INTRODUCTION
PREFACEI am extremely happy to place before the esteemed teacher
BANKING FINANCIAL INSTITUTE IN INDIA. It is an attempt make by me
to find out the leading brands in Sagar City.The Project Report has
on objective to get the B.B.A. Studetns familiar with real life
buisness situations and gives an opportunity to the students to
understand the theoretical concepts of marketing and finance in
practical way. The research starts with a short introduction of the
company followed by the line of the objective and research
methodology.Next Chapter Deals with the data analysis and
interpretation that is based on questionnaire. Then comes the
limitation, suggestions conclusion of the research report. Students
name : ANIL PATEL Class :BBA VTH SEM.
ACKNOWLEDGEMENTI Wish to express my deep sense of gratitude to
all who generously helped in successful completion of the project
work by sharing their valuable time and knowledge. I t thankfully
acknowlege Mr. Manish Jain (HOD BBA Dept) GIMS Sagar for giving me
the opportunity to conduct and survey. I Would like to express my
sincere thanks to MR. MANISH JAIN LecturerBBA Dept) and all other
faculty members, GIMS sagar who directly and indirectly rendered me
all possible hlep and guidance for preparing the report. Finally I
would like to thanks my parents, my friends without whom completion
of my project report would not have been possible. Students name :
ANIL PATEL Class :BBA VTH SEM.
CERTIFICATE A PROJECT REPORT ON BANKING FINANCIAL INSTITUTE IN
INDIA is prepared by ANIL PATEL under The guidance of MR. MANISH
JAIN is a satisfactory in respect to comments Contents and
presentation of the Subject Matter. Language Submission with in due
date.
Signature of Supervisor Signature of Examiner Signature of
HOD
DECLARATION BY THE CANDIDATE
Date:
I declare that the project report titled BANKING FINANCIAL
INSTITUTE IN INDIA is my own work conducted under the supervision
of MR. MANISH JAIN, Gyanveer Institute of Management and Science
Sagar. To the best of my knowledge the report does not contain any
work, which has been submitted for the award of any degree,
anywhere.
Students name : ANIL PATEL Class :BBA VTH SEM.
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TABLE OF CONTENTS Preface Acknowledgement Certificate
Declaration by the CandidateTOPIC NAMEPAGE NO.
CHAPTER 1 INTRODUCTION
(A) COMPANY PROFILE
(B) HISTORY
(C) KEY PERSON
CHAPTER 2 OBJECTIVE
CHAPTER 3 RESEARCH METHODOLOGY
(A) TYPE OF RESEARCH
(B) SOURCE OF RESEARCH
CHAPTER 4 HOME LOAN SERVICE
CHAPTER 5 DATA ANALYSIS AND INTERPRETATION
CHAPTER 6 SWOT ANALYSIS
CHAPTER 7 LIMITATION
CHAPTER 8 SUGGESTION AND CONCLUSION
CHAPTER 9 BIBLIOGRAPHY
CHAPTER 1011 QUESTIONNAIRE
IntroductionWhile walking in the streets of any town or city you
might have seen some signboards on buildings with names-Canara
Bank, Punjab National Bank, State Bank of India, United Commercial
Bank, etc. What do these names stand for? Did you ever try to know
about them? If you enter any such building you will find some kind
of a business office. You will see some employees sitting behind
counters dealing with visitors standing in front of them. You will
find that some are depositing money at one counter while some are
receiving money at another counter. Behind the counters in the
office you will see tables and chairs occupied by officers. On one
side of the office you will also see a chamber (small partitioned
room) where the manager is sitting with papers on his table.This is
the office of a Bank.Let us know in detail about banks and their
activities.
You know people earn money to meet their day-to-day expenses on
food, clothing, education of children, housing, etc. They also need
money to meet future expenses on marriage, higher education of
children, house building and other social functions. These are
heavy expenses, which can be met if some money is saved out of the
present income. Saving of money is also necessary for old age and
ill health when it may not be possible for people to work and earn
their living.
The necessity of saving money was felt by people even in olden
days. They used to hoard money in their homes. With this practice,
savings were available for use whenever needed, but it also
involved the risk of loss by theft, robbery and other accidents.
Thus, people were in need of a place where money could be saved
safely and would be available when required. Banks are such places
where people can deposit their savings with the assurance that they
will be able to withdraw money from the deposits whenever required.
People who wish to borrow money for business and other purposes can
also get loans from the banks at reasonable rate of interest.
Bank is a lawful organization, which accepts deposits that can
be withdrawn on demand. It also lends money to individuals and
business houses that need it.
Banks also render many other useful services like collection of
bills, payment of foreign bills, safe-keeping of jewelery and other
valuable items, certifying the credit-worthiness of business, and
so on.
Banks accept deposits from the general public as well as from
the business community. Any one who saves money for future can
deposit his savings in a bank. Businessmen have income from sales
out of which they have to make payment for expenses. They can keep
their earnings from sales safely deposited in banks to meet their
expenses from time to time. Banks give two assurances to the
depositors
a. Safety of deposit, andb. Withdrawal of deposit, whenever
needed
On deposits, banks give interest, which adds to the original
amount of deposit. It is a great incentive to the depositor. It
promotes saving habits among the public. On the basis of deposits
banks also grant loans and advances to farmers, traders and
businessmen for productive purposes.
Thereby banks contribute to the economic development of the
country and well being of the people in general. Banks also charge
interest on loans. The rate of interest is generally higher than
the rate of interest allowed on deposits. Banks also charge fees
for the various other services, which they render to the business
community and public in general. Interest received on loans and
fees charged for services which exceed the interest allowed on
deposits are the main sources of income for banks from which they
meet their administrative expenses.
The activities carried on by banks are called banking activity.
Banking as an activity involves acceptance of deposits and lending
or investment of money. It facilitates business activities by
providing money and certain services that help in exchange of goods
and services. Therefore, banking is an important auxiliary to
trade. It not only provides money for the production of goods and
services but also facilitates their exchange between the buyer and
seller.
You may be aware that there are laws which regulate the banking
activities in our country. Depositing money in banks and borrowing
from banks are legal transactions. Banks are also under the control
of government. Hence they enjoy the trust and confidence of people.
Also banks depend a great deal on public confidence. Without public
confidence banks cannot survive.
The development of banking in an inevitable precondition for the
healthy and rapid development of the national economic structure.
Banking institutions have contributed much to the development of
the developed countries of the world. Today we cant imagine the
business world without banking institutions. Banking is as
important as blood in the human body. Due to the development of
banking advances are increased and business activities developing
so it is rightly said, The development of banking is not only the
root but also the result of the development of the business world.
After independence, the Indian government also has taken a series
of steps to develop the banking sector. Due to considerable efforts
of the government, today we have a number of banks such as Reserve
Bank of India, State Bank of India, nationalized commercial banks,
Industrial Banks and co-operative banks. India Banks contribute a
lot to the development of agriculture, and trade and industrial
sectors. Even today the banking systems of India possess certain
limitations, but one cant doubt its important role in the
development of the Indian economy.
Banking sector is the first and most important aspect of the
economic-planning of a nation for the faster and speedy development
of a nation; well-development and advanced banking sector is the
precondition. In the most of developed countries of the world,
there is very close relation between the business activities and
banks. It is quite difficult to think the business activities
without the existence in economy as blood in human body.
Thus, we can say that, there is a noteworthy contribution of
banking sector in the development of various fields such as,
agriculture, industries business activities, transportation and
communication.
ORIGIN OF WORD BANKThe word bank is derived from, the Latin word
Bonous or Banca means a bench. A bank refers to the function of
accepting deposits, lending, repaying the deposited money of demand
and functioning an agent whenever asked for. Now for healthy and
rapid development of any national economical structure, the
development of banking is an inevitable pre-condition.Some
authorities observe that the word bank s originally derived from
the German word bank which means a joint stock fund. This word was
Italianized into banco by the German when they were the rulers of
measure part of Italy. This term was again change into banck by the
French; afterwards, the Britishers converted this term into bank
which has now been universalized. The term bank or banker is used
in almost all countries of the world to denote a financial
institution dealing in money.There are different views regarding
the origin of the term bank In ancient Greece and Rome the practice
of granting credit was widely prevalent. The books of the old
Sanskrit law giver, Menu, are full of regulations governing credit.
In, past (I) traders (II) ledgers and (III) goldsmiths performed
banking activities. Some experts opine that the term, bancus or
banque means bench, and the term bank comes from these words.
Ancient bankers and lenders used benches in the market place to do
their lending business. When a banker failed in his business, the
people broke his benches. The term, bankrupt, originated from such
events.
DEFINITION OF BANK
A bank is an institution which deals in money. A Bank receives
money in the form of deposits from the public, and lends money for
the development of trade and commerce. Several economists have
defined the term, baking, in various ways. From various definitions
some of them as follow:
Banking company is a company, which transects the business of
banking in any state of India. Section S (5) of banking company act
1949.
A bank or banker is one who, in the ordinary course of his
business, receives money which he repays by honoring the cheques of
persons from whom or on whose account he receives it. Hart
Pofr.
Bank is an establishment which makes, to individuals, such
advances of money as may be required and safely made and to which
individuals entrust money which it is not required by them for use.
Prof. KenlyBanking means where financial transactions of credit are
done and bank means where draft, cheque, or credit paid by order,
deposits of money or currency are accepted or assets, bonds, gold,
silver, bills of exchange or promissory notes are accepted that
kind of persons firms or companies having the place of business.
Findlay sheraze
"Banking business" means the business of receiving money on
current or deposit account, paying and collecting cheques drawn by
or paid in by customers, the making of advances to customers, and
includes such other business as the Authority may prescribe for the
purposes of this Act; (Banking Act (Singapore), Section 2,
Interpretation)"banking business" means the business of either or
both of the following: 1. receiving from the general public money
on current, deposit, savings or other similar account repayable on
demand or within less than [3 months] ... or with a period of call
or notice of less than that period; 2. paying or collecting cheques
drawn by or paid in by customersSince the advent of EFTPOS
(Electronic Funds Transfer at Point Of Sale), direct credit, direct
debit and internet banking, the cheque has lost its primacy in most
banking systems as a payment instrument. This has led legal
theorists to suggest that the cheque based definition should be
broadened to include financial institutions that conduct current
accounts for customers and enable customers to pay and be paid by
third parties, even if they do not pay and collect cheques.
TRADITIONAL BANKING ACTIVITIESBanks act as payment agents by
conducting checking or current accounts for customers, paying
cheques drawn by customers on the bank, and collecting cheques
deposited to customers' current accounts. Banks also enable
customer payments via other payment methods such as telegraphic
transfer, EFTPOS, and ATM.Banks borrow money by accepting funds
deposited on current accounts, by accepting term deposits, and by
issuing debt securities such as banknotes and bonds. Banks lend
money by making advances to customers on current accounts, by
making installment loans, and by investing in marketable debt
securities and other forms of money lending.Banks provide almost
all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments.
Non-banks that provide payment services such as remittance
companies are not normally considered an adequate substitute for
having a bank account.Banks borrow most funds from households and
non-financial businesses, and lend most funds to households and
non-financial businesses, but non-bank lenders provide a
significant and in many cases adequate substitute for bank loans,
and money market funds, cash management trusts and other non-bank
financial institutions in many cases provide an adequate substitute
to banks for lending savings to
BANKING SYSTEM IN INDIA
In the economic development of a nation banks occupy an
important place. Indian money market comprises both organized as
well as unorganized sectors. The unorganized sectors include money
lenders and indigenous bankers and largely cater to the needs of
person living in villages and small towns. Financial institutions
in the organized sector have grown significantly. Among the
institution in organized sector of the Indian money market
commercial banks, Co-operative banks, regional rural banks,
development banks etc.
In 1770, first Indian bank known as Bank of Hindustan was
started and was closed down twenty years later. Later on, the East
India Co. started three presidency banks with government
participation. These were: Bank of Calcutta 1806Bank of Bombay
1840Bank of Madras 1843 Other banks such as
Allahbad Bank came into existence in 1865Alliance Bank of simla
in 1875.
The first Indian joint stock bank known as Oudh Commercial Bank
was setup in 1880 and Punjab National Bank was launched in 1894.
There were as many as 648 commercial banks in India by the and of
1947 and as many as 161 banks failed during 1913-14. Thus, there
was a great need of an institution to control and regulate banking
in the country. As a result, the RBI was setup in 1935 for
regulating the banks in the country.
A scheme of social control on banks was enforced through
statutory measures with effect from 1-2-1969. The banking industry
saw a revolution after 14 major commercial banks were nationalized
in June, 1982. More than 90 % of the bank deposits came under the
control of the government.
Agricultural Credit Development, Rural Planning and Credit Cell
and Agricultural Refinance and Development Corporation were
combined together to setup national bank for agriculture and rural
development in July, 1982. Later, the Exim Bank and National
Housing Bank were setup in 1984 and 1988 respectively.
RECENT HISTORY OF INDIAN BANKINGIndian banking system, over the
years has gone through various phases after establishment of
Reserve Bank of India in 1935 during the British rule, to function
as Central Bank of the country. Earlier to creation of RBI, the
central bank functions were being looked after by the Imperial Bank
of India. With the 5-year plan having acquired an important place
after the independence, the Govt. felt that the private banks may
not extend the kind of cooperation in providing credit support, the
economy may need. In 1954 the All India Rural Credit Survey
Committee submitted its report recommending creation of a strong,
integrated, State-sponsored, State-partnered commercial banking
institution with an effective machinery of branches spread all over
the country. The recommendations of this committee led to
establishment of first Public Sector Bank in the name of State Bank
of India on July 01, 1955 by acquiring the substantial part of
share capital by RBI, of the then Imperial Bank of India. Similarly
during 1956-59, as a result of re-organization of princely States,
the associate banks came into fold of public sector banking.Another
evaluation of the banking in India was undertaken during 1966 as
the private banks were still not extending the required support in
the form of credit disbursal, more particularly to the unorganized
sector. Each leading industrial house in the country at that time
was closely associated with the promotion and control of one or
more banking companies. The bulk of the deposits collected, were
being deployed in organised sectors of industry and trade, while
the farmers, small entrepreneurs, transporters , professionals and
self-employed had to depend on money lenders who used to exploit
them by charging higher interest rates. In February 1966, a Scheme
of Social Control was set-up whose main function was to
periodically assess the demand for bank credit from various sectors
of the economy to determine the priorities for grant of loans and
advances so as to ensure optimum and efficient utilization of
resources. The scheme however, did not provide any remedy. Though a
no. of branches were opened in rural area but the lending
activities of the private banks were not oriented towards meeting
the credit requirements of the priority/weaker sectors.On July 19,
1969, the Govt. promulgated Banking Companies (Acquisition and
Transfer of Undertakings) Ordinance 1969 to acquire 14 bigger
commercial bank with paid up capital of Rs.28.50 Cr,deposits of
Rs.2629 cr, loans of Rs.1813 cr and with 4134 branches accounting
for 80% of advances. Subsequently in 1980, 6 more banks were
nationalised which brought 91% of the deposits and 84% of the
advances in Public Sector Banking. During December 1969, RBI
introduced the Lead Bank Scheme on the recommendations of FK
Nariman Committee.Meanwhile, during 1962 Deposit Insurance
Corporation wasestablished to provide insurance cover to the
depositors.In the post-nationalisation period, there was
substantial increase in the no. of branches opened in
rural/semi-urban centres bringing down the population per bank
branch to 12000 appx. During 1976, RRBs were established (on the
recommendations of M. Narasimham Committee report) under the
sponsorship and support of public sector banks as the 3rd component
of multi-agency credit system for agriculture and rural
development. The Service Area Approach was introduced during
1989.While the 1970s and 1980s saw the high growth rate of branch
banking net-work, the consolidation phase started in late 80s and
more particularly during early 90s, with the submission of report
by the Narasimham Committee on Reforms in Financial Services Sector
during 1991. In these five decades since independence, banking in
India has evolved through four distinct phases:Foundation phase can
be considered to cover 1950s and 1960s till the nationalisation of
banks in 1969. The focus during this period was to lay the
foundation for a sound banking system in the country. As a result
the phase witnessed the development of neces sary legislative
framework for facilitating re-organisation and consolidation of the
banking system, for meeting the requirement of Indian economy. A
major development was transformation of Imperial Bank of India into
State Bank of India in 1955 and nationalisation of 14 major private
banks during 1969. Expansion phase had begun in mid-60s but gained
momentum after nationalisation of banks and continued till 1984. A
determined effort was made to make banking facilities available to
the masses. Branch network of the banks was widened at a very fast
pace covering the rural and semi-urban population, which had no
access to banking hitherto. Most importantly, credit flows were
guided towards the priority sectors. However this weakened the
lines of supervision and affected the quality of assets of banks
and pressurized their profitability and brought competitive
efficiency of the system at a low ebb. Consolidation phase: The
phase started in 1985 when a series of policy initiatives were
taken by RBI which saw marked slowdown in the branch expansion.
Attention was paid to improving house-keeping, customer service,
credit management, staff productivity and profitability of banks.
Measures were also taken to reduce the structural constraints that
obstructed the growth of money market.
Reforms phase The macro-economic crisis faced by the country in
1991 paved the way for extensive financial sector reforms which
brought deregulation of interest rates, more competition,
technological changes, prudential guidelines on asset
classification and income recognition, capital adequacy, autonomy
packages etc.
BANK NATIONALISATION & PUBLIC SECTOR BANKINGOrganised
banking in India is more than two centuries old. Till 1935 all the
banks were in private sector and were set up by individuals and/or
industrial houses which collected deposits from individuals and
used them for their own purposes. In the absence of any regulatory
framework, these private owners of banks were at liberty to use the
funds in any manner, they deemed appropriate and resultantly, the
bank failures were frequent.Move towards State ownership of banks
started with the nationalisation of RBI and passing of Banking
Companies Act 1949. On the recommendations of All India Rural
Credit Survey Committee, SBI Act was enacted in 1955 and Imperial
Bank of India was transferred to SBI. Similarly, the conversion of
8 State-owned banks (State Bank of Bikaner and State Bank of Jaipur
were two separate banks earlier and merged) into subsidiaries (now
associates) of SBI during 1959 took place. During 1968 the scheme
of social control was introduced, which was closely followed by
nationalisation of 14 major banks in 1969 and another six in
1980.Keeping in view the objectives of nationalisation, PSBs
undertook expansion of reach and services. Resultantly the number
of branches increased 7 fold (from 8321 to more than 60000 out of
which 58% in rural areas) and no. of people served per branch
office came down from 65000 in 1969 to 10000. Much of this
expansion has taken place in rural and semi-urban areas. The
expansion is significant in terms of geographical distribution.
States neglected by private banks before 1969 have a vast network
of public sector banks. The PSBs including RRBs, acount for 93% of
bank offices and 87% of banking system deposits.
STRUCURE OF BANKING IN INDIA
HEAD LINESSTRUCTURE OF INDIAN BANKINGTypes of BankReserve bank
of India (central bank)Foundation of RBIFunction of Reserve Bank of
IndiaCommercial banks Public sector banks,Private sector banks
Foreign banks.Co-Operative banksPrimary Credit SocietiesCentral
Co-operative BanksState Co-operative BanksDevelopment banks
Indian banking system comprises of both organized and
unorganized banks. Unorganized banking includes indigenous bankers
and village money lenders. Organized banking includes the
following,
The main four types are: Reserve bank of India (central bank)
Commercial banks Co-Operative banks Development banksOthers are:
Exim banks Regional rural banks Land development banks National
Bank for Agriculture and Rural Development(NABARD) Industrial
Development Bank of India Small Industrial Development Bank of
IndiaSTRUCURE OF BANKING IN INDIA
Bank for Agriculture and Rural Development
MISSIONI. World Class Indian BankII. Benchmarking against
international standards.III. To build sound customer franchises
across distinct businessesIV. Best practices in terms of product
offerings, technology, service levels, risk management and audit
& compliance
VISION STATEMENT OF HDFC BANK
The HDFC Bank is committed to maintain the highest level of
ethical standards, professional integrity and regulatory
compliance. HDFC Banks business philosophy is based on four core
values such as:-
1. Operational excellence.2. Customer Focus.3. Product
leadership.4. People.
The objective of the HDFC Bank is to provide its target market
customers a full range of financial products and banking services,
giving the customer a one-step window for all his/her requirements.
The HDFC Bank plus and the investment advisory services programs
have been designed keeping in mind needs of customers who seeks
distinct financial solutions, information and advice on various
investment avenues.
OBJECTIVE OF THE STUDY To study how to choose the right housing
finance bank. To study how do get loan for construction of
residential houses. To discuss housing credit more affordable. To
know the some of housing finance schemes. To discuss some tip for
buying house. To study of terms and condition of home loan. To find
out that how people to construction of houses by attractive EMI
systems.
RESEARCH METHODOLOGYAccording to Green and Tall A research
design is the specification of the methods and procedures for
acquiring the information needed. It is the overall operational
pattern or framework of the project that stipulates which
information is to be collected, from where it is to be collected
and by what proceduresThis research process based on primary data
analysis and secondary data analysis will be clearly defined to
meet the objectives of the study. I chose the primary sources to
get the data. A questionnaire was designed in accordance with our
mentor in Banking. I chose a sample of about 45 corporate customers
around the Sagar City from which I can get the instant information
of whose analysis will give me the desired outcome of my research
project. I collected some data from the secondary sources like
published Company documents, internet etc.
Research DesignA research design is the arrangement of
conditions for collections and analysis of data in a manner that
aims to combine relevance to the research purpose with economy in
procedures. It is a descriptive cross sectional design .It is the
conceptual structure with in which research is conducted; it
constitutes the blueprint for the collection, measurement and
analysis of data.It is needed because it facilitates the smooth
sailing of the various research operations, thereby making research
as efficient as possible yielding maximal information with minimal
expenditure of effort, time and money. In the preliminary stage, my
research stage constituted of exploratory study by which it is
clear that the existence of the problem is obvious .So, I can
directly head for the conclusive research. Sampling PlanSampling
plan is a distinct phase of research process. In this stage I have
to determine who is to be sampled, how large should be the needed
sample and how sampling unit is to be selected.PopulationIn my
research, I have defined my population as a complete set of
customers of Sagar CitySample SurveyAs compared to census study, a
sample study has been conducted by us because of: Wide range of
population, it was impossible to cover the whole population Time
and money constraints.Sample UnitIn this survey I took the list of
customers from the dealers of HDFC in Sagar City.Sampling Technique
Sampling technique implies the method of choosing the sample items,
the two methods of selecting sample are: Probability method.
Non-probability method.Probability method is those in which every
item of the universe has an equal chance of the inclusion in the
sample. Non-probability methods are those that do not provide every
item in the universe with known cause of being included in the
sample. The selection process is partially subjective.For my study,
I employed the Non-probability sampling technique, in which I got
the data of the customers from the dealer of HDFC in Sagar City
Instrument of collection of dataI have used one set of
questionnaire to collect data from the customers. This
questionnaire is structured and highly ordered. This includes both
close ended and open ended questions. The close ended questions
included both dichotomous and multiple choice questions.Data
analysis and interpretations Large volumes of raw data were
collected through questionnaires in my research study. This raw
data has been further converted into significant statistical
information before further interpretation so that I can answer my
research objective well. The collected raw data was then edited and
coded by the researchers to eliminate errors and to assign data to
pertinent categories. The data was then tabulated and presented
with the help of bar diagrams and pie charts.
NATIONALIZED BANKS:Following 14 commercial banks were
nationalized on the 19th July, 1969. Bank of India Canara Bank
Central Bank of India Corporation bank Indian Bank Indian overseas
bank Syndicate Bank UCO Bank Allahabad Bank Bank of Baroda Bank of
Maharashtra Dena Bank Oriental Bank of Commerce Punjab & Sind
Bank Union Bank of India United Bank of India Vijaya Bank IDBI
BankOther six banks were nationalized on the 10th April, 1980.
State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank
of Mysore State Bank of Indore State Bank of Pateyala State Bank Of
Saurashtra State Bank of Travancore
In October 1993, the New Bank of Indian and Punjab National Bank
were merged.
PRIVATE SECTOR BANKS: HDFC Bank ICICI Bank Federal Bank ING
Vysya Bank Axis Bank (formerly UTI Bank) Yes Bank Bank of Rajasthan
Bharat Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab
City Union Bank Development Credit Bank Dhanalakshmi Bank Ganesh
Bank of Kurundwad IndusInd Bank Jammu & Kashmir Bank Karnataka
Bank Limited Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas
Bank Nainital Bank Ratnakar Bank SBI Commercial and International
Bank South Indian Bank Amazing Mercantile Bank Punjab National Bank
Rupee Bank Saraswat Bank Tamilnad Mercantile Bank Thane Janata
Sahakari Bank Bassein Catholic Bank
Specialised Banks
There are some banks, which cater to the requirements and
provide overall support for setting up business in specific areas
of activity. EXIM Bank, SIDBI and NABARD are examples of such
banks. They engage themselves in some specific area or activity and
thus, are calledspecialised banks. Let us know about them.
Export Import Bank of India (EXIM Bank): If you want to set up a
business for exporting products abroad or importing products from
foreign countries for sale in our country, EXIM bank can provide
you the required support and assistance. The bank grants loans to
exporters and importers and also provides information about the
international market. It gives guidance about the opportunities for
export or import, the risks involved in it and the competition to
be faced, etc.
Small Industries Development Bank of India (SIDBI): If you want
to establish a small-scale business unit or industry, loan on easy
terms can be available through SIDBI. It also finances
modernisation of small-scale industrial units, use of new
technology and market activities. The aim and focus of SIDBI is to
promote, finance and develop small-scale industries.
National Bank for Agricultural and Rural Development (NABARD):
It is a central or apex institution for financing agricultural and
rural sectors. If a person is engaged in agriculture or other
activities like handloom weaving, fishing, etc. NABARD can provide
credit, both short-term and long-term, through regional rural
banks. It provides financial assistance, especially, to
co-operative credit, in the field of agriculture, small-scale
industries, cottage and village industries handicrafts and allied
economic activities in rural areas.
(1.5.E) Exchange BanksThere is a difference in financing of
foreign trade and financing of internal trade. Generally a person
carrying on international trade requires foreign currencies to meet
his obligations. It is here that exchange banks play the role of
financing the dealer for setting transactions involved in foreign
trade. Though commercial banks undertake financing international
trade, there are specialized banks for foreign exchange business.
In India, there is the Export-Import Bank (EXIM).
(1.5.F) Investment or Industrial BanksInvestment banks provide
long-term credit to industries. They raise their funds by way of
share capital, debentures, and long-term deposits from the public.
They also raise funds by the issue of bonds for business
corporations and government agencies. Usually they underwrite the
fresh issue of shares and debentures of companies. Such banks also
buy the entire issue of new securities of public limited companies
and try to get them subscribed at a higher price by the public.
(1.5.G) Land Development Banks Land development banks were
earlier known as land mortgage banks. In India, there are a limited
number of such banks. They are special institutions providing
long-term loans to agriculturists and farmers. They provide loans
on the security of land and other immovable properties. They supply
long-term funds for period exceeding six years. Agriculturists and
farmers need such funds for making permanent improvements to land
and for buying farming machinery and equipment.
(1.5.H) Rural BankRural Bank provides various advance facilities
for manufacturing activities such as business, industry, and for
the aim of rural economic development, the Rural Bank Act is passed
in 1974. Rural Bank has given major contribution in the development
of rural area.
(1.5.I) Saving BanksSaving banks are specialized institutions
which encourage the general public to save something from their
earnings. In other words, such banks pool the small saving s of the
lower and middle income sections of society. They are not banks in
the true sense of the term and their main aim is to promote and
collect the savings of the public. Not only the depositors are
given interest, but they are allowed to withdraw in times of needs.
The numbers of withdrawals are, however, restricted. Separate
savings banks are organized in various nations. The government can
also run a savings bank. In India, the Postal Department runs the
Postal Saving Bank all over the country.
(1.5.J) Deposit Bank V/s Mixed BanksThe main function of a
commercial bank is to accept deposits from the public and lend them
to traders, industrialists and others for period not exceeding one
year. The loans and advances provided for a short period are meant
to supplement the working capital of trade and industry in times of
need. This type of banking of attracting and accepting deposits and
then lending for short period is known as deposit banking. Banks
which follow such a system are called deposit banks.
(1.6.A) General Banks FunctionPrincipal Function: Accounting
Deposits Granting Advances
Ancillary Function: Discounting of Bills & Cheques.
Collection of Bills & Cheques. Remittance. Safe Custody of
Articles. Safe Deposit Lockers. Conducting: Safe Deposit lockers
Issue of : Letters of credit. Guarantees.
(1.6.B) Function of the Commercial BankCentral Bank of India was
the first Indian commercial bank which was wholly owned and managed
by Indians. So the main function of the commercial bank is as
follow:
The functions of commercial banks are of two types.(A) Primary
functions; and(B) Secondary functions.Let us discuss details about
these functions.
PRIMARY FUNCTIONSThe primary functions of a commercial bank
include:a) Accepting deposits; andb) Granting loans and
advances.Accepting depositsThe most important activity of a
commercial bank is to mobilize deposits from the public. People who
have surplus income and savings find it convenient to deposit the
amounts with banks. Depending upon the nature of deposits, funds
deposited with bank also earn interest. Thus, deposits with the
bank grow along with the interest earned. If the rate of interest
is higher, public are motivated to deposit more funds with the
bank. There is also safety of funds deposited with the bank.
Grant of loans and advancesThe second important function of a
commercial bank is to grant loans and advances. Such loans and
advances are given to members of the public and to the business
community at a higher rate of interest than allowed by banks on
various deposit accounts. The rate of interest charged on loans and
advances varies according to the purpose and period of loan and
also the mode of repayment.
i) LoansA loan is granted for a specific time period. Generally
commercial banks provide short-term loans. But term loans, i.e.,
loans for more than a year may also be granted. The borrower may be
given the entire amount in lump sum or in instalments. Loans are
generally granted against the security of certain assets. A loan is
normally repaid in instalments. However, it may also be repaid in
lump sum.ii) AdvancesAn advance is a credit facility provided by
the bank to its customers. It differs from loan in the sense that
loans may be granted for longer period, but advances are normally
granted for a short period of time. Further the purpose of granting
advances is to meet the day-to-day requirements of business. The
rate of interest charged on advances varies from bank to
bank.Interest is charged only on the amount withdrawn and not on
the sanctioned amount.Types of AdvancesBanks grant short-term
financial assistance by way of cash credit, overdraft and bill
discounting.Let us learn about these.a) Cash CreditCash credit is
an arrangement whereby the bank allows the borrower to draw amount
up to a specified limit. The amount is credited to the account of
the customer. The customer can withdraw this amount as and when he
requires. Interest is charged on the amount actually withdrawn.
Cash Credit is granted as per terms and conditions agreed with the
customers.b) OverdraftOverdraft is also a credit facility granted
by bank. A customer who has a current account with the bank is
allowed to withdraw more than the amount of credit balance in his
account. It is a temporary arrangement. Overdraft facility with a
specified limit may be allowed either on the security of assets, or
on personal security, or both.c) Discounting of BillsBanks provide
short-term finance by discounting bills, that is, making payment of
the amount before the due date of the bills after deducting a
certain rate of discount. The party gets the funds without waiting
for the date of maturity of the bills. In case any bill is
dishonoured on the due date, the bank can recover the amount from
the customer.
SECONDARY FUNCTIONThe subsidiary functions of a commercial bank
constitute the agency services and the miscellaneous services.
Agency Services:-One of the important functions of a banker is
the services performed by him as an agent. The services as an agent
are as under: Collection of Interest and Dividend: The bank
collects interest or dividend as and when earned by the customers
from securities. A very small charge is levied for the collection
on behalf of the customer. Collection and payment: Commercial banks
also collect and pay cheques, bills and promissory notes. Executing
standing orders: A customer may leave standing instructions to a
banker to make payments to certain individuals or institutions
against his account. The banker usually charges small fees for such
services. Buying and selling of Securities: A commercial baker also
undertakes to purchase or sell stocks or shares on behalf of his
customers. Remittance of Funds: It is convenient for banks to
transfer funds as they have a network of branches all over the
country. The remittance of funds is done by mail transfer,
telegraphic transfer, and bank draft. Miscellaneous Services: -
Among the various function when they are many general utility
personal or miscellaneous services rendered to the customers. The
important ones are as under: Safety of Customers valuable: This is
undertaken when they are kept in specially constructed rooms in the
bank premises. Here the bank acts as a bailee of the goods as it is
entrusted to its safe keeping. Usually there are two methods of
ensuring safety of customers valuable. One is the acceptance of
valuables ( e.g. documents of title, jeweler etc.) for safe
custody, and the other is the provision of safe deposit vault
(Lockers) on hire to customers. Foreign Exchange: Commercial banks
also deal in foreign exchange transactions. They assist in foreign
trade by discounting foreign bills of exchange and sometime even
have to arrange transport, insurance and warehousing of goods.
Letters of Credit: A commercial bank can issue personal and
commercial letters of credit, enabling the customer to profit by
the superior credit. Bankers as Referee: Commercial bankers certify
the respectability and financial standing of their customers. This
service benefits businessmen who deal with the banks customers.
Underwriting: - Banks often act as underwriters to local and
municipal authorities or other public bodies. Banks also underwrite
for companies, corporations, and underwrite issues of Govt. loans,
raised by municipal authorities, and industrial
securities.Information & Statistics: - Several big banks have
started the collection of information related to trade and business
and provide the same to its customers. Some banks even publish
monthly reviews containing financial and economic information
DATA ANALYSIS AND INTERPRETATION
Interpretation The amount of advances of CBI is increases since
last 4 years, but it is increasing with decreasing rate because in
2008 growth rate of advances was 11% while in 2009 it 10.20%
Interpretation The amount of current a/c was in increasing rate
since 2005, but in 2009 it was decreased by 20%
Interpretation The amount of saving deposits of CBI is increases
since last 4 years, but it is increasing with fluctuating growth
rate because in 2007 growth rate of saving deposit was 20.1% ,in
2008 it was 9.9%, while in 2009 it was again 17.80%
Interpretation The amount of time deposit was increase with high
rate of growth in 2009 it was around double compare to 2008
TREND ANALYSIS OF PROFIT & LOSS A/C
(By taking data of 2005 as a base year) (Amount in
Rs.)31/3/200531/3/200631/3/200731/3/200831/3/2009
Interest
Earned1,45,89,5001,50,98,7851,97,94,8712,59,28,9713,93,14,270
Other income10,26,35612,05,56014,19,19811,04,37615,18,648
Total
income1,56,15,8561,63,04,3452,12,14,0692,70,33,3474,08,32,918
Interest
Expended98,45,6981,02,56,5651,34,85,4351,84,67,5123,43,94,367
Operating
Expenses35,45,56638,58,58042,71,93646,91,54856,25,512
Total
expenditure1,33,91,2641,41,15,1451,77,57,3712,31,59,0604,00,19,879
Profit22,24,59221,89,20034,56,69838,74,2878,13,039
2006200720082009
Growth in Interest Earned3%31%31%52%
Growth in Other income17%18%-22%38%
Growth in Total income4%30%27%51%
Growth in Interest Expended4%31%37%86%
Growth in Operating Expenses9%11%10%20%
Growth in Total expenditure5%26%30%73%
Growth in Profit-2%58%12%-79%
Interpretation:The amount of the interest earned was increased
with increasing rate so it is good sign for the bank and
profitability point of view, in 2007 and 2008 the growth rate was
became stable but in 2009 it was increased and became around
52%
Interpretation:The amount of other income was also increased
with 38% of growth rate, while in 2008 it was decreased by 22%, so
overall it is good sign for the bank
Interpretation:The total income of the bank was also increased
due to increases in the interest earning and other income
Interpretation:The amount of the interest expended was increased
with increasing rate since 2005, but in 2009 it was increased by
86% which is very high compare to previous years. The reason may be
that increased the dependability on the out side debt like deposits
and borrowing. And this is not good sign for the bank
Interpretation:The operating expenditure also increased with
increasing rate since 2005. In 2008 it was increased by 10% while
in 2009 it was increased by 20%
LIMITATION OF THE STUDY
1- As the Sagar dealt in survey, so the coverage area is small
according to the project need.2- Size Of the research may not be
substantial.3- Information may be biased because of the preference
of the customers.4- Complete data was not available due to company
privacy and secrecy.5- The survey was carried through questionnaire
and the questions were based on perception.6- There was lack of
time on the part of respondents.7- The banking sector is too vast
& it is not possible to cover each & every customer.
FINDINGS-Most of the respondents choose SBI because the bank is
giving more loan and advances facility to the customers.-The age
group of 25yrs 35yrs respondents mostly having accounts in ICICI
bank where as maximum old age respondents having account in SBI. -
According to my knowledge and perception maximum old age customers
found SBI more reliable bank as a public sector bank where as
mostly youngsters have interest in ICICI bank.-Customer awareness
programme is required so that more people should attract towards
loans & advances product.-Maximum customers are satisfied with
todays banking scenario.-Maximum customers like the most in banking
services i.e less paper work where as they also like the EMI base
loan scheme.-Even in case of loan & advances customers not only
give preference to SBI but they are also satisfied with it.-In
ICICI bank maximum customers having saving accounts where as in SBI
maximum customers have fixed account, reason among this that
maximum customer rely over SBI for their long term money
deposits.-maximum customers are satisfied with the more no. of ATM
facilities of SBI where as ICICI customers like it low transaction
cost.-36% of SBI customers well known about its loans &
advances products where as, in ICICI bank 16% customers dont know
about the loan & advances product of it.
RECOMMENDATIONS1-Since many of the respondents are not aware of
their product & services. The bank has to take some
initiatives.2- The bank can post a list of services that they are
rendered to the customers inside the bank Premises And they can
post demo of all these services in their bank website..3- SBI
should concentrate more on the respondents are falling under the
age group 25yrs 35yrs.4- ICICI should concentrate more over the
people are falling under the age group of 45-55 yrs.5- ICICI needs
to increase its lending money to attract the more people towards
its loan and advances products.
CONCLUSIONWe can conclude that the financial sector is a nerve
system of Indian economy. For steady growth in economy innovations
and development in financial sector is very important..The banks
should focus on--Launch Innovative product-Customized advance
products-Better customer services-Fastest customers problem solving
techniques-Customer retentionSince both the banks are competing
equally with each other.But SBI bank is little bit below the line
in young customer handling when compared to ICICI bank. The ICICI
bank is little bit below the line in concentrating on Loan &
advances products & services then to SBI bank. But SBI should
be considering more reliable because of public sector bank &
because of its various schemes.
BIBLIOGRAPHYBOOKS or JOURNALS1- Preston Mcafee, R, Introduction
to economic analysis, IV edition - 2- Varshnnew, P.N. Banking and
Practices, IVth edition3- Mithani, D.M, Money, Banking,
International trade & Public finance 2nd edition4-Business
world 2010 February volume.
WEBSITESwww.rbi.comwww.statebankofindia.comwww.ICICIbank.comwww.moneycontrol.com
ANNEXURE- 1QUESTIONNAIRE1. Name:2. Age: a) 25yrs- 35 yrs b) 36
yrs - 45yrs c) 46 55 yrs d) above 55 yrs3. Gender: a) Male b)
Female 4. Educational Qualification:a) Illiterate (b) School (c) UG
(d) PGe) Professional Course (f) Others5. Occupation:a) House wife
(b) Students (c) Salaried persond) Business man (e) Professionals
(f) Supervisorg) Managerial (h) pensioner6. Income level: a)
Rs.50,000 Rs.150,000 b) Rs.150,001-Rs.250,000 c) Rs.250,001-
Rs.350,000 d) Rs.350,001-Rs.450,000 e) Above Rs. 450,0007. In which
bank do you have an account? a) ICICI bank (b) SBI bank8. Why you
choose the particular bank? a) Efficient customer service b) more
ATMs c) Time saving d) transaction costs e) Technology 9. What type
of account do you have in bank? a) Saving b) Fixed c) Current d)
Others.10. Which type of service you prefer the most in your
bank?a) ATM service b) Internet bankingc) Mobile banking d) core
banking10. Are you satisfied with it? a) Yes b) quite satisfy c)
No11. Are you aware about the product and services provided by
these banks? a) Yes b) No12. What do you feel by services provided
by SBI and ICICI bank in advance product? a) Highly Satisfactory
(b) satisfied c) average d) dissatisfied e) Highly dissatisfied13.
Are you taking the loan from your bank? a) Yes b) No14. What
Features do you like most in todays banking scenario regarding the
loans? a) Less paper work b) Transparency c) Less interest rates d)
longer tenure loan for ease of repayment e) Flexibility to choose
EMI base loan or an over draft f) Specially design products for
self employed.15. Are you satisfied with todays banking system?a)
Yes b) No
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