The document is a report summarizing Anmol Vashishat's summer internship at State Bank of India in Ludhiana from June to August 2013. The internship involved studying the hosiery cluster in Ludhiana to analyze SBI's financial potential and market share. Anmol visited 100 hosiery companies to collect information on their products and operations. The report provides background on SBI, including its history and products. It also describes Anmol's research methodology and findings on the hosiery industry and SBI's role in the local market.

1. 1
REPORT ON SUMMER TRAINING
TOPIC: STUDY AN INDUSTRIAL CLUSTER TO FIND OUT
FINANCIAL POTENTIAL EXTERNAL FUNDING AND SBI SHARES IN
THE CLUSTER.
AT “STATE BANK OF INDIA”, SUNDER NAGAR BRANCH
LUDHIANA
FROM 10 JUNE 2013 TO 10 AUGUST 2013
Internship report submitted to SBI in completion of the requirement of
Summer internship at STATE BANK OF INDIA
Submitted by:
ANMOL VASHISHAT
L-2012-BS-07 –MBA
PAU

2. 2
INTRODUCTION
Name of the Student : ANMOL VASHISHAT
FATHER’S NAME : SHYAM LAL VASHISHAT
QUALIFICATION : DOING M.B.A. FROM PAU, LUDHIANA
ADDRESS : H.NO. 447, PHASE 1A, SHIVALIK AVENEU, NAYA NANGAL
DIST. ROPAR (PUNJAB)
MOBILE NO. : 7814998967
ABOUT MENTOR
NAME OF MENTOR : P.K. BHATIA
DESIGNATION : CHIEF MANGER, SME
BRANCH : SUNDER NAGAR, LUDHIANA
RESPONSIBILITY : LINK WITH HOSIERY INDUSTRIES IN LUDHIANA
ABOUT WORK
The project mentor gave me a target of 100 hosiery industries, and visit there and collect information
related to hosiery industries and also finds out the shares of SBI in cluster. I visited there and gaining some
knowledge about how they prepare yarns, and collect raw material from local market. This was my great
experience in industry. Thanks to mentor who guide me and gave me a chance to visit there.

3. 3
ACKNOWLEDGEMENT
I avail this opportunity to acknowledge the academic interaction, exchange of views and participation of all
those who directly or indirectly contributed towards the completion of this project.
I wish to express my heartfelt thanks to my project guide CHIEF MANAGER P.K. BHATIA for his
continuous guidance, helpful criticism and supervision through course of this project and all other members
of S.B.I. who helped me a lot in completion of my project.
I am highly thankful to Dr. Sandeep Kapur (Director, SBS, PAU) and Dr. Mohit Gupta
(Assistant Professor, SBS, PAU) for giving me this opportunity of getting such valuable exposure by
organizing internship.
Although there may be many who remain unacknowledged in this humble note of gratitude there are none
who remain unappreciated.
ANMOL VASHISHAT
(MBA TRAINEE, PAU)

4. 4
ABSTRACT
I did my internship in State Bank of India. It is the largest bank in India in
termsadvances and number of branches. I was working in the sunder nagar branch of S.B.I.. The
bank deals with the SME industry. It has many companies under this branch.
I was assigned to figure out the reasons for the non-functioning of the products belonging to SME. My
project is related to find out the shares of S.B.I. in hosiery industries.My research was carried in a span of 2
months. It was a good exposure to my learnings.
I visited 100 companies and most of the belonged to the hosiery industries. It
was nice experience visiting the companies to know how operation and procedures work in reality.
The work I did was to know different kinds of products and problems associated with the products offered
to these companies. And also I did a comparative study with the banks present in the same area and
belonging to the same sector about the products.

5. 5
TABLE OF CONTENTS
1 Indian banking sector
2 Definition of banking and bank
3 Structure of banking industry
4 Major banking operations
5 State bank of India
6 History
7 Vision and mission
8 SWOT analysis
9 Product service profile
10 Financial performance
11 Shareholding pattern
12 Organisation structure
13 Delivery channels in SBI
14 Subsidiaries and joint ventures
15 Introduction to SME
16 Brief history
17 SME’s in India
18 Performance & contribution of SME’s
19 Broad categorisation of products
20 NO. of SME’s
21 Research methodology( design, objective & limitations)
22 Ludhiana
23 Hosiery-cluster
24 Case study
25 Credit rating
Suggestions, Findings, conclusion, annexure

6. 6
INTRODUCTION OF BANKING
1.1)INDIAN BANKING SECTOR
Banking- is the business of providing financial services to consumers. The basic services a bank provides
are saving account, Time deposit, Loans that consumers can use to purchase goods and services and basic
cash management services such as foreign currency exchange.
Definition of a bank: is any financial institution that receives, collects, transfers, pays exchanges, lends or
safeguards money for its consumers. Section 5(b) of the BR Act defines banking as, 'accepting, for the
purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise,
and withdraw able, by cheque, draft, and order or otherwise.’ This definition points to the three primary
activities of a commercial bank which distinguish it from the other financial institutions. These are: (i)
maintaining deposit accounts including current accounts, (ii) issue and pay cheques, and (iii) collect cheques
for the bank's customers
STRUCTURE OF BANKING INDUSTRY
Scheduled
Banks
Scheduled Commercial Banks Scheduled Co-operative Banks
Urban Co-operative
Banks
State Co-operative
Banks
Foreign
Banks
Public
Sector
Banks
Regional
Rural
Banks
Private
Sector
Banks
Nationalized
Banks
SBI & its
subsidiaries
Old Private
Sector Banks
New Private
Sector Banks

7. 7
Major Banking Operations
Operations of
Bank
Balancing
Profitability with
Liquidity
Management
Management of
Reserves
 Balancing Profitability with Liquidity Management
Creation of Credit
Banks are commercial concerns which provide various financial services to customers in return for
payments in one form or another, such as interest, discount fees, commission and so on. Their objective
is to make profits. However, what distinguishes them from other business concerns is the degree to
which they have to balance the principle of profit maximization with certain other principles. Banks in
general have to pay much more attention in balancing the profitability with liquidity. Therefore, they
have to devote considerable attention to liquidity management. Banks deal in other people’s money, a
substantial part of which is repayable on demand. That is why, for banks unlike other business concerns
liquidity management is as important as profitability management.
 Management of Reserves
Banks are expected to hold voluntarily a part of their deposits in the form of ready cash which is known
as cash reserves and the ratio of cash reserves to deposits is known as Cash Reserve Ratio (CRR). The
Central Bank in every country is empowered to prescribe the reserve ratio that all banks must maintain.
The Central Bank also undertakes as the lender of last resort, to supply reserves to banks in times of
genuine difficulties. Since the banks are required to maintain a fraction of their deposit liabilities as
reserves, the modern banking system is also known as the fractional reserve banking.

8. 8
 Creation of Credit
Unlike other financial institutions, banks are not merely financial intermediaries but “they can create as
well as transfer money”. Banks are set to create deposits or credit or money or it can be said that every
loan given by bank creates a deposit. This has given rose to the concept of deposit multiplier or credit
multiplier. The importance of this is that banks add to the money supply in the economy and hence,
banks become responsible in a major way for changes in the economic activities.
STATE BANK OF INDIA
2.1)HISTORY
The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later
renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three
Presidency banks, the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of
Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock
companies and were the result of the royal charters. These three banks received the exclusive right to issue
paper currency till 1861 when with the Paper Currency Act, the right was taken over by the Government of
India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took as
its nameImperial Bank of India. The Imperial Bank of India remained a joint stock company but without
Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which
is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 1 july 1955, the
Imperial Bank of India became the State Bank of India. The government of India recently acquired the
Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's
banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight state
banks associates of SBI. A process of consolidation began on 13 September 2008, when the State Bank of
Saurashtra merged with SBI.
SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI acquired in
1969, together with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which
had 24 branches. Five years later, in 1975, SBI acquired KrishnaramBaldeo Bank, which had been
established in 1916 in Gwalior State, under the patronage of Maharaja MadhoRaoScindia. The bank had
been the DukanPichadi, a small moneylender, owned by the Maharaja. The new banks first manager was
Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI
was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala.
The State Bank of India and all its associate banks are identified by the same blue keyhole logo. The State
Bank of India wordmark usually has one standard typeface, but also utilises other typefaces.
State Bank of India (SBI) is a multinational banking and financial services company based in India. It is
a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2012, it
had assets of US$501 billion and 15,003 branches, including 157 foreign offices, making it the largest
banking and financial services company in India by assets.

9. 9
The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of
the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras
merged into the other two presidencies banks—Bank of Calcutta and Bank of Bombay—to form the
Imperial Bank of India, which in turn became the State Bank of India.Government of India nationalised the
Imperial Bank of India in 1955, with Reserve Bank of India 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 was
ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012.
SBI provides a range of banking products through its network of branches in India and overseas, including
products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are
located at important cities throughout the country.
SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian
commercial banks.
The State Bank of India was named the 29th most reputed company in the world according to Forbes 2009
rankings and 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.
Current Board of Directors
As on 14 January 2013, there are fifteen members in the SBI board of directors:-
 PratipChaudhuri (Chairman)
 Hemant G. Contractor (Managing Director)
 Arundhati Bhattacharya (Managing Director)
 A. Krishna Kumar (Managing Director)
 S. Visvanathan (Managing Director)
 S. Venkatachalam (Director)
 D. Sundaram (Director)
 Thomas Mathew (Director)
 S.K. Mukherjee (Officer Employee Director)
 Rajiv Kumar (Director)
 JyotiBhushanMohapatra (Workmen Employee Director)
 Deepak Amin (Director)
 HarichandraBahadur Singh (Director)
Associate banks
SBI has five associate banks; all use the State Bank of India logo, which is a blue circle, and all use the
"State Bank of" name, followed by the regional headquarters' name:
 State Bank of Bikaner & Jaipur
 State Bank of Hyderabad
 State Bank of Mysore
 State Bank of Patiala
 State Bank of Travancore

10. 10
Branches ATM’s Customer Base
26500 21000 13.7 crores
2.2)VISION AND MISSION
Vision
"To be a Leading Global Bank with Pan India footprints and become a household brand in the Indo-
Gangetic Plains providing entire range of financial products and services under one roof"
 To evolve and position the bank as a world class, progressive institution providing comprehensive
financial and related services.
 Integrating frontiers of technology and servicing various segments o society especially weaker
section.
 Committed to excellence in serving the public and also excelling in corporate values.
Mission
"Banking for the unbanked"
 To provide excellent professional services and improve its position as a leader in financial and
related services.
 Build and maintain teams of motivated workforce with high work ethos.
 Use latest technology aimed at customer and act as an effective catalyst for socio economic
developed.

11. 11
2.3)SWOT ANALYSIS
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities,
and Threats involved in a project or in a business venture. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that are favourable and
unfavourable to achieve that objective.
Strength
1. The biggest bank in the country
2. Has a separate act for itself. Thus, a special privilege.
3. Biggest branch network in the country
4. First public sector to move to CBS
Weakness
1. Huge amount of staff
2. Expected to experience high level of attrition due to retirement of its top
management
3. Still carries the image of the old Govt. sector bank
Opportunity
1. Pool in talent to replace the going top management to serve the next generation
2. Make better use of its CRM
3. Expansion into rural areas
Threats
1. Consolidation among private banks
2. New bank licenses by RBI
3. Foreign banks that have sophisticated products
2.4)Products, Service Profile
Bank offers a large no. of services to customers. Broad categorisation of services is as below:
 Personal banking
 Social banking
 MSME
 Agricultural banking
 Corporate banking
 International banking/ NRI
 Financial services

2.5)FINANCIAL PERFORMANCE
S.B.I. continues to maintain its frontline position in the Indian Banking Industry. The impressive operational
and financial performance has been brought about by the bank’s focus on customer based business with
thrust on SME, agriculture, asset liability management and efficiency in core operations. The financial
performance of the bank can be seen in the table below

12. 12
Table 1
0 500000 1000000 1500000
March 2013(rs/crores)
March 2012(rs./crores)
March 2011(rs./crores)
March 2010(rs/crores)
Advances
Deposits
Net Profit
Operating Profit
Parameters March
2010(rs/crores)
March
2011(rs./crores)
March
2012(rs./crores)
March
2013(rs/crores)
Operating
Profit
305550 311657 315735 310817
Net Profit 98564 106055 117073 141050
Deposits 139860 166457 209760 233,109
Advances 631914.15 756719.45 867578.89 1045616.55

13. 13
9.89%
5.20%
4.50%
Share Holding Pattern (%)
19.33%
3.08%
SHARE HOLDING PATTERN:
Organisation structure
58%
Government
Banks/Financial Institutions
Mutual Funds & UTI
Non-Institutions
Insurance Company
FII's
The bank has its head office at mumbai. The delegation of power is decentralized up to the branch level for
quick decision making. The top-down approach at SBI can be classified as follows:-

14. 14
Organizational Structure at SBI
 Delivery Channels in SBI:
Corporate
Office (HO)
Circle Office
(CO)
Circle Office
(CO)
Branch
Office (BO)
Large
Corporate
Branches
Mid
Corporate
Branches
Retail Hub
Specialized
branches e.g.
Agriculture
Circle office
(CO)

15. 15
INTRODUCTION OF SMALL AND MEDIUM
ENTERPRISES
3.1) BRIEF HISTORY
Small and medium enterprises (also SMEs, small and medium businesses, SMBs, and variations thereof) are
companies whose investment in P&M or turnover falls below certain limits.
The abbreviation SME occurs commonly in the European Union and in international organizations, such as
the World Bank, the United Nations and the WTO. The term small and medium-sized businesses or SMBs is
predominantly used in the USA.
EU Member States traditionally have their own definition of what constitutes an SME, for example the
traditional definition in Germany had a limit of 250 employees, while, for example, in Belgium it could have
been 100. But now the EU has started to standardize the concept. Its current definition categorizes
companies with fewer than 50 employees as "small", and those with fewer than 250 as "medium”. By
contrast, in the United States, when small business is defined by the number of employees, it often refers to
those with fewer than 100 employees, while medium-sized business often refers to those with fewer than
500 employees.
In most economies, smaller enterprises are much greater in number. In many sectors, SMEs are also
responsible for driving innovation and competition. Globally SMEs account for 99% of business numbers
and 40% to 50% of GDP.
In South Africa the term SMME, for Small, Medium and Micro Enterprises, is used. Elsewhere in Africa,
MSME is used, for Micro, Small and Medium Enterprises. Size thresholds vary from country to country.
3.2) SME IN INDIA
According to MSME act 2006, MSME can be defined as follows:
Classification Manufacturing sector Services sector
Micro enterprises Units engaged in industrial activity
with original investment in plant
and machinery uptoRs. 25 lacs
Units engaged in industrial activity with
original investment in plant and machinery
upto Rs.10 lacs
Small enterprises Units engaged in industrial activity
with original investment in plant
and machinery up to Rs. 5 crore
Units engaged in industrial activity with
original investment in plant and machinery up
to Rs. 2 crore
Medium enterprises Units engaged in industrial activity
with original investment in plant
and machinery up to Rs. 10crore
Units engaged in industrial activity with
original investment in plant and machinery up
to Rs. 5 crore

16. 16
3.3)Performance and contribution of SME’s
Constitute 90% of
total enterprises
Z
SME
45% of manufacturing
output
outooooutput
Employee’s 59.7
million persons
Contributes to 40%
of total exports

17. 17
Based on products, SMEs in India can be broadly classified into the following groups
 Food products
 Chemicals and chemical products
 Hosiery and garments
 Electrical machinery and parts
 Paper products and Printing
 Cotton textiles
 Nonmetallic mineral products
 Rubber and plastic products
 Machinery and parts excluding electrical goods
 Others
3.4)Increase in no. of SME’s from 2009-2013
SME IN INDIA
Figure 1
MSME annual report 2012-13
400
350
300
250
200
150
100
50
0
2009 2010 2011 2012 2013
SME IN INDIA

18. 18
Research Methodology
Meaning of research
 Research is defined as a systematic, gathering recording and analysis of data about problem relating to
any particular field.
 Once can also define research as a scientific and systematic search for pertinent information on a
specific topic
 It determines strength reliability and accuracy of the project
Research Design
Research Design pertains to the great research approach or strategy adopted for a particular project. A
research project has to be the conducted scientifically making sure that the data is collected adequately and
economically.
There are various type of research designs:
1) Exploratory research design:
It is a type of research conducted for a problem that has not been clearly defined. Exploratory research helps
determine the best research design, data collection method and selection of subjects.
2)Descriptive Research design:
It is to describe market characteristics or functions Specific predictions. Descriptive Design requires clear
specifications of :
 Who
 What
 When
 Where
 Why
 Way
3) Experimental research design:

19. The research design is used to provide a strong basis for the existence of casual relationship between two or
more variables.
19
Research design used for study
Research design used in study is descriptive and analytical in nature as for descriptive design researcher has to
be already equipped with basic information like facts and figures etc. in this study also facts and figures were
already present and research and analysis was conducted based on this information. So descriptive and
analytical is best research design according to information available.
Sources of data
Secondary sources of data are used for study.It is the data which is already collected by someone else.
Researcher has to analyze the data and interprets the results. It involves:
1) Annual reports of SBI
2) MSME annual report
3) Websites
4) Prowess
5) Board note of bank
6) Credit policy book of bank
7) Various files on loans
Objectives of study:
1)To learn about SME’s in India
2) To learn about financing to SME (in general)
3)To study industrial cluster to find out financing potential external funding and SBI share in the cluster.
4) To study the hosiery cluster special product to improve SBI share in the cluster.
5) To study financial position and ratio-analysis of SBI.
Limitations of study
1) All cases related to hosiery industries SME cannot be studied because of shortage of time
2) Not able to calculate all ratios

20. 20
3) Only ratios cannot fully analyze the positives or negatives of bank.
4) Study of hosiery cluster is too difficult to know about profitability and turnover ratio ofthe industries.
LUDHIANA
Ludhiana- a dynamic city
Ludhiana occupies a place of pride in the industrial map of Punjab. Apart from a wide variety of engineering
products, Ludhiana is famous for textile products, both for consumer and industrial use. It is prime centre for
hosiery knitwears and woolen shawl industry in india producing woolen, blended and cotton based fashion
oriented products for both domestic and export markets. The city has a concentration of more than 5000
knitwears and allied business entities. The estimated annual turnover of knitwear and shawls from Ludhiana is
more than rupees 10000 crores. The cluster can be classified in following segments:
Core industry
 Sweater manufacturing for winter wears.
 Knitted garments manufacturing for ummer wear.
 Shawls manufacturing.
Allied industry
 Cotton & blended yarns manufacturing
 Wool & acrylic yarns manufacturing.
 Knitted fabrics manufacturing units.

21. 21
Service industry
 Fabrics processing & printing units.
 Yarn dyeing units.
 Embroidery units.
LUDHIANA-HOSIERY CLUSTER
Ludhiana's hosiery sector has recorded an over 40% jump in sales this winter season over the same period last
year and manufacturers are forced to prolong their production schedules due to unprecedented increase in
demand.
"This year's winter season has been quite good for the Ludhiana's hosiery cluster after a very long
period..intense cold has led to a jump in demand for winter garments which in result has pushed up the sales
of hosiery makers by at least 40-45% in ongoing (winter) season so far," Ludhiana-based Duke Group
chairman Komal Jain said.
With heavy demand for winter garments, Ludhiana-based hosiery companies have extended their production
schedules for at least two months to meet the rising demand from their retailers.
"Normally, we stop producing winter garments till October every year. But this winter season, we have to
continue our production till the middle of December in order to fulfill the requirements of our dealers," said
Jain, whose company is an established player in winter garments.
Mercury has been hovering five to 10 degrees below normal in northern region and even Chandigarh recorded
coldest ever on Wednesday amid intense cold conditions.
According to hosiery makers, the demand for winter garments like jackets, sweaters, thermals, has mainly
originated from Punjab, Haryana, Delhi, Himachal Pradesh, Uttar Pradesh and Jammu and Kashmir.
"We have run out of our stock of winter garments in the month of December itself...last winter season, we
managed to supply our stock till February, which means there is sudden jump in demand," OWM (famous for
its Montecarlo).
Hosiery, also referred to as leg wear, describes garments worn directly on the feet and legs. The term
originated as the collective term for products of which a maker or seller is termed a hosier; and those products

22. are also known generically as hose. The term is also used for all types of knitted fabric, and its thickness and
weight is defined in terms of denier or opacity. Lower denier measurements of 5 to 15 describe a hose which
may be sheer in appearance, whereas styles of 40 and above are dense, with little to no light able to come
through on 100 denier items.
The first references to hosiery can be found in works of Hesiod, where Romans are said to have used leather
or cloth in forms of strips to cover their lower body parts. Even the Egyptians are speculated to have used
hosiery as socks have been found in certain tombs.
Roller derby athletes shortly after a bout in Boise, Idaho wearing fishnet and patterned pantyhose
Most hosiery garments are made by knitting methods. Modern hosiery is usually tight-fitting by virtue of
stretchy fabrics and meshes. Older forms include binding to achieve a tight fit. Due to its close fit, most
hosiery can be worn as an undergarment, but it is more commonly worn as a combined under/outer garment.
22

23. 23
Why focus on clusters??

24. 24
Cluster Profile
1 Name Of Cluster Ludhiana Hosiery cluster
2 Place Ludhiana
3 District Ludhiana
4 State Punjab
5 No of firms (by type) 12000
6 No. of workers 500000
7 Turnover(Rs in Million's) 50000 Million
8
Associations in cluster
Federation of Knitwear,
Textile and Allied Industries Associations
Knitwear Club,
Readymade Hosiery Manufacturers Association
(REHMA),
Apparel Exporters Association of Ludhiana
(APPEAL),
Knitwear Development Group, Knitters
Association,
BhadurKe Textile and
Knitwear Association,
Shawl Club, Dyeing Factories Association (Regd.),
Garment Machinery Manufacturers and
Suppliers Association and
Ludhiana Dyeing Associations
(Cotton Division)
9 Major product
T-shirts, Cotton and blended socks,Under garments, Knitted bed sheet,
Knitted skirts, Knitted tops, Sportswear, Night suits Winter wear
Sweaters, Woollen socks, Pullovers, Cardigans, Thermal wear,
Gloves, Muffler, Baret caps, Shawls, Jackets, Jersey and Blankets
10
Specific and relevant
technical institutions (R&D,
Testing Lab accredited)
Industrial Training Institute (ITI)
Government Polytechnic for Women
Government Institute of Textile Chemistry and
Knitting Technology
Knitwear facility

25. 25
Central tool room
MERADO
NIIFT at Mohali
NIFT, Delhi
Pearl Academy of Fashion at Delhi
11 Major markets
Exports:
U.S.A.,
Canada,
South Africa,
U.K.,
Germany,
France and
U.A.E
12 Major problems/prospects
Spinners
They can t change their process to keep with
the changes in fashion
Are unable to introduce innovative yarn varieties
Import of cheaper yarn for China
Information and financial assistance required to
adopt new technology
Exporters
Delivery schedules.
There is no international airportt nearby.
No exhibition halls.
Quality of garment produced at Ludhiana is poor.
Problems with social, ethical and environmental compliances.
Pilferage and corruption present in the customs
departments.
Entry of China in Angora woolen market
at low price
Machinery manufacturers
No R&D related to metal blends.
The machinery related to machine manufacturing
is not covered under TUFS.
Huge finance required for technology up-gradation
Dyers/ Finisher
Unable to maintain proper standards for dyeing.

26. 26
Export market demands uniformity and high
quality that the dyers find difficult to meet,
especially for repeat orders. Most of the units
use manual colour matching methods.
Information on new technologies and financial
assistance to change the dyeing system.
Disposal of fly ash
Non-consistency in the quality of local dyes and
chemicals
Disposal of effluent
Tightening of environmental issues
Knitters/ Garment manufacturer
Skill development of the machine operators
High import duty on machine and their spare parts
Indigenous machinery lacking technological
up-gradation
Training of second line managers
Poor infrastructure
NOC from the pollution board while they fall
under green category, if having machines costing
more then Rs.25 lacs Capital subsidy for
modernization not being released by the State
Government even after clearance from the centre.
No resource center to keep them updated with
latest trends and designs.
Frequent change of laws.
13 Data source and updated on
DSR by SME Cluster Development in India,
2002-2005 Year 2003

27. 27
CASE STUDY
.
Name of the company: XYZ Co.
BO : Branch Ldh
Circle Office : Ludhiana
Whether fresh/renewal/
enhancement
Sanction of fresh term loan of Rs.90 lac and enhancement in FBWC limit
from Rs.45 lac to 150 lac
Asset Classification as
on_31.3.2013
Standard
Whether Agriculture/Retail/
SME/Large
SME
a) Whether Sensitive Sector –
Real Estate/Capital Market
b) Applicable Risk weight
NO
100%
Consortium/Multiple Banking NA
Lead Bank NA
SBI’s Share % 100%
Date of Receipt of Proposal at
BO/CO/HO
05.05. 2013
Date of last sanction and authority 05.05.2013 Branch Manager
Case study related to the targets of 100 hosiery industries, so I considered two items i.e. t -shirts and
undergarments of these industries and compare the profitability and turnover ratios in different ways.

28. 28
1. PRODUCTION TARGETS
Basis of estimation: 300 Working Days in a Year
Single Shift basis
8 hours per shift
t-shirts undergarments
Quantity(per dozen) 4800 3600
Dozen(rs) 1155000 8150000
Quantity(per dozen)
t-shirts
57%
undergarments
43%

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2. MANUFACTURING PROCESS
The fabric in different colours/ designs is cut with scissors as per required design size and product. The cut
pieces are stitched with the help of stitching/ interlocking machine.
Elastic tape would also stitch Fix incase of underwear. These stitch pieces are packed after inspection for
dispatch.
3. QUALITY CONTROL STANDARD
Product must have following qualities:
a. Colour of cloth must be uniform and strong enough so it would not
change within first few washing.
b. Elastic qualities must be good it may not loose its elastic property.
c. Stitching / Interlocking must be strong enough.
4.Machinery and equipment
S.N. DESCRIPTION QTY VALUE(RS)
1 5 thread flat Lock Sewing machines 1 2000000
2 4 thread flat Lock Sewing machines 1
1500000
3 8 thread flat Lock Sewing machines 1 2500000
4 3 thread flat Lock Sewing machines 1 1000000
5 Rib cutting Machine 1 1500000

30. 30
6 Overlock machines threads with motors 1 1000000
7 Electric irons 250000
8 Pressing tables, cutting tables, stools, office
furniture, racks tools etc.
25000
9 Sales Tax, Freight & Insurance etc 10000
10 Total 10100000
5.RAW MATERIAL (PER MONTH)
Particulars Q T Y . VALUES
1 Bleached cloth suitable for T-SHIRTS 4000 600000
2 Bleached cloth suitable for UNDERGARMENTS 2000 250000
3 Sewing thread, Elastic and packing materials like
polythene and boxes etc
60000
4 Packaging Material 30000
5 TOTAL 840000
6.Other expenses
SR
NO
.
DESCRIPTION AMOUNT
1 Rent of Land & Building(if any) 50000

31. 31
2 Electricity Charges(one month) 10000
3 Fuel Exp.(if not for rented) 0
4 Advertisement & Travelling 20000
5 Transport(export goods) 20000
6 Consumable & stores etc 30000
7 Potage expenses/ telephones 5000
8 Stationery 15000
9 TOTAL 175000
7.WORKING CAPITAL(per month)
S.NO. DESCRIPTION AMOUNT
1 Raw material 250000
2 Other Expenses 175000
3 Total 325000
8.TOTAL CAPITAL INVESTMENT
SR.NO. DESCRIPTION AMT
1 Building & Other Civil Works(if rented) 0
2 Machinery & Equipment 8100000
3 Working capital for one month 425000
4 TOTAL 8525000

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9.Cost of production
Sr.no. description Amount
1 Total recurring cost per year 25000000
2 Depreciation on machinery &
equipment
1010000
3 Interest on total investment @ 10% 852500
4 total 26862500
10.Sales proceed(PER ANNUM)
Sr.no. description Qty (Dz. Nos) Rate Rs./ Dz.
No.
Amount
1 T-SHIRTS 4800 2400 11550000
2 UNDERGARMENTS 3600 2260 8150000
3 TOTAL 19700000
11.PROFITABILITY (BEFORE INCOME TAX)
1 Annual Gross Profit 43520000
2 % of Profit on Sales 20.25%
3 Break Even Analysis
3.1 Annual Fixed Cost 4044000

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3.2 Annual Sales 19700000
3.3. Annual Variable Cost 10560000
3.4 Break Even Point 44.25%
Break-Even Analysis
(% of Total Production envisaged)
Annual fixed cost X 100
-------------- ---------------- ------------- = %
Annual sales – Annual variable costs
1.Jain Amar Hosiery Pvt Ltd
B-24, 4719, Sunder Nagar, Ludhiana - 141007
2.Nagesh Knitwear LTD Exporte
G T Road West, Ludhiana, Ludhiana – 141005
3.Sweety Knitwears
House No-275,B-6, Old Madhopuri, St No-3, Ludhiana, Ludhiana – 141003
4.Mercury Knits
423, Kabir Complex 7, Industrial Area A, Ludhiana – 141003
4.Radiant Knitwears
4, Preet Palace, Jammu Colony, Jammu Colony, Ludhiana – 141003

34. 34
5.Bubly Hosiery Mills
House Number .381, Purana Bazar, VakilanGali, Ludhiana, Ludhiana – 141005
6.UNIQUE HOSIERY
Shop No-1, SubhashNgr,DawarMkt, Kuldeep Nagar, LUDHIANA – 141007
7.R L Oswal Hosiery
B - 24 - 2813 /2 Sunder Nagar, Back Side Retubhra Public School, Sunder Nagar, Ludhiana – 141007
8.Self Knitting Works
1108/10 Farid Nagar, BastiJodhewal Ludhiana, BastiJodhewal, Ludhiana – 141007
9.Oswal SudhirKnitwears
Plot No 14, Near Fire Station, Subder Nagar, Sunder Nagar, Ludhiana – 141007
10.Singh & Singh Trading Co
Sardar Tower, Gandhi NgrMkt, Nr Sdp College Gate, Backside Chand Cinema, St No-15, Ludhiana,
Ludhiana – 141007
11.Jain Sons
18,Sant Nirankari Colony, Sunder Nagar, BombeyTyre Road, Sunder Nagar, Ludhiana - 141007
12.S K SanjeevKnitwears
B-III-1208/A, KalyanNagar,NearBajvaNegar, Sunder Nagar, Ludhiana - 141007
13.A K Sachdeva Hosiery
1, Sunder Nagar, Ludhiana - 141007
Best Deal
14.Dhawan Knitwear
H No B-33-311 LaxmiPuri, Salem Tabri, Salem Tabri, Ludhiana - 141005
15.Jainson Hosiery Industries
Plot No 210, 211, Oswal Road, Industrial Area A, Ludhiana - 141003
12. Suppliers of Raw Materials
From Local cloth market of the area.

35. 35
13. IMPLEMENTATION PERIOD
Proposed Project can commence production with in 6-8 weeks after sanction and first
disbursement of term loan.
14.ASSUMPTION FOR GENERATING PROFITABILITY
1 Number of Working Days in a year 300 Days
2 Number of Shifts in a day 1 One
3 Hours in a Shift 8 hours
4 Plant Capacity Consider on Average production capacities
of plant
5 Raw material Estimates Based upon product Mix
6 Raw Material Availability All districts of PUNJAB
7 Depreciation Straight Line Method
8 Manpower According to project Requirement
9 Rent estimate On the basis of current market prize of the
Area
10 Potential Area of Marketing the
products
Households demand of the area
11 If project is funded, term loan
would be
60-80% of Total investment
12 Moratorium Period 6- 12 months
13 Repayment Period 5-7 years
14 Project may be established under UPTECH BY SBI(SME)

36. 36
CREDIT RATING
Credit rating is a qualified assessment and formal evaluation of company’s credit history and capability of
repaying obligations. It measures the default probability of the borrower, and its ability to repay fully and
timely its financial debt obligations.
The main purpose of credit rating is to provide investors with comparable information on credit risk based on
standard rating scale, regardless of specifics of companies, separate sector of the economy and country as a
whole.
Credit rating reflects financial, sartorial, operational, legal and organizational sides of companies, which
characterize ability and willingness duly and in full amount to repay obligations.
For evaluating the loan proposal (new and existing) under SME two methods are used by bank i:e SBI
score SME and credit rating.
1) SBI score SME: under this 5 credit scoring models are there and is used for amount upto rs 50
lacs
Credit scoring models Amount
SME manufacturing(new case including
takeover)
Above rs 10 lacs up to rs 50 lacs
SME service(new case including takeover)
Above rs 10 lacs up to rs 50 lacs
SME manufacturing and service(new case
including takeover)
Rs 10 lacs and below
SME manufacturing and service
( renewal/enhancement)
Above rs 10 lacs up to rs 50lacs
SME manufacturing and service(
renewal/enhancement)
Rs 10 lacs and below

37. 37
Credit decisions : The score generated by above models will facilitate the sanction and rejection of loan
application as per following scoring and risk category.
S.no Score as per scoring
model
Risk category Implications
1 0-30 D Application rejected
2 Above 30-40 C
3 Above 40-50 B Application considered by
higher authority
4 Above 50-60 BB Application considered at
5 Above 60-70 A branhes/hub.
6 Above 70-80 AA
7 Above 80 AAA

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2. Borrower’s Profile
aG. ro up Name NA
bA. dd ress of Regd. Office JKL Ludhiana
b. Works/Factory 315, Focal point phase 4 ludhiana
c. Constitution Sole proprietorship
d. Date of incorporation/
Establishment
1990
e. Dealing with PNB since 1992
f. Industry/Sector Hosiery
g. Business Activity (Product)/
Installed Capacity.
Manufacturing of shawls, lohis etc.
NA
3. Sole-Proprietor:Sh. XYZ
a) If any of them, in the list of Caution
Advices circulated by the Bank from time
to time/RBI's/Wilful defaulters' list/Caution
List of ECGC/CIBIL Database:
We confirm that none of the liable party ever
appears in such category &it has been verified
from CIBIL database.
b) If any one of them connected in the past
with any
NPA/OTS/Compromise/unscrupulous
defaulters
We confirm that none of them is connected in the
past with any NMA/OTS/compromise
unscrupulous defaulters.
c) If any of them, related to Directors/Senior
Officers of SBI:
NO
d) Management Change since last sanction, if
any
NO

39. 39
FINDINGS:
 Most of the export houses in Ludhiana are dealing in garments, woolen and yarn sector.
 Majority of the exporters of Ludhiana find South Africa as their potential export market followed by
European countries.
 Strength of the hosiery industries is abundant raw material and the weakness is govt. policies.
 China is the major competitor of Indians hosiery industries.
 There is 50% increase in price of acrylic yarn as compared to last year.
 Price charged by vardhman is highest as compared to other mills.
 Price and quality are the major factors that dealers consider important while purchasing yarn.
 Exporters face problem of exchange rate fluctuation in foreign market.
 Cost of production is increased due to increase in exports of textile and clothing.
 Export sales in between 10-15% and rest of the produced material consumed in domestic market.

40. 40
SUGGESTONS:
 More designs and wider market penetration at cheaper rates through better quality products.
 Try to adopt new and modern design to sustain in market.
 Providing the technical knowledge for the staff.
 Competitive pricing to market requirement.
 Providing transportation, good work environment to employees.
 Improvement in technology and training.
 Government should take steps to provide better infrastructure, technology, innovations, and govt.
policies to boost hosiery industries in near future.
CONCLUSION:
 Studying the project we came to know that hosiery industries are one of the biggest industries in all
over India. State bank of India in Ludhiana having special branch of hosiery industries in
sundernagarbranch(SME). I concluded that in hosiery cluster,Colour of cloth must be uniform and
strong enough so it would not change within first few washing. I targeted 100 hosiery industries, they
produced different products i.e. t-shirts, undergarments, etc. After studying the SWOT analysis,we
came to know various strengths of SBI such as quality customer service, greater reach, and
weakness of SBI such as they provide loans to hosieries industries for higher interest rates.
So,Government should take steps to provide better infrastructure, technology, innovations, and govt.
policies to boost hosiery industries in near future.
SOURCES OF DATA:
 Annual reports of SBI
 MSME annual report
 Websites
 Board note of bank
 Credit policy book of bank
 Various files on loans

41. 41
ANNEXURE
NAME OF UNIT:-
NAME OF CEO:-
CONCERN:- PARTERSHIP/COMPANY/SOLE-PROPRIETORSHIP
EXPORTS:-
PRESENT BANKER:-
FACILITIES AVAILED:-
RATE OF INTEREST:-
CONTRAINTS FACED:-
FURTHER REQUIREMENT:-
EXTERNAL RATING:- YES/NO
TURNOVER (LAST 3 YEARS):-
PROFIT:-
RAW MATERIAL:-
FINISHED GOODS:-
CREDIT PERIOD:-
DEBIT PERIOD:-
WORK IN PROGRESS/PERIOD:-
POLLUTION CONTROL (CERTIFICATE):- YES/NO
PREMISES RENTED OR OWNED:-

42. 42
THANK YOU

43. 43