Summer training project report r

SUMMER TRAINING PROJECT REPORT
On
Financial pattern of retail trader with SBI viz viz other banks in a
Lucknow
For

STATE BANK OF INDIA
Towards partial fulfillment of
Master of Business Administration (MBA)
(Affiliated to U.P. Technical University, Lucknow)
Guided by

Submitted by

S.N.TRIVEDI

Prateek Chandra

(B.M. Nishatganj)

MBA IIIrd Semester

(STATE BANK OF INDIA)

ROLL NO. 1205470073

Session 2013-2014
Department Of Management

BABU BANARASI DAS
NATIONAL INSTITUTE OF TECHNOLOGY & MANAGEMENT
Sector I, Dr, Akhilesh Das Nagar, faizabad Road, Lucknow, (u.p.) India

ACKNOWLEDGEMENT
I would like to thank S.N.TRIVEDI, SBI BRANCH MANAGER,
NISHATGANJ,

for the guidance he has given to me in the conduction

of my project work.
I would also like to extend my gratitude to my parents, friends for their
consistent encouragement, suggestions and moral support.

Prateek Chandra
MBA IIIrd Semester

4

DECLARATION

I, PRATEEK CHANDRA , hereby declare that the research project
entitled “Financial pattern of retail trader with SBI viz viz other banks in

a Lucknow” which is also known as STATE BANK OF INDIA IN
LUCKNOW is my original work
.Now it is an asset of “BABU BANARASI DAS NATIONAL INSTITUTE
OF TECHNOLOGY AND MANAGEMENT”. All the rights of using this
project

report

lies

with

the

institute.

Unauthorized

copying,

hiring,

broadcasting or rental of this project without permission from the
institute will be considered illegal.

DATE:

PRATEEK CHANDRA
MBA IIIrd Semester

5

EXECUTIVE SUMMARY

I Prateek Chandra have gone for project report on the topic of “Financial pattern of
retail trader with SBI viz viz other banks in a Lucknow”. Loan is a Secured loan
offered against the security of a property which is funded by the bank’s loan, the property
could be a personal property or a commercial one. The Loan is a loan taken by a borrower
from the bank issued against the security intended to be bought on the part by the borrower
giving the banker a conditional ownership over the property i.e. if the borrower is failed to
pay back the loan, the banker can retrieve the lent money by selling the property.
This study is to know the outcome of loaning scheme provided by SBI, during my survey,
I took 100 people for data collection of my report and from them I got information about
possibilities of takeover of loan scheme provided by SBI. The sample methodologies that
are used by me are judgmental. In primary source questionnaire and observation method
are used by me.
Private bank mostly prefer to finance business loan by the respondents and its strong
competitor for SBI.

6

TABLE OF CONTENTS

PARTICULAR

1.

INTRODUCTION

7

PAGE NO.

2.

COMPANY PROFILE

3. ORGANIZATION CHART
4. AIM AND OBJECTIVE
5. OBJECTIVE OF THE STUDY
6. RESEARCH METHODOLAGY
7. ANALYSIS & INTERPRETATIONS
8. FINDINGS
9. SWOT/ETOP ANALYSIS
10. SUGGESTIONS/RECOMMENDATIONS
11. PROBLEMS AND LIMITATIONS
12. CONCLUSION
13. APPENDIX
14. BIBLIOGRAPHY

8

INDUSTRY PROFILE

INDUSTRIAL PROFILE
HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a
healthy economy. The banking system of India should not only be hassle free
but it should be able to meet new challenges posed by the technology and

9

any other external and internal factors. For the past three decades India’s
banking system has several outstanding achievements to its credit. The most
striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to
the remote corners of the country. This is one of the main reasons for India’s
growth. The government’s regular policy for Indian bank since 1969 has paid
rich dividends with the nationalization of 14 major private banks of India.

The first bank in India, though conservative, was established in 1786. From
1786 till today, the journey of Indian Banking System can be segregated into
three distinct phases. They are as mentioned below

Early phase from 1786 to 1969 of Indian Banks.
Nationalization of Indian Banks and up to 1991 prior to Indian.
Banking sector Reforms.
New phase of Indian Banking System with the advent of Indian.
Financial & Banking Sector Reforms after 1991.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of
Hindustan and Bengal Bank. The East India Company established Bank of

10

Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as
independent units and called it Presidency Banks. These three banks were

Amalgamated in 1920 and Imperial Bank of India was established which
started as private shareholders banks, mostly European shareholders. In
1865 Allahabad Bank was established and first time exclusively by Indians,
Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.

Between 1906 and 1913, Bank of India, Central Bank of India, Bank of
Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up.
Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced
periodic failures between 1913 and 1948. There were approximately 1100
banks, mostly small. To streamline the functioning and activities of banks,
mostly small. To streamline the functioning and activities of commercial
banks, the Government of India came up with The Banking Companies Act,
1949 which was later changed to Banking Regulation Act

1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of
India was vested with extensive powers for the supervision of banking in India
as the Central Banking System.

During those day’s public has lesser confidence in the banks. As an
aftermath deposit mobilization was slow. Abreast of it the savings bank facility

11

provided by the Postal department was comparatively safer. Moreover, funds
were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive
banking facilities on a large scale especially in rural and semi-urban areas. It
formed State Bank of India to act as

The principal agent of RBI and to handle banking transactions of the Union
and state government all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in
1960 on 19th July 1969, major process of nationalization was carried out. It
was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major
commercial banks in the country were nationalized. Second phase of
nationalization Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India
under Government ownership.

The following are the steps taken by the Government of India to Regulate
Banking Institutions in the Country:

12

1. 1949: Enactment of Banking Regulation Act.
2. 1955: Nationalization of State Bank of India.
3. 1959: Nationalization of SBI subsidiaries.
4. 1961: Insurance cover extended to deposits.
5. 1969: Nationalization of 14 major banks.
6. 1971: Creation of credit guarantee corporation.
7. 1975: Creation of regional rural banks.
8. 1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks, the branches of the public sector bank India
raised to approximately 800% in deposits and advances took a huge jump by
11000%. Banking in the sunshine of Government ownership gave the public
implicit faith and immense confidence about the sustainability of these
institutions.

Phase III

This phase has introduced many more products and facilities in the banking
sector in its reforms measure. In 1991, under the chairmanship of M
Narasimha, a committee was set up by his name, which worked for the
Liberalization of Banking Practices.

13

The country is flooded with foreign banks and their ATM stations. Efforts are
being put to give a satisfactory service to customers. Phone banking and net
banking is introduced. The entire system became more convenient and swift.
Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is
sheltered from any crisis triggered by any external macroeconomics shock as
other East Asian Countries suffered. This is all due to a flexible exchange rate
regime, the foreign

Reserves are high, the capital account is not yet fully convertible, and banks
and their customers have limited foreign exchange exposure.
Banking in India originated in the first decade of 18th century with The General
Bank of India coming into existence in 1786. This was followed by Bank of
Hindustan. Both these banks are now defunct. The oldest bank in existence in
India is the State Bank of India being established as “The Bank of Calcutta” in
Calcutta in June 1806. Couple of Decades later, foreign Banks like HSBC and
Credit Lyonnais Started their Calcutta operations in 1850s. At that point of
time, Calcutta was the most active trading port, mainly due to the trade of
British Empire and due to which banking actively took roots there and
prospered. The first fully Indian owned bank was the Allahabad Bank set up in
1865.

By 1900, the market expanded with the establishment of banks like Punjab
National Bank in 1895 in Lahore; Bank of India in 1906 in Mumbai-both of

14

which were founded under private ownership. Indian Banking Sector was
formally regulated by Reserve Bank of India from 1935. After India’s
independence in 1947, the Reserve Bank was nationalized and given broader
powers.

SBI Group

The Bank of Bengal, which later became the State Bank of India. State Bank
of India with its seven associate banks commands the largest banking
resources in India.

15

Nationalization

The next significant milestone in Indian Banking happened in late 1960s when
the then Indira Gandhi government nationalized on 19th July 1949, 14 major
commercial Indian banks followed by nationalization of 6 more commercial
Indian banks in 1980.

The stated reason for the nationalization was more control of credit delivery.
After this, until 1990s, the nationalized banks grew at a leisurely pace of
around 4% also called as the Hindu growth of the Indian economy.

After the amalgamation of New Bank of India with Punjab National Bank,
currently there are 19 nationalized banks in India.

Liberalization-

In the early 1990’s the then Narasimha rao government embarked a policy of
liberalization and gave licenses to a small number of private banks, which
came to be known as New generation tech-savvy banks, which included
banks like ICICI and HDFC. This move along with the rapid growth of the
economy of India, kick started the banking sector in India, which has seen
rapid growth with strong contribution from all the sectors of banks, namely
Government banks, Private Banks and Foreign banks. However there had
been a few hiccups for these new banks with many either being taken over

16

like Global Trust Bank while others like Centurion Bank have found the going
tough.

The next stage for the Indian Banking has been set up with the
proposed relaxation in the norms for Foreign Direct Investment, where all
Foreign Investors in Banks may be given voting rights which could exceed the
present cap of 10%, at present it has gone up to 49% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till
this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go
home at 4) of functioning. The new wave ushered in a modern outlook and
tech-savvy methods of working for traditional banks. All this led to the retail
boom in India. People not just demanded more from their banks but also
received more.

CURRENT SCENARIO

Currently (2007), overall, banking in India is considered as fairly mature
in terms of supply, product range and reach-even though reach in rural India
still remains a challenge for the private sector and foreign banks. Even in
terms of quality of assets and capital adequacy, Indian banks are considered
to have clean, strong and transparent balance sheets-as compared to other
banks in comparable economies in its region. The Reserve Bank of India is an
autonomous body, with minimal pressure from the government. The stated

17

policy of the Bank on the Indian Rupee is to manage volatility-without any
stated exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some
time-especially in its services sector, the demand for banking servicesespecially retail banking, mortgages and investment services are expected to
be strong. M&as, takeovers, asset sales and much more action (as it is
unraveling in China) will happen on this front in India.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to
increase its stake in Kodak Mahindra Bank (a private sector bank) to 10%.
This is the first time an investor has been allowed to hold more than 5% in a
private sector bank since the RBI announced norms in 2005 that any stake
exceeding 5% in the private sector banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public
sector banks (that is with the Government of India holding a stake), 29 private
banks (these do not have government stake; they may be publicly listed and
traded on stock exchanges) and 31 foreign banks. They have a combined
network of over 53,000 branches and 17,000 ATMs. According to a report by
ICRA Limited, a rating agency, the public sector

Banks hold over 75 percent of total assets of the banking industry, with the
private and foreign banks holding 18.2% and 6.5% respectively.

18

Banking in India

1 Central Bank

Reserve Bank of India

State Bank

of India, Allahabad

Bank, Andhra

Bank, Bank of Baroda, Bank of India, Bank of
Maharastra,Canara Bank, Central Bank of India,
2 Nationalised
Banks

Corporation Bank, Dena Bank, Indian Bank, Indian
overseas

Bank,Oriental

Bank

of

Commerce,

Punjab and Sind Bank, Punjab National Bank,
Syndicate Bank, Union Bank of India, United Bank
of India, UCO Bank,and Vijaya Bank.

Bank of Rajastan, Bharath overseas Bank, Catholic
Syrian Bank, Centurion Bank of Punjab, City Union
Bank, Development Credit Bank, Dhanalaxmi
3 Private Banks

Bank, Federal Bank, Ganesh Bank of Kurundwad,
HDFC Bank, ICICI Bank, IDBI, IndusInd Bank, ING
Bank,

Jammu

and

Kashmir

Bank,

Vysya

Karnataka Bank Limited, Karur Vysya Bank, Kotek

19

Mahindra Bank, Lakshmivilas Bank, Lord Krishna
Bank, Nainitak Bank, Ratnakar Bank,Sangli Bank,
SBI Commercial and International Bank, South
Indian Bank, Tamil Nadu Merchantile Bank Ltd.,
United Western Bank, UTI Bank, YES Bank.

20

Structure of Indian Banking

Reserve Bank of India is the regulating body for the Indian Banking Industry. It
is a mixture of Public sector, Private sector, Co-operative banks and foreign
banks. The private sector banks are further spilt into old banks and new
banks.

21

HISTORY OF SBI BANK:-

The evolution of State Bank of India can be traced back to the first decade of
the19th century. It began with the establishment of the Bank of Calcutta in
Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal,
three years later, on 2 January 1809. It was the first ever joint-stock bank of
the British India, established under the sponsorship of the Government of
Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840)
and the Bank of Madras (established on 1 July 1843) followed the Bank of
Bengal. An important turning point in the history of State Bank of India is the
launch of the first Five Year Plan of independent India, in 1951. The Plan

23

aimed at serving the Indian economy in general and the rural sector of the
country, in particular. Until the Plan, the
commercial banks of the country, including the Imperial Bank of India,
confined their services to the urban sector. Moreover, they were not equipped
to respond to the growing needs of the economic revival taking shape in the
rural areas of the country. Therefore, in order to serve the economy as a
whole and rural sector in particular.
The All India Rural Credit Survey Committee proposed the take over of theIm
perial Bank of India, and integrating with it, the former state-owned or stateassociate banks. Subsequently, an Act was passed in the Parliament of India
in May 1955. As a result, the State
Bank of India (SBI) was established on 1 July1955. This resulted in making
the State Bank of India more powerful, because as much as a quarter of the
resources of the Indian banking system were controlled directly by the State.
Later on, the State Bank of India (Subsidiary Banks) Act was passed in
1959.The State Bank of India emerged as a
pacesetter, with its operations carried out byte 480 offices comprising
branches, sub offices and three Local Head Offices, inherited from the
Imperial Bank. Instead of serving as mere repositories of the community’s
savings and lending to creditworthy parties, the State Bank of India catered to
the needs of the customers, by banking purposefully.

24

State Bank of India
(SBI) (LSE:SBID) is the largest bank in India. The bank traces its ancestry
back through the Imperial to the founding in1806of the Bank, making it the
oldest commercial bank in the Indian Subcontinent. The Government
nationalized the Imperial Bank of India in1955, with the Reserve taking a 60%
stake, and renamed it the State Bank of India. In 2008, the Government took
over the stake held by the Reserve Bank of India.SBI provides a range of
banking products through its vast network in India and overseas, including
products aimed antis. With an asset base of $126 billion and its reach, it is a
regional banking behemoth. SBI has laid emphasis on reducing the huge
manpower through Golden schemes, which led to a flight of its best and
brightest managers which took to retirement allowances and then wanton the
become senior managers at new private sector banks, and computerizing its
operations. The roots of the State Bank of India rest in the first decade of 19th
century, when the Bank, later renamed the Bank, was established
on2 June 1806. The Bank of Bengal and two other Presidency banks, namely,
the Bank (incorporated on15 April 1840) and the Bank (incorporated on1
July 1843)... These three banks received the exclusive right tissue paper
currency

in

1861

with

the

Paper

Currency

Act,

a

right

they

retaineduntil the formation of theReserve Bank of India. The Presidency bank
samalgamated on27 January 1921, and the reorganized banking entity took
as its name Imperial Bank of India. The Imperial Bank of India continued to
remain a joint stock company. Pursuant to the provisions of the State Bank of

25

India Act (1955), the Reserve of India, which is India’s, acquired a controlling
interest in the Imperial Bank of India. On30 April 1955the Imperial Bank of
India

became

the

State

Bank

of

India.

In 1959 the Government passed the State Bank of India (SubsidiaryBanks)
Act, enabling the State Bank of India to take over eight former Stateassociated banks as its subsidiaries. Onset, 2008, State Bank of Saurashtra,
one of its Associate Banks, merged with State Bank of India.

Associate banks
There are six associate banks that fall under SBI, and together these six
banks constitute the State Bank Group. All use the same logo of a blue
keyhole

and

banks

constitutes use the "State Bank of" name followed

by the regionalheadquarters' name. Originally, the then seven banks that
became the associate banks belonged to princely until the government
nationalized them in 1959.In tune with the first Five Year Plan, emphasizing
the development of rural India, the government integrated these banks into
State Bank of India to expand its rural outreach. There has been a proposal to
merge all the associate banks into SBI to create a "mega bank" and
streamline operations. The first step along these lines occurred in September
2008 when State merged with State Bank of India, which reduced the number
of state banks from seven to six.

26

*State Bank of Indore
*State Bank of Bikaner & Raipur
*State Bank of Hyderabad
*State Bank of Mysore
*State Bank of Patiala
*State Bank of Travancore

Growth:State Bank of India has often acted as guarantor to the Indian, most notably
during Chandra's tenure as Prime. With more than 11,111 branches and a
further 6500+ associate bank branches, the SBI has extensive coverage.
State Bank of India has electronically networked all of its branches under
Core Banking System(CBS). The bank has one of the largest TM networks in
the region. More than 8500 ATMs across India. The State Bank of India has
had steady growth over its history, though it was marred by the Harsh
ad Mehta scam in 1992. In recent years, the bank has sought to expand its
overseas operations by buying foreign banks. It is the only Indian bank to
feature in the top India. The rest were government nominees, invariably civil
servants, one of whom was elected as the president of the board.

27

EVOLUTION OF SBI

The origin of the State Bank of India goes back to the first decade of the
nineteenth century with the establishment of the Bank of Calcutta in Calcutta
on 2 June 1806. Three years later the bank received its charter and was redesigned as the Bank of Bengal (2 January 1809). A unique institution, it was
the first joint-stock bank of British India sponsored by the Government of
Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July
1843) followed the Bank of Bengal. These three banks remained at the apex
of modern banking in India till their amalgamation as the Imperial Bank of
India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into
existence either as a result of the compulsions of imperial finance or by the
felt needs of local European commerce and were not imposed from outside in
an arbitrary manner to modernize India's economy. Their evolution was,
however, shaped by ideas culled from similar developments in Europe and
England, and was influenced by changes occurring in the structure of both the
local trading environment and those in the relations of the Indian economy to
the economy of Europe and the global economic framework.

28

Bank of Bengal H.O.

Madras. It meant an accretion to the capital of the banks, a capital on which
the proprietors did not have to pay any interest. The concept of deposit
banking was also an innovation because the practice of accepting money for
safekeeping (and in some cases, even investment on behalf of the clients) by
the indigenous bankers had not spread as a general habit in most parts of
India. But, for a long time, and especially up to the time that the three
presidency banks had a right of note issue, bank notes and government
balances made up the bulk of the investible resources of the banks.
The three banks were governed by royal charters, which were revised from
time to time. Each charter provided for a share capital, four-fifth of which were

29

privately subscribed and the rest owned by the provincial government. The
members of the board of directors, which managed the affairs of each bank,
were mostly proprietary directors representing the large European managing
agency houses in India. The rest were government nominees, invariably civil
servants, one of whom was elected as the president of the board.

Group Photograph of Central Board (1921)

30

Business
The business of the banks was initially confined to discounting of bills of
exchange or other negotiable private securities, keeping cash accounts and
receiving deposits and issuing and circulating cash notes. Loans were
restricted to Scone laky and the period of accommodation confined to three
months only. The security for such loans was public securities, commonly
called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a
perishable nature' and no interest could be charged beyond a rate of twelve
per cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton
piece goods, mule twist and silk goods were also granted but such finance by
way of cash credits gained momentum only from the third decade of the
nineteenth century. All commodities, including tea, sugar and jute, which
began to be financed later, were either pledged or hypothecated to the bank.
Demand promissory notes were signed by the borrower in favor of the
guarantor, which was in turn endorsed to the bank. Lending against shares of
the banks or on the mortgage of houses, land or other real property was,
however, forbidden. Indians were the principal borrowers against deposit of
Company's paper, while the business of discounts on private as well as salary
bills was almost the exclusive monopoly of individuals Europeans and their
partnership firms. But the main function of the three banks, as far as the
government was concerned, was to help the latter raise loans from time to
time and also provide a degree of stability to the prices of government
securities

31

Old Bank of Bengal

Major change in the conditions
A major change in the conditions of operation of the Banks of Bengal,
Bombay and Madras occurred after 1860. With the passing of the Paper
Currency Act of 1861, the right of note issue of the presidency banks was
abolished and the Government of India assumed from 1 March 1862 the sole
power of issuing paper currency within British India. The task of management
and circulation of the new currency notes was conferred on the presidency
banks and the Government undertook to transfer the Treasury balances to the
banks at places where the banks would open branches. None of the three
banks had till then any branches (except the sole attempt and that too a shortlived one by the Bank of Bengal at Mirzapore in 1839) although the charters

32

had given them such authority. But as soon as the three presidency bands
were assured of the free use of government Treasury balances at places
where they would open branches, they embarked on branch expansion at a
rapid pace. By 1876, the branches, agencies and sub agencies of the three
presidency banks covered most of the major parts and many of the inland
trade centers in India. While the Bank of Bengal had eighteen branches
including its head office, seasonal branches and sub agencies, the Banks of
Bombay and Madras had fifteen each.

Bank of Madras Note Dated 1861 for Rs.10

33

Presidency Banks Act
The presidency Banks Act, which came into operation on 1 May 1876,
brought the three presidency banks under a common statute with similar
restrictions on business. The proprietary connection of the Government was,
however, terminated, though the banks continued to hold charge of the public
debt offices in the three presidency towns, and the custody of a part of the
government balances. The Act also stipulated the creation of Reserve
Treasuries at Calcutta, Bombay and Madras into which sums above the
specified minimum balances promised to the presidency banks at only their
head offices were to be lodged. The Government could lend to the presidency
banks from such Reserve Treasuries but the latter could look upon them more
as a favor than as a right

34

Bank of Madras

The decision of the Government to keep the surplus balances in Reserve
Treasuries outside the normal control of the presidency banks and the
connected decision not to guarantee minimum government balances at new
places where branches were to be opened effectively checked the growth of
new branches after 1876. The pace of expansion witnessed in the previous
decade fell sharply although, in the case of the Bank of Madras, it continued
on a modest scale as the profits of that bank were mainly derived from trade
dispersed among a number of port towns and inland centers of the
presidency.

35

Stamp of Imperial Bank of India Subsidiaries

The State Bank Group includes a network of eight banking subsidiaries and
several non-banking subsidiaries. Through the establishments, it offers
variousservices including merchant banking services, fund management, fact
oringservices, primary dealership in government securities, credit cards.
The eight banking subsidiaries are:
11.State Bank of Bikaner and Raipur (SBBJ)
12.State Bank of Hyderabad (SBH)
13.State Bank of India (SBI)
14.State Bank of Indore (SBIR)

37

15.State Bank of Mysore (SBM)
16.State Bank of Patiala (SBP)
17.State Bank of Saurashtra (SBS)
18.State Bank of Travancore (SBT)

Products Personal Banking:*SBI Term Deposits SBI Loan For Pensioners
*SBI Recurring Deposits Loan Against Mortgage Of Property
*SBI Housing Loan Loan Against Shares & Debentures
*SBI Car Loan Rent Plus Scheme
*SBI Educational Loan Midi-Plus Scheme
Other Services:*Agriculture/Rural Banking
*NRI Services
*ATM Services
*Demit Services

38

*Corporate Banking
*Internet Banking
*Mobile Banking
*International Banking
*Safe Deposit Locker

RBIEFT
*E-Pay
*E-Rail
*SBI Vishay Yare Foreign Travel Card
*Broking Services
*Gift Cherubs

39

NETWORK OF SBI BANK:SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves
theinternational needs of its foreign customers, in addition to conducting retail
operations. The focus of the offices of SBI is India-related business. Few of
the countries where SBI Bank has branches are as under:

*Australia
*Bahamas
*Bahrain
*Bangladesh
*Belgium
*Bhutan
*Canada
*France
*Germany
*Hong Kong
*Japan

40

*Maldives
*Mauritius
*Muscat
*Nepal
*Nigeria
*Oman
*Russia
*Singapore
*Sri Lanka
*South Africa
*UK
*USA

41

List

of

Directors

State

on

the

Bank

Central

Board

of

of
India

(As on 06th February, 2013)

Under Section of

Sr.
Name

Designation

No.

1

SBI Act 1955

Sheri Prate Chaudhuri

Sheri

Hemans

Chairman

19 (a)

G. Managing Director

2

19 (b)
Contractor

3

Sheri Diwakar Gupta

19 (b)

Managing Director

19 (b)

Director

A.

19 (b)

Managing Director

Sheri

Managing Director

19 (c)

Krishna

4
Kumar

5

Sheri S.Vishvanathan

Sheri
6

S.

Venkatachalam

42

Capital Structure (State Bank of India)

7

Sheri D. Sandarac

19 (c)

Director

Sheri

Director

19 (c)

Director

19 (c)

Parthasarathy

8
Iyengar

9

Sheri Thomas Mathew

Sheri

Jota

Bhushan Workmen Employee

10

19 (ca)
Mohapatra

Director

Officer
11

Sheri S.K. Mukherjee

Employee
19 (cb)

Director

12

Dr. Rajiv Kumar

Director

19 (d)

13

Sheri Deepak Amin

Director

19 (d)

Director

19 (d)

Director

19 (e)

Sheri

Harichandra

14
Bahadur Singh

15

Sheri Rajiv Takru

43

Period

Instrument Authorized Issued
Capital

Capital

(Rs. cr)

(Rs. cr)

-PAIDUP-

Shares

Face Capital

(nos)

From To

Value

Equity
2011 2012

5000

671.13

671044838 10

671.04

5000

635.08

634998991 10

635

1000

634.97

634882644 10

634.88

1000

634.97

634880222 10

634.88

1000

631.56

631470376 10

631.47

1000

526.3

526298878 10

526.3

Share

Equity
2010 2011
Share

Equity
2009 2010
Share

Equity
2008 2009
Share

Equity
2007 2008
Share

Equity
2006 2007
Share

44

Equity
2005 2006

1000

526.3

526298878 10

526.3

1000

526.3

526298878 10

526.3

1000

526.3

526298878 10

526.3

1000

526.3

526298878 10

526.3

1000

526.3

526298878 10

526.3

1000

526.3

526298878 10

526.3

1000

526.3

526298878 10

526.3

1000

526.3

526298878 10

526.3

Share

Equity
2004 2005
Share

Equity
2003 2004
Share

Equity
2002 2003
Share

Equity
2001 2002
Share

Equity
2000 2001
Share

Equity
1999 2000
Share

Equity
1996 2000
Share

45

Equity
1995 1996

1000

474.01

474009872 10

474.01

1000

474.01

474009189 10

474.01

1000

473.83

473828726 10

473.83

1000

200

20000000

200

Share

Equity
1994 1995
Share

Equity
1993 1994
Share

1991 1993 Equity
Share

46

100

Bank Overview

STATE BANK OF INDIA
Not only many financial institution in the world today can claim the antiquity
and majesty of the State Bank Of India founded nearly two centuries ago with
primarily intent of imparting stability to the money market, the bank from its
inception mobilized funds for supporting both the public credit of the
companies governments in the three presidencies of British India and the
private credit of the European and India merchants from about 1860s when
the Indian economy book a significant leap forward under the impulse of
quickened world communications and ingenious method of industrial and
agricultural production the Bank became intimately in valued in the financing
of practically and mining activity of the Sub- Continent Although large
European and Indian merchants and manufacturers were undoubtedly thee
principal beneficiaries, the small man never ignored loans as low as Rs.100
were disbursed in agricultural districts against glad Ornaments. Added to
these the bank till the creation of the Reserve Bank in 1935 carried out
numerous Central – Banking functions.

Adaptation world and the needs of the hour has been one of the strengths of
the Bank, In the post depression exe. For instance – when business
opportunities become extremely restricted, rules laid down in the book of
instructions were relined to ensure that good business did not go post. Yet
seldom did the bank contravenes its value as depart from sound banking

47

principles to retain as expand its business. An innovative array of office,
unknown to the world then, was devised in the form of branches, sub
branches, treasury pay office, pay office, sub pay office and out students to
exploit the opportunities of an expanding economy. New business strategy
was also evaded way back in 1937 to render the best banking service through
prompt and courteous attention to customers.

A highly efficient and experienced management functioning in a well defined
organizational structure did not take long to place the bank an executed
pedestal in the areas of business, profitability, internal discipline

and above all credibility A impeccable financial status consistent maintenance
of the lofty traditions if banking an observation of a high standard of integrity in
its operations helped the bank gain a pre- eminent status. No wonders the
administration for the bank was universal as key functionaries of India
successive finance minister of independent India Resource Bank of governors
and representatives of chamber of commercial showered economics on it.

Modern day management techniques were also very much evident in the
good old days years before corporate governance had become a puzzled the
banks bound functioned with a high degree of responsibility and concerns for
the shareholders. An unbroken records of profits and a fairly high rate of profit
and fairly high rate of dividend all through

48

ensured satisfaction, prudential management and asset liability management
not only protected the interests of the Bank but also ensured that the
obligations to customers were not met.

The traditions of the past continued to be upheld even to this day as the State
Bank years itself to meet the emerging challenges of the millennium.

49

ABOUT LOGO

THE PLACE TO SHARE THE NEWS ...……
SHARE THE VIEWS …

50

Togetherness is the theme of this corporate loge of SBI where the world of
banking services meet the ever changing customers needs and establishes a
link that is like a circle, it indicates complete services towards customers. The
logo also denotes a bank that it has prepared to do anything to go to any
lengths, for customers.

The blue pointer represent the philosophy of the bank that is always looking
for the growth and newer, more challenging, more promising direction. The
key hole indicates safety and security.

MISSION STATEMENT:

To retain the Bank’s position as premiere Indian Financial Service Group, with
world class standards and significant global committed to excellence in
customer, shareholder and employee satisfaction and to play a leading role in
expanding and diversifying financial service sectors while containing
emphasis on its development banking rule.

51

VISION STATEMENT:

Premier Indian Financial Service Group with prospective world-class
Standards of efficiency and professionalism and institutional values
Retain its position in the country as pioneers in Development banking.
Maximize the shareholders value through high-sustained earnings per
Share.
An institution with cultural mutual care and commitment, satisfying and
Good work environment and continues learning opportunities.

VALUES

Excellence in customer service
Profit orientation
Belonging commitment to Bank
Fairness in all dealings and relations
Risk taking and innovative
Team playing
Learning and renewal
Integrity

52

Transparency and Discipline in policies and systems.

53

Organization Structure

MANAGING DIRECTOR

CHIEF GENERAL MANAGER

G. M

G.M

(Operations)

G. M

G.M

(C&B)

(F&S)

(P&D)

Zonal off

Functional Heads

Regional officers

54

G.M

(I) & CVO

Objective of study

Primary: 1. Analysis and evaluation of customer s satisfaction with respect to loan
performance.
2. To determine the main characteristic which customers look upon while
taking

loan?

3. To determine the other bank those are competing with the same product
rang in loan.

Secondary: 1. Service level and channel associate approach.
2. To find the level of brand awareness.
3. To find out the company market share.

Scope of study
Special area to be focused for increasing the sales and for sales
promotion activities to be adopted.

56

To make product more innovative and easy to understand
For providing maximum satisfaction to the customer by knowing their
needs and requirement about product and services.

Steps to be taken at present for survival and facing the competition
with other equivalent product.

Continues improvement and for better management.

Maintaining good relation between manager and customer.

57

Research Methodology
Research as a mean of getting knowledge can be carried out either arbitrarily
or Ina systematic fashion. It is a purposive investigation. Research may be a
mean to know the small change and time forced upon us as individual or as a
society. Research as process involves defining the problem, formulating the
hypothesis, organizing and evaluating the data, deriving inference and
conclusion after careful testing.

Data Collection
As data is required for any research activity, it is collected (for those both the
Primary and Secondary) as follows:

Primary Data:
I have collected this data through questionnaire.

Secondary Data:
This data is collected from different sources available consolidated from book
publication reports, websites where used as a source of secondary data in
order to do this project and to collect necessary data.

59

Types of research:Descriptive research

Primary data collection
Through Questionnaire are filled by respondents.

Secondary data collection
Data collection through – Internet, Magazines.

60

DATA ANALYSIS
AND
INTERPRETATION

61

Sample size & Method of selecting sample
Sample size-: 100 respondents
Number of units banking with SBI and other banks:

Banks

Units

SBI

15

Private banks

03

Other nationalize banks

28

No response

54

private bank, 3

SBI, 15

NO response, 54

62

other
nationalize
bank, 28

How many take a credit facility to S.B.I. and other banks:

Banks

Units

Private banks

02

SBI

00


05

No credit facility

93

units
100
90

93

80
70
60
50
40

units

30
20
10

2

5

0

private banks

other natioalize
banks

sbi

0

63

no credit

Willing to take loan from S.B.I.:

YES

NO

10

90

yes, 10

NO, 90

64

Impression about sbi:

Excellent

17

Average

36

Good

43

Below average

04

No of units

50
40
30
20
10
Series 1

0
Excellent

Good

Average
Below Average
Impression

65

Feedback about S.B.I.:

Feedback

Percentage

Positive

25%

Negative

65%

No feedback

10%

No
feedback, 10%
positive, 25%

Negative, 65%

66

FINDINGS

80% customers prefer the other Bank when taking loan and only
20%customersprefer SBI Bank.
Family members are creating more effect on decisions regarding loan.
Interest rate is main factor consider by customers when taking loan
Most of the customer prefers the repayment of loan in higher duration.
Most of the customers consider the policies of bank regarding
personal loan
10 % customer’s give the higher rating to SBI Bank.
In HDFC and other Bank 70 % customers give the higher rating
Only governments employees are prefer the SBI Bank.
Similarly self-employed & businessman’s are prefer the HDFC Bank.
Low income class people face difficulty to taking loan

68

STRENGTH
•

BRAND NAME

•

MARKET LEADER

•

GOVERNMENT OWNED.

•

DIVERSIFIED PORTFOLIO

WEAKNESSES
•

LESS MODERNISATION

•

HIGHER NPA

•

CUSTOMER

HAVE

NOT

FULLINFORMATION

GETTINGFACILITIES

OPPURTUNITIES
•

HIGH APPROCH OF ATM

•

2000 BRANCHES COMING ONVARIOUS LOCATION

•

MERGED WITH ASSOCITEDBANK

70

ABOUT

THREAT
•

EMPLOYEE STRIKE

•

OTHER NATIONALIZED BANKAND PRIVATE BANKS

•

ADVENT OF MNC BANK

71

Strengths:Brand Name:SBI Bank has earned a reputation in the market over the period of
time(Being the oldest bank in India tracing history back to 1806

Market Leader
SBI is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in
2008Forbes Global 2000. With an asset base of $126 billion and its
reach, it is a regional banking behemoth. Wide Distribution Network:
Excellent penetration in the country with more than 10000 core
branches and more than 5100 branches of associate banks
(subsidiaries).
Diversified Portfolio
SBI Bank has all the products under its belt, which help it to extend the
relationship with existing customer’s Bank has umbrella of products to
offer their customers, if once customer has relationship with the bank.
Some Products, which SBI Bank is offering are: Retail Banking
Business Banking Merchant Establishment Services (EDC Machine)
Personal loans & Car loans Insurance Housing Loans

72

Government Owned
Government owns more than 60% stake in SBI. This gives SBI an
edge over private banks in terms of customer security. Low Transition
Costs-SBI offers very low transition costs which attracts small
customers.

Weaknesses:The existing hierarchical management structure of the bank, although
strength in some respects, is a barrier to change.
Though SBI cards are the 2nd largest player in the credit card
industry, it has the highest non-performing assets (NPAs) in the
industry, which stand out to be at 16.28 % (Dec 2007).

Modernization: SBI lags with respect to private players in terms of
modernization of its processes, infrastructure, centralization, etc.

73

Opportunities:Merger of associate banks with SBI: Merger of all the associate banks
(likes, SBM, etc.) into SBI will create a mega bank which streamlines
operations and unlocks value.
Planning to add 2000 branches and 3000 ATMs in 2013-2014. This
will further increase its reach.
Increasing trade and business relations and a large number of
expatriate populations offers a great opportunity to expand on foreign
soil.

Threats:Advent of MNC banks: Large numbers of MNC banks are
mushrooming in the Indian market due to the friendly policies adopted
by the government. This can increase the level of competition and
prove a potential threat for the market share of SBI bank.
Consumer expectations have increased many folds in last few years
and the bank has not been responsive enough to meet them on time.

74

Private banks have started venturing into the rural and semi-urban
sector, which used to be the bastion of the State Bank and other PSU
banks
Employee Strike: There was an employee strike in the year 2006 which
disrupted SBI’s activities. This can be repeated in the future

75

RECOMMENDATIONS
AND
SUGGESTIONS

76

Suggestions:
•

Recruit new employee.

•

Increase the branches and ATMs.

•

We would like to enhance advertisements among society.

•

Customer satisfaction should be bank’s motto.

77

Limitations of the study
•

The study was limited only LUCKNOW (up).

•

Many formalities and requirements during process of taking loan.

•

Many times respondents were so busy that they didn’t t give reply.
There were biased replies also.

•

Study was based on the opinion of the customer

•

Time and other factor

79

Duration of the Study:60 day from
14TH JUNE TO 14TH AUGUST

80

CONCLUSION

The study at SBI gave a vast learning experience to me and has helped to
enhance my knowledge. During the study I learnt how the theoretical financial
analysis aspects are used in practice during the working capital finance
assessment. I have realized during my project that a credit analyst must own
multi-disciplinary talents like financial, technical as well as legal know-how.

The credit appraisal for working capital finance system has been devised in a
systematic way. There are clear guidelines on how the credit analyst or
lending officer has to analyze a loan proposal. It includes phase-wise analysis
which consists of 4 phases:

1.

Financial statement analysis

2.

Credit risk assessment

3.

Documentation

4.

Loan administration

State Bank of India’s adoptions of the Projected Balance Sheet method of
assessment procedures are based on sound principles of lending. This
method of assessment has certain flexibility required to avoid any rigid
approach to fixing quantum of finance. It is superior and more rational

82

compared to the Turnover Method; Cash Budget Method of assessment .It
also facilitates the Bank to carry on follow up procedures. The PBS method
have been rationalized and simplified to facilitate complete flexibility in
decision-making.

To ensure asset quality , proper risk assessment right at the beginning , is
extremely important. That is why Credit Risk Assessment system is an
essential ingredient of the Credit Appraisal exercise. The SBI was the first to
formulate a Credit Risk Assessment model. It considers important parameters
like profitability, repayment capacity, efficiency of the unit , historical / industry
comparisons etc… which were not factored in other models. It is equally
efficient as the SIDBI’s CART (Credit Assessment and Rating Tool) model.

83

ANNEXURE

Survey report

Name of unit/firm…………………………………………………………………
Address of the unit…………………………………………………………………
Mobile No…………………………………………………………………………..
Typeof business……………………………………………………………………..

Banking with
•

S.B.I

•

Private Banks

•


•

NO response

85

Take a credit facility to S.B.I. and other banks:
•

Private Banks

•

Other nationalizes banks

•

S.B.I.

•

No credit facility

Type of credit facility:
•

Cash credit

•

Term loan

Willing to take loan from S.B.I.:
•

Yes

•

No

86

Impression about sbi:
Excellent
Good
Average
Below Average

Feedback about S.B.I.:
•

Positive

•

Negative

•

No Feedback

87

BIBLIOGRAPHY
•

http://www.statebankofindia.com/

•

http://www.banknetindia.com/

•

G.Subramanium ,SBI group Banking Guide, Twelfth edition,

89

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