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INTRODUCTION

The word bank it derived from the word bancus or banque that is French.

There was other of the opinion that the word bank is originally derived from the German word

back meaning oint for which was !taliani"ed into banco. #ut whatever be the origin of the

word bank as $rof. %ramchandra %ao says.& !t would trace the history of banking in 'urope from

middle ages.&

General ly( banks do the bus iness of money they take deposi ts of moneys f rom

client and give loan to the person who has need of money. #ut in this age( for the

convenience of customer( banks provides some other services to their customer

such as bankers cheque( overdraft ( internet banking( )T* facil i ty( paying of

bills( credit card( telegraphic transfer( insurance( demat etc.

For a people( i t i s di f f icul t to keep a very big amount of money in his house

safely. +o( people save their money to bank. #ank gives loan to the person who

has need of money and gets higher interest on i t than the interest of deposit . The

margin between the interest of loan and interest of deposit is the income of bank.

,


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EARLY HISTORY OF BANKING

)s early as ,--- #.. the #abylonians had developed a banking system. There is

evidence to show the temples of #abylon were used as banks. )fter a period oft ime( there was a spread of irrel igion( which soon destroyed the public sense of

securi ty in deposit ing money and valuable in temples. The priests were longer

act ing as f inancial agents . The %omans did minute regulat ions ( as to conduct

private banking and to create confidence in it. /oan banks were also common in

%ome. From these the poor c it i"ens r eceived loans without paying interes t(

against security of land for 0 or years.

2uring the ear ly per iods( al though pr ivate individual most ly did the banking

business( many countries established public banks either for the purpose of

facilitating commerce or to serve the government.

3owever( upon the revival of civi l i"at ion( growing necessity forced the issued in

the middle of the 1, t h century and banks were established at 4enice and Genoa.

The #ank of 4enice established in 1156 is supposed to be the most ancient bank.

7riginally( it was not a bank in the modern sense( during simply an office for the

transfer of the public debt.

!n !ndia( as early as the 4edic $eriod( banking( in most crude from e8isted. The

books of *anu contain references regarding deposits( pledges( policy of loans(

and rate of interest . True( the banking in those days largely mint money lending

and they did not know the complicated mechanism of modern banking.

This is t rue not only in the case of !ndia but also of other countries. )lthough(

the business of banking is as old as authentic history( banking inst i tut ions have

since than changed in character and content very much. They are developed from

a few simple operations involving the sat isfaction of a few individual wants to

the compl icated mechanism of modern banking( involving the sati s faction of

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The #anking ompany )ct es tablishes i t in Auly 1=>= by nat ionali"ation of 1

maor banks of !ndia. The sent percent ownership of the bank is of government of

!ndia.

STATE BANK GROUP

The +tate #ank of !ndia was established under

the +tate #ank of !ndia )ct( 1=55( the subsidiary

banks under the +tate #ank of !ndia 9subsidiary

#anks: )ct 1=5=. The %eserve #ank of !ndia

owns the +tate #ank of !ndia( to a large e8tent(

and rest of the part is some private ownership in

the share capital of +tate #ank of !ndia. The +tate

#ank of !ndia owns the subsidiary #anks.

OLD PRIVATE BANK

These banks are registered under ompany )ct( 1=5>. #asic 2ifference

between co


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services. This is also registered under the ompany )ct. 1=5>. #etween old and new private

sector bank( there is wide difference.

FOREIGN BANKS

Foreign #ank means multi


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STATUS WISE BIFURCATION OF BANKS

They are divided into two groups@

+cheduled #anks

;on +cheduled #anks

SCHEDULED BANKS

!n first schedule( government of !ndia notifies the $rimary #anks( which are licensed and whose

demand and time liability are not less than 5- crores in 1=B6.

Government of !ndia notify the $rimary banks( which are licensed and whose demand and time

liability are not less than 1--crores can only qualify to be included in the second schedule since

1==0.

) bank becomes scheduled when it fulfils the followings@

) grade rating from %#!

2emand and Time /iability over 1--crores.

+atisfy the %#! guidelines related to %% and +/%

)s per the norms $riori ty +ector wise landing benefi ts of being a +cheduled

co


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The conferment of scheduled status on the banks has certain advantages like refinance facility(

directly industrial finance from %eserve #ank of !ndia. )vail of %eserve #ank of !ndia

%emittance facility scheme( accept deposits from local bodies( quasi


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=


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$a%&' chan(e "n )he c&nd")"&n!

) maor change in the conditions of operation of the #anks of #engal( #ombay and *adras

occurred after 1B>-. ?ith the passing of the $aper urrency )ct of 1B>1( the right of note issue of

the presidency banks was abolished and the Government of !ndia assumed from 1 *arch 1B>, the

sole power of issuing paper currency within #ritish !ndia. 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.

;one of the three banks had till then any branches 9e8cept the sole attempt and that too a short( brought the threepresidency 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 )ct also stipulated the creation of %eserve Treasuries at alcutta(

#ombay and *adras 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 %eserve Treasuries but the latter could look upon them more as a

favour than as a right.

Ban &* $ad'a!

The decision of the Government to keep the surplus balances in %eserve 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 1B6>. The pace of e8pansion witnessed in the previous decade fell

sharply although( in the case of the #ank of *adras( 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

centres of the presidency.

!ndia witnessed rapid commercialisation in the last quarter of the nineteenth century as its railway

11


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network e8panded to cover all the maor regions of the country. ;ew irrigation networks in

*adras( $unab and +ind accelerated the process of conversion of subsistence crops into cash

crops( a portion of which found its way into the foreign markets. Tea and coffee plantations

transformed large areas

of the eastern Terais( the hills of )ssam and the ;ilgiris into regions of estate agriculture par

e8cellence. )ll these resulted in the e8pansion of !ndiaDs international trade more than si8


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P'e!"denc0 Ban! &* Ben(al

The $residency #anks of #engal( #ombay and *adras with their 6- branches were merged in

1=,1 to form the !mperial #ank of !ndia. The triad had been transformed into a monolith and a

giant among !ndian commercial banks had emerged. The new bank took on the triple role of acommercial bank( a bankerDs bank and a banker to the government.

#ut this creation was preceded by years of deliberations on the need for a D+tate #ank of !ndiaD.

?hat eventually emerged was a Dhalf


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restrictions on its business were removed and the bank was permitted to undertake

foreie8changing business and e8ecutor and trustee business for the first time.

I12e'"al Ban

The !mperial #ank during the three and a half decades of its e8istence recorded an impressive

growth in terms of offices( reserves( deposits( investments and advances( the increases in some

cases amounting to more than si8


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S)a12 &* I12e'"al Ban &* Ind"a

?hen !ndia attained freedom( the !mperial #ank had a capital base 9including reserves: of

%s.11.B5 crores( deposits and advances of %s.,65.1 crores and %s.6,.= crores respectively and a

network of 16, branches and more than ,-- sub offices e8tending all over the country.

F"'!) F"3e Yea' Plan

!n 1=51( when the First Five Eear $lan was launched( the development of rural !ndia was given

the highest priority. The commercial banks of the country including the !mperial #ank of !ndia

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. !n order( therefore( to serve the

economy in general and the rural sector in particular( the )ll !ndia %ural redit +urvey

ommittee recommended the creation of a state


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The #ank is actively involved since 1=60 in non


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and Govt. ta8( 'lectronic #ill $ayment( +*+ )lerts( '


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WAN 6 The bank has set up a ?ide )rea ;etwork( known as +#! connect( which provides

connectivity to B1= branchesJoffices of +#! Group across 0B5 cities as at 01st *arch ,--B. This

network provides across the board benefits by providing nationwide connectivity for its business

applications

D"'ec)&'! &n )he Ban7! Cen)'al B&a'd

a! &n 8+!) Dece1be' 9//,

#7)%2 7F 2!%'T7%+

Cen)'al B&a'd O* S)a)e Ban O* Ind"a 4A! &n +!) A2'"l 9//,5

Sl.N&. Na1e &* D"'ec)&' Sec. &* SBI Ac): +;. $rof. *ohd. +alahuddin )nsari 1=9d:

6. 2r.9*rs.: 4asantha #harucha 1=9d:

B. +hri )run %amanathan 1=9e:

=. +mt. +hyamala Gopinath 1=9f:

ASSOCIATE BANKS

1B


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S)a)e Ban &* Ind"ahas the following seven )ssociate #anks 9)#s: with controlling interest

ranging from 65C to 1--C.

1. +tate #ank of #ikaner and Aaipur 9+##A:

,. +tate #ank of 3yderabad 9+#3:

0. +tate #ank of !ndore 9+#!r:

. +tate #ank of *ysore 9+#*:

5. +tate #ank of $atiala 9+#$:

>. +tate #ank of +aurashtra 9+#+:

6. +tate #ank of Travancore 9+#T:

)s on 01stmarch( ,--B the financial information of +tate bank of !ndia is given as under

F"nanc"al De)a"l! RS 4"n c'&'e5

Ca2")al -8+.=>

B&''&?"n(! 9>.=+

De2&!")! :=/8.;=

In3e!)1en)! +:,;:8/+.9>

Ad3ance! =:+-:>-,.+;

P'&*") -:>9;.


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Gene'al Sha'eh&lde' In*&'1a)"&n

;umber of shareholders as on 0-.=.,-- was 5.>1 lacs. The shareholding pattern was as under.

SHARE HOLDERSSHARE HOLDERS PERCENTAGESPERCENTAGES

Reserve Bank of India 59.73 %

Non-residents (FIIs, OCBs, NRIs) 19.83 %

Banks, FIs including insurance companies 6.21 %

Mutual funds!"I 6.47 %

#omestic companiesprivate corporate $odiestrusts 1.79 %

Resident individuals 5.97 %

,-


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59.73%19.83%

6.21%

6.47%1.79%5.97%

Reserve Bank of IndiaNon-residents (FIIs !"Bs NRIs#Banks FIs in$&din' ins&ran$e $o)anies*&t&a f&nds+,Ioesti$ $o)anies+)rivate $or)orate /odies+tr&stsResident individ&as

MISSIONMISSION

To retain the Banks Position as the Premier Indian Financial ServicesGroup, with world class standards and significant Global business,committed to ecellence in customer, shareholder and emplo!eesatisfaction and to pla! a leading role in the epanding and diversif!ingfinancial services sector while continuing emphasis, on its developmentbanking role"

DR. KALA$ TALKS ABOUT SBI PLAN AND $ISSON

,1


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'? 2'/3! @ $resident ).$.A. )bdul Halam on Tuesday chalked out a seven


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,0

SBI ranked )thin the*cono%ics

Ti%es Market+ap (ist #up$ro% '0 lastyear&

SBI ranked )thin the*cono%ics

Ti%es Market+ap (ist #up$ro% '0 lastyear&

Today SBI,SBI+-. is theNo/1syndicator o$

do%estic debtin AsiaPaciicREGION.

Today SBI,SBI+-. is theNo/1syndicator o$do%estic debtin AsiaPaciicREGION.

No/1 in%ergers -cuisition

2eals #312eals o$ 4S 516/bn&

.

No/1 in%ergers -cuisition2eals #312eals o$ 4S 516/bn&

.

S!I is No 1"ro#i$er oAGRIFinance an$No% 1 inCre$itLin&in' oRs (%)* lacs

SHGS

S!I is No 1"ro#i$er oAGRIFinance an$No% 1 inCre$itLin&in' oRs (%)* lacs

SHGS

SBI is %arket(eader in$inancingSSIs 8ith a%arket shareo$ "69

SBI is %arket(eader in$inancingSSIs 8ith a%arket shareo$ "69

Rea$ers$i'est +a,. Gol$enA/ar$ orbein'a0on' tet/o 0ost

truste$ban&s in

Rea$ers$i'est +a,. Gol$enA/ar$ orbein'a0on' tet/o 0ost

truste$ban&s in


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,

p gradation of

ratings by citi

groupJ *organ

+tanley

*oodyss +$

p gradation of

ratings by citi

groupJ *organ

+tanley

*oodyss +$

0rd in the

Ec&n&1"c

T"1e! brand

'quity %anking

Top 5- most

trusted service

brands in the

service sector

0rd in the

Ec&n&1"c

T"1e! brand

'quity %anking

Top 5- most

trusted servicebrands in the

service sector

Bu!"ne!!

S)anda'd ha!

A?a'ded the

#est #anker of

the Eear )ward

to +hri7.$.#hatt for his

initiative to

reenergi"e the

#ank

Bu!"ne!!

S)anda'd ha!

A?a'ded the

#est #anker of

the Eear )ward

to +hri7.$.#hatt for his

initiative to

reenergi"e the

#ank

CNN I!Nnet8ork 1 hasselected shri/O/./Bhatt asIndian o$ the

:ear Business"007 $or sho8ingho8 a publicsector behe%othcan $le; its%uscle in the$erociouslyco%petitiveBanking sector

CNN I!Nnet8ork 1 hasselected shri/O/./Bhatt asIndian o$ the

:ear Business"007 $or sho8ingho8 a publicsector behe%othcan $le; its%uscle in the$erociouslyco%petitiveBanking sector

Asian centre forcorporateGovernance &Sustainability and

Indian MerchantsChamber hasawarded theTransformationalLeader Award 2!to Shri "#$#%hattfor leadershipcharismainspiration andintellectualsti0ulation or te

Asian centre forcorporateGovernance &Sustainability andIndian Merchants

Chamber hasawarded theTransformationalLeader Award 2!to Shri "#$#%hattfor leadershipcharismainspiration andintellectual

sti0ulation or teentire S!I tea0


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ORGNISATION STRUCTURE

+


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2M2> 2*.4T: M-N-?IN? ++O> + + +O=* B-NAIN?

O@@I+*=NB> NON B-NAIN? IB> INT*=N-TION-( B-NAIN?

$AOR CO$PETITOR

,>

D$D @ CCO

D$D @ CFO

D$D @ CDOD$D CORPORATE

STRATEGY @ NEW

BUSINESS

D$D 4IT5CHIF ECONO$ICADVISOR

CVO

D$D RURAL @ AGRIBUSINESS GROUP

$D @ GE

4CB5

$D @ GE

4NB5D$D @ GE

4TRESASURY

@ $ARKETS

D$D @ GE

4ASSOCIATES

@ +#+!2!)%!'+

D$D 4I @ $A5

4L&ca)ed a) H0de'abad5


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+tate bank of !ndia has been facing great rivalry and maor competition with other public sector

banks and some of private commercial banks. +tate bank of !ndia has many banks as art rival.

+ome of its art rival.

L"!) &* 1a%&' c&12e)")&'! &* SBI

I. !!! #ank

II. #ank of #aroda

III. anara #ank

IV. $unab ;ational #ank

V. #ank of !ndia

VI. nion #ank of !ndia

VII. entral #ank of !ndia

VIII. 32F #ank

I. 7riental #ank of ommerce.

3ere especially some of the public sector and private sector banks are giving hardcore

competition to the state bank of !ndia. +o let us have some of the best banks which is also

mentioned above and mentioned below in detail.

ICICI BANK

!!! bank stands for !ndustrial redit and !nvestment orporation of !ndia. This !!!bank is one of the heavyweight banks of private sector of !ndia. !t is providing the core

competition to the state bank of !ndia. 'specially in lending money( !nvestment.

#ut in profit making state bank of !ndia is standing ahead. )nd when and where social

responsibility of concern state bank of !ndia is heading high than any other banks in !ndia

,6


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HDFC BANK

32F stands for 3ousing 2evelopment and Finance orporation ltd. This is also one of

the leading banks of !ndia in private sector. This bank is also providing hardcore

competition to all the banks as well as state bank of !ndia

#ut we mention earlier that state bank of !ndia is ahead in banking !ndia. +o 32F bank

has to work hard to reach at the milestone achieved by state bank of !ndia.

BANK OF BARODA

#ank of #aroda is also one of the leading public sector banks in !ndia. #ank of #aroda isknown as #7#. This $+ bank is also providing the tough competition to all other banks

in !ndia. The #7# bank is very renowned banks of !ndia today. !t is very changed and

very professionally working public sector banks

#7# has got professional in recent time so. !t has to work very hard to achieve position

and reputation which are achieved by +tate +ank of !ndia.

,B


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MARKET SHARE

31%

3%3%

3%4%5%5%6%7%

10%

23%

-- BN !F

IN.I

.F" BN

,"! BN

"N-R BN !F

IN.I

,NI!N BN !F

IN.I

BN !F BR!.

BN !F IN.I

$ARKET SHARE IN DEPOSITES AND ADVANCES

#$%&'F

B$#(

%$)(&T S*$)& I# +&'PSITS $#+$+$#-&S ./0

ST$T& B$#( 'F I#+I$ 12"13 /

*+F- B$#( 1"24 /

5-' B$#( 1"26/

-T)$ B$#( 'F I#+I$ 1"76 /

5#I'# B$#( 'F I#+I$ 7"31 /

B$#( 'F B$)'+$ 6"42 /

B$#( 'F I#+I$ 6"38 /

P5#9$B #$TI'#$: B$#( ;"76 /

-$#$)$ B$#( ;"64 /

I-I-I B$#( 42"11 /

'T*&) B$#(S 33"3< /

T'T$: 422/

,=


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$AIN PRODUCT OF SBI

HOUSING LOAN6

3ome is where the heart isL )t +#!( we understand this better than most M the toil and sweat that goes into

buildingJ buying a house and the subsequent pride and oy of owning one. This is why our 3ousing loan

schemes are designed to make it simple for you to make a choice at least as far as financing goesL

El"("b"l")0

*inimum age ,1 years as on the date of sanction

+teady source of income

L&an A1&un)

)pplicantJ any one of the applicants are aged over ,1 years and upto 5 years M >- times ;et *onthly

!ncome 9;*!: or 5 times ;et )nnual !ncome 9;)!:( subect to aggregate repayment obligations not

'8ceeding 56.5-C of ;*!J ;)!

)pplicant9s: aged over 5 years of age M B times ;*! or times ;)!( subect to aggregate

repayment obligations not e8ceeding 5-Cof ;*!J ;)!

$a'("n

$urchaseJ onstruction of a new 3ouseJ FlatJ $lot of land@ 15C

$urchase of an e8isting 3ouseJ Flat@ 15C

%epairsJ %enovation of an e8isting 3ouseJ Flat@ ,-C

0-


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HOUSING LOAN INTEREST RATES6

In)e'e!) 'a)e!

Fl&a)"n( "n)e'e!) 'a)e! 4l"ned )& S)a)e Ban Ad3ance Ra)e SBAR56

4SBAR6 +9.>


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*ove ahead in life with +#! ar /oansL !f you have been putting off purchasing that car( we invite you to

go through our ar /oans scheme.

/ow interest rates( easy repayment options( total transparency( /ow processing charges( finance to include

vehicle registration charges( insurance and one time road ta8.

?ell( what are you waiting forN Aust step in to any of our branches 9more than >---: that offer ar /oans

or our $ersonal #anking #ranches and give wheels to your desireL

Eou can apply for an +#! ar /oan to purchase@ ) new car( eep( *ulti tility 4ehicle 9*4: or +4 9any make or model:

)n old car J eep J *4 J+4 9not more than 5 years old:. 9any make or model:

El"("b"l")0

To avail an +#! ar /oan( you should be

!ndividual between the age of ,15 years of age.

) $ermanent employee of +tateJentral Government( $ublic +ector ndertaking(

$rivate company or a reputed establishment

) $rofessionals or self


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%epayment period for old vehicles@ p to B months from the date of original purchase of the vehicle.

SCHE$E FOR LOAN FOR TWO WHEELERS

E"!)"n( In)e'e!) Ra)eS)'uc)u'e ?.e.*. 8+./8.9//,

Re3"!ed In)e'e!) Ra)eS)'uc)u'e ?.e.*. 9>./-.9//,

Fl&a)"n( Ra)e &* In)e'e!) 1,.,5C p.a. 1,.65C p.a.

F"ed Ra)e &* In)e'e!) 1,.5-C p.a. 10.--C p.a.

NOTE6 All )he!e "n)e'e!) 'a)e! a'e !ub%ec) )& chan(e: ?")h&u) n&)"ce .

The 'e3"!ed "n)e'e!) 'a)e! a'e a22l"cable &nl0 &n *'e!h de2&!")! and 'ene?al &* 1a)u'"n( de2&!")!.

EDUCATION LOAN6

) term loan granted to !ndian ;ationals for pursuing higher education in !ndia or abroad where admission

has been secured.

El"("ble C&u'!e!

)ll courses having employment prospects are eligible.

Graduation coursesJ $ost graduation coursesJ $rofessional courses

7ther courses approved by GJGovernmentJ)!T' etc.

A1&un) &* L&an

For studies in !ndia( ma8imum %s. 1- lacs

+tudies abroad( ma8imum %s. ,- lacs

In)e'e!) Ra)e

For loans upto %s. lakh 1-.5-C p.a.

For loans above %s. lakh 11.5-C p.a.

Re2a01en) Tenu'e

%epayment will commence one year after completion of course or > months after securing a ob( whichever i

earlier.

00


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HU$AN RESOURCES

4+5 Lea'n"n( @ De3el&21en)

#ank has taken up several key initiatives to motivate and retain its manpower. !n order to

channeli"e the energy created by the $arivartan campaign( the #ank has launched a /andmark

e8ercise for creation of the new 4ision *ission 4alues statement which will be in placeshortly. Eoung officers are being encouraged to take


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#ank( to reward eligible employees as also to encourage equity ownership by them. The price wasfi8ed at %s.15=-J< 9the face value of 1 share is %s.1-J


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CHAPTER-2

RE3IE4

OFLITERATURE

06


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%eview of literature helps a researcher to get acquainted with hisJher selected research problem

and also may provide some guidelines in selecting a proper research methodology. !t is also

helpful in finding out the research gaps in the e8isting literature. This will help the researcher in

fine


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The reduction in private mortgage insurance requirements on high loan to value

mortgages.

The increasing use of software to streamline the origination process and modify J

recast delinquent loans in order to keep them classified as Kcurrent&.

hanges in the appraisal process which has led to widespread over appraisal J

overvaluation problems.

!f these trends remain in place( it is likely that the home purchase boom of the past decade will

continue unabated. 2espite the increasingly more difficult economic

environment( it may be possible for lenders to further ease credit standards and more fully e8ploit

less penetrated markets. %ecently( targeted populations that have historically been denied

homeownership opportunities have offered the mortgage industry novel hurdles to overcome.

!ndustry participants in combination with eased regulatory standards and the support of the G+'s

9Government +ponsored 'nterprises: have overcome many of them. !f there is an economic

disruption that causes a marked rise in unemployment( the negative impact on the housing marketcould be quite large. These impacts come in several forms. They include a reduction in the

demand for homeownership( a decline in real estate prices and increased foreclosure e8penses.

These impacts would be e8acerbated by the increasing debt burden of the .+. consumer and the

reduction of home equity available in the home. )lthough we have yet to see any materially

negative consequences of the rela8ation of credit standards( we believe the risk of credit

rela8ation and leverage cant be ignored. !mportantly( a relatively new method

of loan forgiveness can temporarily alter the perception of credit health in the housing sector. !n

an effort to keep homeowners in the home and reduce foreclosure e8penses( holders of mortgage

assets are currently recasting or modifying troubled loans. +uch policy initiatives may for a time

distort the relevancy of delinquency and foreclosure statistics. 3owever( a protracted housingslowdown could eventually cause modifications to become uneconomic and( thus( credit quality

statistics would likely become relevant once again. The virtuous circle of increasing

homeownership due to greater leverage has the potential to become a vicious cycle of lower home

prices due to an accelerating rate of foreclosures.

A 'e!ea'ch a')"cle en)")led H&1e O?ne'!h"2 R"! Be0&nd a Sub2'"1e C'"!"!6 The R&le &*

Del"nuenc0 $ana(e1en)J b0 ac& $el"!!a B. 49//95

+he concluded that public investment in and promotion of homeownership and

the home mortgage market often relies on three ustifications to supplement shelter goals@ to build

household wealth and economic self


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hinges in part. 7n the conditions under which homeownership is obtained( maintained( leveraged(

and in some situations

e8ited. Given that high leverage or trigger events such as ob loss and medical problems play

significant roles in mortgage delinquency independent of loan terms( better origination practices

cannot eliminate the need for delinquency management. !n terms of analy"ing this framework( it

is tempting to focus on its impact on mortgage credit cost and access or on the absolute number of

homes temporarily saved( but her proposed analysis is based on whether the system honors and

furthers the goals of wealth building( positive social psychological states( and community

development. #ecause those ends are not ine8orably linked to ownership generally or owning a

particular home( a system of delinquency management that honors these obectives should strive

to provide fair( transparent( humane( and predictable strategies for home e8it as well as for home

retention.

A 'e!ea'ch a')"cle en)")led H&u!"n( P'&ble1 and Publ"c Ac)"&n6 C&n)"nued

Inc&12a)"b"l")0 E2e'"ence *'&1 a S&u)h Ind"an S)a)eJ b0 $. $ahade3a 49//=5.!n this article( the author has analysed the nature and distribution of the housing

problem in Harnataka and e8amined how the state has addressed this issue. !n particular( it

considers the strategies adopted during the =-s and identifies a number of failures including the

task force on housing. +ome of the maor weaknesses( pertaining to incidence by type and by

rural


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-*$PT&)=1

)&S&$)-*

%&T*'+':'G>1


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)&S&$)-* +&SIG#

7ne of the scienti fi c pr inc ip les of modern management i s p lanning( and i f

someone wants to conduct a research proect effectively and eff iciently( then he

has to plan the whole research process . This research plan is the argon of the

researcher ( i s cal led a r esearch design . The word des ign means to prepare a

preliminary sketch or to plan for work to be e8ecuted( and research design would

mean to prepare a plan to e8ecute a research repor t . ! have done my research

proect mainly used e2l&'a)&'0 'e!ea'ch !)ud"e! .

&plorator! research studies : - *eans are also termed as formulat ive

research s tudies. The main purpose of such s tudies i s tha t of formula ting a

problem for more precise investigation or of developing the working hypotheses

f rom an operat ional point of view. The maor emphasis in such s tudies i s on

discovery of ideas and insights . )s such the research design appropriate for such

studies must be f le8ible enough to provide opportunity for considering different

aspects of the problem under study.

,


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SA$PLING DESIGN

SA$PLING UNIT6 The research work is in +asaram and sample would include the

employees of STATE BANK OF INDIA.

This may include the recruiter( trainers and the candidates that are interviewed at STATE BANK

OF INDIA.

SA$PLING SIE6 +ince it would not be possible to study whole of the universe( i.e. the

people who are using these products( in this research proect so ! will be taking the !a12le

!"e &* ,/ "nd"3"dual! CUSTO$ERSwhich would be representing the entire universe or

population.

SA$PLING TECHNIMUE6 The sampling method is c&n3en"ence ".e. n&n#2'&bab"l")0

)echn"ue!of sampling and anybody who uses these products respective places.

0


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Re!ea'ch &b%ec)"3e!

+ummer !nternship $roect gives a practical e8posure and helps in acquiring the on road skills.

First and foremost obective is to find out the reasons for using of )dvance $roduct from

+#!.

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 ! 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 +#! )dvance $roduct ahead of the competitors.

To find out the customer awareness on booming )dvance $roduct 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 +#!

)dvance $roduct.


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5


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S"(n"*"cance and !c&2e

The geographical scope of the study is restricted to #hubaneswar only with sample si"e of ,---

people.

)ll 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@


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C&llec)"&n &* da)a

DATA COLLECTION

#oth the primary and secondary will be the sources of data collection but in this study the data

was collected mainly through primary sources. !n primary sources and +econdary sources we

include@

COLLECTION OF DATA

P'"1a'0 S&u'ce Sec&nda'0 S&u'ce

In)e'3"e? Mue!)"&nna"'e C&12an0! %&u'nal B&&!

4"5 P'"1a'0 Da)a6 ! had used Questionnaire and survey as primary data.

4""5 Sec&nda'0 Da)a@ ! also collected data from internet( maga"ines( ;ewspaper as secondary

sources.

BOOKSBOOKS

Dha'n" !"nha SBI Se'3"ce cu!)&1e':U2a' 2ubl"ca)"&n

NEWSPAPER6 ECONO$IC TI$E

In)e'ne) P&')al!6

???.!b".c&1:

???.?""2ed"a.c&1

???.!e'3"ce*"n.c&1

6
http://www.servicefin.com/http://www.servicefin.com/http://www.servicefin.com/http://www.servicefin.com/http://www.servicefin.com/http://www.servicefin.com/http://www.servicefin.com/


48/69

In*&'1a)"&n &* C&llec)"n( )he Da)a

2etail of #orrower

%eason of 2ue amount

%eason for become ;$)s

ommitment of #orrowers

tilisation of Fund

)wareness of /oan

2etail of /oan

?e personally contact to each and every defaulter and collect the whole data which mention herefor more information we attach Questionnaire here.

ollection of data is the essential part of the research. )s possible as we collect the more data(view of customer( their opinion their problem and analysis those things and try give them better

satisfaction bank as well as customer.

2ata collect and bifurcate in different category as per their loan( which ! mentioned earlier( 3omeloan( $ersonal /oan( 'ducation /oan( 4ehicle /oan and +#F.

B


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CHAPTER#=

ANALYSIS

@

INTERPRETATION

=


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ANALYSIS @FINDINGS

For our +ummer $roect we got permission in %)+*' 2epartment of +tate #ank of !ndia(

%akot. 7ur department is a $rocess department. #ut our main work is to +urvey and %ecovery

the ;$)s.

This is a 3ead 7ffice and they provide us 2ata of ;$)s account. +tate #ank of !ndia have a >#ranch in %akot. ?e got a ombine data of whole branch

S" B'anch

4ikramgang.

+hivsagar

*arketing Eard

ommercial #ranch

*ain #ranch /akhai %a

Ou' Su'3e0 &n P# Se(1en) &* L&an

'ducation /oan

$ersonal /oan

3ome /oan

ar /oan

Gold /oan

I have provided near about 250 Account but only 150 NPAs account person can cover and their list areunder.

5-


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d& oan

29 19%

5o(e oan

48 32%

6er.oan

44 29%

e:i$es

oan 17

11%

BF 13 9%

d& oan 5o(e oan 6er.oan e:i$es oan BF

#o"'fBorrowers

&du":oan *ome :oan Personal:oan

ehicle :oan SBF

151 29 4 44 1! 1"

LOAN PROFILES

#ere$ As per above chart i% &e see that &e %ind that #o'e loan havin( 'ore )e%aulter. No. o% *orro&er in

*ome :oanis 78 and Percenta(e is 13 /.

$mount of :oan

#o"'f Borrowers Total $mount 'f:oan

Total $mount of '?S )ecover!

151 +$0!$9$22 1$1!$9+$0!+ "0$$!"2

51


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Total O/S,

11796076

Recovery,

3088732

0

2000000

4000000

6000000

8000000

10000000

12000000

Total O/S Recovery

Total O/S

Recovery

)urin( 'y ,u''er Proect I recovered )s"12,88,


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Edu.L&an Pe'.L&an H&1e L&an Veh"cle

L&an

SBF T&)al

10(B-(=-- 110.B-- 6(6,(55- 0(=-(51, (0-(=6- 8/:,,:>89

Amo!t Recover

d&.oan

44%oe oan

25%

er.oan 4%

e:i$es

oan 13%

BF 14%

d&.oan oe oan er.oan e:i$es oan BF

3ere( as per above chart more amount in Educa)"&n l&anamount is R!.+8:,/:;//and

percentage is ==.

EDUCATION LOAN

N&. &*

B&''&?e'!

L&an A1). O! A1). Rec&3e' A1).

,= ,(>6(1(500 ,6(>=(-> 10(B-(=-- =.B>C

HO$E LOAN

N&. &*

B&''&?e'!

L&an A1). OS A1). Rec&3e' A1).

B 1(=(0(>, >5(>0(=0> 6(6,(55- 11.6>C

50


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PERSONAL LOAN

N&. &*B&''&?e'!


01(=>(--- 11(,B(B 110(B-- 1-.-BC

CAR LOAN

N&. &*

B&''&?e'!

L&an A1). O! A1). Rec&3e' A1).

10 >=(06(,5- 11(-0(,6> (0-(=6- 0=.->C

GOLD LOAN

N&. &*

B&''&?e'!


16 05(>=(B,1 6(>0(65B 0(=-(51, 51.11C

)s per above show that more amount is recovery from Educa)"&n L&anR!.+8:,/:;//but if

we see the recover by more share from 3eh"cle! l&anthat


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#anks are now working on utili"ing the services of 2ebt %ecovery Tribunals to solve this

problem. The government has also mooted the suggestion of an )sset %econstruction

ompany( which will be speciali"ed agency set up for rehabilitating revivable ;$)s 9say(

salvaging proects which are inherently sound: and recovering funds out of unrevivable

;$)s.

Oter Strate'ies

Fi8ing up of budgets for profits and recovery rather than for advances. #udget

oriented approach( at times leads to release of credit facilities without ensuring

compliance of covenants of sanction. ) suitable mechanism could be drawn at each

#ank level to provide monetary benefitsJrecognition to the operating staff

particularly for recovery in ;$)sJwrite off cases.

$roect with old technology should not be considered for finance.

/arge e8posure on big corporateJsingle proect should avoid.

There is a need to shift in $+#s approach from collateral security to viability of the

proect and intrinsic strength of promoters.

p gradation of credit skills of the operating staff working in advances department.

Timely sanctionJrelease to avoid time and cost overruns.

55


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A *'e!h l&& a) Rec&3e'0 P'&ble1

#asically each branch engaged in lending has to plan for recovery of loans disbursed

by it. The manager should be familiar with the prospects of recovery through internal

and e8ternal factors. Hnowledge about willful defaulters is equally important. Thus

three pronged strategy is necessary.

4A5 RECOVERY 6 INTERNAL SOURCES4a5 C&12u)a)"&n &* de1and

Guidelines suggest that repayment of installments of loans should be fi8ed in such

manner( which will coincide with the harvesting of crops or sale of milk or any other

farm output proposed to be produced through the bank loan. The demand for crop

loans or for installment of term loans should therefore be computed in a manner

conducive to the income flow.

4b5 A22'a"!al &* l&an a22l"ca)"&n and 2'e#!anc)"&n !u'3e0!

2uring the initial processing of the proposal( it has to be ensured that the repayment

program for an itemRequipment is fi8ed in accordance with the guidelines prescribed

by %.#.!. )wareness about %.#.!. guidelines should be increased at the branch level.

4c5 Rec&3e'0 ca12!

5>


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The central idea of recovery camp is to bring a ma8imum number of persons together

at one place and repay the loans. The recovery camps in addition to effecting recovery

create a proper climate for recovery.

4d5 N&n#ban"n( bu!"ne!! da0

This day should be utili"ed fully for field visits and contact with the borrowers

4e5 C&12'&1"!e 2'&2&!al!

!n genuine cases( the banks can consider compromise proposal and a lot depends upon

the initiative of the branch manager in utili"ing this facility.

4*5 C&n3e'!"&n!'e!chedul"n( &* l&an!

There are guidelines for the operating staff of the banks for conversion.Jrescheduling

of loans in the areas affected by natural calamities. rop loans can be made repayable

over period of one year in the event of crop loss.

4(5 In)e('a)"&n &* 'ec&3e'0 "n b'anch bud(e)"n(

%ecovery targets should be fi8ed at the time of settlement of branch business budget.

4B5 RECOVERY6 ETERNAL SOURCES

?herever the states have enacted laws on the pattern of the Talwar *odel #ill( support

of the government machinery can be enlisted accordingly.

!f the branches prepare village


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The branches may also compile detailed position of defaulters and share the same with

the convener banks and government authorities periodically.

4C5 TACKLING DEFAULTERS

To prevent willful default( comprehensive and discrete enquiries( therefore( should be

made before disbursing loans to farmers. +ome of the banks have already devised

systems of maintaining village dossiers( which comprise names of farmers who do not

have good reputation. ) non


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PRO6ECT Fin$in's7

From this proect it is found that +#! advance product having the 1 stplace in the market at

#hubaneswar( there is a great opportunity to compete with !!! #ank to retain its

customer by fulfilling the requirement of customer in +#! advance product.

!t has been observed that appro8imately B5C correspondents are using advance product of

+#! and 15C are not using any type of advance product of +#! in #hubaneswar.

)ll of +#! customers are satisfied with the services provided by the bank.

*any of these customers satisfied with the low interest rate and longer repayment period

of the advance product.

*ost of the customers at #hubaneswar prefer to take loan from +#!.

)ppro8imately 0C of advance product users said that the service of +#! in advance

product is e8cellent.

) response from customer care is so clear good.

*any customers have no time to call customer care so that they are not able to know about

the service features of +#! advance product.

*ost customers are shifted from other banks advance product to +#! because of hidden

charges( high interest rate( less repayment period.

Government employees are more concern than private employees for advance product.

5=


60/69

REASONS FOR HIGHLY USE OF SBI ADVANCE PRODUCT6

/'++ $)$'% ?7%H

)TT%)T!4' !;T'%'+T %)T'+

T%);+$)%';E

+!*$/' F)+T $%7'++!;G

/7;G'% %'$)E*';T $'%!72

Q!H $%7'++!;G

CHAPTER#-


61/69

REC$$ENDATION

S

Rec&11enda)"&n6

ustomer awareness programme is required so that more people should attract towards

advance product.

!f there are any kind of hidden charges than that must disclose to customer before giving

loan to them.

+#! must take some steps so that customers can get their loan in time. /ike phone

verification by customer care that one customer is got their loan on time or not .!t must be

before a certain date so necessary steps can be taken.

+#! should more concern about physical verification rather than phone verification so it

will avoid fraud or cheating.

)dvance product selling agents must not give any type of wrong information regarding

advance product.

>1


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For the better service new offers would be require.

+#! customer care should more concern about the fastest settlement of customer problems.

#efore deducting or charging any monetary charge +#! must consult with customer.

)gents should be trained( well educated proper trained to convince the people about

different advance product.

!t is the duty of the bank to disclose all the material facts regarding advance product( like

interest charged( repayment period( other types of charges( etc.

+pecial scheme should be implemented to encourage both customer and agents.

The bank should increase the period for repayment of loan.

+#! should more focus on %etaining e8isting customers.

+#! must focus on +egmentation based on customer knowledge $roduct offering based on

customer demand.

+#! must take feedbacks of customers regarding features services.

CONCLUSION

?e are happy to getting opportunity to part of +tate #ank of !ndia and also get

opportunity to tackle the ;$)s )ccount.

2uring 7ur +ummer Training we meet 15- clients of bank and get their opinion the their

problems. +o( )ccording to that duration we would like to conclude that( )ccount become

;$)s in many way sometimes( +ometimes technical problem( +ome times personal

problem but these all problem will be solved by few precautions which earlier we

mentioned.

>,


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!n any financial institution( ;$)s are inevitable in the loan portfolio. #ut efforts should be

made to maintain a reasonable level of ;$)s. Heeping in mind the %#! plan to introduce

the concept of K7ne quarter& for identification of ;$)s by ,--( it is a high time to go in

for recovery drive on a war0
http://www.sbi.co.in/http://www.rbi.org.in/http://www.google.com/http://www.sbi.co.in/http://www.rbi.org.in/http://www.google.com/


64/69

B&&!6#

;G# #usiness bulletin

!ndian Financial +ystem

$a(a"ne @ &u'nal!6#

The F"nanc"al E2'e!!

9!ndias #est #anks:

Ta)a $c G'a? H"ll

9)ccounting Finance

>


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Questionnaire

Gene'al In*&'1a)"&n

1: ;ame of the #orrower@


66/69

OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

$h.;o. 9%:OOOOOOOOOOOOOOOOOOOOO97:OOOOOOOOOOOOOOOOOOOOOO

: 'ducation @ < S Graduate

S nder Graduate

S $ost Graduate S 7thers

5: 7ccupation @ < S #usiness S $rofessional

S 'mployee Govt J ;on Govt.

S 7thers

>: Guarantors ;ame )dd.@


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10: !nstallment )mount@


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Plan &* Ac)"&n )& Re(ula'"e )he L&an

,0: ?hen ?ill you meet )sset verification official %)+*'

S ?eek

S *onthS *ore then *onth

,: ?hen will you %epay the due amount

S ?eek

S *onthS *ore then *onth

495 Fac)&'! Rela)ed )& Ban

,5: $roect cost @: Time taken in sanction

2istribution of/oan @

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