This document provides an overview and synopsis of a project on credit appraisal under the small and medium enterprises (SME) segment at Dena Bank. It introduces Dena Bank and provides context on the banking industry and environment in India. It then outlines the research methodology used in the project, which studied Dena Bank's process for loan applications, credit appraisals, disbursements, and monitoring. The document concludes that the project provided insight into Dena Bank's credit transactions and appraisal processes.

1. PROJECT SYNOPSIS
Name ........................
Roll No. ..............................
Course & Semester Master of Business Administration – MBA Semester 4
Title “Credit Appraisal Under SME segment” at DENA BANK
Date of Submission
Session
“ WORKING CAPITAL MANAGEMENT ”
ACADEMIC GUIDE:
DESIGNATION:

2. INTRODUCTION
A snapshot of the banking industry
The Reserve Bank of India (RBI), as the central bank of the country, closely monitors developments in the
whole financial sector.
The banking sector is dominated by Scheduled Commercial Banks (SBCs). As at end March 2002, there
were 296 Commercial banks operating in India. This included 27 Public Sector Banks (PSBs), 31 Private, 42
Foreign and 196 Regional Rural Banks. Also, there were 67 scheduled co-operative banks consisting of 51
scheduled urban cooperative banks and 16 scheduled state co-operative banks.
Scheduled commercial banks touched, on the deposit front, a growth of 14% as against 18% registered in the
previous year. And on advances, the growth was 14.5% against 17.3% of the earlier year.
State Bank of India is still the largest bank in India with the market share of 20% ICICI and its two
subsidiaries merged with ICICI Bank, leading creating the second largest bank in India with a balance sheet
size of Rs. 1040bn.
Higher provisioning norms, tighter asset classification norms, dispensing with the concept of ‘past due’ for
recognition of NPAs, lowering of ceiling on exposure to a single borrower and group exposure etc., are
among the measures in order to improve the banking sector.
A minimum stipulated Capital Adequacy Ratio (CAR) was introduced to strengthen the ability of banks to
absorb losses and the ratio has subsequently been raised from 8% to 9%. It is proposed to hike the CAR to
12% by 2004 based on the Basle Committee recommendations.
Retail Banking is the new mantra in the banking sector. The home Loans alone account for nearly two-third
of the total retail portfolio of the bank. According to one estimate, the retail segment is expected to grow at
30-40% in the coming years.
Net banking, phone banking, mobile banking, ATMs and bill payments are the new buzz words that banks
are using to lure customers.
With a view to provide an institutional mechanism for sharing of information on borrowers / potential
borrowers by banks and Financial Institutions, the Credit Information Bureau (India) Ltd. (CIBIL) was set up
in August 2000. The Bureau provides a framework for collecting, processing and sharing credit information
on borrowers of credit institutions. SBI and HDFC are the promoters of the CIBIL.
The RBI is now planning to transfer of its stakes in the SBI, NHB and National bank for Agricultural and
Rural Development to the private players. Also, the Government has sought to lower its holding in PSBs to a
minimum of 33% of total capital by allowing them to raise capital from the market. Banks are free to acquire
shares, convertible debentures of corporate and units of equity oriented mutual funds, subject to a ceiling of
5% of the total outstanding advances (including commercial paper) as on March 31 of the previous year.
The finance ministry spelt out structure of the government-sponsored ARC called the Asset Reconstruction
Company (India) Limited (ARCIL), this pilot project of the ministry would pave way for smoother
functioning of the credit market in the country. The government will hold 49% stake and private players will
hold the rest 51%- the majority being held by ICICI Bank (24.5%).

3. INTRODUCTION TO DENA BANK.
Vision
DENA BANK will emerge as the most preferred bank of customer choice in its area of operations ,by
its reputation and performance ,DENA BANK will provide its
Customers - premier financial services of great value,
Staff - positive work environment and opportunity for
growth and achievement,
Shareholders - superior financial returns,
Community - economic growth
Dena Bank was founded on 26th May, 1938 by the family of Devkaran Nanjee under the name Devkaran
Nanjee Banking Company Ltd
It became a Public Ltd. Company in December 1939 and later the name was changed to Dena Bank Ltd.
In July 1969 Dena Bank Ltd. along with 13 other major banks was nationalized and is now a Public Sector
Bank constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Under
the provisions of the Banking Regulations Act 1949, in addition to the business of banking, the Bank can
undertake other business as specified in Section 6 of the Banking Regulations Act, 1949.
Milestones
 One among six Public Sector Banks selected by the World Bank for sanctioning a loan of Rs.72.3
crores for augmentation of Tier-II Capital under Financial Sector Developmental project in the year
1995.
 One among the few Banks to receive the World Bank loan for technological up gradation and
training.
 Launched a Bond Issue of Rs.92.13 crores in November 1996.
 Maiden Public Issue of Rs.180 Crores in November 1996.
 Introduced Tele banking facility of selected metropolitan centers.
RESEARCH METHODOLOGY
INTRODUCTION
RESEARCH-Research
is the search for and retrieval of existing, discovery or creation of new information or
knowledge for a specific purpose.
METHODOLOGY-

4. Methodology means body of method used in a particular activity. To proceed with study in
the right direction, it is essential to select an appropriate method. Selection of method is again a
very cautious work and has to be done with proper understanding.
RESEARCH METHODOLOGY-Research
methodology is a way to systematically solve the research problem. It may be
understood as a science of study how research is done scientifically. In it, various steps are studied
that are used for studying the research problem along with the logic behind them.
Research methodology, therefore has many dimensions. It has a wider scope. The purpose of
the methodology section is to describe the research procedures. Therefore research methodology not
only includes the research methods but also considers the logic behind the methods in the context of
research study .It helps in explaining why a particular method or technique is being used and why
not others ,so the research results are capable of being evaluated himself or by others.
CONCLUSION
The project entitled CREDIT APPRAISAL UNDER SME gives the detailed knowledge of the whole
process of loans and advances which DENA BANK performs. Starting from the loan application from
the borrower and compilation of confidential reports on him and the guarantor, the process continues till
the disbursement of loan and after it the close monitoring till the adjustment of Bank’s loan.
The project was an attempt to understand and perform the work in credit transaction and credit
appraisal proposal which I have included is just an example of it.
I have worked on many such proposals, which are beyond the scope of this project. Hence the whole
experience of working in such renowned public sector unit was very good and made me a learn a lot out
of it.

5. BIBLIOGRAPHY
 Magazines
1. Business week
2. Frontline
3. Business World
 News Papers
1. Business standard
2. Financial Express
3. Economics Times
4. Times of India
 Websites
1. www.denabank.co.in
2. www.google.com
3. www.wikipedia.com
4. www.yahoofinance.com
5. www.indiabankassociation.org.in
6. www.smetoolkit.org
7. www.economicstimes.com
 Circulars, Manuals of Dena Bank.
 Last but not the least, I feel indebted to all persons and organization who have helped me directly or
indirectly in the successful completion of this study.