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Summer training project report r

  1. 1. SUMMER TRAINING PROJECT REPORT On Financial pattern of retail trader with SBI viz viz other banks in a Lucknow For STATE BANK OF INDIA Towards partial fulfillment of Master of Business Administration (MBA) (Affiliated to U.P. Technical University, Lucknow) Guided by Submitted by S.N.TRIVEDI Prateek Chandra (B.M. Nishatganj) MBA IIIrd Semester (STATE BANK OF INDIA) ROLL NO. 1205470073 Session 2013-2014 Department Of Management BABU BANARASI DAS NATIONAL INSTITUTE OF TECHNOLOGY & MANAGEMENT Sector I, Dr, Akhilesh Das Nagar, faizabad Road, Lucknow, (u.p.) India
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  4. 4. ACKNOWLEDGEMENT I would like to thank S.N.TRIVEDI, SBI BRANCH MANAGER, NISHATGANJ, for the guidance he has given to me in the conduction of my project work. I would also like to extend my gratitude to my parents, friends for their consistent encouragement, suggestions and moral support. Prateek Chandra MBA IIIrd Semester 4
  5. 5. DECLARATION I, PRATEEK CHANDRA , hereby declare that the research project entitled “Financial pattern of retail trader with SBI viz viz other banks in a Lucknow” which is also known as STATE BANK OF INDIA IN LUCKNOW is my original work .Now it is an asset of “BABU BANARASI DAS NATIONAL INSTITUTE OF TECHNOLOGY AND MANAGEMENT”. All the rights of using this project report lies with the institute. Unauthorized copying, hiring, broadcasting or rental of this project without permission from the institute will be considered illegal. DATE: PRATEEK CHANDRA MBA IIIrd Semester 5
  6. 6. EXECUTIVE SUMMARY I Prateek Chandra have gone for project report on the topic of “Financial pattern of retail trader with SBI viz viz other banks in a Lucknow”. Loan is a Secured loan offered against the security of a property which is funded by the bank’s loan, the property could be a personal property or a commercial one. The Loan is a loan taken by a borrower from the bank issued against the security intended to be bought on the part by the borrower giving the banker a conditional ownership over the property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money by selling the property. This study is to know the outcome of loaning scheme provided by SBI, during my survey, I took 100 people for data collection of my report and from them I got information about possibilities of takeover of loan scheme provided by SBI. The sample methodologies that are used by me are judgmental. In primary source questionnaire and observation method are used by me. Private bank mostly prefer to finance business loan by the respondents and its strong competitor for SBI. 6
  7. 7. TABLE OF CONTENTS PARTICULAR 1. INTRODUCTION 7 PAGE NO.
  8. 8. 2. COMPANY PROFILE 3. ORGANIZATION CHART 4. AIM AND OBJECTIVE 5. OBJECTIVE OF THE STUDY 6. RESEARCH METHODOLAGY 7. ANALYSIS & INTERPRETATIONS 8. FINDINGS 9. SWOT/ETOP ANALYSIS 10. SUGGESTIONS/RECOMMENDATIONS 11. PROBLEMS AND LIMITATIONS 12. CONCLUSION 13. APPENDIX 14. BIBLIOGRAPHY 8
  9. 9. INDUSTRY PROFILE INDUSTRIAL PROFILE HISTORY OF BANKING IN INDIA Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and 9
  10. 10. any other external and internal factors. For the past three decades India’s banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons for India’s growth. The government’s regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below Early phase from 1786 to 1969 of Indian Banks. Nationalization of Indian Banks and up to 1991 prior to Indian. Banking sector Reforms. New phase of Indian Banking System with the advent of Indian. Financial & Banking Sector Reforms after 1991. Phase I The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of 10
  11. 11. Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were Amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly European shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking System. During those day’s public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility 11
  12. 12. provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. Phase II Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as The principal agent of RBI and to handle banking transactions of the Union and state government all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 12
  13. 13. 1. 1949: Enactment of Banking Regulation Act. 2. 1955: Nationalization of State Bank of India. 3. 1959: Nationalization of SBI subsidiaries. 4. 1961: Insurance cover extended to deposits. 5. 1969: Nationalization of 14 major banks. 6. 1971: Creation of credit guarantee corporation. 7. 1975: Creation of regional rural banks. 8. 1980: Nationalization of seven banks with deposits over 200 crores. After the nationalization of banks, the branches of the public sector bank India raised to approximately 800% in deposits and advances took a huge jump by 11000%. Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions. Phase III This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimha, a committee was set up by his name, which worked for the Liberalization of Banking Practices. 13
  14. 14. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign Reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure. Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as “The Bank of Calcutta” in Calcutta in June 1806. Couple of Decades later, foreign Banks like HSBC and Credit Lyonnais Started their Calcutta operations in 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of British Empire and due to which banking actively took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank set up in 1865. By 1900, the market expanded with the establishment of banks like Punjab National Bank in 1895 in Lahore; Bank of India in 1906 in Mumbai-both of 14
  15. 15. which were founded under private ownership. Indian Banking Sector was formally regulated by Reserve Bank of India from 1935. After India’s independence in 1947, the Reserve Bank was nationalized and given broader powers. SBI Group The Bank of Bengal, which later became the State Bank of India. State Bank of India with its seven associate banks commands the largest banking resources in India. 15
  16. 16. Nationalization The next significant milestone in Indian Banking happened in late 1960s when the then Indira Gandhi government nationalized on 19th July 1949, 14 major commercial Indian banks followed by nationalization of 6 more commercial Indian banks in 1980. The stated reason for the nationalization was more control of credit delivery. After this, until 1990s, the nationalized banks grew at a leisurely pace of around 4% also called as the Hindu growth of the Indian economy. After the amalgamation of New Bank of India with Punjab National Bank, currently there are 19 nationalized banks in India. Liberalization- In the early 1990’s the then Narasimha rao government embarked a policy of liberalization and gave licenses to a small number of private banks, which came to be known as New generation tech-savvy banks, which included banks like ICICI and HDFC. This move along with the rapid growth of the economy of India, kick started the banking sector in India, which has seen rapid growth with strong contribution from all the sectors of banks, namely Government banks, Private Banks and Foreign banks. However there had been a few hiccups for these new banks with many either being taken over 16
  17. 17. like Global Trust Bank while others like Centurion Bank have found the going tough. The next stage for the Indian Banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in Banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. CURRENT SCENARIO Currently (2007), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated 17
  18. 18. policy of the Bank on the Indian Rupee is to manage volatility-without any stated exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector, the demand for banking servicesespecially retail banking, mortgages and investment services are expected to be strong. M&as, takeovers, asset sales and much more action (as it is unraveling in China) will happen on this front in India. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kodak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector Banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. 18
  19. 19. Banking in India 1 Central Bank Reserve Bank of India State Bank of India, Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharastra,Canara Bank, Central Bank of India, 2 Nationalised Banks Corporation Bank, Dena Bank, Indian Bank, Indian overseas Bank,Oriental Bank of Commerce, Punjab and Sind Bank, Punjab National Bank, Syndicate Bank, Union Bank of India, United Bank of India, UCO Bank,and Vijaya Bank. Bank of Rajastan, Bharath overseas Bank, Catholic Syrian Bank, Centurion Bank of Punjab, City Union Bank, Development Credit Bank, Dhanalaxmi 3 Private Banks Bank, Federal Bank, Ganesh Bank of Kurundwad, HDFC Bank, ICICI Bank, IDBI, IndusInd Bank, ING Bank, Jammu and Kashmir Bank, Vysya Karnataka Bank Limited, Karur Vysya Bank, Kotek 19
  20. 20. Mahindra Bank, Lakshmivilas Bank, Lord Krishna Bank, Nainitak Bank, Ratnakar Bank,Sangli Bank, SBI Commercial and International Bank, South Indian Bank, Tamil Nadu Merchantile Bank Ltd., United Western Bank, UTI Bank, YES Bank. 20
  21. 21. Structure of Indian Banking Reserve Bank of India is the regulating body for the Indian Banking Industry. It is a mixture of Public sector, Private sector, Co-operative banks and foreign banks. The private sector banks are further spilt into old banks and new banks. 21
  22. 22. COMPANY PROFILE 22
  23. 23. HISTORY OF SBI BANK:- The evolution of State Bank of India can be traced back to the first decade of the19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan 23
  24. 24. aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular. The All India Rural Credit Survey Committee proposed the take over of theIm perial Bank of India, and integrating with it, the former state-owned or stateassociate banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959.The State Bank of India emerged as a pacesetter, with its operations carried out byte 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community’s savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. 24
  25. 25. State Bank of India (SBI) (LSE:SBID) is the largest bank in India. The bank traces its ancestry back through the Imperial to the founding in1806of the Bank, making it the oldest commercial bank in the Indian Subcontinent. The Government nationalized the Imperial Bank of India in1955, with the Reserve taking a 60% stake, and renamed it the State Bank of India. In 2008, the Government took over the stake held by the Reserve Bank of India.SBI provides a range of banking products through its vast network in India and overseas, including products aimed antis. With an asset base of $126 billion and its reach, it is a regional banking behemoth. SBI has laid emphasis on reducing the huge manpower through Golden schemes, which led to a flight of its best and brightest managers which took to retirement allowances and then wanton the become senior managers at new private sector banks, and computerizing its operations. The roots of the State Bank of India rest in the first decade of 19th century, when the Bank, later renamed the Bank, was established on2 June 1806. The Bank of Bengal and two other Presidency banks, namely, the Bank (incorporated on15 April 1840) and the Bank (incorporated on1 July 1843)... These three banks received the exclusive right tissue paper currency in 1861 with the Paper Currency Act, a right they retaineduntil the formation of theReserve Bank of India. The Presidency bank samalgamated on27 January 1921, and the reorganized banking entity took as its name Imperial Bank of India. The Imperial Bank of India continued to remain a joint stock company. Pursuant to the provisions of the State Bank of 25
  26. 26. India Act (1955), the Reserve of India, which is India’s, acquired a controlling interest in the Imperial Bank of India. On30 April 1955the Imperial Bank of India became the State Bank of India. In 1959 the Government passed the State Bank of India (SubsidiaryBanks) Act, enabling the State Bank of India to take over eight former Stateassociated banks as its subsidiaries. Onset, 2008, State Bank of Saurashtra, one of its Associate Banks, merged with State Bank of India. Associate banks There are six associate banks that fall under SBI, and together these six banks constitute the State Bank Group. All use the same logo of a blue keyhole and banks constitutes use the "State Bank of" name followed by the regionalheadquarters' name. Originally, the then seven banks that became the associate banks belonged to princely until the government nationalized them in 1959.In tune with the first Five Year Plan, emphasizing the development of rural India, the government integrated these banks into State Bank of India to expand its rural outreach. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline operations. The first step along these lines occurred in September 2008 when State merged with State Bank of India, which reduced the number of state banks from seven to six. 26
  27. 27. *State Bank of Indore *State Bank of Bikaner & Raipur *State Bank of Hyderabad *State Bank of Mysore *State Bank of Patiala *State Bank of Travancore Growth:State Bank of India has often acted as guarantor to the Indian, most notably during Chandra's tenure as Prime. With more than 11,111 branches and a further 6500+ associate bank branches, the SBI has extensive coverage. State Bank of India has electronically networked all of its branches under Core Banking System(CBS). The bank has one of the largest TM networks in the region. More than 8500 ATMs across India. The State Bank of India has had steady growth over its history, though it was marred by the Harsh ad Mehta scam in 1992. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board. 27
  28. 28. EVOLUTION OF SBI The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was redesigned 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. 28
  29. 29. Bank of Bengal H.O. Madras. It meant an accretion to the capital of the banks, a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially up to the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the investible resources of the banks. The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were 29
  30. 30. privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board. Group Photograph of Central Board (1921) 30
  31. 31. Business The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Scone laky and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favor of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden. Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities 31
  32. 32. Old Bank of Bengal Major change in the conditions A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole power of issuing paper currency within British India. The task of management and circulation of the new currency notes was conferred on the presidency banks and the Government undertook to transfer the Treasury balances to the banks at places where the banks would open branches. None of the three banks had till then any branches (except the sole attempt and that too a shortlived one by the Bank of Bengal at Mirzapore in 1839) although the charters 32
  33. 33. had given them such authority. But as soon as the three presidency bands were assured of the free use of government Treasury balances at places where they would open branches, they embarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies of the three presidency banks covered most of the major parts and many of the inland trade centers in India. While the Bank of Bengal had eighteen branches including its head office, seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each. Bank of Madras Note Dated 1861 for Rs.10 33
  34. 34. Presidency Banks Act The presidency Banks Act, which came into operation on 1 May 1876, brought the three presidency banks under a common statute with similar restrictions on business. The proprietary connection of the Government was, however, terminated, though the banks continued to hold charge of the public debt offices in the three presidency towns, and the custody of a part of the government balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums above the specified minimum balances promised to the presidency banks at only their head offices were to be lodged. The Government could lend to the presidency banks from such Reserve Treasuries but the latter could look upon them more as a favor than as a right 34
  35. 35. Bank of Madras The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened effectively checked the growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centers of the presidency. 35
  36. 36. Bank of Bombay 36
  37. 37. Stamp of Imperial Bank of India Subsidiaries The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries. Through the establishments, it offers variousservices including merchant banking services, fund management, fact oringservices, primary dealership in government securities, credit cards. The eight banking subsidiaries are: 11.State Bank of Bikaner and Raipur (SBBJ) 12.State Bank of Hyderabad (SBH) 13.State Bank of India (SBI) 14.State Bank of Indore (SBIR) 37
  38. 38. 15.State Bank of Mysore (SBM) 16.State Bank of Patiala (SBP) 17.State Bank of Saurashtra (SBS) 18.State Bank of Travancore (SBT) Products Personal Banking:*SBI Term Deposits SBI Loan For Pensioners *SBI Recurring Deposits Loan Against Mortgage Of Property *SBI Housing Loan Loan Against Shares & Debentures *SBI Car Loan Rent Plus Scheme *SBI Educational Loan Midi-Plus Scheme Other Services:*Agriculture/Rural Banking *NRI Services *ATM Services *Demit Services 38
  39. 39. *Corporate Banking *Internet Banking *Mobile Banking *International Banking *Safe Deposit Locker RBIEFT *E-Pay *E-Rail *SBI Vishay Yare Foreign Travel Card *Broking Services *Gift Cherubs 39
  40. 40. NETWORK OF SBI BANK:SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves theinternational needs of its foreign customers, in addition to conducting retail operations. The focus of the offices of SBI is India-related business. Few of the countries where SBI Bank has branches are as under: *Australia *Bahamas *Bahrain *Bangladesh *Belgium *Bhutan *Canada *France *Germany *Hong Kong *Japan 40
  41. 41. *Maldives *Mauritius *Muscat *Nepal *Nigeria *Oman *Russia *Singapore *Sri Lanka *South Africa *UK *USA 41
  42. 42. List of Directors State on the Bank Central Board of of India (As on 06th February, 2013) Under Section of Sr. Name Designation No. 1 SBI Act 1955 Sheri Prate Chaudhuri Sheri Hemans Chairman 19 (a) G. Managing Director 2 19 (b) Contractor 3 Sheri Diwakar Gupta 19 (b) Managing Director 19 (b) Director A. 19 (b) Managing Director Sheri Managing Director 19 (c) Krishna 4 Kumar 5 Sheri S.Vishvanathan Sheri 6 S. Venkatachalam 42
  43. 43. Capital Structure (State Bank of India) 7 Sheri D. Sandarac 19 (c) Director Sheri Director 19 (c) Director 19 (c) Parthasarathy 8 Iyengar 9 Sheri Thomas Mathew Sheri Jota Bhushan Workmen Employee 10 19 (ca) Mohapatra Director Officer 11 Sheri S.K. Mukherjee Employee 19 (cb) Director 12 Dr. Rajiv Kumar Director 19 (d) 13 Sheri Deepak Amin Director 19 (d) Director 19 (d) Director 19 (e) Sheri Harichandra 14 Bahadur Singh 15 Sheri Rajiv Takru 43
  44. 44. Period Instrument Authorized Issued Capital Capital (Rs. cr) (Rs. cr) -PAIDUP- Shares Face Capital (nos) From To Value Equity 2011 2012 5000 671.13 671044838 10 671.04 5000 635.08 634998991 10 635 1000 634.97 634882644 10 634.88 1000 634.97 634880222 10 634.88 1000 631.56 631470376 10 631.47 1000 526.3 526298878 10 526.3 Share Equity 2010 2011 Share Equity 2009 2010 Share Equity 2008 2009 Share Equity 2007 2008 Share Equity 2006 2007 Share 44
  45. 45. Equity 2005 2006 1000 526.3 526298878 10 526.3 1000 526.3 526298878 10 526.3 1000 526.3 526298878 10 526.3 1000 526.3 526298878 10 526.3 1000 526.3 526298878 10 526.3 1000 526.3 526298878 10 526.3 1000 526.3 526298878 10 526.3 1000 526.3 526298878 10 526.3 Share Equity 2004 2005 Share Equity 2003 2004 Share Equity 2002 2003 Share Equity 2001 2002 Share Equity 2000 2001 Share Equity 1999 2000 Share Equity 1996 2000 Share 45
  46. 46. Equity 1995 1996 1000 474.01 474009872 10 474.01 1000 474.01 474009189 10 474.01 1000 473.83 473828726 10 473.83 1000 200 20000000 200 Share Equity 1994 1995 Share Equity 1993 1994 Share 1991 1993 Equity Share 46 100
  47. 47. Bank Overview STATE BANK OF INDIA Not only many financial institution in the world today can claim the antiquity and majesty of the State Bank Of India founded nearly two centuries ago with primarily intent of imparting stability to the money market, the bank from its inception mobilized funds for supporting both the public credit of the companies governments in the three presidencies of British India and the private credit of the European and India merchants from about 1860s when the Indian economy book a significant leap forward under the impulse of quickened world communications and ingenious method of industrial and agricultural production the Bank became intimately in valued in the financing of practically and mining activity of the Sub- Continent Although large European and Indian merchants and manufacturers were undoubtedly thee principal beneficiaries, the small man never ignored loans as low as Rs.100 were disbursed in agricultural districts against glad Ornaments. Added to these the bank till the creation of the Reserve Bank in 1935 carried out numerous Central – Banking functions. Adaptation world and the needs of the hour has been one of the strengths of the Bank, In the post depression exe. For instance – when business opportunities become extremely restricted, rules laid down in the book of instructions were relined to ensure that good business did not go post. Yet seldom did the bank contravenes its value as depart from sound banking 47
  48. 48. principles to retain as expand its business. An innovative array of office, unknown to the world then, was devised in the form of branches, sub branches, treasury pay office, pay office, sub pay office and out students to exploit the opportunities of an expanding economy. New business strategy was also evaded way back in 1937 to render the best banking service through prompt and courteous attention to customers. A highly efficient and experienced management functioning in a well defined organizational structure did not take long to place the bank an executed pedestal in the areas of business, profitability, internal discipline and above all credibility A impeccable financial status consistent maintenance of the lofty traditions if banking an observation of a high standard of integrity in its operations helped the bank gain a pre- eminent status. No wonders the administration for the bank was universal as key functionaries of India successive finance minister of independent India Resource Bank of governors and representatives of chamber of commercial showered economics on it. Modern day management techniques were also very much evident in the good old days years before corporate governance had become a puzzled the banks bound functioned with a high degree of responsibility and concerns for the shareholders. An unbroken records of profits and a fairly high rate of profit and fairly high rate of dividend all through 48
  49. 49. ensured satisfaction, prudential management and asset liability management not only protected the interests of the Bank but also ensured that the obligations to customers were not met. The traditions of the past continued to be upheld even to this day as the State Bank years itself to meet the emerging challenges of the millennium. 49
  50. 50. ABOUT LOGO THE PLACE TO SHARE THE NEWS ...…… SHARE THE VIEWS … 50
  51. 51. Togetherness is the theme of this corporate loge of SBI where the world of banking services meet the ever changing customers needs and establishes a link that is like a circle, it indicates complete services towards customers. The logo also denotes a bank that it has prepared to do anything to go to any lengths, for customers. The blue pointer represent the philosophy of the bank that is always looking for the growth and newer, more challenging, more promising direction. The key hole indicates safety and security. MISSION STATEMENT: To retain the Bank’s position as premiere Indian Financial Service Group, with world class standards and significant global committed to excellence in customer, shareholder and employee satisfaction and to play a leading role in expanding and diversifying financial service sectors while containing emphasis on its development banking rule. 51
  52. 52. VISION STATEMENT: Premier Indian Financial Service Group with prospective world-class Standards of efficiency and professionalism and institutional values Retain its position in the country as pioneers in Development banking. Maximize the shareholders value through high-sustained earnings per Share. An institution with cultural mutual care and commitment, satisfying and Good work environment and continues learning opportunities. VALUES Excellence in customer service Profit orientation Belonging commitment to Bank Fairness in all dealings and relations Risk taking and innovative Team playing Learning and renewal Integrity 52
  53. 53. Transparency and Discipline in policies and systems. 53
  54. 54. Organization Structure MANAGING DIRECTOR CHIEF GENERAL MANAGER G. M G.M (Operations) G. M G.M (C&B) (F&S) (P&D) Zonal off Functional Heads Regional officers 54 G.M (I) & CVO
  55. 55. OBJECTIVE OF STUDY 55
  56. 56. Objective of study Primary: 1. Analysis and evaluation of customer s satisfaction with respect to loan performance. 2. To determine the main characteristic which customers look upon while taking loan? 3. To determine the other bank those are competing with the same product rang in loan. Secondary: 1. Service level and channel associate approach. 2. To find the level of brand awareness. 3. To find out the company market share. Scope of study Special area to be focused for increasing the sales and for sales promotion activities to be adopted. 56
  57. 57. To make product more innovative and easy to understand For providing maximum satisfaction to the customer by knowing their needs and requirement about product and services. Steps to be taken at present for survival and facing the competition with other equivalent product. Continues improvement and for better management. Maintaining good relation between manager and customer. 57
  58. 58. RESEARCH METHODOLOGY 58
  59. 59. Research Methodology Research as a mean of getting knowledge can be carried out either arbitrarily or Ina systematic fashion. It is a purposive investigation. Research may be a mean to know the small change and time forced upon us as individual or as a society. Research as process involves defining the problem, formulating the hypothesis, organizing and evaluating the data, deriving inference and conclusion after careful testing. Data Collection As data is required for any research activity, it is collected (for those both the Primary and Secondary) as follows: Primary Data: I have collected this data through questionnaire. Secondary Data: This data is collected from different sources available consolidated from book publication reports, websites where used as a source of secondary data in order to do this project and to collect necessary data. 59
  60. 60. Types of research:Descriptive research Primary data collection Through Questionnaire are filled by respondents. Secondary data collection Data collection through – Internet, Magazines. 60
  61. 61. DATA ANALYSIS AND INTERPRETATION 61
  62. 62. Sample size & Method of selecting sample Sample size-: 100 respondents Number of units banking with SBI and other banks: Banks Units SBI 15 Private banks 03 Other nationalize banks 28 No response 54 private bank, 3 SBI, 15 NO response, 54 62 other nationalize bank, 28
  63. 63. How many take a credit facility to S.B.I. and other banks: Banks Units Private banks 02 SBI 00 Other nationalize banks 05 No credit facility 93 units 100 90 93 80 70 60 50 40 units 30 20 10 2 5 0 private banks other natioalize banks sbi 0 63 no credit
  64. 64. Willing to take loan from S.B.I.: YES NO 10 90 yes, 10 NO, 90 64
  65. 65. Impression about sbi: Excellent 17 Average 36 Good 43 Below average 04 No of units 50 40 30 20 10 Series 1 0 Excellent Good Average Below Average Impression 65
  66. 66. Feedback about S.B.I.: Feedback Percentage Positive 25% Negative 65% No feedback 10% No feedback, 10% positive, 25% Negative, 65% 66
  67. 67. FINDINGS 67
  68. 68. FINDINGS 80% customers prefer the other Bank when taking loan and only 20%customersprefer SBI Bank. Family members are creating more effect on decisions regarding loan. Interest rate is main factor consider by customers when taking loan Most of the customer prefers the repayment of loan in higher duration. Most of the customers consider the policies of bank regarding personal loan 10 % customer’s give the higher rating to SBI Bank. In HDFC and other Bank 70 % customers give the higher rating Only governments employees are prefer the SBI Bank. Similarly self-employed & businessman’s are prefer the HDFC Bank. Low income class people face difficulty to taking loan 68
  69. 69. SWOT ANALYSIS OF SBI BANK 69
  70. 70. STRENGTH • BRAND NAME • MARKET LEADER • GOVERNMENT OWNED. • DIVERSIFIED PORTFOLIO WEAKNESSES • LESS MODERNISATION • HIGHER NPA • CUSTOMER HAVE NOT FULLINFORMATION GETTINGFACILITIES OPPURTUNITIES • HIGH APPROCH OF ATM • 2000 BRANCHES COMING ONVARIOUS LOCATION • MERGED WITH ASSOCITEDBANK 70 ABOUT
  71. 71. THREAT • EMPLOYEE STRIKE • OTHER NATIONALIZED BANKAND PRIVATE BANKS • ADVENT OF MNC BANK 71
  72. 72. Strengths:Brand Name:SBI Bank has earned a reputation in the market over the period of time(Being the oldest bank in India tracing history back to 1806 Market Leader SBI is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in 2008Forbes Global 2000. With an asset base of $126 billion and its reach, it is a regional banking behemoth. Wide Distribution Network: Excellent penetration in the country with more than 10000 core branches and more than 5100 branches of associate banks (subsidiaries). Diversified Portfolio SBI Bank has all the products under its belt, which help it to extend the relationship with existing customer’s Bank has umbrella of products to offer their customers, if once customer has relationship with the bank. Some Products, which SBI Bank is offering are: Retail Banking Business Banking Merchant Establishment Services (EDC Machine) Personal loans & Car loans Insurance Housing Loans 72
  73. 73. Government Owned Government owns more than 60% stake in SBI. This gives SBI an edge over private banks in terms of customer security. Low Transition Costs-SBI offers very low transition costs which attracts small customers. Weaknesses:The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change. Though SBI cards are the 2nd largest player in the credit card industry, it has the highest non-performing assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec 2007). Modernization: SBI lags with respect to private players in terms of modernization of its processes, infrastructure, centralization, etc. 73
  74. 74. Opportunities:Merger of associate banks with SBI: Merger of all the associate banks (likes, SBM, etc.) into SBI will create a mega bank which streamlines operations and unlocks value. Planning to add 2000 branches and 3000 ATMs in 2013-2014. This will further increase its reach. Increasing trade and business relations and a large number of expatriate populations offers a great opportunity to expand on foreign soil. Threats:Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of SBI bank. Consumer expectations have increased many folds in last few years and the bank has not been responsive enough to meet them on time. 74
  75. 75. Private banks have started venturing into the rural and semi-urban sector, which used to be the bastion of the State Bank and other PSU banks Employee Strike: There was an employee strike in the year 2006 which disrupted SBI’s activities. This can be repeated in the future 75
  76. 76. RECOMMENDATIONS AND SUGGESTIONS 76
  77. 77. Suggestions: • Recruit new employee. • Increase the branches and ATMs. • We would like to enhance advertisements among society. • Customer satisfaction should be bank’s motto. 77
  78. 78. LIMITATIONS OF THE STUDY 78
  79. 79. Limitations of the study • The study was limited only LUCKNOW (up). • Many formalities and requirements during process of taking loan. • Many times respondents were so busy that they didn’t t give reply. There were biased replies also. • Study was based on the opinion of the customer • Time and other factor 79
  80. 80. Duration of the Study:60 day from 14TH JUNE TO 14TH AUGUST 80
  81. 81. CONCLUSION 81
  82. 82. CONCLUSION The study at SBI gave a vast learning experience to me and has helped to enhance my knowledge. During the study I learnt how the theoretical financial analysis aspects are used in practice during the working capital finance assessment. I have realized during my project that a credit analyst must own multi-disciplinary talents like financial, technical as well as legal know-how. The credit appraisal for working capital finance system has been devised in a systematic way. There are clear guidelines on how the credit analyst or lending officer has to analyze a loan proposal. It includes phase-wise analysis which consists of 4 phases: 1. Financial statement analysis 2. Credit risk assessment 3. Documentation 4. Loan administration State Bank of India’s adoptions of the Projected Balance Sheet method of assessment procedures are based on sound principles of lending. This method of assessment has certain flexibility required to avoid any rigid approach to fixing quantum of finance. It is superior and more rational 82
  83. 83. compared to the Turnover Method; Cash Budget Method of assessment .It also facilitates the Bank to carry on follow up procedures. The PBS method have been rationalized and simplified to facilitate complete flexibility in decision-making. To ensure asset quality , proper risk assessment right at the beginning , is extremely important. That is why Credit Risk Assessment system is an essential ingredient of the Credit Appraisal exercise. The SBI was the first to formulate a Credit Risk Assessment model. It considers important parameters like profitability, repayment capacity, efficiency of the unit , historical / industry comparisons etc… which were not factored in other models. It is equally efficient as the SIDBI’s CART (Credit Assessment and Rating Tool) model. 83
  84. 84. ANNEXURE 84
  85. 85. ANNEXURE Survey report Name of unit/firm………………………………………………………………… Address of the unit………………………………………………………………… Mobile No………………………………………………………………………….. Typeof business…………………………………………………………………….. Banking with • S.B.I • Private Banks • Other nationalize banks • NO response 85
  86. 86. Take a credit facility to S.B.I. and other banks: • Private Banks • Other nationalizes banks • S.B.I. • No credit facility Type of credit facility: • Cash credit • Term loan Willing to take loan from S.B.I.: • Yes • No 86
  87. 87. Impression about sbi: Excellent Good Average Below Average Feedback about S.B.I.: • Positive • Negative • No Feedback 87
  88. 88. BIBLIOGRAPHY 88
  89. 89. BIBLIOGRAPHY • http://www.statebankofindia.com/ • http://www.banknetindia.com/ • G.Subramanium ,SBI group Banking Guide, Twelfth edition, 89
  90. 90. 90

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