SBI Internship on Electronic Dealer Financing Scheme

CHAPTER – I
Introduction
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1.1 Nature and Scope of the project
The purpose of this study is to Test the Prototype of a New Financial Scheme named
Electronic- Dealer Financing Scheme (e-DFS) introduced by STATE BANK OF INDIA (SBI)
on a Tie-up with Indian Oil, Bharath Petroleum and Hindustan Petroleum Corporations. In this
new scheme SBI offers Full Financial Assistance for the petrol pump dealers at 10.30% interest
without any cash handling charges. In addition with that the bank expects a very low collateral
security of 25%. This study makes a comparison between the various factors like Current
markets Interest Rate, Repayment Period, e-Banking Facilities and Cash Handling Charges of
various banks with SBI. This helps to understand the Effectiveness of e-DFS with other schemes
that the banks are offering to the Dealers. It gives an opportunity to get exposure on various
banking schemes. It provides an excellent interaction with Petrol Dealers. It also provides a
better learning regarding how we should have to behave to the Business professionals of the
external world and the way to create our relationship with them.
1.2 Objectives of the study
The major objectives are,
 To study the Dealer’s nature of business and to find the point of source for his/her
business.
 To determine the Current Base rate, Collateral Security expected by bankers, Cash
handling charges, Repayment period and e-Banking facilities for the Cash Credit account
the dealer maintains.
 To establish a comparison between the Cash credit / Over Draft facility availed by the
bankers with the Electronic Dealer Financing Scheme.
 To Measure the Satisfaction level of the dealers based on the Facilities they are enjoying
through the current banking facility.
 To make them aware on the e-DFS scheme and make a contact with the bank and the
dealer.
 To determine the Benefits the Dealers will obtain after using e-DFS.

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1.3 Collection of Data
The Primary and Secondary data were collected through several ways for this study
1.3.1 Primary data
The primary data is collected from the formal meet with the relationship manager of the
State Bank of India.
1.3.2 Secondary Data
The Secondary data for the study were collected from the Internet and also through other
external sources such as books.
1.4 Time Span for the Study
The time span to conduct the survey is from May – June of 2014.
1.5 Chapter Scheme
Chapter I Introduction
Nature and Scope of the project, Objectives of the study, Collection of Data, Time
span for the study.
Chapter II Industry Profile
Banking Industry, Overview, Standard activities, Products in Banking, Types of
Banking, Structure of Banking Industry, List of top players in the Industry, Brief
profile of major players in the Industry
Chapter III Organization Profile
Evolution of SBI, Establishment, Business, Major changes in the conditions,
Presidency banks act, Presidency Banks of Bengal, Imperial Bank, VISION,
MISSION, VALUES, Awards & Achievements, Small and Medium Enterprises,
Challenges and future outlook, SME products
Chapter IV Electronic Dealer Financing System (e-DFS)
e-DFS and v-DFS, Difference between CC and OD, Working procedure for
inventory funding scheme-DFS, Flow chart for the process of e-DFS.

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Chapter V Analysis and Interpretation
Introduction, Study of various parameters like age, no of dealers, Nature of
business, working capital, CC/OD facility, Preference level etc. and satisfaction
levels.
Chapter VI Findings and Suggestions
Findings from the study, Findings through satisfaction level of Dealers,
Suggestions, and Conclusion.
Chapter VII Appendix

CHAPTER – II
Industry Profile
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2.1 Banking Industry
2.2 Overview
A Bank is a financial intermediary that accepts deposits and channels those deposits
into lending activities, either directly by loaning or indirectly through capital markets. A bank
links together customers that have capital deficits and customers with capital surpluses.
Due to their importance in the financial system and influence on national economies,
banks are highly regulated in most countries. Most nations have institutionalized a system known
as fractional reserve banking. They are generally subject to minimum capital requirements based
on an international set of capital standards, known as the Basel Accords.
India is one of the top 10 economies globally, with vast potential for the banking sector to
grow. The last decade witnessed a tremendous upsurge in transactions through ATMs, and
Internet and mobile banking. In 2014, the country’s Rs.81 trillion (US$ 1.34 trillion) banking
industry is set for a greater change. Two new banks have already received licenses from the
government. Furthermore, the Reserve Bank of India’s (RBI) new norms will provide incentives
to banks to spot potential bad loans and take corrective steps that will curb the practices of rogue
borrowers.
The Indian government’s role in expanding the banking industry has been significant.
Through the Financial Inclusion Plan (FY 10–13), banking connectivity in the country increased
more than three-fold to 211,234 villages in 2013 from 67,694 at the beginning of the plan.
2.3 Standard Activities
Banks act as payment agents by conducting checking or current accounts for customers,
paying cheques drawn by customers on the bank, and collecting cheques deposited to customers'
current accounts. Banks also enable customer payments via other payment methods such
as Automated Clearing House (ACH), Wire transfers or telegraphic transfer, and automated teller
machine (ATM).
Banks borrow money by accepting funds deposited on current accounts, by
accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend
money by making advances to customers on current accounts, by making installment loans, and
by investing in marketable debt securities and other forms of money lending.
Banks provide different payment services, and a bank account is considered
indispensable by most businesses and individuals. Non-banks that provide payment services such
as remittance companies are normally not considered as an adequate substitute for a bank
account.

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2.4 Products in Banking
Retail banking
 Checking account
 Savings account
 Money market account
 Certificate of deposit (CD)
 Individual retirement account (IRA)
 Credit card
 Debit card
 Mortgage
 Mutual fund
 Personal loan
 Time deposits
 ATM card
 Current Accounts
 Cheque books
Business (or commercial/investment) banking
 Business loan
 Capital raising (Equity / Debt / Hybrids)
 Mezzanine finance
 Project finance
 Revolving credit
 Risk management (FX, interest rates, commodities, derivatives)
 Term loan
 Cash Management Services (Lock box, Remote Deposit Capture, Merchant Processing)
 Credit services
2.5 Types of Banking
Banks' activities can be divided into:
 Retail banking, dealing directly with individuals and small businesses
 Business banking, providing services to mid-market business
 Corporate banking, directed at large business entities
 Private banking, providing wealth management services to high net worth individuals and
families
 Investment banking, relating to activities on the financial markets

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2.6 Structure of the Banking Industry
Figure 2.1
Source: www.dnb.co.inbfsisectorinindiaBankC2.aspx

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2.7 List of Top players in the Industry
The lists of top 10 players in the Banking Industry are and their holding positions are,
Figure 2.2
Source: www.ibef.org/download/Banking-Sector-04jan.pdf

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2.8 Brief Profile of major players in the industry
2.8.1State Bank of India
The State Bank of India, popularly known as SBI, is one of the leading banks in India.
The bank traces its origin to the first decade of the 19th century. Later on, it was merged with the
Imperial Bank. In the year 1955, the Government of India nationalized the Imperial Bank along
with the Reserve Bank of India. Ever since that time, the bank acquired its present name that is
SBI.
The State Bank of India is India's largest commercial bank. The bank has been striving
sincerely to adhere to the efforts of providing utmost customer satisfaction to the best possible
extent.
2.8.2 ICICI Bank
ICICI Bank is the largest private sector bank in India in terms of market capitalization. It
is also the second largest bank in India in terms of assets with a total asset of 3,674.19 billion
(US$ 77 billion) as on June 30, 2009. Formerly known as Industrial Credit and Investment
Corporation of India, ICICI Bank has an extensive network of 1,544 branches with about 4,816
ATMS located across India and in 18 other countries.
ICICI Bank serves over 24 Million customers throughout the world. It is considered as
one of the ‘Big Four Banks’ in India along with State Bank of India, HDFC Bank and Axis
Bank. ICICI Bank provides a wide array of banking products and financial services to its retail
and corporate customers.
2.8.3 HDFC Bank
The Housing Development Finance Corporation Limited, popularly called HDFC Bank,
was set up in India in the month of August in the year 1994 with the name “HDFC Bank
Limited”. This was the 1st organization to be approved by R. B. I. (Reserve Bank of India) to
establish a private sector bank.
This happened as a part of the liberalization of the banking industry in the country by
R.B.I. in the same year. However, this scheduled business bank started its operations mainly
from January, 1995. Headquartered in the city of Mumbai, this is one of the main companies
involved in housing finance.
2.8.4 Punjab National Bank
Punjab National Bank, popularly called P. N. B., initially started its business on 12th
April of the year 1895. With their mission to provide banking services to the un-banked, they

aim to be the leading player in global banking. Over the time, they have become a known name,
especially in the Indo-Gangetic plains.
The huge network of this bank includes over 5, 100 offices, which include 5 overseas
branches and more than 60 million customers. This bank has continued to maintain their
leadership position for its strong fundamentals, superior brand image as well as huge franchise
value.
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2.8.5 Bank of Baroda
The Bank of Baroda was established in the year 1908 in Baroda. Ever since its inception,
the bank has been growing and expanding its branches successfully. At the turn of a century, the
bank has its presence in 25 countries across the world. Bank of Baroda has progressively taken a
step towards commitment and values by providing uncompromising standards of service to its
customers, stakeholders, employees and the like.
2.8.6 Canara Bank
Canara Bank was established in 1906 by Shri Ammembal Subba Rao Pai at Mangalore in
India. The founder of the bank Shri Ammembal Subba Rao Pai was a great visionary who sensed
the need of a bank in Mangalore which in those days was a small port in Karnataka. Having
successfully developed over the years as a major financial conglomerate of the country Canara
Bank today holds an unmatched reputation especially in South India. Known for its diverse
product portfolio and excellent services and facilities Canara Bank has achieved several
milestones in the financial sector in India. Personal Banking, Corporate Banking, NRI Banking
and Priority & SME Credit are some of the important functions provided by the bank.
2.8.7 Central Bank of India
Central Bank of India is one of the largest commercial banks in India. Founded in
December 21, 1911 by Sorabji Pochkhanawala, Central Bank of India is believed to be the first
commercial bank in India, owned and managed fully by the Indians. In 1923, Central Bank of
India acquired Tata Industrial Bank. It has made its position in the Indian banking industry
through a range of innovative and unique banking activities, which continued even after the
nationalization of banks in India in 1969
2.8.8 IBDI Bank
The Industrial Development Bank of India Limited, popularly known as IDBI Bank is
one of the leading public sector banks in India. Categorized as "other public sector bank" by
Reserve Bank of India (RBI), IDBI Bank is also the 4th largest Indian bank. Founded in 1964 to
provide credit and other facilities to its customers, IDBI Bank currently has 457 centers, 688
branches and 1020 ATMs across the nation. It is world's 10th largest development bank in terms

of reach. IDBI Bank also built several institutions including the National Stock Exchange of
India (NSE), the Stock Holding Corporation of India (SHCIL) and the National Securities
Depository Services Ltd. (NSDL) etc.
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2.8.9 Axis Bank
Axis Bank, previously known as UTI Bank, is one of the Big Four Banks of India along
with State Bank of India, HDFC Bank and ICICI Bank. Established in 1994, it's the first of the
new private sector banks in India to start its operations, when Government of India opened the
gate for the private banks to flock into the Indian financial market. Though the bank started its
operation with the name UTI Bank, but later, in order to avoid ambiguities and confusion with
other discrete entities carrying the same name, it changed its name to its current form (Axis
Bank) in April 2007.
Axis Bank Limited recorded a total income of ` 13,745.04 crores as on the year ended
March 31, 2009. It also made a net profit of ` 1,812.93 crores in the same financial year.
2.8.10 Bank of India
Bank of India was initially a private owned bank, when in it was established in the year
1906 on 7th September. After almost 63 years from its establishment, in the month of July, 1969,
this Indian bank was transformed into a nationalized bank. Starting its operation with just 50
employees in a Mumbai based office; this bank has grown rapidly over these years. Presently, it
has got a strong national as well as sizable international presence and is considered to be one of
the premier nationalized banks in India. Apart from 3, 752 branches in this country, this bank in
India have even got one joint venture and three subsidiaries abroad.
Its international footprints located in London, New York, Tokyo, Paris, Singapore and
Hong Kong accounts for approximately 17.82 % of B. O. I.’s total business. This was the first
bank from India to establish a foreign branch in 1946 in London and in 1974 at Paris in Europe.
This Indian bank is associated with B. S. E. (Bombay Stock Exchange) since the year 1921.
2.9 SWOT for the Banking Industry
2.9.1 Internal Factors
Strength
 Indian banks have compared favourably on growth, asset quality and profitability with
other emerging economies banks over the last few years.
 Policy makers have made some notable changes in policy and regulation to help
strengthen the sector. These changes include strengthening prudential norms, enhancing

the payments system and integrating regulations between commercial and co-operative
banks.
 Bank lending has been a significant driver of GDP growth and employment.
 Extensive reach: the vast networking & growing number of branches & ATMs. Indian
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banking system has reached even to the remote corners of the country.
 In terms of quality of assets and capital adequacy, Indian banks are considered to have
clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region.
 Foreign banks will have the opportunity to own up to 74 per cent of Indian private sector
banks and 20 per cent of government owned banks.
Weakness
 PSUs need to fundamentally strengthen institutional skill levels especially in sales and
marketing, service operations, risk management and the overall organizational
performance ethic & strengthen human capital.
 Old private sector banks also have the need to fundamentally strengthen skill levels.
 The cost of intermediation remains high and bank penetration is limited to only a few
customer segments and geographies.
 Structural weaknesses such as a fragmented industry structure, restrictions on capital
availability and deployment, lack of institutional support infrastructure, restrictive labor
laws, weak corporate governance and ineffective regulations beyond Scheduled
Commercial Banks (SCBs), unless industry utilities and service bureaus.
 Refusal to dilute stake in PSU banks: The government has refused to dilute its stake in
PSU banks below 51% thus choking the headroom available to these banks for raining
equity capital.
2.9.2 External Factors
Opportunities
 The market is seeing discontinuous growth driven by new products and services that
include opportunities in credit cards, consumer finance and wealth management on the
retail side, and in fee-based income and investment banking on the wholesale banking
side. These require new skills in sales & marketing, credit and operations.
 With increased interest in India, competition from foreign banks will only intensify.
 Given the demographic shifts resulting from changes in age profile and household
income, consumers will increasingly demand enhanced institutional capabilities and
service levels from banks.
 New private banks could reach the next level of their growth in the Indian banking sector
by continuing to innovate and develop differentiated business models to profitably serve

segments like the rural/low income and affluent/HNI segments; actively adopting
acquisitions as a means to grow and reaching the next level of performance in their
service platforms. Attracting, developing and retaining more leadership capacity.
 Foreign banks committed to making a play in India will need to adopt alternative
approaches to win the “race for the customer” and build a value-creating customer
franchise in advance of regulations potentially opening up post 2009. At the same time,
they should stay in the game for potential acquisition opportunities as and when they
appear in the near term. Maintaining a fundamentally long-term value-creation mindset.
 Reach in rural India for the private sector and foreign banks.
 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
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banking, mortgages and investment services are expected to be strong.
 Reserve Bank of India (RBI) has approved a proposal from the government to amend the
Banking Regulation Act to permit banks to trade in commodities and commodity
derivatives.
 Hybrid capital: In an attempt to relieve banks of their capital crunch, the RBI has allowed
them to raise perpetual bonds and other hybrid capital securities to shore up their capital.
If the new instruments find takers, it would help PSU banks, left with little headroom for
raising equity.
Threats
 Threat of stability of the system: failure of some weak banks has often threatened the
stability of the system.
 Rise in inflation figures which would lead to increase in interest rates.
 Increase in the number of foreign players

CHAPTER – III
Organization Profile
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STATE BANK OF INDIA
3.1 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.
Figure 3.1 Bank of Bengal H.O.
3.2 Establishment
The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock
banking in India. So was the associated innovation in banking, viz. the decision to allow the
Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a
restricted geographical area. This right of note issue was very valuable not only for the Bank of
Bengal but also its two siblings, the Banks of Bombay and 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 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.
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Figure 3.2 Group Photograph of Central Board (1921)
3.3Business
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 Rs.one lakh 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.
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Figure 3.3 Old Bank of Bengal
3.4 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 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.
3.5 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.
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.
India witnessed rapid commercialization in the last quarter of the nineteenth century as its
railway network expanded to cover all the major regions of the country. New irrigation networks
in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash
crops, a portion of which found its way into the foreign markets. Tea and coffee plantations
transformed large areas of the eastern Terrains, the hills of Assam and the Nilgiris into regions of
estate agriculture par excellence. All these resulted in the expansion of India's international trade
more than six-fold. The three presidency banks were both beneficiaries and promoters of this
commercialization process as they became involved in the financing of practically every trading,
manufacturing and mining activity in the sub-continent. While the Banks of Bengal and Bombay
were engaged in the financing of large modern manufacturing industries, the Bank of Madras
went into the financing of large modern manufacturing industries; the Bank of Madras went into
the financing of small-scale industries in a way which had no parallel elsewhere. But the three
banks were rigorously excluded from any business involving foreign exchange. Not only was
such business considered risky for these banks, which held government deposits, it was also
feared that these banks enjoying government patronage would offer unfair competition to the
exchange banks which had by then arrived in India. This exclusion continued till the creation of
the Reserve Bank of India in 1935.
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Figure 3.4Bank of Madras

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3.6 Presidency Banks of Bengal
The presidency Banks of Bengal, Bombay and Madras with their 70 branches were
merged in 1921 to form the Imperial Bank of India. The triad had been transformed into a
monolith and a giant among Indian commercial banks had emerged. The new bank took on the
triple role of a commercial bank, a banker's bank and a banker to the government.
But this creation was preceded by years of deliberations on the need for a 'State Bank of
India'. What eventually emerged was a 'half-way house' combining the functions of a commercial
bank and a quasi-central bank.
The establishment of the Reserve Bank of India as the central bank of the country in 1935
ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the
Government of India and instead became agent of the Reserve Bank for the transaction of
government business at centers at which the central bank was not established. But it continued to
maintain currency chests and small coin depots and operate the remittance facilities scheme for
other banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers'
bank by holding their surplus cash and granting them advances against authorized securities. The
management of the bank clearing houses also continued with it at many places where the
Reserve Bank did not have offices. The bank was also the biggest tenderer at the Treasury bill
auctions conducted by the Reserve Bank on behalf of the Government.
The establishment of the Reserve Bank simultaneously saw important amendments being
made to the constitution of the Imperial Bank converting it into a purely commercial bank. The
earlier restrictions on its business were removed and the bank was permitted to undertake foreign
exchange business and executor and trustee business for the first time.
Figure 3.5Bank of Bombay

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3.7Imperial Bank
The Imperial Bank during the three and a half decades of its existence recorded an
impressive growth in terms of offices, reserves, deposits, investments and advances, the
increases in some cases amounting to more than six-fold. The financial status and security
inherited from its forerunners no doubt provided a firm and durable platform. But the lofty
traditions of banking which the Imperial Bank consistently maintained and the high standard of
integrity it observed in its operations inspired confidence in its depositors that no other bank in
India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent
position in the Indian banking industry and also secure a vital place in the country's economic
life.
When India attained freedom, the Imperial Bank had a capital base (including reserves)
of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively
and a network of 172 branches and more than 200 sub offices extending all over the country.
The State Bank of India was thus born with a new sense of social purpose aided by the
480 offices comprising branches, sub offices and three Local Head Offices inherited from the
Imperial Bank. The concept of banking as mere repositories of the community's savings and
lenders to creditworthy parties was soon to give way to the concept of purposeful banking sub
serving the growing and diversified financial needs of planned economic development. The State
Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking
system into the exciting field of national development.
Figure 3.6Stamp of Imperial Bank of India

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3.8 Vision
 My SBI.
 My Customer first.
 My SBI: First in customer satisfaction
3.9 Mission
 We will be prompt, polite and proactive with our customers.
 We will speak the language of young India.
 We will create products and services that help our customers achieve their goals.
 We will go beyond the call of duty to make our customers feel valued.
 We will be of service even in the remotest part of our country.
 We will offer excellence in services to those abroad as much as we do to those in India.
 We will imbibe state of the art technology to drive excellence.
3.10 Values
 We will always be honest, transparent and ethical.
 We will respect our customers and fellow associates.
 We will be knowledge driven.
 We will learn and we will share our learning.
 We will never take the easy way out.
 We will do everything we can to contribute to the community we work in.
 We will nurture pride in India
3.11 Awards & Achievements
 SBI won the Best Bank award in the 'Asia MONEY FX POLL OF POLLS 2014’ for best
overall performance as domestic provider of Forex services over the last 10 years.
 SBI was ranked as the top bank in India based on tier 1 capital by The Banker magazine in a
2014 ranking.
 SBI was ranked 298th in the Fortune Global 500 rankings of the world's biggest corporations
for the year 2012.
 SBI won "Best Public Sector Bank" award in the D&B India's study on 'India's Top Banks
2013'.
 State Bank of India won three IDRBT Banking Technology Excellence Awards 2013 for
“Electronic Payment Systems”, “Best use of technology for Financial Inclusion”, and
“Customer Management & Business Intelligence” in the large bank category.

 SBI won National Award for its performance in the implementation of Prime Minister’s
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Employment Generation Program me (PMEGP) scheme for the year 2012.
 Best Online Banking Award, Best Customer Initiative Award & Best Risk Management
Award (Runner Up) by IBA Banking Technology Awards 2010.
 SKOCH Award 2010 for Virtual corporation Category for its e-payment solution.
 SBI was the only bank featured in the "top 10 brands of India" list in an annual survey
conducted by Brand Finance and The Economic Times in 2010.
 The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine.
 Best Bank – Large and Most Socially Responsible Bank by the Business Bank Awards 2009.
 Best Bank 2009 by Business India.
 The Most Trusted Brand 2009 by The Economic Times.
 SBI was named the 29th most reputed company in the world according to Forbes 2009
rankings.
 Most Preferred Bank & Most preferred Home loan provider by CNBC.
 Visionaries of Financial Inclusion By FINO.
 Technology Bank of the Year by IBA Banking Technology Awards.
 SBI was 11th most trusted brand in India as per the Brand Trust Report 2010.
3.12 Small and Medium Enterprises (SME)
SME finance is the funding of small and medium sized enterprises, and represents a
major function of the general business finance market – in which capital for different types of
firms are supplied, acquired and priced. Capital is supplied through the business finance market
in the form of bank loans and overdrafts; leasing and hire-purchase arrangements;
equity/corporate bond issues; venture capital or private equity; and asset-based finance such as
factoring and invoice discounting.
However, not all business finance is external/commercially supplied through the market. Much
finance is internally generated by businesses out of their own earnings and/or supplied
informally as trade credit, that is, delays in paying for purchases of goods and services.
3.13 Importance
The economic and banking importance of the small and medium enterprise (SME) sector
is well recognized in academic and policy literature. It is also acknowledged that these actors in
the economy may be under-served, especially in terms of finance. This has led to significant
debate on the best methods to serve this sector.

 Collateral based lending offered by traditional banks and finance companies is usually
made up of a combination of asset-based finance, contribution based finance, and
factoring based finance, using reliable debtors or contracts.
 Information based lending usually incorporates financial statement lending, credit
24
scoring, and relationship lending.
 Viability based financing is especially associated with venture capital.
 Reliable for the entire small ticket loan.
In accordance with the provision of Micro, Small & Medium Enterprises Development
(MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two
Classes:
3.13.1Manufacturing Enterprises: The enterprises engaged in the manufacture or production of
goods pertaining to any industry specified in the first schedule to the industries (Development
and regulation) Act, 1951) or employing plant and machinery in the process of value addition to
the final product having a distinct name or character or use. The Manufacturing Enterprise is
defined in terms of investment in Plant & Machinery.
3.13.2 Service Enterprises: The enterprises engaged in providing or rendering of services and
are defined in terms of investment in equipment.
The limit for investment in plant and machinery / equipment for manufacturing / service
enterprises, as notified under:
Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore
rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises Investment in equipment’s
Micro Enterprises Does not exceed ten lakh rupees
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five core rupees
Table 3.1

25
3.14 Challenges and Future outlook of Banking Industry
The economic growth of the country is an apt indicator for the growth of the banking
sector. The Indian economy is projected to grow at a rate of 5-6 percent and the country’s
banking industry is expected to reflect this growth. The onus for this lies in the capabilities of the
Reserve Bank of India as an able central regulatory authority, whose policies have shielded
Indian banks from excessive leveraging and making high risk investments.
The competitive scenario in India is strong, with the landscape primarily dominated by
government banks. Market entry at the country level is expected to be tough for new players due
to the moderately consolidated nature of the industry and extremely high competition. The key
challenges for the industry are to reduce NPAs, increase financial inclusion and raise capital for
the Basel III compliance. The overall impact of suggested changes in the 2012–13 Union Budget
is expected to be positive. These changes are mostly focused on financial inclusion through
expansion into rural areas, and bringing stability by boosting credit growth. This may enable
banks to meet the increasing demand for credit in the economy and comply with the Basel III
norms.
According to the top consulting firms, the growth of Indian banks, especially in the
public sector, can be optimized through increasing productivity and efficient human resource
management. Banks need to hire employees with both core and specialist skills, while
simultaneously working to control attrition.
Further, banks need to optimize the time and cost of performing non consumer activities
with the help of special tools and revamping existing knowledge processes. Sustained
government support and a careful re-evaluation of existing business strategies can help the
Indian banks achieve strong growth. Sustained government support and a careful re-evaluation of
existing business strategies can set the stage for Indian banks to become bigger and stronger,
thereby setting the stage for expansions into a global consumer base.
3.15 Small and Medium Enterprises (SME) Products
3.15.1 SME Credit Card (Up to Rs.10 Lakh)
Product provides loans for the micro enterprises including SSI units, small business
enterprises, professional and self-employed persons, small retail traders, transport operators etc.
for meeting any kind of credit requirement including purchase of shops, maximum limit being Rs
10 lakhs including term loan & working capital loan. The loan will be sanctioned for 3 years
with an annual review. This product has simplified sanction process without requirement of
elaborate financial data.
The borrower will be provided a photo identity card and a passbook giving details of the
limit and validity of the facility. A Cheque book marked as SME Credit Card and a pass book
would be issued to the customer.

26
3.15.2 SME Smart Score (Up to Rs.50 Lakh)
The Loan product is for units in Micro and Small Enterprise sector in manufacturing
trade and services segments to meet working capital needs and for acquisition of fixed assets. A
simplified appraisal model has been developed to standardize the appraisal process for loans up
to Rs 50 lakhs in SSI sector and up to Rs 25 lakhs for trade and services sector available with
attractive interest rates. The loan will be sanctioned for 2 years with an annual review.
3.15.3 General Purpose Term Loan for SSI Sector (Up to Rs.50 Lakh)
This product is for existing borrowers for any general commercial purpose such as
shoring up of Net Working capital, substitution of high cost debt, R&D, ISO certification etc.
subject to disbursement being made in line with the specific purpose approved. Maximum loan
available is Rs 50 lakhs repayable in maximum period of 5 years.
3.15.4 Open Term Loan (Up to Rs.2.5 Cr)
A pre-sanctioned term loan with limit up to Rs 2.5 crore for existing or new corporate or
non-corporate customers in manufacturing sector and up to Rs.1 crore for hotels, hospitals,
educational institutions in service sector.
The scheme provides option of multiple disbursements for multiple purposes like
expansion/modernization, substitution of high cost debt, up-gradation of technology, energy
conservation system, acquisition of software, hardware, visits abroad for acquiring technology,
finalizing deals, participation in fairs, market promotion etc. The sanctioned limit is valid for 1
year. Margin requirement is 10%.
3.15.5 Corporate Loan (For Rs.25 Lakh up to Rs.10 Cr)
The scheme provides term loan for all existing customers and established non customers
(subject to takeover norms of the Bank) in manufacturing sector for repayment of high cost debt,
VRS scheme expenses, ongoing capital expenditure such as replacement of parts of machineries,
up gradation and renovation, shoring up of net working capital, R&D expenses, acquisition of
tools jigs etc.
Quantum of Finance is minimum Rs.25 lakhs and maximum Rs.10 crores for non-
Corporate and no cap for Corporate borrowers. No Margins are required under the scheme. A
maximum of three corporate loans can be outstanding per borrower at any point of time.
3.15.6 SME Credit Plus
For existing and new borrowers this scheme provides a clean cash credit facility to meet
contingencies, sudden and unforeseen expenditures like repairs, meeting bulk orders, tax
payments, mismatch in cash flows etc.

Under the scheme 20% of aggregate WC or max Rs.25 lakhs fund based limit can be
availed. Margins are not required and interest rate will be same as applicable to cash credit limit.
The facility is repayable in 2 months and can be availed for 12 times a year.
27
3.15.7 SME Collateral Free Loan (SMECFL)
Collateral free loan for viable projects of micro and small enterprises in manufacturing
and service sector with maximum guarantee cover up to Rs.1.00 crore under CGTMSE guarantee
scheme for working capital & Term Loan facilities.
3.15.8 Traders Easy Loan
Easy loan for specific business needs of traders, wholesalers and professionals, self-employed,
small business enterprises, agents engaged in purchase and sale of food grains,
commodities, cold storage units, having collaterals like land, buildings and liquid securities.
Loan can be availed for normal day to day business requirements or for purchase of
equipment/ fixed assets. Loan is available up to Rs 5 crore with very competitive rate of interest.
3.15.9 SME Construction Equipment Loan
Term Loan for purchase of construction equipment viz. loaders, excavators, cranes etc.,
for contractors and firms engaged in construction activity. Loan is not available for purchasing
old machinery/ vehicles. Maximum loan available is up to Rs 25 crore with minimum margin
applicable up to 15%. Tenure of loan can be extended up to maximum of 4 years.
3.15.10 SME Car Loan
Loans for purchase of passenger cars, jeeps, multi utility vehicles etc., to the
promoter/partner/senior executives of the SME units having borrowing arrangements with the
Bank/ their family members either in their own name or the units name as per the choice of the
customer.
SME Current Account holders of the Bank or their family member either in their own
name or in the unit’s name, and other SME clients subject to obtaining a NOC from the bank
where they might have a loan account, are also eligible.Loans available for used cars also.

CHAPTER – IV
Electronic Dealer Financing Scheme
(e-DFS)
28

29
4.1 STATE BANK OF INDIA (Supply Chain Finance)
Electronic Vendor Financing Scheme (e-VFS) and
Electronic Dealer Financing Scheme (e-DFS)
State Bank of India introduces Supply Chain Finance by leveraging its state of the art
technology for the convenience of the customers. SCF will strengthen the relationship of SBI
with the Corporate World by financing their supply chain partners.
Under Supply Chain Finance Unit they have established an online platform for financing
the Supply Chain partners of various reputed Corporate.
A Web based platform which:
 Provides convenient paperless banking.
 Ensures Real time online transfer of funds and MIS.
 Is fully customizable as per your business requirement.
 Is capable of being fully integrated with Corporate Enterprise Resource Planning
Software (ERP)/SAP.
They offer two products on the supply chain to cater to the needs of both vendors and dealers:
 Electronic Vendor Financing Scheme (e-VFS): Financing Vendors/Suppliers for their
receivables from corporate buyers which are Industry Majors (IMs). The Corporate
buyers can upload the details of invoices raised by their Vendors on our Bank's online
platform which results in instant credit to Vendor account.
 Electronic Dealer Financing Scheme (e-DFS): Financing Dealers for their purchases
from Corporate Sellers. Corporate Sellers make online requests to our Bank's online
platform for debiting dealer's account by providing details of invoices raised on their
Dealers which results in immediate credit to corporate seller's account.
Figure 4.1 Structure of Supply chain
Source: https://www.onlinesbi.com/scfu/scfu_channel_financing.html

All product offerings under Channel Finance are designed to ensure efficient management of
working capital cycle and sustained growth and profitability of business partners.
30
4.2 Benefits across the Supply Chain:
Buyer Seller Bank
Reduce the cost of
goods purchased
Reduce the cost of
capital through
improved Days Sales
Outstanding (DSO)
and lower finance
costs.
Build stronger,
collaborative
relationships with
customers.
Reduce working
capital requirements
through improved
Days Payable
Outstanding (DPO)
Generate flexible,
predictable cash flow
Enhance customer
retention
Enjoy a more stable
supply base
Gain access to low-cost
finance rates.
Increase bottom line by
supporting customers’
entire supply chain
from end to end.
Table 4.1
4.3 Electronic Dealer Financing Scheme (e-DFS)
It is a scheme for financing the purchases of Dealers from companies/Industry majors
backed by a strong web based platform which ensures remittance of funds to the industry Major
(Corporate) from the dealer’s e-DFS A/c as per the invoice amount i.e., Bank, Company and
Dealer. It provides Management Information System (MIS) to the branches and facilities
monitoring of end use of funds in the dealer accounts.
It provides need based finance to dealers for their purchases from the Industry Majors
(Corporate) backed by a strong web based platform which ensures remittance of funds to the
industry Major (Corporate) from the dealer’s e-DFS A/c as per the invoice amount. Dealers
recommended by the reputed Industry Majors which have tie-up arrangement with the Bank.
Recommended dealers are those dealers for whom IM provides the introduction letter/
confirmation cum comfort letter/ performance letter.

31
4.4 Difference between traditional Cash Credit (CC) & e-DFS
In this scheme, a limit will be sanctioned to the dealer exclusively for inventory funding
for making the payments to the Industry Major. The e-DFS A/c (Inventory Funding Account)
will operate on electronic platform with no manual intervention of branches. The limits will be
sanctioned based on the introduction letter/comfort letter/performance letter provided by the
Industry Major for the dealer.
4.4.1 Advantages of the Scheme over normal CC
 Need based finance taking into account past performance and/ or projected turnover
whichever is higher. Limit recommendation of IM as per projected supplies is also taken
into consideration.
 Seasonal/ adhoc limits may be sanctioned upfront and utilized as per requirement/
recommendation.
 100% financing of invoices – Nil margin
 Invoice-wise customized MIS reports.
 Improved margins on account of Competitive pricing
 Better funds management.
 SMS/ e-mail alert on the debit in the e-DFS A/c.
4.4.2 Interest Rate for Dealers in e-DFS
Competitive interest is charged as per tie up arrangement terms and conditions discussed
with the Industry Major. The Base rate as per the Scheme is 10%+ 0.30% (10.30%) for the
dealers. If the dealer failed to pay the finance within the allocated time (10days). Then the
interest rate will get raised to 2% (i.e.) 12.30% in the Grace Period of 5 Days.
4.4.3Amount of Facility
100% Hypothecation of Stocks and Receivables
4.4.4 Security
To obtain the Financial Assistance the dealer has to show up minimum 25% Tangible
Collateral Security in the form of Land and Building/ Cash Collateral/Bank Approved
Securities. Land up to which Retail Outlet (Petrol Pump) is located can be mortgaged only after
prior permission of IOCL.

32
4.4.5 Period of Advance & Grace Period
Each debit (i.e. each consignment) in a dealer e-DFS A/c will have a fixed period of
repayment (known as credit period/ period of advance). Dealers have to repay the loan amount
taken for a consignment within the specified time period (within the applicable terms and
conditions) Grace period is the time given over and above the credit period as per applicable
terms and conditions to enable the dealer to pay after the credit period. Normally the Period of
Advance for e-DFS is 10-days and the Grace period is 5-days.
4.4.6 Other General Instructions
The dealer can have CC facility with other Bank/s (other than inventory funding facility
under the respective IM to avoid double financing) If the dealer wishes, SBI can take over the
limits enjoyed by dealers from other Banks as per the laid down policies of Bank. Dealers can
also have separate working capital limits for other purposes than inventory funding. On the
request of the dealer, the existing CC limit can be migrated fully or partially to the e-DFS
platform. No Cheque book will be issued for e-DFS account. Separate current account shall be
opened for doing other transactions.
4.4.7 Reports Provided by the Bank for the Dealers
 SMS/ e-mail alerts on the debit of funds from the account (Debit Advice).
 Report of Successful transactions.
 Report of failure transactions.
 Inactive status report of the Dealer.
 Active status report of the dealer.
4.5 Working procedure for the Inventory Funding e-DFS
There are two methods available for initiation of transactions:
4.5.1 Pull Method: When the Industry Major makes a request for debit in the dealer’s
account
 The Dealer will place an indent to the IM for the purchase of goods. IM will view (as per
debit mandate given by the Dealer to the Bank) the limits available in each of the dealer’s
loan a/c associated with the IM through the e-DFS website and decide on supplies to be
made to the Dealer.

 Then IM will generate a file detailing the invoices raised on the dealers with the help of
their ERP system based on the limits available report which is mailed to designated email
IDs of the IM for various dealers’ account. This file will be uploaded on the e-DFS
website by the IM.
 Once the file is uploaded, the IM authorizer/s will authorize the transaction data on the e-
33
DFS website.
 Once IM authorizes the file, it may be presented to authorizer in SCFU (Operations) for
final authorization. This is optional depending on the tie up with the Industry Major.
 Once the file is authorized the invoice amount will be debited to the dealer’s e- DFS
inventory account and credited to IM’s account.
4.5.2 Push Method: When the dealer originates the remittance
The Dealer will place an indent to the IM for the purchase of goods and make payment to
IM by debiting his e-DFS account and remitting money to the Company account either
maintained in SBI or through RTGS to accounts maintained with other Banks.
4.5.3 Common steps to both PULL and PUSH mode:
 Internet banking server will automatically debit the various dealers e-DFS loan account
and credit the IM account after the transaction is authorized by IM Authorizer ( SCFU
authorization is optional)
 Each debit in a dealer a/c will have a fixed period of repayment i.e. the credit period as
agreed between the Bank and the Industry Major (Corporate). The Dealer is supposed to
repay the loan amount within the agreed credit period including grace period (if any).If
any dealer fails to repay the amount within the agreed time period, system will charge the
penal interest rate for another period of 10 days, as agreed and remains unpaid, then INB
system will not allow further drawings to the IM. Each consignment will have a
consignment number and its tenure will be monitored with the help of that number. E-mail/
SMS will be sent to the dealer for the debit transaction in the CC account. The
overdue position and the penal interest will also be advised to the dealer, IM and the
dealing branch by email/ SMS.
 Dealer may make the repayment through the current / CC account maintained with the
bank through internet or through other any other mode directly to his e-DFS account.

Since the multiple chance remittance modules are now enabled, there will be no need to
open a separate account for the repayment. Dealer can use the e-DFS CC account for
repayment also by RTGS credit, cash deposit, Cheque deposit and internet banking
transfer. The invoices will be knocked off on a First in First Out (FIFO) basis.
 If any dealer fails to repay against any particular consignment with in the agreed credit
period, penal interest, will be levied on the dealer for the fixed period of time and if that
time also expire then no further debit will be allowed from the dealer’s CC account to the
IM. This repayment will be monitored branch as well as by SCFU (operations) also
system driven validations will be made which will do automatic checks and stop further
drawings. A daily report will be sent to the respective branches with the status of the
dealer accounts. If any dealer is in INACTIVE status, branched are requested to
proactively act and find out the reason for the non-payment of the invoice with in the
credit period + grace period. Immediate inspection should be undertaken by a visit to the
dealer with the MIS repot, which will provide the outstanding invoice details.
1. Options will be made available to SCFU to allow further drawings (authorize
except transactions) after receiving a written confirmation from the Dealer and the
branch once a dealer fails to repay in time. This feature is kept in the lines of
excess drawing arrangements at the discretion of appropriate authority.
 MIS will be made available online to IM/Dealer/SCFU/Branch/Respective Monitoring
Authorities about the various activities performed at each level. System generated
alerts/MIS will also be made available as per the requirements.
 System will also furnish warnings about possible non repayments by the dealer to all
34
parties concerned.

35
4.6 Flow chart for the process of e-DFS
Figure 4.2

CHAPTER – V
Analysis and Interpretation
36

37
5.1 Introduction
The sources of information and the method of collecting the data are the two important
things in the collection of data. Sources for the data are both the primary and secondary. Analysis
and interpretation means mass data need to be reduced to meaningful number by using various
statistical tools. Interpretation is the task of drawing conclusions and inference from a careful
analysis of data.
This chapter discloses all data from both the company as well as the survey part. The
statistical tools like Percentage analysis, bar chart, Pie chart etc. are employed for analyzing the
data collected.

38
5.2 Age group of Petrol Pump Dealers
Parameter Age
Below 40 14
Above 40 29
Table 5.1
Below 40 Above 40
Figure 5.1
30
25
20
15
10
5
0
Interpretation
The figure 5.1 shows that the people above the age of 40 are mostly involved in Petrol
pump Dealership. Hence it is an age related business, as people will not have strain full in this
business.
People below the age limit of 40 were making the petrol pump dealership as one of their
businesses. They can make more profit by handing many businesses.
Below 40
Above 40

39
5.3Number of Petrol Pump Dealers around the City
Petrol Corporation No of Dealers
IOCL 21
BPCL 13
HPCL 9
Table 5.2
Figure 5.2
49%
Interpretation
30%
21%
BPCL
HPCL
IOCL
Among the three petrol corporation, the research clearly notifies that the Indian Oil
Corporation has wide range Dealers around the city of about 49%. While Bharath petroleum
holds the second place in coverage of 30% according to the figure 5.2
Hindustan petroleum has least number of Dealers around the city of about 21%. Whereas
the IOCL dealer maintains various cash credit accounts to run their business. HPCL dealers
relatively using over draft facility compared to CC account.

40
5.4 Nature of Business
Nature of business No. of Dealers
One of the Businesses 14
Full time Business 29
Table 5.3
One of businesses Full time Business
Figure 5.3
30
25
20
15
10
5
0
Interpretation
One of businesses
Full time Business
Most of Petrol pump dealers are concentrating on a single business. They all time
available in the stations and maintaining the lower hierarchy people to make the business a good
and profitable one.
Where, the other category is the set of dealers who are maintaining the petrol pump as
one of their businesses. The recruit a person for in charge of the petrol pump station and
concentrates on other businesses also.

41
5.5 Source for the Business Working Capital
Source for the businesses No. of Dealers
Own Financing 37
Loan Facilities 6
Table 5.4
0 5 10 15 20 25 30 35 40
Figure 5.4
Own
Loan facilities
Interpretation
Loan facilities
Own
Dealer Finance availability in the banks makes a better benefit for the people who
manages their small/medium businesses. By this study it shows that most of the Dealer of petrol
pumps was using the financial assistance provided by banks for their working capital.
Part of the dealers is not expecting any financial help from the banks for the working
capital. They invest and they are feeling comfortable with the profit. But a beginner will always
expect a loan facility for his new start up business.

42
5.6 Rate of the Dealers using Cash Credit/ Over Draft facility
Type of Account No. of Dealers
Cash Credit 16
Over Draft Facility 14
e-DFS scheme 7
Own financing 6
Table 5.5
Figure 5.5
Interpretation
The Cash Credit is a Separate account. Whereas the Over Draft facility is used in current
account. But CC is a permanent and OD is Temporary. Most of the Dealers prefer Cash Credit
Account compared to Over Draft.
Dealers who are in need for a minimum working capital for their business will select OD
facility which is of lower interest rate compared to CC. But the experts will need more capital
structure for investment. By this survey it is understood that about 37% of the dealers use CC
account, while 33% of them are maintain doing their business with the OD facility in their
current account.
Part of the Dealers was already aware of the Electronic Dealer Financing Scheme of
about 16% using it for their enhancement.
37%
33%
16%
14%
Cash Credit
Over Draft
e-DFS
Own

43
5.7 Preference level of Banks the Dealers using to avail CC/OD
Name of the bank No. of the dealers avails
Axis Bank 2
Bank of Baroda 1
Canara bank 2
City Union Bank 1
Corporation bank 2
HDFC Bank 1
ICICI Bank 3
IDBI bank 4
Karur Vysya Bank 4
Lakshmi Vilas Bank 2
State Bank of India 11
Tamilnadu Mercantile Bank 4
Vijaya Bank 1
Table 5.6
Figure 5.6
12
10
6
4
2
0
8
Axis Bank
Bank of Baroda
Canara Bank
City Union Bank
Corporation Bank
HDFC
ICICI
IDBI
Karur Vysya Bank
Lakshmi Vilas Bank
State Bank of India
TMB
Vijaya Bank

44
Interpretation
State Bank of India is the First preference of the Dealers to avail a CC/OD as it is a
nationalized bank. IBDI bank, Tamilnadu Mercantile bank and Karur Vysya bank hold the same
second level of preference among the Petrol pump Dealers as their services are good compared
to other privatized banks.
Canara bank, Axis Bank, Lakshmi vilas bank and Corporation banks are in the preference
level three. The Bank of Baroda, City Union Bank and HDFC bank are in the Least Preference
level of dealers to avail any loan facilities.

45
5.8Rate of Interest
Rate of Interest Response of the no. of Dealers
Above 10.30% 30
10.30% 7
None 6
Table 5.7
Figure 5.7
Interpretation
Almost 70% of the Dealers are uncomfortable with the current interest rate of Cash credit
or Over Draft facility they are availing. The State Bank of India launches e-DFS at the Interest
rate of 10.30%. Moreover several banks are charging an interest rate more than 10.30% makes
the dealers suffer.
The 16% of the Dealers mentioned in the graph owns an e-DFS account in SBI who pay
the 10.30% interest.
The remaining 14% of the Dealers are financing on their own. They invests and make
their own profits.
70%
16%
14%
Above 10.30 %
10.30%
None

46
5.9Rate of Payment of Cash Handling Charges
Parameter No. of Dealers
Paying Cash Handling Charges 31
Not Paying Cash Handling Charges 2
None 10
Table 5.8
Figure 5.8
35
30
25
20
15
10
5
0
Interpretation
More number of Dealers are maintains CC account in the Bank for the working capital.
Banks collect Cash Handling Charges and Operating Charges on every transaction on which the
Dealers have to pay.
Some of the banks like SBI are not collecting the Cash Handling Charges which makes
the supply chain comfortable.
The part of the Dealers who finances on their own are not in need to pay operational
charges.
Paying Cash
Handling
Charges
Not Paying Cash
Handling
Charges
None
Paying Cash Handling Charges
Not Paying Cash Handling
Charges
None

47
5.10Collateral Security expectation rate
Rate of Collateral security No. of Dealers
25% 8
50% 10
More than 50% 19
None 6
Table 5.9
25% 50% More than 50% None
Figure 5.9
Interpretation
19%
23%
44%
14%
44% of the Banks expect the collateral security of more than 50% rate. Hence the risk
factor the dealer rises. 23%% of the banks are expecting a fifty-fifty security with a margin for
the investment too.
Some of the banks like SBI expect a minimum security level of 25% that will make a
better benefit for the dealers. The dealers who lie in the none category are financing themselves
were about 14%.

48
5.11Satisfaction Level of Dealers on Current Interest Rate
Satisfaction level No. of Dealers
Very Dissatisfied 7
Dissatisfied 14
Neither Satisfied Nor Dissatisfied 6
Satisfied 6
Very much Satisfied 4
Mean Rate 2.25
Table 5.10
Figure 5.10
15
10
5
0
Interpretation
Very Dis-satisfied
Dis-satisfied
Neither Satisfied Nor Dis-satisfied
Satisfied
Very Satisfied
It shows that the Dissatisfaction on the current interest rate over the cash credit account
the dealers avail is more. Some more dealers are expressing that the interest rate is very much
dissatisfied for them. The mean rate for the satisfaction level of interest rate 2.25. This shows
that the banks should concentrate more on the interest rate.
Some privatized banks were doing favor to the dealers by reducing the interest rate of the
cash credit account they hold by obtaining a higher collateral security from the dealers. The
Satisfied dealers are mostly the users of the e-DFS scheme.

49
5.12Satisfaction level of current Repayment Period
Very Dissatisfied 0
Dissatisfied 3
Satisfied 15
Mean Rate 3.1
Table 5.11
5
10
Figure 5.11
Very Satisfied
Satisfied
Interpretation
0
15
Dis-satisfied
Very Dis-satisfied
Very Dis-satisfied
Dis-satisfied
Satisfied
Very Satisfied
Petrol is a very Fast Moving Consumer Good (FMCG). Hence the dealers need a
minimum days to repay the loan they borrow from the bank. Some of the dealers hold the money
for a long term purpose and return it back with an interest rate.
Most of the dealers are satisfied with the repayment period the banks provides. Some of
them need an extra time to make a good profit by reinvesting it again and again. The dealers feel
that one week of time is more than enough to make the repayment. None of the dealers were very
much disappointed with the repayment time. As the mean rate is in average of 3.1 most of the
dealers were satisfied with the repayment period.

50
5.13Satisfaction Level of the e-Banking Facility
Very Dissatisfied 1
Dissatisfied 2
Satisfied 16
Mean Rate 4.3
Table 5.12
Figure 5.12
25
20
15
10
5
0
Interpretation
Very Dis-satisfied
Dis-satisfied
Satisfied
Very Satisfied
As the e-Banking facility is a booming one among the banking industry, the survey
results that the dissatisfaction level is very much low. The Dealers are making the transaction of
money in the place they are resting at by this facility.
Dealers express that the facility is flexible and convenient to use. But they are being
affected by the network problem with some banks including SBI. Dealers who are running the
petrol pumps as one of the businesses are not showing interest towards e-Banking facility. They
are remaining in the position of neither satisfied or dissatisfied conditions.The Mean Rate is
almost 4.3, as it shows that most of the dealers are satisfied with the e-Banking facilities.

51
5.14Satisfaction Level of Financial Assistance
Very Dissatisfied 0
Dissatisfied 4
Satisfied 19
Mean Rate 3.3
Table 5.13
Figure 5.13
20
15
10
5
0
Interpretation
Very Dis-satisfied
Dis-satisfied
Neither Satisfied Nor
Dis-satisfied
Satisfied
Very Satisfied
The risk of the dealer will get reduces when the financial assistance is sufficient for them.
Most of the privatized and public sector banks are fulfilling the needs of the dealers which make
them to fetch this result, that they are satisfied.
Several banks are not ready to take more risk, because the dealers are not that much
richer to produce equal securities to take away the loan. This makes the dealers to produce the
result as dissatisfied. None of the dealers are very much dissatisfied. The mean rate is 3.3, as it
shows that the part of the dealers were dissatisfied with the financial assistance provided by the
banks.

52
5.15 Satisfaction Level of Service provided by banks
Very Dissatisfied 0
Dissatisfied 2
Satisfied 16
Mean Rate 3.8
Table 5.14
Figure 5.14
16
14
12
10
8
6
4
2
0
Interpretation
Very Dis-satisfied
Dis-satisfied
Satisfied
Very Satisfied
As the Banking industry is really a fast growing one, each and every bank is trying to
satisfy its customers in a very plausible manner. They are not letting their customers in to a worst
situation on any condition. Hence the satisfaction level over the dealers gets increased.
Most of the dealers were given a positive reply over the banks on which they maintain an
account. One or two of the privatized banks are being worst in their services as the mean rate
shows as 3.8.

CHAPTER – VI
Findings and Suggestions
53

54
6.1 Findings from the study
The complete study of the Relationship between the Petrol Pump Dealers and the various
banks in the current market fetches the pros and cons about the field. Various banking factors
which the Dealers like and dislike are in clear with the help of this survey. There are several
findings through this survey they are:
 The Dealers above the age of forty are mostly involved in the Petrol Pump Dealership.
 Among the two cities Dindigul and Madurai the number of dealers for the Indian Oil
Corporation is more in number.
 The Nature of the business the dealers run is more in number with the Full time.
 Dealers who are in the situation of not able to finance themselves for the business own a
Cash Credit account or Over Draft facility from the banks they prefer.
 Even most of dealers who are having enough money to invest in the business are not
investing because they are not ready to take a risk by financing themselves.
 The Petrol Pump a dealer who needs a lot of money to invest and to make a better profit
opens a Cash Credit account in separate to finance the Working Capital.
 The dealers who are doing his/her business as one of the business are financing with the
help of the Current Account by the Over Draft facility.
 A Part of the people has already started using the Electronic Dealer Financing Scheme (e-
DFS) and enjoying the benefits by it.
 With the help of the survey the preference level of the banks may also be determined.
The Highest preferred bank by the petrol corporation dealers is State Bank of India.
 Almost 70% of the people in the market are paying the interest rate above 10.30%, which
goes up to 15% even. Some of the banks may even charge a higher cash handling
charges.
 The dealers who submit the collateral security of about more than 50% to the banks are
abundant.

55
6.2 Findings through Satisfaction Level of Dealers
 The dealers are dissatisfied with the interest rate that they are currently paying to the
bank in which they are having CC Account.
 Dealers are somewhat satisfied with the period of repayment. But not all the dealers.
 No problem arises in the e-banking facility except the network problem.
 The Dealers are not satisfied with the financial assistance provided by the bank. The
banks provide only partial credit which is not sufficient for the dealers. They can’t
maintain both the CC and OD at a same time with the bank.
 The overall services provided by the banks are in a good format. Some of the privatized
banks have as many complaints from the customer side.

56
6.3 Suggestions
 E-DFS is a new emerging scheme which is developed with the Tie-up of several Petrol
corporates with SBI. It satisfies all the needs of the petrol pump dealers to achieve both
the Win-Win situation on either sides (bank and dealers).
 They make the customers to provide a best rating for it among all the Cash Credit
accounting systems available. It helps the dealers to feel a comfort in all the business
practices.
 The user of this scheme feels that no other scheme in the current market is as good as
e-DFS in the Working capital financing.
 He/She uses the scheme will pay an Interest rate of 10.30% with full working capital
supply by the absence of cash handling charges. Importantly the collateral security the
user has to provide is 25%.
 Using this new financial scheme will make the dealer to obtain a great profit with the
absence of risk.
6.4 Advantages to the Bank
 Comparatively the State Bank of India is arranging for the e-DFS to make welfare of the
petrol pump dealers. This develops the goodwill among the market and helps the bank to
innovate many new advantageous financial schemes.
 Helps the Bank to satisfy all the financial needs of consumers without any flaw.
 The bank will get a special credit comparing to other banks from the people.
6.5 Conclusion
This Internship is quite useful for me to start my first step in the field of marketing. It
teaches me how to maintain a relationship with the common people, business professionals and
bankers. It helps me in the way to understand many loan facilities available in the SME and the
banking industry in a very clear manner. The support yielded by me from the faculty side also
helps me a lot.

58
7.1 References
https://www.onlinesbi.com/scfu/scfu_home.html
www.ibef.org/download/Banking-Sector-04jan.pdf
www.dnb.co.inbfsisectorinindiaBankC2.aspx
http://business.mapsofindia.com/india-company/top-10-banking-companies.html
http://www.dcmsme.gov.in/ssiindia/defination_msme.html
http://msme.gov.in/Web/Portal/New-Default.aspx
http://en.wikipedia.org/wiki/Bank
https://www.onlinesbi.com/scfu/scfu_channel_financing.html
http://www.rbi.org.in/scripts/banklinks.aspx
http://www.idbi.com/dealers-of-corporates.asp
http://www.kvbkunlun.com/en/html/aboutkvb/accreditation.aspx
http://www.axisbank.com/business-banking/credit-financing/solutions-corporates/supply-chain-management.
aspx
http://www.icicibank.com/business-banking/business-loans/working-capital/vendor-dealer-finance.
page
http://www.hdfcbank.com/wholesale/corporates/supply_chain_partners/dealer_financing/dealer_
financing.html
http://www.pnbindia.in/En/ui/Loan-against-Future-Lease-Rentals.aspx

59
7.2 Questionnaire on Dealers
Description:Electronic-Dealer Financing System is a new scheme launched by State bank of
India on Tie-up with Indian Oil Corporation Ltd, Bharath Petroleum Corporation Ltd and
Hindustan Petroleum Corporation Ltd. It propagates in to market and helps the Dealers to get full
capital for their business to purchase the Inventory at a very low Interest rate of 10.30%. SBI
asks for very low collateral security of about 25% from dealers to get the preliminary loan
amount. A separate account has to be maintained by the Dealers in order to obtain the financial
assistance they need. This questionnaire is to test the effectiveness of e-DFS in the current
market.
1. Name of the Dealer :
2. Age :
3. Address :
4. With which corporation are you maintaining Dealership?
a) IOCL
b) BPCL
c) HPCL
d) Others
5. Is the petrol bunk you run is a
a) Part time Business
b) Full time Business
6. The Working Capital for your business through
a) Loan Facilities
b) Own
7. In which bank are you maintaining account?
a) SBI
b) ICICI bank
c) Canara Bank
d) Corporation bank
e) Others
8. Is the account you holing in the bank for your business is a
a) Normal Cash Credit account
b) e-DFS account
c) Both
d) Others

60
9. How much Base Interest rate are you paying for the loan?
a) Below 10.30%
b) 10.30%
c) Above 10.30%
d) Others
10. Are you paying Cash Handling charges for the loan you get for the business?
a) Yes
b) No
11. How much collateral Security do the bankers expect to get the preliminary loan amount?
a) 25%
b) 50%
c) More than 50%
d) 100%
12. Are you maintaining several bank accounts for your business?
a) Yes
b) No
13. Which factor is comparatively good in e-DFS scheme?
a) Low Interest rate
b) Full Working Capital getting facility
c) e-Banking facility
d) Others
14. Please rate the following parameters of the bank in which you are having CC / OD:
Parameters Very
Dissatisfied(1)
Dissatisfied(2) Neither
satisfied nor
Dissatisfied(3)
Satisfied(4) Very much
Satisfied(5)
Current Interest Rate
Period given for
repayment of loan
e-Banking
Facilities
Cash Handling
charges collected
from the banks
Financial
assistanceyou get
from banks for your
business rather than
SBI
Services provided by
the banks

61
15. What is your rating to e-DFS when compared to other cash credit options
16. Any Suggestions from you regarding the e-DFS scheme

SBI Internship on Electronic Dealer Financing Scheme

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