to play a leading role in

expanding and diversifying financial service sectors while containing

emphasis on its development banking rule.

52

VISION STATEMENT:

Premier Indian Financial Service Group with prospective world-class

Standards of efficiency and professionalism and institutional values

Retain its position in the country as pioneers in Development banking.

Maximize the shareholders value through high-sustained earnings per

Share.

An institution with cultural mutual care and commitment, satisfying and

Good work environment and continues learning opportunities.

VALUES

Excellence in customer service

Profit orientation

Belonging commitment to Bank

Fairness in all dealings and relations

Risk taking and innovative

Team playing

Learning and renewal

Integrity

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Transparency and Discipline in policies and systems.

54

Organization Structure

G. M G.M G. M G.M G.M

(Operations) (C&B) (F&S) (I) & CVO

(P&D)

Zonal off Functional Heads

Regional officers

MANAGING DIRECTOR

CHIEF GENERAL MANAGER

55

OBJECTIVE OF STUDY

56

Objective of study

Primary: -

1. Analysis and evaluation of customer s satisfaction with respect to loan

performance.

2. To determine the main characteristic which customers look upon while

taking loan?

3. To determine the other bank those are competing with the same product

rang in loan.

Secondary: -

1. Service level and channel associate approach.

2. To find the level of brand awareness.

3. To find out the company market share.

Scope of study

Special area to be focused for increasing the sales and for sales

promotion activities to be adopted.

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To make product more innovative and easy to understand

For providing maximum satisfaction to the customer by knowing their

needs and requirement about product and services.

Steps to be taken at present for survival and facing the competition

with other equivalent product.

Continues improvement and for better management.

Maintaining good relation between manager and customer.

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RESEARCH METHODOLOGY

59

Research Methodology

Research as a mean of getting knowledge can be carried out either arbitrarily

or Ina systematic fashion. It is a purposive investigation. Research may be a

mean to know the small change and time forced upon us as individual or as a

society. Research as process involves defining the problem, formulating the

hypothesis, organizing and evaluating the data, deriving inference and

conclusion after careful testing.

Data Collection

As data is required for any research activity, it is collected (for those both the

Primary and Secondary) as follows:

Primary Data:

I have collected this data through questionnaire.

Secondary Data:

This data is collected from different sources available consolidated from book

publication reports, websites where used as a source of secondary data in

order to do this project and to collect necessary data.

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Types of research:-

Descriptive research

Primary data collection

Through Questionnaire are filled by respondents.

Secondary data collection

Data collection through – Internet, Magazines.

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DATA ANALYSIS

AND

INTERPRETATION

62

Sample size & Method of selecting sample

Sample size -: 100 respondents

Number of units banking with SBI and other banks :

Banks Units

SBI 15

Private banks 03

Other nationalize banks 28

No response 54

private bank, 3

SBI, 15

other

nationalize

bank, 28

NO response, 54

How many take a credit facility to S.B.I. and other banks:

Banks

Private banks

SBI

Other nationalize banks

No credit facility

20

10

20

30

40

50

60

70

80

90

100

private banks

63


Units

02

00

Other nationalize banks 05

93

5 0

private banks other natioalize

banks

sbi no credit

units


93

no credit

units

Willing to take loan from S.B.I.:

YES

10

64


NO

90

yes, 10

NO, 90

Impression about sbi:

Excellent

Average

Good

Below average

0

10

20

30

40

50

Excellent

No

of

un

its

65


17

36

43

04

ExcellentGood

AverageBelow Average

Impression

Below Average

Series 1

Feedback about S.B.I.:

Negative, 65%

No

feedback, 10%

Feedback

Positive

Negative

No feedback

66


positive, 25%

Negative, 65%

Percentage

25%

65%

10%

67

FINDINGS

68

FINDINGS

� 80% customers prefer the other Bank when taking loan and only

20%customersprefer SBI Bank.

� Family members are creating more effect on decisions regarding loan.

� Interest rate is main factor consider by customers when taking loan

� Most of the customer prefers the repayment of loan in higher duration.

� Most of the customers consider the policies of bank regarding

personal loan

� 10 % customer’s give the higher rating to SBI Bank.

� In HDFC and other Bank 70 % customers give the higher rating

� Only governments employees are prefer the SBI Bank.

� Similarly self-employed & businessman’s are prefer the HDFC Bank.

� Low income class people face difficulty to taking loan

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SWOT ANALYSIS OF

SBI BANK

70

STRENGTH

• BRAND NAME

• MARKET LEADER

• GOVERNMENT OWNED.

• DIVERSIFIED PORTFOLIO

WEAKNESSES

• LESS MODERNISATION

• HIGHER NPA

• CUSTOMER HAVE NOT FULLINFORMATION ABOUT

GETTINGFACILITIES

OPPURTUNITIES

• HIGH APPROCH OF ATM

• 2000 BRANCHES COMING ONVARIOUS LOCATION

• MERGED WITH ASSOCITEDBANK

71

THREAT

• EMPLOYEE STRIKE

• OTHER NATIONALIZED BANKAND PRIVATE BANKS

• ADVENT OF MNC BANK

72

Strengths:-

Brand Name:-

� SBI Bank has earned a reputation in the market over the period of

time(Being the oldest bank in India tracing history back to 1806

Market Leader

� SBI is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in

2008Forbes Global 2000. With an asset base of $126 billion and its

reach, it is a regional banking behemoth. Wide Distribution Network:

Excellent penetration in the country with more than 10000 core

branches and more than 5100 branches of associate banks

(subsidiaries).

� Diversified Portfolio

� SBI Bank has all the products under its belt, which help it to extend the

relationship with existing customer’s Bank has umbrella of products to

offer their customers, if once customer has relationship with the bank.

Some Products, which SBI Bank is offering are: Retail Banking

Business Banking Merchant Establishment Services (EDC Machine)

Personal loans & Car loans Insurance Housing Loans

73

Government Owned

� Government owns more than 60% stake in SBI. This gives SBI an

edge over private banks in terms of customer security. Low Transition

Costs-SBI offers very low transition costs which attracts small

customers.

Weaknesses:-

� The existing hierarchical management structure of the bank, although

strength in some respects, is a barrier to change.

� Though SBI cards are the 2nd largest player in the credit card

industry, it has the highest non-performing assets (NPAs) in the

industry, which stand out to be at 16.28 % (Dec 2007).

� Modernization: SBI lags with respect to private players in terms of

modernization of its processes, infrastructure, centralization, etc.

74

Opportunities:-

� Merger of associate banks with SBI: Merger of all the associate banks

(likes, SBM, etc.) into SBI will create a mega bank which streamlines

operations and unlocks value.

� Planning to add 2000 branches and 3000 ATMs in 2013-2014. This

will further increase its reach.

� Increasing trade and business relations and a large number of

expatriate populations offers a great opportunity to expand on foreign

soil.

Threats:-

� Advent of MNC banks: Large numbers of MNC banks are

mushrooming in the Indian market due to the friendly policies adopted

by the government. This can increase the level of competition and

prove a potential threat for the market share of SBI bank.

� Consumer expectations have increased many folds in last few years

and the bank has not been responsive enough to meet them on time.

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� Private banks have started venturing into the rural and semi-urban

sector, which used to be the bastion of the State Bank and other PSU

banks

� Employee Strike: There was an employee strike in the year 2006 which

disrupted SBI’s activities. This can be repeated in the future

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RECOMMENDATIONS

AND

SUGGESTIONS

77

Suggestions:

• Recruit new employee.

• Increase the branches and ATMs.

• We would like to enhance advertisements among society.

• Customer satisfaction should be bank’s motto.

78

LIMITATIONS OF THE STUDY

79

Limitations of the study

• The study was limited only LUCKNOW (up ).

• Many formalities and requirements during process of taking loan.

• Many times respondents were so busy that they didn’t t give reply.

There were biased replies also.

• Study was based on the opinion of the customer

• Time and other factor

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Duration of the Study:-

60 day from

14TH JUNE TO 14TH AUGUST

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CONCLUSION

82

CONCLUSION

The study at SBI gave a vast learning experience to me and has helped to

enhance my knowledge. During the study I learnt how the theoretical financial

analysis aspects are used in practice during the working capital finance

assessment. I have realized during my project that a credit analyst must own

multi-disciplinary talents like financial, technical as well as legal know-how.

The credit appraisal for working capital finance system has been devised in a

systematic way. There are clear guidelines on how the credit analyst or

lending officer has to analyze a loan proposal. It includes phase-wise analysis

which consists of 4 phases:

1. Financial statement analysis

2. Credit risk assessment

3. Documentation

4. Loan administration

State Bank of India’s adoptions of the Projected Balance Sheet method of

assessment procedures are based on sound principles of lending. This

method of assessment has certain flexibility required to avoid any rigid

approach to fixing quantum of finance. It is superior and more rational

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compared to the Turnover Method; Cash Budget Method of assessment .It

also facilitates the Bank to carry on follow up procedures. The PBS method

have been rationalized and simplified to facilitate complete flexibility in

decision-making.

To ensure asset quality , proper risk assessment right at the beginning , is

extremely important. That is why Credit Risk Assessment system is an

essential ingredient of the Credit Appraisal exercise. The SBI was the first to

formulate a Credit Risk Assessment model. It considers important parameters

like profitability, repayment capacity, efficiency of the unit , historical / industry

comparisons etc… which were not factored in other models. It is equally

efficient as the SIDBI’s CART (Credit Assessment and Rating Tool) model.

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ANNEXURE

85

ANNEXURE

Survey report

Name of unit/firm…………………………………………………………………

Address of the unit…………………………………………………………………

Mobile No…………………………………………………………………………..

Typeof business……………………………………………………………………..

Banking with

• S.B.I

• Private Banks

• Other nationalize banks

• NO response

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Take a credit facility to S.B.I. and other banks:

• Private Banks

• Other nationalizes banks

• S.B.I.

• No credit facility

Type of credit facility:

• Cash credit

• Term loan


• Yes

• No

87


Excellent

Good

Average

Below Average


• Positive

• Negative

• No Feedback

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BIBLIOGRAPHY

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BIBLIOGRAPHY

• http://www.statebankofindia.com/

• http://www.banknetindia.com/

• G.Subramanium ,SBI group Banking Guide, Twelfth edition,

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