NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Introduction to Advance Product:

Now a day not all the people have the capacity to fulfill their requirement by their own earning, thats why they need help from others. For this so many government & private sector bank provide them money to fulfill their requirement, thats call the Advance Product (loan product) of the bank. All the banks have so many different types of advance product as per the requirement of the people or customers. In Sindhanoor also there are so many banks those provide loan to the people for different causes.

Types of Advance Product

Home Loan Educational Loan Car Loan Personal Loan Property Loan Loan Against Shares\Debentures Etc.

Now a day a large no. of people are taking loan form different banks. It helps people to fulfill their need and it really easy to repayment the loan amount with a longer repayment period.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

SBI Advance Product

1)SBI Home Loans:
Purpose

Purchase/ Construction of House/ Flat Purchase of a plot of land for construction of House Extension/ repair/ renovation/ alteration of an existing House/ Flat Purchase of Furnishings and Consumer Durables as a part of the project cost. Takeover of an existing loan from other Banks/ Housing Finance Companies.

Eligibility Minimum age 18 years as on the date of sanction Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which the loan should be fully repaid. Availability of sufficient, regular and continuous source of income for servicing the loan repayment.
Loan Amount 40 to 60 times of NMI, depending on repayment capacity as % of NMI as under

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Net Annual Income Upto Rs.2 lacs Above Rs.2 lac to Rs. 5 lacs Above Rs. 5 lacs EMI/NMI Ratio 40% 50% 55%

To enhance loan eligibility you have option to add: 1. Income of your spouse/ your son/ daughter living with you, provided they have a steady income and his/ her salary account is maintained with SBI. 2. Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is

Margin (Special Festival Season Offer) Purchase/ Construction of a new House/ Flat/ Plot of land: 15% for loans up to Rs. 1 cr., 20% for loans above Rs. 1 cr. Repairs/ Renovation of an existing House/ Flat: 15%

Floating interest rates (linked to State Bank Advance Rate - SBAR) (SBAR: 12.25% p.a.)

Loan Tenor

-> Upto Rs.30 2.25% below Lacs Above SBAR, 10.00% p.a. 2.00% below

Upto 5 years

Above 5 years and upto 15 years 2.00% below SBAR, 10.25% p.a. 1.75% below SBAR, 10.50% p.a.

Above 15 years and upto 25 years 1.75% below SBAR, 10.50% p.a. 1.50% below SBAR, 10.75% p.a.

Rs.30 Lacs SBAR, 10.25% p.a. Fixed interest rates

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Tenure (p.a.)*Upto 10 years Rate of Interest 12.75%

* Fixed rate loans will be subject to: 'force maejure' clause and interest reset at the end of every two years on the basis of fixed interest rates prevailing then.

2)CAR LOAN:

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Purpose You can take finance for: A new car, jeep or Multi Utility Vehicles (MUVs) A used car / jeep (not more than 5 years old). (Any make or model). Take over of existing loan from other Bank/Financial institution (Conditions apply) Eligibility To avail an SBI Car Loan, you should be :

Individual between the age of 21-65 years of age. A Permanent employee of State / Central Government, Public Sector Undertaking, Private company or a reputed establishment or

A Professionals or self-employed individual who is an income tax assesses or A Person engaged in agriculture and allied activities. Net Annual Income Rs. 100,000/- and above.

Salient features Loanamount There is no upper limit for the amount of a car loan. A maximum loan amount of 2.5 times the net annual income can be sanctioned. If married, your spouse's income could also be considered provided the spouse becomes a co-borrower in the loan. The loan amount includes finance for one-time road tax, registration and insurance!
No ceiling on the loan amount for new cars.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Loan amount for used car is subject to a maximum limit of Rs. 15 lacs.

Type of Loan
1. Term Loan 2. Overdraft - a) For New vehicles only b) Minimum loan amount: Rs. 3 lacs. Documents required you would need to submit the following documents along with the completed application form if you are an existing SBI account holder: 1. Statement of Bank account of the borrower for last 12 months. 2. 2 passport size photographs of borrower(s). 3. Signature identification from bankers of borrower(s). 4. A copy of passport /voters ID card/PAN card. 5. Proof of residence. 6. Latest salary-slip showing all deductions 7. I.T. Returns/Form 16: 2 years for salaried employees and 3 years for professional/self-employed/businessmen duly accepted by the ITO wherever applicable to be submitted. 8. Proof of official address for non-salaried individuals. If you are not an account holder with SBI you would also need to furnish documents that establish your identity and give proof of residence. Margin New / Used vehicles: 15% of the on the road price. Repayment You enjoy the longest repayment period in the industry with us. Repayment period: For Salaried: Maximum of 84 months For Self-employed & Professionals: Maximum 60 months

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Repayment period for used vehicles :Up to 84 months from the date of original purchase of the vehicle (subject to maximum tenure as above). Prepayment Penalty: Prepayment fee of 2% of the amount of the loan prepaid will be levied subject to certain conditions FLOATING RATES: A. for Term Loans 1. New Vehicles (Term Loan) Repayment Period All Centers (SBAR 12.25%) Upto 3 years (for loans Rs. 7.5 lac & above) 0.75% below SBAR i.e. 11.50% p.a. Upto 3 years (for loans below Rs. 7.5 lac) 0.50% below SBAR i.e. 11.75%p.a. Above 3 yrs up to 5 yrs (for all loans) 0.50% below SBAR i.e. 11.75% p.a. Above 5 yrs up to 7 yrs (for all loans) 0.25% below SBAR i.e. 12.00% p.a.

2. Used Vehicles: Floating only W.E.F. February 27, 2008

Repayment Period Upto 3 years

All Centers (SBAR-12.25%) 3.00% above SBAR i.e. 15.25% p.a.

Above 3 yrs up to 7 yrs

3.25% above SBAR i.e. 15.50% p.a.

B. For Overdrafts: For New Vehicles only W.E.F. February 27, 2008

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Repayment Period Upto 3 years (for loans Rs. 7.5 lac & above) All Centres (SBAR 12.25%) 0.25% below SBAR i.e. 12.00% p.a. Upto 3 years (for loans below Rs. 7.5 lac) Above 3 yrs up to 5 yrs (for all loans) Above 5 yrs up to 7 yrs (for all loans) At SBAR i.e. 12.25% p.a. At SBAR i.e. 12.25% p.a. 0.25% above SBAR i.e. 12.50% p.a.

3)EDUCATION LOAN:
A term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. Eligible Courses All courses having employment prospects are eligible.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Graduation courses/ Post graduation courses/ Professional courses Other courses approved by UGC/Government/AICTE etc.

Expenses considered for loan

Fees payable to college/school/hostel Examination/Library/Laboratory fees Purchase of Books/Equipment/Instruments/Uniforms Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees for the entire course) Travel Expenses/Passage money for studies abroad Purchase of computers considered necessary for completion of course Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc. Amount of Loan

For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 20 lacs

Interest Rates For loans up to Rs.4 lacs - 11.75 % p.a. Floating For loans above Rs. 4 lacs and upto Rs.7.50 lacs - 13.25 % Floating For loans above Rs.7.50 lacs - 12.25% p.a. Floating Processing Fees

No processing fee/ upfront charges Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the margin money

Repayment Tenure

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Repayment will commence one year after completion of course or 6 months after securing a job, whichever is earlier.

Place of Study

Loan Amount

Repayment in Period Years

Studies in India Studies Abroad

Rs. 10.0 lacs Rs. 20.0 lacs

5-7 5-7

Security Amount For loans upto Rs. 10.00 lacs for Studies in India and upto Rs. 20.00 lacs for studies abroad Upto Rs. 4 lacs lacs to Rs. 7.50 lacs No Security Collateral security in the form of suitable third party Guarantee. The bank may, at its discretion, in exceptional cases, weive third party guarantee if satisfied with the net-worth/means of parent/s who would be executing the documents as "joint borrower" Tangible collateral security of suitable value, along with the assignment of future income of the student For payment of installments.

All loans should be secured by parent(s)/guardian of the student borrower. In case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Margin

For loans up to Rs.4.0 lacs : No Margin For loans above Rs.4.0 lacs:
o o

Studies in India: 5% Studies Abroad: 15%

Documentation Required

Completed Education Loan Application Form. Mark sheets of last qualifying examination Proof of admission scholarship, studentship etc Schedule of expenses for the specified course 2 passport size photographs Borrower's Bank account statement for the last six months Income tax assessment order, of last 2 years Brief statement of assets and liabilities, of the Co-borrower Proof of Income (i.e. Salary slips/ Form 16 etc)

4)SBI SARAL PERSONAL LOAN:

Purpose The loan will be granted for any legitimate purpose whatsoever (e.g. expenses for domestic or foreign travel, medical treatment of self or a family member, meeting any financial liability, such as marriage of son/daughter, defraying educational expenses of wards, meeting margins for purchase of assets etc.) Eligibility You are eligible if you are a Salaried individual of good quality

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT corporate, self employed engineer, doctor, architect, chartered accountant, MBA with minimum 2 years standing. Salient Features Loan Amount Your personal loan limit would be determined by your income and repayment capacity. Minimum: Rs.24,000/- in metro and urban centres Rs.10, 000/- in rural/semi-urban centres Maximum: 12 times Net Monthly Income for salaried individuals and pensioners subject to a ceiling of Rs.10 lacs in all centres Documents Required Important documents to be furnished while opening a Personal Loan Account: For existing bank customers Passport size photograph From salaried individuals Latest salary slip and Form 16 Margin We do not insist on any margin amount. Interest Rates 3.25% above SBAR floating i.e. 15.50% p.a. Repayment The loan is repayable in 48 EMI. You are allowed to pay more than the EMI if you wish to, without attracting any prepayment penalty. Security NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT NIL Processing Fee Processing charges are 1-2% of the loan amount. This is amongst the lowest fees in the industry. Processing fees have to be paid upfront. There are no hidden costs or other administrative charges.

5)PROPERTY LOAN:
Purpose This is an all purpose loan, i.e., the loan can be obtained for any purpose whatsoever. If amount of loan is Rs.25.00 lacs and above then purpose of loan will have to be specified along with an undertaking that loan will not be used for any speculative purpose whatever including speculation on real estate and equity shares.

Eligibility You are eligible if you are:

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT A. An individual who is; a. An Employee or b. A Professional, self-employed or an income tax assesse or c. Engaged in agricultural and allied activities. B. Your Net Monthly Income (salaried) is in excess of Rs.12,000/- or Net Annual Income (others) is in excess of Rs.1,50,000/-. The income of the spouse may be added if he/she is a co-borrower or a guarantor. C. Maximum age limit: 60 years. Salient Features Loan Amount Minimum: Rs.25, 000/Maximum: Rs.1 crore. The amount is decided by the following calculation:

24 times the net monthly income of salaried persons (Net of all deductions including TDS) OR 2 times the net annual income of others (income as per latest IT return less taxes payable)

Margin We will finance upto 75% of the market value of your property.

Interest Term Loan 0.75% above SBAR. i.e.13.00% p.a. Floating Repayment Maximum of 60 equated monthly installments, upto 120 months for

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT salaried individuals with check-off facility. You could opt to divert any surplus funds towards prepayment of the loan without attracting any penalty. Security As per banks extant instructions.

6)LOAN AGAINST SHARES \ DEBENTURES:

Eligibility This facility is available to our existing individual customers enjoying a strong relationship with SBI. This loan could be availed either singly or as a joint account with spouse in 'Either or Survivor'/ 'Former or Survivor' mode. It is offered as an Overdraft or Demand Loan. The facility is available at 50 select centers. Salient Features: Purpose For meeting contingencies and needs of personal nature. Loan will be permitted for subscribing to rights or new issue of shares / debentures NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT against the security of existing shares / debentures. Loan will not be sanctioned for (i) speculative purposes (ii) inter-corporate investments or (iii) acquiring controlling interest in company / companies. LoanAmount You can avail of loans up to Rs 20.00 lacs against your shares/debentures. Documents Required You will be required to submit a declaration indicating: Details of loans availed from other banks/ branches for acquiring shares/ debentures. Details of loans availed from other banks/ branches against security of shares/ debentures Margin You will need to provide a margin amount of 50% of the prevailing market prices of the shares/ non-convertible debentures being offered as security. (The market prices refer to the prices in the Stock Exchanges as reported in the Economic Times.) Interest At SBAR Floating i.e. 12.25% p.a. Repayment Schedule To be liquidated in maximum period of 30 months through a suitable reducing DP programme. In case of a default or if the outstanding is over Rs.20.00 lacs, the shares/debentures will be transferred in the name of the Bank. Security: Pledge of the demat shares/debentures against which overdraft is granted.

Statement of problem

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT SBI Main Branch, Sindhanoor want to know about the customer perception about the advance product provide by them to the people. To find out what kind of service provide by the competitors in advance product. To find out the need of the customer and hence formulate the strategy to level the economy in the society. How the products are helping the customer. To know the utility of the product. To find out the need of the customer in Sindhanoor region and introduce new product or facilitate new service in existing product.

Research objectives
Summer Internship Project gives a practical exposure and helps in acquiring the on road skills.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT First and foremost objective is to find out the reasons for using of Advance Product from SBI. To find out the services that other bank given to their customer. To generate the leads through the survey. To sort out the prospective leads from the data I have collected through the survey. To build the relation ship with the customers and to follow up them, make sure that they are satisfied with the product. To maintain good relationship with the corporate employees. To get more references from the customers and generate new leads by following a chain process. To place SBI Advance Product ahead of the competitors. To find out the customer awareness on booming Advance Product market and to find out the using patterns of the people To make the customer aware of the benefits of the product and convince him to go for SBI Advance Product.

Significance and scope

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

The geographical scope of the study is restricted to Sindhanoor only with sample size of 200 people. All the analysis and suggestions are based on the analysis of the both primary and secondary data. There fore the scope of the study revolves around the following aspects: Consumer perception towards Advance Product Consumer awareness about Advance Product scheme and its benefit. Aware the Bank about the customer problems, especially in case of automobile sector.

Sources of data
Sources of data is a methodology for collecting all sorts of information & data pertaining to the subject in question. The objective is to examine all the issues involved & conduct situational analysis. The methodology includes the overall research design, sampling procedure & fieldwork done & finally the analysis procedure. The methodology used in the study consistent of sample survey using both primary & secondary data. The primary data has been collected with the help of questionnaire as well as personal observation book, magazine; journals have been referred for secondary data. The questionnaire has been drafted & presented by the researcher himself.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Sample Size: Sample of 200 people was taken into study, and their data was collected Sampling Technique: To study the Project, a Simple Random Sampling technique is used. Data Collection: Collection of data is done by Secondary Data & through Questionnaire i.e., Primary data was collected through Questionnaire.

Data Analysis: After data collection, Im able to analyze customers views, ideas and opinions related to Advance Product and about SBI Advance Product and from this, SBI will come to know the customer requirements. Data Interpretation:

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Interpretation of data is done by using statistical tools like Pie diagrams, Bar graphs, and also using quantitative techniques (by using these techniques) accurate information is obtained.
Classification & tabulation of data:

The data thus collected were classified according to the categories, counting sheets & the summary tables were prepared. The resultant tables were one dimensional, two dimensional.

Statistical tools used for analysis: Out of the total respondents, the respondents who responded logically were taken into account while going into statistical details & analysis of data. The tools that have been used for analyzing data & inference drawing are mainly statistical tools like percentage, ranking, averages, etc. As per questionnaire and market surveys I have find out different responses from different people. According to their responses I analyze the findings and draw certain remarks.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

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 any other external and internal factors. For the past three decades Indias 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 Indias growth. The governments 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: NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 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 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 days public has lesser confidence in the banks. As an aftermath deposit mobilisation was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 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.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Phase II Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially 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 nationalised in 1960 on 19th July 1969, major process of nationalisation 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 nationalisation 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: 1. 1949: Enactment of Banking Regulation Act. 2. 1955: Nationalisation of State Bank of India. 3. 1959: Nationalisation of SBI subsidiaries. 4. 1961: Insurance cover extended to deposits. 5. 1969: Nationalisation of 14 major banks. 6. 1971: Creation of credit guarantee corporation. 7. 1975: Creation of regional rural banks. 8. 1980: Nationalisation 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

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name, which worked for the Liberalization of Banking Practices. 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 sssbanking 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 which were founded under private ownership. Indian Banking Sector was formally regulated by Reserve Bank Of India from 1935. After Indias independence in 1947, the Reserve Bank was nationalised and given broader powers.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

The Indian Banking System:

Banking in our country is already witnessing the sea changes as the banking sector seeks new technology and its applications. The best port is that the benefits are beginning to reach the masses. Earlier this domain was the preserve of very few organizations. Foreign banks with heavy investments in technology started giving some Out of the world customer services. But, such services were available only to selected few- the very large account holders. Then came the liberalization and with it a multitude of private banks, a large segment of the urban population now requires minimal time and space for its banking needs. Automated teller machines or popularly known as ATM are the three alphabets that have changed the concept of banking like nothing before. Instead of tellers handling your own cash, today there are efficient machines that dont talk but just dispense cash. Under the Reserve Bank of India Act 1934, banks are classified as scheduled banks and non-scheduled banks. The scheduled banks are those, which are entered in the Second Schedule of RBI Act, 1934. Such banks are those, which have paid- up capital and reserves of an aggregate value of not less then Rs.5 lacs and which satisfy RBI that their affairs are carried out in the interest of their depositors. All commercial banks Indian and Foreign, regional rural banks and state cooperative banks are Scheduled banks. Non Scheduled banks are those, which have not been included in the Second Schedule of the RBI Act, 1934. The organized banking system in India can be broadly classified into three categories: (i) Commercial Banks (ii) Regional Rural Banks and (iii) Cooperative banks. The Reserve Bank of India is the supreme monetary and banking authority in the country and has the responsibility to control the

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT banking system in the country. It keeps the reserves of all commercial banks and hence is known as the Reserve Bank. Current scenario:Currently (2007), the 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

With the growth in the Indian economy expected to be strong for quite some time especially in its services sector, the demand for banking services especially retail banking, mortgages and investment services are expected to be strong. Mergers & Acquisitions., takeovers, are much more in action in India.

One of the classical economic functions of the banking industry that has remained virtually unchanged over the centuries is lending. On the one hand, competition has had considerable adverse impact on the margins, which lenders have enjoyed, but on the other hand technology has to some extent reduced the cost of delivery of various products and services. Bank is a financial institution that borrows money from the public and lends money to the public for productive purposes. The Indian Banking Regulation Act of 1949 defines the term Banking Company as "Any company which transacts banking business in India" and the term banking as "Accepting for the purpose of lending all investment of deposits, of money from the

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT public, repayable on demand or otherwise and withdrawal by cheque, draft or otherwise". Banks play important role in economic development of a country, like: Banks mobilise the small savings of the people and make them

available for productive purposes. Promotes the habit of savings among the people thereby

offering attractive rates of interests on their deposits. payment. Banks provide convenient means of transfer of fund from one Provides safety and security to the surplus money of the

depositors and as well provides a convenient and economical method of

place to another. Helps the movement of capital from regions where it is not

very useful to regions where it can be more useful. Banks advances exposure in trade and commerce, industry and

agriculture by knowing their financial requirements and prospects. Bank acts as an intermediary between the depositors and the

investors. Bank also acts as mediator between exporter and importer who does foreign trades.

Thus Indian banking has come from a long way from being a sleepy business institution to a highly pro-active and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances.

The Structure of Indian Banking:

The Indian banking industry has Reserve Bank of India as its Regulatory Authority. This is a mix of the Public sector, Private sector, Co-operative banks and foreign banks. The private sector banks are again split into old banks and new banks.

Reserve Bank of India [Central Bank]

Scheduled Banks

Scheduled Commercial Banks

Scheduled Co-operative Banks

Public Sector Banks

Private Sector Banks

Foreign Banks

Regional Rural Banks

Nationalized Banks

SBI & its Associates

Scheduled Urban Co-Operative Banks

Scheduled State Co-Operative Banks

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Old Private Sector Banks

New Private Sector Banks

Chart Showing Three Different Sectors of Banks

i) ii)

Public Sector Banks Private Sector Banks

Public Sector Banks

SBI and SUBSIDIARIES Nationalized Banks Regional Rural Banks

SBI and subsidiaries

This group comprises of the State Bank of India and its seven subsidiaries viz., State Bank of Patiala, State Bank of Hyderabad, State Bank of Travancore, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Saurashtra, State Bank of India State Bank of India (SBI) is the largest bank in India. If one measures by the number of branch offices and employees, SBI is the largest bank in the world. Established in 1806as Bank of Bengal it is the oldest commercial bank in the Indian subcontinent. SBI provides various domestic, international and NRI products and services, through its vast network in India and overseas.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT With an asset base of $126 billion and its reach, it is a regional banking behemoth. The government nationalized the bank in1955, with the Reserve bank of India taking a 60% ownership stake. In recent years the bank has focused on two priorities, 1), reducing its huge staff through Golden handshakeschemes known as the Voluntary Retirement Scheme, which saw many of its best and brightest defect to the private sector, and 2), computerizing its operations.

The State Bank of India traces its roots to the first decade of19th century, when the Bank of culcutta, later renamed theBank of bengal, was established on 2 jun 1806. The government amalgamatted Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay and the bank of Madras, and named the reorganized banking entity the Imperial Bank of India. All these Presidency banks were incorporated ascompanies, and were the result of theroyal charters. The Imperial Bank of India continued to remain a joint stock company. Until the establishment of a central bank in India the Imperial Bank and its early predecessors served as the nation's central bank printing currency. The State Bank of India Act 1955, enacted by the parliament of India, authorized the Reserve Bank of India, which is the central Banking Organisationof India, to acquire a controlling interest in the Imperial Bank of India, which was renamed the State Bank of India on30th April 1955. 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 100 world banks in the Fortune Global 500 rating and various other rankings. According to the Forbes 2000 listing it tops all Indian companies.

Nationalized banks
This group consists of private sector banks that were nationalized. The Government of India nationalized 14 private banks in 1969 and another 6 in the year 1980. In early 1993, there were 28 nationalized banks i.e., SBI and its 7 subsidiaries plus 20 nationalized banks. In 1993, the loss making new bank

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT of India was merged with profit making Punjab National Bank. Hence, now only 27 nationalized banks exist in India.

Regional Rural banks

These were established by the RBI in the year 1975 of banking commission. It was established to operate exclusively in rural areas to provide credit and other facilities to small and marginal farmers, agricultural laborers, artisans and small entrepreneurs.

Private Sector Banks

Private Sector Banks

Old private Sector Banks new private Sector Banks

Old Private Sector Banks

This group consists of the banks that were establishes by the privy sectors, committee organizations or by group of professionals for the cause of economic betterment in their operations. Initially, their operations were concentrated in a few regional areas. However, their branches slowly spread throughout the nation as they grow.

New private Sector Banks

These banks were started as profit orient companies after the RBI opened the banking sector to the private sector. These banks are mostly technology driven and better managed than other banks.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Foreign banks
These are the banks that were registered outside India and had originated in a foreign country. The major participants of the Indian financial system are the commercial banks, the financial institutions (FIs), encompassing term-lending institutions, investment

institutions, specialized financial institutions and the state-level development banks, Non-Bank Financial Companies (NBFCs) and other market intermediaries such as the stock brokers and money-lenders. The commercial banks and certain variants of NBFCs are among the oldest of the market participants. The FIs, on the other hand, are relatively new entities in the financial market place.

IMPORTANCE OF BANKING SECTOR IN A GROWING ECONOMY In the recent times when the service industry is attaining greater importance compared to manufacturing industry, banking has evolved as a prime sector providing financial services to growing needs of the economy. Banking industry has undergone a paradigm shift from providing ordinary banking services in the past to providing such complicated and crucial services like, merchant banking, housing finance, bill discounting etc. This sector has become more active with the entry of new players like private and foreign banks. It has also evolved as a prime builder of the economy by understanding the needs of the same and encouraging the development by way of giving loans, providing infrastructure facilities and financing activities for the promotion of entrepreneurs and other business establishments.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT For a fast developing economy like ours, presence of a sound financial system to mobilize and allocate savings of the public towards productive activities is necessary. Commercial banks play a crucial role in this regard. The Banking sector in recent years has incorporated new products in their businesses, which are helpful for growth. The banks have started to provide fee-based services like, treasury operations, managing derivatives, options and futures, acting as bankers to the industry during the public offering, providing consultancy services, acting as an intermediary between two-business entities etc.At the same time, the banks are reaching out to other end of customer requirements like, insurance premium payment, tax payment etc. It has changed itself from transaction type of banking into relationship banking, where you find friendly and quick service suited to your needs. This is possible with understanding the customer needs their value to the bank, etc. This is possible with the help of well organized staff, computer based network for speedy transactions, products like credit card, debit card, health card, ATM etc. These are the present trend of services. The customers at present ask for convenience of banking transactions, like 24 hours banking, where they want to utilize the services whenever there is a need. The relationship banking plays a major and important role in growth, because the customers now have enough number of opportunities, and they choose according to their satisfaction of responses and recognition they get. So the banks have to play cautiously, else they may lose out the place in the market due to competition, where slightest of opportunities are captured fast. Another major role played by banks is in transnational business, transactions and networking. Many leading Indian banks have spread out their network to other countries, which help in currency transfer and earn exchange over it. These banks play a major role in commercial import and export business, between parties of two countries. This foreign presence also helps in bringing in the international standards of operations and ideas. The liberalization policy of 1991 has allowed many foreign banks to enter the Indian market and NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT establish their business. This has helped large amount of foreign capital inflow & increase our Foreign exchange reserve. Another emerging change happening all over the banking industry is consolidation through mergers and acquisitions. This helps the banks in strengthening their empire and expanding their network of business in terms of volume and effectiveness.

EMERGING SCENARIO IN THE BANKING SECTOR The Indian banking system has passed through three distinct phases from the time of inception. The first was being the era of character banking, where you were recognized as a credible depositor or borrower of the system. This era come to an end in the sixties. The second phase was the social banking. Nowhere in the democratic developed world, was banking or the service industry nationalized. But this was practiced in India. Those were the days when bankers has no clue whatsoever as to how to determine the scale of finance to industry. The third era of banking which is in existence today is called the era of Prudential Banking. The main focus of this phase is on prudential norms accepted internationally.

SBI GroupThe 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.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NationalisationThe 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 nationalisation of 6 more commercial Indian banks in 1980. The stated reason for the nationalisation was more control of credit delivery. After this, until 1990s, the nationalised 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 nationalised banks in India.

LiberalizationIn the early 1990s the then Narasimha rao government embarked a policy of liberalization and gave licences 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 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 pesent 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-

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 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 SCENARIOCurrently (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 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 unravelling 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 Kotak 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.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

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 3 Private Banks Bank, Dhanalaxmi Bank, Federal Bank, Ganesh Bank of Kurundwad, HDFC Bank, ICICI Bank, IDBI, IndusInd Bank, ING Vysya Bank, Jammu and Kashmir Bank, Karnataka Bank Limited, Karur Vysya Bank, Kotek 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.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

COMPANY PROFILE
HISTORY
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. NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 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 modernise 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.

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 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)

Business

The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one Lakh 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 woollens, 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 favour 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.

FirstFiveYearPlan

In 1951, when the First Five Year Plan was launched, the development of rural India was given the highest priority. The commercial banks of the country including the Imperial Bank of India had till then confined their operations to the urban sector and were not equipped to respond to the emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the economy in general and the rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a state-partnered and state-sponsored bank by taking over the

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking system thus passed under the direct control of the State. Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (laternamed Associates).

The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking subserving the growing and diversified financial needs of planned economic development. The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development.

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

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 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 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.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 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 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.

ABOUT LOGO

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT THE PLACE TO SHARE THE NEWS ... SHARE THE VIEWS 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, VISION AND VALUES

MISSION STATEMENT: To retain the Banks 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. 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.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 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 Transparency and Discipline in policies and systems.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

ORGANISATION STRUCTURE MANAGING DIRECTOR

CHIEF GENERAL MANAGER

G. M G.M (Operations) (P&D)

G.M (C&B)

G. M (F&S)

G.M (I) & CVO

Zonal officers

Functional Heads

Regional officers

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

COMPETITORS

Competitors and other players in the field:Top Performing Public Sector Banks
Andhra Bank Allahabad Bank Punjab National Bank Dena Bank Vijaya Bank

Top Performing Private Sector Banks

HDFC Bank

ICICI Bank

AXIS Bank

Kotak Mahindra Bank

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Centurion Bank of Punjab

Top Performing Foreign Banks

Citibank Standard Chartered HSBC Bank ABN AMRO Bank American Express

Strength/ Opportunities:
The growth for SBI in the coming years is likely to be fueled by the following factors: Continued effort to increase low cost deposit would ensure improvement in NIMs and hence earnings. Growing retail & SMEs thrust would lead to higher business growth. Strong economic growth would generate higher demand for funds pursuant to higher corporate demand for credit on account of capacity expansion.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Weakness/ Threats:
The risks that could ensue to SBI in time to come are as under: SBI is currently operating at a lowest CAR. Insufficient capital may restrict the growth prospects of the bank going forward. Stiff competition, especially in the retail segment, could impact retail growth of SBI and hence slowdown in earnings growth. Contribution of retail credit to total bank credit stood at 26%. Significant thrust on growing retail book poses higher credit risk to the bank. Delay in technology upgradation could result in loss of market shares. Management indicated a likely pension shortfall on account of AS-15 to be close to Rs50bn. Slow down in domestic economy would pose a concern over credit off-take thereby impacting earnings growth.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

DIFFERENT PRODUCTS OF SBI:

DEPOSIT Savings Account Life Plus Senior Citizens Savings Account Fixed Deposits Security Deposits Recurring Deposits Tax-Saver Fixed Deposit Salary Account Advantage Woman Savings Account Rural Savings Account People's Savings Account Freedom Savings Farmer Distribution Cards Business Card Merchant Services SBI Advantage Cards Personal Loans Car Loan Loans against Securities Two Wheeler Pre-approved Loans Retail Asset Travel Card Debit Cards Commercia l Cards Corporate Cards Prepaid Card Purchase Card Partnership Cards SBI Gold Master cards Your City Your Cards Loan Against Property LOANS Home Loans CARDS Consumer Cards Credit Card DIFFERENT CREDIT CARDS SBI International cards SBI Gold cards

SBI Employee Cards

Finance Business Instalment Plan Flexi Cash

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Account

SBI RECENT ACHIVEMENTS AND MILESTONES:

AWARDS: SBI has been the proud recipient of the ICRA Online Award - 8 times, CNBC TV 18, Crisil Award 2006 - 4 Awards, The Lipper Award (Year 2005-2006) and most recently with the CNBC TV - 18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes.

SBI Card reaches three million milestone: SBI Card, a joint venture between State Bank of India and GE Money, announced yet another landmark achievement of crossing the three million cardholders-mark. Roopam Asthana, CEO-SBI Card, said, "This milestone is even more remarkable as we have added one million cardholders in just ten months. Our objective is to accelerate the pace of growth by extending the benefits to a broader range of consumers in Tier II cities, along with improved value propositions for the urban affluent customers." SBI Card recently signed up Indian cricketer Yuvraj Singh as its brand ambassador.

SBI joins Chinese bank to touch 10,000 branches: Public sector State Bank of India on Sunday became only the second bank in the world to have 10,000 branches when Union Finance Minister P Chidambaram inaugurated its latest branch here. Speaking on the occasion, Chidambaram said China's ICBC Bank was the other bank to have 10,000 branches. Opening 10,000 branches was a great feat. "It is not an easy NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT milestone though the SBI was the bank of the government and Indian people even before other banks were nationalised," he said. People all over the world,
including the Chinese, would now know about this small village where the 10000th branch of the SBI had been opened, he said adding they would be amazed by the bank's growth. The bank should be proud of the achievement he said and wished that the bank opened one lakh branches. The Minister said out of the over 100 crore people, seventy 75 per cent did not have any type of insurance. Similarly, 50 per cent of the 11 crore farmers did not have bank account. Banks should go to the people and enroll them as account holders. 'That is what economists say is financial inclusion,' he said.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

1Income Related:Interest Received

Year 2006-07 2007-08 Amount 31389470.23 39641629.11

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 2008-09 Graph No.4.1

Income Related
50000000 40000000 Amount 30000000 20000000 10000000 0 2006-07 2007-08 Year 2008-09

46903032.52

Analysis:Above the table & graph says income of interest received up to 3 years fulfill 2006-07 the amount is 31389470.23, 2007-08 amount is 39641629.11,& lastly is 2008-09 amount is 46903032.52.

Interpretation:About sindhanur branch SBI income of interest received what we are seen above table & graph its says year by year interest received income is increasing & also says company growing stage. It means providing of loan year to year increasing like Interest received on demand loans Interest received on demand loans Interest received on cash credits etc.

II) Commission Received:Table 4.2

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Year 2006-07 2007-08 2008-09 Graph 4.2
Commission Received
5000000 4000000 Amount 3000000 2000000 1000000 0 2006-07 2007-08 Year 2008-09

Amount 2040483.16 3919125.75 439160907

Analysis:Above the table & graph other income of commission received for 3 years such as year of 2006-07 amount is 2040483.16,year of 2007-08 the amount is 3919125.75, & year 2008-09 amount is 439160.07

Interpretation:About this income what are datas including in commission received of other income up to 3 years. Above table graphs of bar chart its indicate year to year other income of commission received there was fluctuating not for constant or similar and it is increasing. Commission Received is getting through these services On Government Transaction On Letter of Credit On Deferred payment guarantees On other Guaranteess On collection On Sale of Gold On term loan & demand loan processing fee/upfront fee On other loans processing fees On other transactions (Including safe deposit locker rent)

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT When this income is increasing net profit of this bank is also increasing.

Expenditures Interest paid on term deposits

Table 4.3 Year 2006-07 2007-08 2008-09 Graph 4.3 Interest paid on deposits
4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2006-07 2007-08 Year 2008-09

Amount 1713345.49 2848880.68 4208666.85

Analysis:Above the table & graph these says of interest paid on term deposits this expenses up to 3 years is there such as 2006-07 the amount is 1713345.49,2007-08 amount is 2848880.68,year2008-09 amount is 4208666.85 .

Interpretation:I have to say about this expenditure namely call it as interest paid on term deposits above the table 7 graph on these data gives its increasing stage. Above the what analyzed and so overall new according to data this expenditure is also including some expenses also NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

A mt

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

on term deposits (including interest paid on deposits) on special term deposits on NRNR rupees term deposits on FCNR deposits (Bank scheme)s on FCNR deposits (RBI scheme) on cash certificates (discount) on Annuity deposits on certificate of deposits on NHB-HLAS accounts on Recurring Deposits on Janata deposits on other deposits accounts of any (please specify deposit a/c) Overall view of this expenditure not so for good because year by year increasing whiles its effect on profit.but its very helpful of customers and enjoying lots

II) Interest paid on savings bank accounts:-

Table 4.4
Year 2006-07 2007-08 2008-09 Graph 4.4
Interst paid on SB Accounts
5000000 4000000 Amount 3000000 2000000 1000000 0 2006-07 2007-08 Year 2008-09

Amount 1393044.38 2050594.79 4026617.38

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Analysis:Above the table & graph is related expenditure of interest paid on savings bank a/c table says up to 3 year data such as 2006-07 the amount is 1393044.38,2007-08 the amount is 2050594.79 & lastly 2008-09 amount of 4026617.38 graph is also says similar to table.

Interpretation:About interest paid on SB Bank account up to 3 years increasing 2006 to 2009 this expenses its lot of beneficial to customer but not for bank. This interest paid related to current accounts.

III)Rent Taxes and Lighting:Table 4.5 Year 2006-07 2007-08 2008-09 Graph 4.5 Amount 729323.47 761659.00 757485.00

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Rent Taxes and Lighting

800000 700000 600000 500000 400000 300000 200000 100000 0 1 2 Year 3 4

Analysis:Rent taxes & lighting this expenses relating of table gives the data like 2006-07 the amount was729323.47, 2007-08 the amount is 761659.00 & 2008-09 the amount is 757485.00. And graph f says of bar chart the year 2006-07 to 2007-08 little but increasing & again 2008-09 decreasing stage.

Interpretation:Rent taxes & lighting of this expenditure what have seen table & graph & including analysis part also maintaining of this expenses is good position because fraction of amount is distance in year to year. This expense including further expenses also such as given. Below Office Rent House rent (fees rent recovered on staff quarters) Local taxes wealth tax Electricity & fuel These are all including under rent taxes & lighting.

IV)Printing & Stationary:NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Amount

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Table 4.6
Year 2006-07 2007-08 2008-09 Graph 4.6
Printing & stationary
100000 98000 96000 Amount 94000 92000 90000 88000 86000 2006-07 2007-08 Year 2008-09

Amount 92432.67 90485.41 97489.00

Analysis:Above the table of printing & stationary data give up to 3 years 200607 the amount is 92432.67,2007-08amount is 90485.41,2008-09 last year amount is 97489.00

Interpretation:This expenses relating stationary & local printing/purchases above the analysis says about 3 years data view to the year increasing printing & stationary of this expenses is need of every organization paper, broachers, vouchers register etc.

V)Advertisement & publicity:Table 4.7 Year 2006-07 Amount 7200

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 2007-08 2008-09 Graph 4.7

Advertisment & Publicity
15000 Amount 10000 5000 0 2006-07 2007-08 Year 2008-09

13600

Analysis:Above the table graph it gives 3 data of advertisement & publicity 2006-07 amount is 7200,2007-08 the amount is 13600 & lastly 2008-09 nil.

Interpretation:Advertisement is publicity of this expenses is very less compare to other expenses this expenses is necessary of every organization because aware about this organization of all publicity relation or people & publicity when view this organization all people preferred to this organization.

VI)Depreciation
Table 4.8 Year 2006-07 2007-08 2008-09 Graph 4.8 Amount 266621.00 349655 258846.00

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Depriciation
400000.00 Amount 300000.00 200000.00 100000.00 0.00 2006-07 2007-08 Year 2008-09

Analysis:above the table & graph it gives depreciation data of 3 years 2006-07 the amount is 266621.00,2007-08 the amount is 349655.00,2008-09 the amount is 258846.00.

Interpretation:Depreciation is charged as usage of machinery & other equipment related ideas depreciation is uncontrollable expenses because any machinery using of organization decreasing. that machinery group under balance in this bank 2006-07 the amount is 266621 the next year is increasing it means its effect on profit also & 2008-09again it was decreasing compare to 2006-07 data.

VII)Repairs & maintenance to banks property Table 4.9

years 2006-07 amounts 2880.00

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT 2007-08 2008-09 Graph 4.9 10999.00 720

Analyses
Above the table and graph shows of the expenses of repairs and maintenance to banks property. The year of 2006-07 amount is 2880, year of 2007-08 the amount is 10999 &year of 2008-09 the amount is 720. And graph also gives similar to table.

Interpretation
About the expenditure of repairs and maintenance to banks property of this expenses common task of every organization. Relating of this expenses repairs of machinery and computer Maintenance of bank premises & other property also. According to table &graph first year amount is less compare to second year &third year very less compare above two years.

VIII)total expenses Year 2006-07 2007-08 2008-09 Graph 4.10 NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Amount 7913211.89 10909895.34 14404252.14

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

total expencess
16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 2006-07 2007-08 yea rs 2008-09

Analyses
Above the table shows up to 3 years data of total expenses. Such as the year of 2006-07 the amount is 7913211.89 the year of 2007-08 the amount is 10909895.34.&lastly the year of 2008-09 amount is 14404252.14

Interpretation
About the total expenses of sbi bank in sindhanoor branch what data gives up to three years above the table &graph its year to year increasing stage. It means all expenses also increasing of this bank. Such as given below. Total interest on deposits Any other interest expended Payment to &provision for employees Rent taxes &lighting Printing and stationary Advertisement & publicity Depreciation Audit expenses Law charges NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

t n u o m a

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT Repairs &maintenance Insurance Other expenditure

IX)Operating profit
Table 4.11 Year 2006-07 2007-08 2008-09 Graph 4.11 Amount 26424142.65 33274123.97 37906904.86

operatingprofit
40000000 35000000 30000000 25000000 20000000 15000000 10000000 5000000 0 2006-07 2007-08 year 2008-09

Analyses
Above the table &graph its shows operating profit of of sbi branch in sindhanoor up to 3 years such as 2006-07 the amount is 26424142.65 the year of 2007-08 the amount is 33274123.97 &lastly 2008-09 the amount is 37906904.86.

Interpretation
sOperating profit is nothing but a EBIT(earning before interest on profit)Of sbi bank in sindhanoor branch its not a big town but turnover of this bank is realy good &profit also its good so above the table &graph its gives 3 years data year to year its lot of increasing &its beneficials to sindhanoor economy.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

t n u o m a

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

Total advances and deposits

Table 4.12 2007 Total advances Total deposits Total Graph 4.12 467500000 268700000 736200000 2008 468000000 269200000 737200000 2009 468800000 270000000 738800000

Analysis:Above the table it shows of total advances &total deposits upto 3 years data like the year of 2007 amount is 467500000 & 268700000 the year of 2008 amount is 468000000 & 269200000 last year of 2009 the amount is 468800000 &270000000. Interpretation :About the total advances and total deposits above the table and graph it gives three years data such as 2007,2008 &2009.these
NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

3 years total advances and total deposits both are increasing. when increasing these datas its lot of helpful for bank. Because more providing loans while more receiving interest by customers. and bank profit also increasing. Advances Table 4.12 Advances Small scale industries Agriculture Cash and credit Personal loan 2007 54000000 29000000 10000000 92500000 2008 38000000 301000000 27000000 82000000 2009 31200000 311200000 3900000 97000000

Graph 4.12
Advances(loans)
350000000 300000000 250000000 200000000 ssi agriculture cash&credit personal loan

t n u o m A

150000000 100000000 50000000 0 2007 2008 Yea r 2009

Analysis:Above the table and graph it shows 3 years datas of loan such as small scale industries, agriculture, cash credit & personal loan the year of 2007 amount is 5.4(cr)29.00(cr),1.00(cr) &9.25(cr).the year of 2008 amount is 3.8(cr), 30.10(cr), 2.7(cr)
NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT

&8.20(cr).the year of 2009 the amount is 3.12(cr),31.12(cr),0.39(cr) &9.70(cr). Interpretation:About the these loans above the table &graph its indicate year of 2007 to 2009.small scale industries loan providing to the customers it data is declining order up to three years. Agriculture loan is year by year increasing its helpful for formers because its increasing income level.cash credit loan it is first two year is increasing order and last year is decline compare to first two years.this loan providing to trust, industries, commerce education etc.overall view of those datas its lot of beneficial to bank because interest receiving is increasing and profit also.

NATIONAL COLLEGE OF COMMERCE AND MANAGEMENT