SUMMER TRAINING PROJECT
PRESENTATION
ON
ANALYZING REASONS FOR SLOW GROWTH IN PERSONAL
AND AGRICULTURAL LOAN IN BORSAD AND ...
Content of presentation
• Introduction
• Objectives of study
• Results analysis and discussion

• Conclusion
• Suggestions...
Introduction
• The banking sector is the most dominating sector of the

financial system in India. Significant progress ha...
CONCERNS.....
• The macroeconomic situation continues to raise concerns.

Even as growth has slowed significantly, inflati...
• Higher capital requirements and the need for meaningful

financial inclusion are the primary challenges before banks.
• ...
Advances
• India has recorded syndicated loan volume of only $7.2 billion for

the first nine months of 2012, just one-thi...
Trends in advances
• Over the past 12 months, total bank loans have risen by less than
four percent, while deposits have i...
Challenges for bank
• Financial inclusion
• Profitability
• Non-Performing Assets
• Credit risk
State Bank Of India - A Brief Introduction
The State Bank of India is the largest bank in India.
SBI history started in th...
Products Portfolio
• Personal Banking

• Agricultural & Rural Banking
• NRI Services
• International Banking

• Corporate ...
Kisan Vikas Patra
• Kisan Vikas Patra is a saving scheme that was announced

by the Government of India that doubles the m...
OBJECTIVES OF THE STUDY

To find out the reasons behind the slow growth/ negligible growth in
personal and Agricultural lo...
RESEARCH METHODOLOGY
• Background of study-

• The growth in retail advances of the bank has become
stagnant. Also the ass...
Source of data
• Primary data:
Data collected from the bank officials as well as from people
(customers as well as other) ...
Research design:
Sampling method:

Non Probability Sampling

Sampling technique:

Convenient Sampling

Sample area:

Borsa...
4. RESULTS AND DISCUSSIONS
FIG 4.1 Deposits v/s Advances
600000

500000
400000

DEPOSIT
300000
ADVANCES
200000
100000
0
Jan/08

Jan/09

Jan/10

Jan/1...
FIG 4.2 Accounts facilitated with followings
493

11

39

61

144 176
FIG 4.3 Regular v/s Defaulted
accounts in different facilities
500
450
400
350
300
250
200
150
100
50
0

493

120
61

1

5...
Fig 4.4 Amount disbursed in regular

and defaulted accounts
Amount in NPA in defaulted
account

amount in different accoun...
NPA accounts in

FIG 4.5

different segments

Personal
5%

SBF
16%

Amount of NPA in
segments

SBF
35%
Agriculture
57%

Ag...
• ANALYSIS OF CUSTOMER RESPONSES
Occupation
FIG 4.6

36
34

23

7

other

service

agriculture

business
Annual income
FIG 4.7

42

38

12
8

below 200000

above 1000000

500000 - 1000000

200000 - 500000
Do you have an account in any bank
FIG 4.8

no
6%

yes
94%
FIG 4.9

no
47%

non
institutional
42%

yes
53%

Taken loan from any
where

institutional
58%

source of loan
Reason for non institutional
FIG 4.10

a. easy
availability
41%

b. flexibility of
amount
9%
c. personal
relations
13%

e....
Types of institutional loan
FIG 4.11
other
22%

educational loan
16%

home loan
27%

Car/vehicle loan
12%

Agriculture loa...
Source of institutional credit
FIG 4.12

other
10%

SBI
58%

private banks
13%

Other public
sector banks
19%
Reasons for choosing SBI loan
FIG 4.13
other
5%

transparency
13%

trustworthyness
34%

Low cost
28%

offer from the
insti...
Difficulties / Problems of institutional
loans

FIG 4.14

lack of
awareness
8%

heavy paper
work
61%

other
10%

more time...
Start up / continue taking up SBI
loan
FIG 4.15
no
15%

yes
85%
If no then what is the reason
FIG 4.16
no timeliness
13%

inflexibility of
amount
13%

heavy paper
work
54%

less cooperat...
Reason for continuity/starting up
loan from SBI
FIG 4.17
other
11%

reliability
48%

low interest rate
27%

good service
1...
Valuation or scale of finance is
satisfactory
FIG 4.18
yes
12%

no
88%
Do you know about Kisan Vikas
Patra saving?
FIG 4.19
yes
28%

no
72%
Aware of loan against KVP

Taken up loan against KVP

FIG 4.20

no
28%
yes
72%

no
100%
Conclusion from discussion with bank
• Although the growth in advances is at par with deposits but still the

overall loan...
• Farmers who own the land jointly with other
family members find it difficult to take the
loan.

• Lack of staff is also ...
Conclusion of customer analysis
• The customer processing time is huge in loan application as an

average it takes minimum...
Recommendations
• Need of little flexibility in terms of amount under

consideration, time and documents requirements.
• B...
Recommendations
• The recovery of loan should be done professionally.

• The staff should be given more authority and powe...
REFERENCES
• Anonymous;

http://data.gov.in/catalogs?page=2&filter=agency%3A1202;

accessed on 18 July 2013.
• Anonymous; ...
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reasons for slow growth in personal and agricultural loan

  1. 1. SUMMER TRAINING PROJECT PRESENTATION ON ANALYZING REASONS FOR SLOW GROWTH IN PERSONAL AND AGRICULTURAL LOAN IN BORSAD AND ANAND ROAD BRANCHES OF STATE BANK OF INDIA Presented by Shashank Jain 04-2062-2012 Guided by Dr. Mahesh R Prajapati Asstt. Professor
  2. 2. Content of presentation • Introduction • Objectives of study • Results analysis and discussion • Conclusion • Suggestions • References
  3. 3. Introduction • The banking sector is the most dominating sector of the financial system in India. Significant progress has been made with respect to the banking sector in new economic era (post liberalization period). • Deregulation has opened new opportunities for banks to increase revenue. • Liberalization has created the more competitive environment in banking sector.
  4. 4. CONCERNS..... • The macroeconomic situation continues to raise concerns. Even as growth has slowed significantly, inflation remains well beyond the comfort level of the Reserve Bank. • The impact from domestic and international economic developments posed challenges to the banking sector during the year 2012-13
  5. 5. • Higher capital requirements and the need for meaningful financial inclusion are the primary challenges before banks. • Under extreme shocks, some banks could face moderate liquidity problems and their profitability could be affected.
  6. 6. Advances • India has recorded syndicated loan volume of only $7.2 billion for the first nine months of 2012, just one-third of the $21.2 billion closed by the end of the third quarter last year. • Volume has dropped significantly this year in the absence of large offshore M&A deals, previously a big volume booster. And deal flow has been muted amid a dramatic slowdown in economic growth.
  7. 7. Trends in advances • Over the past 12 months, total bank loans have risen by less than four percent, while deposits have increased over eight percent. • The overall loan-deposit ratio for the banking industry is getting lower. • Business loans are the fastest growing segment, with real estate and consumer loans just barely expanding. • SBI expects to achieve lower advances growth rate of 16% in 2013 advances as compare to 21% of previous year
  8. 8. Challenges for bank • Financial inclusion • Profitability • Non-Performing Assets • Credit risk
  9. 9. State Bank Of India - A Brief Introduction The State Bank of India is the largest bank in India. SBI history started in the year 1806 with formation of the Bank of Calcutta. Bank of Bengal in 1809. Imperial Bank of India 1921. State Bank of India (SBI) 1955. creation of the State Bank of India Group (SBI Group) 1959.
  10. 10. Products Portfolio • Personal Banking • Agricultural & Rural Banking • NRI Services • International Banking • Corporate Banking • Services • Govt. Business • SME
  11. 11. Kisan Vikas Patra • Kisan Vikas Patra is a saving scheme that was announced by the Government of India that doubles the money invested in eight years and seven months • The “kisan” in Kisan Vikas Patra does not mean that only farmers can buy these saving certificates but means that the revenue mobilized by this scheme will be used by the Government of India in welfare schemes for farmers.
  12. 12. OBJECTIVES OF THE STUDY To find out the reasons behind the slow growth/ negligible growth in personal and Agricultural loan. To know the view of people regarding institutional loan and its procedures with particular emphasis on SBI’s Personal and Agricultural loan. To know the awareness regarding loan against securities. Kisan Vikas Patra or
  13. 13. RESEARCH METHODOLOGY • Background of study- • The growth in retail advances of the bank has become stagnant. Also the asset quality is getting degraded day by day; the study aims to identify the reasons which are responsible for the slow growth in loan segment. The study is based on analysis of Factors (of bank and customers) and their linkages, within the research framework of 10 weeks.
  14. 14. Source of data • Primary data: Data collected from the bank officials as well as from people (customers as well as other) through semi structured questionnaire. • Secondary data: Secondary data collected from the bank’s annual reports, financial journals, economic issues, as well as RBI & SBI websites
  15. 15. Research design: Sampling method: Non Probability Sampling Sampling technique: Convenient Sampling Sample area: Borsad and Anand region Sample size: 100 Sampling unit: Customers and non customers of Bank. Analytical tools: Interpreting using charts, graphs and tables etc.
  16. 16. 4. RESULTS AND DISCUSSIONS
  17. 17. FIG 4.1 Deposits v/s Advances 600000 500000 400000 DEPOSIT 300000 ADVANCES 200000 100000 0 Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13
  18. 18. FIG 4.2 Accounts facilitated with followings 493 11 39 61 144 176
  19. 19. FIG 4.3 Regular v/s Defaulted accounts in different facilities 500 450 400 350 300 250 200 150 100 50 0 493 120 61 1 53 25 176 144 39 2 11 0 overdraft 5 term loan agri term loan 11 recalled assets no of accounts demand loans agri cash credit no of NPA accounts cash credit
  20. 20. Fig 4.4 Amount disbursed in regular and defaulted accounts Amount in NPA in defaulted account amount in different accounts agri term loan 4% term loan 56% demand loans 5% cash credit 10% overdraft 13% agri cash credit 12% overdraft 5% cash credit 29% agri term loan 25% term loan 20% agri cash credit 21%
  21. 21. NPA accounts in FIG 4.5 different segments Personal 5% SBF 16% Amount of NPA in segments SBF 35% Agriculture 57% Agriculture 79% Personal 8%
  22. 22. • ANALYSIS OF CUSTOMER RESPONSES
  23. 23. Occupation FIG 4.6 36 34 23 7 other service agriculture business
  24. 24. Annual income FIG 4.7 42 38 12 8 below 200000 above 1000000 500000 - 1000000 200000 - 500000
  25. 25. Do you have an account in any bank FIG 4.8 no 6% yes 94%
  26. 26. FIG 4.9 no 47% non institutional 42% yes 53% Taken loan from any where institutional 58% source of loan
  27. 27. Reason for non institutional FIG 4.10 a. easy availability 41% b. flexibility of amount 9% c. personal relations 13% e. No other option 14% d. timeliness 23%
  28. 28. Types of institutional loan FIG 4.11 other 22% educational loan 16% home loan 27% Car/vehicle loan 12% Agriculture loan 23%
  29. 29. Source of institutional credit FIG 4.12 other 10% SBI 58% private banks 13% Other public sector banks 19%
  30. 30. Reasons for choosing SBI loan FIG 4.13 other 5% transparency 13% trustworthyness 34% Low cost 28% offer from the institute 20%
  31. 31. Difficulties / Problems of institutional loans FIG 4.14 lack of awareness 8% heavy paper work 61% other 10% more time consuming 21%
  32. 32. Start up / continue taking up SBI loan FIG 4.15 no 15% yes 85%
  33. 33. If no then what is the reason FIG 4.16 no timeliness 13% inflexibility of amount 13% heavy paper work 54% less cooperation 20%
  34. 34. Reason for continuity/starting up loan from SBI FIG 4.17 other 11% reliability 48% low interest rate 27% good service 14%
  35. 35. Valuation or scale of finance is satisfactory FIG 4.18 yes 12% no 88%
  36. 36. Do you know about Kisan Vikas Patra saving? FIG 4.19 yes 28% no 72%
  37. 37. Aware of loan against KVP Taken up loan against KVP FIG 4.20 no 28% yes 72% no 100%
  38. 38. Conclusion from discussion with bank • Although the growth in advances is at par with deposits but still the overall loan deposit ratio is less. • Rising NPA causing degradation in asset quality hence it is adversely affecting the lending abilities of bank. • The recovery of agricultural loan is not efficient in rural areas like Borsad which is ultimately creating the burden on other segments e.g. Personal and small financing. • The officers who process loan is made responsible if it defaults.
  39. 39. • Farmers who own the land jointly with other family members find it difficult to take the loan. • Lack of staff is also causing the loss of customers as many customers unaddressed of their problems. are left
  40. 40. Conclusion of customer analysis • The customer processing time is huge in loan application as an average it takes minimum 10 days to process a loan from application to final sanctioning. • People think that loan from institutions is a tiring procedure and requires heavy paperwork and lot of time. • Respondents of semi urban and rural areas were having less awareness of various schemes and facilities provided by the bank to promote the advances, as loan against securities and KVP had less impact on the people.
  41. 41. Recommendations • Need of little flexibility in terms of amount under consideration, time and documents requirements. • Banks should promote the schemes related to loan against the KVP, property and other collateral according to socio-economic profile of the region. • The complaints of customers should address as quickly as possible.
  42. 42. Recommendations • The recovery of loan should be done professionally. • The staff should be given more authority and power to verify the loan procedure and to recover it, so they can feel free while sanctioning the loan. • Employee turnover should be reduced as it takes time to build the relations again with new staff and customers
  43. 43. REFERENCES • Anonymous; http://data.gov.in/catalogs?page=2&filter=agency%3A1202; accessed on 18 July 2013. • Anonymous; www.rbi.org.in; RBI web page accessed on 20 Aug 2013. • Anonymous; www.sbi.co.in; accessed on 15 July 2013 • Bhatt, O. P.; State Bank of India: Pioneer in Agricultural lending. • Hunt Robert; Case Study: State Bank of India, World's Largest Centralized Core Processing Implementation • Singh Anurag. B.; Priyanka Tandon; “A study of financial performance: a comparative analysis of sbi and icici bank” International Journal of Marketing, Financial Services & Management Research; Vol.1 Issue 11, November 2012, ISSN 2277 3622.

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