This presentation analyzes reasons for slow growth in personal and agricultural loans in branches of State Bank of India in Borsad and Anand regions. It finds that while deposit growth has outpaced loan growth, rising non-performing assets are degrading asset quality and hindering lending. Customer surveys found the loan application process is seen as lengthy and difficult. Awareness of schemes like loans against investment certificates is low. Recommendations include more flexibility, better promotion of schemes, quicker complaint resolution, and reduced staff turnover.

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. Content of presentation
• Introduction
• Objectives of study
• Results analysis and discussion
• Conclusion
• Suggestions
• References

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. 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. • 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. 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. 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. Challenges for bank
• Financial inclusion
• Profitability
• Non-Performing Assets
• Credit risk

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. Products Portfolio
• Personal Banking
• Agricultural & Rural Banking
• NRI Services
• International Banking
• Corporate Banking
• Services
• Govt. Business
• SME

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. 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. 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. 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. 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. 4. RESULTS AND DISCUSSIONS

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. FIG 4.2 Accounts facilitated with followings
493
11
39
61
144 176

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. 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. 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. • ANALYSIS OF CUSTOMER RESPONSES

23. Occupation
FIG 4.6
36
34
23
7
other
service
agriculture
business

24. Annual income
FIG 4.7
42
38
12
8
below 200000
above 1000000
500000 - 1000000
200000 - 500000

25. Do you have an account in any bank
FIG 4.8
no
6%
yes
94%

26. FIG 4.9
no
47%
non
institutional
42%
yes
53%
Taken loan from any
where
institutional
58%
source of loan

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. Types of institutional loan
FIG 4.11
other
22%
educational loan
16%
home loan
27%
Car/vehicle loan
12%
Agriculture loan
23%

29. Source of institutional credit
FIG 4.12
other
10%
SBI
58%
private banks
13%
Other public
sector banks
19%

30. Reasons for choosing SBI loan
FIG 4.13
other
5%
transparency
13%
trustworthyness
34%
Low cost
28%
offer from the
institute
20%

31. Difficulties / Problems of institutional
loans
FIG 4.14
lack of
awareness
8%
heavy paper
work
61%
other
10%
more time
consuming
21%

32. Start up / continue taking up SBI
loan
FIG 4.15
no
15%
yes
85%

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. Reason for continuity/starting up
loan from SBI
FIG 4.17
other
11%
reliability
48%
low interest rate
27%
good service
14%

35. Valuation or scale of finance is
satisfactory
FIG 4.18
yes
12%
no
88%

36. Do you know about Kisan Vikas
Patra saving?
FIG 4.19
yes
28%
no
72%

37. Aware of loan against KVP
Taken up loan against KVP
FIG 4.20
no
28%
yes
72%
no
100%

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. • 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. 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. 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. 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. 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.